Slide 1: Management Presentation Second Quarter & YTD 2014
July 24, 2014 Management Presentation Second Quarter & YTD 2014
Slide 2: Forward Looking Statements & Other Information
2 FORWARD LOOKING STATEMENTS & OTHER INFORMATION This presentation, including our “ 2014 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 histor
Slide 3: Second Quarter 2014 Summary
3 • Solid operating performance continued in the second quarter – results ahead of expectations • Sustained industry - leading organic revenue growth from award - winning partner companies • Strong growth of Net Income attributable to MDC Partners, Adjusted EBITDA, and Adjusted EBITDA Available for
Slide 4: Second Quarter 2014 Financial Highlights
4 • Industry - leading organic revenue growth of 7.0% • Revenue increased 10.5% to $317.7 million from $287.5 million • Net Income attributable to MDC Partners increased 67.8% to $16.5 million from $9.8 million • Adjusted EBITDA increased 9.5% to $48.8 million from $44.6 million • Adjusted EBITDA ma
Slide 5: Year-to-Date 2014 Financial Highlights
5 • Industry - leading organic revenue growth of 7.3% • Revenue increased 10.3% to $610.3 million from $553.1 million • Net Income attributable to MDC Partners increased $41.0 million to $7.6 million from a loss of $33.3 million • Adjusted EBITDA increased 13.0% to $85.3 million from $75.4 million •
Slide 6: Consolidated Revenue and Earnings
6 Note: Actuals may not foot due to rounding CONSOLIDATED REVENUE AND EARNINGS (US$ in millions, except percentages) 2014 2013 2014 2013 Revenue 317.7$ 287.5$ 10.5 % 610.3$ 553.1$ 10.3 % Operating Expenses Cost of services sold 200.2 189.7 5.5 % 391.9 367.5 6.6 % Office and general expenses 78.6 60.
Slide 7: Summary of Segment Results - Revenue
7 • Q2 2014 revenue of $317.7 million represents 10.5% YoY growth • Strength across disciplines and geographies including Advertising, Media, Insights, Strategic Communications & PR, Design, CRM and International SUMMARY OF SEGMENT RESULTS - REVENUE Note: Actuals may not foot due to rounding (US$ in
Slide 8: Organic Revenue Growth by Segment
8 ORGANIC REVENUE GROWTH BY SEGMENT Note: Actuals may not foot due to rounding • Strategic Marketing Services continues to deliver exceptional organic growth, increasing 10.4% in the quarter, and +11.5% year - to - date • Modest decline in Performance Marketing Services; good sequential trend Strate
Slide 9: Second Quarter Revenue by Client Industry
9 Q2 2014 Mix Year - over - Year Growth by Category • Auto, Healthcare and Financials are our fastest growing sectors • Our top 10 clients declined to 24.7% of revenue in Q2 2014 from 28.6% a year ago, demonstrating the ongoing diversification of the business (largest <4%) SECOND QUARTER REVENUE BY
Slide 10: Organic Growth Highlights: Sustained Market Share Gains
10 ORGANIC GROWTH HIGHLIGHTS SUSTAINED MARKET SHARE GAINS Note: Peers include Omnicom, IPG, WPP, Havas and Publicis . WPP and Havas have not yet reported 2Q 2014 results and therefore are not included in the peer aggregate for the most recent quarter.
Slide 11: Summary of Segment Results - Adjusted EBITDA
11 Note: Actuals may not foot due to rounding • Our efforts to optimize profitability and the strong growth of our highest margin businesses are bringing us increasingly closer to our 15 - 17% margin target SUMMARY OF SEGMENT RESULTS – ADJUSTED EBITDA (US$ in millions, except percentages) 2014 2013
Slide 12: Adjusted EBITDA Available for General Capital Purposes
12 Note: Actuals may not foot due to rounding ADJUSTED EBITDA AVAILABLE FOR GENERAL CAPITAL PURPOSES (1) Capital Expenditures, net represents capital expenditures net of landlord reimbursements . (2) Cash Interest, net & Other represents the quarterly accrual of cash interest under our Senior Notes
Slide 13: Available Liquidity
13 AVAILABLE LIQUIDITY (US$ in millions) December 31, 2013 June 30, 2014 Commitment Under Facility $225.0 $225.0 Drawn - - Undrawn Letters of Credit 4.9 5.0 Funds Available Under Facility $220.1 $220.0 Total Cash & Cash Equivalents 102.0 72.3 Liquidity $322.1 $292.3
Slide 14: 2014 Financial Outlook
14 • We are raising our full year outlook given the superior performance in the first half and our expectations for the continued momentum across the portfolio 2014 FINANCIAL OUTLOOK Note: See appendix for definitions of non - GAAP measures 2014 2014 2014 Implied 2013 Initial Guidance Revised Guidan
Slide 15: Appendix
15 APPENDIX
Slide 16: Temporal Put Obligations and Impact on EBITDA
16 TEMPORAL PUT OBLIGATIONS AND IMPACT ON EBITDA Incremental (US$ in millions) Cash Stock Total EBITDA in Period 2014 1.6 0.0 1.6 1.8 2015 3.6 0.0 3.6 1.9 2016 3.5 0.1 3.6 0.1 2017 4.3 0.0 4.3 0.9 Thereafter 3.7 1.5 5.2 0.0 Total $16.7 $1.6 $18.3 $4.7 Effective Multiple 3.9x Estimated Put Impact at
Slide 17: Summary of Cash Flow
17 Note: Actuals may not foot due to rounding SUMMARY OF CASH FLOW Note: Actuals may not foot due to rounding (US$ in millions) 2014 2013 Cash flows provided by continuing operating activities $33.1 $55.8 Discontinued operations (0.3) (1.7) Net cash provided by operating activities $32.8 $54.1 Cash
Slide 18: Definition of Non-GAAP Measures
18 Note: Actuals may not foot due to rounding 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 adjust
Slide 19: MDC Partners contact details
MDC Partners Innovation Centre 745 Fifth Avenue, Floor 19 New York, NY 10151 646 - 429 - 1800 www.mdc - partners.com