Stagwell Inc. · NASDAQ:STGW
Stagwell — MDC Partners — Deutsche Bank Leveraged Finance Conference 2019
19 slides from Stagwell's conference presentation, Sep 25, 2019
Slide 1: Deutsche Bank Leveraged Finance Conference
The picture can't be displayed. Deutsche Bank Leveraged Finance Conference SEPTEMBER 25, 2019
Slide 2: Forward-looking statements and non-GAAP financial measures
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 with sev
Slide 3: How is the Advertising World Progressing?
3 GLOBAL AD SPENDING 2019 (Total $639B) GLOBAL AD SPENDING 2000 (Total $329B) Source: eMarketer 8% 5% 31% 6% 1% 7% 44% Newspapers Magazines Television Radio Cinema Outdoor Internet 33% 15% 35% 9% 6% 2% CMOs have been transformed from brand builders to performance marketers How is the Advertising Wor
Slide 4: MDC is in a strong position to meet the needs of today's CMOs
The picture can't be displayed. MDC is in a strong position to meet the needs of today’s CMOs + benefit from this evolution Unparalleled creativity that fuels the world’s most iconic global brands Disrupting with the disruptors
Slide 5: The New World Plan
the new world plan
Slide 6: Transform MDC from holder of individual companies to a holding company
Transform MDC from holder of individual companies to a holding company From creative company to data & creativity From 25 individual units to multi - agency networks From individual cost centers to centrally managed G&A Position MDC to thrive in this new world PURPOSE
Slide 7: MDC and Stagwell unified go-to-market
STAGWELL MDC BOTH LA SAN DIEGO SF PORTLAND MINNEAPOLIS CHICAGO DETROIT ALBANY NYC DC COLUMBIA ATLANTA NASHVILLE SCOTTSDALE LONDON HAMBURG PARIS MOSCOW DUBAI JERUSALEM TOKYO SEOUL SHANGHAI HONG KONG SINGAPORE SAO PAULO, BR SYDNEY MUMBAI NEW DELHI BANGALORE BANGKOK BEIJING CHENGDU BERLIN AMSTERDAM COP
Slide 8: Data without creativity is as useless as creativity without data
Data without creativity is as useless as Creativity without data DATA CREATIVITY STRATEGY PERFORMANCE A model that is nimble, lean, & focused ▪ Enhanced data and technology expertise ▪ Integrated Media offering ▪ Unique IP ▪ Campaign Media Management From creative agencies to data + creativity power
Slide 9: Providing suite of modern services
PROVIDING SUITE OF MODERN SERVICES Data Analytics Research Production Strategy Creative MEDIA AS COMMON SERVICE SIMPLIFYING Reporting Units Networks 25 7 - 10 Multi - agency networks = more holistic solutions + more effective marketing
Slide 10: Alliances simplify structure & operations
Alliances simplify structure & operations *Targeting $100M in free cash flow including M&A payments from Q2 2019 – Q4 2020 Leveraging scale for greater efficiency Improved compensation to revenue ratio Reduction of overhead at agencies that operate above the mean Reduction in corporate overhead Shri
Slide 11: Progress to date
Progress to date x Established strategy + agency buy - in x Alliance execution underway x OneMDC pitches in progress x $43M of net new business in Q2 19 = strongest in 5 years x Savings actions commenced x DAC continues to decline Net New Business is non - GAAP financial measure defined at the end o
Slide 12: Financial Overview
The picture can't be displayed. f inancial overview
Slide 13: H1 2019 results
The picture can't be displayed. H1 2019 results ▪ Revenue of $690.9 million versus $706.7 million a year ago ▪ Organic revenue decreased 1.7%, including a 209 basis point benefit from billable pass through costs ▪ Net loss attributable to MDC Partners Inc. common shareholders of $1.4 million for the
Slide 14: M&A costs overview
M&A costs overview Source: Company filings 1) Represents aggregate of Contingent Payments and Fixed Payments balances ($ in millions) DAC & NON - CONTROLLING INTEREST BALANCES HAVE DECLINED MATERIALLY 205 347 230 122 84 58 195 69 60 63 52 43 93 79 66 58 65 40 2014 2015 2016 2017 2018 Q2 2019 Deferre
Slide 15: Transformational opportunity
The picture can't be displayed. ▪ Long - term EBITDA margin target: 17 – 19% ▪ Significantly lower M&A obligations, down from $500M (2015) to $140M (Q2 19) ▪ Targeting $100M free cash flow by end 2020 ▪ Reducing leverage, targeting approximately ¾ turn annually ▪ Data + Creativity positions MDC to b
Slide 16: Thank you
thank you MDC Partners Innovation Center | 745 Fifth Avenue, Floor 19 | New York, NY 10151 www.mdc - partners.com
Slide 17: Definition of non-GAAP measures
The picture can't be displayed. Definition of non - GAAP measures ▪ In addition to its reported results, MDC Partners has included in its earnings release and supplemental management presentati on certain financial results that the Securities and Exchange Commission defines as "non - GAAP financial
Slide 18: Revenue reconciliation table
The picture can't be displayed. Revenue reconciliation table Organic Revenue is a non - GAAP financial measure defined at the end of this presentation. ($ in millions) Six Months Ended Revenue $ % Change June 30, 2018 $706.7 Organic revenue growth (decline) (1) (12.1) (1.7%) Non - GAAP acquisitions
Slide 19: EBITDA reconciliation table
The picture can't be displayed. EBITDA reconciliation table 1. Covenant EBITDA is a measure that includes pro forma adjustments for acquisitions, one - time charges, and other adjustments, as d efined in the Credit Agreement. Covenant EBITDA is calculated as the aggregate of operating results for th
MDC Partners — Deutsche Bank Leveraged Finance Conference 2019 on 6ix