Stagwell Inc. · NASDAQ:STGW
Stagwell — Investor Day (November 2021)
42 slides from Stagwell's investor day presentation, Nov 8, 2021
Slide 1: Stagwell: Transforming Marketing
= ess STAGWELL | TRANSFORMING MARKETING
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: Forward Looking Statements & Other Information: Non-GAAP Financial Measures
FORWARD LOOKING STATEMENTS & OTHER INFORMATION Non-GAAP Financial Measures In addition to its reported results, Stagwell Inc has included in this presentation certain financial results that the Securities and Exchange Commission (SEC) defines as "non-GAAP Financial Measures." Management believes tha
Slide 4: Investing in the future of marketing
Investing in the future of marketing High- Proven Strong & Industry- Value Moving Growth Leadership Expanding leading Creation Into Larger Digital Team Margins Growth Platform Markets 4
Slide 5: Market Backdrop
Market Backdrop 5
Slide 6: The advertising market is ripe for disruption
THE ADVERTISING MARKET IS RIPE FOR DISRUPTION MARKET BACKDROP ~$2B OTHERS $21B $60B spent with the top 4 STAGWELL $26B IBM iX $5B $15B An opportunity to $120B $5B Deloitte Digital disrupt the $60B of $5B PwC Digital the legacy holding $8B $12B spent on advertising Accenture company marketplace Inter
Slide 7: Digital media is disrupting marketing
DIGITAL MEDIA IS DISRUPTING MARKETING MARKET BACKDROP The new marketplace creates new opportunities 2% 6% GLOBAL AD 6% GLOBAL AD 9% 1% SPENDING 2000 SPENDING 2020 (Total $329B) 44% (Total $613B) 33% 6% 35% 15% 31% 7% 5% Newspapers Magazines Television Radio Cinema Outdoor Internet Source: Zenith res
Slide 8: Digital marketing continues to grow rapidly
DIGITAL MARKETING CONTINUES TO GROW RAPIDLY MARKET BACKDROP Double digit growth in e-commerce & digital marketing services E-Commerce Digital Marketing Services Designing, creating, implementing & Services enabling influencers & managing consumer e-commerce platforms global performance marketing US
Slide 9: Political & advocacy
POLITICAL & ADVOCACY MARKET BACKDROP Strong secular growth in spend & fundraising facilitated by technology and driven by increased engagement Political Political Paid Media Spend Funds Raised Online ($ in billions) ($ in billions) $14 $7 $9 $6 $4 $2 $0 $1 2014 2016 2018 2020 2014 2016 2018 2020 Sou
Slide 10: Precision data
PRECISION DATA MARKET BACKDROP Addressable data for personalized, digital campaigns is growing rapidly and real-time insights becoming critical Addressable Data For Digital Targeting $150B Global marketing data spend estimated by 2030 96 80 New Sources New Types 68 → Offline → Demographic 58 51 52 5
Slide 11: Marketing technology
MARKETING TECHNOLOGY MARKET BACKDROP New technologies increasing marketing precision, efficiency, and sophistication Rise Of Martech $43B Campaign Management Software & Customer Data Platform Spend by 2030 → Resource & Asset → Communications 43 Management Automation 34 → Lead Generation → Data Onboa
Slide 12: E-commerce
E-COMMERCE MARKET BACKDROP E-Commerce and marketing are converging, creating new ways to purchase Social Commerce Primary & Secondary Marketplaces Interactive 1212
Slide 13: CTV
CTV MARKET BACKDROP Connected devices are creating new digital formats and ways to reach targeted audiences Connected TV (CTV) 23% CAGR US CTV Ad Spend 18 16 14 Smart Streaming Gaming TVs Devices Consoles 11 8 6 2019 2020 2021E 2022E 2023E 2024E ($ in billions) Source: eMarketer Oct. 2020 1313
Slide 14: In-housing
IN-HOUSING MARKET BACKDROP CMO’s are bringing lower-margin, tactical capabilities in-house, creating a digital products opportunity ~25% OF MARKETING BUDGETS Marketing Budget Allocations Across Major Resources WERE SPENT ON IN-HOUSE LABOR IN 2020 Motivations #1 COST EFFICIENCIES ENSURE BRAND CONSIST
Slide 15: Stagwell Today
Stagwell Today 15
Slide 16: Integrated platform for the modern marketer
Integrated Platform FOR THE MODERN MARKETER STAGWELL TODAY 1 Digital Transformation Building Digital Experiences for Clients Performance Media & Data Capabilities 2 Addressable on a Global Scale 3 Rigorous Consumer Insights & Strategy Tracking Across Consumer Journey 4 Extremely Strong Creativity, C
Slide 17: Key Stats
Key Stats STAGWELL TODAY 10,000 1,000 $120B+ Employees Engineers Addressable Market 68 24 ~4,000 Cities Countries Blue-Chip Customers ~$2.2B $383M $200M+ LTM Revenue LTM Adj. EBITDA Free Cash Flow Note: Financials are Pro Forma as if the combination was completed January 1, 2019 17
Slide 18: Founder and CEO background
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 Served key corporate (Texaco, AT&T, Microsoft, Ford, Merck, etc.) & political (President Clinton’s pollster for six year
Slide 19: One streamlined go-to-market structure
One Streamlined CONSTELLATION GO-TO-MARKET STAGWELL TODAY STRUCTURE MEDIA Optimized GLOBAL SOLUTIONS for Growth DIGITAL INNOVATION GROUP Communications & Advocacy 19
Slide 20: Creating Stagwell Media Network
Creating Stagwell Media Network A SINGLE STAGWELL TODAY MEDIA & DATA MANAGEMENT SMN STRUCTURE FRONT DOORS Global Omnichannel Media Creative Media Consulting Influencer & Innovation B2B + SMB Central Buying ~$5B MEDIA / SMN Multi-Lingual Media & Transcreation PLATFORMS $335M REVENUE / Data + Tech Pro
Slide 21: The merger is working: Pro forma financial highlights
The Merger Pro Forma Financial Highlights IS WORKING 3Q 2021 STAGWELL TODAY → Net Revenue Growth of 25.2% year-over year,, 14.4% vs. 3Q 2019 $2,150M-$2,180M → Organic Net Revenue Growth of 22.8% year-over year, 27.9% excluding advocacy businesses Revised PF Total Revenue Growth → Adjusted EBITDA Gui
Slide 22: The merger beginning to drive larger wins
The Merger Beginning to IS WORKING drive larger wins STAGWELL TODAY Cue Health, which recently went public, provides rapid, lab-quality molecular testing at home for COVID, the flu, and much more. Doner, KWT and MMI won the integrated marketing account across creative, media and public relations. Wo
Slide 23: The Stagwell Plan
Nasdaq STGW | NasdaqListed
Slide 24: Giving Stagwell new digs
Giving Stagwell NEW DIGS THE STAGWELL PLAN DIGITAL Investing behind digital businesses and leveraging competitive advantage to incubate technology products. I. Continuing to centralize back-office services into INTEGRATED network-wide functions in IT, HR, Real Estate, & other operations. II. Going t
Slide 25: Digital mix today
D Digital Mix We have the scale & mix of high growth digital TODAY TODAY that legacy peers are slowly working towards 1 Digital Transformation 48% DIGITAL REVENUE DIGITAL Building Digital Experiences for Clients Growing Blended 20%+ 25% → Digital Transformation, 2 Performance Media & Data Capabiliti
Slide 26: High growth digital transformation, digital media, online research
D High Growth Digital Transformation, Digital Media, Online Research These core businesses have driven growth through pandemic DIGITAL ENGINE 3Q 2021 DIGITAL High Growth Vs. 3Q 2019 Digital Mix 37% OF +89% REVENUE NET NET REVENUE 44% OF ADJ. EBITDA +145% EBITDA ADJ. Note: Financials and guidance are
Slide 27: 2025 target digital mix with Martech layer
D 2025 But we are not stopping there, adding a Martech Layer of new SaaS & DaaS products & investing in our core digital platforms TARGET MIX Proprietary SaaS & DaaS Products Developed by Stagwell’s Innovation Group DIGITAL 25% ~65% DIGITAL REVENUE 14% 9% 52% ~35% Today 2025 Target Note: Today repre
Slide 28: Longer term digital mix
D Longer Term Beyond 2025, Target Digital Mix of 75% as we invest MIX behind digital transformation & scale our Martech efforts ~80% DIGITAL DIGITAL REVENUE ~20% 28
Slide 29: Our SaaS & DaaS advantage
D Our Saas & Daas ADVANTAGE Thousands of DIGITAL high-quality clients 1,000 in-house engineers Thousands of marketing experts MarTech product development at far lower cost than a start-up 29
Slide 30: Stagwell suite of digital marketing products
D Stagwell Suite Of Digital Marketing Products MARKETING CLOUD Based On AI, Proprietary Data & Insights DIGITAL ~50% Influencer Audience AI For Management Platform Identification & Activation Public Relations Pros of marketing budgets spent on in-house Augmented Reality Creation Platform Modern Bran
Slide 31: Consumer understanding & engagement platform
D CONSUMER UNDERSTANDING & ENGAGEMENT PLATFORM DIGITAL CUE is an audience exploration application that allows a marketer to understand the consumer at the deepest level possible, create segments, test creative with audiences and activate these audiences in an omnichannel way. It uses a variety of at
Slide 32: The Stagwell Plan
THE STAGWELL PLAN 32
Slide 33: Harris Brand Platform
D Harris Polls thousands of people every day to provide real-time, global intelligence on brands and consumers BRAND PLATFORM Brand Intelligence Delivers curated data on the most important brand, media, campaign, DIGITAL and purchase funnel metrics to continuously evaluate performance and drive stra
Slide 34: New frontiers
D New FRONTIERS AUGMENTED NFTS QR CODES DIGITAL REALITY 34
Slide 35: Expanding Stagwell Marketing Cloud TAMs
D Expanding Stagwell Marketing Cloud Spans Large, Rapidly Expanding TAMs OUR TAM $293B EXPANDED TAM Marketing Data DIGITAL Data generated across the different touchpoints $113B involved in the consumer’s path to purchase $25B Campaign Martech EXISTING TAM Specifically marketing campaign automation $
Slide 36: Shared services & synergies: targeting $30 million cost savings
I SHARED SERVICES & SYNERGIES Targeting $30 Million Cost Savings INTEGRATED Other ~ $30M 7% T&E 5% Corporate 9% Media 32% Real Estate Targeted Annualized Cost Synergies 9% ~55% Targeted To Be Realized by Year 1 ~90% Targeted To Be Realized by Year 2 Production 10% Shared 100% Targeted To Be Realized
Slide 37: Expanding global network through affiliates
G Expanding → → Targeting 50 Affiliates Expanded offering for large, multi-regional OUR GLOBAL NETWORK pitches with no capital investment GLOBAL STAGWELL AFFILIATES Stagwell +Affiliates CITIES 68 84 COUNTRIES 24 37 EMPLOYEES 10K+ +16K+ Note: As of 9/30/21 37
Slide 38: Scaling global development
G Scaling Building a consistent global development GLOBAL DEVELOPMENT practice with 24/7 “follow the sun” delivery GLOBAL North America 225+ Europe ~50 India Philippines EXPANDING LATAM 330+ ~100 upon North American base with lower cost ~300 global engineering hubs As of 9/30/21 38
Slide 39: Media business plan for winning globally
G Media Business Plan FOR WINNING GLOBAL → Win additional paired media and creative contracts in the US GLOBAL → Compete for media-only global contracts with our affiliate scale → Continue digital-led fast growth in Middle East and Asia → Improve relationships with flagship creative agencies → Capit
Slide 40: Strategic growth platform
S Strategic THE VALUE-ADDED PLATFORM GROWTH PLATFORM Shared Services STRATEGIC Accretive Acquisitions at Scale Innovation Group & Stagwell Marketing Cloud Central Marketing & Global Solutions Unified, engaged corporate team Affiliate Network Reach providing essential centralized services to drive bo
Slide 41: Raising long term organic growth expectations
Adding RAISING LONG TERM ORGANIC GROWTH EXPECTATIONS IT ALL UP THE STAGWELL PLAN Potential Equation for Success* ($M) 7-9% Organic Growth >$2,900 OPPORTUNITY + Stagwell Marketing Cloud ~$75 TO GROW TO $3.4 BILLION+ + M&A Growth $450 AND BEYOND OF TARGET GAAP REVENUE IN 2025 THROUGH COMBINATION OF OR
Slide 42: Investing in the future of marketing
Investing in the future of marketing High- Proven Strong & Industry- Value Moving Growth Leadership Expanding leading Creation Into Larger Digital Team Margins Growth Platform Markets 42