Stagwell Inc. · NASDAQ:STGW
Stagwell — Investor Presentation (October 2023)
22 slides from Stagwell's investor presentation, October 2023
Slide 1: Investor Presentation October 2023
Investor Presentation OCTOBER | 2023
Slide 2: Disclaimer
DISCLAIMER Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statements. Such risk factors include, but are not limited to, the following: • risks associated w
Slide 3: Disclaimer: Forward-Looking Statements
DISCLAIMER Forward-Looking Statements This presentation 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 repre
Slide 4: Introduction to Stagwell: At a Glance
INTRODUCTION TO STAGWELL STAGWELL At A Glance Mark Penn $2.7B 57% Chairman & CEO FY22 GAAP REVENUE Digital in FY22 $451M ~$270M “Stagwell is a holistic, technology-first, enterprise FY22 ADJ. EBITDA FY22 FREE CASH FLOW services company owing to its combination of ad agency creative and technology en
Slide 5: Stagwell From Zero: Story to Market Hero
INTRODUCTION TO STAGWELL STAGWELL FROM ZERO Story to Market Hero $2.7B Founded in late 2015 with a vision for a FY 2022 REVENUE new digital-first marketing company, Stagwell has grown to become the first Marketing Services company in 40+ years to reach competitive scale Driven by visionary leadershi
Slide 6: Visionary Leadership From an Industry Veteran
INTRODUCTION TO STAGWELL VISIONARY LEADERSHIP From An Industry Veteran Mark Penn Steve Ballmer Chairman & CEO Former CEO, Microsoft First Investor, Stagwell A Record of Vision & Accomplishment “I have known Mark for many, many years. At Microsoft, he did some critical work for In 2015, Mark believed
Slide 7: The Legacy Advertising Market Is Ripe For Disruption
THE LEGACY ADVERTISING MARKET STAGWELL OPPORTUNITY Is Ripe For Disruption $2.7B ~ $60B $18B spent with the OTHERS $27B top 4 legacy holding companies1 Stagwell represents only 2% $15B of the global advertising and IBM iX $7B marketing services market ~$130B $10B $14B Deloitte Ample room to continue
Slide 8: Stagwell Uniquely Positioned To Capture Share As New Markets Emerge
STAGWELL UNIQUELY POSITIONED STAGWELL OPPORTUNITY To Capture Share As New Markets Emerge & Mature $1.3T TOTAL ADDRESSABLE NEW MARKETS IN 2026 AI ARTIFICIAL INTELLIGENCE Delivering proprietary AI-enabled tools and services, developed in-house by Stagwell Marketing Cloud, to help marketers increase pe
Slide 9: Integrated Platform For The Modern Marketer
INTEGRATED PLATFORM For The Modern Marketer 1 STAGWELL TODAY Stagwell Marketing Cloud Group SaaS and DaaS Tools for the In-House Marketer Digital Transformation 2 Building Digital Platforms & Consumer Experiences Performance Media & Data 3 Integrated Omnichannel Media, Data & E-Commerce Consumer Ins
Slide 10: Blue-Chip Customer Base: Land & Expand
BLUE-CHIP CUSTOMER BASE Demonstrated Ability To Land & Expand STAGWELL TODAY $360M 80% CLIENT RETENTION YEAR-OVER-YEAR2 REVENUE FROM TOP 10 CUSTOMERS1 11% GROWTH IN AVERAGE RELATIONSHIP TOP 10 CUSTOMERS3 4K+ BLUE CHIP CUSTOMERS 1 As of May 30, 2023 2 Client relationships over $100K in revenue (repre
Slide 11: Strategic Value-Added Investment Platform
STRATEGIC THE VALUE-ADDED PLATFORM Investment SSTTAAGG W Platform WE Global Media Affiliate Client Services ELL Marketing Network Reach L TT O Unified & engaged corporate team delivering value-added $ Growth O DDAAYY shared services driving both Central M&A Innovation Group Investment revenue & cost
Slide 12: Stagwell's Acquisition Strategy
STAGWELL GROWTH DRIVERS STAGWELL’S ACQUISITION STRATEGY Systematically expanding our digital & global footprint INCREASING OUR GROWING OUR REVENUE FROM DIGITAL REVENUE MIX OUTSIDE OF NORTH AMERICA 57% 20% 65% 40% FOCUS Digital Transformation: Platform design, Increasing our global footprint AREAS op
Slide 13: Stagwell Marketing Cloud: SaaS & DaaS Tools
STAGWELL GROWTH DRIVERS STAGWELL MARKETING CLOUD SMC PRODUCT SPOTLIGHTS SaaS & DaaS Tools For The In-House Marketer Augmented Building complementary software solutions leveraging the domain Reality expertise and distribution channels already in place at Stagwell Bringing a whole new level of stadium
Slide 14: Stagwell Financial Model
STAGWELL FINANCIAL MODEL ADDING Potential Equation for Success* ($M) it all up 10-12% long-term organic growth target driven by: 10-20% Digital Transformation 5-15% Performance Media & Data 5-15% Research & Strategy ~$3,500 OPPORTUNITY 3-7% Creativity & Communications TO GROW TO + Stagwell Marketing
Slide 15: Proven Leadership Team Primed To Deliver
PROVEN LEADERSHIP TEAM Primed To Deliver STAGWELL LEADERSHIP FOUNDER & POLLSTER Founded Penn and Schoen in 1975 with his Harvard roommate Doug Schoen GROWER Under Penn’s leadership, firm expanded to 200+ people with offices around the world. Mark Penn ADVISOR Served key corporate (Texaco, AT&T, Micr
Slide 16: Stagwell Is Under-Appreciated
UNDER-APPRECIATED ASSET STAGWELL IS UNDER-APPRECIATED Stock Price Doesn’t Reflect How Stagwell Is Disrupting Marketing Landscape Industry-leading NET REVENUE GROWTH Best-in-Class UNDER-VALUED ADJ. EBITDA MARGIN On Virtually All Metrics (P/S, EV/EBITDA, P/E) Efficient CONVERSION OF EBITDA TO FCF Sust
Slide 17: Appendix
| me SL ASWELL Appendix
Slide 18: GAAP Consolidated Operating Performance
GAAP CONSOLIDATED OPERATING PERFORMANCE Three Months Ended December 31, Twelve Months Ended December 31, $ and Shares in Thousands 2022 2021 2022 2021 Revenue $ 708,185 $ 611,927 $ 2,687,792 $ 1,469,363 Cost of services 419,811 348,000 1,673,576 906,856 Office & general expenses 172,415 197,318 601,
Slide 19: Reconciliation of GAAP Net Income to Adj. EBITDA & FCF
RECONCILIATION OF GAAP NET INCOME TO ADJ. EBITDA & FCF Full Year Ended December 31, $ in Thousands 2022 2021 Net Income $ 65,842 35,920 Net income attributable to noncontrolling & redeemable noncontrolling interests (38,573) (14,884) Net income attributable to Stagwell Inc. common shareholders 27,26
Slide 20: Reconciliation of Combined Net Revenue Growth to Organic Growth
RECONCILIATION OF COMBINED NET REVENUE GROWTH TO COMBINED ORGANIC NET REVENUE GROWTH COMPONENTS OF CHANGE CHANGE $ In thousands, Net Revenue - Year Net Revenue – except Ended December 31, Foreign Net Acquisitions Total Year Ended December percentages 2021 Currency (Divestitures) Organic Change 31, 2
Slide 21: Capital Structure
CAPITAL STRUCTURE Net Debt & Debt-Like ($M, as of 6/30/2023) Share Count5 (Thousands, as of 8/4/2023) Revolving Credit Facility $ 402 Class A 116,451 Bonds 1,100 NCI1 26 DAC2 114 Class C 151,649 (equal voting & economic rights to Class A) RNCI3 47 Less: Investments4 19 Share-based awards6 701 Less:
Slide 22: Thank You
= me SL ASWELL Thank You