MDC Posts Industry-Leading 2013 Organic Growth

MDC Partners posted an 8.1% revenue gain in 2013 to $1.15 billion, while its full-year loss widened to $148.9 million versus $85.4 million in 2012. Earnings before interest, taxes, amortization and depreciation were up by a third to $159.4 million.

MDC posted organic revenue growth for the year of 8.3%, the highest of the holding companies reporting so far -- albeit from a lower revenue base. 

Omnicom Group, for example, reported last week that it achieved organic growth (which excludes the impact of acquisitions, dispositions and currency fluctuations) of 3.5% for the full year and 4.2% for the fourth quarter. The comparable figures for proposed Omnicom merger partner Publicis Groupe were 2.6% and 0.7%, respectively. Havas had 1% organic growth for the year and growth of 1.6% for the fourth quarter. The comparable figures for Interpublic, respectively, were 2.8% and 3.7%.

MDC’s fourth-quarter revenue was up 4.9% to $307.1 million with a net loss of $94.3 million, versus a $24.5 million loss for the prior year period. EBITDA in the quarter was $44.6 million, up 14.5%. Q4 organic growth was 5%.

Company CEO Miles Nadal told Wall Street analysts on a conference call Thursday afternoon that its media operations turned in double-digit organic growth for the year. That sector, he said, “exceeded our profit and revenue expectations,” and is expected to deliver strong results in the future as media continues to be “increasingly more about performance than scale” within the industry.

Nadal said the company’s new business pipeline remains “robust.” The company generated $133 million in net new business revenue in 2013 with $25 million of that coming in the fourth quarter. Recent wins included J.C. Penney, Starbucks, Hotel.com, Bristol-Myers Squibb and Merck.    

To some degree, those wins were off-set by the recent loss of Crispin Porter + Bogusky client Arby’s. That loss resulted in the agency’s decision to lay off approximately 65 employees, most of whom are leaving in the first quarter, when MDC’s severance costs will total $5 million, company officials said.

For full year 2014, company CFO David Doft forecasts revenue growth of between 7.1% and 9.2% with organic growth of between 5% and 7%. EBITDA is expected to increase between 11% and 13.5%, with a profit margin improvement of half a percentage point. 

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