Management Presentation Third Quarter 2019 Results November 5, 2019 - PowerPoint PPT Presentation

Management Presentation Third Quarter 2019 Results November 5, 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 filed with the Securities and Exchange Commission (the "SEC") under the caption “Risk Factors”, and in the Company’s other SEC filings. 2

SUMMARY • Net new business of $30.5 million as agencies capitalized on the strengthening of MDC's pipeline • Aided by ongoing cost-reduction initiatives, MDC delivers year-over-year growth of 5.9% in 3Q 2019 YTD Adjusted EBITDA and 120 basis point improvement in Adjusted EBITDA Margin in YTD to 11.3% • 3Q 2019 revenue declines driven principally by a combination of softness in the Media segment and the healthcare sector, as well as cycling through earlier losses at one of the Global Integrated agencies • Specialist Communications continues to capture market share with 8% growth • MDC executing against two year strategic plan, designed to organize MDC's offerings, capitalize on its strengths and enhance Company's go-to-market strategy, to enable a return to revenue growth and consistent financial returns • FY 2019 Outlook - Expects to complete FY2019 with approximately $175 million to $185 million of Covenant EBITDA, consistent with prior guidance; Revises FY2019 Organic Revenue outlook to 3 - 5% decline. Note: See appendix for definitions of non-GAAP measures 3

----- DRAFT ----- THIRD QUARTER 2019 FINANCIAL HIGHLIGHTS • Revenue of $342.9 million versus $375.8 million in the prior year period • Organic revenue declined by 7.5% versus the prior year period, including a 101 basis point benefit from billable pass through costs • Net loss attributable to MDC Partners Inc. common shareholders of $5.1 million in the third quarter of 2019 versus $18.2 million in the prior year period. Net loss attributable to MDC Partners common shareholders for the last twelve months (LTM) of $90.5 million as of September 30, 2019 versus $103.7 million as of June 30, 2019 • Adjusted EBITDA of $49.2 million versus $59.8 million in the prior year period, a decrease of 17.8% • Adjusted EBITDA Margin of 14.3% vs. 15.9% in prior year, a decline of 160 basis points • Covenant EBITDA (LTM) of $178.9 million for the third quarter of 2019 versus $187.9 million for the second quarter of 2019, a decrease of 4.8% • Net new business wins of $30.5 million Note: See appendix for definitions of non-GAAP measures 4

----- DRAFT ----- NINE MONTHS 2019 FINANCIAL HIGHLIGHTS • Revenue of $1.03 billion versus $1.08 billion for the prior year period • Organic revenue declined 3.7% versus the prior year period, including a 179 basis point benefit from billable pass through costs • Net loss attributable to MDC Partners Inc. common shareholders of $6.5 million for the first nine months of 2019 versus $48.3 million for the prior year period • Adjusted EBITDA of $117.1 million versus $110.6 million for the prior year period, an increase of 5.9% • Adjusted EBITDA Margin improvement of 110 basis points to 11.3% versus 10.2% for the prior year period • Net New Business wins of $56.4 million, including $5 million reduction to Q2 2019 Net New Business Note: See appendix for definitions of non-GAAP measures 5

CONSOLIDATED REVENUE AND EARNINGS (US$ in millions, except percentages) Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 % Change 2019 2018 % Change Revenue: $ 342.9 $ 375.8 (8.8) % $ 1,033.8 $ 1,082.5 (4.5) % Operating Expenses: Cost of services sold 222.4 238.7 (6.8) % 700.4 735.1 (4.7) % Office and general expenses 79.7 102.4 (22.1) % 234.1 270.1 (13.3) % Depreciation and amortization 9.4 11.1 (15.9) % 28.9 35.2 (18.0) % (90.7) % (91.7) % Goodwill and other asset impairment 1.9 21.0 1.9 23.3 Operating income 29.4 2.6 NM 68.5 18.8 NM Interest expense and finance charges, net (16.1) (17.1) (49.3) (50.0) Foreign exchange gain (loss) (4.0) 3.3 4.4 (9.9) Other, net (0.4) 0.2 (4.6) 1.2 Income tax expense (benefit) 3.5 3.0 6.3 (3.4) Equity in earnings of non-consolidated affiliates 0.1 0.3 0.4 0.4 Net income (loss) 5.5 (13.7) 13.2 (36.2) Net income attributable to the noncontrolling interest (7.3) (2.5) (10.7) (5.9) Accretion on and net income allocated to convertible preference shares (3.3) (2.1) (8.9) (6.2) Net loss attributable to MDC Partners Inc. common shareholders $ (5.1) $ (18.2) $ (6.5) $ (48.3) 6

REVENUE SUMMARY (US$ in millions, except percentages) Three Months Ended Nine Months Ended Revenue $ % Change Revenue $ % Change September 30, 2018 $ 375.8 $ 1,082.5 Organic revenue growth (decline) (28.1) (7.5)% (40.2) (3.7)% Non-GAAP acquisitions (dispositions), net (2.4) (0.6)% 3.2 0.3% Foreign exchange impact (2.4) (0.6)% (11.7) (1.1)% (32.9) (8.8)% (48.7) (4.5)% Total Change $ 342.9 $ 1,033.8 September 30, 2019 Organic revenue decline of 7.5% in the third quarter of 2019 versus the prior year period, including a 101 basis points benefit from increased billable pass-through costs incurred on clients’ behalf from certain of our partner firms acting as principal. 7

REVENUE BY GEOGRAPHY AND SEGMENT (1) (US$ in millions, except percentages) Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Total Total Organic Revenue Total Total Organic Revenue Revenue Growth Growth (Decline) Revenue Growth Growth (Decline) United States $ 271.7 (8.4)% (8.5)% $ 819.3 (3.4)% (4.8)% Canada 25.9 (19.4)% (7.0)% 72.8 (20.5)% (5.6)% North America 297.6 (9.5)% (8.3)% 892.1 (5.1)% (4.9)% Other 45.3 (3.8)% (1.5)% 141.6 (0.7)% 3.8% Total $ 342.9 (8.8)% (7.5)% $ 1,033.8 (4.5)% (3.7)% Global Integrated Agencies $ 145.9 (7.3)% (6.1)% $ 430.0 (3.4)% (1.5)% Domestic Creative Agencies 57.6 (2.6)% (2.3)% 176.7 (3.7)% (3.2)% Specialist Communications 42.1 8.4% 5.7% 128.2 8.7% 6.6% Media Services 21.2 (28.3)% (28.3)% 75.8 (16.6)% (16.6)% All Other 76.1 (16.3)% (12.2)% 223.1 (9.0)% (8.3)% Total $ 342.9 (8.8)% (7.5)% $ 1,033.8 (4.5)% (3.7)% 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, 3) HL Design and Redscout, previously within Specialist Communications and All Other category, respectively are included in Yes & Company, and 4)Varick Media, previously within the Yes & Company operating segment is included within MDC Media Partners. Note: Actuals may not foot due to rounding 8