Stagwell Inc. · NASDAQ:STGW
Stagwell — MDC Partners — Q3 2020 Earnings Presentation
23 slides from Stagwell's earnings presentation, Oct 29, 2020
Slide 1: Management Presentation Third Quarter 2020 Results
Management Presentation Third Quarter 2020 Results October 29, 2020
Slide 2: Forward Looking Statements & Other Information
FORWARD LOOKING STATEMENTS & OTHER INFORMATION This presentation contains forward-looking statements. Statements in this presentation that are not historical facts, including without limitation the information under the heading "Financial Outlook" and statements about the Company’s beliefs and expec
Slide 3: Summary
SUMMARY • Organic Revenue decline of 16.4% in the third quarter and 14.1% YTD driven by lower spending by clients in connection with the COVID-19 pandemic • Sequential revenue growth of 9.1% from the second quarter of 2020. • Adjusted EBITDA Margin for the third quarter of 2020 was 19.1% vs. 14.3% i
Slide 4: Third Quarter 2020 Financial Highlights
----- THIRD DRAFT ----- QUARTER 2020 FINANCIAL HIGHLIGHTS • Revenue of $283.4 million versus $342.9 million in the prior year period • Organic revenue decreased by 16.4% versus the prior year period. Organic revenue was unfavorably impacted by 121 basis points from billable pass through costs • Sequ
Slide 5: 2020 Financial Highlights: Nine Months
----- DRAFT ----- 2020 FINANCIAL HIGHLIGHTS NINE MONTHS • Revenue of $870.8 million versus $1,033.8 million in the prior year period • Organic revenue decreased by 14.1% versus the prior year period. Organic revenue was unfavorably impacted by 198 basis points from billable pass through costs • Adju
Slide 6: Consolidated Revenue and Earnings
CONSOLIDATED REVENUE AND EARNINGS (US$ in millions, except percentages) Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 % Change 2020 2019 % Change Revenue: $ 283.4 $ 342.9 (17.3) % $ 870.8 $ 1,033.8 (15.8) % Operating Expenses: Cost of services sold 172.5 222.4 (22.4) % 5
Slide 7: Revenue Summary
REVENUE SUMMARY (US$ in millions, except percentages) Three Months Ended Nine Months Ended Revenue $ % Change Revenue $ % Change September 30, 2019 $ 342.9 $ 1,033.8 Organic revenue (56.3) (16.4) % (145.3) (14.1) % Non-GAAP acquisitions (dispositions), net (4.1) (1.2) % (13.9) (1.3) % Foreign exchan
Slide 8: Revenue by Geography and Segment
REVENUE BY GEOGRAPHY AND SEGMENT (1) (US$ in millions, except percentages) 2019 2020 Q3 Q4 Q1 Q2 Q3 Organic Organic Organic Organic Organic Total Total Revenue Total Total Revenue Total Total Revenue Total Total Revenue Total Total Revenue Growth Growth Growth Growth Growth Revenue Growth (Decline)
Slide 9: Revenue by Geography and Segment
REVENUE BY GEOGRAPHY AND SEGMENT (1) (US$ in millions, except percentages) Nine Months Ended September 30, 2019 2020 Organic Organic Total Total Revenue Total Total Revenue Growth Growth Revenue Growth (Decline) Revenue Growth (Decline) United States $ 819.3 (3.4) % (4.8) % $ 703.2 (14.2) % (12.9) %
Slide 10: Revenue by Client Industry
REVENUE BY CLIENT INDUSTRY Q3 2020 Mix Year-over-Year Growth by Category Automotive 5% Transportation and Q3 2020 QTD Q3 2020 YTD Travel/Lodging 3% Technology 15% Other 9% 0% to 10% Retail, Healthcare Healthcare Consumer Products, Food and Beverage, Retail, Food & Beverage 17% Automotive, Technology
Slide 11: Adjusted EBITDA
ADJUSTED EBITDA (1) (US$ in millions, except percentages) % Change 2019 2020 Q3 2020 vs. Q3 2019 Q3 Q4 Q1 Q2 Q3 Integrated Networks - Group A 24.0 31.7 16.3 17.2 21.0 (12.5) % Integrated Networks - Group B 22.0 19.5 17.1 16.4 29.6 34.5 % Media & Data Network 1.4 5.4 1.8 0.9 3.0 NM % All Other 9.2 10
Slide 12: Adjusted EBITDA
ADJUSTED EBITDA (1) (US$ in millions, except percentages) Nine Months Ended September 30, 2020 2019 % Change Integrated Networks - Group A $ 54.5 $ 43.1 26.4 % Integrated Networks - Group B 63.1 65.1 (3.1) % Media & Data Network 5.7 2.4 NM % All Other 23.9 27.0 (11.2) % Corporate (17.5) (20.5) (14.6
Slide 13: Covenant EBITDA
COVENANT EBITDA Covenant EBITDA 2019 2020 (LTM) (1) Q2-2020- Q3-2020 - (US$ in millions) Q3 Q4 Q1 Q2 Q3 LTM LTM Net income (loss) attributable to MDC Partners Inc. common shareholders $ (5.1) $ (10.5) $ (2.4) $ (4.1) $ 0.4 $ (22.1) $ (16.7) Adjustments to reconcile to operating income: Accretion on
Slide 14: Summary of Cash Flow
SUMMARY OF CASH FLOW (US$ in millions) Nine Months Ended September 30, 2020 2019 Net cash used in operating activities $ (2.5) $ (5.8) Net cash provided by investing activities 4.5 3.3 Net cash used in financing activities (72.0) (2.2) Effect of exchange rate changes on cash, cash equivalents, and c
Slide 15: 2020 Financial Outlook
2020 FINANCIAL OUTLOOK • Given the uncertainties in the global business environment arising from the COVID-19 pandemic, the Company is not providing a 2020 outlook for Revenue and Covenant EBITDA at this time. 15
Slide 16: Appendix
APPENDIX 16
Slide 17: Revenue Trending Schedule
REVENUE TRENDING SCHEDULE (US$ in thousands, except percentages) 2019 2020 Q1 Q2 Q3 Q4 YTD Q1 Q2 Q3 YTD Revenue United States $ 263,017 $ 284,659 $ 271,671 $ 296,698 $ 1,116,045 $ 264,561 $ 210,342 $ 228,256 $ 703,158 Canada 22,378 24,564 25,895 32,230 105,067 18,256 16,609 20,299 55,164 North Ameri
Slide 18: Adjusted EBITDA Trending Schedule
ADJUSTED EBITDA TRENDING SCHEDULE (US$ in thousands) 2019 2020 Q1 Q2 Q3 Q4 YTD Q1 Q2 Q3 YTD PARTNER FIRMS Revenue $ 328,791 $ 362,130 $ 342,907 $ 381,975 $ 1,415,803 $ 327,742 $ 259,678 $ 283,423 $ 870,843 Operating income 20,504 40,073 38,532 26,899 126,008 37,667 11,921 43,651 93,239 Depreciation
Slide 19: Reconciliations
RECONCILIATIONS (US$ in thousands) 2019 2020 Q1 Q2 Q3 Q4 YTD Q1 Q2 Q3 YTD NON-GAAP ACQUISITIONS (DISPOSITIONS), NET GAAP revenue from current year acquisitions $ — $ 698 $ 1,347 $ 1,396 $ 3,441 $ — $ — $ — $ — (1) GAAP revenue from prior year acquisitions 15,685 1,519 1,109 291 18,604 — — — — Foreig
Slide 20: Available Liquidity
AVAILABLE LIQUIDITY1 (US$ in millions) September 30, 2020 December 31, 2019 Commitment Under Facility $ 211.5 $ 250.0 Drawn — — Undrawn Letters of Credit 18.6 4.8 Undrawn Commitments Under Facility (1) $ 192.9 $ 245.2 Total Cash & Cash Equivalents 37.1 106.9 Liquidity $ 230.0 $ 352.1 1 Subject to av
Slide 21: Current Credit Picture
CURRENT CREDIT PICTURE $211.5 million Credit Facility Covenants (1) Current Debt Maturity Profile (5) (US$ in millions) September 30, 2020 Covenants Total Senior Leverage I. Ratio 0.02 Maximum per covenant 2.00 II. Total Leverage Ratio 4.38 Maximum per covenant 6.25 III. Fixed Charges Ratio 3.03 Min
Slide 22: Definition of Non-GAAP Financial Measures
DEFINITION OF NON-GAAP FINANCIAL MEASURES In addition to its reported results, MDC Partners has included in its earnings release and supplemental management presentation certain financial results that the Securities and Exchange Commission defines as "non-GAAP financial measures." Management believe
Slide 23: MDC Partners
MDC Partners One World Trade Center, Floor 65 New York, NY 10007 646-429-1800 www.mdc-partners.com