INVESTOR PRESENTATION - Shareworks€¦ · Certain financial measures in this presentation...
Transcript of INVESTOR PRESENTATION - Shareworks€¦ · Certain financial measures in this presentation...
INVESTOR
PRESENTATIONMARCH 2019
TSX: SUM
FORWARD LOOKING STATEMENTSThis document may contain forward-looking statements and/or assumptions that involve known and/or unknown risks. Such statements and assumptions may include: the size and/or
economics of the market, plans and intentions to increase market share, expand geographically, and/or further develop product capabilities; the results of strategic initiatives; and the impact
of competition. These forward-looking statements and assumptions are based on the expectations of Solium and involve known and unknown risks, uncertainties and other factors that may
cause or influence the actual results, market performance, or achievements to differ from any future expected results, performance or achievements expressed or implied by such forward-
looking statements. Solium is not making any representation, expressed or implied, as to the accuracy or completeness of the statements or assumption of future performance and
operational results made in this document. Important factors that could cause or influence such differences include, but are not limited to: inaccurate assumptions on the size and/or
economic parameters of the market; changes in economic or business conditions in general; changes in the competition; changes in services provided by Solium’s suppliers, alliance
partners, and channel partners; changes in customer needs and expectations; and any governmental or regulatory actions. In making an investment decision, prospective investors must
make their own determinations as to the reliability of these projections, assumptions and forward-looking statements. Solium undertakes no obligation to update any forward-looking
statement, assumptions, or the other information herein in order to reflect events or circumstances that may arise after the date of this document. The information in this document is not to
be copied, printed or distributed without the prior written approval of Solium.
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NON-IFRS MEASURESCertain financial measures in this presentation – namely earnings before interest, depreciation and amortization (“EBITDA”), adjusted EBITDA, free cash flow and enterprise value are non-
IFRS financial measures which do not have any standardized meaning prescribed by IFRS and therefore unlikely to be comparable to similar measures presented by other issuers.
Therefore, these non-IFRS financial measures should not be considered in isolation or as a substitute for financial measures prepared in accordance with IFRS. All non-IFRS measures are
included because management monitors and uses the information on a regular basis to analyze the performance of the business and therefore may be considered useful information by
investors.
EBITDA and adjusted EBITDA is defined and reconciled to the IFRS measures in Solium’s Management’s Discussion and Analysis for the year ended December 31, 2018. Free cash flow is
a measure calculated by subtracting purchases of property, plant and equipment from cash from (used in) operating activities per the consolidated statement of cash flows in Solium’s
audited Consolidated Financial Statements for the year ended December 31, 2018. Enterprise value is a measure calculated by 1) multiplying closing market price of shares at the period
end date by the number of shares outstanding; 2) adding debt from the revolving credit facility; and 3) subtracting cash and cash equivalents converted to CAD at the period end date.
Additional information relating to Solium is available on SEDAR at www.sedar.com under Solium Capital Inc.
INVESTMENT HIGHLIGHTS
Robust Technology Solution1
2
3
4
5
Multiple Distribution Channels & Blue Chip Customer
Base
Strong and Predictable Subscription-Based Revenue Model
Consistent Revenue Growth with 5-year CAGR of 10% &
Strong Balance Sheet
Sizable Total Market Opportunity
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BUILDING THE WORLD’S
LEADING EQUITY
MANAGEMENT PLATFORM
4
SINGLE SAAS PLATFORM
Transacting on 13 global
exchanges
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Single, real-time,
cloud-enabled platform
Transacting on 15 global
exchanges
First and only
global platform
REMOVING COMPLEXITY AND ENSURING COMPLIANCE
REPORTING
• Streamlined report
generation in real time
• Matrix security
• Report sharing functionality
• Enhanced international tax
COMPLIANCE
• Automated processes
improve data integrity
• Accurate audit trail
• Global regulatory and
compliance database
ADMINISTRATION
• HRIS integration
• Grant allocation in multiple
currencies
• Fund distribution in multiple
currencies
SERVICE
• Participant transactions in
real time
• Enhanced user support for
administrators
• Participant support
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Multi-jurisdiction
operationsNumerous
award types
Stringent
compliance
environment
International
tax & financial
reporting
Global & mobile
employee base
Multiple data
entry points
Manual
calculationsLimited
access points
Incompatible
platforms
OUR GLOBAL ADVANTAGE
7
Participant logins in a
24-hour period
Participants in over 100 Countries
Unified Service Model
Global money movement
(US$8.5B 2017)
4 global operating centers
(Calgary, Tempe, London, Sydney)
24/7 Call Center
Scalable enterprise offering with
global capabilities
Global Shared Services
DIVERSIFIED CUSTOMER BASE
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Canada United States EMEA Australia
HOW WE SELL
Direct sales force
White label partners
Third party partners
• Law firms
• Wealth managers
• System integrators
• HCM companies
Customers
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MORGAN STANLEY AND UBS PARTNERSHIPS
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Q4 2017FIRST CLIENT
MIGRATIONS LIVE -
COMPLETE ALL BY
2020
45NEW DEALS CLOSED
JOINTLY WITH MORGAN
STANLEY
> 400MORGAN STANLEY
AND UBS
CORPORATE CLIENTS
R&DDEVELOPMENT ON TRACK
AND ACHIEVING TARGET
MILESTONES
PRIVATE MARKET FOCUS
Pre-Seed Seed Series A Series B & Beyond Pre-IPO Public
409A valuations
Fast 409A Valuation Platform Liquidity Events and Secondary Transactions
Law Firms VCsAdvisors &
Consultants
Accounting
Firms
Outsourced
CFOs
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Compensation Data and Planning Tools
FINANCIAL AND
OPERATING METRICS
TTM KEY FINANCIALS (THROUGH Q4 2018)
14
$108.3MTOTAL
REVENUE
REVENUE BY GEOGRAPHY
Canada
32%
U.S.
52%
**International
16%
$15.3MADJUSTED
EBITDA* **Primarily comprised of UK & Australia
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All $ figures in USD and based on trailing twelve months (“TTM”)
* Non-IFRS measure. See reconciliation of Adjusted EBITDA in the 2018 MD&A available on www.sedar.com
REVENUE MODEL
68%FIXED-RECURRING
SUBSCRIPTION REVENUE
27%PARTICIPANT & PLAN BASED -
REOCCURRING ACTIVITY
5%ONE-TIME
• Brokerage, transaction & fund movement fees
• Foreign exchange spread
95%
• Implementation fees
• Special projects & consulting
+ +
Based on TTM
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AVERAGE ANNUALIZED TRADES PER PARTICIPANT
15
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18
12-month moving average5-year moving average
0
20
40
60
80
100
120
2013 2014 2015 2016 2017 2018
GROWING ANNUAL REVENUE
16
(USD, in millions)
5 YEAR CAGR*
10%
* CAGR calculated 2013-2018
21%20%
17%
14%
12%
10%
12%
14%
0
5
10
15
20
25
TTM Q1 2017 TTM Q2 2017 TTM Q3 2017 TTM Q4 2017 TTM Q1 2018 TTM Q2 2018 TTM Q3 2018 TTM Q4 2018
TTM ADJUSTED EBITDA
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(USD, in millions)
TTM Adjusted EBITDA Margin
Note: The decline in adjusted EBITDA margin is inline with the Company’s expectation and reflects planned hiring to support the U.S. white label agreements
KEY FINANCIAL METRICS
(USD, in millions) Q4 – 18 Q3 – 18 TTM
Cash(USD, in millions)
97.0 96.1 N/A
Free Cash Flow*(USD, in millions)
6.6 3.5 9.9
Enterprise Value**(CAD, in millions)
537 516 N/A
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No Debt and Strong Cash Balance to Fuel Acquisitions and Support New Client Wins
* Non-IFRS measure calculated by subtracting purchases of property, plant and equipment from cash from (used in) operating activities.
**Non-IFRS measure calculated by 1) multiplying closing market price of shares at the period end date by the number of shares outstanding; 2) adding debt from the revolving credit facility; and 3) subtracting cash and cash
equivalents converted to CAD at the period end date December 31, 2018.
GROWTH
STRATEGY
INTERNATIONAL GROWTH OPPORTUNITIES
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• Leverage lead market share
• Win a share of IPOs choosing
Shareworks
• Significant white-label and
partnership potential with large
Wealth Management firms
United States
• Market-leading presence in
equity administration
• Expansion into ESPP
market
• Success in signing Macquarie
Group and BHP Billiton
• Continuing to build brand
awareness and strong pipeline
with focus on ASX 100
companies
Australia
• Distribution strength through channel
and direct sales
• Expansion into Germany via landmark
German account
• Barcelona service centre in place to
support mainland Europe
UK/EuropeCanada
GROWTH THROUGH A GLOBAL PLATFORM
1ORGANIC GROWTH
2ACQUISITIONS
3 GEOGRAPHIC EXPANSION
• Direct salesforce
• Increase share of wallet within
customer base
• Wide range of products for
addressing multiple markets
• Strong distribution capabilities
in all major operating markets
• Acquire “books of business”
• Continue to lead the
consolidation
• Leverage diminishing marginal
cost model of business
• Continued investment in key
global markets & capacity
• Building global scale – enabling
access to larger global
opportunities
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White-Label Partnership Opportunities
LONG-TERM OPPORTUNITY
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Asia / Pacific
United States
EMEA
Canada
Global tax
& mobility
US$108MTTM REVENUE
>$1B
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TOTAL
ADDRESSABLE
MARKET
Complementary
products & services
Total rewards
reporting
SOLIUM’S GROWTH FOCUS
Unified Service Model1
2
3
4
5
White Label Partnerships
Continuing Investment in Product and Innovation
Geographic Expansion
Acquisitions
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THE GLOBAL SOLUTION
FOR EQUITY COMPENSATION
ADMINISTRATION