Stagwell Inc. · NASDAQ:STGW
Stagwell — Q1 2023 Earnings Presentation
29 slides from Stagwell's earnings presentation, May 9, 2023
Slide 1: First Quarter 2023 Earnings Presentation
First Quarter 2023 EARNINGS PRESENTATION MAY 9 | 2023
Slide 2: Forward-looking statements
This document contains forward-looking statements. within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company’s representatives may also make forward-looking
Slide 3: Definitions of Non-GAAP Financial Measures
DEFINITIONS OF NON-GAAP FINANCIAL MEASURES 3 In addition to its reported results, Stagwell Inc. has included in this earnings presentation certain financial results that the Securities and Exchange Commission (SEC) defines as "non-GAAP Financial Measures." Management believes that such non-GAAP fina
Slide 4: Financial Outlook: Reiterating Full-Year 2023 Outlook
4 FINANCIAL Outlook Reiterating Full-Year 2023 Outlook 7.5 - 10% Organic Net Revenue Growth 10 - 14% Organic Net Revenue Growth Ex-Advocacy $450M - $490M In Adjusted EBITDA 50 - 60% EBITDA Conversion on Free Cash Flow $0.90 - $1.05 In Adjusted Earnings Per Share Note: Guidance as of 5/09/2023. The C
Slide 5: Buy-Back Transaction
5 BUY-BACK Transaction 23.3 million Shares Agreed to be Repurchased from AlpInvest by Stagwell Inc. $6.43 Purchase Price of Shares ~$150 million Dollar Size of Transaction ~267 million Shares Outstanding Post Transactions › On May 9, 2023, Stagwell Inc. agreed to repurchase approximately 23.3 millio
Slide 6: First Quarter Highlights
F I R S T Q U A R T E R H I G H L I G H T S Winning INDUSTRY RECOGNITION Compelling TWO-YEAR GROWTH Investing IN TECHNOLOGY Improving EFFICIENCY Received 70+ awards from industry publications GALE recognized as Breakthrough Media Agency of Year by Adweek Observatory won 3 SABRE Gold Awards for Dorit
Slide 7: Summary Combined Financials
S U M M A R Y C O M B I N E D F I N A N C I A L S Note: Figures may not foot due to rounding. Three Months Ended March 31, 2023 2022 Net Revenue $ 521,662 $ 526,637 Billable Costs 100,782 116,266 Revenue $ 622,444 $ 642,903 Billable Costs 100,782 116,266 Staff costs 349,677 340,638 Administrative co
Slide 8: 1Q Net Revenue
1 Q 2 3 N E T R E V E N U E Note: Figures may not foot due to rounding. Three Months Ended March 31, 2023 Net Revenue Change March 31, 2022 $ 526,637 Organic revenue (16,109) (3.1%) Acquisitions (divestitures), net 18,483 3.5% Foreign currency (7,349) (1.4%) Total Change $ (4,975) (0.9%) March 31, 2
Slide 9: 1Q Net Revenue by Geography
79.9% 7.8% 12.4% 1 Q N E T R E V E N U E B Y G E O G R A P H Y Note: Figures may not foot due to rounding. 1Q Organic Growth Y/Y Geography 1Q23 United States (4.6)% United Kingdom 10.6% Other (0.5)% TOTAL (3.1)% TOTAL EX-ADVOCACY (1.1)% 9 % OF NET REVENUE
Slide 10: Global Network
G L O B A L N E T W O R K 10 North America Latin America Europe Asia Pacific • Australia • China • Hong Kong • India • Indonesia • Japan • Malaysia • Philippines • Taiwan • Thailand • Singapore • South Korea Middle East & Africa • Austria • Belgium • Bulgaria • Italy • Latvia • Romania • Slovak Repu
Slide 11: Our Principal Capabilities
O U R P R I N C I P A L C A P A B I L I T I E S Creativity & Communications Blue-Chip Customer Base Performance Media & Data Addressable on a Global Scale Consumer Insights & Strategy Tracking Across the Entire Consumer Journey Digital Transformation Building & Designing Digital Platforms & Technolo
Slide 12: Net Revenue Growth by Capability
N E T R E V E N U E G R O W T H B Y C A P A B I L I T Y Notes: Advocacy includes Targeted Victory, SKDK, and TMA Direct. Figures may not foot due to rounding. EBITDA includes corporate expenses, notionally allocated ratably across each capability. 1Q23 Principal Capability Organic Net Revenue Growth
Slide 13: Adjusted EBITDA Growth by Capability
A D J E B I T D A G R O W T H B Y C A P A B I L I T Y Note: Advocacy includes Targeted Victory, SKDK, and TMA Direct. Figures may not foot due to rounding. *EBITDA includes corporate expenses, notionally allocated ratably across each capability. Principal Capability 1Q23 Digital Transformation (23%)
Slide 14: 1Q Ex-Advocacy Net Revenue & Adjusted EBITDA
Three Months Ended, March 31, 2023 March 31, 2022 % Change Total Net Revenue $522 $527 (0.9%) Advocacy Net Revenue 27 37 (26.3%) Total Ex Advocacy 494 489 1.0% Three Months Ended, March 31, 2023 March 31, 2022 % Change Total Adj. EBITDA $72 $101 (28.8%) Advocacy Adj. EBITDA 1 12 (90.9%) Total Ex Adv
Slide 15: New Business Update
N E W B U S I N E S S U P D A T E 15 PER CLIENT AT TOP 25 Notable Business WINS & EXPANSIONSNet New Business 1Q23 $53M LTM $212M Avg. Net Revenue 1Q23 $6.2M
Slide 16: We Have Our Financial House in Order
16 WE HAVE OUR FINANCIAL HOUSE in order Refinanced Bonds, Securing $1.1B in financing › Fixed interest rate of 5.625% in rising interest rate environment › ~6 years to maturity in 2029, providing financial flexibility Increased Revolving Credit Facility to $640M with flexible terms, 5-year maturity
Slide 17: Liquidity
17 LIQUIDITY Available Liquidity (as of 3/31/2023) Commitment Under Credit Facility $ 500 Drawn 150 Undrawn Letters of Credit 25 Undrawn Commitments Under Facility $ 325 Total Cash & Cash Equivalents 139 Total Available Liquidity $ 464 $ in Millions
Slide 18: Maintaining Discipline Around Deferred Acquisition Costs
18 MAINTAINING DISCIPLINE AROUND Deferred Acquisition Costs REDUCED DAC BY $59M FROM 1Q22 QUARTER-END BALANCE $224M $166M 1Q22 1Q23
Slide 19: Adjusted Earnings Per Share
A D J U S T E D E A R N I N G S P E R S H A R E Three Months Ended March 31, 2023 Reported (GAAP) Adjustments Non-GAAP Net income attributable to Stagwell Inc. common shareholders $ 443 $ 18,623 $ 19,066 Net income attributable to Class C Shareholders (3,165) 23,104 19,939 Net income – diluted EPS $
Slide 20: GAAP Consolidated Operating Performance
G A A P C O N S O L I D A T E D O P E R A T I N G P E R F O R M A N C E Three Months Ended March 31, 2023 2022 Revenue $ 622,444 $ 642,903 Cost of services 413,898 411,970 Office & general expenses 158,836 144,512 Depreciation & amortization 33,477 31,204 Impairment & other losses - 557 Total operat
Slide 21: Pro Forma Capital Structure
P R O F O R M A C A P I T A L S T R U C T U R E Note: Pro Forma share count assumes full conversion of Class C shares to Class A on a one-to-one basis. Numbers may not foot due to rounding 1. Excludes non-controlling interest of Stagwell Class C shareholders to reflect NCI balance pro forma for full
Slide 22: Stagwell Marketing Cloud Group
22 STAGWELL MARKETING CLOUD GROUP SaaS & DaaS tools for the in-house marketer SMC Real-Time Research SMC Comms Tech SMC Advanced Media Platforms SMC Media Studio SMC Data & AI Marketplace QR Code
Slide 23: Applying a Proven Playbook to Scale Stagwell Marketing Cloud Group
23 APPLYING A PROVEN PLAYBOOK to scale Stagwell Marketing Cloud Group Building complementary software solutions leveraging the domain expertise and distribution channels already in place at Stagwell SMC Advanced Media Platforms Proprietary & Premium Owned Media Channels SMC Media Studio Platform for
Slide 24: Product Incubation Playbook
24 We've developed a proven strategy to develop and incubate new technologies, making informed product roadmap decisions based off agency clients while leveraging our world-class tech team STAGWELL MARKETING CLOUD GROUP Product Incubation Playbook WE BUILD ADVANCED PRODUCTS MORE EFFICIENTLY than the
Slide 25: Product Spotlight: Real-Time Insights
25 REAL-TIME INSIGHTS Product Spotlight Customer Benefit Unlocking continuous brand tracking on an affordable, global, modern basis for research professionals
Slide 26: Product Spotlight: Artificial Intelligence
26 ARTIFICAL INTELLIGENCE Product Spotlight Customer Benefit Revolutionizing the PR process through AI, saving PR professionals from millions of tedious working hours
Slide 27: Product Spotlight: Augmented Reality
27 AUGMENTED REALITY Product Spotlight Customer Benefit Bringing a whole new level of stadium entertainment and fan engagement to sports and entertainment through shared AR
Slide 28: Stagwell Marketing Cloud Group Pricing Model
28 STAGWELL MARKETING CLOUD GROUP Pricing Model Modern, flexible pricing models that fit the needs and budgets for the modern, in-house marketer Subscription Pricing Annual SaaS contract Consumption Fee Data and media spend Advertising-Based Sponsorship fees
Slide 29: Thank You
Thank You Contact Us: IR@StagwellGlobal.com