Quad Graphics, Inc · NYSE:QUAD
Quad Graphics — Q4 2021 Earnings Presentation
24 slides from Quad Graphics's earnings presentation, Feb 23, 2022
Slide 1: 4th Quarter 2021 Earnings Call
4th Quarter 2021 Earnings Call February 23, 2022
Slide 2: Call Participants & Forward-Looking Statements
Call Participants & Forward-Looking Statements Forward-Looking Statements This communication contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward- Joel Quadracci looking statements include statements regarding, among other
Slide 3: 2021 Results
2021 Results 3% 40% Net Sales Net Debt Growth Reduction We achieved Net Sales of $3 billion, up 3% Over the past two years, we reduced from 2020 when excluding divestitures Net Debt (1) by $410 million or 40% (1) See slide 17 for definitions of our Non-GAAP measures and slide 21 for a reconciliation
Slide 4: Our Key Competitive Advantages
Our Key Competitive Advantages Our key competitive advantages power our strategic priorities and distinguish Quad as a Marketing Solutions Partner 4
Slide 5: Net Sales Breakdown
Net Sales Breakdown 19% 22% Integrated Integrated Solutions 8% Solutions 10% Agency Solutions 17% Agency Solutions 17% 9% Catalogs Catalogs 2% 10% 39% 42% Logistics QuadMed Logistics 2% Targeted QuadMed Targeted 2019 2021 5% Europe 13% Print 14% Print 11% Latin Direct Marketing 6% Europe Direct Mark
Slide 6: Success Story - Agency Solutions
Success Story - Agency Solutions Opportunity • Created an advertising campaign highlighting PEMCO’s strength in personal lines insurance with the tagline “We insure ambition” OUTCOME Quad Solution • Helped PEMCO achieve its • Developed an integrated campaign strategy that included a series of campai
Slide 7: Success Story - Agency Solutions
Success Story - Agency Solutions Opportunity • Partnered with a regional retailer that operates over 200 stores to provide hyper-local non-print media services Quad Solution • Provided integrated media strategy, planning and placement for all non-print paid media: broadcast, digital and out-of-home
Slide 8: Success Story - Data & Analytics
Success Story - Data & Analytics Opportunity • Partnered with a leading direct-to-consumer company to improve its customer acquisition strategy using the power of data and analytics, and direct marketing Quad Solution • Using proprietary data sets, created and tested a prospecting model to provide i
Slide 9: Success Story - Sustainable Packaging
Success Story - Sustainable Packaging Opportunity • Engaging with two leading national retailers to advance sustainable packaging for their “own” or private brands Quad Solution • Conducting material reduction and replacement evaluations, packaging redesigns, and sustainable sourcing consulting OUTC
Slide 10: Commitment to Culture & Social Purpose
Commitment to Culture & Social Purpose Environmental Social Governance 10
Slide 11: Financial Overview
Financial Overview Fourth Quarter Full-Year US $ Millions (Except Per Share Data) December 31, 2021 December 31, 2020 December 31, 2021 December 31, 2020 STATEMENT OF OPERATIONS (excluding discontinued operations) Net Sales $ 854.6 $ 843.3 $ 2,960.4 $ 2,929.6 Cost of Sales 701.8 682.9 2,389.9 2,334.
Slide 12: Debt Capital Structure
Debt Capital Structure 24% 2.54x Floating 4.9% 76% Debt Leverage Ratio (1) Blended Interest Rate as of December 31, 2021 as of December 31, 2021 Fixed $180 million $396 million May 2022 Cash on Hand Unused Capacity under Revolver Next Significant Debt Maturity of as of December 31, 2021 as of Decemb
Slide 13: Net Debt Reduction
Net Debt Reduction -40% $1,034 $873 $624 12/31/2019 12/31/2020 12/31/2021 Net Debt ($ millions) We reduced Net Debt (1) by $410 million, or 40%, over the past two years despite challenges from the COVID-19 pandemic (1) See slide 17 for definitions of our Non-GAAP measures and slide 21 for a reconcil
Slide 14: 2022 Guidance
2022 Guidance Full-Year 2022 Guidance Annual Net Sales Change (1) 3% to 7% increase Full-Year Adjusted EBITDA (2) $230 to $270 million Free Cash Flow (2) $70 to $100 million Capital Expenditures $55 to $65 million Year-End Debt Leverage Ratio (2)(3) Approximately 2.25x (1) Annual Net Sales Change ex
Slide 15: Thank You
Thank You
Slide 16: Supplemental Information
Supplemental Information
Slide 17: Non-GAAP Financial Measures
Non-GAAP Financial Measures • In addition to financial measures prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), this presentation also contains Non-GAAP financial measures, specifically EBITDA, EBITDA Margin, Adjusted EBITDA, Adjusted EB
Slide 18: Adjusted EBITDA
Adjusted EBITDA Fourth Quarter Three Months Ended December 31, US $ Millions 2021 2020 Net loss attributable to Quad common shareholders $ (21.1) $ (94.0) Interest expense 14.5 16.6 Income tax expense 5.4 17.8 Depreciation and amortization 38.0 42.7 EBITDA [Non-GAAP] $ 36.8 $ (16.9) EBITDA Margin [N
Slide 19: Adjusted EBITDA
Adjusted EBITDA Full-Year Year Ended December 31, US $ Millions 2021 2020 Net earnings (loss) attributable to Quad common shareholders $ 37.8 $ (128.3) Interest expense 59.6 68.8 Income tax expense 9.5 0.3 Depreciation and amortization 157.3 181.6 EBITDA [Non-GAAP] $ 264.2 $ 122.4 EBITDA Margin [Non
Slide 20: Free Cash Flow
Free Cash Flow Full-Year Year Ended December 31, US $ Millions 2021 2020 Net cash provided by operating activities $ 136.5 $ 190.2 Less: purchases of property, plant and equipment (50.0) (61.0) Free Cash Flow [Non-GAAP] $ 86.5 $ 129.2 The above calculation of Free Cash Flow includes the cash flows r
Slide 21: Net Debt and Debt Leverage Ratio
Net Debt and Debt Leverage Ratio Year Ended December 31, US $ Millions 2021 2020 Total debt and finance lease obligations on the balance sheets $ 803.7 $ 928.2 Less: Cash and cash equivalents 179.9 55.2 Net Debt [Non-GAAP] $ 623.8 $ 873.0 Divided by: Adjusted EBITDA [Non-GAAP] $ 246.0 $ 260.4 Debt L
Slide 22: Balance Sheet
Balance Sheet US $ Millions December 31, 2021 December 31, 2020 ASSETS Cash and cash equivalents $ 179.9 $ 55.2 Receivables, less allowance for credit losses 362.0 399.1 Inventories 226.2 170.2 Prepaid expenses and other current assets 41.0 54.7 Property, plant and equipment—net 727.0 884.2 Operatin
Slide 23: Adjusted Diluted Earnings Per Share
Adjusted Diluted Earnings Per Share Fourth Quarter Three Months Ended December 31, US $ Millions (Except Per Share Data) 2021 2020 Loss from continuing operations before income taxes and equity in earnings of unconsolidated entity $ (15.9) $ (68.6) Restructuring, impairment and transaction-related c
Slide 24: Adjusted Diluted Earnings Per Share
Adjusted Diluted Earnings Per Share Full-Year Year Ended December 31, US $ Millions (Except Per Share Data) 2021 2020 Earnings (loss) from continuing operations before income taxes and equity in (earnings) loss of $ 47.0 $ (106.1) unconsolidated entity Restructuring, impairment and transaction-relat