Descartes Systems Group Inc. · TSX:DSG
Descartes Systems — The Descartes Systems Group — Investor Presentation (September 2022)
22 slides from Descartes Systems's investor presentation, September 2022
Slide 1: Descartes – Uniting Business in Commerce
Descartes – Uniting Business in Commerce September 2022 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 ▪ Leader in providing SaaS solutions for logistics- intensive businesses ▪ Proven ‘Total Growth’ model supported by disciplined acquisition strategy ▪ High-recurring revenue profile ▪ Delivering profitable growth and free cash flow generation 25,000 + 160 + Customers Countries
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 R S M A N U FA C T U R E R S D I S T R I B U TO R S
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 31 acquisitions since 2014 for a total consideration of ~US $1,040 million ▪ Disciplined approach that is focused 2014 2015 2016 2017 2018 2019 2020 2021 2022 on comple
Slide 12: Recent Acquisition Success
Recent Acquisition Success Acquired XPS in June 2022 for ~$65mm + up Acquired Portrix May 2021 for ~$25m and Acquired February 2019 for ~$250mm to ~$75mm earn-out Kontainers June 2020 for ~$6m + up to ~$6m earn-out ▪ XPS provides its cloud-based multi-carrier ▪ Kontainers and Portrix provide key ▪ C
Slide 13: Industry-Leading Solutions Help Customers Reduce Environmental Footprint
Industry-Leading Solutions Help Customers Reduce Environmental Footprint Descartes’ Environmental Impact – We Helped our Customers Save >696,000 >2.84 billion >1.087 million tons of CO2 sheets of paper liters of fuel *INFOGRAPHIC CALCULATIONS WERE MADE USING THE PAPER CALCULATOR FROM ENVIRONMENTAL P
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 $425 $176 $349 $326 $131 $104 0% YoY $123 $46 $46 $105 FY20 FY21 FY22 Q2-22 Q2-23 FY20 FY21 FY22 Q2-22 Q2-23 Net Income and Net Income as a % of Revenues Adjusted EBITDA(1) and Adjusted EBITDA as a % of Revenues(1) $86 $186 $52 $142 $123
Slide 17: Efficient and Disciplined Operating Model
Efficient and Disciplined Operating Model Gross Margin Sales and Marketing 74% 74% 76% 76% 77% 12% 12% 11% 11% 11% FY20 FY21 FY22 Q1-23 Q2-23 FY20 FY21 FY22 Q1-23 Q2-23 Research and Development General and Administrative 16% 16% 15% 15% 14% 11% 10% 10% 10% 10% FY20 FY21 FY22 Q1-23 Q2-23 FY20 FY21 FY
Slide 18: Capital Structure – July 31, 2022
Capital Structure – July 31, 2022 • Common shares • 84.8 million – Basic (current) • 86.3 million – Fully diluted (current) • Mixed-Shelf filed on July 15, 2022 (no limit – currently unused) • Cash and cash equivalents • $US 189.0 million • Acquisition line of credit • $US 350.0 million with the pot
Slide 19: Baseline Calibration
Baseline Calibration Figures per Quarter Baseline Actual Actual % of Baseline ▪ Baseline revenues = visible, contracted and Q3’22 Revenue $95.0 $108.9 115% recurring revenues at the beginning of Net Income $25.5 Net Income as a % of Revenues 23.4% each quarter1. Baseline revenues is not a Adj. EBITD
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 – Q2-23
Reconciliation of Non-GAAP Financial Measures - Adjusted EBITDA and Adjusted EBITDA as a percentage of revenues – Q2-23 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 – FY22
Reconciliation of Non-GAAP Financial Measures - Adjusted EBITDA and Adjusted EBITDA as a percentage of revenues – FY22 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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