Stagwell Inc. · NASDAQ:STGW
Stagwell — MDC Partners — Q3 2017 Earnings Presentation
22 slides from Stagwell's earnings presentation, Oct 30, 2017
Slide 1: Management Presentation Third Quarter 2017 Results
October 30, 2017 Management Presentation Third Quarter 2017 Results
Slide 2: Forward Looking Statements & Other Information
1 FORWARD LOOKING STATEMENTS & OTHER INFORMATION This presentation, including our “ 2017 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 histor
Slide 3: Third Quarter 2017 Summary
2 THIRD QUARTER 2017 SUMMARY » Strong execution with solid financial results across all key financial metrics » Industry - leading organic revenue growth, including gains in the U.S. in key verticals such as CPG, and continued double - digit growth internationally » Increases in both Adjusted EBITDA
Slide 4: Third Quarter 2017 Financial Highlights
3 » Revenue increased 7.6% to $375.8 million from $349.3 million » Organic revenue growth of 7.8%, including a 180 basis points benefit from increased billable pass - through costs » Net income attributable to MDC Partners common shareholders increased to $16.5 million from a loss of ($32.1) million
Slide 5: Year-to-Date Financial Highlights
4 » Revenue increased 11.6% to $1.11 billion from $995.3 million » Organic revenue growth of 8.4%, including a 200 basis points benefit from increased billable pass - through costs » Net income attributable to MDC Partners common shareholders increased to $14.8 million from a loss of ($54.9) million
Slide 6: Consolidated Revenue and Earnings
5 CONSOLIDATED REVENUE AND EARNINGS 1 Revised due to the correction of prior period financial statements relating to the Company’s deferred tax liability and incom e t ax expense. Note: Actuals may not foot due to rounding. (US$ in millions, except percentages) 2017 2016 (1) 2017 (1) 2016 (1) Revenu
Slide 7: Revenue Summary
6 » Organic revenue growth of 7.8% in Q3, favorably impacted by 180 basis points from increased billable pass - through costs incurred on clients’ behalf REVENUE SUMMARY 1 Non - GAAP Acquisitions (Dispositions), net consists of $3.2 million of Dispositions for the three months ended September 30, 20
Slide 8: Revenue by Geography and Segment
7 REVENUE BY GEOGRAPHY AND SEGMENT » Organic growth by region: United States +6.0%, Other (International) strong and steady at +23.8%, Canada continued to lag but improved to +0.2% Note: Actuals may not foot due to rounding (US$ in millions, except percentages) Total Total Organic Revenue Total Tota
Slide 9: Revenue by Client Industry
8 Year - over - Year Growth by Category » Best performing sectors: Communications, Financials, Food & Beverage » Top 10 clients decreased to 22.3% of revenue vs 22.4% a year ago (largest <4%) REVENUE BY CLIENT INDUSTRY Q3 2017 2017 YTD Above 10% Communications, Financials, Food & Beverage, Consumer
Slide 10: Adjusted EBITDA
9 » Margin expansion of 110 basis points during Q3 and 10 basis points year - to - date ADJUSTED EBITDA 1 Adjusted EBITDA is a non - GAAP measure. See appendix for the definition. Note: Actuals may not foot due to rounding. (US$ in millions, except percentages) 2017 2016 2017 2016 Advertising and Co
Slide 11: Summary of Cash Flow
10 SUMMARY OF CASH FLOW Note: Actuals may not foot due to rounding (US$ in millions) 2017 2016 Net cash provided by (used in) operating activities $22.1 ($41.4) Net cash used in investing activities ($19.5) ($14.7) Net cash (used in) provided by financing activities ($11.7) $15.1 Effect of exchange
Slide 12: 2017 Financial Outlook
11 2017 FINANCIAL OUTLOOK Organic Revenue Adjusted EBITDA Margin Note: The Company has excluded a quantitative reconciliation with respect to the Company’s 2017 guidance under the “unreasona ble efforts” exception in item 10(e)(1)( i )(B) of Regulation S - K. Note: See appendix for definitions of no
Slide 13: Appendix
12 APPENDIX
Slide 14: Revenue Trending Schedule
13 REVENUE TRENDING SCHEDULE Note: See appendix for definitions of non - GAAP measures Note: Actuals may not foot due to rounding (US$ in thousands, except percentages) Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 YTD Revenue United States $252,018 $271,375 $270,512 $291,147 $1,085,051 $252,199 $272,992 $
Slide 15: Adjusted EBITDA Trending Schedule
14 ADJUSTED EBITDA TRENDING SCHEDULE 1 Adjusted EBITDA is a non - GAAP measure. See appendix for the definition 2 Prior to 2017, Adjusted EBITDA included an additional adjustment for acquisition deal costs. Beginning with 2017, on a prospe cti ve basis we no longer include the acquisition deal cost
Slide 16: Acquisition Revenue Detail
15 ACQUISITION REVENUE DETAIL 1 For the nine months ended September 30, 2017, revenue from acquisitions was comprised of $43.5 million from 2016 acquisitions . 2 Contributions to organic revenue growth (decline) represents the change in revenue, measured on a constant currency basis, re lat ive to t
Slide 17: Reconciliations
16 RECONCILIATIONS * GAAP revenue from prior year acquisitions for 2017 and 2016 relates to acquisitions which occurred in 2016 and 2015, respe cti vely. ** Contributions to organic revenue growth (decline) represents the change in revenue, measured on a constant currency basis , r elative to the co
Slide 18: Available Liquidity
17 AVAILABLE LIQUIDITY 1 1 Subject to available borrowings under the Credit Facility. Note: Actuals may not foot due to rounding (US$ in millions) September 30, 2017 December 31, 2016 Commitment Under Facility $325.0 $325.0 Drawn 48.6 54.4 26.7$ Undrawn Letters of Credit 5.0 4.4 Undrawn Commitments
Slide 19: Current Credit Picture
18 CURRENT CREDIT PICTURE 1 These ratios and measures are not based on generally accepted accounting principles and are not presented as alternatives mea sur es of operating performance or liquidity. Some of these ratios and measures include, among other things, proforma adjustments for acquisitions
Slide 20: Temporal Put Obligations and Impact on Adjusted EBITDA
19 TEMPORAL PUT OBLIGATIONS AND IMPACT ON ADJUSTED EBITDA 1 This amount is in addition to ( i ) $42.3 million of opti ons to purchase only exercisable upon termination not within the control of the Company, or death, and (ii) the excess of the in itial redemption value recorded in Redeemable Noncont
Slide 21: Definition of Non-GAAP Measures
20 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 measures." Management believes
Slide 22: MDC Partners contact details
MDC Partners Innovation Center 745 Fifth Avenue, Floor 19 New York, NY 10151 646 - 429 - 1800 www.mdc - partners.com