Caldwell Partners International Inc. · TSX:CWL
Caldwell Partners International — Shareholder Meeting (February 2024)
34 slides from Caldwell Partners International's shareholder meeting presentation, Feb 13, 2024
Slide 1: Caldwell Annual General Meeting
CALDWELL ANNUAL GENERAL MEETING Starting soon! February 13, 2024 Elias Vamvakas Chair of the Board
Slide 2: Agenda
Introduction Approval of minutes of last year’s meeting Approval of audited financial statements Agenda Election of Board Directors Appointment of auditors Termination of meeting Presentation by management John Wallace – Chief Executive Officer Chris Beck – President, Caldwell and
Slide 3: Election of Directors
Election of Directors Director and President, Caldwell and Chief Financial Officer • Appointment of Directors 3
Slide 4: Appointment of Auditors
Appointment of Auditors • It is proposed that KPMG be appointed as auditors of the Corporation 4
Slide 5: Management Presentation
Management Presentation John Wallace Chief Executive Officer
Slide 6: Forward Looking Statements
FORWARD We endeavour to be open and informative in our presentations. LOOKING However, we are not always correct in our expectations, and many STATEMENTS circumstances can cause our forecasts and opinions to change; possibly materially so. Any statements that we make today that may be considered to
Slide 7: Forward Looking Statements
FORWARD Forward-looking statements in this document are based on current expectations subject to the significant risks and uncertainties cited. These forward-looking statements generally can be identified by the use of statements that include phrases such as “believe,” “expect,” “anticipate,” “inten
Slide 8: Disclaimer
Disclaimer This presentation is not, and under no circumstances is to be construed as, a prospectus, offering memorandum, or advertisement or a public offering of securities. Offers to sell, or the solicitations of offers to buy, any security can only be made through official offering documents that
Slide 9: A Special Thank You
= Caldwell ASPECIAL THANK YOU PAUL DAOUST Director and Chair of the Compensation Committee
Slide 10: Who We Are
WHO WE ARE • Caldwell is a technology-powered talent acquisition firm, leveraging the latest innovations in AI to offer an integrated spectrum of retained executive search and on-demand talent acquisition support services. • We believe talent transforms, and our purpose is to enable organizations to
Slide 11: Caldwell Today
CALDWELL TODAY • We operate through two distinct segments – retained executive search Seamless talent and analytics solutions are conducted as Caldwell, and support of acquisition clients’ in-house recruitment needs are conducted as IQTalent. 11
Slide 12: Presentation Overview
A challenging hiring market: • Record fiscal 2022 (12 months ending 8/31/2022) • Material reduction in hiring demand industry-wide during fiscal 2023 • IQTP impacted more rapidly and severely than Caldwell due to VC/tech Presentation weighting and on-demand/hourly nature of business model Overview •
Slide 13: Presentation Overview: The Bright Spots
Presentation The bright spots Overview • Successfully negotiated termination of IQTalent Nashville lease agreement Q1 fiscal 2024 (three months ending 11/30/2023), providing significant expense relief • IQTalent experiencing daily billing rate has been stable since beginning of December • Acquisitio
Slide 14: Caldwell Executive Search
Caldwell Executive Search Chris Beck President, Caldwell and Chief Financial Officer
Slide 15: Caldwell: Executive Search
• Exiting the pandemic, we experienced a “post-pandemic surge” of CALDWELL: hiring activity. We anticipated this elevated demand would ease back EXECUTIVE to historical norms. SEARCH • We experienced a significant reduction in our client’s hiring demands during Q1 fiscal 2023 (three months ending 11
Slide 16: General Market Environment vs. Executive Search / Hiring Environment
General Market Environment vs. Executive Search / Hiring Environment
Slide 17: Historical Revenue Trend
HISTORICAL Annual Professional Fees Trend (CAD $ in millions) REVENUE TREND $180.0 Fiscal Years Ending August 31st $160.0 $155.6* Caldwell’s executive search operations had $140.0 historical CAGR of 15.4% $119.4 $51.6 Industry-wide coming into the $120.0 reduction in pandemic and $23.3 hiring demand
Slide 18: Appendix: Caldwell Executive Search Practice Diversification
Life Sciences ANSEC % of professional fees—f’23 3.3% APPENDIX: 7.7% Financial Professional Services Services 38.5% Real Estate Alternative Investment CALDWELL 7.8% 1.0% (Hedge Funds/PE) 17.8% EXECUTIVE SEARCH TMT/IT Insurance 4.3% 35.4% Asset PRACTICE Consumer Financial Management Services 10.1% DIV
Slide 19: Business Model
= Caldwell BUSINESS MODEL EXECUTIVE SEARCH BUSINESS MODEL (ay # OF SEARCHES AVERAGE FEE ‘ PER PARTNER PER SEARCH Our partners are hunter/market Executive search is competitive, makers with deep relationships. but the core fee structure in the We provide the technology, industry (1/3 of the placed pr
Slide 20: Metrics: Caldwell Executive Search
METRICS Average Fee per Assignment (CAD $000s) # of Assignments per Partner per Year $200 16.0 F'21, 14.7 F'22, 13.3 14.0 $180 CALDWELL $160 12.0 10.0 EXECUTIVE SEARCH $140 8.0 F'23, 9.1 F'23, $171 6.0 $120 Historical average = 11.7 4.0 $100 2.0 $80 - F'10 F'11 F'12 F'13 F'14 F'15 F'16 F'17 F'18 F'1
Slide 21: Down-cycle Impact
Down-cycle Impact Caldwell (executive search) Revenue Quantification of Current Cyclical Suppressed Hiring Demand Average search volume/partner/year trailing 10 years (f'14 to f'23) 11.7 Search volume/partner/year actual f'23 9.1 Temporary cycle hiring demand decline/partner/year (2.6) Current # of
Slide 22: Executive Search Seasonality
Executive Search Back half % higher Seasonality f'12 24.0% f'13 62.1% f'14 34.5% Back half of f'15 18.4% f'16 10.3% fiscal year f'17 19.4% traditionally f'18 19.8% significantly f'19 34.9% -28.1% f'20 pandemic higher than f'21 41.7% first half -3.0% f'22 f'23 15.8% Avg. 18.5% -40.0% -30.0% -20.0% -1
Slide 23: Celebrating Successes: The Counsel Network
CELEBRATING • $3 to $4 million Canadian boutique focused on the legal industry: SUCCESSES Law firms (partners, associates, infrastructure/administrative roles) Corporate in-house counsel THE COUNCIL NETWORK • 2 partners—Dal Bhathal (Toronto) and Sameera Sereda (Calgary) • 9 total employees • htt
Slide 24: Celebrating Successes: New Partners and Principals
CELEBRATING SUCCESSES NEW PARTNERS AND PRINCIPALS Lindsay Lane Miriam Leung Rajiv Lulla Tisha MacEacheron Caldwell Caldwell Caldwell Caldwell Advance Average # of Partners 55.0 50.0 45.0 40.0 35.0 30.0 25.0 F'10F'11F'12F'13F'14F'15F'16F'17F'18F'19F'20F'21F'22F'23
Slide 25: North American Market Share
North American Market Share--Top 50 Outsourced Executive Search Firms NORTH AMERICAN $3.5 Elites SHREKs MARKET SHARE Fewer # Recruiters Higher average fee/roles Large # Recruiters High average fee/roles Revenue per Consultant (USD $ millions) Spencer Stuart , 13.6% Global brands $3.0 ON Partners , 1
Slide 26: Opportunity
OPPORTUNITY • Accelerating ability to attract partners to executive search as brand recognition has increased with our growth. • Caldwell's historical revenue growth rate of 15.4% achieved with a primarily organic growth focus. • Target EBITDA margins of 8-10% for Caldwell in a normal demand market
Slide 27: IQTalent
= Caldwell 10Talent John Wallace
Slide 28: IQTalent: What Happened?
— Record fiscal 2022 (12 months ending 11/30/2022): $40 million USD IQTALENT revenue WHAT HAPPENED? — Predominance of clients had been in the tech sector, supporting their in-house recruiting — Revenue decline began as a technology sector pull-back — As revenue declined, we reduced our contracted wo
Slide 29: IQTalent Growth Path Long-Term
IQTALENT GROWTH IQTalent Monthly Revenue Trend PATH • Mirrors monthly trend of tech job posting (below) LONG-TERM GROWTH ACROSS • Technology represented over INTERMITTENT 60% of revenue historically, pandemic now down to less than 30% CYCLICAL DOWNTURNS PATTERN FOLLOWED US TECH JOB POSTINGS BY Month
Slide 30: IQTalent On-Demand Proforma Historical Revenue Trend
Calendar Year Revenue ($000s USD) $40,000 IQTALENT $35,000 $34,298 ON-DEMAND $31,669 $30,000 PROFORMA $25,000 HISTORICAL REVENUE TREND $20,000 Industry-wide reduction in $15,509 hiring demand $15,000 $11,802 pandemic $11,373 $10,515 $10,000 $6,666 $4,816 $5,000 $- 2016 2017 2018 2019 2020 2021 2022
Slide 31: IQTalent: Where Are We Now and Where Are We Going?
IQTALENT — Enacted cost-cutting measures to break even and bring the cost of service margins in line. WHERE ARE WE — Tech sector clients down to less than 30% of revenue. NOW AND WHERE — Diversifying client base into healthcare, manufacturing, ARE WE GOING? industrial. — Spun-out IQRecruit (candidat
Slide 32: Summary
Caldwell SUMMARY
Slide 33: Path Forward
Path Forward • Continue focus on growing in the “elite” market quadrant—top of the house executive searches with high average fee. • Organic growth supplemented with boutique acquisitions primarily in United States; 125 partners billing $2.0 million = $250 million+ North American executive search bu
Slide 34: Questions?
=icaitwell = Caldwell Qiua@tALeNT’ QUESTIONS? TRANSFORMING THE WORLD OF TALENT,
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