Enghouse Corporate Presentation - Q2 FY 15 [Read-Only] · Intuition Attendant Console ......

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Corporate Overview Q2 FY 15

Transcript of Enghouse Corporate Presentation - Q2 FY 15 [Read-Only] · Intuition Attendant Console ......

Page 1: Enghouse Corporate Presentation - Q2 FY 15 [Read-Only] · Intuition Attendant Console ... Continuing transition to next-generatio n network technologies and new service ... Enghouse

Corporate Overview

Q2 FY 15

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Forward-Looking Statements DisclaimerCertain statements made in this presentation and the related materials may contain forward-looking statements,which are not historical facts, but are based on certain assumptions and reflect Enghouse’s current expectations.These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results orevents to differ materially from current expectations. These risk factors are identified in Enghouse’s AnnualInformation Form and other periodic reports filed with applicable regulatory authorities from time to time. Enghousedisclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of newinformation, future events or otherwise.

Market and Industry DataThis document contains certain statistical, market and industry data obtained from industry publications and reports.Industry publications and reports generally indicate that information has been obtained from sources believed to bereliable, but do not guarantee the accuracy and completeness of such information. Actual outcomes may varymaterially from those forecast in such reports or publications, and the prospect for material variation can be expectedto increase as the length of the forecast period increases. While we believe this data to be reliable, market andindustry data is subject to variations and cannot be verified with certainty due to limits on the availability andreliability of data. Enghouse has not independently verified any of the third party data referred to in this document.

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Enghouse InteractiveContact center software

Consistently profitableRevenue1350+ employees

HQ in Canada + 27 countries

Snapshot

Enghouse NetworksTelecom software

Enghouse TransportationTransportation software

Dual Growth – organic & acquisitions

Toronto Stock Exchange TSX:ESL

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Build a larger, more diverse enterprise software and services company through:

– Growing our interaction management solutions business

• Interactive Management Group

– Growing our network solutions and transportation management software businesses

• Asset Management Group

– Consistently generating revenue growth and positive cash flow

– Completing selective acquisitions within existing markets and entering new strategicsoftware markets on an opportunistic basis

Strategy

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Interactive - Sector Dynamics

Contact Center is at the front line of customer interaction, driving technology upgrades on premise and in the cloud

IP migration, multi media routing and email driving technology refresh

Mobile computing/workforce driving significant multi-channel requirements

Trend to in-sourcing contact centers due to increasing costs overseas and political/nationalistic pressures

Traditional PBX market becoming increasingly commoditized, adoption of SaaS delivery model

Microsoft’s entry in the IP PBX could be a disruptive force (Lync Voice Platform)

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Interactive Portfolio

CCEEnterprise

cloud or on-premise

Leading customer interaction solutions, in the cloud, hosted or on-premise toaddress specific market requirements

CCSPService Providerhosted, multi-tenant

CCSME

on-premise Operator Console

on-premise

Scal

e

Functionality

Mul

ti-sit

eSi

ngle

-site

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Interactive PortfolioLeading solutions to maximize the value of customer interaction

MULTI-CHANNEL CONTACT CENTERContact Center Enterprise · Contact Center Service Provider · Communication Center w/Microsoft Lync · Contact Center OnDemand · Outbound Dialer

ATTENDANT/OPERATOR CONSOLEIntuition Attendant Console (Avaya/Genband) · Arc Pro Attendant Console for CISCO · Operator Console for Microsoft Lync · ANDTEK Console

SELF-SERVICECommunication Portal · Knowledge Management Suite

QUALITY MANAGEMENTCall Billing and Reporting Enterprise & Cloud · Call & Computer Recording · Agent Evaluation · Quality Management Suite · Workforce Management System

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Transportation - Sector Dynamics

Fragmented and competitive market. New technologies driving growth in systems andtangible cost benefits / savings

Evolving tablet and smart phone technologies replacing traditional Mobile DataTerminals (MDT’s). LTE networks to provide interoperability across geographies

Cloud computing gaining momentum and driving replacement of legacy technologysystems in a space traditionally slow to adopt

Economic uncertainty and rising fuel costs driving increased ridership in both publicand private sectors

International political focus on terrorism and natural disasters driving continuedinvestment in transportation and public safety systems

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Transportation Portfolio

TRANSIT OPERATIONSFixed Route & Para-transit Scheduling · Dispatch · Workflow /Driver Management

COMMUNICATIONSFixed Route & Para-transit IVR · Web Based Trip Planning

PRIVATE TRANSPORTATIONCoach and Tour Operations Management

Software based transportation and workforce management solutions for thepublic, private and public safety sectors

PUBLIC SAFETYEmergency Control Center & Dispatch (Police, Fire, Ambulance) · Non-Emergency Patient Transport

FLEET & TRANSPORTATION MANAGEMENTLogistics Management · Order Tracking · Telematics · Container and Vehicle Tracking and Monitoring

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Networks - Sector Dynamics

Industry growth fueled by wireless subscriber growth and demand for smartphones, tablet devices and OTT applications

Continuing transition to next-generation network technologies and new service offerings while also dealing with customer services and retention

Big data and analytics technologies being deployed to tailor value-added services based on subscriber usage and behavior

Adoption of cloud and network virtualization will continue to gain momentum

Highly fragmented, open for more industry consolidation among 400+ vendors

BSS/OSS market was valued at $17B in 2011 and is expected to grow to $48.5B in2018, a CAGR of 16% from 2012-2018 (Source – Transparency market Research)

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Network Planning · Rollout · Design · Engineering · Visual IntelligenceGEOGRAPHIC INFORMATION SYSTEM

INTELLIGENT NETWORK SUITELeast Cost Routing · Enhanced Toll Free · Wholesale · Number Portability · Analytics

Real-time Predictive Analysis · Profiling · Dashboard · Business Rules Engine

FRAUD MANAGEMENT

Billing · Order Management · Workflow · CRM · Service Catalog · ProvisioningSERVICE DELIVERY CLOUD

WHOLESALE REVENUE MANAGEMENTMediation · Interconnect · Roaming · Trading · Taxation · Content

MOBILE VALUE ADDED SERVICESMessaging · Call Completion · Rich Communications

Technology solutions to optimize performance for next generationnetwork operators

Networks Portfolio

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ANNUAL RESULTS

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Fiscal Year Results (ending Oct 31)

Note¹ : CAGR – Compound annual growth rate

FY10 FY11 FY 12 FY 13 FY 14

$94m 

$123m $136m 

$220m

TOTAL REVENUE

$180m

FY10 FY11 FY 12 FY 13 FY 14

$47m 

$59m 

$72m

$92m 

$115m

50% 48% 52% 52%

RECURRING REVENUE

51%

FY 10 FY 11 FY 12 FY 13 FY 14

$0.14 

$0.18 

$0.23 

$0.29 

$0.36 

DIVIDEND PER SHARE(based on date of record)

FY 10 FY 11 FY 12 FY 13 FY 14

$0.85

$1.26$1.35

$1.69

$2.09

ADJUSTED EBITDA PER SHARE

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Revenue Split FY 14

Interactive Management 

Group             $169m – 77%

Asset Management 

Group$51m  ‐ 23%

REVENUE BY BUSINESS GROUP

License33%

Hosted/Mtce52%

Services12%

Hardware3%

REVENUE BREAKDOWN

US33%

UK22%

EMEA34%

CANADA4% APAC

7%

REVENUE BY GEOGRAPHY

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6 MONTHS - FY 15

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6 months - FY 15

6 months FY 15

6 months FY 14

Revenue - increase of 29% over FY 14 $131.7m $102.4m

Revenue by Segment

Interactive Management Group $88.6m $81.7m

Asset Management Group $43.1m $20.7m

License revenue $40.7m $34.6m

Recurring revenue - increase of ~ 24% over FY 14 $65.9m $53.4m

R & D expense as a % revenue 15.7% 17.7%

Adjusted EBITDA¹ per diluted share - increase of 24% over FY 14 $1.20 $0.97

Adjusted EBITDA¹ - increase of ~ 25% over FY 14 $32.4m $26.0m

Note¹: Adjusted EBITDA: income before income taxes adjusted for depreciation of PPE, amortization of acquired software and customer relationships, finance income/expenses, other income, litigation settlements and special charges for acquisition related restructuring costs.

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6 months - FY 15

6 months FY 15

6 months FY 14

Quarterly dividend - per common share, based on date of record $0.20 $0.16

Cash spent on dividend $5.2m $4.2m

Cash spent on acquisitions (net of cash acquired) $20.5m $13.5m

Cash & Investments balance - beginning of period $84.9m $90.3m

Cash & Investments balance - end of period $88.5m $101.0m

Acquisitions

IAT Nov 4th

IT Sonix March 4th

CDRator March 3rd

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Q2 FY 15

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Q2 FY 15

Q2 FY 15 Q2 FY 14

Revenue - increase of 25% over Q2 FY 14 $68.7m $55.0m

Revenue by Segment

Interactive Management Group $44.9m $43.9m

Asset Management Group $23.8m $11.1m

License revenue $21.1m $18.9m

Recurring revenue - increase of ~ 19% over Q2FY 14 $33.7m $28.3m

R & D expense as a % revenue 15.7% 17.1%

Adjusted EBITDA¹ per diluted share - increase of ~15% over Q2 FY 14 $0.60 $0.52

Adjusted EBITDA¹ - increase of ~ 17% over Q2 FY 14 $16.2m $13.9m

Note¹: Adjusted EBITDA: income before income taxes adjusted for depreciation of PPE, amortization of acquired software and customer relationships, finance income/expenses, other income, litigation settlements and special charges for acquisition related restructuring costs.

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Q2 FY 15

Q2 FY 15 Q2 FY 14

Quarterly dividend - per common share, based on date of record $0.10 $0.08

Cash spent on dividend $2.6m $2.1m

Cash spent on acquisitions (net of cash acquired) $20.1m $11.3m

Cash & Investments balance - beginning of period $101.8m $100.0m

Cash & Investments balance - end of period $88.5m $101.0m

Acquisitions

IT Sonix March 4th

CDRator March 3rd

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Quarterly Results

$0$10$20$30$40$50$60$70$80

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

FY 12 FY 13 FY 14 FY 15

REVENUE$ millions

$0$5

$10$15$20$25$30$35$40

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

FY 12 FY 13 FY 14 FY 15

RECURRING REVENUE$ millions

$0.00

$0.02

$0.04

$0.06

$0.08

$0.10

$0.12

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

FY 12 FY 13 FY 14 FY 15

DIVIDEND PER SHARE(based on date of record)

$0$2$4$6$8

$10$12$14$16$18$20

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

FY 12 FY 13 FY 14 FY 15

ADJUSTED EBITDA$ millions

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Acquisition Strategy

Established track record of value creation through acquisitions

To consistently generate positive operating cash flows to fund further growthand drive shareholder value

Economic factors favorable for acquisitions especially for small-cap companies

Target companies in the $5m - $50m revenue range preferably with strongrecurring revenue

– Geographic, product or scale expansion– Mission critical solutions– High barriers to entry

Objective is for a cash payback within 5 - 6 years

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Recent Acquisitions

REITEKMay, 2015Q3 FY 15

ITALY

CDRATORMarch, 2015

Q2 FY 15

DENMARK

IT SONIX March, 2014

Q2 FY 14

GERMANY

BASSETJuly, 2014Q3 FY 14

SWEDEN

IATNov, 2013Q1 FY 14

USA

JINNYAug, 2014Q4 FY 14

IRELAND

VOXTRONOct, 2014Q4 FY 14

BELGIUM

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THANK YOU!