Quad Graphics, Inc · NYSE:QUAD
Quad Graphics — Q3 2022 Earnings Presentation
24 slides from Quad Graphics's earnings presentation, Nov 2, 2022
Slide 1: 3rd Quarter 2022 Earnings Call
3rd Quarter 2022 Earnings Call November 2, 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-looking Joel Quadracci statements include statements regarding, among other t
Slide 3: Third Quarter 2022 Results
Third Quarter 2022 Results 18% Print Segment Share Gains Increased Pricing in Response to Net Sales Inflationary Cost Pressures Increased Sales in Growth International Locations We delivered a sixth consecutive quarter of Net Sales growth 3
Slide 4: Net Sales Breakdown
Net Sales Breakdown Third Quarter Year to Date 23% 22% Integrated Integrated Solutions 11% Solutions Agency 10% Solutions Agency 17% 10% 16% Solutions Catalogs 2% Catalogs 10% 41% 42% Logistics QuadMed Logistics 2% 6% Europe Q3 ’21 Targeted Print QuadMed Q3 ’22 14% Direct Targeted Print YTD 14% 6% E
Slide 5: Quad: A Marketing Experience Company
Quad: A Marketing Experience Company Business Insights & Technology Strategy Analytics Solutions Managed Agency & Studio Media Services Solutions Print In-Store Packaging We will strategically invest in our platform to give our clients a more streamlined, flexible and frictionless way to go to marke
Slide 6: Our Key Competitive Advantages
Our Key Competitive Advantages Our key competitive advantages power our strategic priorities and distinguish Quad as a Marketing Experience Company 6
Slide 7: Introducing Quad to New and Expanded Audiences
Introducing Quad to New and Expanded Audiences PACKAGING S U S TA I N A B I L I T Y SYMPOSIUM To strengthen our brand as a marketing experience company, we continue to make investments in how we market ourselves, including introducing Quad to new and expanded audiences 7
Slide 8: Recent Success Story
Recent Success Story Opportunity • Large and complex legacy brand insurance and financial services company sought a partner to: • Creatively bring its brand story to life • Make better use of data in order to connect more effectively and authentically with consumers Quad Solution • Presented an inte
Slide 9: Recent Success Story
Recent Success Story Sirius XM Opportunity • To help strategic marketers like Sirius XM overcome challenges with the “cookie-less” future, we spearheaded a campaign that fully integrates digital marketing with traditional mail and data capture Quad Solution • Introduced innovation for monetizing off
Slide 10: Commitment to Culture & Social Purpose
Commitment to Culture & Social Purpose Quad’s 2022 ESG Update is available for download at www.Quad.com/company/ESG/ 10 10
Slide 11: Commitment to Culture & Social Purpose
Commitment to Culture & Social Purpose Sales and Business Development VP Kelly Burt Quad Co-Founder Betty Quadracci Recognized by the Path to Purchase Institute Recognized by Milwaukee Women Inc. for Business Excellence as part of its for her legacy of advancing inclusive leadership Environmental Wo
Slide 12: Financial Overview
Financial Overview Third Quarter Year-to-Date US $ Millions (Except Per Share Data) September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 STATEMENT OF OPERATIONS Net Sales $ 829.9 $ 706.1 $ 2,331.8 $ 2,105.8 Cost of Sales 673.5 574.1 1,911.2 1,688.1 Selling, General and Adminis
Slide 13: Debt Capital Structure
Debt Capital Structure 3.07x 19% 5.7% Fixed 81% Debt Leverage Ratio (1) Blended Interest Rate as of September 30, 2022 as of September 30, 2022 Floating $14 million $245 million January 2024 Cash on Hand Unused Capacity under Revolver Next Significant Debt Maturity of as of September 30, 2022 as of
Slide 14: 2022 Guidance Update
2022 Guidance Update Full-Year 2022 Original Guidance Updated Guidance Annual Net Sales Change (1) 3% to 7% growth 8% to 10% growth Full-Year Adjusted EBITDA (2) $230 to $270 million $235 to $255 million Free Cash Flow (2) $70 to $100 million $70 to $90 million Year-End Debt Leverage Ratio (2)(3) Ap
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 Third Quarter Three Months Ended September 30, US $ Millions 2022 2021 Net earnings $ 13.7 $ 14.3 Interest expense 12.1 15.0 Income tax expense 2.6 2.3 Depreciation and amortization 34.8 38.7 EBITDA [Non-GAAP] $ 63.2 $ 70.3 EBITDA Margin [Non-GAAP] 7.6% 10.0% Restructuring, impairmen
Slide 19: Adjusted EBITDA
Adjusted EBITDA Year-to-Date Nine Months Ended September 30, US $ Millions 2022 2021 Net earnings $ 18.0 $ 58.9 Interest expense 32.3 45.1 Income tax expense 4.0 4.1 Depreciation and amortization 106.6 119.3 EBITDA [Non-GAAP] $ 160.9 $ 227.4 EBITDA Margin [Non-GAAP] 6.9% 10.8% Restructuring, impairm
Slide 20: Free Cash Flow
Free Cash Flow Year-to-Date Nine Months Ended September 30, US $ Millions 2022 2021 Net cash provided by (used in) operating activities $ (30.3) $ 22.1 Less: purchases of property, plant and equipment (49.5) (41.6) Free Cash Flow [Non-GAAP] $ (79.8) $ (19.5) 20
Slide 21: Net Debt and Debt Leverage Ratio
Net Debt and Debt Leverage Ratio US $ Millions September 30, 2022 December 31, 2021 Total debt and finance lease obligations on the balance sheets $ 729.3 $ 803.7 Less: Cash and cash equivalents 14.0 179.9 Net Debt [Non-GAAP] $ 715.3 $ 623.8 Divided by: trailing twelve months Adjusted EBITDA [Non-GA
Slide 22: Balance Sheet
Balance Sheet US $ Millions September 30, 2022 December 31, 2021 ASSETS Cash and cash equivalents $ 14.0 $ 179.9 Receivables, less allowance for credit losses 399.2 362.0 Inventories 323.2 226.2 Prepaid expenses and other current assets 42.4 41.0 Property, plant and equipment—net 681.8 727.0 Operati
Slide 23: Adjusted Diluted Earnings Per Share
Adjusted Diluted Earnings Per Share Third Quarter Three Months Ended September 30, US $ Millions (Except Per Share Data) 2022 2021 Earnings before income taxes and equity in earnings of unconsolidated entity $ 16.3 $ 16.4 Restructuring, impairment and transaction-related charges 5.6 7.4 Gain from sa
Slide 24: Adjusted Diluted Earnings Per Share
Adjusted Diluted Earnings Per Share Year-to-Date Nine Months Ended September 30, US $ Millions (Except Per Share Data) 2022 2021 Earnings before income taxes and equity in earnings of unconsolidated entity $ 22.0 $ 62.9 Restructuring, impairment and transaction-related charges 12.4 (3.4) Gains from