Stagwell Inc. · NASDAQ:STGW
Stagwell — MDC Partners — Q3 2013 Earnings Presentation
19 slides from Stagwell's earnings presentation, Oct 28, 2013
Slide 1: Management Presentation Third Quarter Results
October 28, 2013 Management Presentation Third Quarter Results
Slide 2: Forward-looking statements
2 This presentation, including our “ 2013 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 Comp
Slide 3: Summary
3 • Organic revenue growth acceleration and margin improvement driving results ahead of expectations • New business wins and pipeline remain robust as incremental share of the client’s wallet and increasing market share provide visibility for future performance • Significant free cash flow generatio
Slide 4: Key Financial Highlights
4 QUARTERLY DIVIDEND INCREASED 41.2% TO $0.24 FROM $0.17 PER SHARE PRE - SPLIT, UNDERSCORING CONTINUED STRONG FREE CASH FLOW GENERATION • Organic revenue increased 9.3% • Q3 2013 r evenue increased from $265.9 million to $289.0 million, an increase of 8.7% • Q3 2013 EBITDA increased from $34.4 milli
Slide 5: Consolidated Revenue and Earnings
5 Note: Actuals may not foot due to rounding CONSOLIDATED REVENUE AND EARNINGS (US$ in millions, except percentages) 2013 2012 2013 2012 Revenue 288.9$ 265.9$ 8.7 % 842.5$ 771.9$ 9.1 % Operating Expenses Cost of services sold 189.2 179.1 5.7 % 556.8 540.1 3.1 % Office and general expenses 89.0 72.3
Slide 6: Summary of Segment Results - Revenue
6 • Strategic Marketing Services organic growth accelerated by 640 basis points to 15.9% in the quarter • Strong new business wins over the last several quarters enhances visibility on financial performance SUMMARY OF SEGMENT RESULTS - REVENUE Note: Actuals may not foot due to rounding (US$ in milli
Slide 7: Third Quarter 2013 Revenue Growth by Segment
7 Note: Actuals may not foot due to rounding THIRD QUARTER 2013 REVENUE GROWTH BY SEGMENT Note: Actuals may not foot due to rounding Strategic Performance Weighted Marketing Marketing Average Services Services Total Organic Growth 15.9% -3.5% 9.3% Foreign Exchange Growth -0.4% -1.1% -0.7% Total 15.5
Slide 8: Year to Date 2013 Revenue Growth by Segment
8 Note: Actuals may not foot due to rounding (US$ in millions, except percentages) 2013 2012 Revenue 267.0$ 235.2$ 13.6 % Operating Expenses Cost of services sold 179.0 176.0 1.7 % Office and general expenses 68.0 59.9 13.6 % Depreciation and amortization 9.6 10.0 (3.7) % Operating profit (loss) 10.
Slide 9: Third Quarter Revenue by Client Sector
9 Consumer Products 30% Retail 16% Communications 11% Other 12% Financials 7% Technology 12% Healthcare 6% Auto 6% Consumer Products 32% Retail 17% Communications 12% Other 12% Financials 8% Technology 8% Healthcare 5% Auto 6% Q3 2013 Q3 2012 • Technology was our Fastest Growing Sector • Our Busines
Slide 10: Organic Growth Highlights Sustained Market Share Gains
10 MDC TODAY ORGANIC GROWTH HIGHLIGHTS SUSTAINED MARKET SHARE GAINS -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% MDC Partners vs. Peers Trailing 12 Month Organic Revenue MDC Partners Peers Notes: *Peers include Omnicom, Interpublic, WPP Group, Havas and Publicis . * Due to timing of earnings Havas
Slide 11: Summary of Segment Results - EBITDA
11 Note: Actuals may not foot due to rounding • We remain focused on sustainable profitable growth by optimizing the conversion of incremental revenues to EBITDA and Free Cash Flow SUMMARY OF SEGMENT RESULTS - EBITDA (US$ in millions, except percentages) 2013 2012 2013 2012 EBITDA Strategic Marketin
Slide 12: Free Cash Flow
12 Note: Actuals may not foot due to rounding FREE CASH FLOW (US$ in millions) 2013 2012 2013 2012 Cash Flow Provided by Continuing Operating Activities $58.6 $22.8 $113.2 $19.4 Distributions 0.1 0.4 3.2 0.5 Interest Expense, net 10.6 11.5 33.2 34.2 Changes in Working Capital (17.9) 0.7 (43.7) 21.4
Slide 13: Available Liquidity
13 AVAILABLE LIQUIDITY September 30, 2013 December 31, 2012 (US$ in millions) Commitment Under Facility $225.0 $150.0 Drawn - - Undrawn Letters of Credit 5.0 4.8 Funds Available Under Facility $220.0 $145.2 Total Cash & Cash Equivalents 63.3 60.3 Liquidity $283.3 $205.5
Slide 14: 2013 Financial Outlook
14 • Continued strong year to date financial results and margin expansion lead us again to increase financial guidance for 2013 2013 FINANCIAL OUTLOOK Prior Revised Implied 2012 2Q 2013 2013 Year over Year Actuals Guidance Guidance Change Revenue $1.07 billion $1.155 - $1.180 billion $1.155 - $1.180
Slide 15: Appendix
15 APPENDIX
Slide 16: Temporal Put Obligations and Impact on EBITDA
16 TEMPORAL PUT OBLIGATIONS AND IMPACT ON EBITDA Incremental (US$ in millions) Cash Stock Total EBITDA in Period 2013 1.4 0.3 1.7 1.5 2014 1.3 0.4 1.7 0.2 2015 3.7 0.4 4.1 1.7 2016 2.7 0.1 2.8 - Thereafter 5.0 0.0 5.0 0.3 Total $14.1 $1.2 $15.3 $3.7 Effective Multiple 4.1 Estimated Put Impact at Sep
Slide 17: Summary of Cash Flow
17 Note: Actuals may not foot due to rounding SUMMARY OF CASH FLOW Note: Actuals may not foot due to rounding (US$ in millions) 2013 2012 Cash flows provided by continuing operating activities $113.2 $19.4 Discontinued operations (7.8) (3.5) Net cash provided by operating activities $105.4 $15.8 Cas
Slide 18: Definition of Non-GAAP Measures
18 MDC TODAY DEFINITION OF NON - GAAP MEASURES EBITDA: EBITDA is a non - GAAP measure, that represents operating profit plus depreciation and amortization, stock - based compensation, acquisition deal costs, deferred acquisition consideration adjustments and profit distributions from affiliates. Org
Slide 19: MDC Partners contact details
MDC Partners Innovation Centre 745 Fifth Avenue, Floor 19 New York, NY 10151 646 - 429 - 1800 www.mdc - partners.com