Calian Group Ltd. · TSX:CGY
Calian — Investor Day (February 2023)
126 slides from Calian's investor day presentation, Feb 15, 2023
Slide 1: Investor Day Presentation
Investor Day Presentation February 15, 2023
Slide 2: Welcome Remarks
Welcome Remarks Jennifer McCaughey Director, Investor Relations
Slide 3: Agenda
Agenda 1 Welcome Remarks 2 Update on Strategic Plan 3 Capital Allocation Priorities 4 IT and Cyber Solutions 5 Advanced Technologies 6 Break 7 Health 8 Learning 9 Cross Selling 10 Closing Remarks 11 Survey 12 Q&A
Slide 4: Caution Regarding Forward Looking Statements
Caution Regarding Forward Looking Statements Certain information included in this document is forward-looking and is subject to important risks and uncertainties. The results or events predicted in these statements may differ materially from actual results or events. Such statements are generally ac
Slide 5: Senior Leadership Team
Senior Leadership Team Kevin Ford Patrick Houston Michele Bedford Sean Hamer Sue Ivay Michael Muldner CEO CFO & Corporate Secretary CCO CTO CHRO CIO Robin Richardson Patrick Thera Gordon McDonald Derek Clark Sacha Gera Don Whitty VP Marketing Advanced Technologies Health (Outgoing) Health (Incoming)
Slide 6: Calian – FY22 Snapshot
Calian – FY22 Snapshot 40 years 4,500 Ottawa $649M CGY History Workforce Head Office Market Cap TSX 30% 26% ITCS Advanced Technologies REVENUE SEGMENTATION Customers Geography Technology $582M 53% 29% 27% 2022 Revenues Commercial International Products 47% 71% 73% Government Canada Services 16% 29%
Slide 7: Four-Piston Engine
Four-Piston Engine 30% 29% 26% 16% ITCS HEALTH ADVANCED TECHNOLOGIES LEARNING $173M $167M $150M $92M 2022 Revenues 2022 Revenues 2022 Revenues 2022 Revenues • On-demand Talent & • Healthcare • Space • Domestic Defence Government Solutions Professional Services • Defence • Global Defence • IT Solutio
Slide 8: Agenda
Agenda 1 Welcome Remarks 2 Update on Strategic Plan 3 Capital Allocation Priorities 4 IT and Cyber Solutions 5 Advanced Technologies 6 Break 7 Health 8 Learning 9 Cross Selling 10 Closing Remarks 11 Survey 12 Q&A 8
Slide 9: Update on Strategic Plan
Update on Strategic Plan Kevin Ford CEO
Slide 10: Strategic Plan – Growth Strategy
Strategic Plan – Growth Strategy 1 2 3 4 Customer Retention Customer Diversification Innovation Continuous Improvement 5% 5% 10% Organic + Acquisitive = Target Growth Growth Growth Revenue objective: Crossing the $500 million mark
Slide 11: Track Record – 5-Year Revenue Growth
Track Record – 5-Year Revenue Growth Revenue Total Revenue Growth (in millions of $) (in %) 582 10% 26% 518 432 20% 343 305 12% 12% 11% 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 Surpassing 10% revenue growth objective every year 11
Slide 12: Track Record – 5-Year Revenue Diversification
Track Record – 5-Year Revenue Diversification 5-Year Revenue (in millions of dollars) 308 53% CAGR: 33% Commercial Revenue 169 157 29% 27% 98 61 55 32% 20% 18% 2018 2022 2018 2022 2018 2022 Geography Offering Customer Diversifying revenues by geography, offering and customer
Slide 13: Track Record – 5-Year Margin Expansion
Track Record – 5-Year Margin Expansion Gross Profit & Margin Adj. EBITDA1 & Margin1 Gross (in millions Profitexcept of dollars, & Margin margin) (in millions dollars,1except Adj.ofEBITDA & Margin 1 margin) (in millions of $, except margin) (in millions of $, except margin) 180 169 40.0% 70 66 160 22
Slide 14: Looking Ahead
Looking Ahead
Slide 15: Looking Ahead – Going Global
Looking Ahead – Going Global Our four-piston engine is gaining a growing global footprint
Slide 16: Looking Ahead – M&A
Looking Ahead – M&A Cash Flow Generation Financial Position Capital Allocation Available Liquidity We have the funding to make it happen
Slide 17: Looking Ahead – Executing High Growth Opportunities
Looking Ahead – Executing High Growth Opportunities ITCS Health Learning AT Selected Growth XaaS & Cyber Managed Pharmaceutical Industry Integrated Synthetic Training GNSS antennas Opportunity Detection & Response (MDR) Solutions (PSP & CRO) Environments Tailwinds from end markets Cross-selling oppo
Slide 18: Agenda
Agenda 1 Welcome Remarks 2 Update on Strategic Plan 3 Capital Allocation Priorities 4 IT and Cyber Solutions 5 Advanced Technologies 6 Break 7 Health 8 Learning 9 Cross Selling 10 Closing Remarks 11 Survey 12 Q&A
Slide 19: Capital Allocation Priorities
Capital Allocation Priorities Patrick Houston CFO and Corporate Secretary
Slide 20: Generating Strong and Growing Operating FCF
Generating Strong and Growing Operating FCF Adj. EBITDA1 Operating Free Cash Flow (OFCF)1&2 OFCF Conversion1&2 (in millions of $) (in millions of $) (in %) 70 66 47 76% 72% 60 66% 52 63% 50 35 50% 40 37 28 30 25 27 17 13 20 10 0 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 2018 2019 2020 2021 2
Slide 21: Working Capital Dynamics
Working Capital Dynamics 700 Net WC as a % Revenue 40.0% (in millions of $, except %) 600 582 35.0% 518 30.0% 500 432 25.0% 400 343 21.2% 305 20.0% 300 16.6% 17.4% 15.1% 15.0% 13.8% 200 10.0% 100 5.0% 0 0.0% 2018 2019 2020 2021 2022 Revenue Net WC / Revenue Net WC as a % of revenue is reverting to n
Slide 22: M&A – Track Record of EBITDA Accretive Acquisitions
M&A – Track Record of EBITDA Accretive Acquisitions 2018 2019 2020 2021 2022 • 2 deals • 2 deals • 4 deals • 3 deals • 2 deals • $5M Capital • $33M Capital • $58M Capital • $109M Capital • $53M Capital deployed deployed deployed deployed deployed Consistent deployment of capital 22
Slide 23: M&A – Track Record of Post Acquisition Performance
M&A – Track Record of Post Acquisition Performance Actions How? • Ability to identify good targets and 9 >$200M 5X complete successful deals Acquisitions Capital deployed Avg. multiple paid upfront (avg. of 2 deals/year) (increasing from <$5M to $80M) (trailing EBITDA) • Deal structure that enables
Slide 24: M&A – Targeting Larger Acquisitions
M&A – Targeting Larger Acquisitions • Profitable & growing • Dedicated M&A team • Strategic fit (complementary/scale) • Pipeline: ~10 deals/quarter • Cultural fit • Target closing: ~2-3 deals/year (larger transactions) • Disciplined valuation (do not overpay) • Individual bids & competitive bids Com
Slide 25: Dividend – Maintaining Payment History
Dividend – Maintaining Payment History Dividends & Dividends/Share Dividend Yield Dividend/OFCF1&2 (in millions of $ & in dollars) (in %) (in %) 14 13 68% 1.80 12 12 1.60 3.7% 10 1.40 3.2% 51% 10 9 9 1.20 8 1.12 1.12 1.12 1.12 1.12 36% 1.00 2.0% 35% 6 0.80 1.7% 1.8% 27% 4 0.60 0.40 2 0.20 0 0.00 201
Slide 26: Equity Investments – Ramping Up Deals
Equity Investments – Ramping Up Deals ECO System Investments Example • Geographical expansion and entry into new • Field Effect Cyber Range – a simulation-based cyber security markets necessitates greater partnership training platform used to grow individual skills, rehearse and eco-system to bring
Slide 27: Balance Sheet – Positioned to Support Growth
Balance Sheet – Positioned to Support Growth Cash & Cash Equivalents $58M Total Debt Net Cash Position (in millions of $) (in millions of $) (in millions of $) Q1-23 Cash 79 79 13 43 8 35 24 24 22 22 17 4 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 $58M Q1-23 Cash Cali
Slide 28: Liquidity – Current Availability
Liquidity – Current Availability Credit Facility Cash & Cash Equivalents Cash Available (in millions of $) (in millions of $) (in millions of $) 79 40 40 40 40 43 84 24 62 159 22 17 44 115 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 Used Unused Accordian Net Liquidity
Slide 29: Liquidity – Potential Availability
Liquidity – Potential Availability We deploy our liquidity* We buy at reasonable multiples 1 2 $165 Million 5.0x – 8.0x We use our un-levered We get back EBITDA* balance sheet 4 3 30%-50% growth in $21-33 Million EBITDA from FY2022 Significant growth opportunity from using balance sheet at conservat
Slide 30: Key Takeaways
Key Takeaways • Profitable growth and execution • Strong cash flow conversion • Consistent deployment of capital • Ability to drive significant return from capital deployment The capital allocation priority is making strategic acquisitions 30
Slide 31: Agenda
Agenda 1 Welcome Remarks 2 Update on Strategic Plan 3 Capital Allocation Priorities 4 IT and Cyber Solutions 5 Advanced Technologies 6 Break 7 Health 8 Learning 9 Cross Selling 10 Closing Remarks 11 Survey 12 Q&A
Slide 32: IT and Cyber Solutions
IT and Cyber Solutions Sacha Gera
Slide 33: ITCS – FY22 Snapshot
ITCS – FY22 Snapshot ~475 8% / 102% 17% $205M $97M Workforce Organic/Acquisitive Growth EBITDA % New Contract Signings Backlog 26% XaaS and Cyber MDR REVENUE SEGMENTATION 31% Customers Geography Offering IT Solution $173M Provider ~65% ~45% 36% 2022 Revenues Commercial International Products ~35% ~5
Slide 34: ITCS – Key Historical Milestones
ITCS – Key Historical Milestones 2022 Acquisition 2022 Computex Technology Solutions XaaS: ITCS US – ISO 27001 – 2020 • Managed IT Certification Acquisition • Managed Cyber & MDR Field Effect Investment EMSEC IT Solution Provider • Cyber Range (Physical Security RF Emissions) U.S. Sales Engine • SMB
Slide 35: ITCS – Financial Performance
ITCS – Financial Performance Revenues Gross Profit & Margin Adj. EBITDA1 & Margin1 (in millions of $) (in millions of $, except margin) (in millions of $, except margin) 173 70.0 50.0%35.0 25.0% 61.1 45.0%30.0 29.5 60.0 40.0% 20.0% 35.3% 17.1% 50.0 35.0%25.0 40.0 30.0%20.0 15.0% 82 24.3% 25.0% 12.1%
Slide 36: ITCS – Business Description
ITCS – Business Description 43% 31% 26% On-demand Talent and Government Solutions IT Solution Provider XaaS & Cyber MDR PROBLEM SOLVED: PROBLEM SOLVED: PROBLEM SOLVED: • Talent Scarcity • Cloud Transformation • IT & Cyber Scale • Physical Security • Hybrid Work • Geographic Coverage • Government Com
Slide 37: ITCS – Brands That Trust Us
ITCS – Brands That Trust Us Manufacturing & Retail and Transportation Energy Finance Healthcare Tech and Defence Public Sector Real Estate >1,100 customers to mine for cross-sell and up-sell, at the beginning of this upside
Slide 38: ITCS – Customers and Contracts
ITCS – Customers and Contracts On-Demand Talent and IT Solution Provider XaaS & Cyber MDR Government Solutions Number • ~50 • ~1,100 • ~300 Size • Public Sector (government) • Mid-Market & Enterprise • Mid-Market Customers • ICT OEMs • Public sector (SLED) • Publc sector (hospitals) Geography • Cana
Slide 39: ITCS – EBITDA Margins and Growth Potential
ITCS – EBITDA Margins and Growth Potential On-Demand Talent & IT Solution Provider XaaS & Cyber MDR Government Solutions EBITDA % (relative to ITCS Below In-line Above Segment Margin of 17%) Growth Potential Low Low/Medium Medium/High XaaS & Cyber MDR XaaS & Cyber MDR has greatest potential for grow
Slide 40: ITCS – Building Enterprise Value Via Stage 3 of our Rocket
ITCS – Building Enterprise Value Via Stage 3 of our Rocket Stage 1 Stage 2 Stage 3 = On Demand Talent IT Solution XaaS & Cyber & Government Provider MDR Solutions Increasing EBITDA Multiple EBITDA Multiple Revenue Multiple Enterprise Value Brainware Digital Transformation Recurring Revenue Sum of th
Slide 41: ITCS – Generating Recurring Revenue Streams
ITCS – Generating Recurring Revenue Streams +18% $54M 5X Subscription bundles MRR, YoY Exit, ARR MRR – XaaS (CAD $Ks) 4,600 4,466 4,334 4,360 4,400 4,217 Systems+ Cybersecurity+ Servers, Networks, Prevention, Remediation, 4,200 Storage Incident Response 4,027 4,000 3,925 3,828 3,800 3,600 Productivi
Slide 42: ITCS – Total Addressable Market of XaaS and Cyber MDR
ITCS – Total Addressable Market of XaaS and Cyber MDR Total Managed and Professional Security Services Market Revenue Forecast by Product (M$), Americas, 2017-2025 20,000 15,000 10,000 5,000 0 2017 2018 2019 2020 2021 2022 2023 2024 2025 PSS MSS CAGR 2020-2025: 11.3% Source: All figures are rounded.
Slide 43: ITCS – Market Trends for XaaS & Cyber MDR
ITCS – Market Trends for XaaS & Cyber MDR • Rapid migration to multi-cloud and multi- • Ransomware attacks increasing in frequency and vendor IT environments driving complexity; complexity causing significant loss of business, talent & skills shortage driving operational disruption, reputational har
Slide 44: ITCS – Competitive Landscape for XaaS and Cyber MDR
ITCS – Competitive Landscape for XaaS and Cyber MDR Total Managed and Professional Security Services Market Revenue Share of Top Participants, Americas 2020 28.7% 14.9% Accenture These are full breadth IT & Cyber service Others providers; strong brand assist in sales cycle. Largely SME & mid market
Slide 45: ITCS – Competitive Landscape for 'Other' Cyber Pure Plays
ITCS – Competitive Landscape for ‘Other’ Cyber Pure Plays Capability Technology Competitive Full-suite Delivery model Visibility Platform-based to Scale Connectivity agnostic pricing services Platform-led and co-managed Co-managed Co-managed Platform-led Co-managed + workbench Platform-led MSS Co-ma
Slide 46: ITCS – Growth Strategy - XaaS and Cyber MDR
ITCS – Growth Strategy - XaaS and Cyber MDR 2017-2022 | Storming and Forming 2023-2024 | Norming 2025-2030 | Performing ✓ Acquired MDR - iSecurity • Harmonizing N.A Operations, GTM, and Sales • Top 5 XaaS & Cyber MDR Provider in N.A. ✓ Acquired XaaS & U.S. Footprint - Computex • Cross-sell & Upsell
Slide 47: ITCS – Value Proposition for XaaS and Cyber MDR
ITCS – Value Proposition for XaaS and Cyber MDR 1. Talent and ability to source & scale including government secret cleared 2. N.A. geographic and vertical market focus 3. Breadth/depth of portfolio, sales distribution engine 4. Strategic partners: CRWD, MSFT, CSCO, PALO 5. 24 x 7 global enablement,
Slide 48: ITCS – Key Takeaways
ITCS – Key Takeaways • Vision: Top 5 XaaS & Cyber MDR N.A. player in five years • Diverse customer base, equipped to weather recessionary pressure • Organic growth is accelerating • Cross-sell focus and mining of >1,100 customer base in infancy • Harmonizing Operations, GTM and Sales across N.A. • A
Slide 49: Q&A
Q&A
Slide 50: Agenda
Agenda 1 Welcome Remarks 2 Update on Strategic Plan 3 Capital Allocation Priorities 4 IT and Cyber Solutions 5 Advanced Technologies 6 Break 7 Health 8 Learning 9 Cross Selling 10 Closing Remarks 11 Survey 12 Q&A
Slide 51: Advanced Technologies
Advanced Technologies Patrick Thera
Slide 52: AT – FY22 Snapshot
AT – FY22 Snapshot ~925 -10% / 0% 14% $184M $168M Workforce Organic / Acquisitive Growth EBITDA % New Contract Signings Backlog 22% Defense REVENUE SEGMENTATION Customers Geography Offering $150M 53% ~79% ~70% 62% Space Commercial International Products 2022 Revenues ~21% ~30% 38% 25% Government Can
Slide 53: AT – Key Historical Milestones
AT – Key Historical Milestones 1965 1973 1987 2001 2014 2017 2019 2022 The University of SED delivers the Defence Contract Calian signs Calian signs a contract with Calian is awarded a contract Calian performs 24/7 Founding Saskatchewan ground control providing European Space General Dynamic Land by
Slide 54: AT – Financial Performance
AT – Financial Performance Revenues Gross Profit & Margin Adj. EBITDA1 & Margin1 (in millions of $) (in millions of $, except margin) (in millions of $, except margin) 167 50.0 25.0 30.0% 153 150 41.6 43.3 50.0% 21.0 20.9 20.7 40.0 20.0 17.7 25.0% 34.0 40.0% 16.5 99 110 28.8 30.6 30.0 15.0 20.0% 28.
Slide 55: AT – Business Description
AT – Business Description 53% 25% 22% Space Terrestrial Defence Global leader in the provision of sophisticated ground-based Provides solutions oriented to a variety of markets. Defence engineering services, solutions and products. solutions to the satellite industry for over 55 years. • Wired and t
Slide 56: AT – Brands That Trust Us
AT – Brands That Trust Us Space Terrestrial Defence Customers come to us when failure is not an option
Slide 57: AT – Customers and Contracts
AT – Customers and Contracts Space Terrestrial Defence Number >100 >500 >10 Size Mixed Mixed Large defence primes Customers Geography Global Global – mostly North American and Europe Mostly North American and Europe Verticals • Communications • GNSS • Military vehicles components and assemblies • Sa
Slide 58: AT – EBITDA Margins and Growth Potential
AT – EBITDA Margins and Growth Potential Space Terrestrial Defense EBITDA % (relative to In line Above In line AT Segment Margin of 14%) Growth Potential Moderate High Moderate Global Navigation Satellite Key output of GNSS antennas and receivers are an accurate System (GNSS) antennas location and t
Slide 59: AT – GNSS Market and Growth
AT – GNSS Market and Growth The growing adoption and integration of in-vehicle systems amongst new car shipments pushes the share of the Road and Automotive segment amongst the global installed base of GNSS devices from 9% in 2021 to 12% in 2031 Installed base of GNSS devices by segment Shipments by
Slide 60: AT – Market Trends for GNSS Top Markets
AT – Market Trends for GNSS Top 3 Markets Aviation and drones is the market The Maritime segment is currently the Agriculture market expected to surpass Maritime expecting largest growth second largest market segment in coming years • Growth in the autonomous and electric • With automation and 5G ex
Slide 61: AT – Competitive Landscape for GNSS
AT – Competitive Landscape for GNSS Top Competitors Market Verticals Value Chain • Agriculture • International organizations and standardization • Aviation and Drones bodies • Biodiversity, Ecosystems and Natural Capital • Component manufacturers • Climate Services • Receiver manufacturers • Consume
Slide 62: AT – New Markets - Beyond the Antenna
AT – New Markets - Beyond the Antenna Augmented GNSS and Cloud Technologies enable new levels of Asset Management • Smart antennas enable location tracking to centimetres in 3-dimensions allowing for in-building tracking solutions • Allows not only for fleet tracking but tracking of assets in vehicl
Slide 63: AT – Growth Strategy for GNSS
AT – Growth Strategy for GNSS Organic growth Acquisition criteria • Invest in novel new antenna solutions for new • Searching for targets that have market niches complementary as opposed to competing • Differentiate antenna solutions in existing markets technologies – different verticals, different
Slide 64: AT – Value Proposition for GNSS
AT – Value Proposition for GNSS 1. Provide antenna solutions to meet or exceed Performance for provide differentiation customer requirements at an attractive price • Availability – percentage of time timing/location data is 2. Support our customers from pre-sales available for the user engineering t
Slide 65: AT – Key Takeaways
AT – Key Takeaways • In business for over 55 years with global customers built up through relationships and reputation that provide us with repeat business • Diverse in our markets common in our solid team of engineers and technicians capable of strong subject matter expertise to build critical solu
Slide 66: Q&A
Q&A Q&A
Slide 67: Agenda
Agenda 1 Welcome Remarks 2 Update on Strategic Plan 3 Capital Allocation Priorities 4 IT and Cyber Solutions 5 Advanced Technologies 6 Break 7 Health 8 Learning 9 Cross Selling 10 Closing Remarks 11 Survey 12 Q&A
Slide 68: Agenda
Agenda 1 Welcome Remarks 2 Update on Strategic Plan 3 Capital Allocation Priorities 4 IT and Cyber Solutions 5 Advanced Technologies 6 Break 7 Health 8 Learning 9 Cross Selling 10 Closing Remarks 11 Survey 12 Q&A
Slide 69: Health
Health Gordon McDonald
Slide 70: Health – FY22 Snapshot
Health – FY22 Snapshot ~1,550 -14% / 0% 17% $154M $707M Workforce Organic / Acquisitive Growth EBITDA % New Contract Signings Backlog 4% In-store Health Clinics 18% REVENUE SEGMENTATION Pharmaceutical Industry Solutions Customers Geography Offering 78% ~42% ~5% 0% $167M Healthcare Commercial Interna
Slide 71: Health – Key Historical Milestones
Health – Key Historical Milestones 1982 2004 2014 2017 2020 Calian Technology Strategic Health Contract Acquisition Med-Team, Strategic Health Contract Military Family Doctor Network Ltd. Established win for DND (HSSC) (clinic operations) win for DND, VAC, RCMP Program hits 3000 members (HCPR – 12 y
Slide 72: Health – Financial Performance
Health – Financial Performance Revenues Gross Profit & Margin Adj. EBITDA1 & Margin1 (in millions of $) (in millions of $, except margin) (in millions of $, except margin) 55.0 50.0% 40 30.0% 195 47.8 34.8 45.0% 35 163 167 45.0 41.6 40.0% 30 28.3 25.0% 35.0 32.4 35.0% 23.4 116 25 20.0% 30.0% 99 23.2
Slide 73: Health – Business Description
Health – Business Description 78% 18% 4% Healthcare Professional Services Pharmaceutical Industry Solutions In-store Health Clinics Manage a network of more than 2,800 Provide clinical trial management services, Design, build and manage all in-store healthcare professionals delivering primary specia
Slide 74: Health – Brands That Trust Us
Health – Brands That Trust Us The defence industry represents over 50% of Health segment revenues
Slide 75: Health – Customers & Contracts
Health – Customers & Contracts Healthcare Professional Services Pharmaceutical Industry Solutions In-Store Health Clinics Number >50 >120 products 1 Customers Size Large (public sector) Multi-national large corporations Large national customer (Loblaws) Geography Canada Canada, International Canada
Slide 76: Health – EBITDA Margins & Growth Potential
Health – EBITDA Margins & Growth Potential Healthcare Professional Services Pharmaceutical Industry Solutions In-Store Health Clinics EBITDA % (relative to In line Below Above Health Segment Margin of 17%) Growth Potential Low High Low Patient Support Programs (PSP) using Nexi Digital Health Platfor
Slide 77: Health – Home Healthcare Market & Growth (PSP)
Health – Home Healthcare Market & Growth (PSP) Global Home Healthcare Market U.S. Home Healthcare Market Revenue (USD Billion) Size, by component (USD Billion) Services Equipment 900 800 700 600 $113.5B 500 $102.2B 400 $370.7 300 $278.0 200 100 0 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 202
Slide 78: Health – Pharma Market & Growth (CRO)
Health – Pharma Market & Growth (CRO) CRO: Revenue Forecast ($B) CRO: Revenue Forecast by Clinical Global, 2018-2027 Development Phases ($B) North America, 2028-2027 120 30 100 25 80 20 60 15 40 10 20 5 0 0 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2018 2019 2020 2021 2022 2023 2024 2025 202
Slide 79: Health – Market Trends for the Pharma Industry
Health – Market Trends for the Pharma Industry • High cost of institutional care (cost savings for • Demand for sustainable Patient Support payers of home healthcare vs hospitals) Programs (PSP) • Increased funding for Medicare and Medicade (US) • Evolving payer environment • Increased demand for pe
Slide 80: Health – Competitive Landscape for Pharma Industry
Health – Competitive Landscape for Pharma Industry Global United States Canada High barriers to entry • Availability of pharmaceutical subject matter expertise • Licensing and accreditation requirements • Regulations and evidence required to obtain reimbursements • Geographic licensing requirements
Slide 81: Health – Growth Strategy for Pharma Industry
Health – Growth Strategy for Pharma Industry Organic growth • Leverage Nexi in Canada/U.S./Europe as a SaaS and licensed model • Expand on pharma driven PSPs into community care and private care • Clients are taking us into new geographies (PSPs into US/Europe) • Continue to productize/license Nexi
Slide 82: Health – Acquisition Strategy for Pharma Industry (CRO/PSP)
Health – Acquisition Strategy for Pharma Industry (CRO/PSP) Acquisition criteria Market focus/verticals for acquisitions: Targeting revenue of $25M to $50M Digital health – smart services/online services Seeking health technology through a Patient support programs leverageable platform Pha
Slide 83: Health – Value Proposition for Pharma Industry
Health – Value Proposition for Pharma Industry 1. Speed and reliability 2. Feature-rich Digital Health Enterprise Management platform The Calian® Nexi™ health-enterprise (leverage Nexi) resource management platform 3. Reduction of costs of operation in the pharmaceutical transforms patient support p
Slide 84: Health – Key Takeaways
Health – Key Takeaways • Over 80% of current Health segment revenues are stable and supported by long-term contracts • The addition of Alio/Allphase in 2020 was a transformative acquisition into pharmaceutical industry solutions (CRO & PSP) • Generating organic growth by leveraging our Nexi platform
Slide 85: Health – Incoming New President - Derek Clark
Health – Incoming New President - Derek Clark President Chief Operating Officer General Manager of Sales Chief Commercial Officer – Canada Derek started on February 6, 2023
Slide 86: Health – Why Calian?
Health – Why Calian? Digital Health Trends Assets to Leverage 4-Piston Engine • Remote/Virtual Care • Balance sheet strength • Health • Access/Connectivity/Security • 40 years of credibility • ITCS • Clinical trial management • Unmatched clinical depth • Learning • VR/Augmented Reality • Deep Pharma
Slide 87: Q&A
Q&A
Slide 88: Agenda
Agenda 1 Welcome Remarks 2 Update on Strategic Plan 3 Capital Allocation Priorities 4 IT and Cyber Solutions 5 Advanced Technologies 6 Break 7 Health 8 Learning 9 Cross Selling 10 Closing Remarks 11 Survey 12 Q&A
Slide 89: Learning
Learning Don Whitty
Slide 90: Learning – FY22 Snapshot
Learning – FY22 Snapshot ~1,375 7% / 16% 18% $154M $328M Workforce Organic / Acquisitive Growth EBITDA % New Contract Signings Backlog 10% Commercial REVENUE SEGMENTATION 15% Global Customers Geography Offering Defence 75% ~10% ~15% 4% $92M Domestic Commercial International Products 2022 Revenues De
Slide 91: Learning – Key Historical Milestones
Learning – Key Historical Milestones 1982 1997 1999 2017 2019 2021 Calian Technology Awarded first DLSE Acquisition PPI, (computer Acquisition International Contract ALSC 3-year Acquisition SimFront Ltd. Established contract, which over training services) Safety Research (ISR), (valued at about $17M
Slide 92: Learning – Financial Performance
Learning – Financial Performance Revenues Gross Profit & Margin Adj. EBITDA1 & Margin1 (in millions of $) (in millions of $, except margin) (in millions of $, except margin) 92 25.0 23.3 50.0% 18.0 16.9 30.0% 75 16.0 20.0 17.3 40.0% 14.0 12.4 25.0% 62 63 58 12.0 15.0 12.5 12.5 30.0% 8.8 20.0% 11.9 2
Slide 93: Learning – Business Description
Learning – Business Description 75% 15% 10% Domestic Defence Global Defence Commercial Provides simulation-based training for Provides a range of military training for Develops and delivers more engaging, • VCCI – Virtual Command the Canadian Armed Forces. This includes NATO member countries, includ
Slide 94: Learning – Institutions That Trust Us
Learning – Institutions That Trust Us Leveraging NATO relationships to gain new opportunities in Europe
Slide 95: Learning – Customers and Contracts
Learning – Customers and Contracts Domestic Defence Global Defence Commercial Number < 20 <20 >25 Size Large Medium and Large Medium and Large organizations Customers Geography Canada NATO, NATO Nations, Australia, Africa North America Verticals • Defence • Defence • Government & Crown Corporations
Slide 96: Learning – EBITDA Margins & Growth Potential
Learning – EBITDA Margins & Growth Potential Domestic Defence Global Defence Commercial EBITDA % (relative to Learning Segment Margin of In line Above Above 18%) Growth Potential Low to medium High High Integrated Synthetic Training Environments (ISTE) to Global Defence market Targeting a sustainabl
Slide 97: Learning – Military Training & Simulation Market and Growth
Learning – Military Training & Simulation Market and Growth Total Military Training & Simulation Market Revenue Forecast: North America & Europe 2022-2027 ($B USD) 2022-2027 ($B USD) 19.6 10.6 19.4 19.0 10.0 9.7 9.5 17.7 9.1 9.3 16.7 14.7 3.3 3.5 3.0 2.4 2.7 2.2 2022 2023 2024 2025 2026 2027 2022 20
Slide 98: Learning – Market Trends for ISTE
Learning – Market Trends for ISTE War in Ukraine Operational tempo Defence budgets Defence budgets for training • Budgets are accelerating for partners and uncertainty • Broadly higher defence budgets, with • Militaries are facing pressure to reduce closer to the battle front • High operational driv
Slide 99: Learning – Competitive Landscape for ISTE
Learning – Competitive Landscape for ISTE Vast Majority of Forecasted Business Has Not been Won 100 90 80 Orange represents the upcoming military training and simulation contracts that have not yet been Market Share (%) 70 60 won. There are many incumbents in the market, 50 however, the upcoming pro
Slide 100: Learning – Growth Strategy for ISTE
Learning – Growth Strategy for ISTE Organic growth Acquisition criteria • Grow the NATO 360 Scenario Design contract at NATO • Growing through strategically filling gaps on Joint Warfare Centre in Norway (expected to grow by our ISTE offering (Analytics/AI, War-gaming, 30% in 2023) Urban Warfare) •
Slide 101: Learning – Value Proposition for ISTE
Learning – Value Proposition for ISTE 1. We have experience and credibility 2. The only military training leader to provide end-to-end synthetic training solutions for high-readiness and collective training 3. Our solution is system-agnostic and interoperable with existing simulation tools and opera
Slide 102: Learning – Key Takeaways
Learning – Key Takeaways • Over 70% of Learning segment revenues are stable and supported by long term contracts ($328M of backlog) • The addition of SimFront was a game changer • Taking advantage of our VCCI technology to offer reduced training costs • Generating organic growth by leveraging NATO r
Slide 103: Q&A
Q&A Q&A
Slide 104: Agenda
Agenda 1 Welcome Remarks 2 Update on Strategic Plan 3 Capital Allocation Priorities 4 IT and Cyber Solutions 5 Advanced Technologies 6 Break 7 Health 8 Learning 9 Cross Selling 10 Closing Remarks 11 Survey 12 Q&A
Slide 105: Cross Selling: Capturing our Synergies
Cross Selling: Capturing our Synergies Robin Richardson VP, Marketing
Slide 106: Synergies Across the Four-Piston Engine–Cybersecurity
Synergies Across the Four-Piston Engine–Cybersecurity Health Training Advanced Technologies Digital Health Solutions Cyber Ranges Communications Systems IT & Cyber Solutions Cyber solutions are required across every solution across the Calian Four-Piston Engine
Slide 107: Solution Synergies–Remote Patient Monitoring
Solution Synergies–Remote Patient Monitoring Learning–Patient training ITCS–Cybersecurity AT–Remote connectivity Health–Virtual care Opportunities to bring the four-piston engine together to solve customer problems
Slide 108: Market Synergies–Defence
Market Synergies–Defence Global Defence ITCS Health Learning AT Significant NAVY opportunities Air Force to leverage our Army four-piston NATO engine European Defence Defence OEMs APAC Defence US Defence Defence offers the largest opportunity to cross sell by leveraging one business unit to introduc
Slide 109: Key Takeaways
Key Takeaways We Are Just Getting Started Leveraging synergies within the business units for cross selling Leveraging synergies across business units—cybersecurity and training are leading the way across all business units Customer Solution Synergies See opportunities to combine our business u
Slide 110: Agenda
Agenda 1 Welcome Remarks 2 Update on Strategic Plan 3 Capital Allocation Priorities 4 IT and Cyber Solutions 5 Advanced Technologies 6 Break 7 Health 8 Learning 9 Cross Selling 10 Closing Remarks 11 Survey 12 Q&A
Slide 111: Closing Remarks
Closing Remarks Kevin Ford CEO
Slide 112: Key Takeaways – Track Record of Execution
Key Takeaways – Track Record of Execution • Revenue growth surpassing 10%/year • Revenue diversification • By geography (from 20% to 29% international) • By offering (from 18% to 27% technology products) • By customer (from 32% to 53% commercial) • Margin expansion • Gross margin (from 21.0% to 29.1
Slide 113: Key Takeaways – M&A
Key Takeaways – M&A • Generating robust cash flow • High operating FCF conversion rate • Working capital reverting back to normalized levels • Track record of M&A • EBITDA accretive acquisitions • Post acquisition performance • Strong balance sheet • Net cash position • Over $200M of funding capacit
Slide 114: Key Takeaways – Promising Organic Growth Opportunities
Key Takeaways – Promising Organic Growth Opportunities ITCS Health Learning AT Selected Growth XaaS & Cyber MDR Pharmaceutical Industry Integrated synthetic GNSS antennas Opportunity training environments Market Growth 11.3% (CAGR 2020-25) 10.1% (CAGR 2018-28) 5.9% (CAGR 2022-27) 5.0% (CAGR 2021-31)
Slide 115: Delivering Guidance
Delivering Guidance Revenues Adj. EBITDA1 Adj. Net Profit1 (in millions of $) 630-680 (in millions of $) (in millions of $) 70-75 46-50 582 518 66 44 432 52 37 343 37 24 27 19 2019 2020 2021 2022 2023E 2019 2020 2021 2022 2023E 2019 2020 2021 2022 2023E 1) This is a non-GAAP measure. Please refer to
Slide 116: Our Journey to $1 Billion of Revenues
Our Journey to $1 Billion of Revenues Continue to deliver double digit growth Leverage high growth opportunities • Strong FCF • Enhanced cross selling • Increasing margins • Larger M&A deals • Growing into new customers • Focus on high organic growth assets Today Run Rate - End FY25 We have the trac
Slide 117: Putting ESG at the Forefront
Putting ESG at the Forefront Aligning our ESG reporting framework to several United Nations Sustainable Development Goals (SDGs)
Slide 118: Investment Value Proposition
Investment Value Proposition 1 2 3 4 Proven management team Strong balance sheet Diversification in what Tailwinds in target markets and track record and cash flows we do and where we do it
Slide 119: We help the world communicate, innovate, learn, and lead safe and healthy lives
We help the world communicate, innovate, learn, and lead safe and healthy lives – today and tomorrow.
Slide 120: Slide 120
Slide 121: Agenda
Agenda 1 Welcome Remarks 2 Update on Strategic Plan 3 Capital Allocation Priorities 4 IT and Cyber Solutions 5 Advanced Technologies 6 Break 7 Health 8 Learning 9 Cross Selling 10 Closing Remarks 11 Survey 12 Q&A
Slide 122: Survey
Survey
Slide 123: Survey – QR Code
Survey - QR Code 123
Slide 124: Agenda
Agenda 1 Welcome Remarks 2 Update on Strategic Plan 3 Capital Allocation Priorities 4 IT and Cyber Solutions 5 Advanced Technologies 6 Break 7 Health 8 Learning 9 Cross Selling 10 Closing Remarks 11 Survey 12 Q&A
Slide 125: Q&A
Q&A
Slide 126: Thank you
Thank you ir@calian.com www.calian.com © Copyright Calian. All rights reserved.