Stagwell Inc. · NASDAQ:STGW

Stagwell — MDC Partners — Q1 2016 Earnings Presentation

21 slides from Stagwell's earnings presentation, May 3, 2016

  1. Slide 1: Management Presentation First Quarter 2016 Results

    Management Presentation First Quarter 2016 Results May 3, 2016

  2. Slide 2: Forward Looking Statements & Other Information

    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 historical fact

  3. Slide 3: First Quarter 2016 Summary

    FIRST QUARTER 2016 SUMMARY  Positive but uneven organic growth due to timing of revenue recognition, continued decline in billable pass-through costs, and shifts in spend by some clients  Good start to the year for profitability: Q1 Adjusted EBITDA margins +30 basis points; on target to achieve $1

  4. Slide 4: First Quarter 2016 Financial Highlights

    FIRST QUARTER 2016 FINANCIAL HIGHLIGHTS  Organic revenue growth of 2.2%, after a 241 basis points reduction from significantly lower billable pass-through costs  Revenue increased 2.3% to $309.0 million from $302.2 million  Net loss attributable to MDC Partners improved to ($23.3) million vs ($32

  5. Slide 5: Consolidated Revenue and Earnings

    CONSOLIDATED REVENUE AND EARNINGS (US$ in millions, except percentages) Three Months Ended March 31, 2016 2015 % Change Revenue $ 309.0 $ 302.2 2.3 % Operating Expenses Cost of services sold 211.4 210.4 0.5 % Office and general expenses 77.8 74.3 4.7 % Depreciation and amortization 11.2 12.3 (8.8) %

  6. Slide 6: Revenue Summary

    REVENUE SUMMARY (US$ in millions, except percentages) Three Months Ended Revenue $ % Change March 31, 2015 $302.2 Foreign Exchange Impact (3.6) -1.2% Acquisition Growth 3.8 1.3% Organic Growth 6.6 2.2% Total Change 6.8 2.3% March 31, 2016 $309.0  Organic growth of +2.2%, negatively impacted by 241

  7. Slide 7: Revenue by Geography

    REVENUE BY GEOGRAPHY (US$ in millions, except percentages) Three Months Ended March 31, 2016 % Total % Organic Revenue $ Growth Growth United States $252.2 0.1% -1.2% Canada 28.4 -4.8% 4.5% North America 280.6 -0.4% -0.6% Other 28.4 39.5% 41.4% Total $309.0 2.3% 2.2%  U.S. declined due to decreased

  8. Slide 8: Revenue by Client Industry

    REVENUE BY CLIENT INDUSTRY Q1 2016 Mix Year-over-Year Growth by Category Q1 2016 Above 10% Technology 0% to 10% Automotive, Food & Beverage, Consumer Products Below 0% Communications, Healthcare, Retail, Financials  Fastest growing client sectors: Technology, Automotive, Food & Beverage  Diversifi

  9. Slide 9: Organic Growth: MDC Partners vs. Peers

    ORGANIC GROWTH MDC Partners vs. Peers1 Trailing 12 Month Organic Revenue 1 Peers include Omnicom, IPG, WPP, Havas and Publicis. 9

  10. Slide 10: Adjusted EBITDA

    ADJUSTED EBITDA (US$ in millions, except percentages) Three Months Ended March 31, 2016 2015 % Change Advertising and Communications 42.8 44.2 (3.3) % Corporate Group (10.0) (13.1) (23.8) % Adjusted EBITDA (1) $ 32.8 $ 31.2 5.3 % margin 10.6% 10.3%  Adjusted EBITDA growth and margin expansion aided

  11. Slide 11: Adjusted EBITDA Available for General Capital Purposes

    ADJUSTED EBITDA AVAILABLE FOR GENERAL CAPITAL PURPOSES (US$ in millions) Three Months Ended March 31, 2016 2015 Adjusted EBITDA (1) $32.8 $31.2 Net Income Attibutable to the Noncontrolling Interests (0.9) (2.4) Capital Expenditures, net (2) (5.5) (5.3) Cash Taxes (0.1) (0.5) Cash Interest, net & Oth

  12. Slide 12: Available Liquidity

    AVAILABLE LIQUIDITY1 (US$ in millions) March 31, 2016 December 31, 2015 Commitment Under Facility $325.0 $325.0 Drawn 17.0 0.0 Undrawn Letters of Credit 4.6 5.0 Undrawn Commitments Under Facility $303.4 $320.0 Total Cash & Cash Equivalents 21.8 61.5 Liquidity $325.2 $381.5 1 Subject to available bor

  13. Slide 13: 2016 Financial Outlook

    2016 FINANCIAL OUTLOOK Prior Revised Implied 2015 2016 2016 Year over Year Actuals Guidance Guidance Change Revenue $1.326 billion $1.410 to $1.440 billion $1.410 to $1.440 billion +6.3% to +8.6% Adjusted EBITDA $197.7 million $225 to $235 million $225 to $235 million +13.8% to +18.9% Implied Adjust

  14. Slide 14: Appendix

    APPENDIX 14

  15. Slide 15: Temporal Put Obligations and Impact on EBITDA

    TEMPORAL PUT OBLIGATIONS AND IMPACT ON EBITDA Estimated Put Impact at March 31, 2016 Payment Consideration Incremental (US$ in millions) Cash Stock Total Income in Period 2016 2.6 0.0 2.6 1.1 2017 3.7 0.0 3.7 0.0 2018 2.9 0.1 3.0 2.4 2019 1.6 0.0 1.6 0.0 Thereafter 5.8 0.0 5.8 1.9 Total $16.6 $0.1 $

  16. Slide 16: Summary of Cash Flow

    SUMMARY OF CASH FLOW Three Months Ended March 31, (US$ in millions) 2016 2015 Cash flows use in continuing operating activities ($128.7) ($112.4) Discontinued operations 0.0 (1.3) Net cash used in operating activities ($128.7) ($113.7) Cash flows used in continuing investing activities ($8.1) ($8.9)

  17. Slide 17: Revenue Trending Schedule

    REVENUE TRENDING SCHEDULE (US$ in thousands, except percentages) 2014 2015 2016 Q1-14 Q2-14 Q3-14 Q4-14 FY 2014 Q1-15 Q2-15 Q3-15 Q4-15 FY 2015 Q1-16 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 Canada 30,913 39,028 38,052

  18. Slide 18: Organic Growth Methodology

    ORGANIC GROWTH METHODOLOGY Year over Year Change in GAAP Revenue Less: Impact of Foreign Currency Less: Impact of Acquisitions* __________________________ = Organic Growth * Includes revenue prior to MDC’s ownership of acquisitions completed in the current year in addition to revenue from acquisitio

  19. Slide 19: Acquisition Revenue Disclosures

    ACQUISITION REVENUE DISCLOSURES 2015 10K, MD&A Section, page 20: Represents the incremental impact on revenue for the comparable period prior to MDC’s ownership from businesses acquired in the current year, in addition to revenue from businesses acquired in the prior year through the 12 month annive

  20. Slide 20: Definition of Non-GAAP Measures

    DEFINITION OF NON-GAAP MEASURES Adjusted EBITDA: Adjusted EBITDA is a non-GAAP measure, that represents operating profit plus depreciation and amortization, stock-based compensation, acquisition deal costs, deferred acquisition consideration adjustments, distributions from non-consolidated affiliate

  21. Slide 21: MDC Partners Innovation Center, New York

    MDC Partners Innovation Center 745 Fifth Avenue, Floor 19 New York, NY 10151 646-429-1800 www.mdc-partners.com

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