Descartes Systems Group Inc. · TSX:DSG
Descartes Systems — The Descartes Systems Group — Investor Presentation (March 2021)
21 slides from Descartes Systems's investor presentation, March 2021
Slide 1: Descartes – Uniting Business in Commerce
Descartes – Uniting Business in Commerce March 2021 Pr o p rietary an d Co p yr ight o f T h e Descartes S ystems G r ou p In c. A ll r igh ts r eserved.
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 Disciplined M&A Strategy Highly-Experien
Slide 4: Descartes at a Glance
Descartes at a Glance Revenues (US$ millions) 349 326 ▪ Leader in providing SaaS solutions for logistics- 275 intensive businesses ▪ Proven ‘Total Growth’ model supported by disciplined acquisition strategy ▪ High-recurring revenue profile FY19 FY20 FY21 Net Income & Adj. EBITDA (US$ millions)(1) ▪
Slide 5: Global Logistics Network
GLOBAL LOGISTICS NETWORK C ARRIERS S HIPPERS Ocean Air Ground Rail Retailers Manufacturers Service & Distributors Providers D ESCARTES 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 I N T E R M E D I A R IE S R E TA IL E RS M A N U FA C TU 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 A u t o m at i o n cloud integration and automation G l o b a l Tr a d e Heightened regulatory compliance requirements and shifting gl
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 26 acquisitions since 2014 for a total consideration of ~US $875 million ▪ Disciplined approach that is focused on complementary technologies, industry consolidation an
Slide 12: Recent Acquisition Success
Recent Acquisition Success Acquired November 2020 for $CAD 25mm Acquired February 2020 for ~£19mm Acquired February 2019 for ~$250mm (~$19mm) + up to $CAD 25mm (~$19mm) (~$25mm) earn-out ▪ Cloud-based mobile resource management ▪ Cloud-based ecommerce warehouse ▪ Cloud-based global trade data conten
Slide 13: Financial Overview
Financial Overview DESCARTES 13
Slide 14: 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 15: Strong and Consistent Growth
Strong and Consistent Growth Revenue Cash Flow from Operations $131 $349 $326 $104 $275 $78 $93 $36 $84 $26 FY19 FY20 FY21 Q4-20 Q4-21 FY19 FY20 FY21 Q4-20 Q4-21 Net Income and Net Income as a % of Revenues Adjusted EBITDA(1) and Adjusted EBITDA as a % of Revenues(1) $60 100.0% $52 90.0% $160 100.0%
Slide 16: Efficient and Disciplined Operating Model
Efficient and Disciplined Operating Model Gross Margin Sales and Marketing 73% 74% 74% 74% 73% 74% 75% 13% 12% 11% 11% 11% 11% 11% FY19 FY20 FY21 Q1-21 Q2-21 Q3-21 Q4-21 FY19 FY20 FY21 Q1-21 Q2-21 Q3-21 Q4-21 Research and Development General and Administrative 17% 16% 16% 16% 16% 15% 15% 11% 11% 11%
Slide 17: Capital Structure – January 31, 2021
Capital Structure – January 31, 2021 • Common shares • 84.5 million – Basic (current) • 86.0 million – Fully diluted (current) • Mixed-Shelf filed on July 16, 2020 (up to $1 billion – currently unused) • Cash and cash equivalents • $US 133.7 million • Acquisition line of credit • $US 350.0 million w
Slide 18: Baseline Calibration
Baseline Calibration Figures per Quarter Baseline Actual Actual % of Baseline ▪ Baseline revenues = visible, contracted and Q1’21 Revenue $81.3 $83.7 103% Net Income $11.0 recurring revenues at the beginning of Net Income as a % of Revenues 13.1% each quarter1. Baseline revenues is not a Adj. EBITDA
Slide 19: 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 Disciplined M&A Strategy Highly-Experien
Slide 20: Reconciliation of Non-GAAP Financial Measures - Adjusted EBITDA Q4-21
Reconciliation of Non-GAAP Financial Measures - Adjusted EBITDA and Adjusted EBITDA as a percentage of revenues – Q4-21 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 21: Reconciliation of Non-GAAP Financial Measures - Adjusted EBITDA FY21
Reconciliation of Non-GAAP Financial Measures - Adjusted EBITDA and Adjusted EBITDA as a percentage of revenues – FY21 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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