Tecsys Inc. · TSX:TCS
Tecsys — Q2 2023 Earnings Presentation
23 slides from Tecsys's earnings presentation, December 2022
Slide 1: Investor Presentation Q2 2023
Investor Presentation Q2 2023 Committed to a Connected World
Slide 2: Safe Harbour
Safe Harbour The statements in this presentation relating to matters that are not historical fact are forward looking statements that are based on management's beliefs and assumptions. Such statements are not guarantees of future performance, and are subject to a number of uncertainties, including b
Slide 3: Our story is all about our customers
Our story is all about our customers Our Purpose: To empower good companies to be great. Our Position: To clarify uncertainty in the supply chain. Our Mission: To equip supply chain greatness. Our Vision: That good companies have the space to thrive. 3
Slide 4: Visionary provider of supply chain technology for the world's most complex supply networks
39 11 9 Years Times Customers of complex supply Tecsys named in Gartner's Tecsys is proud to have nine network experience Magic Quadrant for WMS customers, two with and promoted to Masters recognition, on Challenger in 2022 Gartner’s Healthcare Supply Chain Top 25 for 2022 Visionary provider of supp
Slide 5: Global Reach
Global Reach 30% $142M $71M 717 1,000+ Revenue** Annual Recurring SaaS Revenue Employees*** Customers 66% USA Revenue*** Growth* 20% Canada 14% ROW (primarily Europe) * Constant currency growth in Q2 vs. same period last year based on October31, 2022 exchange rates 5 ** Last twelve months, October 3
Slide 6: End-to-end Integrated Supply Chain Management Solutions
End-to-end Integrated Supply Chain Management Solutions SUPPLIERS PARTNERS CUSTOMERS ENTERPRISE SYSTEMS Collaboration E-Commerce Demand Procurement Warehouse Transportation Planning & Inventory Point of Use Financial Management 3RD Party Billing ANALYTICS Healthcare – Distribution – Retail – 3PL 6
Slide 7: Tecsys Momentum
Tecsys Momentum $142* $137 $123 Total Revenue (in $ million) $105 $76 $29.88** TSX:TSE $15.40 2019 2020 2021 2022 2023 TSX30™ New CHRO hired New CRO Partner COVID-19 Organic Hired New IT Hired Ecosystem Growth Sec Leadership Promoted to Challenger in Hired New R&D Hired New Gartner WMS Quadrant Lead
Slide 8: Key Markets
Key Markets Converging Complex Distribution Healthcare Percentage of Annual Recurring Revenue 43% 57% Solutions Built on Experience: Delivering end-to-end solutions with technology & services tailored to key industries. 8
Slide 9: COVID-19 Exposed Weaknesses in Healthcare Supply Chains
COVID-19 Exposed Weaknesses in Healthcare Supply Chains Point of Use Breakdowns Standardization across Volume Fluctuations networks IDNs struggling Extraordinary pressure on supply chain to deliver Result: Healthcare supply chains need solutions urgently Opportunity: Tecsys is considered t
Slide 10: Healthcare Market Opportunity
Healthcare Market Opportunity Becoming Dominant in US Health Systems Market – The $600M ARR* Opportunity Health Systems Base Account Market Share Penetration 300 31% 17% ARR Opportunity: ARR Opportunity $600m with Current Base: $100m+ 83% Target Health Systems 69% Market Opportunity Current Share Ma
Slide 11: Brand Owner/Retail Convergence Drives Opportunity in Complex Distribution
Brand Owner/Retail Convergence Drives Opportunity in Complex Distribution Seismic shift happening Businesses/trading in retail – amplified by partners expect the same COVID19 Extraordinary pressure on Consumers demand supply chain to deliver products faster Result: Supply Chain Management ne
Slide 12: Distribution Convergence Market Opportunity – $6B
Distribution Convergence Market Opportunity –$6B Industries: High Volume distribution/wholesalers of hard goods in these specific verticals: General hard goods – agricultural equipment, auto parts, computer equipment, construction materials, consumer packaged goods, electrical & electronics, fulfill
Slide 13: Partner Ecosystem - Accelerate Growth
Partner Ecosystem - Accelerate Growth Software Alliances Consultants & SI e.g., Microsoft, AWS, IBM, OSF Digital, e.g., RiseNow, Avalon, Bricz, Sequoia, Six Zebra Technologies, Terso Solutions, Peaks Interfaceware • Synergistic Services • Synergistic Solutions • Aligned Vertical Focus • Market Reach
Slide 14: Building Annual Recurring Revenue (ARR)
Building Annual Recurring Revenue (ARR*) Amounts in October 31, 2022 constant in $CAD Millions $80.00 43% $71.20 $70.00 $65.28 of ARR is Healthcare $60.00 $55.70 57% $50.00 $47.00 $40.00 $38.10 Complex Distribution (3PL, Retail, Distributors) $30.00 $20.00 18% YoY constant currency $10.00 growth Q2
Slide 15: Annual Recurring Revenue Net Retention Rate
Annual Recurring Revenue Net Retention Rate 110% 109% 108% 107% 106% 105% 100% 109% LTM Q2 2023 95% Recurring Revenue Net Retention Rate 90% Net Retention = (Existing customer expansion less churn) divided by Beginning 85% period ARR 80% 2020 2021 2022 LTM Q2 2023 15
Slide 16: SaaS Bookings Fuel Recurring Revenue Growth
SaaS Bookings Fuel Recurring Revenue Growth Amounts in $CAD million Quarterly SaaS Revenue 30% YoY SaaS Revenue Growth Q2 FY23 (constant currency basis) 52% Q2 FY23 SaaS Revenue as a percentage of total recurring revenue (up from 44% in Q2 FY22 and 49% Q4 FY22)
Slide 17: Tecsys Growth Vector – SaaS
Tecsys Growth Vector – SaaS in $CAD millions SaaS growing at 34% constant currency; SaaS combined with professional services growing at 11% constant currency. SaaS and Prof. Services Growth Revenue Growth by Type Q2 FY23 YTD Q2 FY23YTD vs Q2 FY22YTD
Slide 18: SaaS Growth Driving Increase in Recurring Revenue Mix
SaaS Growth Driving Increase in Recurring Revenue Mix in $CAD millions $33.7 $32.1 $32.7 $8.8 $28.9 $8.1 $26.9 $19.2 45.0% 46.2% 50.2% 52.1% 53.7% $9.0 $2.4 FY 2019 FY 2020 FY 2021 FY 2022 Q2 2023 Maintenance and Support Revenue SaaS Revenue % Recurring Revenue over total Revenue excluding Hardware
Slide 19: Strong & Growing SaaS Backlog
Strong & Growing SaaS Backlog in $CAD millions FY22 SaaS Backlog* Growth: 43% $100.00 $94.00 $90.00 $80.00 $70.00 $65.70 $60.00 October 31, 2022 $52.00 SaaS Backlog: $50.00 $109.5 $40.00 $30.00 $20.00 $15.10 million $10.00 $0.40 $0.00 2018 2019 2020 2021 2022 *Please refer to FY 2022 Annual Report M
Slide 20: Corporate Information
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Slide 21: Financial Highlights
Financial Highlights in $CAD millions except EPS Q2 2023 Q2 2022 Δ YoY Q2 2023 TTM Q2 2022 TTM Δ YoY $ % $ % $ % $ % $ % $ % Total Revenue $38,111 100% $34,269 100% $3,842 11% $142,014 100% $131,817 100% $10,197 8% Total Revenue Excluding Hardware $31,490 83% $28,823 84% $2,667 9% $120,043 85% $110,
Slide 22: Corporate Overview
Corporate Overview $435M 28¢ 21% Market Cap** Symbol TCS Dividend per Year* Insider Ownership** 14.6M S/O Bank of Montreal Brokerage Cormark Securities Echelon Partners Coverage LB Securities National Bank Raymond James Stifel/GMP * Last twelve months, October 31, 2022 22 ** At October
Slide 23: Reasons to Invest
Reasons to Invest $600M $6B 2.75x Cloud- ARR ARR ARR SaaS NTM based Growth TAM TAM EV/sales Operates a single Greenfield Disruptor SaaS bookings LTM October 31, Trading at 2.75x cloud-based opportunity in opportunity in representing 85% 2022 ARR YoY NTM EV/sales, a platform that healthcare with comp