Stagwell Inc. · NASDAQ:STGW
Stagwell — MDC Partners — ThinkEquity Partners Fifth Annual Growth Conference 2007
18 slides from Stagwell's conference presentation, Sep 17, 2007
Slide 1: Where Great Talent Lives
MDC(X)PARTNERS Where Great Talent Lives ThinkEquity Partners Fifth Annual Growth Conference September 17, 2007 (Nasdaq: MDCA / TSX: MDZ.A)
Slide 2: Forward Looking Statements & Other Information
MDC(K)PARTNERS Forward Looking Statements & Other Information ‘This presentation 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 historical facts, including statements ab
Slide 3: Client and agency brands
Burger King Crispin Porter + Bogusky Lal Target kirshenbaum bond Hennessy kirshenbaum bond nal ae ‘ ine Purina Colle + McVoy New Castle VitroRobertson ~ Volkswagen Crispin Porter + Bogusky rm Liz Claiborne Bratskeir & Company MoMA Bruce Mau Designs Truth Whirlpool Allard Johnson
Slide 4: We Are a Marketing Services Network
MDC\ PARTNERS jf We Are a Marketing Services Network ry > 40 brands providing marketing services in the North America, Europe and Latin America > Strategically focused on high growth specialty communications > We are media agnostic > Strong, well-diversified blue-chip clientele > Large presence in D
Slide 5: We are Partners with Some of the Most Prolific Firms
MDC(K)PARTNERS We are Partners with Some of the Most Prolific — i ainda ACCENT iaraetcom| EINORTHSTAR H ay . +@ Bruce Mau Design Inc. ZYMAN 6: CHERMARTIN hello GROUP REDSCOUT “i . Veritas 2e vitrorob a, YAMAMOTOMOSS MACKENZIE BryanMillslradesso E mono Se henderson bas cieen ind” Oo ‘ company c sourc
Slide 6: Marketers care about fresh thinking and new ideas
Vv RTNEF Marketers care about fresh thinking and new ideas Clients are under siege to grow Clients want actionable strategies to make their brands win in the marketplace Financial success in marketing services is a by-product of providing great work for great clients that produces superior results i
Slide 7: Our Market Perspective
Our Market Perspective > Advertising is a $600 billion dollar global industry > Digital innovation is changing at an accelerated rate — No client wants to hear about an idea that doesn’t encapsulate how consumers consume influence in a digital economy > Unconventional but strategic and sound solutio
Slide 8: Partner model: ownership and motivation
JPARTNER > Motivation is driven by financial and emotional ownership > We initially invest 51% to 70% for equity ownership — Founders keep ‘skin in the game’ — Succession planning for ‘Gen II’ is critical +> We partner with businesses that have: — Significant growth opportunities — Industry leading
Slide 9: Provides a Cultural Currency that is Unique in the Marketplace
... Provides a Cultural Currency that is Unique in the ; Marketplace &* > We pay: — 5x to 7x Profit Before Taxes — Consideration paid 80% cash and 20% MDC equity > We receive: — Priority on profit returns for the first five years — All cash managed centrally by MDC — We control the balance sheet and
Slide 10: Why are we Growing Faster than our Competitors
Why are we Growing Faster than our Competitors +> Smaller, very entrepreneurial and more nimble > Large ownership is in the hands of the Partner / Management +> 40% of our business is in the Digital Innovation & Direct Response > 65% of our business is in areas other than traditional advertising 10
Slide 11: How Do We Add Value
PARTNERS > How Do We Add Value >We measure our ability by which we add value using the following 5 metrics: CCPCC Clients Companies People Cross-selling Cultural Enhancement
Slide 12: Target Areas of Expansion
Target Areas of Expansion > Integrated Agencies > Digital / Interactive > Branding / Strategy > Public Relations > Data Mining / Analytics > Lift outs from big networks
Slide 13: Our Revenue Growth Rate is Expanding
PARTNERS Our Revenue Growth Rate is Expanding ‘ aa ee - $US Millions $600 25% $500 20% 5 a e $400 15% & S $300 yl 3 10% § © $200 " g $100 5% ~ $0 0% 2004 2005 2006 2007E* YTD 2007 > 31% 3-Year CAGR (2003 — 2006); 9% average organic growth > 16% — 18% growth for 2007; 12% organic growth * Based on ma
Slide 14: Our Model Works — Accelerating Organic Growth
MDC RTNERS Our Model Works — Accelerating Organic Growth uy $US Millions Total Revenues Acquisition Growth Total Growth Peer Average Organic Growth (RG/OMCIWPPIPUBIHAV) * Based on management's guidance in press release and accompanying slides issued 6/8/07 and reaffirmed on 812107 earnings call. 14
Slide 15: Excellent Potential for Further Margin Expansion
MDC(()PARTNERS Excellent Potential for Further Margin Expansion % Se agg Ag ae ea # $US Millions $45 20% sg $40 9 & $35 15% Ww $30 im © $25 on a 5 $20 10% 3 r, ® $15 = & $10 5% @ S $5 a $- 0% 2004 2005 2006 2007E* YTD 2007** > 60% 3-Year CAGR (2003 — 2006) > 8-—11% Growth for 2007 (Management Guidan
Slide 16: Potential Contractual Put/Call Options and Impact on EBITDA
MDC PARTNER Potential Contractual Put/Call Options and Impact on EBITDA Fa Estimated Put/Call Impact at June 30, 2007 Payment Consideration Incremental (USS in millions) Cash Stock Total EBITDA in Period 2007 $9.1 $1.0 $10.1 $3.0 2008 30.1 79 38.0 9.2 2009 13.5 4.0 17.5 18 2010 35.0 9.6 44.5 34 Tota
Slide 17: YTD 2007 Financial Highlights
MDC YTD 2007 Financial Highlights PARTNERS {f $US Millions 2007 YTD Revenue 2007 MDC’s Share of Adjusted EBITDA $300 pe sae Be $175 $250 6.1% 9° $198.2 ie _— $200 $12 ‘$10.5 ‘$150 $10 $8 $100 6 34 $50 i sot sot ‘rp 2006 YTD 2007 YTD 2006 Yrp 2007 2007 YTD Gross Adjusted EBITDA & Margin 11.0%. 410.9%
Slide 18: Summary
Summary +> MDC Partners’ mission is to be “The Place Where Great Talent Lives” > Organic revenue growth has been outpacing the industry peer average for the last several years — First half 2007: 21.9% vs. 4.6% > Organic revenue growth guidance for 2007 of 12%* > First half 2007 MDC’s Adjusted Share
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