MDC Partners Upbeat About Business, Records 13.6% Rev Gain
MDC Partners reported a 13.6% gain in revenue for the first quarter of 2013 to $235 million, while nearly quadrupling pre-tax earnings (EBITDA) to $30.4 million.
Organic revenue growth, which excludes the impact of acquisitions and currency fluctuations, was over 10% and the highest among agency holding companies reporting first-quarter results so far. By comparison, Omnicom Group, Interpublic Group and Publicis Groupe reported organic growth for the period of 2.9%, 2.3% and 1.3%, respectively.
MDC reported net new business wins of $53 million, a company record for the first-quarter period. Wins included Charles Schwab, Boar’s Head and Coty. On a Thursday afternoon conference call with investors and analysts, company CEO Miles Nadal attributed the company’s new business success in part to the hiring in recent quarters of nearly two dozen chief growth officers at company shops whose focus is business development.
The company’s pitch-to-win ratio is “way up,” Nadal said. Also, some clients have hired MDC agencies without a formal review process. “It’s all driven by results for clients,” he said.
MDC said the first-quarter performance exceeded expectations; it was revising upwards its financial guidance for the year. The company now expects to generate between
$1.145 billion and $1.170 billion in revenue this year, up between 12.4% and 12.5% over 2012. That’s about $20 million more revenue than the company initially projected it would generate this
MDC also boosted its guidance for free cash flow from $55-$60 million to $70-$75 million. Its EBITDA margin is now expected to be between 12.4% and 12.5% for the full year.
International revenues were up 24% in the quarter, with two agencies -- Allison + Partners and Anomaly -- expanding to China.
Nadal characterized the first-quarter performance as a “strong start” to the year. The company also redid its debt package in the quarter and indicated that the move would save around $10 million in annual interest payments going forward.