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Corporate Overview · 5/3/2018 · Overview Leading provider of registry and information...
Transcript of Corporate Overview · 5/3/2018 · Overview Leading provider of registry and information...
company.isc.ca TSX:ISV
Corporate OverviewMay 3, 2018
ISC | Forward-Looking Information
This presentation contains forward-looking information within the meaning of applicable Canadian securities legislation including, withoutlimitation, those contained in the “Outlook 2018” section hereof, and management’s expectations, intentions and beliefs concerning theindustries 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 includingexpected 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 suchforward-looking information. Important factors that could cause actual results to differ materially from the Company's plans orexpectations include risks relating to changes in economic, market and business conditions, reliance on key customers, dependence on keyprojects and clients, securing new business and fixed-price contracts, identification of viable growth opportunities, implementation of ourgrowth strategy, competition and other risks detailed from time to time in the filings made by the Company including those detailed inISC’s Annual Information Form dated March 13, 2018 and ISC’s unaudited condensed consolidated interim Financial Statements and Notesand Management’s Discussion and Analysis for the first quarter ended March 31, 2018, copies of which are filed on SEDAR atwww.sedar.com.
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.
Forward-Looking Information
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Our Business at a Glance
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Overview
Leading provider of registry and information management services for public data and records.
Saskatchewan’s exclusive provider of the Land Titles Registry, Land Surveys Directory, Personal Property Registry and Corporate Registry through ASD model.
Focus on growth.
Corporate services and corporate accessories acquired AVS Systems Inc. in Dec 2017.
company.isc.ca TSX:ISV 4
Registry technology solutions and expertise with registry implementations on 3 continents.
Offering solutions to manage, secure and administer information through our Registry and Services segments.
2017 Financial highlightsRevenue $93.6MEBITDA $30.0MEBITDA margin 32.1%FCF $22.9MBasic EPS $1.59
ISC | Our Business at a Glance
TSX: ISVMarket cap $308.9 M52 week high $19.1052 week low $16.35Dividend per share $0.80Dividend yield 4.6%
As at May 3, 2018
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ISC | Our Business at a Glance
Our Business
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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 long-
term 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
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1 Saskatchewan
2 Ohio
3 Nova Scotia
4 Ireland
5 Guernsey
6 Jersey
7 Serbia
8 United Arab Emirates
9 Malaysia
company.isc.ca TSX:ISV
ISC | Our Business at a Glance
Our Business: Technology Solutions
ISC | Our Business at a Glance
Revenue Model
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* For a full list of our fees, go to www.isc.ca**For a full list of our fees, go to www.eservicecorp.ca/index.php/pricing-turnaround-times
Service Revenue type
Registry Operations
• Searches• Registrations • Maintenance and related services
Per transaction*: • Flat fees • Value-based fees
Services• Searches and registrations • Filings• Corporate supplies• Credit due diligence, protection and
default services
• Flat fees per transaction**• Per unit fees
Technology Solutions
• Hosting, support and maintenance • Solution definition and implementation
• Consulting fees• Fee-for-service • Annual maintenance contracts
Financial Position
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Registries Services
2017 Reportable Segments
2018 Reportable Segments
Reportable Segments - Changes
ISC | Financial Position
ISC | Financial Position
Financial Position
Strong balance sheet • Ability to fund growth opportunities.
• Continues to support dividend.
$27.2 MAmount of cash on hand as at March 31, 2018
$3.5 MAmount of 2018 dividends paid to shareholders as at March 31, 2018
$5.8 MFree cash flow as at March 31, 2018
$21.6 MTotal debt as at December 31, 2017
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ISC | Financial Position
EarningsConsolidated EBITDA1 and consolidated adjusted EBITDA1
for the year ended December 31(CAD$ millions)
1EBITDA, 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, 2017. The 2017 EBITDA figure does not include the gain from our sale of ownership in D&D.
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28.4 29.5 30.030.4
33.5 33.4
2015 2016 2017
EBITDA Adjusted EBITDA
Revenue
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Consolidated revenue for the year ended December 31(CAD$ millions)
ISC | Financial Position
124.
0-1
30.0
0
20
40
60
80
100
120
140
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018F
Registries Services Other
EBITDA
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Consolidated EBITDA for the year ended December 31(CAD$ millions)
ISC | Financial Position
32.6
22.1 22.224.2
28.830.6 30.2
28.4 29.5 30.0
0
5
10
15
20
25
30
35
40
45
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
1EBITDA, 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, 2017. The 2017 EBITDA figure does not include the gain from our sale of ownership in D&D.
Revenue / EBITDA
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Consolidated revenue and EBITDA1 for the year ended December 31(CAD$ millions)
1EBITDA, 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, 2017. The 2017 EBITDA figure does not include the gain from our sale of ownership in D&D.
ISC | Financial Position
66.4
57.160.3
70.8 75.379.1 80.5 78.3
88.493.6
32.6
22.1 22.2 24.228.8 30.6 30.2 28.4 29.5 30.0
0
10
20
30
40
50
60
70
80
90
100
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Revenue EBITDA
Revenue / EBITDA Margin
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Consolidated revenue and EBITDA margin1 for the year ended December 31(CAD$ millions)
1EBITDA, 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, 2017. The 2017 EBITDA figure does not include the gain from our sale of ownership in D&D.
ISC | Financial Position
78.3 88.4 93.6 124.0 – 130.0
36.2%
33.4% 32.1%
24.0% - 26.0%*
2015 2016 2017 2018F
Revenue EBITDA Margin
*Note that the acquisition of AVS inDecember 2017, with a high revenue,lower margin profile, changes ISC’sexpected consolidated revenue andEBITDA margin profile compared toprevious years.
ISC | Financial Position
Multiple Lines of RevenueBy Segment – 1st Quarter 2018
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The balance of our corporate activities and shared services functions are reported as Corporate and elimination, which are not included in the pie chart.
24.7%EBITDA margin
$0.15EPS (basic share)
$26.9 MTotal revenue
55%
29%
16%
Registry Operations
Services
Technology Solutions
ISC | Outlook
Results and Guidance
Continued focus on sustaining our core business while pursuing new growth opportunities.
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Revenue
EBITDA Margin
CapEx
2017 results and progress 2018 guidance
$93.6Mcompared to $88.4M in 2016
Targeting between
$124.0M and $130.0M
32.1%compared to 33.4% in 2016
Targeting between
24.0% and 26.0%*
$2.0Mcompared to $6.3M in 2016
Targeting between
$4.0M and $6.0M
*Note that the acquisition of AVS in December 2017, with a high revenue, lower margin profile, changes ISC’s consolidated revenue and EBITDA margin profilecompared to previous years.
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Growth
ISC | Growth
Market Trends
Outsourcing Business Processes & ServicesGovernments, legal firms and financial institutions are looking to find cost savings and focus on their core business without compromising service quality.
Increased Regulatory & Compliance RequirementsImproved workflows and automated processes help meet requirements and reduce potential business risk for clients.
Emphasis on Reliability & Security of InformationISC has the know-how, processes, technology and proven experienceto manage data authentication and security.
Emerging Global Registry MarketISC continues to believe the global registry market is an emerging sector.
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ISC | Growth
Recent Growth
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Acquisitions Business development
• AVS Systems Inc.
• Alliance Online
• 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 An expanded leadership team
• 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.
• To advance the business and future growth of the Company.
• Includes new leadership in marketing and business development.
Investment Proposition
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ISC | Investment Proposition
Investment Proposition
Strong core businessLong-term service agreements for registry operations on behalf of governments.
Proven growth strategyDiversifying our business by continuing to execute on our growth strategy focused on organic growth and acquisitions.
Disciplined capital allocationInvesting in growth opportunities while ensuring stable dividend program.
Robust shareholder returnsReturning $14.0 million annually to shareholders and 62% total shareholder return since IPO in 2013.
Strong balance sheetMaintaining a solid balance sheet and strong operating cash flow.
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Appendices
company.isc.ca TSX:ISV
ISC | Appendices
ISC | Appendices
TSX: ISVShares 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
[email protected] or call toll free 1-855-341-8363
As at May 3, 2018
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ISC | Appendices
Appendix A: Ownership
Top 5 Institutional Holders% O/S
Analyst Coverage
Ownership Distribution
37%
33%
31% Retail Investors
Institutional Investors
Government of Saskatchewan
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As at April 24, 2018
company.isc.ca TSX:ISV
Institutional Shareholder % O/S
Sentry Investments, Inc. 14.88%
QV Investors Inc. 8.98%
Burgundy Asset Management 3.67%
Mackenzie Financial Corporation 2.05%
IG Investment Management 0.81%
Institution Analyst Cover initiated on
RBC Steve Arthur, CFA August 7, 2013
GMP Securities Justin Keywood, CFA February 3, 2014
CIBC Stephanie Price July 15, 2014
Note: Values may not add due to rounding.
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Appendix B: ISC Leadership
company.isc.ca TSX:ISV
Kenneth W. BudzakExecutive Vice-President, Registry Operations
Kathy E. Hillman-Weir, Q.C.Executive Vice-President, Chief Corporate Officer, General Counsel and Corporate Secretary
Shawn B. PetersExecutive Vice-President and Chief Financial Officer
Loren CisykExecutive Vice-President, Technology Solutions
Laurel GarvenVice-President, Business Strategy
Catherine McLeanVice-President, People and Culture
Dennis WhiteVice-President, Marketing and Business Development
Chris ValentinePresident, ESC Corporate Services
Jeff StusekPresident and Chief Executive Officer
ISC | Appendices
From left: Doug Emsley, Iraj Pourian,
Scott Musgrave, Karyn Brooks, Tom
Christiansen, Joel Teal, Tony Guglielmin,
Michelle Ouellette, Q.C., Dion Tchorzewski
ISC | Appendices
Appendix C: Board of Directors
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ISC | Appendices
Appendix D: 2018 Q1 Consolidated Revenue
Thousands of CAD dollars Three Months EndedMar 31, 2018
Three Months EndedMar 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
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