Descartes Systems Group Inc. · TSX:DSG
Descartes Systems — The Descartes Systems Group — Investor Presentation (December 2023)
22 slides from Descartes Systems's investor presentation, December 2023
Slide 1: Descartes – Uniting Business in Commerce
Descartes – Uniting Business in Commerce December 2023 Proprietary and Copyright of The Descartes Systems Group Inc. All rights reserved.
Slide 2: Safe Harbor Statement
Safe Harbor Statement Certain statements to be made today and in this presentation, and that may be made in response to questions, constitute forward-looking information for the purposes of applicable securities laws (“forward-looking statements”), including, but not limited to: statements using the
Slide 3: Investment Highlights
Investment Highlights World’s Largest Multi-Modal and Neutral Logistics Network Cloud-Based Software Applications and Data Content Automating and Optimizing the Increasingly Complex Logistics Market Strong Market Position with Significant Competitive Barriers Industry-Leading Solutions Help Customer
Slide 4: Descartes at a Glance
Descartes at a Glance Leader in providing SaaS solutions for logistics- intensive businesses Proven ‘Total Growth’ model supported by disciplined acquisition strategy High-recurring revenue profile Delivering profitable growth and free cash flow generation 25,000 + 160 + Customers Countries
Slide 5: Global Logistics Network
GLOBAL LOGISTICS NETWORK CARRIERS SHIPPERS Ocean Air Ground Rail Retailers Manufacturers Service & Distributors Providers DESCARTES GOVERNMENTS INTERMEDIARIES GLN™ Customs Regulators Associations Customs Freight Forwarders Brokers Brokers & 3PLs 5
Slide 6: Solutions
SOLUTIONS Ecommerce, Shipping Global Trade Transportation & Fulfillment Intelligence Broker & Forwarder Routing, Mobile Management Enterprise Systems Customs & & Telematics Regulatory Compliance DESCARTES GLN™ 6
Slide 7: Industry-Leading Customers
Industry-Leading Customers AIR OCEAN TRUCK INTERMEDIARIES R E TA I L E RS M A N U FA C T U R E RS D I S T R I B U TO RS 7
Slide 8: Customer Case Studies
Customer Case Studies Leverages Descartes’ Advanced Home Leverages many Descartes solutions Descartes’ solutions help Delta Airlines Delivery solution for: across multiple DHL operating groups: meet a growing number of logistic challenges across the globe: Real-time delivery appointment Global F
Slide 9: Why We Win
Why We Win Global Multi- Neutral modal Network Pure play logistics technology provider with compelling combination of network, applications and data content 9
Slide 10: Market Drivers and Opportunities
Market Drivers and Opportunities Cloud Enables Global Logistics Network offers operational excellence, increased digitization of freight and higher precision through Automation cloud integration and automation G l o b a l Tra d e Heightened regulatory compliance requirements and shifting global trad
Slide 11: M&A is a Core Competency for Descartes
M&A is a Core Competency for Descartes Descartes’ acquisition strategy is a key enabler of its ‘Total Growth’ model Has completed 29 acquisitions since 2015 for a total consideration of ~US $1.1 billion Disciplined approach that is focused 2015 2016 2017 2018 2019 2020 2021 2022 2023 on compleme
Slide 12: Recent Acquisition Success
Recent Acquisition Success Acquired GroundCloud (February 2023) for Acquired XPS (June 2022) for ~$65mm + up Acquired Supply Vision (January 2023), ~$138mm + up to ~$80mm earn-out to ~$75mm earn-out Portrix (May 2021) and Kontainers (June 2020) - ~$43m + up to ~$9m earn-out GroundCloud is a leader
Slide 13: Industry-Leading Solutions Help Customers Reduce Environmental Footprint
Industry-Leading Solutions Help Customers Reduce Environmental Footprint Descartes’ Environmental Impact – We Helped our Customers Save >696,000 >2.4 billion >902.8 million tons of CO2 sheets of paper liters of fuel *INFOGRAPHIC CALCULATIONS WERE MADE USING THE PAPER CALCULATOR FROM ENVIRONMENTAL PA
Slide 14: Financial Overview
Financial Overview DESCARTES
Slide 15: Financial Highlights
Financial Highlights Strong and consistent revenue growth Highly-recurring subscription and transaction-based revenue model High-quality and diverse revenue profile Continued margin expansion through cost control and operating efficiency Robust cash generation and high conversion rates Proven acquis
Slide 16: Strong and Consistent Growth
Strong and Consistent Growth Revenue Cash Flow from Operations $486 $192 $425 $176 $349 $131 $145 $51 $56 $121 FY21 FY22 FY23 Q3-23 Q3-24 FY21 FY22 FY23 Q3-23 Q3-24 Net Income and Net Income as a % of Revenues Adjusted EBITDA(1) and Adjusted EBITDA as a % of $120 100.0% Revenues(1) $102 90.0% $250 $
Slide 17: Efficient and Disciplined Operating Model
Efficient and Disciplined Operating Model Gross Margin Sales and Marketing 74% 76% 77% 76% 76% 76% 13% 12% 12% 12% 11% 11% FY21 FY22 FY23 Q1-24 Q2-24 Q3-24 FY21 FY22 FY23 Q1-24 Q2-24 Q3-24 Research and Development General and Administrative 16% 15% 15% 15% 15% 14% 10% 10% 10% 10% 10% 10% FY21 FY22 F
Slide 18: Capital Structure – Oct 31, 2023
Capital Structure – Oct 31, 2023 • Common shares • 85.1 million – Basic (current) • 86.8 million – Fully diluted (current) • Mixed-Shelf filed in July 2022 (no limit – currently unused) • Expiring August 2024 • Cash and cash equivalents • $US 279.6 million • Acquisition line of credit • $US 350.0 mi
Slide 19: Baseline Calibration
Baseline Calibration Figures per Quarter Baseline Actual Actual % of Baseline Baseline revenues = visible, contracted and Q4’23 Revenue $108.0 $125.1 116% recurring revenues at the beginning of each Net Income $29.8 quarter1. Baseline revenues is not a revenues Net Income as a % of Revenues 23.8%
Slide 20: Investment Highlights
Investment Highlights World’s Largest Multi-Modal and Neutral Logistics Network Cloud-Based Software Applications and Data Content Automating and Optimizing the Increasingly Complex Logistics Market Strong Market Position with Significant Competitive Barriers Industry-Leading Solutions Help Customer
Slide 21: Reconciliation of Non-GAAP Financial Measures - Adjusted EBITDA – Q3-24
Reconciliation of Non-GAAP Financial Measures - Adjusted EBITDA and Adjusted EBITDA as a percentage of revenues – Q3-24 We prepare and release quarterly unaudited and annual audited financial statements prepared in The table below reconciles Adjusted EBITDA and Adjusted EBITDA as a percentage of rev
Slide 22: Reconciliation of Non-GAAP Financial Measures - Adjusted EBITDA – FY23
Reconciliation of Non-GAAP Financial Measures - Adjusted EBITDA and Adjusted EBITDA as a percentage of revenues – FY23 We prepare and release quarterly unaudited and annual audited financial statements prepared in The table below reconciles Adjusted EBITDA and Adjusted EBITDA as a percentage of reve
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