MDC Partners: Ad Spend, Revs Up
Toronto-based agency holding company MDC Partners reported a nearly 14% revenue gain for the third quarter to almost $268 million. The company reduced its year-to-year net
loss by about 23% to $13.4 million.
MDC said its organic revenue growth (ORG) for the third quarter was 6.7%, higher than the other holding companies reporting for the period so far. Company executives acknowledged that their growth rate was helped by the fact that most of their business -- 95% -- is U.S.-based.
Thus, the company didn’t have to contend with sharp
European drops in ad spending and a cooling off of the Chinese economy, like its rivals. That said, other companies showed organic revenue declines in the U.S. as well.
On a conference call with analysts and investors to discuss results, MDC CEO Miles Nadal said that net new business revenues totaled $23 million for the quarter and $103 million for the first nine months of the year, up 36% versus the first nine months of 2011. New assignments this year have come from Bud Light Canada and Toyota.
While the other holding companies, including Interpublic and WPP, indicated that clients pulled back spending in the third quarter, MDC said that its clients did not. “We didn’t experience what they did,” said Nadal. “We’re not hearing about changed expectations” for the fourth quarter or 2013, he added.
Nadal said that MDC expects to meet stated guidance for this year of 5% to 7% ORG and a 7% to 10% gain in earnings before interest, taxes, depreciation and amortization. The company won’t issue formal 2013 guidance until the fourth-quarter earnings call, but Nadal said the company expects to achieve similar results next year.
The company’s media business turned in double-digit organic growth of between 12% and 15% for the third quarter, Nadal said, while EBITDA for that side of the business was up more than 20%. Digital and direct response performed particularly well, he said.
Nadal also said the company was on track to improve its profit margin by a full percentage point this year. Automotive, beverages, package goods, technology and fast food were all strong-performing categories for the company during the quarter.