Stagwell Inc. · NASDAQ:STGW
Stagwell — MDC Partners — Q2 2019 Earnings Presentation
22 slides from Stagwell's earnings presentation, Aug 7, 2019
Slide 1: Management Presentation Second Quarter 2019 Results
August 7, 2019 Management Presentation Second Quarter 2019 Results
Slide 2: Forward Looking Statements & Other Information
2 FORWARD LOOKING STATEMENTS & OTHER INFORMATION This presentation contains forward - looking statements . Statements in this presentation that are not historical facts, including without limitation statements about the Company’s beliefs and expectations, earnings guidance, recent business and econo
Slide 3: Summary
3 SUMMARY • Net new business rebounded strongly to $43.0 million as agencies took advantage of the continued strength of MDC's pipeline • Aided by ongoing cost - reduction initiatives, MDC delivers strong year - over - year growth in Adjusted EBITDA and 150 basis point improvement in Adjusted EBITDA
Slide 4: Second Quarter 2019 Financial Highlights
4 ----- DRAFT ----- • Revenue of $362.1 million versus $379.7 million a year ago • Organic revenue decrease 2.4%, including a 200 basis point benefit from billable pass through costs • Net income attributable to MDC Partners Inc. common shareholders of $0.8 million in the second quarter of 2019 vers
Slide 5: Six Months 2019 Financial Highlights
5 ----- DRAFT ----- • Revenue of $690.9 million versus $706.7 million a year ago • Organic revenue decreased 1.7%, including a 209 basis point benefit from billable pass through costs • Net loss attributable to MDC Partners Inc. common shareholders of $1.4 million for the first six months of 2019 ve
Slide 6: Consolidated Revenue and Earnings
6 CONSOLIDATED REVENUE AND EARNINGS (US$ in millions, except percentages) Three Months Ended June 30, Six Months Ended June 30, 2019 2018 % Change 2019 2018 % Change Revenue: $ 362.1 $ 379.7 (4.6 ) % $ 690.9 $ 706.7 (2.2 ) % Operating Expenses: Cost of services sold 240.7 253.4 (5.0 ) % 477.9 496.4
Slide 7: Revenue Summary
7 Organic revenue decline of 2.4%, including a 200 basis points benefit from increased billable pass - through costs incurred on clients’ behalf from certain of our partner firms acting as principal. Non - GAAP acquisitions (dispositions), net largely due to impact of the divestiture of Kingsdale RE
Slide 8: Revenue by Geography and Segment
8 REVENUE BY GEOGRAPHY AND SEGMENT 1 Due to changes in the composition of certain business and the Company’s internal management and reporting structure during 20 19, reportable segment results for the 2018 periods presented have been recast to reflect the reclassification of certain businesses betw
Slide 9: Revenue by Client Industry
9 Top 10 clients increased to 24% of revenue versus 23% a year ago (largest <5.1%) REVENUE BY CLIENT INDUSTRY Year - over - Year Growth by Category Q2 2019 Mix
Slide 10: Adjusted EBITDA
10 ADJUSTED EBITDA 1 NM - Not meaningful 2 Adjusted EBITDA is a non - GAAP measure. See appendix for the definition. 3 Due to changes in the composition of certain business and the Company’s internal management and reporting structure during 20 19, reportable segment results for the 2018 periods pre
Slide 11: Covenant EBITDA
COVENANT EBITDA Covenant EBITDA cena ee @ a a ae saeco Interest pense and fnance charge net “somtimes tak Se saeuon ciara a ee Other agjstments net (0) Comes EBITDA mee ha inl ro forma ate fr seins, one inca nother fitment, atin th rt Aree ‘Soren ERETDA ocala in epee opeating rote tie re mone 730, a
Slide 12: Summary of Cash Flow
12 SUMMARY OF CASH FLOW (US$ in millions) Six Months Ended June 30, 2019 2018 Net cash used in operating activities $ (40.2 ) $ (61.7 ) Net cash provided by (used in) investing activities 9.8 (36.1 ) Net cash provided by financing activities 25.7 76.3 Effect of exchange rate changes on cash, cash eq
Slide 13: 2019 Financial Outlook
13 2019 FINANCIAL OUTLOOK Note: The Company has excluded a quantitative reconciliation with respect to the Company’s 2019 guidance under the “unreasona ble efforts” exception in item 10(e)(1)(i)(B) of Regulation S - K. Note: See appendix for definitions of non - GAAP measures 2019 Outlook Commentary
Slide 14: Appendix
14 APPENDIX
Slide 15: Revenue Trending Schedule
15 REVENUE TRENDING SCHEDULE Note: See appendix for definitions of non - GAAP measures Note: Actuals may not foot due to rounding
Slide 16: Adjusted EBITDA Trending Schedule
16 ADJUSTED EBITDA TRENDING SCHEDULE 1 Adjusted EBITDA is a non - GAAP measure. See appendix for the definition Note: Actuals may not foot due to rounding
Slide 17: Reconciliations
RECONCILIATIONS ©Sianition) em em 7 es a 2 Wp [NON-GAAP ACQUSITIONS (DISPOSITIONS), NET (GAAP reves om cue! yeu spss S - $ie6 sam si ws. $e et GAAP reves fom rr yur ago" es 15181208 put of lopon of ASC 608 win oo am mae) Foregnachar pact : Contin oi evens (pont) die GA) 68) G25) CH GOH) GAH ror year
Slide 18: Available Liquidity
18 AVAILABLE LIQUIDITY 1 1 Subject to available borrowings under the Credit Facility. Note: Actuals may not foot due to rounding (US$ in millions) June 30, 2019 December 31, 2018 Commitment Under Facility $ 250.0 $ 325.0 Drawn 27.5 68.1 Undrawn Letters of Credit 4.7 4.7 Undrawn Commitments Under Fac
Slide 19: Current Credit Picture
19 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, pro forma adjustments for acquisition
Slide 20: Temporal Put Obligations and Impact on Adjusted EBITDA
20 TEMPORAL PUT OBLIGATIONS AND IMPACT ON ADJUSTED EBITDA 1 This amount is in addition to ( i ) $23.5 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 Noncontr
Slide 21: Definition of Non-GAAP Measures
21 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