Slide 1: Management Presentation: Third Quarter 2011 Results
Management Presentation November 2, 2011 Third Quarter 2011 Results
Slide 2: Forward-Looking Statements
This presentation, including our “ 2011 Financial Outlook”, contains forward - looking statements . The Company’s representatives may also make forward - looking statements orally from time to time . Statements in this presentation that are not historical facts, including statements about the Compan
Slide 3: Key Highlights
KEY HIGHLIGHTS • Q3 2011 organic revenue growth of 17.9% and YTD organic growth of 21.5% • Q3 2011 revenue increased 33.4% to $238.2 million versus $178.6 million in Q3 2010 • Q3 2011 EBITDA decreased 21.1% to $16.3 million versus $20.6 million in Q3 2010 • Net new business wins of $28.9 million for
Slide 4: Consolidated Revenue and Earnings
CONSOLIDATED REVENUE AND EARNINGS (US$ in millions, except percentages) 2011 2010 2011 2010 Revenue 238.2$ 178.6$ 33.4 % 696.2$ 484.4$ 43.7 % Operating Expenses Cost of services sold 175.4 122.7 42.9 % 497.0 335.7 48.1 % Office and general expenses 56.6 45.1 25.5 % 156.1 118.5 31.8 % Depreciation an
Slide 5: Summary of Segment Results - Revenue
SUMMARY OF SEGMENT RESULTS - REVENUE • Strategic Marketing Services Group: Technology, integrated marketing and communication service firms and strategic consulting service firms. • Maintained double digit organic growth despite the roll off associated with a client loss from the first quarter. • Pe
Slide 6: Third Quarter 2011 Revenue Growth by Segment
THIRD QUARTER 2011 REVENUE GROWTH BY SEGMENT Strategic Performance Weighted Marketing Marketing Average Services Services Total Organic Growth 14.3% 23.8% 17.9% Acquisition Growth 16.9% 10.7% 14.5% Foreign Exchange Growth 0.9% 0.9% 1.0% Total 32.1% 35.4% 33.4%
Slide 7: Year to Date 2011 Revenue Growth by Segment
YEAR TO DATE 2011 REVENUE GROWTH BY SEGMENT Strategic Performance Weighted Marketing Marketing Average Services Services Total Organic Growth 23.1% 18.8% 21.5% Acquisition Growth 19.3% 24.4% 21.2% Foreign Exchange Growth 1.0% 1.2% 1.0% Total 43.4% 44.4% 43.7%
Slide 8: Third Quarter Revenue by Client Sector
THIRD QUARTER REVENUE BY CLIENT SECTOR Note: Actuals may not foot due to rounding Retail, 16% Other, 12% Financials, 8% Communications, 16% Consumer Products, 29% Technology, 12% Healthcare, 6% Auto, 3% Q3 2011 Q3 2010 Retail, 12% Communications, 13% Other, 15% Financials, 9% Auto, 4% Healthcare, 5%
Slide 9: Outperformance Despite More Difficult Comparisons
Outperformance Despite More Difficult Comparisons Note: Peers include Omnicom, Interpublic, WPP Group, Havas and Publicis for 1Q08 - 3Q11 ORGANIC GROWTH 3Q +17.9% MDC Partners vs. Peers Trailing 12 Month Organic Revenue -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 1Q082Q083Q084Q081Q092Q093Q094Q091
Slide 10: Summary of Segment Results - EBITDA
SUMMARY OF SEGMENT RESULTS - EBITDA (US$ in millions, except percentages) 2011 2010 2011 2010 EBITDA Strategic Marketing Services 10.0$ 15.9$ (37.0) % 54.3$ 44.1$ 23.1 % margin 6.9% 14.4% 12.3% 14.3% Performance Marketing Services 11.4 7.9 44.3 % 23.9 15.1 58.8 % margin 12.4% 11.6% 9.4% 8.6% Marketi
Slide 11: Free Cash Flow
FREE CASH FLOW (US$ in millions) 2011 2010 2011 2010 EBITDA $16.3 $20.6 $63.5 $48.5 Net Income Attibutable to Noncontrolling Interests (2.0) (1.4) (6.1) (4.5) Capital Expenditures (9.2) (2.4) (16.4) (8.2) Cash Taxes 0.0 0.0 (0.2) (0.8) Cash Interest, net and other (9.8) (8.0) (28.2) (22.0) Free Cash
Slide 12: Liquidity
LIQUIDITY *Note: At September 30, 2011, after giving effect to the limitations under the 11% Senior Notes indenture, approximately $32 mi llion was available under the bank credit facility. (US$ in millions) Commitment Under Facility 150.0$ Drawn 47.6 Letters of Credit 5.5 Funds Available Under Faci
Slide 13: 2011 Financial Outlook
2011 FINANCIAL OUTLOOK Revised 2011 Guidance Revenue $915 - $930 million EBITDA $90 - $100 million Free Cash Flow $23 - $33 million + Change in Working Capital and Other +$20 million Total Free Cash Flow $43 - $53 million Note: See appendix for definitions of non-GAAP measures
Slide 14: Appendix
APPENDIX
Slide 15: Temporal Put Obligations and Impact on EBITDA
TEMPORAL PUT OBLIGATIONS AND IMPACT ON EBITDA Note: Excludes put rights of $54.5 million exercisable pursuant to termination of employment or death. Incremental (US$ in millions) Cash Stock Total EBITDA in Period 2011 4.1 0.5 4.6 2.8 2012 14.4 0.8 15.2 1.7 2013 5.9 1.2 7.1 1.2 2014 3.8 0.7 4.5 0.8 T
Slide 16: Balance Sheet: 2016 Senior Notes
BALANCE SHEET: 2016 SENIOR NOTES Principal Amount $345 Million Date October 23, 2009/May 14, 2010/April 19, 2011 Maturity November 1, 2016 Security Unsecured Coupon 11% Ratings Moody’s -Corporate: B1; Notes: B2 S&P: Corporate: B+; Notes: B+ Principal Amount $345 Million Date October 23, 2009/May 14,
Slide 17: Balance Sheet: Revolving Credit Facility
BALANCE SHEET: REVOLVING CREDIT FACILITY Amount $150 Million Type Senior Secured Maturity October 23, 2015 Facility Fee 50bps per annum Drawn Rate Prime + 225bps / LIBOR +250bps Covenants •Minimum EBITDA: $94.6 million •Fixed Charge Coverage Ratio: 1.25:1.0 •Senior Leverage Ratio: 2.0:1.0 •Total Lev
Slide 18: Summary of Cash Flow
SUMMARY OF CASH FLOW (US$ in millions) 2011 2010 Cash flows (used in) provided by continuing operating activities ($6.2) $27.0 Discontinued operations - (1.7) Net cash (used in) provided by operating activies ($6.2) $25.3 Cash flows used in continuing investing activities ($69.3) ($86.4) Discontinue
Slide 19: Definition of Non-GAAP Measures
DEFINITION OF NON - GAAP MEASURES • EBITDA: EBITDA is a non-GAAP measure, that represents operating profit plus depreciationand amortization, stock- based compensation, acquisition deal costs, deferred acquisitionconsideration adjustments and profit distributions from affiliates. • Organic Growth: O