Stagwell Inc. · NASDAQ:STGW
Stagwell — Investor Presentation (March 2024)
25 slides from Stagwell's investor presentation, March 2024
Slide 1: Investor Presentation March 2024
Investor Presentation MARCH | 2024
Slide 2: Disclaimer
DISCLAIMER Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statements. Such risk factors include, but are not limited to, the following: • risks associated w
Slide 3: Disclaimer: Forward-Looking Statements
DISCLAIMER Forward-Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company’s repre
Slide 4: Stagwell at a Glance
at a Glance Mark Penn CHAIRMAN & CEO $2.5B 57% FY23 GAAP REVENUE DIGITAL IN FY23 “ Stagwell is a holistic, technology-first, enterprise services company owing to its $360M ~$270M combination of ad agency creative and technology enterprise. FY23 ADJ. EBITDA FY23 NET NEW BUSINESS We differentiate ours
Slide 5: Stagwell From Zero to Market Hero
INTRODUCTION TO STAGWELL STAGWELL FROM ZERO to Market Hero Story $2.7B FY 2022 Founded in late 2015 with a vision for REVENUE a new digital-first marketing company, Stagwell has grown to become the first Marketing Services company in 40+ years to reach competitive scale Driven by visionary leadershi
Slide 6: Visionary Leadership From An Industry Veteran
INTRODUCTION TO STAGWELL VISIONARY LEADERSHIP From An Industry Veteran Mark Penn CHAIRMAN & CEO Steve Ballmer A Record of Vision & FORMER CEO, MICROSOFT FIRST INVESTOR, STAGWELL Accomplishment In 2015, Mark believed that the marketing industry was ripe “I have known Mark for many, many years. for di
Slide 7: The Legacy Advertising Market Is Ripe For Disruption
STAGWELL OPPORTUNITY THE LEGACY ADVERTISING MARKET Is Ripe For Disruption $2.7B ~ $60B $18B spent with the OTHERS $27B top 4 legacy holding companies1 Stagwell represents only 2% $15B of the global advertising and IBM iX $7B $130B marketing services market ~ $10B $14B Deloitte Ample room to continue
Slide 8: Stagwell Uniquely Positioned To Capture Share As New Markets Emerge
STAGWELL OPPORTUNITY STAGWELL UNIQUELY POSITIONED To Capture Share As New Markets Emerge & Mature $1.3T TOTAL ADDRESSABLE NEW MARKETS IN 2026 AI ARTIFICIAL INTELLIGENCE Delivering proprietary AI-enabled tools and services, developed in-house by Stagwell Marketing Cloud, to help marketers increase pe
Slide 9: Integrated Platform For The Modern Marketer
STAGWELL TODAY INTEGRATED PLATFORM For The Modern Marketer STAGWELL TODAY Stagwell Marketing Cloud Group 1 SaaS and DaaS Tools for the In-House Marketer Digital Transformation 2 Building Digital Platforms & Consumer Experiences Performance Media & Data 3 Integrated Omnichannel Media, Data & E-Commer
Slide 10: Blue-Chip Customer Base: Demonstrated Ability To Land & Expand
STAGWELL TODAY BLUE-CHIP CUSTOMER BASE Demonstrated Ability To Land & Expand 80% CLIENT RETENTION YEAR-OVER-YEAR2 $375M GROWTH IN REVENUE FROM TOP 10 CUSTOMERS1 11% AVERAGE RELATIONSHIP TOP 10 CUSTOMERS3 4K+ BLUE CHIP CUSTOMERS 1 LTM net revenue from 10 largest customers by 2023 net revenue 2 Client
Slide 11: Strategic Value-Added Investment Platform
STAGWELL TODAY STRATEGIC THE VALUE-ADDED PLATFORM Investment Platform Global Media Affiliate Client Marketing Network Reach Services Unified & engaged corporate team delivering value-added $ Growth shared services driving both Central M&A Innovation Group Investment revenue & cost synergies Incentiv
Slide 12: Stagwell's Acquisition Strategy
STAGWELL GROWTH DRIVERS STAGWELL’S ACQUISITION STRATEGY Systematically Expanding Our Digital & Global Footprint INCREASING OUR GROWING OUR REVENUE FROM DIGITAL REVENUE MIX OUTSIDE OF NORTH AMERICA 57% 20% 65% 40% FOCUS Digital Transformation: Platform design, Increasing our global footprint AREAS op
Slide 13: Stagwell's Artificial Intelligence Strategy
STAGWELL GROWTH DRIVERS STAGWELL’S ARTIFICIAL INTELLIGENCE STRATEGY Full-service and self-service business transformation. 1 ENABLE 2 BE EFFICIENT 3 ENGAGE ACROSS OPERATIONS IN MARKETING WITH CUSTOMERS Analyze focus group feedback Homegrown Stori tool Audience persona in a fraction of the time to en
Slide 14: Stagwell Marketing Cloud: SaaS & DaaS Tools
STAGWELL GROWTH DRIVERS STAGWELL MARKETING CLOUD SaaS & DaaS Tools For The In-House Marketer $198M Building complementary software solutions leveraging the domain NET REVENUE expertise and distribution channels already in place at Stagwell from SMC Group in FY23 31% Y/Y GROWTH DIGITAL SERVICES TECHN
Slide 15: Stagwell Marketing Cloud Group: Product Incubation Playbook
STAGWELL GROWTH DRIVERS STAGWELL MARKETING CLOUD GROUP Product Incubation Playbook We've developed a proven strategy to develop and incubate new technologies, making informed product roadmap decisions based off agency clients while WE BUILD leveraging our world-class tech team ADVANCED Faster Shared
Slide 16: Product Spotlight
STAGWELL GROWTH DRIVERS STAGWELL MARKETING CLOUD GROUP Product Spotlight Bringing a whole new level of stadium entertainment and fan engagement to sports and INTEGRATION WITH MLB’S NATIVE entertainment through shared AR BALLPARK APP Revolutionizing the PR process through AI, saving the PR profession
Slide 17: Financial Model: Adding It All Up
STAGWELL FINANCIAL MODEL Potential Equation for Success* ($M) ADDING It All Up 10-12% long-term organic growth target driven by: 10-20% Digital Transformation 5-15% Performance Media & Data 5-15% Research & Strategy ~$3,500 OPPORTUNITY 3-7% Creativity & Communications TO GROW TO + Stagwell Marketing
Slide 18: Proven Leadership Team: Primed To Deliver
STAGWELL LEADERSHIP PROVEN LEADERSHIP TEAM Primed To Deliver FOUNDER & POLLSTER Founded Penn and Schoen in 1975 with his Harvard roommate Doug Schoen GROWER Under Penn’s leadership, firm expanded to 200+ people with offices around the world. Mark Penn ADVISOR Served key corporate (Texaco, AT&T, Micr
Slide 19: Stagwell Is Under-Appreciated
STAGWELL is UNDER- APPRECIATED Industry-leading Stock price doesn’t reflect NET REVENUE GROWTH how Stagwell is disrupting marketing landscape Best-in-Class ADJ. EBITDA MARGIN UNDER-VALUED Efficient On Virtually All Metrics CONVERSION OF EBITDA TO FCF (P/S, EV/EBITDA, P/E) Sustainable LEVERAGE POSITI
Slide 20: Appendix
= me SL ASWELL Appendix
Slide 21: GAAP Consolidated Operating Performance
GAAP CONSOLIDATED OPERATING PERFORMANCE Three Months Ended Dec 31, Twelve Months Ended Dec 31, $ and Shares in Thousands 2023 2022 2023 2022 Revenue $ 654,895 $ 708,185 $ 2,527,177 $ 2,687,792 Cost of services 419,865 419,811 1,621,174 1,673,576 Office & general expenses 179,871 172,415 661,250 601,
Slide 22: Reconciliation of GAAP Net Income to Adj. EBITDA & FCF
RECONCILIATION OF GAAP NET INCOME TO ADJ. EBITDA & FCF Full Year Ended December 31, $ in Thousands 2023 2022 Net Income $ 41,642 $ 50,044 Net income attributable to noncontrolling & redeemable noncontrolling interests (41,508) (30,125) Net income attributable to Stagwell Inc. common shareholders 134
Slide 23: Reconciliation of Combined Net Revenue Growth to Organic Net Revenue Growth
RECONCILIATION OF COMBINED NET REVENUE GROWTH TO COMBINED ORGANIC NET REVENUE GROWTH COMPONENTS OF CHANGE CHANGE $ In thousands, Net Revenue - Year Net Revenue – except Ended December 31, Foreign Net Acquisitions Total Year Ended December percentages 2022 Currency (Divestitures) Organic Change 31, 2
Slide 24: Capital Structure: Net Debt & Share Count
CAPITAL STRUCTURE Net Debt & Debt-Like ($M, as of 12/31/2023) Share Count5 (Thousands, as of 2/22/2024) Revolving Credit Facility $ 59 Class A 117,579 Bonds 1,100 NCI1 32 DAC2 101 Class C 151,649 (equal voting & economic rights to Class A) RNCI3 31 Less: Investments4 22 Share-based awards6 5,936 Les
Slide 25: Thank You
= me SL ASWELL Thank You