Stagwell Inc. · NASDAQ:STGW
Stagwell — MDC Partners — Shareholder Meeting (June 2021)
31 slides from Stagwell's shareholder meeting presentation, Jun 23, 2021
Slide 1: Annual General Meeting June 22, 2021
1 ANNUAL GENERAL MEETING JUNE 22, 2021
Slide 2: In 2019, We Instituted a New World Plan
IN 2019, WE INSTITUTED A NEW WORLD PLAN 2
Slide 3: Year 1
3 YR 1
Slide 4: Twelve Months 2020 Financial Highlights
4 ▪ Revenue of $1.20 billion versus $1.42 billion for the prior year period ▪ Organic revenue decreased by 13.9% versus the prior year period. Organic revenue was unfavorably impacted by 162 basis points from billable pass through costs ▪ Adjusted EBITDA of $177.3 million versus $174.2 million for t
Slide 5: Revenue by Client Industry
Q4 2020 QTD 2020 YTD Above 10% Consumer Products - 0% to 10% Retail, Healthcare Healthcare Below 0% Automotive, Technology, Food & Beverage, Communications, Financials, Transportation & Travel / Lodging, Other Technology, Consumer Products, Communications, Financials, Transportation & Travel / Lodgi
Slide 6: Revenue and Organic Growth by Region and Network
2020 2019 Total Total Organic Revenue Total Total Organic Revenue Revenue Growth Growth (Decline) Revenue Growth Growth (Decline) United States $ 959.6 (14.0 )% (12.7 )% $ 1,116.0 (3.2 )% (4.1 )% Canada 81.9 (22.0 )% (17.9 )% 105.1 (15.3 )% (0.9 )% North America 1,041.6 (14.7 )% (13.2 )% 1,221.1 (4.
Slide 7: Summary of Cash Flow
Note : Actuals may not foot due to rounding SUMMARY OF CASH FLOW TWELVE MONTHS ENDED DECEMBER 31 (US$ IN MILLIONS) 2020 2019 Net cash provided by operating activities $ 32.6 $ 86.5 Net cash provided by (used in) investing activities (8.3 ) 0.1 Net cash used in financing activities (73.4 ) (11.7 ) Ef
Slide 8: Time for the Next Plan
TIME FOR THE NEXT PLAN 8
Slide 9: Moving Forward Must Dos
9 Complete the Merger to Newco 1 3 2 4 Reshape the organization to merged org I. More integrated spine II. Facilitate growth III. For larger scale Sell the story of Newco to investors, clients, media, & talent Organize our Media, Data operations into our Power of One Grow 5% to 15% a year based on s
Slide 10: Better Together
10 TOGETHER, WE BECOME the transformative company that modern marketers need. THE COMBINATION UNITES THE AWARD - WINNING TALENT OF MDC WITH THE ADVANCED TECHNOLOGY PLATFORM OF STAGWELL BETTER TOGETHER
Slide 11: Digital Media Is Disrupting Marketing
DIGITAL MEDIA IS DISRUPTING MARKETING CREATING NEW ADDRESSABLE MARKETS REQUIRING DIGITAL EXPERTISE 8% 5% 31% 6% 1% 7% 44% 33% 15% 35% 9% 6% 2% Newspapers Magazines Television Radio Cinema Outdoor Internet By 2025 nearly 68 % of US ad spend is expected to be online Source: Morgan Stanley research GLO
Slide 12: Aging Holding Companies Control Half the Marketplace
$21B $15B $12B $10B $120B SPENT ON ADVERTISING & MARKETING SERVICES IN 2018 AGING HOLDING COMPANIES CONTROL HALF THE MARKETPLACE DESPITE OUTDATED MODELS AS CLIENTS LACK AT - SCALE ALTERNATIVES Source: Morgan Stanley research Dentsu Accenture Interactive PwC Di gital Deloitte Digital IBM iX OTHERS $6
Slide 13: The Marketplace: Just Right for the Times
13 THE MARKETPLACE The combination brings together the right mix of talent + technology Consulting firms lack essential creative talent JUST RIGHT FOR THE TIMES Legacy holding companies grew too big 13
Slide 14: A Modern Marketing Platform Uniting Creative Talent and Technology
14 A MODERN MARKETING PLATFORM UNITING CREATIVE TALENT + TECHNOLOGY BETTER TOGETHER HARMONY A long history of award - winning creativity Performance born of the new digital economy WILL FORM THE 8 TH LARGEST GLOBAL MARKETING SERVICE COMPANY
Slide 15: Better Together Today: One Company
15 Combined company with targets of 5%+ annual organic growth , driven by 10 - 15% digital marketing growth and complementary capabilities, and 9%+ total annual revenue growth including new products and acquisitions Integrated services driving $30M in cost synergies , with ~90% achieved in the first
Slide 16: Better Together: MDC and Stagwell 2020 Actuals
BETTER TOGETHER ($ M ) 16 MDC 2020 Actual Stagwe ll 2020 Actual REVENUE: $888 NET REV: $633 ADJ. EBITDA: $143 COUNTRIES: 20 EMPLOYEES: 3,865 GAAP REV: $1,199 NET REV: $1,023 ADJ. EBITDA: $177 COUNTRIES: 14 EMPLOYEES: 4,900 Stagwell financial information presented herein is based on Stagwell’s press
Slide 17: What We Can Build Together: $3 Billion Annual Revenue Plan
WHAT WE CAN BUILD TOGETHER A PLAN FOR $3 BILLION IN ANNUAL REVENUES Equation For Success ($M ) 2025 Basis Combined Organic Revenue Growth $2,600 5%+ annual organic growth, driven by 10 - 15% digital marketing growth and complementary capabilities + New Digital Revenue Streams $75 Growth & developmen
Slide 18: Growth Driver: Digital Transformation Engine
GROWTH DRIVER 1 DIGITAL TRANSFORMATION ENGINE 10% - 15% ANNUAL GROWTH DRIVEN BY E - COMMERCE, ONLINE ADVOCACY, & DIGITAL MARKETING SERVICES 18 Political & advocacy consulting, digital strategy, & online fundraising Designing, creating, implementing & managing consumer e - commerce platforms Services
Slide 19: Business Mix: Deepened Expertise in Digital Services
(% 2019 Revenue) Advertising 59% HIGH GROWTH DIGITAL SERVICES 9% Media 7% Other 9% Advertising 31% Marketing Comm. / PR 17% HIGH GROWTH DIGITAL SERVICES 38% Media 4% Other 5% Research 5% Marketing Comm. / PR 16% BUSINESS MIX DEEPENED EXPERTISE IN DIGITAL SERVICES 19 (% 2020 Revenue) Note: Does not r
Slide 20: Growth Driver: Precision Media and Data Capabilities
20 PRECISION MEDIA & DATA CAPABILITIES GROWTH DRIVER 2 PIONEERING SCALED CREATIVE PEFORMANCE THE COMBINATION CREATES SOMETHING NEW IN THE MARKETPLACE: A FORMIDABLE CONTENDER PURPOSE - BUILT TO SCALE CREATIVE PERFORMANCE Our data - fueled media and content practice will invest to lead the industry in
Slide 21: Growth Driver: New SaaS Products
GROWTH DRIVER 3 NEW SaaS PRODUCTS NEW RECURRING REVENUE STREAMS FROM SUITE OF MARKETING PRODUCTS BASED ON AI, PROPRIETARY DATA, & INSIGHTS Audience identification and activation I nfluencer management platform AI for public relations pros Mobile device usage and behavior Modern brand management Onli
Slide 22: Growth Driver: Accessing Global Contracts
22 GROWTH DRIVER 4 ACCESSING GLOBAL CONTRACTS THE INTEGRATED SOLUTIONS NEEDED TO UNLOCK $90 - $150M IN NEW BUSINESS A YEAR LEADERSHIP THAT BRINGS IT ALL TOGETHER INTO ONE SYNERGISTIC OFFERING Second - to - None Creativity & Communications Blue Chip Customer Base Precision Media & Data Capabilities A
Slide 23: MDC and Stagwell Combined Presence
23 STAGWELL MDC BOTH AS OF 12.31.20 With Affiliates Cities 42 49 67 80 Countries 14 20 23 31 Employees 4,900 3,865 8,765 ~10,765 BETTER TOGETHER MDC & STAGWELL’S COMBINED PRESENCE SPANS 23 COUNTRIES & 67 CITIES AFFILIATES IN 28 CITIES, 23 COUNTRIES WITH ~2,000 EMPLOYEES AFFILIATE Note: Affiliates ad
Slide 24: Improved Credit Outlook
IMPROVED CREDIT OUTLOOK 24 “MDC’s corporate family rating was upgraded to B2 from B3 following the company’s announced merger… The combined company’s leverage, enhanced scale and increased exposure in digital services were the drivers of the rating action.” “We believe [ Stagwell’s ] specialty in di
Slide 25: Second-to-None Creativity and Blue Chip Customer Base
SECOND - TO - NONE CREATIVITY & COMMUNICATIONS BLUE CHIP CUSTOMER BASE Communications / Media Retail Food & Beverage Consumer Products Technology Automotive Financial Services Healthcare 25
Slide 26: Thank You
26 THANK YOU
Slide 27: Appendix
27 APPENDIX
Slide 28: Cautionary Statement Regarding Forward-Looking Statements
Cautionary Statement Regarding Forward - Looking Statements This communication may contain certain forward - looking statements (collectively, “forward - looking statements”) within the meanin g of Section 27A of the U.S. Securities Act of 1933, as amended and Section 21E of the U.S. Exchange Act an
Slide 29: Additional Information and Where to Find It
Additional Information and Where to Find It In connection with the Proposed Transaction, MDC and New MDC filed with the SEC the Proxy Statement/Prospectus. This commun ica tion is not a substitute for the Proxy Statement/Prospectus or any other document MDC may file with the SEC in connection with t
Slide 30: Pro Forma Financial Information
Pro Forma Financial Information The unaudited summary pro forma financial information contained in this presentation has been prepared for illustrative purpo ses only and is not necessarily indicative of the operating results or financial position that would have been achieved if the Proposed Transa
Slide 31: Non-GAAP Financial Measures
Non - GAAP Financial Measures The presentation includes certain financial measures that the SEC defines as “non - GAAP financial measures.” MDC’ management beli eves that such non - GAAP financial measures, when read in conjunction with the results reported in accordance with generally accepted acco