MDC Partners had a winning quarter -- thanks to international markets, new account wins, and increasingly, the workload of its current client roster. "You are what your record says, and our earnings are probably better than ever," says Miles Nadal, Chairman and CEO, MDC Partners. "Our [upcoming] prospects are even more encouraging."
The holding company reports 1Q 2014 revenue "exceeded internal expectations" by increasing 10.1% year-over-year to $292.6 million. Organic revenue increased 8.3%, down a bit from the 10.1% organic growth it posted in the first quarter of 2013.
Revenue from net new business wins totaled $24.4 million. "This doesn't factor in potential acquisitions that haven't closed or growth of business from existing clients," says Nadal. "This is all new clients."
Indeed, new companies awarding MDC business in the quarter included Timberland, American Legacy Truth and NBA 2K.
At the same time, company agencies were expanding their relationships with their current client base. Fortune 500 companies initially sign up for MDC Partners services in one region and gradually expand their focus to other countries or a broader assortment of services, says Nadal. As such, 7% of MDC Partners' revenue is now outside of North America.
The company’s outposts in Brazil, Sweden and Amsterdam all reported strong growth, while London reported double digit growth. In Asia, China grew more rapidly than expected or forecast, said David Doft, CFO, MDC Partners.
Still, in order to continue momentum, MDC Partners anticipates several acquisitions throughout the year to add 3%-5% revenue to its bottom line. These deals have strict parameters, say executives. Shops must generate $10 million-$30 million in bookings, grow faster than MDC proper and maintain margins of more than 20%. Ultimately, says Nadal, these acquisitions aren't "about size, but rather [finding] singles and doubles that can contribute on day one."
No high-level advertising executive can avoid discussing the upcoming merger between Omnicom and Publicis. Nadal says his agency is benefiting from agency defections as a result of the merger, echoing similar statements from Interpublic Group executives earlier this week. "We are soon going to announce several senior-level hires at our agencies and these kinds of opportunities never happened before this recent situation."