INVESTOR NEWSLETTER - MDC Partners

13
HIGHLIGHTS FROM OUR PARTNER NETWORK KEY FINANCIAL HIGHLIGHTS CORPORATE ACTIVITY FACT SHEET INVESTOR NEWSLETTER 2015

Transcript of INVESTOR NEWSLETTER - MDC Partners

HIGHLIGHTS FROM OUR PARTNER NETWORK

KEY FINANCIAL HIGHLIGHTS

CORPORATE ACTIVITY

FACT SHEET

INVESTORNEWSLETTER

2015

2015 Q1 INVESTOR NEWSLETTER 1

I’M CONSTANTLY HUNTING INTERESTING IDEAS, MY JOB IS TO STAY CONNECTED WITH WHERE THE TALENT ARE REALLY INNOVATING.

Jason GoodmanFounder & CEO, Albion

72andSunny/Carl’s Jr.

2015 Q1 INVESTOR NEWSLETTER 2

HIGHLIGHTS FROM OUR PARTNER NETWORK

USING SOCIAL MEDIA TO SNUFF OUT SMOKING72andSunny and Assembly, The American Legacy

Foundation/truth

Truth wanted to connect with today’s social

media-savvy generation of 15-21 year olds and

challenge them to eradicate smoking in their

lifetime. Led by data insights collected from a

social experiment and MDC’s Assembly, truth’s

media agency of record, 72andSunny enlisted

popular YouTube and Vine influencers to drive the

message home. The result was “Left Swipe Dat”,

an original song and music video starring the

influencers rejecting, or “swiping left” on images

of people holding cigarettes. The video, which

aired during the Grammy Awards, plays off of

today’s popular dating app concept of “swiping

left” - meaning you’re not interested in the

person - to shine light on the fact that smoking is

unattractive.

To sustain momentum on launch night,

72andSunny established a social media war

room to interact, engage and disseminate the

message online. Overall, the campaign secured

more than 79,000 replies, retweets, mentions and

favorites on Twitter, and more than 2.5 million on

Facebook.

#LeftSwipeDat was the #1 Worldwide Twitter

Trending Topic twice during its TV debut, beating

out the official hashtag of The Grammys during

the actual airing of the show. The music video has

more than 29 million total views and has earned

over 1.6 billion media impressions to date.

RECALLING LIFE AT THE DAWN OF THE INTERNET TO SAY HELLO TO THE FUTUREkbs+, BMW

To introduce the world to the BMW i3, kbs+

created the spot, “Newfangled Idea”. The core

idea behind the ad was a 1994 conversation

between former Today Show hosts Katie Couric

and Bryant Gumbel in which they couldn’t wrap

their heads around the newfound idea of the

“internet.” Fast-forward 21 years later, Katie and

Bryant are equally stumped by the concept of

a car built in a wind-powered factory, with no

engine under the hood.

To kick off the campaign, the spot premiered

on the Today Show, prior to the Super Bowl. A

fully-integrated strategy was executed across

all of BMW’s channels including a pre-Super

Bowl YouTube launch, digital shorts, additional

video content, social channel paid campaigns, a

hidden “email egg” campaign and an instagram

campaign, among others.

In the first two weeks of the campaign, the spot

received over 30 million online video views, with

17 million on YouTube alone. It earned 950 million

media impressions, over 42,000 Twitter mentions

with an audience reach of 228 million. BMWUSA.

com saw 1.6 million visits, it was the #3 most

engaged with Super Bowl spot and it received

“Top Spot” rankings across various publication

lists including Advertising Age, Fast Company,

Rolling Stone, Variety and Entertainment Tonight,

among many others.

TURNING SNEAKERS INTO STREET ART FOR SELF-EXPRESSIONAnomaly, Converse

Since their 1917 debut, Converse’s Chuck

Taylor All-Stars have served as a canvas for

self-expression. When Converse wanted to

celebrate its signature line of Chucks and reclaim

their iconic status, Anomaly developed a global

campaign called “Made By You” centered around

the insight that the Chuck Taylor is the only

sneaker defined by the people who wear them.

From around the globe, the company curated

over 400 sneakers from a diverse collection of

wearers, from everyday consumers to pop culture

icons such as Andy Warhol, Patti Smith, Kate

Lanphear and Glenn O’Brien. In the company’s

most expensive brand initiative to date, Anomaly

and Converse turned streets into exhibition

spaces in 41 cities across 5 continents. The multi-

channel campaign was both global and “hyper-

local,” stretching across online and social media,

with launches in New York, London, Beijing and

Mexico City.

The campaign also included a Google Cardboard

virtual reality experience, which allowed

consumers to step into the shoes of their famous

owners, and see the world through their eyes in a

360-degree video, as well as through mobile app

and online recreations. Across social channels,

each portrait and film was credited to the owner

in front of Converse’s 45+ million followers. In

turn, fans and followers continued to interact,

engage and amplify the message. People even

started creating their own portraits.

Just as grassroots as it was global, the campaign

succeeded in capturing the creative spirit of local

communities and subcultures across the world,

showcasing the deep affection consumers have

for Chucks and fueling inspiration for continued

creative expression around the globe.

2015 Q1 INVESTOR NEWSLETTER 3

HIGHLIGHTS FROM OUR PARTNER NETWORK

Adidas72andSunny

Unilever (Axe)72andSunny

Highmark HealthDoner

Smashburgermono

Elevate FinancialAssembly

Major League BaseballAnomaly

BSH Home AppliancesAllison+Partners

VênsetteHL Group

American Legacy FoundationAssembly

International Tennis Hall of FameDoner

BetsafeCP+B Scandinavia

Kedskbs+

General Mills (Totino’s)72andSunny

Fairview Health ServicesYamamoto

Thomas Cook Albion

AWARDS

CP+B was recognized three times

on Advertising Age’s ranking of the

Top 15 Campaigns of the 21st century - more than any other

agency on the list

At Graphis’ Advertising Annual 2015 Awards, Doner took home

a platinum and silver for its work

with NGK Spark Plugs and ADC

(respectively) while CP+B won silver

for its work with Hotels.com

Colle+McVoy won a Creative Media Award for its launch of Caribou

Coffee’s new Real Inspiration blend

Concentric won Gold at the Pharma Choice Awards for its work with

Novartis

72andSunny and Anomaly were

named to Advertising Age’s Annual Agency A-List and were named

as Creativity’s Innovators of the Year, while CP+B was named as a

Standout Agency

72andSunny was named to Fast

Company’s list of the World’s 50 Most Innovative Companies

kbs+’s Distortion of Sound was a

winner in the Documentary category

at The One Show’s One Screen Festival

At the Holmes Report’s Sabre

Awards, Allison+Partners was

awarded Most Innovative Agency

Path Worldwide was shortlisted

as Best Breakthrough Agency of 2015

Yamamoto won a GDUSA American Package Design Award for its work with KING

Doner won a Cleveland ADDY for

its work with Bellfaire

72andSunny’s Rebekah Jefferis and

Anomaly’s Eric Segal were named to

Advertising Age’s 40 Under 40 list

CP+B’s iPad ordering app for

Domino’s as well as its .GIFYs

awards, Colle+McVoy’s TapServer,

and Hello Design’s Art of the Cap

for Speedo were recognized in

Communication Arts’ Interactive Annual competition

Anomaly’s Alex Holder was named

to Business Insider’s list of the

30 Most Creative Women in Advertising

Hunter PR was ranked as #2 in

O’Dwyer’s Top Food & Beverage PR Firms

Allison+Partners was named as

PRWeek’s Midsize Agency of the Year while Exponent PR received

an honorable mention for Small Agency of the Year

TEAM won eight awards at the

ADDY Awards

At the Business Finance Awards,

Albion’s Craig Wildman was named

Financial Director of the Year

At the Shorty Awards, 72andSunny

and CP+B won Best in Hospitality and Best in Retail & E-Commerce,

respectively, while kbs+, Doner

and CP+B all received honorable

mentions

CP+B’s voice-ordering campaign for

Domino’s won at the R3 Integration 40 Awards

Q1 NEW BUSINESS

These select account wins

solidified $27.9 million of

net annualized revenue:

CP+B/PokerStars

Anomaly/AB InBev

* Includes select wins in

the public domain.

2015 Q1 INVESTOR NEWSLETTER 4

THERE ARE TWO INGREDIENTS FOR A SUCCESSFUL AGENCY: KILLER WORK. NICE PEOPLE.

Chuck PorterChairman, CP+B

mono/Sperry

2015 Q1 INVESTOR NEWSLETTER 5

(1) Organic revenue growth is a non-GAAP measure that refers to growth in revenues from sources other than acquisition or foreign exchange impacts.

(2) Adjusted EBITDA is a non-GAAP measure, and represents operating profit plus depreciation and amortization, stock-based compensation, acquisition deal

costs, deferred acquisition consideration adjustments, profit distributions from affiliates, and other non-recurring items.

(3) Adjusted EBITDA Available for General Capital Purposes is a non-GAAP measure, and represents funds available for repayment of debt, acquisitions, deferred

acquisition consideration, dividends, and other general corporate initiatives.

Note: A reconciliation of non-GAAP to US GAAP reported results has been provided by the Company in the tables included in the earnings release issued

on April 27, 2015. Figures exclude discontinued opperations.

* As of April 27, 2015.

Summary Financial Statement Data

$ in Millions, except per share data

12 months ended

December 31, 2014

3 months ended

March 31, 2015

Operating Data

Total Revenue $1,223.5 $302.2

Organic Revenue Growth (1) +10.8% +7.4%

Adjusted EBITDA (2) $179.4 $31.2

Net Income (Loss) ($24.1) ($32.1)

Adjusted EBITDA Available for General Capital Purposes (3) $98.8 $10.3

Balance Sheet Data

Cash and Cash Equivalents $113.3 $17.6

Total Long-Term Debt $743.1 $762.3

Other Data

Closing Price (NASDAQ: MDCA) $22.72 $28.35

Wtd. Average Diluted Shares Outstanding 49.5 49.8

Agendy / Year

On Track to Deliver on all Financial TargetsReaffirming 2015 Guidance*

Organic Revenue Growth (1) of 7.4% in Q1

Q1 Conference Call ReplayA recording of the conference call will be

available until 9:00 am (ET) on May 12,

2015, by dialing 1-412-317-0088 or toll free

1-877-344-7529 (passcode: 10064651) or

by visiting www.mdc-partners.com.

2015 Guidance*

2014 Actuals 2015 Guidance

Implied Year

Over Year Change

Revenue $1.22 billion $1.300 to $1.330 billion +6.5% to +8.5%

Adusted EBITDA (2) $179.4 million $195 to $205 million +8.7% to +14.3%

Implied EBITDA Margin 14.7% 15.0% to 15.4% +35 to +75 basis points

Adjusted EBITDA Available for General Capital Purposes (3) $98.8 million $109 to $119 million +10.3% to +20.4%

Q1 2015 KEY FINANCIAL HIGHLIGHTS

Net New Business $27.9 Million in Q1

2015 Q1 INVESTOR NEWSLETTER 6

1Q 2Q 3Q 4Q 2Q1Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 4Q1Q 2Q 3Q 1Q 2Q 3Q 4Q 1Q

2008 2009 2010 2011 2012 2013 2014 2015

-10%

-5%

-0%

5%

10%

15%

20%

25%

MDC Partners MDC Partners (ex Accent) Peers

(1) Peers include Omnicom, Interpublic, WPP, Havas and Publicis(2) Pro Forma for planned divestiture of ACCENT

MDC Partners vs. PeersTrailing 12 Month Organic Revenue Growth

UNITED STATES

Allison+PartnersAnomalyAttentionAssemblyBruce Mau DesignCivilianColle+McVoyConcentricCP+BDonerExponent PRHello DesignHL GroupHunter PRkbs+KingsdaleKwittkenLaird+PartnersLBNLuntz Globalmono AdvertisingNorthstarRedscoutReleventHud:sunRumble FoxSloane & CompanySource Marketing72andSunnyTEAMThe Media KitchenTrade XVITROVarick Media ManagementYamamoto

ASIA

Allison+PartnersAnomalyCP+Bkbs+

UK/EUROPE

72andSunnyAlbionAllison+PartnersAnomalyCP+BDonerkbs+KwittkenNorthstarPath WorldwideRedscout

CANADA

6 DegreesAndretti Sports MarketingAnomalyAttentionBOOM! MarketingBruce Mau DesignBMIRGale43kbs+KennaKwittkenKingsdaleNorthstarTatt2 MediaUnionVeritas

SOUTH AMERICA

CP+B

Q1 2015 KEY FINANCIAL HIGHLIGHTS

MDC Global Network

2015 Q1 INVESTOR NEWSLETTER 7

ENTREPRENEURS ARE INHERENTLY OPTIMISTIC, THEY BELIEVE THINGS THAT OTHER PEOPLE CAN’T SEE.

Matt JarvisChief Strategy Officer, 72andSunny

72andSunny/Carlsberg

2015 Q1 INVESTOR NEWSLETTER 8

Additional information about MDC investor events is available at www.mdc-partners.com.

UPCOMING EVENTS

05/08/2015Jefferies Media IR Summit New York, NY

05/13/2015Jefferies Global Technology, Media & Telecom ConferenceMiami, FL

05/27/2015Nomura Media Summit: Global Agency DayNew York, NY

06/04/2015MDC Annual Meeting of ShareholdersNew York, NY

06/18/2015Telsey Advisory GroupAd Trends ConferenceNew York, NY

06/22/2015Stifel Baltusrol SummitSpringfield, NJ

06/24/2015Bernstein Future of Media SummitBoston, MA

RECENT EVENTS

03/11/2015Goldman Sachs TMT Leveraged Finance ConferenceNew York, NY

03/11/2015Piper Jaffray Technology, Media & Telecommunications ConferenceNew York, NY

03/10/2015Deutsche Bank Media, Internet & Telecom ConferencePalm Beach, FL

02/24/2015JP Morgan High Yield & Leveraged Finance ConferenceMiami, FL

01/07/2015Citi Internet, Media & Telecommunications ConferenceLas Vegas, NV

MDC PARTNERS CORPORATE ACTIVITY

VITRO/ASICS

Doner/ADT

2015 Q1 INVESTOR NEWSLETTER 9

MDC PARTNERS CORPORATE ACTIVITY

MDC CARES SPOTLIGHT

In the first quarter, MDC Partners proudly

welcomed the recipients of the 2014 MDC Partners/Harlem RBI Scholarships to the

MDC Innovation Centre to celebrate the great

accomplishments of these young leaders. The

scholarships celebrate our shared values of

Teamwork, Leadership, Integrity and Effort and

recognize the great talent of Harlem RBI students

in the classroom, in the community and on the

playing field. This year’s recipients were selected

by a team of ten MDC staff members who

reviewed and ranked applications, interviewed

participants and spearheaded a campaign to

raise additional dollars through staff donations

to ensure that all applicants received a financial

contribution to their post-secondary studies. The

2015 scholarship process is now well underway

and this year’s recipients will be announced this

summer.

In an effort to better engage MDC employees in

the company’s charitable giving efforts, MDC has

created a Social Impact Task Force. The Task

Force will allow employees to participate in the

grantmaking process by assessing applications

for funding from charitable organizations and

by helping decide which organizations MDC

supports, in line with the company’s strategic

giving objectives.

And finally, MDC Partners was honored with

Year Up’s “Corporate Champion Award”, recognizing outstanding commitment, dedication

and service to urban young adults. February

marked the graduation of ten Year Up interns, and

the beginning of a new cohort of interns placed

at MDC agencies. MDC Partners is proud to be

fulfilling the Clinton Global Initiative Commitment

to Action made at the 2014 CGI America

conference which will see 25 young people facing

barriers to employment placed in internships in

the MDC network.

For more information about MDC’s ongoing

community and philanthropic initiatives, please

visit the MDC Cares Blog at www.mdccares.com.

kbs+/BMW

2015 Q1 INVESTOR NEWSLETTER 10

MDC PARTNERSFACT SHEET

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A PARTNER COMPANY NOT A PARENT COMPANY

MDC Partners is one of the leading and fastest-

growing global Business Transformation

Organizations. We thrive by empowering the

most talented, entrepreneurial and innovative

thought leaders to drive competitive advantage

and business growth for clients. Our agency

partners leverage technology, marketing

communications, data analytics, insights

and strategic consulting solutions to drive

meaningful, measureable returns on marketing

and communications investments for over 1,500

clients worldwide.

Anomaly/Converse

2015 Q1 INVESTOR NEWSLETTER 11

MDC PARTNERSFACT SHEETMDC PARTNERSFACT SHEET

Global LeadershipMiles S. Nadal

Chairman & CEO

David Doft

CFO

Bob Kantor

Chief Marketing & Business Development Officer

ContactsInvestor Inquiries

Matt Chesler, CFA

VP, Investor Relations

[email protected]

646-412-6877

Press Inquiries

Alexandra Delanghe

SVP, Corporate Communications

[email protected]

646-429-1845

Company Securities

MDC Partners’ Class A Shares are

publically traded on NASDAQ under

the symbol “MDCA” and on the

Toronto Stock Exchange under the

symbol “MDZ.A”

Additional Information

Additional information is available on

our corporate website at

www.mdc-partners.com

6 Degrees

72andSunny

Albion

Allison+Partners

Andretti Sports Marketing

Anomaly

Assembly

Attention

BOOM! Marketing

Bruce Mau Design

Bryan Mills Iradesso

Civilian

Colle+McVoy

Concentric

CP+B

Doner

Exponent PR

Gale43

Hello Design

HL Group

Hud:sun Media

Hunter PR

kbs+

Kenna

Kingsdale Shareholder Services

Kwittken

Laird+Partners

LBN

Luntz Global

MDC Media Partners

mono

Northstar Research Partners

Path Worldwide

Real Interactive

Redscout

Relevent

Rumble Fox

Sloane & Company

Source Marketing

TEAM

The Media Kitchen

Trade X

Union

Varick Media Management

Veritas

VITRO

Yamamoto

Partners

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NOTABLE AWARDS

4A’s O’TOOLE Awards

monoSmall Agency of the Year (2012)

Advertising Age

72andSunnyAgency of the Year (2012)

72andSunnyMost Viral Agency of the Year (2014)

AnomalyMost Viral Super Bowl Ad (2014)

CP+BAgency of the Decade (2010)

Adweek

72andSunnyAgency of the Year (2013)

kbs+Project Isaac Awards (2014), 2 Gold

Cannes Lions

72andSunnyGold (2014) (Samsung)

AnomalyGold (2014) (Dick’s Sporting Goods)

MDC VariousFive Grand Prix (2012)

Creativity A-List

72andSunnyInnovators of the Year (2014)

72andSunnyAgency of the Year (2013)

The Delaney Report

DonerAgency of the Year (2013)

EFFIES

72andSunnyGold (2014) (Activision)

72andSunnySilver (2014) (Samsung)

AnomalySilver (2014) (Bud Canada)

72andSunnyGrand Prix, Gold (2013) (Activision)

CP+BGold (2013) (Kraft)

CP+BGold (2013) (Amex)

CP+BGold (2012) (Baby Carrots)

EMMYS

CP+B Late Night with Jimmy Fallon (2014)

AnomalyAvec Eric (2011)

The Holmes Report

Allison+PartnersGrand North American Agency of the Year (2014)

KwittkenSmall Agency of the Year (2014)

VeritasCanadian Consultancy of the Year (2014)

Hunter PRConsumer Agency of the Year (2014)

Sloane & CompanyCrisis Agency of the Year (2012)

Jay Chiat Awards for Strategic Excellence

72andSunnyGrand Prix (2013)

Medical Market & Media Magazine

ConcentricTop 100 Agencies (2014)

ONE Show

AnomalyGold (2014) (Budweiser)

72andSunnyGold (2014) (Samsung)

kbs+Automobile Advertising of the Year (2013) (BMW)

Ogilvy Awards

CP+BGrand Prix (2011) (Domino’s)

PRSA

Exponent PRIndustry Campaign of the Year (Healthcare) (2014) (Medtronic)

ExponentIndustry Campaign of the Year (B2B) (2014) (DuPont)

PRWeek

Allison+PartnersTechnology Campaign of the Year (2013) (Dropbox)

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2015 Q1 INVESTOR NEWSLETTER

Forward Looking Statements & Other Information

This presentation, including our “2015 Guidance 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 historical facts, including statements about the Company’s

beliefs and expectations, earnings guidance, recent business and economic

trends, potential acquisitions, estimates of amounts for deferred acquisition

consideration and “put” option rights, constitute forward-looking statements.

These statements are based on current plans, estimates and projections, and

are subject to change based on a number of factors, including those outlined

in this section. Forward-looking statements speak only as of the date they are

made, and the Company undertakes no obligation to update publicly any of

them in light of new information or future events, if any.

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 with the SEC’s ongoing investigation of the Company, as

disclosed in more detail in the Company’s most recent Quarterly Report on

Form 10-Q for the period ended March 31, 2015;

· risks associated with severe effects of international, national and regional

economic downturn;

· the Company’s ability to attract new clients and retain existing clients;

· the spending patterns and financial success of the Company’s clients;

· the Company’s ability to remain in compliance with its debt agreements and

the Company’s ability to finance its contingent payment obligations when due

and payable, including but not limited to those relating to “put” option rights

and deferred acquisition consideration;

· the successful completion and integration of acquisitions which compliment

and expand the Company’s business capabilities; and

· foreign currency fluctuations.

The Company’s business strategy includes ongoing efforts to engage in material

acquisitions of ownership interests in entities in the marketing communications

services industry. The Company intends to finance these acquisitions by using

available cash from operations and through incurrence of bridge or other debt

financing, either of which may increase the Company’s leverage ratios, or

by issuing equity, which may have a dilutive impact on existing shareholders

proportionate ownership. At any given time the Company may be engaged in

a number of discussions that may result in one or more material acquisitions.

These opportunities require confidentiality and may involve negotiations that

require quick responses by the Company. Although there is uncertainty that any

of these discussions will result in definitive agreements or the completion of any

transactions, the announcement of any such transaction may lead to increased

volatility in the trading price of the Company’s securities.

Investors should carefully consider these risk factors and the additional risk

factors outlined in more detail in the Annual Report on Form 10-K under the

caption “Risk Factors” and in the Company’s other SEC filings.