Corporate Overview. company.isc.ca. May 3, 2018 TSX:ISV

Transcription

1 Corporate Overview May 3, 2018

2 ISC Forward-Looking Information Forward-Looking Information This presentation contains forward-looking information within the meaning of applicable Canadian securities legislation including, without limitation, those contained in the Outlook 2018 section hereof, and management s expectations, intentions and beliefs concerning the industries in which we operate, business strategy and strategic direction, growth opportunities, integration, contingent consideration, development and completion of projects, the competitive landscape, seasonality, our future financial position and results including expected revenue, EBITDA, and capital expenditures, and market trends. 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. Important factors that could cause actual results to differ materially from the Company's plans or expectations include risks relating to changes in economic, market and business conditions, reliance on key customers, dependence on key projects and clients, securing new business and fixed-price contracts, identification of viable growth opportunities, implementation of our growth strategy, competition and other risks detailed from time to time in the filings made by the Company including those detailed in ISC s Annual Information Form dated March 13, 2018 and ISC s unaudited condensed consolidated interim Financial Statements and Notes and Management s Discussion and Analysis for the first quarter ended March 31, 2018, copies of which are filed on SEDAR at 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 Overview Focus on growth. Leading provider of registry and information management services for public data and records. Offering solutions to manage, secure and administer information through our Registry and Services segments. Saskatchewan s exclusive provider of the Land Titles Registry, Land Surveys Directory, Personal Property Registry and Corporate Registry through ASD model. Registry technology solutions and expertise with registry implementations on 3 continents Financial highlights Revenue $93.6M EBITDA $30.0M EBITDA margin 32.1% FCF $22.9M Basic EPS $1.59 TSX: ISV Market cap $308.9 M 52 week high $ week low $16.35 Dividend per share $0.80 Dividend yield 4.6% As at May 3, 2018 Corporate services and corporate accessories acquired AVS Systems Inc. in Dec

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6 ISC Our Business at a Glance Our Business Description Characteristics Revenue Categories Brands Registry Operations Delivery of registry services on behalf of governments. Trusted full-service registry operator. Strong customer service focus. Recurring revenue through longterm service agreements. SK Land Registry SK Personal Property Registry SK Corporate Registry Services Delivery of products and services that utilize public records and data to provide value to customers in the legal and financial sectors. Delivery of industry-leading solutions uniting public record data, customer authentication and collateral management. Our solutions provide corporate legal services and support optimal lending practices to clients with business across Canada. Financial Support Services Legal Support Services Technology Solutions Development, delivery and support of registry (and related) technology solutions. RegSys is the complete registry platform capable of serving a wide range of registry needs. Software implementation and long-term service contracts to ensure maintenance of stable registry systems. Hosting, support and maintenance Solution definition and implementation 6

7 ISC Our Business at a Glance Our Business: Technology Solutions 1 Saskatchewan 2 Ohio 3 Nova Scotia 4 Ireland 5 Guernsey 6 Jersey 7 Serbia 8 United Arab Emirates 9 Malaysia 7

8 ISC Our Business at a Glance Revenue Model Registry Operations Services Technology Solutions Service Searches Registrations Maintenance and related services Searches and registrations Filings Corporate supplies Credit due diligence, protection and default services Hosting, support and maintenance Solution definition and implementation Revenue type Per transaction*: Flat fees Value-based fees Flat fees per transaction** Per unit fees Consulting fees Fee-for-service Annual maintenance contracts * For a full list of our fees, go to **For a full list of our fees, go to 8

9 Financial Position 9

10 ISC Financial Position Reportable Segments - Changes 2017 Reportable Segments Registries Services 2018 Reportable Segments 10

11 ISC Financial Position Financial Position Strong balance sheet Ability to fund growth opportunities. Continues to support dividend. $27.2 M Amount of cash on hand as at March 31, 2018 $3.5 M Amount of 2018 dividends paid to shareholders as at March 31, 2018 $5.8 M Free cash flow as at March 31, 2018 $21.6 M Total debt as at December 31,

12 ISC Financial Position Earnings Consolidated EBITDA 1 and consolidated adjusted EBITDA 1 for the year ended December 31 (CAD$ millions) EBITDA Adjusted EBITDA 1 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 sections Non-IFRS Measures and Financial Measures and Key Performance Indicators for a reconciliation of EBITDA and adjusted EBITDA to net income in the Management s Discussion & Analysis for the period ended December 31, The 2017 EBITDA figure does not include the gain from our sale of ownership in D&D. 12

13 ISC Financial Position Revenue Consolidated revenue for the year ended December 31 (CAD$ millions) F Registries Services Other 13

14 ISC Financial Position EBITDA Consolidated EBITDA for the year ended December 31 (CAD$ millions) 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 sections Non-IFRS Measures and Financial Measures and Key Performance Indicators for a reconciliation of EBITDA and adjusted EBITDA to net income in the Management s Discussion & Analysis for the period ended December 31, The 2017 EBITDA figure does not include the gain from our sale of ownership in D&D. 14

15 ISC Financial Position Revenue / EBITDA Consolidated revenue and EBITDA 1 for the year ended December 31 (CAD$ millions) Revenue EBITDA 1 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 sections Non-IFRS Measures and Financial Measures and Key Performance Indicators for a reconciliation of EBITDA and adjusted EBITDA to net income in the Management s Discussion & Analysis for the period ended December 31, The 2017 EBITDA figure does not include the gain from our sale of ownership in D&D. 15

16 ISC Financial Position Revenue / EBITDA Margin Consolidated revenue and EBITDA margin 1 for the year ended December 31 (CAD$ millions) *Note that the acquisition of AVS in December 2017, with a high revenue, lower margin profile, changes ISC s expected consolidated revenue and EBITDA margin profile compared to previous years. 36.2% 33.4% 32.1% 24.0% %* F Revenue EBITDA Margin 1 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 sections Non-IFRS Measures and Financial Measures and Key Performance Indicators for a reconciliation of EBITDA and adjusted EBITDA to net income in the Management s Discussion & Analysis for the period ended December 31, The 2017 EBITDA figure does not include the gain from our sale of ownership in D&D. 16

17 ISC Financial Position Multiple Lines of Revenue By Segment 1 st Quarter % Registry Operations 55% Services 29% Technology Solutions $26.9 M Total revenue 24.7% EBITDA margin $0.15 EPS (basic share) The balance of our corporate activities and shared services functions are reported as Corporate and elimination, which are not included in the pie chart. 17

18 ISC Outlook Results and Guidance 2017 results and progress 2018 guidance Revenue $93.6M compared to $88.4M in 2016 Targeting between $124.0M and $130.0M EBITDA Margin 32.1% compared to 33.4% in 2016 Targeting between 24.0% and 26.0%* CapEx $2.0M compared to $6.3M in 2016 Targeting between $4.0M and $6.0M Continued focus on sustaining our core business while pursuing new growth opportunities. *Note that the acquisition of AVS in December 2017, with a high revenue, lower margin profile, changes ISC s consolidated revenue and EBITDA margin profile compared to previous years. 18

19 Growth 19

20 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 experienceto manage data authentication and security. Emerging Global Registry Market ISC continues to believe the global registry market is an emerging sector. 20

21 ISC Growth Recent Growth Acquisitions AVS Systems Inc. Alliance Online Business development Nova Scotia Registry of Joint Stock Companies Yukon Land Title Registry Ohio Secretary of State s Office (United States) Companies Registration Office (Ireland) Supported by Increased emphasis on technology solutions To complement existing Registry Operations and Services business. Appointment of Executive Vice President, Technology Solutions. Now have a team of 50+ technical resources with deep registry expertise. An expanded leadership team To advance the business and future growth of the Company. Includes new leadership in marketing and business development. 21

22 Investment Proposition 24

23 ISC Investment Proposition Investment Proposition Strong core business Long-term service agreements for registry operations on behalf of governments. Proven growth strategy Diversifying our business by continuing to execute on our growth strategy focused on organic growth and acquisitions. Disciplined capital allocation Investing in growth opportunities while ensuring stable dividend program. Robust shareholder returns Returning $14.0 million annually to shareholders and 62% total shareholder return since IPO in Strong balance sheet Maintaining a solid balance sheet and strong operating cash flow. 23

24 ISC Appendices Appendices 24

25 ISC Appendices TSX: ISV As at May 3, 2018 Shares Outstanding Listing Market Cap 52-Week High 52-Week Low Dividend History Contact 17.5 million Class A Limited Voting Shares TSX: ISV $308.9 million $19.10 $16.35 $0.80 per share annually (paid quarterly) since 2013 Investor.relations@isc.ca or call toll free

26 ISC Appendices Appendix A: Ownership Top 5 Institutional Holders Institutional Shareholder % O/S Analyst Coverage Institution Analyst Cover initiated on Sentry Investments, Inc % QV Investors Inc. 8.98% Burgundy Asset Management 3.67% Mackenzie Financial Corporation 2.05% IG Investment Management 0.81% 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% 37% Retail Investors Institutional Investors Government of Saskatchewan Note: Values may not add due to rounding. As at April 24,

27 ISC Appendices Appendix B: ISC Leadership Jeff Stusek President and Chief Executive Officer Shawn B. Peters Executive Vice-President and Chief Financial Officer Kathy E. Hillman-Weir, Q.C. Executive Vice-President, Chief Corporate Officer, General Counsel and Corporate Secretary Kenneth W. Budzak Executive Vice-President, Registry Operations Loren Cisyk Executive Vice-President, Technology Solutions Laurel Garven Vice-President, Business Strategy Catherine McLean Vice-President, People and Culture Chris Valentine President, ESC Corporate Services Dennis White Vice-President, Marketing and Business Development 27

28 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 28

29 ISC Appendices Appendix D: 2018 Q1 Consolidated Revenue Thousands of CAD dollars Three Months Ended Mar 31, 2018 Three Months Ended Mar 31, 2017 SK Land Registry $ 11,835 $ 11,754 SK Personal Property Registry $ 2,371 $ 2,347 SK Corporate Registry $ 2,704 $ 2,817 Registry Operations revenue $ 16,910 $ 16,918 Services revenue $ 8,872 $ 3,754 Technology Solutions revenue $ 4,887 $ 5,505 Corporate and elimination - revenue $(3,797) $(3,681) TOTAL revenue $ 26,872 $ 21,496 29