1000 T G2 Inner Working - Jefferies Group Working.pdf · by InnerWorkings Enterprise contracts over the past 3 years won with our acquired entrepreneurs Average deal size $10 MM Average

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Investor PresentationInnerWorkings | 2013

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Safe Harbor

This presentation contains statements relating to future results. These

statements are forward-looking statements under the federal securities laws. We

can give no assurance that any future results discussed in these statements will

be achieved. Any forward-looking statements represent our views only as of

today and should not be relied upon as representing our views as of any

subsequent date. These statements are subject to a variety of risks and

uncertainties that could cause our actual results to differ materially from the

statements contained in this presentation. For a discussion of important factors

that could affect our actual results, please refer to our SEC filings, including the

"Risk Factors" section of our most recently filed Form 10-K.

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Contents

1 Our approach

2 Our growth engines

3 Our performance

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INW

K

Investment Thesis

� Massive Growth Opportunity

� Enabling Technology

� Single Global Platform

� Trusted and Respected Brand

� Demonstrated Execution

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Our Unique Approach

Who we are… … who we are not

Procurement professionals…���� … Print manufacturers����

Displays, packaging, direct marketing…���� …Books, forms, newspapers����

Technology and data driven… ���� …Relationship-based decisions, limited

accountability

����

Full global solution… ���� … Partial offering����

Transparent, long-term contracts…���� … Price discrimination����

Design, logistics, eCommerce, value-

added engineering…���� … Commodity provider����

Driven, ambitious, in full growth mode… ���� … Playing defense����

Bringing new talent into the industry…���� … Tired, habitual����

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Large Global Market Opportunity

Estimated market1

$150 billion

$35 billion

$145 billion

$175 billion

1 Pira International ; 2010 Printing Industries of America Economic and Market Research

North America

South America

Europe / Middle East

Asia Pacific

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1 Our approach

2 Our growth engines

3 Our performance

Contents

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OpportunisticMergers & Acquisitions

Proven Growth Engines

Majority of Growth Over

Past Few Years

Corporate Enterprise

Contracts

Complementary

Growth Engines

Working in

Unison

New Growth EngineSmall & Medium

Business Services

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• Long term contractual solution

with on-site personnel and

transparent fee structure

• Delivered majority of growth over

the past 5 years

• 2012 was our best year by a wide

margin

• Delivering 15-20% savings for

clients

EnterpriseEnterpriseLarge Corporate Contracts

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Enterprise Growth

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Technology

& Data

Global

Platform

Enterprise Advantages

Breadth of

Offering

Flagship

Clients

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Breadth of Offering

ORIGINAL FOCUSTODAY

Warehousing &

Fulfillment

Postal

Optimization

eCommerce

Solutions

Value

Engineering

Savings &

Reporting

Creative

Services

Print

Production

Print

Sourcing

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Technology & Data Advantage

• Innovative procurement and

production management tool

• Growing set of pricing and equipment

profile data

• Independent systems by geographic

region

ORIGINAL PLATFORM

• Single system supports global

financial and operational platform

– Currencies, languages and local

accounting rules

• Collaborative sourcing capabilities

that aggregates global spend

• Facilitates sharing of brand

concepts and materials across

businesses and regions within a

client

• Clients, suppliers, and

InnerWorkings employees have

access to key information through

highly intuitive user interface

TODAY

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Healthcare

Publishing

Not-for-Profit

Retail

Consumer

Packaged Goods

Financial Services

Flagship Clients in Major Verticals

Beverages

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Global Platform

2 years ago…Today…

... operations in 2 countries.... operations in 33 countries.

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Technology

& Data

Global

Platform

Breadth of

Offering

Flagship

Clients

Our Enterprise Advantage

Never had more to offer to our

new and existing clients

Strongest pipeline of new prospective clients in

our company’s history

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M & A

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M & AM & A

• Thousands of independent brokers

between $1MM and $30MM in revenue

• Top 1%-2% are energetic entrepreneurs

able to drive growth

• Represents the best source of business

development talent for our company

• Focused on complementary categories

and geographies that enhance our scale

• We remain the most active, credible

buyer in the market

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M & A Overview

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Entrepreneurs retained

by InnerWorkings

Enterprise contracts

over the past 3 years

won with our acquired

entrepreneurs

$10MMAverage deal size

3 yrs.Average earn out period

EBITDA multiple paid

EBITDA multiple realized

5.7x

3.9x

50%Average down payment

(1) Represents 2006-2012 acquisitions with a purchase price > $1 million

82%

87%29Number of acquisitions

(1)

Target earn-outs

achieved

68%

Track Record of Success

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Small & Medium

Business Services

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Small & Medium

Business ServicesMiddle Market

Small & Medium

Business ServicesMiddle Market

• Market is underserved and

overcharged

• Our comprehensive supplier

network and data give us a

competitive advantage

• Efficient, scalable and unique

client acquisition strategy

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Mid-Market Opportunity

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SMB Acquisition Strategy

Low Touch /

Low Acquisition

Cost

High Touch /

High

Acquisition Cost

Phone Sales & Support “Feet on Street”Self-Service

Internet

Inside Sales is the perfect balance of responsive service and

cost effective client acquisition

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Contents

1 Our approach

2 Our growth engines

3 Our performance

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Revenue Momentum

$5 $16$39

$77

$161

$288

$419$400

$482

$634

$798

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

FYE: December 31

Revenue $MM

Execution

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What We’ve Accomplished

Near

20% organic

growth for last 3 years

ROIC growtheach of last 3

years

EBITDA margin

improvement since 2009

Meaningful

investments to fuel

growthgoing forward

Over

$100MM of new enterprise

revenue in 2012

Debt leverage

ratio

declineeach of last 3

years

2012 Y-O-Y Change

Revenue $798MM +26%

Adjusted

EBITDA$45MM +20%

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$0.13

$0.24

$0.34 $0.41

Diluted EPS

2009 2010 2011 2012* 2013E

$0.45-$0.50

Revenue$MM

$400 $482 $634

$798 $900-930

2009 2010 2011 2012 2013

E

2013 Guidance

* Adjusted for legal settlements

13–17%

10–22%

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Revenue Guidance Build

$798 2012 Revenue

$5 to $10

$20

Run Rate from 2012 M&A

2013 M&A (DB Studios)

$105 to $120 New Global Enterprise Growth (Organic)

($50) Reduction of Large Retail Client Spend

$20 to $30 New Middle Market Growth (Organic)

$900 to $930 2013 Revenue Guidance

$MM

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Strong Liquidity & Financial Position

2.3

1.61.5

1.4

2009 2010 2011 2012

Gross Debt

Leverage Ratio

• Net debt down 25% at Q4

2012 vs. Q3 2012

• DSO = further opportunity

• Limited CAPEX needs (< 1%

of annual revenue)

• Increasing ROIC

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Long Term Model

Financial Metric Key Assumption Long Term Target

Revenue>15% annual organic revenue

growthBillions in annual revenue

Onsite EmployeesSigning major, global enterprise

contractsHundreds and hundreds

Earnings

Healthy increase in annual

earnings growth despite

investments driving top-line

revenue growth

Adjusted EBITDA margin

8 to 9%

Growing Annually

Adjusted EBITDA Margin

Return on Invested Capital

Declining Annually

Days Sales Outstanding

Effective Tax Rate

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INW

K

Thinking Big

• “Once-in-a-lifetime” opportunity

• At less than 1% of our eligible market, we’re just

getting started

• Big data advantage, which is getting bigger

• Laser-focused on execution

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Thank You