Stagwell Inc. · NASDAQ:STGW
Stagwell — Investor Day (November 2021)
22 slides from Stagwell's investor day presentation, November 2021
Slide 1: Financial Review, November 2021
FINANCIAL REVIEW NOVEMBER | 2021
Slide 2: Forward Looking Statements & Other Information
FORWARD LOOKING STATEMENTS & OTHER INFORMATION This presentation contains forward-looking statements. Statements in this presentation that are not historical facts, including without limitation the information under the heading "Financial Outlook" and statements about the Company’s beliefs and expec
Slide 3: Forward Looking Statements & Other Information: Non-GAAP Financial Measures
FORWARD LOOKING STATEMENTS & OTHER INFORMATION Non-GAAP Financial Measures In addition to its reported results, Stagwell Inc has included in this presentation certain financial results that the Securities and Exchange Commission (SEC) defines as "non-GAAP Financial Measures." Management believes tha
Slide 4: Q3 & YTD Proforma Results
Q3 & YTD PROFORMA RESULTS 3Q 2021 3Q YTD Net Revenue: $498M, +25.2% y/y Net Revenue: $1,407M, +18.7% y/y Net Revenue Growth vs. 2019: 14.4% Net Revenue vs. 2019: 9.5% Organic Net Revenue Growth: 22.8% y.y Organic Net Revenue Growth: 15.6% Organic Net Revenue Growth Ex-Advocacy: 27.9% y/y Organic Net
Slide 5: Historical Pro Forma Quarterly Results
HISTORICAL PRO FORMA QUARTERLY RESULTS $ in Thousands Three Months Ended Three Months Ended Three Months Ended Three Months Ended Three Months Ended Three Months Ended Three Months Ended March 31, 2020 June 30, 2020 September 30, 2020 December 31, 2020 March 31, 2021 June 30, 2021 September 30, 2021
Slide 6: Pro Forma Advocacy Impact
PRO FORMA ADVOCACY IMPACT $ in Millions Q3 Net Revenue Adjusted EBITDA 2021 2020 2019 2021 2020 2019* Total 498 398 435 100 89 76 Advocacy 30 39 15 6 20 7 Total Ex Advocacy 468 359 420 94 69 70 Advocacy y/y -24% 156% -71% 211% Q3 YTD Net Revenue Adjusted EBITDA 2021 2020 2019 2021 2020 2019* Total 1
Slide 7: Geographic Mix
GEOGRAPHIC MIX 3Q 2021 3Q YTD 9 3 2 % OF NET REVENUE 10 22 86 86 Note: All figures presented on a Pro Forma basis giving effect to the combination as if it was completed on January 1, 2019.
Slide 8: Expanding Our Global Network
EXPANDING OUR GLOBAL NETWORK International revenue will mix will rise as investments and affiliate program expand our global network STAGWELL AFFILIATES Stagwell +Affiliates CITIES 74 84 COUNTRIES 31 37 EMPLOYEES 10K+ +16K+ 8
Slide 9: Line of Business Mix
LINE OF BUSINESS MIX 3Q 2021 3Q YTD % 4 2 1 4 2 9 OF NET 1 9 13 REVENUE 13 37 36 34 35 Note: All figures presented on a Pro Forma basis giving effect to the combination as if it was completed on January 1, 2019.
Slide 10: Raising the Growth Outlook: Path to $3.4B by 2025
RAISING THE GROWTH OUTLOOK Path to $3.4B by 2025 Why? Our high-growth digital businesses have $75M 1 $3.4B New Digital outperformed and are a larger part of the mix Products Revenue More free cash flow to dedicate to acquisitions $450 M&A & Organic 2 in synergistic geographies and capabilities Growt
Slide 11: Road Map to Synergy Savings
ROAD MAP TO SYNERGY SAVINGS Current view on Projected Synergies ACHIEVING Media Group $8-10M $30M Shared Services $5.5M Real Estate $3.5-$5M RUN RATE Benefits $3M SAVINGS Corporate All Other $3M $8M 11
Slide 12: Synergies - Media Group
SYNERGIES-MEDIA GROUP Efficiency & Automation Reallocating resources to lower cost markets ESTIMATED Enhanced automation & STAGE, our proprietary media platform which automates routine campaign management & reporting $8-10M Duplicative Responsibilities Reducing duplicative responsibilities, RUN RATE
Slide 13: Synergies - Shared Services
SYNERGIES-SHARED SERVICES Consolidation of Backoffice Operations ESTIMATED Savings through a combination of: $5.5M 1. 2. Implementing a common global ERP (Maconomy) Approximately 40-50 back-office personnel (e.g., AP, RUN RATE AR, Payroll & Benefits, and accounting), redeployed into low-cost markets
Slide 14: Synergies - Real Estate
SYNERGIES-REAL ESTATE ESTIMATED $3.5-5M Real Estate Co-Locations Savings are expected from co-location initiatives in Los Angeles, Minneapolis, Toronto, Denver and RUN RATE further consolidation in New York. SAVINGS Low End Expected by End of 2023 14
Slide 15: Synergies - Benefits
SYNERGIES-BENEFITS ESTIMATED Employee Benefits & Administration $3M Savings are expected from the deployment of a global HRIS & Payroll System (UKG UltiPro), improved RUN RATE pricing on employee benefits and lower admin costs driven by scale SAVINGS Fully Expected by mid 2023 15
Slide 16: Synergies - Corporate
SYNERGIES-CORPORATE ESTIMATED $3M Duplicative Responsibilities Reducing duplicative responsibilities, enabling a better allocation of talent resources across legal, operations, RUN RATE finance, and communications SAVINGS Fully Expected by End of 2022 16
Slide 17: Synergies - All Other
SYNERGIES-ALL OTHER 3rd Party Spend Re-capture ESTIMATED Initiatives related to production, $8M translation services, and market research General & Administrative RUN RATE Scaled Enterprise pricing arrangements related SAVINGS to technology (hardware & software), publications & subscriptions, busine
Slide 18: Leverage
LEVERAGE S&P GLOBAL Positive Outlook (Dec. 2020) RATINGS “We expect the combined company 2020 will benefit from Stagwell’s history of → Combination positive revenue growth, good EBITDA reduced leverage 3.9x1 margins, and favorable cash generation.” by ~1x 3.0x2 Upgrade to B+ (Aug. 2021) Upon post-co
Slide 19: Capital Structure
CAPITAL STRUCTURE Net Debt & Debt-Like ($M) as of 9/30/21 Pro Forma Common Equity (Thousands) Revolving Credit Facility $181 Class A & B 78,984 Bonds $1,100 Class C 179,970 Preferred 33,035 M&A Obligations $105 Less: Cash $116 Awards Out. 3,896 TOTAL $1,270 FULLY DILUTED 295,885 Note: fully diluted
Slide 20: Targets & Quarterly KPIs
TARGETS & QUARTERLY KPIs Targets KPIs Annual Organic Revenue Growth: 7-9% Net Revenue & Growth M&A (+organic growth): $450M by 2025 Organic Net Revenue Growth Stagwell Cloud (digital products): $75M by 2025 Adjusted EBITDA & Net Revenue Margin Leverage 2025 Target Total Revenue: $3.4B Advocacy Impac
Slide 21: Thank You
= me SL ASWELL Thank You
Slide 22: Investment Highlights
Near-Term tailwinds INVESTMENT HIGHLIGHTS 1 Advocacy 2022 Mid-term election & issues cycle 2 Digital Transformation Continued demand in response to lasting digital acceleration 3 Digital Media Integrated media offering qualifying Stagwell for larger contracts 4 Travel Further recovery as global trav