Corporate Overview. company.isc.ca. August 3, 2017 TSX:ISV

Transcription

1 Corporate Overview August 3, 2017

2 ISC Forward-Looking Statement Forward-Looking Statement This presentation contains forward-looking information within the meaning of applicable Canadian securities legislation, including management s expectations and certain assumptions with respect to our registry services, corporate services and information products industry, our competitive landscape, economic conditions in Canada (in particular, Saskatchewan, Ontario and Quebec) and internationally, real estate market in Saskatchewan, economic impact of energy and resource sectors, fluctuations in the Canadian dollar and other foreign currencies, seasonality, transaction volumes, statements regarding the future financial position or results of ISC, customer growth and diversification, dividend expectations, creation of shareholder value, growth opportunities, capital and operating expectations, real gross domestic product, changes that impact our registry services, such as changes in high-value property registrations, motor vehicle sales volume and the number of active business entities, consolidated EBITDA margin, income taxes, our ability to attract and retain skilled staff, the compensation and benefits that will be paid or provided to employees, our level of customer service and expected activity in the global registry market, as well as goodwill and intangibles are material factors in preparing forward-looking statements. In addition, the words may, will, would, should, could, expect, plan, intend, trend, indicate, anticipate, believe, estimate, predict, project, targets, strive, strategy, continue, likely or potential or the negative or other variations of these words or other comparable words or phrases are intended to identify forward-looking statements. Forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those expressed or implied by such forward-looking information. Although ISC believes the forward-looking information contained in this release is based upon reasonable assumptions, readers are cautioned not to place undue reliance on forward-looking information as it is inherently uncertain and no assurance can be given that the expectations reflected in such information will prove to be correct. Many factors and risks could cause our actual results to differ materially from those expressed or implied by forward-looking information including those detailed in ISC s Annual Information Form, dated March 14, 2017, ISC s Unaudited Interim Consolidated Financial Statements and Notes and Management s Discussion and Analysis for the second quarter ended June 30, 2017, as well as other documents filed by ISC with Canadian securities regulators through SEDAR at from time to time. Investors and others should carefully consider the above-noted factors and risks and other uncertainties and potential events. The forward-looking information in this release is made as of the date hereof and, except as required under applicable securities legislation, ISC assumes no obligation to update or revise such information to reflect new events or circumstances. 2

3 Our Business at a Glance 3

4 ISC Our Business at a Glance Operating Segments We operate in two reportable segments defined by their primary type of service offering. The balance of our corporate activities and shared services functions, including the services and functions provided by our subsidiary, ERS, are reported as Corporate. Registries: - Saskatchewan Land Registry (includes Land Titles Registry, Land Surveys Directory and Geomatics) - Saskatchewan Personal Property Registry - Saskatchewan Corporate Registry (includes Common Business Identifier and Business Registration Saskatchewan Program) - Saskatchewan Asbestos Registry Services: - ESC Search and Registration Services - ESC Know-Your-Customer Services - ESC Corporate Supplies and Accessories 4

5 ISC Our Business at a Glance Registries End-use customers: Individuals or businesses who directly benefit from ISC registries: - Individuals - Non-profit organizations - Business owners - Municipalities - Home builders - Financial institutions - Insurance companies - Car and equipment dealers Channel customers: Intermediaries who manage relationships with end users but are typically not the beneficiary of our registry services: - Law firms - Engineers - Surveyors - Agents (representing end-user customers) 5

6 ISC Our Business at a Glance Services Search & Registration: - Law firms - Financing companies Know-Your-Customer: - Financial institutions Corporate Supplies & Accessories: - Legal professionals 6

7 ISC Our Business at a Glance Corporate Founded in 2002 Based in Ireland Acquired by ISC on Jan 23, 2017 Consulting Implementation & support Registry implementations on 3 continents *The balance of our corporate activities and shared services functions, including the services and functions provided by our subsidiary ERS, are reported as Corporate. 7

8 ISC Our Business at a Glance Revenue Model Registries TRANSACTION Searches Registrations Maintenance and related services * For a full list of our fees, go to SERVICE Online or in person / Customized Online or in person Online or in person / Customized REVENUE TYPE* Flat fees (standard searches, e.g. $11 per land title search) Value-based fees (0.3% of the value of the land title) Flat fees (other registries) Flat or negotiated fees Services TRANSACTION Search & Registration Know-Your-Customer Corporate Supplies & Accessories SERVICE Online or in person / Customized In person Online or in person / Customized REVENUE TYPE* Flat fees Flat fees Per unit fees * For a full list of our fees, go to 8

9 Financial Position 9

10 ISC Financial Position Financial Position Balance sheet remains strong with ability to fund growth opportunities. Continues to support dividend. $31.6 M Amount of cash on hand as at June 30, 2017 $7.0 M Amount of 2017 dividends paid to shareholders as at June 30, 2017 $7.7 M Free cash flow as at June 30, 2017 $32.3 M Total long-term debt as at June 30,

11 ISC Financial Position Earnings Consolidated EBITDA 1 and consolidated adjusted EBITDA 1 for the year ended December 31 (CAD$ millions) EBITDA 33.5 Adj. EBITDA EBITDA, EBITDA margin, adjusted EBITDA, adjusted EBITDA margin and free cash flow are not recognized as measures under IFRS and do not have a standardized meaning prescribed by IFRS and therefore, are not comparable to similar measures by other corporations. See section name Non-IFRS Measures in the Management s Discussion & Analysis for the period ended December 31,

12 ISC Financial Position Multiple Lines of Revenue Total revenue for the year ended December 31 (CAD$ millions) Land Surveys Directory Geomatics Services Corporate Registry Personal Property Registry Land Titles Registry

13 ISC Financial Position Multiple Lines of Revenue Revenue 2 nd Quarter % Land Titles Registry Geomatics 15% Land Surveys Directory Personal Property Registry Corporate Registry Services Other 11% 11% 57% 1% 2% $24.6 M Total revenue 35.8% EBITDA margin $0.27 EPS (basic share) *The balance of our corporate activities and shared services functions, including the services and functions provided by our subsidiary ERS, are reported as Corporate/Other. 13

14 ISC Financial Position 2017 Second Quarter Financial Highlights Thousands of CAD dollars; except earnings per share and where noted Three Months Ended June 30, 2017 Three Months Ended June 30, 2016 Six Months Ended June 30, 2017 Six Months Ended June 30, 2016 Revenue $ 24,646 $ 24,674 $ 46,142 $ 44,280 Net income $ 4,733 $ 6,578 $ 7,159 $ 8,774 EBITDA 1 $ 8,824 $ 10,282 $ 14,592 $ 15,359 Adjusted EBITDA 1 $ 9,553 $ 11,134 $ 15,775 $ 16,605 EBITDA margin 1 (% of revenue) 35.8% 41.7% 31.6% 34.7% Adjusted EBITDA margin % 45.1% 34.2% 37.5% Free cash flow 1 $ 7,747 $ 6,297 $ 13,349 $ 9,613 Dividend declared per share $ 0.20 $ 0.20 $ 0.40 $ 0.40 Earnings per share 2 (basic) $ 0.27 $ 0.38 $ 0.41 $ 0.50 Earnings per share, (diluted) 2 $ 0.27 $ 0.37 $ 0.40 $ EBITDA, EBITDA margin, adjusted EBITDA, adjusted EBITDA margin and free cash flow are not recognized as a measure reported under IFRS and do not have a standardized meaning prescribed by IFRS. See section name Non-IFRS Measures in Management s Discussion & Analysis for the three and six months ended June 30, The calculation of earnings per share is based on net income after tax and the weighted average number of shares outstanding during the period. 14

15 ISC Outlook Outlook 2017 Continued focus on sustaining our core business while pursuing new growth opportunities. Expected consolidated annual EBITDA margin between 31% and 33%. Revised CapEx guidance of $3.5 - $5 million from $5 - $6 million. Temperate economic growth in Saskatchewan for Registries results similar to 2016, with modest growth for Ontario and Quebec economies to deliver moderate growth in the Services segment. 15

16 Growth 16

17 ISC Growth Market Trends Outsourcing Business Processes & Services Governments, legal firms and financial institutions are looking to find cost savings and focus on their core business without compromising service quality. Increased Regulatory & Compliance Requirements Improved workflows and automated processes help meet requirements and reduce potential business risk for clients. Emphasis on Reliability & Security of Information ISC has the know-how, processes, technology and proven experience to manage data authentication and security. Emerging Global Registry Market ISC continues to believe the global registry market is an emerging sector. 17

18 ISC Growth Growth Focus Become More Efficient Internally Grow bottom line by: - Cost management - Increased productivity Explore New Paths Externally - Extend current products and services to other jurisdictions and private industries - Add new services or features to expand business from existing clients - Acquire companies with competencies or operations in our industry space 18

19 Investment Proposition

20 ISC Investment Proposition Investment Proposition Strong Core Business - 20-year exclusive Master Service Agreement with Government of Saskatchewan, including data license - Understanding of Alternative Service Delivery model and needs of governments Emerging Diversification - Investment in Dye & Durham Corp. - Acquisition of ESC Corporate Services Ltd. and Enterprise Registry Solutions Financial Position - Strong cash flow - Solid balance sheet 20

21 ISC Appendices Appendices 21

22 ISC Appendices TSX: ISV Shares Outstanding Listing Market Cap 52-Week High 52-Week Low Dividend History Contact As at August 3, million Class A Limited Voting Shares TSX: ISV $ million $21.30 $16.55 $0.80 per share annually (paid quarterly) since 2013 Investor.relations@isc.ca or call toll free

23 ISC Appendices Appendix A: Ownership Top 5 Institutional Holders Analyst Coverage Institutional Shareholder % O/S Institution Analyst Cover initiated on: Sentry Investments, Inc % QV Investors Inc. 9.27% Burgundy Asset Management Ltd. 3.80% Mackenzie Financial Corporation 2.02% Mawer Investment Management Ltd. 1.00% RBC Steve Arthur, CFA August 7, 2013 GMP Securities Justin Keywood, CFA February 3, 2014 CIBC Stephanie Price July 15, 2014 Ownership Distribution 31% 33% 36% Retail Investors Institutional Investors Government of Saskatchewan As at July 27,

24 ISC Appendices Appendix B: Management Jeff Stusek President & Chief Executive Officer Kathy Hillman-Weir, Q.C. VP Corporate Affairs & General Counsel, Chief Privacy Officer Kenneth W. Budzak VP Operations & Customer Experience Shawn B. Peters VP Finance & Technology and Chief Financial Officer 24

25 ISC Appendices Appendix C: Board of Directors From left: Doug Emsley, Iraj Pourian, Scott Musgrave, Karyn Brooks, Tom Christiansen, Joel Teal, Tony Guglielmin, Michelle Ouellette, Q.C., Dion Tchorzewski 25

26 ISC Appendices Appendix D: 2017 Q2 Consolidated Revenue Thousands of CAD dollars Three Months Ended June 30, 2017 Three Months Ended June 30, 2016 Land Registry (Land Titles Registry, Land Surveys, and Geomatics) $ 14,943 $ 15,371 Personal Property Registry 2,781 2,778 Corporate Registry 2,621 2,378 Registries $ 20,345 $ 20,527 Services 3,551 3,618 Other Total Revenue $ 24,646 $ 24,674 26