Descartes Systems Group Inc. · TSX:DSG
Descartes Systems — The Descartes Systems Group — Investor Presentation (December 2021)
22 slides from Descartes Systems's investor presentation, December 2021
Slide 1: Descartes – Uniting Business in Commerce
Descartes – Uniting Business in Commerce December 2021 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 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 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
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 28 acquisitions since 2014 for a total consideration of ~US $930 million Disciplined approach that is focused on 2014 2015 2016 2017 2018 2019 2020 2021 complementary
Slide 12: Recent Acquisition Success
Recent Acquisition Success Acquired Portrix May 2021 for ~$25m and Acquired July 2021 for ~$30mm + up to Acquired February 2019 for ~$250mm Kontainers June 2020 for ~$6m + up to ~$10mm earn-out ~$6m earn-out Kontainers and Portrix provide key Cloud-based mobile route execution solutions Cloud-
Slide 13: Industry-Leading Solutions Help Customers Reduce Environmental Footprint
Industry-Leading Solutions Help Customers Reduce Environmental Footprint Descartes’ FY2021 Environmental Impact – We Helped our Customers Save >552,000 >1.86 billion >727 million tons of CO2 sheets of paper liters of fuel *INFOGRAPHIC CALCULATIONS WERE MADE USING THE PAPER CALCULATOR FROM ENVIRONMEN
Slide 14: Financial Overview
Financial Overview DESCARTES 14
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 $349 $131 $326 $275 $104 $78 $109 $43 $88 $33 FY19 FY20 FY21 Q3-21 Q3-22 FY19 FY20 FY21 Q3-21 Q3-22 Net Income and Net Income as a % of Revenues Adjusted EBITDA(1) and Adjusted EBITDA as a % of Revenues(1) $52 $142 $37 $123 $31 $25 $94 1
Slide 17: Efficient and Disciplined Operating Model
Efficient and Disciplined Operating Model Gross Margin Sales and Marketing 73% 74% 74% 76% 76% 76% 13% 12% 11% 11% 11% 11% FY19 FY20 FY21 Q1-22 Q2-22 Q3-22 FY19 FY20 FY21 Q1-22 Q2-22 Q3-22 Research and Development General and Administrative 17% 16% 16% 15% 15% 15% 11% 11% 11% 10% 10% 10% FY19 FY20 F
Slide 18: Capital Structure – October 31, 2021
Capital Structure – October 31, 2021 • Common shares • 84.6 million – Basic • 86.3 million – Fully diluted • Mixed-Shelf filed on July 16, 2020 (up to $1 billion – currently unused) • Cash and cash equivalents • $US 171.1 million • Acquisition line of credit • $US 350.0 million with the potential to
Slide 19: Baseline Calibration
Baseline Calibration Figures per Quarter Baseline Actual Actual % of Baseline Baseline revenues = visible, contracted and Q4’21 Revenue $83.0 $93.4 113% recurring revenues at the beginning of Net Income $17.2 Net Income as a % of Revenues 18.4% each quarter1. Baseline revenues is not a Adj. EBITDA
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 – Q3-22
Reconciliation of Non-GAAP Financial Measures - Adjusted EBITDA and Adjusted EBITDA as a percentage of revenues – Q3-22 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 – 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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