Stagwell Inc. · NASDAQ:STGW
Stagwell — MDC Partners — William Blair Emerging Growth Conference 2009
21 slides from Stagwell's conference presentation, Oct 7, 2009
Slide 1: Where Great Talent Lives
MDC (MX) PARTNERS Where Great Talent Lives William Blair Emerging Growth Conference October 6, 2009 (Nasdaq: MDCA / TSX: MDZ.A)
Slide 2: Forward Looking Statements & Other Information
JPARTNER Forward Looking Statements & Other Information ‘This presentation contains forward-looking statements. The Company's representatives may also make forward-looking statements orally ffom time to time. Statements in this presentation that are not historical facts, including statements about t
Slide 3: MDC Partners is a Global Marketing Services Company Built for Growth
Ss JPARTNER MDC Partners is a Global Marketing Services Company Built for Growth > Over 30 brands in the US, Canada and Europe +> 9 Largest Marketing Services Firm in the World > 2009E Revenues of $545-$575 million > Best in breed organic growth > 70% of revenues from non-traditional marketing servi
Slide 4: Our Clients Are Some of the Most Recognized Brands in the World
MDC(()PARTNERS Our Clients Are Some of the Most Recognized Brands in the World BURGER — = Ca i =, MOLSON Coots. 2. ¥, Fax] fo o>" i {7 So re, 0" > BW DIAGEO 4 h U | U BuTER oO CWeightWatchers i _ Sprint y Panasonic Kao
Slide 5: i
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Slide 6: Our Current Strategy Makes Us Unique
Our Current Strategy Makes Us Unique Pd > Small and nimble / Media-agnostic approach > Breaking the mold with Digital Innovation / Gaining market share +> Expanding margins / Improving operating leverage > Growing cash flow / Attractive valuation > Improving capital structure / Deleveraging
Slide 7: The Drive to 40% Digital
We Are Not Complacent: ; The Drive to 40% Digital - > Formal plan to aggressively grow digital revenues to an industry leading position over next 3 to 5 years > Leverage emerging and social media as a platform for growth > Facilitate expansion of existing platforms > Acquire capabilities and platfor
Slide 8: MDC Partners Mix vs. Industry - Today and the Future
MDC Partners Mix vs. Industry — Today andthe Future er Industry Mix Digital 12% Other Non- Traditional 41% Advertising ‘Source: Advertsing Age. 47% MDC Mix - Today MDC Mix - Future Digital Other Non- anil Traditional Other Non- Digital 35% Traditional 40% 44% ‘Advertising ‘Advertising 28% pp
Slide 9: Our Positioning Has Driven Strong Wins and Market Share Gains
Our Positioning Has Driven Strong Wins and Market Share Gains... $US Millions $100 $80 $60 $40 $20 $0 $69.4 iC $77.3 WOPARTNERS Average: $70 million 2006 2007 2008
Slide 10: Global Expansion Adds New Leg to our Growth Story
MDC(X)PARTNERS Global Expansion Adds New Leg to our Growth Story * fj +> CP+B Europe launched July 1st, 2009 with acquisition of Daddy * Other Agencies evaluating > Leverage existing clients overseas > Pursue new clients on the Continent > Participate in Cross-Border pitches for first time = Open up
Slide 11: Financial Review
MDC(K) PARTNERS Where Great Talent Lives Financial Review
Slide 12: Our Goal for 2009 is to Grow the Bottom Line and Free Cash Flow
MDC(X)PARTNERS OUR GOAL FOR 2009 IS TO GROW THE BOTTOM LINE AND FREE CASH FLOW
Slide 13: Ongoing Actions to Optimize our Bottom Line
Ongoing Actions to Optimize our Bottom Line Pad > Strategic Resource Center a valuable corporate offering > Portfolio optimization initiatives — Consolidation of complimentary businesses to build scale: * Accent /Targetcom * HL Group / Clifford PR * Zig/ACLC * KBP Partnership / Company C — Sale of n
Slide 14: Historically, Revenue Growth Set Us Apart
MDC 00 PAR Historically, Revenue Growth Set Us Apart... $US Millions $700 $600 $500 $400 $300 $200 $100 $0 + R 26.2% eee S $585 $545-$575 ae $341 $226 il il $261 2004 2005 2006 2007 2008 YTD "20096 2009
Slide 15: Organic growth versus peers and industry
25% 25% 20% 15% 11.9% 10%] gg, 4% 34% ae 49% 5.3% 45% 31% 27% 32% 0% 2005 2006 2007 2008 5% (3.7%) “10% =Mmoc Peers - NA Only (OMC, IPG, WPP, PUB) Industry Avg - NA Only Note: Source: Company flings. ZenithOptimedia Adverising Expenditure Forecasts ~ July 2008 'MDC's 2007-2008 results have been adju
Slide 16: In This Economy, Focus on MDC EBITDA and Free Cash Flow Are a Priority
...In This Economy, Focus on MDC EBITDA and Free Cash FlowAreAPriority __ i $US Millions $70 $61 63-65 70% $60 60% $50 50% $40 $37-$39 40% $30 30% $20 20% $10 + s9 10% $- 4 n n n H + 0% 2005 2006 2007 2008 2009E FCF gam! MDC EBITDA —®— FCF/MDC EBITDA ‘Note: 2008-2008 resutts have been adjusted for d
Slide 17: Free Cash Flow Emergence Not Evident in Valuation
PARTNERS Free Cash Flow Emergence Not Evident in Valuation ¥ $US Millions $40 $37-$39 7 50% $30 $20 2005 2006 2007 2008 2009E (mm FCF —@— Yield % Note: 2008-2008 yield represents FCF / Market Cap based on year end market price. 2008 yield represents FCF / Market Cap based on market price on October
Slide 18: Available Liquidity at June 30, 2009
Available Liquidity at June 30, 2009 > Cash flow strong in Q2 2009 58 inmitiny Commitment Under Facility $185.0 Revolver 119 ; ie ‘Tein Loa A! dae > Senior leverage ratio at ‘Delayed Draw: Team Loan; —n0, quarter end stood at 1.57x 141.9 Letters of Credit 44 Funds Available Under Facility $s 387 > C
Slide 19: Revenue, MDC's Share of EBITDA, Free Cash Flow
Revenue ‘MDC's Share of EBITDA Free Cash Flow, Implied ‘Year over Year Growth ‘Note: See appendix for definitions of non-GAAP measures
Slide 20: MDC Partners is well positioned for a difficult economy
> MDC Partners is well positioned for a difficult economy — Weathering the downturn and improving efficiency > Will benefit significantly when the economy turns — Accelerating growth > Emerging Free Cash Flow / Attractive valuation > Global expansion is big opportunity > Near-term catalysts as signi
Slide 21: Where Great Talent Lives
MDC (i) PARTNERS Where Great Talent Lives William Blair Emerging Growth Conference October 6, 2009 (Nasdaq: MDCA / TSX: MDZ.A)
MDC Partners — William Blair Emerging Growth Conference 2009 on 6ix