Data Communications Management Corp. · TSX:DCM
Data Communications Management — Investor Presentation (March 2013)
39 slides from Data Communications Management's investor presentation, March 2013
Slide 1: Investor Presentation March 2013
We do what we say we will do. We do what we say we will do. 1 Investor Presentation March 2013
Slide 2: Forward-Looking Statements
Forward-Looking Statements Certain statements in this document are “forward-looking statements”, which reflect management’s current beliefs and expectations regarding the DATA Group’s future growth, results of operations, performance, and business prospects and opportunities. Forward-looking stateme
Slide 3: Agenda
Agenda DATA’s Strategic Growth Plan Q4 & YTD Results Dividends Value proposition and capabilities Industry Dynamics – The data supports our growth plan Social Responsibility Investor Highlights Summary We do what we say we will do. 3
Slide 4: DATA's Strategic Growth Plan
DATA…at a glance DATA’s Strategic Growth Plan Launched February 2011 Our Goals In 2011 stabilize financial results. In 2012 begin sustainable growth in the markets we have defined; • Document Management • Marketing Communications • Expansion into the U.S. with existing clients In 2013 and beyond, gr
Slide 5: DATA's Growth Plan: Launch New Products and Services
DATA’S DATA’sGrowth Plan Growth Plan Launch New Products and Services Through “greenfield” start up as well as acquisitions • Acquisitions will be immediately accretive In the areas of electronic communication, digital print and outsourcing services for Document Management and Marketing Communicatio
Slide 6: Strong Core Fueling New Growth
DATA’S Growth Plan Strong Core…Fueling DATA…at a glance New Growth Continuous Improvement in our core business Aggressive sales effort to win market share • Winning new business ~ $20 million annually Stable customer relationships • Due to our strong customer service (“We do what we say we will do”)
Slide 7: Relentless Cost Savings
DATA’S Growth Plan Strong Core…Fueling DATA…at a glance New Growth Relentless Cost Savings Achieved savings of ~ $4 - $5 million annually from 2009 to 2012. Intend to increase this rate of savings, beginning in 2013. • Multi-year plan to reduce costs in all aspects of our business, partially offset
Slide 8: New Mission Statement
DATA’S Growth Plan New Mission Statement DATA is a communications management company. We excel by providing exceptionally innovative and reliable marketing and document management solutions in electronic and print media. We begin by understanding our client’s needs. Then we combine our talented peop
Slide 9: Results of the Strategic Growth Plan
Results of the Strategic Growth Plan We do what we say we will do. 9
Slide 10: Financial Results
Financial Results Early 2011 - growth plan was implemented Revenue and Adjusted EBITDA stabilized in 2011. Revenue and gross profit grew in 2012, while Adjusted EBITDA declined due to investment in our growth strategy. We do what we say we will do. 10
Slide 11: New Talent to Support Growth
New Talent to Support Growth Significant change in Senior Management to support the growth strategy New Chief Executive Officer New VP Sales and Marketing (DATA East division) New Chief Information Officer New VP of Digital and Direct Marketing New VP, Strategic Services (DATA East division) New VP,
Slide 12: New Products and Services: Web Based Direct Marketing
New Products and Services Web Based Direct Marketing – Launched September 2011 Direct Marketing via email, web pages, mobile messaging. Creative design and copy writing services for marketing programs. Compliments our existing direct mail services. Steady growth in sales volume since inception. We d
Slide 13: New Products and Services: FSA Group and FSA Datalytics
New Products and Services FSA Group and FSA Datalytics – Acquired November 2011 •Acquired The Fulfillment Solutions Advantage Inc. (“FSA”) Markham, Ontario based direct marketer. Focused on digitally printed direct mail, fulfillment and related call center services. •Acquired a 70% (now 82.35%) inte
Slide 14: New Products and Services: Document Process Management
New Products and Services Document Process Management – Launched September 2012 Outsourcing of document intensive business functions from our customers to DATA. New revenue opportunity for DATA by adding services that address entire document lifecycle. • Workflow automation, call center services, sc
Slide 15: New Products and Services: Marketing Campaign Management
New Products and Services Marketing Campaign Management – Launched October 2012 Software that automates marketing campaign planning and development. This creates collaborative workflow between our clients, their advertising agencies, and fulfillment of the campaign by DATA. New revenue opportunity f
Slide 16: New Products and Services: Managed Business Communications Services
New Products and Services Managed Business Communications Services – Launched Q4 2012 All of DATA’s new products and services, bundled together with our traditional print management services, into a comprehensive offering. Delivers cost reduction and revenue enhancement for our clients. • Marketed a
Slide 17: U.S. Expansion
U.S. Expansion U.S. expansion with selected existing clients – Launched Q4 2012 Expand relationship with existing clients who have U.S. operations by offering our Managed Business Communications Services on a North American basis. • Allows DATA to expand into the U.S. with the support of multi-year,
Slide 18: 2012 Financial Results: Q4 Revenue
2012 Financial Results Q4 Revenue decreased 3% vs. 2011 Revenue Q4 100.00 75.00 C$ Millions 50.00 89.80 86.92 25.00 0.00 Q4 2011 Q4 2012 We do what we say we will do. 18
Slide 19: 2012 Financial Results: Annual Revenue
2012 2012 Financial Financial Results Results 2012 revenue increased 1.3% vs. 2011 2012 Revenue 350.00 300.00 C$ Millions 250.00 200.00 332.04 336.32 150.00 100.00 2011 2012 We do what we say we will do. 19
Slide 20: 2012 Financial Results: Q4 Gross Profit
2012 Financial Results Q4 Gross Profit up 3% vs. 2011 Q4 Gross Profit 30.00 20.00 C$Milllions 10.00 22.51 23.17 0.00 Q4 2011 Q4 2012 We do what we say we will do. 20
Slide 21: 2012 Financial Results: Gross Profit
2012 2012Financial FinancialResults Results 2012 Gross Profit up 4.5% vs. 2011 2012 Gross Profit 100.00 80.00 C$ Millions 60.00 83.41 87.17 40.00 20.00 2011 2012 We do what we say we will do. 21
Slide 22: 2012 Financial Results: Q4 Adjusted EBITDA
2012 Financial Results Q4 Adjusted EBITDA increased 5.1% Q4 Adjusted EBITDA 9.00 7.00 C$Millions 5.00 8.61 9.05 3.00 1.00 Q4 2011 Q4 2012 We do what we say we will do. 22
Slide 23: 2012 Financial Results: Adjusted EBITDA
2012 Financial 2012 Results Financial Results 2012 Adjusted EBITDA decrease due to investment in our growth strategy, partially offset by increased Gross profit. 2012 Adjusted EBITDA 32.00 27.00 22.00 C$ Millions 17.00 30.38 28.67 12.00 7.00 2.00 Q4 2011 Q4 2012 We do what we say we will do. 23
Slide 24: 2012 Financial Results: Balance Sheet
2012 2012Financial FinancialResults Results Balance Sheet Dec. 31, 2012 December 31, 2011 Selected Balance Sheet Information (C$ millions) (C$ millions) Cash & Equivalents - 4.05 Net Working Capital 43.75 48.30 Revolving Bank Facility 57.55 60.12 Convertible Debentures 42.31 42.23 Total shareholder/
Slide 25: Dividends
Dividends Dividends Dividend of $0.30 (annualized value) as of January 1, 2013 Our recent dividend change is intended to create an improved balance between our strategic financial goals and ultimately, to drive investor value; • Continue to invest in the growth strategy as we have in 2011 and 2012.
Slide 26: Value Proposition and Capabilities
Value Proposition and Capabilities We do what we say we will do. 26
Slide 27: Value Proposition
Value Proposition Customer Value Proposition DATA offering Customer Value Document Management solutions Reduce costs Marketing Communications Build revenue Stable operational and financial platform Avoid risk Managed Business Communications Services All of the above Market Differentiation Superior e
Slide 28: Strong Document Management Market Position
Value Proposition Strong Document Management Market Position Over $150 million in annual Document Management revenue We provide services for the total document lifecycle Destruction Printing Archiving (paper or electronic) Creative / Design Destruction Printing Archiving Document (paper or electroni
Slide 29: Strong Marketing Communications Market Position
Value Proposition Strong Marketing Communications Market Position Approximately $70 million in annual Marketing revenue We provide services for the total direct marketing and marketing promotional print lifecycle. Creative Marketing Design and Campaign Copy Management Call Center Consumer & Services
Slide 30: 'Blue Chip' Customers
Value Proposition ‘Blue Chip’ Customers Multi-year, multi-product contractual relationships Majority of top 25 customers > 10 year relationships No single customer > 10% of our total revenue We do what we say we will do. 30
Slide 31: Strong Current Product Mix to Leverage Industry Growth
Strong Core Value Proposition Strong current product mix to leverage industry growth areas DATA’s Product Mix aligns with industry growth areas: (see slide 32-35 for industry data) Labels Digital Marketing Solutions Digital Document Management Document Process Outsourcing We do what we say we will d
Slide 32: Industry Dynamics
Industry Dynamics Research data supports our strategic plan… We do what we say we will do. 32
Slide 33: Evolving to Blended Digital & Paper Solutions
Industry Dynamics Evolving to blended digital & paper solutions, professional services and document outsourcing Increase in digitization • Blending electronic and paper based solutions Increase in Professional Services • Document Management technology solutions • Marketing Services (content manageme
Slide 34: There's Growth If You Know Where to Look
Industry Dynamics There’s growth if you know where to look! E-marketing growing 20% Outsourcing of document related processes growing 14.5% Digital colour printing growing 9% Data and content management growing 5.2% Pressure sensitive labels growing 4.8% Document print outsourcing growing 2.2% Direc
Slide 35: Opportunity for the Right Companies
Industry Dynamics Opportunity for the right companies Customers are seeking help with increasingly complex, blended electronic and paper options Opportunity for trusted, innovative, single-source providers to expand • Add new products and services for existing clients • Take market share from slower
Slide 36: Social Responsibility
Social Responsibility We are committed to employment equity We are committed to the environment We are committed to maintaining a safe workplace We support charities in our communities For more information on our programs visit www.datagroup.ca We do what we say we will do. 36
Slide 37: Investor Highlights Summary
Investor Highlights Summary Strategic Growth Plan • Grow profitability through revenue growth and cost reduction. • Revenue growth fueled by; new product development, bundled solutions, selective U.S. expansion, acquisitions. • Cost reduction program launched in late 2012 that accelerates the rate o
Slide 38: For more information
For more information: Michael Suksi PRESIDENT AND CEO 905.494.4006 msuksi@datagroup.ca Paul O’Shea CFO 905.494.4002 poshea@datagroup.ca www.datagroup.ca TSX symbols: DGI (shares) and DGI.DB.A (debentures) We do what we say we will do. 38
Slide 39: We do what we say we will do.
We do what we say we will do. We do what we say we will do. 39
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