Management Presentation First Quarter 2019 Results May 7, 2019 - PowerPoint PPT Presentation

Management Presentation First Quarter 2019 Results May 7, 2019

FORWARD LOOKING STATEMENTS & OTHER INFORMATION This presentation contains forward-looking statements. Statements in this presentation that are not historical facts, including without limitation statements about the Company’s beliefs and expectations, earnings guidance, recent business and economic trends, potential acquisitions, and estimates of amounts for redeemable noncontrolling interests and deferred acquisition consideration, constitute forward-looking statements. Words such as “estimates”, “expects”, “contemplates”, “will”, “anticipates”, “projects”, “plans”, “intends”, “believes”, “forecasts”, “may”, “should”, and variations of such words or similar expressions are intended to identify 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 below. 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 severe effects of international, national and regional economic conditions; • 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 retain and attract key employees; • 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 redeemable noncontrolling interests and deferred acquisition consideration; • the successful completion and integration of acquisitions which complement and expand the Company’s business capabilities, and the potential impact of one or more asset sales; and • foreign currency fluctuations. Investors should carefully consider these risk factors and the additional risk factors outlined in more detail in the Company’s 2018 Annual Report on Form 10-K under the caption “Risk Factors”, and in the Company’s other SEC filings. 2

SUMMARY • Mark Penn joined MDC as CEO on March 18, 2019 following the $100 million investment from The Stagwell Group on March 14, 2019 • 1Q 2019 Revenue growth impacted by timing of client wins and losses; Company expects improved organic revenue growth for remainder of 2019 • Cost control initiatives implemented in 2018 drove meaningful improvement in Adjusted EBITDA and Adjusted EBITDA Margin in 1Q 2019; cost structure to meaningfully benefit for the remainder of 2019 • CEO Penn initiates two year strategic plan designed to transform MDC Partners to a modern marketing services company, combining top creative talent with leading data, research, strategy, digital and media offerings and to drive meaningfully improved growth in margins and cash flow • FY 2019 Outlook - Company is providing additional commentary with respect to “Covenant EBITDA” as defined under the senior secured credit facility; Expects to complete FY2019 with approximately $175 million to $185 million of Covenant EBITDA Note: See appendix for definitions of non-GAAP measures 3

----- DRAFT ----- FIRST QUARTER 2019 FINANCIAL HIGHLIGHTS • Revenue of $328.8 million versus $327.0 million a year ago • Organic revenue decreased 0.9%, including a 242 basis point benefit from billable pass through costs • Net loss attributable to MDC Partners common shareholders of $2.5 million in the first quarter of 2019 versus a loss of $31.4 million a year ago. Net loss attributable to MDC Partners common shareholders for the last twelve months (LTM) of $103.3 million as of March 31, 2019 versus $132.3 million loss as of December 31, 2018 • Adjusted EBITDA of $21.5 million versus $7.8 million a year ago, an increase of 175% • Adjusted EBITDA Margin improvement of 410 basis points to 6.5% versus 2.4% a year ago • Covenant EBITDA (LTM) of $183.8 million versus $172.6 million at year end 2018, an increase of 6.5% Note: See appendix for definitions of non-GAAP measures 4

CONSOLIDATED REVENUE AND EARNINGS (US$ in millions, except percentages) Three Months Ended March 31, 2019 2018 % Change Revenue: $ 328.8 $ 327.0 0.6 % Operating expenses: Cost of services sold 237.2 243.0 (2.3) % Office and general expenses 67.1 83.9 (20.3) % Depreciation and amortization 8.8 12.4 (28.6) % Goodwill and other asset impairment — 2.3 NM Operating income (loss) 15.7 (14.6) NM Interest expense and finance charges, net (16.8) (16.1) Foreign exchange transaction gain (loss) 5.4 (6.7) Other, net (3.4) 0.4 Income tax expense (benefit) 0.7 (8.3) Equity in earnings of non-consolidated affiliates 0.1 0.1 Net income (loss) 0.3 (28.5) Net income attributable to the noncontrolling interests (0.4) (0.9) Accretion on convertible preference shares (2.4) (2.0) Net loss attributable to MDC Partners Inc. common shareholders $ (2.5) $ (31.4) 5

REVENUE SUMMARY (US$ in millions, except percentages) Three Months Ended Revenue $ % Change March 31, 2018 $ 327.0 Organic revenue growth (decline) (2.9) (0.9)% Non-GAAP acquisitions (dispositions), net 9.9 3.0% Foreign exchange impact (5.1) (1.6)% Total change 1.8 0.6% March 31, 2019 $ 328.8 Organic revenue decline of 0.9%, including a 242 basis points benefit from increased billable pass-through costs incurred on clients’ behalf from certain of our partner firms acting as principal. 6

REVENUE BY GEOGRAPHY AND SEGMENT (US$ in millions, except percentages) Three Months Ended March 31, 2019 Total Total Organic Revenue Revenue Growth Growth (Decline) United States $ 263.0 2.5% (1.7)% Canada 22.4 (15.2)% (3.8)% 285.4 (0.9)% (1.9)% North America Other 43.4 (1.5)% 5.4% Total $ 328.8 0.6% (0.9)% Global Integrated Agencies $ 129.7 (0.2)% 2.9% Domestic Creative Agencies 67.0 0.5% 1.1% Specialized Communications 39.0 0.3% (1.4)% Media Services 20.2 (18.3)% (18.3)% All Other 72.9 8.4% (3.5)% Total $ 328.8 0.6% (0.9)% 1 Due to changes in the composition of certain business and the Company’s internal management and reporting structure during 2019, reportable segment results for the 2018 periods presented have been recast to reflect the reclassification of certain businesses between segments.The changes were as follows: 1) Doner, previously within the Global Integrated Agencies category is now aggregated into the Domestic Creative Agencies reportable segment, 2) Yes and Co, previously within the Media Services category, was included within the Domestic Creative Agencies reportable segment, and 3) HL Design and Redscout, previously within Specialist Communications and All Other category, respectively are included in Yes & Company. Note: Actuals may not foot due to rounding 7

REVENUE BY CLIENT INDUSTRY Q1 2019 Mix Year-over-Year Growth by Category Q1 2019 Above 10% Communications, Financials, Transportation 0% to 10% Food & Beverage, Consumer Products, Other Below 0% Retail, Automotive, Technology, Healthcare Top 10 clients remained flat at approximately 23% of revenue versus a year ago (largest <5%) Note: Actuals may not foot due to rounding. Year-over-year category growth shown on a reported basis. 8

ADJUSTED EBITDA (US$ in millions, except percentages) Three Months Ended March 31, 2019 2018 % Change Advertising and Communications Group $ 26.0 $ 18.0 44.4 % Global Integrated Agencies 6.6 (2.3) (387.0) % Domestic Creative Agencies 6.6 4.8 37.5 % Specialist Communications 5.9 5.4 9.3 % Media Services (0.5) 0.8 (162.5) % All Other 7.4 9.3 (20.4) % Corporate Group (4.6) $ (10.1) (54.5) % Adjusted EBITDA (1) $ 21.5 $ 7.8 175.6 % margin 6.5% 2.4% 2019 Adjusted EBITDA excluded $1.6 million of costs related to the Company's strategic review process. 1 Adjusted EBITDA is a non-GAAP measure. See appendix for the definition. 2 Due to changes in the composition of certain business and the Company’s internal management and reporting structure during 2019, reportable segment results for the 2018 periods presented have been recast to reflect the reclassification of certain businesses between segments.The changes were as follows: 1) Doner, previously within the Global Integrated Agencies category is now aggregated into the Domestic Creative Agencies reportable segment, 2) Yes and Co, previously within the Media Services category, was included within the Domestic Creative Agencies reportable segment, and 3) HL Design and Redscout, previously within Specialist Communications and All Other category, respectively are included in Yes & Company. Note: Actuals may not foot due to rounding. 9