MDC Partners is a mid-sized North American marketing group, housing a broad portfolio of creative and diversified marketing agencies, now mainly headquartered in the US, but with a growing international network. Operating primarily as a venture capital investor, it has accumulated stakes in a collection of separately branded, often single-office agencies, several of which have gradually developed a limited international profile. MDC has become best known for its shareholdings in two highly admired American shops, Crispin Porter & Bogusky and 72andSunny, each of whom also has outposts in Europe. Other subsidiaries include KBS, Anomaly and fashion specialist Laird & Partners. A key addition in 2012 was the purchase of a minority stake in Detroit-based Doner. The main benefit MDC offers its partner agencies is the upfront payout for their shares. Beyond that, businesses are left with operational independence, and that includes the freedom not to work with each other to grow faster or more efficiently. Gradually, though, the group has begun to encourage synergies between its various subsidiaries, not least through the creation of a pooled central media buying agency, now known as Assembly.
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|Colle & McEvoy||Concentric Pharma|
|HL Group||Source Marketing|
Adbrands Weekly Update 2nd Nov 2017: The declines suffered by several of the large groups are being offset by (or indeed caused by) gains further down the feeding chain. MDC Partners, which had been struggling for a couple of years, has pulled off a solid turnaround, and the latest figures demonstrated continuing momentum, though growth was slightly lower than last quarter. 3Q revenues of $376m represented organic growth of 7.6% for the quarter, and a YTD figure of 8.4%. That's more than double the rate delivered by nearest competitor Omnicom. The group doesn't break out performance by individual agencies, but clearly Anomaly is the major contributor to this turnaround following an exceptional new business performance so far this year. Better still (in our opinion), net income of $16.5m lifted bottom line into positive territory for the year. Could MDC finally be on course to report a decent full year profit?
Yet there are still icebergs ahead. A shadow was cast over MDC Partners' strong set of financial results this quarter by three significant account reviews this week. BMW finally confirmed an anticipated review of US creative out of KBS; Crispin Porter & Bogusky lost the global Hotels.com account to an as yet unnamed new agency, and burger chains Carl's Jr and Hardee's are reviewing creative out of 72andSunny.
Adbrands Weekly Update 17th Aug 2017: MDC Partners appeared to have finally turned the corner with its best results for several quarters. Q2 revenues of $390m represented organic growth of 11.7%, well above the first three months of the year. Adjusted EBITDA, which strips out accounting adjustments, finance charges and deferred acquisition payments, was up 12% against the year-ago period. Better still was an attributable net profit for common shareholders of $9.3m, one of the best performances ever reported by this notoriously profit-shy group. The crucial factor in the latest quarter's profit appears to be more than $9m of "other income", mainly an accounting adjustment to reflect changes in exchange rates on intercompany balances between Canadian and US dollars. MDC is still marginally in the red for the half, not least because of burdensome finance expenses, which have cost it $32m already this year, but there's hope at least that it might finally turn a decent profit for the year as a whole. But will it last? That's the real question. Although Anomaly has been doing exceptionally well this year for account gains, and 72andSunny continues strong, there have been major concerns over Crispin Porter & Bogusky and KBS, both of which have been suffering an exodus of senior managers as well as some significant account losses.
Adbrands Weekly Update 18th May 2017: With all the marketing groups' results now in, here's the final ranking for organic growth for 1Q 2017. MDC Partners leads with 5.6% followed by Omnicom (4.4%), Dentsu (3.9%), Interpublic (2.7%), WPP (net sales 0.8%, revenues 0.2%), Havas (0.1%) and Publicis (negative 1.2%).
Adbrands Weekly Update 4th May 2017: MDC Partners - parent to 72andSunny, CP&B, Anomaly and others - reported a slightly better set of numbers for 1Q but it is still making losses. Revenues rose 5.6% overall on an organic basis to $344.7m, including 8.9% in the US. That's the group's best topline performance for several quarters, and significantly higher than any of its larger marketing group competitors (none of whom exceeded 4.4%). However, expenses rose by more than revenues, so operating profit was actually weaker than the year ago quarter. Net loss for the quarter halved to $11.1m; but the earlier quarter had included a large one-off charge for early settlement of part of its debt. There was no such exceptional item this time round, and the group's sizeable remaining debt continues to place a heavy burden on financial performance. MDC still has debts of almost $890m and owes another $124m in deferred acquisition consideration, resulting in Interest and finance expenses of almost $17m during the latest quarter.
Adbrands Weekly Update 9th Mar 2017: With all the marketing groups' results now in, here's the final ranking for organic growth for 4Q and full year 2016. The full year ranking is led by Dentsu (5.1%), followed by Interpublic (5.0%), Omnicom (3.5%), Havas (3.1%), WPP (net sales 3.1%, revenues 3.0%), MDC Partners (2.3%) and Publicis (negative 0.7%). The table for 4Q alone is topped by Interpublic (5.1%), ahead of Havas (4.2%), Dentsu (3.9%), MDC Partners (3.8%), Omnicom (3.6%), WPP (net sales 2.1% revenues 0.5%) and Publicis (negative 2.5%).
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