Quad Graphics, Inc · NYSE:QUAD
Quad Graphics — Q1 2024 Earnings Presentation
25 slides from Quad Graphics's earnings presentation, May 1, 2024
Slide 1: 1st Quarter 2024 Earnings Call
ww 1s Quarter 2024 Earnings Call May 1, 2024 Lit Quad&
Slide 2: Forward-looking statements
This communication contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements regarding, among other things, our current expectations about the Company’s future results, financial condition,
Slide 3: End-to-end and everywhere in between
End-to-end and everywhere in between • Unique data • Brand design • Managed services • Omnichannel media • Audience analytics • Campaign ideation • In-Store • Addressable media anywhere • Campaign measurement • Premedia & adaptive design • Packaging • Commerce & retail media • Research & testing • C
Slide 4: In-store retail media network
x • Gives retailers and consumer packaged goods companies the ability to deliver engaging brand messages and promotions at the store shelf • Partnering with The Save Mart Companies to launch its in-store retail media network • Leverages growth opportunities in omnichannel Retail Media Networks, wher
Slide 5: Shared mail solution
From Sent separately to • Combines various marketing multiple individuals at mail from different brands or the same household various magazines from different publishers into a single package delivered to one address To • Leverages our print production volume and operational scale to create efficien
Slide 6: Connected Teams, Modern Data Stack, Radical Transparency
Connected Modern Integrated Radical Teams Data Stack Transparency Brings together our full Privacy at its core and resilient No hidden charges and range of media and data to industry challenges minimizes the tech tax paid services under one brand to data onboarding platforms Quad 6
Slide 7: Client results: loyalty and store locator visits
13% increase 124% increase in loyalty and in store locator 1.8 million visits and 18% website visits sales increase Quad 7
Slide 8: Raw Sugar Living client win
• Help Raw Sugar Living facilitate next phase of brand growth through engaging creative campaigns and strategic consumer connection points • Brand strategy • Integrated campaign development • Named Raw Sugar Living’s Creative Agency of Record • Content production • Launching first-ever direct-to-con
Slide 9: Raw Sugar Living pop-up market at Quad NYC
|RAWSUGAR’ Pop-up Market at Quad NYC SS
Slide 10: SpinLife agency of record
• Help strengthen SpinLife’s consumer connections to increase its response rates and revenue • High-impact creative for print, web and digital Credit: SpinLife • Catalog printing and distribution • Data-backed media solutions, including: • Named SpinLife’s Marketing Agency of Record – Paid search –
Slide 11: Net Sales by product category
Integrated Integrated Solutions Solutions 10% 10% Agency Solutions 19% Agency Solutions 19% Catalogs Catalogs 9% 10% 2% Logistics 2% Logistics QuadMed Targeted QuadMed Targeted Print Print 12% 12% 6% Europe Direct 5% Europe Direct Marketing Marketing Latin Net Sales Latin America Net Sales America I
Slide 12: First Quarter financial summary
First Quarter US $ Millions (Except Per Share Data) March 31, 2024 March 31, 2023 STATEMENT OF OPERATIONS Net Sales $ 654.8 $ 766.5 Cost of Sales 521.3 617.5 Selling, General and Administrative Expenses 83.1 89.2 Adjusted EBITDA(1) $ 50.6 $ 60.2 Adjusted EBITDA Margin(1) 7.7% 7.9% Adjusted Diluted E
Slide 13: Cash generation: free cash flow and asset sales
($ millions) $83.9(3) $741.7 $60.0 $108.5 $23.9 $76.8 $98.9 $31.7 $94.3 $446.8 $252.5 $4.6 $86.5 $166.0 $197.9 $129.2 $294.9 $68.7 2020 2021 2022 2023 2024 Guidance Total Free Cash Flow Asset Sales (1) See slide 20 for definitions of our non-GAAP measures and slide 22 for a reconciliation of Free Ca
Slide 14: Net debt, interest rate and liquidity
Net Debt(1) Blended Interest Rate as of March 31, 2024 Unused Capacity Under Revolver and as of March 31, 2024 Including the Impact of the April 30, 2024 Cash on Hand as of March 31, 2024 Interest Rate Swap Floating Debt Leverage Ratio(1) Next Significant Debt Maturity as of March 31, 2024 Fixed of
Slide 15: Net debt and debt leverage ratio trend
($ millions) 3.1x 3.0x 2.8x 2.4x 2.4x 2.3x 2.4x 2.4x 2.2x 2.0x 1.8x $684 $715 $624 $664 $632 $604 $584 $545 $544 $470 $405 $174 $106 $95 $34 $27 -$36 -$21 -$23 -$79 -$70 Q4 ’21 Q1 ’22 Q2 ’22 Q3 ’22 Q4 ’22 Q1 ’23 Q2 ’23 Q3 ’23 Q4 ’23 Q1 ’24 Q4 ’24 Net Debt Debt Leverage Ratio Net Debt Free Cash Flow
Slide 16: 2024 Guidance
Financial Metric 2024 Guidance Annual Net Sales Change 5% to 9% decline Full-Year Adjusted EBITDA(1) $205 to $245 million Free Cash Flow(1) $50 to $70 million Capital Expenditures $60 to $70 million Year-End Debt Leverage Ratio(1)(2) Approximately 1.8x (1) See slide 20 for definitions of our non-GAA
Slide 17: Investment highlights and strategy
• Featuring through-the-line marketing solutions deployed across offline and online channels • Accessing additional revenue opportunity in advertising and marketing services industry • Serving 2,700 clients across growing verticals such as retail, publishing, consumer packaged goods, finance and ins
Slide 18: 18
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Slide 19: Supplemental Information
Supplemental Information
Slide 20: Non-GAAP measures definitions
• In addition to financial measures prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), this presentation also contains non-GAAP financial measures, specifically EBITDA, EBITDA Margin, Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow,
Slide 21: Adjusted EBITDA reconciliation
First Quarter Three Months Ended March 31, US $ Millions 2024 2023 Net loss $ (28.1) $ (24.6) Interest expense 15.2 16.3 Income tax expense 2.4 8.8 Depreciation and amortization 28.6 33.7 EBITDA (non-GAAP) $ 18.1 $ 34.2 EBITDA Margin (non-GAAP) 2.8% 4.5% Restructuring, impairment and transaction-rel
Slide 22: Free Cash Flow reconciliation
First Quarter Three Months Ended March 31, US $ Millions 2024 2023 Net cash used in operating activities $ (52.2) $ (50.6) Less: purchases of property, plant and equipment 17.9 28.7 Free Cash Flow (non-GAAP) $ (70.1) $ (79.3) Quad 22
Slide 23: Net Debt and Debt Leverage Ratio reconciliation
US $ Millions March 31, 2024 December 31, 2023 Total debt and finance lease obligations on the balance sheets $ 553.8 $ 522.7 Less: Cash and cash equivalents 10.2 52.9 Net Debt (non-GAAP) $ 543.6 $ 469.8 Divided by: trailing twelve months Adjusted EBITDA (non-GAAP) (1) $ 224.1 $ 233.7 Debt Leverage
Slide 24: Balance sheet
US $ Millions March 31, 2024 December 31, 2023 ASSETS Cash and cash equivalents $ 10.2 $ 52.9 Receivables, less allowances for credit losses 302.7 316.2 Inventories 180.6 178.8 Prepaid expenses and other current assets 56.3 39.8 Property, plant and equipment—net 601.8 620.6 Operating lease right-of-
Slide 25: Adjusted Diluted Earnings Per Share reconciliation
First Quarter Three Months Ended March 31, US $ Millions (Except Per Share Data) 2024 2023 Loss before income taxes $ (25.7) $ (15.8) Restructuring, impairment and transaction-related charges 32.5 26.0 Adjusted net earnings, before income taxes (non-GAAP) 6.8 10.2 Income tax expense at 25% normalize