Slide 1: Management Presentation Second Quarter 2016 Results
July 28, 2016 Management Presentation Second Quarter 2016 Results
Slide 2: Forward Looking Statements & Other Information
2 FORWARD LOOKING STATEMENTS & OTHER INFORMATION This presentation, including our “ 2016 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: Second Quarter 2016 Summary
3 SECOND QUARTER 2016 SUMMARY » Challenging quarter: organic revenue grew 0.3% and Adjusted EBITDA decreased 11.8% » Results impacted by timing and delayed ramp of new business, full quarter impact of prior client losses, international deceleration, decrease in billable pass - through costs, costs i
Slide 4: Second Quarter 2016 Financial Highlights
4 » Revenue increased 0.1% to $337.0 million from $336.6 million » Organic revenue growth of 0.3%, after a 20 basis points reduction from decreased billable pass - through costs » Net income attributable to MDC Partners of $1.2 million versus $29.6 million » Adjusted EBITDA decreased 11.8% to $41.9
Slide 5: First Half 2016 Financial Highlights
5 » Revenue increased 1.1% to $646.1 million from $638.8 million » Organic revenue growth of 1.2%, after a 120 basis points reduction from decreased billable pass - through costs » Net loss attributable to MDC Partners of ($22.1) million versus ($2.5) million » Adjusted EBITDA decreased 5.0% to $74.
Slide 6: Consolidated Revenue and Earnings
6 CONSOLIDATED REVENUE AND EARNINGS Note: Actuals may not foot due to rounding (US$ in millions, except percentages) 2016 2015 2016 2015 Revenue 337.0$ 336.6$ 0.1 % 646.1$ 638.8$ 1.1 % Operating Expenses Cost of services sold 228.8 225.0 1.7 % 440.3 435.5 1.1 % Office and general expenses 72.7 53.1
Slide 7: Revenue Summary
7 » Organic revenue growth negatively impacted by decreased billable pass - through costs by 20 basis points in Q2 and 120 basis points year - to - date REVENUE SUMMARY Note: Actuals may not foot due to rounding (US$ in millions, except percentages) Revenue $ % Change Revenue $ % Change June 30, 201
Slide 8: Revenue by Geography
8 REVENUE BY GEOGRAPHY » U.S. impacted by timing and delayed ramp of new accounts, the full quarter impact of prior client losses, and decreased billable pass - through costs » Deceleration in International due to timing and shift of some work loads for global clients from overseas to domestic agenc
Slide 9: Revenue by Client Industry
9 Q2 2016 Mix Year - over - Year Growth by Category » Fastest growing client sectors: Communications, Food & Beverage, Automotive » Diversification continues: Top 10 clients declined to 23.6% of revenue in Q2 2016 from 24.1% a year ago (largest <4%) REVENUE BY CLIENT INDUSTRY Q2 2016 2016 YTD Above
Slide 10: Organic Revenue Growth vs. Peers
10 ORGANIC REVENUE GROWTH 1 Peers include Omnicom, IPG, WPP, Havas and Publicis . MDC Partners vs. Peers 1 Trailing 12 Month Organic Revenue Growth (Decline)
Slide 11: Adjusted EBITDA
11 » Adjusted EBITDA impacted by delayed revenue, new business start - up costs, and incremental severance expense at corporate related to our strategic action plan ADJUSTED EBITDA 1 Adjusted EBITDA is a non GAAP measure. See schedules 2 through 5 of the Q2 2016 press release for a reconciliation of
Slide 12: Adjusted EBITDA Available for General Capital Purposes
12 ADJUSTED EBITDA AVAILABLE FOR GENERAL CAPITAL PURPOSES 1 Adjusted EBITDA is a non GAAP measure. See schedules 2 through 5 of the Q2 2016 press release for a reconciliation of Net los s t o Adjusted EBITDA. 2 Capital Expenditures, net represents capital expenditures net of landlord reimbursements.
Slide 13: Available Liquidity
13 AVAILABLE LIQUIDITY 1 1 Subject to available borrowings under the Credit Facility. (US$ in millions) June 30, 2016 December 31, 2015 Commitment Under Facility $325.0 $325.0 Drawn 107.4 0.0 Undrawn Letters of Credit 4.6 5.0 Undrawn Commitments Under Facility $213.0 $320.0 Total Cash & Cash Equival
Slide 14: 2016 Financial Outlook
14 2016 FINANCIAL OUTLOOK Revenue Adjusted EBITDA Adjusted EBITDA Available for General Capital Purposes Implied Adjusted EBITDA Margin $1.326 billion $197.7 million $113.4 million 14.9% $1.390 to $1.420 billion $205 to $215 million $110 to $120 million 14.7% to 15.1% +4.8% to +7.1% +3.7% to +8.8% -
Slide 15: Appendix
15 APPENDIX
Slide 16: Revenue Trending Schedule
16 Note: Actuals may not foot due to rounding REVENUE TRENDING SCHEDULE (US$ in thousands, except percentages) Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Q2 YTD Revenue United States $228,833 $243,128 $249,128 $272,385 $993,474 $252,018 $271,375 $270,512 $291,146 $1,085,051 $252,198 $272,991 $525,189 Canada 3
Slide 17: Reconciliations
17 Note: Actuals may not foot due to rounding RECONCILIATIONS Note: Actuals may not foot due to rounding (US$ in millions) Q1 Q2 Q3 Q4 FY Q1 Q2 YTD Other items, net SEC investigation and class action litigation expenses 5,762$ 3,882$ 2,722$ 1,340$ 13,706$ 1,486$ 1,359$ 2,845$ D&O insurance proceeds
Slide 18: Summary of Cash Flow
18 Note: Actuals may not foot due to rounding SUMMARY OF CASH FLOW Note: Actuals may not foot due to rounding (US$ in millions) 2016 2015 Cash flows provided by (used in) continuing operating activities ($138.5) $69.5 Discontinued operations 0.0 (1.0) Net cash provided by (used in) operating activit
Slide 19: Temporal Put Obligations and Impact on EBITDA
19 TEMPORAL PUT OBLIGATIONS AND IMPACT ON EBITDA 1 This amount is in addition to ( i ) $47.1 million of options to purchase only exercisable upon termination not within the control of the Company, or death, and (i i) the excess of the initial redemption value recorded in Redeemable Noncontrolling In
Slide 20: Definition of Non-GAAP Measures
20 DEFINITION OF NON - GAAP MEASURES Organic Revenue: “Organic revenue growth” and “organic revenue decline” refer to the positive or negative results, respectively, of the following calculation: ( i ) the change in revenue during the relevant time period, less (ii) for each business acquired in the
Slide 21: MDC Partners contact details
MDC Partners Innovation Center 745 Fifth Avenue, Floor 19 New York, NY 10151 646 - 429 - 1800 www.mdc - partners.com