Data Communications Management Corp. · TSX:DCM
Data Communications Management — 42nd Annual Growth Conference (August 2022)
33 slides from Data Communications Management's conference presentation, Aug 10, 2022
Slide 1: 42nd Annual Growth Conference Presentation
Presentation to: 42nd Annual Growth Conference DATA Communications Management Corp. DCM-TSX | DCMDF-OTCQX August 10, 2022
Slide 2: Objectives Today
Objectives Today: 1. Who is DCM? 2. What’s our Strategic Direction? 3. How are We Performing? 4. Why Invest in DCM? 2
Slide 3: Forward-looking Statements and Information Disclosure
Forward-looking Statements Information Disclosure Forward-looking Statements Non-IFRS Measures Certain statements in this presentation constitute “forward-looking” statements that involve This presentation includes certain non-IFRS measures as supplementary information. In known and unknown risks, u
Slide 4: 1. Who is DCM?
1. Whois DCM? DCM
Slide 5: Our mission is to transform our clients' businesses
Our mission is to transform our clients’ businesses by simplifying the way they communicate and operate – so they can accomplish more with fewer steps and less effort without compromising on quality. 5
Slide 6: DCM at a Glance
DCM at a Glance We help leading brands manage their online and offline communication needs We’re Trusted We’re Reliable We’re Passionate We’re Significant 75% 3 of 5 60+ $255M of Canada’s largest Years of of revenue largest corporations Federal government experience trust DCM agencies rely on DCM 6
Slide 7: DCM's Locations
DCM’s Locations Wherever you go, we’re there for you. Centre of excellence A. Calgary, AB B. Drummondville, QC A C. Brampton, ON Burlington, ON Toronto, ON B D. Chicago, IL C Other locations Ottawa, ON Regina, SK Toronto, ON Winnipeg, MB D Montreal, QC 7
Slide 8: Vertical Expertise
Vertical Expertise 70 of the top 100 largest corporations in Canada trust us with their brand leveraging our various capabilities based on their specific needs Transportation Financial Healthcare Retail Emerging markets Consumer health Energy QSR
Slide 9: 2. What's our Strategic Direction?
2. What’s our Strategic Direction? 9
Slide 10: Simplifying Workflow
Simplifying Workflow Complex conventional Tech-enabled Digital asset management print solutions marketing workflow tech-enabled service Client Client Migration Migration Marketing Business Print and solutions process digital outsourcing solutions Advanced tech-enabled service provider that delivers
Slide 11: Evolution from "Print First" to "Digital First"
Evolution from “Print First” to “Digital First” +5-10% Revenue $255.1M Revenue CAGR Objective 2% 7% 18% 31% 5 years TTM 2026 67% Complex Conventional Print Solutions 75% Tech-enabled Marketing Workflow Tech-enabled Services Fees Objective to grow digital revenue to drive higher margins and cash flow
Slide 12: Five-year Financial Objectives
Five-year Financial Objectives From print first to digital first +5-10% 35-40% 18-20% 18-25% <1.0x Revenue CAGR Gross margins SG&A Adjusted EBITDA Debt / EBITDA +60% Martech Growth, +80% GM 12
Slide 13: 3. How we are Performing?
3. How we are Performing? DcM =
Slide 14: Momentum
~ Momentum
Slide 15: Strong Momentum in 2022
Strong Momentum in 2022 Revenue Gross Profit Net Income EBITDA Q2 2022 +23.4% +29.0% +490% +48.7% vs. 2021 YTD 2022 +16.8% +17.7% +212% +38.1% vs. 2021 TTM 2022 run-rate +8.4% +8.7% +324% +20.8% vs. fiscal 2021
Slide 16: Continued Revenue Momentum in Q2 2022
Continued Revenue Momentum in Q2 2022 First half revenue +16.8% vs. 2021 Quarterly Revenue (millions) $69.3 $68.1 $62.4 $60.9 $55.2 $56.9 2021 2022 Q1 Q2 Q3 Q4 $255.1M of TTM Revenue through Q2 2022 (vs. $235.3M in fiscal 2021) * TTM = Trailing twelve months through June 30, 2022 16
Slide 17: Continued Gross Profit Momentum in Q2 2022
Continued Gross Profit Momentum in Q2 2022 First half gross profit +17.7% vs. 2021 Quarterly Gross Profit (millions) $20.3 $20.4 $18.8 $17.2 $17.7 $15.8 2021 2022 Q1 Q2 Q3 Q4 $75.6M of TTM gross profit through Q2 2022 (vs. $69.5M in fiscal 2021) * TTM = Trailing twelve months through June 30, 2022 1
Slide 18: Employee Productivity Growth
Employee Productivity Growth Headcount at End of Period Revenue per Employee* (thousands) $277.6 $255.2 $231.7 $240.6 1,411 1,433 $225.2 $205.2 1,221 1,078 922 919 2017 2018 2019 2020 2021 Q2 '22 2017 2018 2019 2020 2021 TTM Productivity per employee +35% over the last 5 years * Revenue per Employee
Slide 19: "Clean" EBITDA Momentum in Q2 2022
“Clean” EBITDA Momentum in Q2 2022 First half EBITDA +38.1% vs. 2021 Quarterly EBITDA (millions) $9.4 $9.5 $7.3 $6.4 $6.4 $5.0 2021 2022 Q1 Q2 Q3 Q4 $30.3M of TTM EBITDA through Q2 2022 (vs. $25.0M in fiscal 2021) * TTM = Trailing twelve months through June 30, 2022 19
Slide 20: Adjusted EBITDA Momentum through Q2 2022
Adjusted EBITDA Momentum through Q2 2022 First half Adj. EBITDA +14.2% vs. 2021 Quarterly Adj. EBITDA (millions) $9.3 $9.4 $9.5 $9.4 $7.3 $7.3 2021 2022 Q1 Q2 Q3 Q4 $35.6M of Adjusted EBITDA on a TTM basis (vs. $33.3M in fiscal 2021) * TTM = Trailing twelve months through June 30, 2022 20
Slide 21: Continuing to Pay Down Fixed Term Debt
Continuing to Pay Down Fixed Term Debt $5.9M of Term Debt repaid in first half of 2022 Term Debt Revolving Credit Facility (millions) (millions) $34.1 $28.1 $10.8 $3.0 31-Dec-21 30-Jun-22 31-Dec-21 30-Jun-22 -17.4% YTD reduction in fixed term, higher cost debt 21
Slide 22: New Business Wins Year to Date
New Business Wins Year to Date +$22M Financial services Healthcare Regulated industries Retail ~100% of new business “tech-enabled” Manufacturing Hospitality Lottery services 22
Slide 23: ESG Highlights
ESG Highlights Energy-efficient lighting installation underway 16 Committee members for DCM’s 5 largest facilities across Canada 332,796 ESG from across DCM, with support from many others trees reforested globally via Estimated greenhouse gas PrintReleaf partnership emissions reduction 2 years = 1,5
Slide 24: 4. Why Invest in DCM?
4. Why Invest in DCM? DCM
Slide 25: Attractive Valuation
Attractive Valuation $57.5M $35.6M $26.9M F.D. Market TTM Cash Flow from Capitalization Adjusted EBITDA Operations in Fiscal 2021 Right-sizing is complete and $0 restructuring forecast in 2022 25
Slide 26: Continued Path to Pay-down Term Debt
Continued Path to Pay-down Term Debt Term credit facilities fully amortize through 2026 • $25.1M of fixed term debt to be repaid through 2023 Outstanding term credit facility balances (millions) $40.0 $34.1 $30.0 $11.0 $21.4 $2.2 $20.0 $9.4 $9.4 $1.2 $9.6 $10.0 $1.7 $4.9 $6.3 $4.7 $9.7 $7.9 $5.8 $-
Slide 27: Well Positioned for Digital Acceleration
Well Positioned for Digital Acceleration • 250 enterprise clients Clients • +2,500 SME clients • Penetration across 8 key verticals • +60 commercial sales reps • +20 years mar-tech experience Capabilities • API architecture experts • Significant install base of FLEX- enabled applications • $255.1M r
Slide 28: Contact Information
Contact Information For more information, please visit www.datacm.com or reach out to: Investor, media and corporate development inquiries Richard Kellam James Lorimer President & CEO Chief Financial Officer rkellam@datacm.com jlorimer@datacm.com +1 (416) 451-1117 +1 (905) 494-4101 DCM – TSX | DCMDF
Slide 29: Thank you
Thank you DCM 29
Slide 30: Capitalization and Ownership
Capitalization and Ownership “DCM” ON Ownership summary Capitalization TSX (Fully diluted) Recent Share Price (August 8, 2022) $1.14 52 week high/low $1.45/$0.93 Directors and Retail and Other Officers Common Shares Outstanding 44.1M Shareholders 31.1% Options ($0.97 average ex. price) 4.7M 46.9% 50
Slide 31: Non-IFRS Measures
Non-lIFRS Measures DCM #*
Slide 32: EBITDA and Adjusted EBITDA Reconciliation
EBITDA and Adjusted EBITDA Reconciliation 32
Slide 33: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation 33
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