Altus Group Limited · TSX:AIF
Altus — Q3 2023 Earnings Presentation
28 slides from Altus's earnings presentation, Nov 9, 2023
Slide 1: Q3 2023 Earnings Call & Webcast
Q3 2023 Earnings Call & Webcast TSX: AIF | November 9, 2023
Slide 2: Forward-looking information & statements
Forward-looking information & statements Certain information in this presentation may constitute “forward-looking information” within the meaning of applicable securities legislation. All information contained in this presentation, other than statements of current and historical fact, is forward-loo
Slide 3: Non-GAAP and other measures
Non-GAAP and other measures We use certain non-GAAP financial measures, non-GAAP ratios, total of segments measures, capital management measures, and supplementary and other financial measures as defined in National Instrument 52-112 - Non-GAAP and Other Financial Measures Disclosure (“NI 52-112”).
Slide 4: M&A update
M&A update Jim Hannon Chief Executive Officer Q3 2023
Slide 5: Financial update
Financial update Pawan Chhabra Chief Financial Officer Q3 2023
Slide 6: Consolidated Q3 2023 performance
Consolidated Q3 2023 performance Q3 Q3 Year-over-year change YTD 2023: $ CAD Millions, except EPS figures 2023 2022 As Reported CC* Revenues $185.2 $177.7 4.2% 0.8% 2.0% Profit (Loss) $0.9 $6.8 86.4% Revenues (y/y, CC*) 8.5% Excluding the impact of the Basic EPS $0.02 $0.15 86.7% $33.2M annuity bill
Slide 7: Growing revenues & expanding margins at Analytics
Growing revenues & expanding margins at Analytics Q3 2023: C$M $120 30% As reported CC* 26.9% 23.8% 23.9% 21.4% 24.5% $100 25% Revenue $95.3M 8.8% 4.6% 19.1% 18.0% 14.0% 16.8% 19.5% 18.8% $80 15.9% 14.8% 20% 16.0% 15.0% Recurring Revenue* $87.4M 13.7% 9.2% $60 15% $40 10% Adjusted EBITDA $23.3M 11.6
Slide 8: Growing Analytics recurring revenue base
Growing Analytics recurring revenue base Q3 2023: C$ (M) C$M Recurring Revenue* 9.2% $100 $89 $87 $90 $86 $85 $80 $77 $71 (y/y, CC*) $70 $68 $60 $60 $55 $50 YTD 2023: $50 $43 $41 $43 $43 $40 $40 $30 $20 15.7% $10 (y/y, CC*) $0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 ~90% of Analytics YTD revenu
Slide 9: Expanding Analytics margins
Expanding Analytics margins Adjusted EBITDA margin* Q3 2023: 30% 25% 26.9% 24.5% 24.5% 23.9% 23.8% Adjusted EBITDA margin* 20% 21.4% 20.7% 60 bps y/y 16.6% 16.8% 15% YTD 2023: 14.0% 23.2% 10% 410 bps y/y 5% Adjusted EBITDA margin* 480 bps y/y 0% FY 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 FY 2022 Q1 202
Slide 10: Steady Property Tax performance
Steady Property Tax performance C$M $100 45.8% 50% Q3 2023: 45.0% $90 40.7% 45% $80 37.6% 40% As reported CC* 31.8% $70 31.4% 31.5% 30.3% 35% 29.2% $60 25.8% 30% Revenue $60.8M 0.1% 4.1% 22.8% 22.6% $50 20.8% 25% $40 17.7% 20% Adjusted 20.3% EBITDA $12.7M 28.7% 31.9% $30 15% $20 10% Adjusted $10 5%
Slide 11: Appraisals & Development Advisory performance
Appraisals & Development Advisory performance C$M Q3 2023: $35 10.9% 25% 19.9% 19.5% 14.6% 17.4% 13.9% 10.0% 10.1% 10.1% $30 9.0% 9.9% 14.1% 13.7% 9.8% 13.7% As reported CC* 20% $25 Revenue $29.3 0.8% 0.6% $20 15% $15 10% Adjusted EBITDA $3.0M 27.6% 27.4% $10 5% $5 Adjusted EBITDA 10.1% 380 bps $0 0
Slide 12: Healthy balance sheet enables continued investment in growth
Healthy balance sheet enables continued investment in growth HEALTHY BALANCE SHEET: GROWING CASH FLOWS: CASH Q3 2023: $44.7 M POSITION $34.1 M $314.1 M BANK Free Cash Flow* 96.5% DEBT 2.08x FUNDED DEBT TO EBITDA RATIO $36.0 M 49.0% 1.98x NET DEBT TO ADJUSTED EBITDA RATIO* Net cash provided by operat
Slide 13: Operational update
Operational update Jim Hannon Chief Executive Officer Q3 2023
Slide 14: Steady ARGUS Cloud adoption
Steady ARGUS Cloud adoption Cloud Adoption Rate* 80% 70% 72% 70% 67% 64% 60% 55% 50% 44% 52% +10M Valuation models on ARGUS Cloud 42% +1M 40% Unique properties 29% on ARGUS Cloud 30% 26% 22% 20% 14% 10% 10% 8% 6% 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2020 2020 2020 2020 2021 2021 2021 2021
Slide 15: Adding new bookings at Analytics
Adding new bookings at Analytics Q3 2023: C$M New Bookings* C$ (M) 21.1% $40 $34.2 total $35 $31.1 total New Bookings* $28.0 $26.9 $30 total (y/y, CC*) total $24.6 $23.5 total $22.2 $25 $21.3 $22.1 $20.5 total $21.4 total total total total total $20 24.3% $14.9 $20.8 $15.0 $19.1 total $12.8 total $1
Slide 16: Building scale with our valuation offer
Building scale with our valuation offer REVS FORBURY • Utilizing our strong balance sheet to Independent, tech-enabled CRE CRE valuation software solutions pursue opportunistic M&A valuation management solutions tailored for APAC region • Opportunity to bolster our offer ~C$310.1M cash purchase pric
Slide 17: In a dynamic CRE market, Altus is:
In a dynamic CRE market, Altus is: Consistently growing Expanding Analytics Continuing to add New Analytics Recurring Adjusted EBITDA Bookings* at Analytics Revenue* margin* >$20M per quarter, in line 15.7% CC* YTD 480 bps YTD with 2021 averages Delivering on cloud Growing core Property Improving co
Slide 18: Question period
Question period For additional inquiries please email IR@altusgroup.com
Slide 19: Appendix
a AltusGroup Appendix
Slide 20: Well positioned for sustained growth in 2023
Well positioned for sustained growth in 2023 BUSINESS OUTLOOK FY 2023 PERFORMANCE EXPECTATIONS CONSOLIDATED • Sustained revenue & Adjusted EBITDA* growth ANALYTICS • Double-digit revenue growth and expanded Adjusted EBITDA margin* • U.K. annuity revenue stream resets in 2023; cyclicality to cause re
Slide 21: Resilient business model provides stability
Resilient business model provides stability APAC, 4% Appraisals & Development Advisory 15% Trusted by the largest CRE leaders EMEA, Diversified Canada, 21% 27% Equity Debt Valuers & Banks revenue base Property Tax Analytics 50% Investors Investors Appraisers YTD 2023 35% U.S., 48% Developers Corpora
Slide 22: Selected financial information
Selected financial information Three months ended Nine months ended Selected Financial Information September 30, September 30, In thousands of dollars, except for per share amounts 2023 2022 2023 2022 Revenues $ 185,232 $ 177,691 $ 581,269 $ 551,689 Canada 24% 27% 27% 27% U.S. 51% 49% 48% 44% EMEA 2
Slide 23: Reportable segment performance
Reportable segment performance Revenues Three months ended September 30, Nine months ended September 30, Constant Constant In thousands of dollars 2023 2022 % Change Currency 2023 2022 % Change Currency % Change % Change Analytics $ 95,338 $ 87,599 8.8% 4.6% $ 289,723 $ 250,042 15.9% 10.7% Property
Slide 24: Reconciliation of Profit (Loss) to Adjusted EBITDA and Adjusted Earnings
Reconciliation of Profit (Loss) to Adjusted EBITDA and Adjusted Earnings Three months ended Nine months ended September 30, September 30, (1) Management uses the non-GAAP occupancy costs calculated on a similar basis prior to the adoption of IFRS 16 when analyzing In thousands of dollars, except for
Slide 25: Debt, leverage & liquidity
Debt, leverage & liquidity Quarter end Cash position Total bank debt Funded debt to Adjusted Net debt to Adjusted Liquidity as at September 30, 2023: EBITDA ratio EBITDA ratio* Q3 2023 $44.7 M $314.1 M 2.08x 1.98x Cash $44.7 M Q2 2023 $43.1 M $335.8 M 2.19x 2.10x Q1 2023 $42.9 M $350.1 M 2.21x 2.13x
Slide 26: Summary of consolidated quarterly results
Summary of consolidated quarterly results 2023 2022 2021 In thousands of dollars, Sep 30 Jun 30 Mar 31 Fiscal 2022 Dec 31 Sep 30 Jun 30 Mar 31 Fiscal 2021 Dec 31 except for per share amounts Results of Operations Revenues $ 185,232 $ 205,213 $ 190,824 $ 735,451 $ 183,762 $ 177,691 $ 206,414 $ 167,58
Slide 27: Non-GAAP and other measures definitions
Non-GAAP and other measures definitions Altus Group uses certain non-GAAP financial measures, non-GAAP ratios, total of segments measures, capital management measures, and supplementary and other financial measures as defined in National Instrument 52-112 - Non-GAAP and Other Financial Measures Disc
Slide 28: Non-GAAP and other measures definitions
Non-GAAP and other measures definitions Net debt to Adjusted EBITDA leverage ratio: Altus Group uses Net debt to Adjusted EBITDA leverage ratio as a measure of its ability to service debt and other long-term obligations. How it’s calculated: Net debt (total borrowings less cash and cash equivalents,