Investor Presentation

Transcription

1 Investor Presentation CONNECTING THE GLOBAL COMMERICAL REAL ESTATE MARKETPLACE TSX: AIF November 2018

2 Forward Looking Statements Certain information in this presentation may constitute forward-looking information within the meaning of applicable securities legislation. All information contained in this presentation, other than statements of current and historical fact, is forward-looking information. Forward-looking information includes information that relates to, among other things, objectives, strategies and intentions, and future financial and operating performance and prospects. Generally, forward-looking information can be identified by use of words such as may, will, expect, believe, plan, would, could and other similar terminology. All of the forward-looking information in this presentation is qualified by this cautionary statement. Forward-looking information includes, but is not limited to, the discussion of Altus Group s business and operating initiatives; its expectations of future performance for its various business units and its consolidated financial results; and its expectations with respect to cash flows and its level of liquidity. Forward-looking information is not, and cannot be, a guarantee of future results or events. Forward-looking information is based on, among other things, opinions, assumptions, estimates and analyses that, while considered reasonable by Altus Group at the date the forward-looking information is provided, inherently are subject to significant risks, uncertainties, contingencies and other factors that may cause actual results, performance or achievements, industry results or events to be materially different from those expressed or implied by the forward-looking information. The material factors or assumptions that were identified and were applied by Altus Group in drawing conclusions or making forecasts or projections set out in the forwardlooking information include, but are not limited to: the successful execution of Altus Group s business strategies; consistent and stable economic conditions or conditions in the financial markets; consistent and stable legislation in the various countries in which Altus Group operates; no disruptive changes in the technology environment; the opportunity to acquire accretive businesses; the successful integration of Altus Group s businesses; and the continued availability of qualified professionals. Inherent in the forward-looking information are known and unknown risks, uncertainties and other factors that could cause Altus Group s actual results, performance or achievements, or industry results, to differ materially from any results, performance or achievements expressed or implied by such forward-looking information. Given these risks, uncertainties and other factors, investors should not place undue reliance on forward-looking information as a prediction of actual results. The forward-looking information contained herein is current as of the date of this presentation and, except as required under applicable law, Altus Group does not undertake to update or revise it to reflect new events or circumstances. Additionally, Altus Group undertakes no obligation to comment on analyses, expectations or statements made by third parties in respect of Altus Group, its financial or operating results, or its securities. Please consult Altus Group s most recent regulatory filings on SEDAR for more information on the Company s forward-looking statements. Altus Group uses certain non-ifrs measures (such as Adjusted EBITDA and Adjusted EPS), and as indicators of financial performance. Readers are cautioned that they are not defined performance measures under IFRS and may differ from similar computations as reported by other similar entities and, accordingly, may not be comparable to financial measures as reported by those entities. We believe that these measures are useful supplemental measures that may assist investors in assessing an investment in our shares and provide more insight into our performance. 2

3 Connecting the Global CRE Marketplace Altus Group Enables Clients to: MAXIMIZE THE VALUE of CRE assets & portfolios through: We are: Enabling clients to unlock the potential of underutilized data for better performance management Creating cloud-based solutions that provide complete portfolio transparency and insights across the business Providing technologyenabled expert advisory services to maximize value of assets & portfolios Software & data solutions for CRE investment management Independent technology-enabled CRE professional services Combining data, software and expert services to enable clients to connect to the market with greater speed, visibility and efficiency 3

4 Uniquely Positioned Market Leader Established Market Leader Market Standard Software & Data Solutions Global Scale Depth in Expert Services Unmatched Global Blue Chip Client Base Strong Financial Profile Leading provider of independent advisory services, software and data solutions to the global CRE industry Heavily embedded in customers daily workflows Market standard software solutions for global CRE property & portfolio analysis Market standard for investment performance benchmarking & attribution analysis standard for US CRE institutional investors Leading provider of Canadian real estate market data Headquartered in Canada, with 75 offices & 2,500+ employees in major markets across North America, Europe & Asia Pacific Trusted CRE advisor in property tax management, valuations, market research, development cost consulting & project management, and geometrics services Leading market share in CRE consulting practices Serving the world s largest CRE industry participants Solid balance sheet with strong cash generation Strong track record of profitable organic growth and accretive acquisitions Long-standing and sustainable dividend policy in place 4

5 Pressure Points Affecting CRE Modernization Accelerated Transactions Disruptive Business Models Increased Risk & Regulatory Pressures Increased Transparency Globalization Approx. US$6 billion invested in CRE tech since 2011, about 70% in last couple of years (source: CB Insights) 5 Real estate funds AUM expected to double from US$600 billion globally at the end of 2017 to $1.2 trillion by the end of 202 (source: Prequin)

6 Current Current Altus Analytics Evolution SET THE STANDARD GLOBALLY Wave 1 Wave 2 Wave 3 North America DCF Upgrade Committed; Deployment Ongoing UK ValCap Upgrade UK & Continental Europe Go Global Enterprise Agreements UPSELL Same Client Application Sale & SME Strong re-purchase rates from current AE customers (adding more seats and/or functionality) Upgrade Sale Enterprise Sale Global Solution INNOVATE New Applications & Partnerships ARGUS in the Cloud Data Monetization New Markets & Applications (ex. Debt Markets) 6

7 Altus Analytics Roadmap MODERN Cloud Workflow Sync Analytics GLOBAL Canada USA UK Europe Australasia APPLICATIONS Global Asset & Investment Management Data & Performance Attribution Development Feasibility & Management 10/10 Top Global Service Providers 600+ AOD Clients 2,000+ Development Clients 3,500+ AE Clients 70+ Countries 225/350 Top Global Asset Managers

8 Technology-Enabled Expert Services Our people, powered by technology & data, provide value-added insights at key decision points across the asset lifecycle SOFTWARE Global & diverse bench strength of Property Tax, Valuations and Development Cost professionals (leading market share in key practice areas) Modernizing with technology and platforms to drive internal efficiencies & enhance client value Leveraging data Unique Altus Asset Identifiers & Altus Data Studio to provide deeper, actionable advice to clients DATA EXPERT SERVICES Future opportunity to monetize Expert Services data for benchmarking capabilities in ARGUS Enterprise ALTUS DATA STUDIO (Validate, Standardize, Organize) 8

9 Financial Performance $600 $500 $400 $442 M $45 M $96 M $478 M $49 M $102 M $502 M $44 M $106 M Adjusted EBITDA Revenue Adj. EBITDA Margin 2018 YTD YoY Chg. ALTUS ANALYTICS $ % $ % 24% $300 $200 $151 M $159 M $179 M CRE CONSULTING $100 $151 M $169 M $173 M Revenue Adj. EBITDA Margin $ % $ % 21% $ TTM Altus Analytics Property Tax V&C Advisory Geomatics CONSOLIDATED CAGR ( ) 10.2% Revenue 9.4% Adj. EBITDA Revenue Adj. EBITDA Margin $ % $ % 15% 9

10 Financial Strength Strong Cash Generation Prudent Financial Management Strong Financial Growth Financial Flexibility Steady Shareholder Returns $57.8 M in cash from operating activities in 2017 Increasing recurring revenues at Altus Analytics 73 day DSO Corporate costs as a % of revenues declined to 6.4% (vs. 7.7% in 2017) As at Sept. 30, % 4-Yr Revenue CAGR (up to 2017) 9% 4-Yr Adj. EBITDA CAGR (up to 2017) $93.0 M cash position $185.2 M term debt 1.72x bank funded debt to EBITDA ratio 19% share price increase in 2017 Strong TSR track record: 1 Yr 3 Yr 5 Yr 21.6% 24.1% 39.3% As at Sept. 30, 2018 As at Dec. 31, 2017 $23.1 M paid in dividends in 2017 (including DRIP) 10

11 Corporate Leadership ROBERT COURTEAU CARL FARRELL ANGELO BARTOLINI LIANA TURRIN ED ORLIK TRISH BALL Chief Executive Officer President Chief Financial Officer General Counsel and Corporate Secretary Chief Information Officer Chief Human Resources Officer +2,500 employees worldwide 75 offices in major CRE markets ~9% employee ownership 11

12 Board of Directors RAYMOND MIKULICH, CHAIRMAN Mr. Mikulich currently serves as the Managing Partner and Chief Investment Officer for Ridgeline Capital Group, LLC, a real estate investment and asset management company, and the Chief Executive Officer of HomeLPC, LLC, a real estate investment company based in New York, NY. He was head of Apollo Global Real Estate North America. Mr. Mikulich was a member of the investment committee and the co-head of the Real Estate Private Equity Group of Lehman Brothers and the Group Head of Global Real Estate Investment Banking at Lehman Brothers. He has served as a Trustee of the Urban Land Institute, on the Board of The Real Estate Roundtable, as a member of the Advisory Board of the National Association of Real Estate Investment Trusts (NAREIT) as well as numerous other industry organizations. ROBERT COURTEAU, CEO Mr. Courteau is Chief Executive Officer of Altus Group. An accomplished senior executive, Mr. Courteau has extensive experience in leading new business initiatives and achieving growth objectives with some of the world s foremost companies. He was a corporate executive with SAP AG, a global market leader in enterprise application software, including roles as the President, North America and Global Chief Operating Officer. He has been an active board member of numerous North American not-for-profit organizations and has served on boards of several publiclytraded companies. Mr. Courteau holds a Bachelor of Commerce degree from Concordia University and was awarded an Honorary Doctor of Laws degree from Concordia University in In recognition of his commitment to education and endorsement of international standards and regulation, he was awarded an Honorary Fellowship with RICS (FRICS) in CARL FARRELL, PRESIDENT Mr. Farrell is a seasoned technology executive who most recently served as the Executive Vice President & Chief Revenue Officer for SAS Institute, a leader in business analytics software and the largest independent vendor in the business intelligence market. Mr. Farrell has over 30 years of global experience in the software and related services industry and has held executive positions at Vignette Corporation, Idiom Technologies, JD Edwards and JBA Plc. ANGELA BROWN Ms. Brown is an experienced executive with more than 25 years in the payments industry, including merchant acquiring, consumer and commercial payment products, payment processing and merchant acceptance. Ms. Brown currently serves as President and Chief Executive Officer of Moneris Solutions Corporation. Prior to joining Moneris, Ms. Brown was Group Executive, Enterprise Development, Merchants & Acceptance, for MasterCard Worldwide. She was responsible for cultivating MasterCard s relationship with merchants, creating new merchant value propositions and expanding the reach of MasterCard s network. Previously, Ms. Brown spent 13 years at the Canadian Imperial Bank of Commerce within the ATM and Cards divisions. Ms. Brown graduated with a Master s degree in Business Administration from the Schulich School of Business at York University in Toronto. 12

13 Board of Directors ERIC W. SLAVENS Mr. Slavens currently serves on the boards of NexGen Financial Corporation, an asset management company, Effort Trust Company, a financial services, real estate and asset management company, and Titanium Corporation Inc., an oil sands services and technology company. He is a Fellow of the Chartered Professional Accountants of Ontario. Mr. Slavens was a partner of PricewaterhouseCoopers LLP for 30 years, serving most recently as the National Leader, IPO Services. Mr. Slavens has a Bachelor of Commerce from the University of Toronto and is a graduate of the Directors Education Program co-sponsored by Rotman School of Management and the Institute of Corporate Directors. DIANE MacDIARMID Ms. MacDiarmid is President, MacDiarmid & Company, a strategy and organizational effectiveness consulting firm. Previously she was Executive Vice President, Corporate Resources with Bentall Kennedy LP, a North American real estate investment and services company. Prior to joining Bentall Kennedy, Ms. MacDiarmid was President of Oliver Wyman Delta Canada. Earlier in her career she worked in financial services, consulting engineering and the oil industry. Ms. MacDiarmid holds a Master of Business Administration from the Schulich School, York University, Toronto and a Bachelor of Applied Science (Civil Engineering) from Queen s University, Kingston, Ontario. She is a member of the boards of Morneau Shepell and Altus Group and is past chair of the board of AMREF (African Medical and Research Foundation) Canada. TONY GAFFNEY Mr. Gaffney was formerly Chief Executive Officer of Aon Hewitt Canada, a human capital and management consulting company. Previously, he was Managing Partner, Toronto, of Accenture Inc. Mr. Gaffney has served as President and Chief Executive Officer of BCE Emergis, a publicly-traded company, and Bell Nexxia. Mr. Gaffney has also held international leadership positions with SHL Systemhouse Inc. and MCI Corp. He currently sits on the boards of President s Choice Bank, Canada s Walk of Fame and Bishop Strachan School. Mr. Gaffney holds a Bachelor of Engineering (B.A.I) degree and M.A. from Trinity College in Dublin, Ireland. He is also a graduate of the Rotman Corporate Directors program (ICD.D). JANET WOODRUFF Ms. Woodruff is an experienced corporate director and senior executive with over 30 years of business experience in the energy, transportation and health sectors, including her most recent role as acting Chief Executive Officer of Transportation Investment Corporation, a B.C. Crown Corporation. Ms. Woodruff currently serves on the boards and audit committees of Capstone Infrastructure Corporation and FortisBC Inc. Ms. Woodruff is a member of the Institute of Corporate Directors, holding the ICD.D designation, and is a Fellow Chartered Accountant of British Columbia. She earned her Honours Bachelor of Science from the University of Western Ontario and her Master of Business Administration degree from York University. 13

14 CONNECTING THE GLOBAL REAL ESTATE MARKETPLACE TSX: AIF Appendix

15 Capital Markets Stats SECURITY SYMBOLS TSX: AIF ANALYST COVERAGE Included in S&P/TSX Composite Index MARKET CAPITALIZATION $950 Million SHARES OUTSTANDING 39.4 M RECENT SHARE PRICE $24.17 (November 16) 52-WEEK RANGE $37.55 / $ MTH AVG. TRADING VOLUME ~61K QUARTERLY DIVIDEND $0.15 per share (2.5% yield) ADJUSTED EPS $1.13 per share (2017) BMO, Stephen MacLeod Canaccord, Yuri Lynk Cormark, Maggie MacDougall CIBC, Stephanie Price GMP, Deepak Kaushal National Bank, Richard Tse RBC, Paul Treiber Scotia, Paul Steep OWNERSHIP ~80% Institutions & ~9% Employees TD, Daniel Chan $40 $35 $30 $25 $20 $15 H H H H H H H H H H H Altus Group Limited - Price 15

16 Recent Financial Performance By Business Segment In thousands of Cdn. dollars Q Q * % change YTD Q YTD Q * % change Altus Analytics Revenues $ 44,094 $ 40, % $ 131,602 $ 126, % Adjusted EBITDA $ 10,102 $ 11,843 (14.7%) $ 31,202 $ 40,090 (22.2%) Adjusted EBITDA Margin 22.9% 29.3% 23.7% 31.8% CRE Consulting Property Tax $ 38,946 $ 39,385 (1.1%) $ 137,624 $ 116, % Valuation & Cost Advisory 26,380 24, % 78,632 75, % Revenues $ 65,326 $ 64, % $ 216,256 $ 191, % Property Tax $ 7,214 $ 15,355 (53.0%) $ 35,705 $ 35, % Valuation & Cost Advisory 3,973 3, % 10,278 9, % Adjusted EBITDA $ 11,187 $ 19,019 (41.2%) $ 45,983 $ 44, % Adjusted EBITDA Margin 17.1% 29.6% 21.3% 23.2% Geomatics Revenues $ 11,338 $ 12,580 (9.9%) $ 32,151 $ 36,947 (13.0%) Adjusted EBITDA $ 1,812 $ 1, % $ 2,721 $ 3,461 (21.4%) Adjusted EBITDA Margin 16.0% 11.8% 8.5% 9.4% Consolidated Revenues $ 120,636 $ 117, % $ 379,544 $ 354, % Adjusted EBITDA $ 16,504 $ 23,310 (29.2%) $ 55,783 $ 60,696 (8.1%) Adjusted EBITDA Margin 13.7% 19.9% 14.7% 17.1% *Restated for the impact of IFRS 15 16

17 Revenue Streams ALTUS ANALYTICS ARGUS software tools for CRE portfolio & investment management - for asset valuation, portfolio management, budgeting, forecasting, sensitivity analysis, data management, etc. Appraisal management advisory with data analytics tools - attribution analysis, benchmarking, risk analysis Revenue contribution, YTD: Industry valuation/ transactions standard (ARGUS Enterprise) Global footprint $131.6 M US industry standard in fund valuation data (used by 22/23 NCREIF open-end index funds) First to market in Europe Canadian market data subscription products (RealNet, Altus InSite, HPI) Largest CRE data provider in Canada EXPERT SERVICES Property Tax management & administration services - tax assessment reviews, appeals & negotiations, expert witness services, etc. Valuation & advisory services valuations/appraisals, due diligence, market research, economic consulting, etc. Cost consulting and project management services - construction feasibility studies, budgeting, cost planning, risk management, loan monitoring, etc. Competitive Strengths: Competitive Strengths: Cross-border capability Canadian & UK market leader, one of top 5 providers in US Independence Canadian market leader in valuations & independent market research Canadian market leader & dominant position with developer market Strong presence in Asia Pacific 35% +70% are recurring* Revenue contribution, YTD: $137.6 M 36% $78.6 M 21% ARGUS branded products are sold as perpetual licenses, with ongoing maintenance, or on a subscription basis. The contractual terms of our appraisal management agreements are generally for 3-5 year terms and pricing is primarily based on the number of real estate assets on our platform, adjusted for frequency of valuations and complexity. Occasionally, our Altus Analytics professionals also perform due diligence assignments in connection with CRE transactions. Pricing for services is based on a fixed fee or time and materials fee basis, and for a significant number of projects in Property Tax, on a contingency basis Geomatics technical services - field & construction surveys, 3D scanning, internet mapping Market leader in geomatics services in Western Canada $32.2 M 8% GEOGRAPHIC REVENUE SPLIT: 41% Canada 35% US 18% Europe 6% Asia Pacific *Altus Analytics recurring revenues represent revenues related to software & data subscriptions, maintenance for perpetual licenses and appraisal management solutions, where the contract value for software subscriptions is recognized ratably over the contract term. 17 As at nine months ended Sept. 30, 2018

18 TSX: AIF altusgroup.com For investor inquiries, please contact: Camilla Bartosiewicz VP, Investor Relations