Quad/Graphics (QUAD) Small-Cap Growth Virtual Investor Conference summary

Company transformation and strategy

• Evolved from a leading print company to a marketing experience provider, expanding integrated solutions across media channels and launching new offerings like Betty and In-Store Connect.

• Serves over 2,700 clients across diverse verticals, focusing on integrated, data-driven marketing solutions.

• Offers a suite of services: creative (brand strategy, content), production, media placement, analytics, and proprietary technology, including MX Solutions Suite.

• Leverages unique household-level data and proprietary solutions like Household Fusion to enhance targeted marketing and operational efficiencies.

• Recent campaigns for clients like Raw Sugar Living and SpinLife demonstrate successful integrated marketing strategies and agency-of-record wins.

Financial performance and outlook

• Q1 2024 net sales were $654.8 million, with adjusted EBITDA of $50.6 million and a margin of 7.7%.

• 2024 guidance projects a 5% to 9% decline in annual net sales, adjusted EBITDA of $205–$245 million, and free cash flow of $50–$70 million.

• Strong cash generation: over $740 million since 2020, used to reduce debt from over $1 billion to $400 million by year-end 2024.

• Net debt as of March 31, 2024, was $544 million, with a leverage ratio of 2.43x, targeting 1.8x by year-end 2024.

• Dividend reinstated at $0.20 per share annually, with potential for opportunistic share buybacks.

Market dynamics and competitive positioning

• Print segment faces ongoing decline, especially in retail inserts, but targeted print and agency services are stable or growing.

• Integrated marketing solutions now represent a growing share of net sales, reflecting the shift from traditional print to multi-channel offerings.

• In-Store Connect aims to build a large retail network for dynamic advertising, with a revenue-sharing model and attractive margins.

• Competitive advantage comes from deep retailer relationships and proprietary technology, targeting retailers unable to build their own networks.

• Positioned to capitalize on the growth of omnichannel retail media networks, with ad spending in this segment expected to exceed $100 billion by 2027.