Calian Group Ltd. · TSX:CGY
Calian — Non-Deal Roadshow (June 2023)
70 slides from Calian's roadshow presentation, Jun 7, 2023
Slide 1: Investor Presentation
Investor Presentation Toronto Roadshow in collaboration with Canaccord Genuity June 7, 2023 1
Slide 2: Caution Regarding Forward Looking Statements
Caution Regarding Forward Looking Statements Certain information included in this document is forward-looking and is subject to important risks and uncertainties. The results or events predicted in these statements may differ materially from actual results or events. Such statements are generally ac
Slide 3: Table of Contents
Table of Contents 1 INVESTMENT THESIS 2 EXECUTING ON OUR GROWTH OBJECTIVE 3 DEPLOYING CAPITAL EFFECTIVELY 4 FUNDING GROWTH 5 FOUR-PISTON ENGINE (OPERATING SEGMENTS) 6 Q2-23 RESULTS 7 OVERVIEW OF CALIAN 3
Slide 4: Investment Thesis
Investment Thesis 4
Slide 5: Investment Statement
Investment Statement Calian creates value for shareholders 5
Slide 6: Value Proposition
Value Proposition 1 2 3 4 Impressive value proposition 6
Slide 7: Track Record of Growth
1 – Track Record of Growth Organic Revenue Growth Revenues Revenue Diversification (in %) (in millions of $) (in % of revenues) 655 582 53% 21% 518 432 343 305 32% 27% 8% 8% 18% 29% 7% 8% 20% 7% 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 2023F 2018 2019 2020 2021 2022 2023F International Prod
Slide 8: Track Record of Growth
1 – Track Record of Growth Gross Profit & Margin Adj. EBITDA1 & Margin1 Operating Free Cash Flow (OFCF)1&2 and (in millions of $, except margin) (in millions of $, except margin) OFCF/share1&2 180 169 40.0% 70 66 (in millions of $ and per share) 160 50 47 $8.00 60 22.0% 140 127 35.0% 52 $7.00 50 40
Slide 9: Accretive Capital Deployment
2- Accretive Capital Deployment Acquisition Criteria Acquisitions Acquisition Postmortem (in millions of $) 66 9 49 ▪ Average multiple paid upfront: 5X 29 21 5 34% 51% 2018 2019 2020 2021 2022 Successful M&A strategy 9
Slide 10: Accretive Capital Deployment
2- Accretive Capital Deployment Adj. Return on Capital Employed1 Adj. EBITDA1/share Invested Capital (in %) (in $) (in millions of $) 305 23% $5.68 292 20% $4.60 17% 18% 14% 14% $3.77 200 $3.26 $3.42 115 100 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 1) Adj. ROCE = Ad
Slide 11: Strong Balance Sheet
3- Strong Balance Sheet Total Debt Cash & Cash Equivalents Net Liquidity (in millions of $) (in millions of $) (in millions of $) 79 159 13 5X Avg. multiple paid upfront 115 (trailing EBITDA) 8 43 84 62 24 22 44 17 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 1) Net Liq
Slide 12: Confident to Reach $1B in Revenues
4- Confident to Reach $1B in Revenues Backlog Book-to-Bill Ratio Adj. EBITDA1 (in billions of $) (in millions of $) 70-75 1.3 1.33 1.2 66 1.31 1.27 1.29 1.1 1.23 1.1 52 0.9 0.9 37 27 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 2019 2020 2021 2022 2023E 1) This is a non-GAAP measure. Please ref
Slide 13: Confident to Reach $1B in Revenues
4- Confident to Reach $1B in Revenues Leverage High Growth Opportunities Tailwinds in End Markets Increasing Revenue Visibility Leveraging growth opportunities, market trends and recurring revenues 13
Slide 14: The Calian Difference
The Calian Difference Integrity – Teamwork – Innovation - Customer Commitment 14
Slide 15: Executing on our Growth Objective
Executing on our Growth Objective 15
Slide 16: Four Pillars of Growth
Four Pillars of Growth 5% 5% 10% Organic Growth + Acquisitive Growth = Target Growth 1 2 3 4 Customer Retention Customer Diversification Innovation Continuous Improvement Through continued delivery Through continued Through continued investment Through continued leverage of excellence, each segment
Slide 17: Growing Revenues, Profitability and Margins
Growing Revenues, Profitability and Margins Revenues Gross Profit & Margin Adj. EBITDA1 & Margin1 (in millions of $, except margin) (in millions of $, except margin) (in millions of $) 582 180 169 40.0% 70 66 160 60 22.0% 518 52 140 127 35.0% 432 50 120 17.0% 343 89 29.1% 30.0% 40 37 305 100 75 27 1
Slide 18: Surpassing 10% Annual Revenue Growth Objective
Surpassing 10% Annual Revenue Growth Objective Acquisitive Revenue Growth Total Revenue Growth Organic Revenue Growth (in %) (in %) (in %) 19% 21% 26% 12% 20% 11% 12% 12% 8% 8% 5% 5% 7% 3% 10% 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 -6% Lapping tough year in Health
Slide 19: Diversifying Revenue Streams
Diversifying Revenue Streams Grow Market Share by Generate Higher Margins with De-Risk the Customer Base & Diversifying Internationally Products Generate Higher Margins Geography Offering Customer 20% 19% 25% 22% 18% 20% 25% 27% 29% 33% 32% 31% 47% 49% 53% 80% 81% 75% 78% 82% 80% 75% 73% 71% 67% 68%
Slide 20: Delivering on Guidance
Delivering on Guidance Revenues Adj. EBITDA1 Adj. Net Profit1 (in millions of $) (in millions of $) (in millions of $) 630-680 70-75 46-50 582 518 66 44 432 52 37 343 37 24 27 19 2019 2020 2021 2022 2023E 2019 2020 2021 2022 2023E 2019 2020 2021 2022 2023E 1) This is a non-GAAP measure. Please refer
Slide 21: Starting From a Solid Base
Starting From a Solid Base Recurring Revenues Revenues Backlog (in millions of $) (in millions of $) 630-680 664 582 518 577 432 261 343 320 Revenues 316 YTD Q2-23 2019 2020 2021 2022 2023E FY23 FY24 Beyond FY24 We have visibility on ~88% of FY23 revenues (at midpoint) 21
Slide 22: Driving Future Revenues
Driving Future Revenues Backlog New Contract Signings Book-to-Bill Ratio (in billions of $) (in millions of $) 699 1.3 1.33 1.31 1.29 1.2 1.27 1.1 1.23 492 442 447 0.9 0.9 270 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 New contract signings exceed revenues 22
Slide 23: Reaching $1 Billion of Revenues
Reaching $1 Billion of Revenues Continue to deliver double digit growth Leverage high growth opportunities • Strong FCF • Enhanced cross selling • Increasing margins • Larger M&A deals • Growing into new customers • Focus on high organic growth assets Today Run Rate - End FY25 We have the track reco
Slide 24: Deploying Capital Effectively
Deploying Capital Effectively 24
Slide 25: Generating Increasing Operating FCF
Generating Increasing Operating FCF Adj. EBITDA2 Operating Free Cash Flow (OFCF)1&2 OFCF Conversion1&2 (in millions of $) (in millions of $) (in %) 70 66 76% 47 72% 60 66% 52 63% 50 35 50% 40 37 28 30 25 27 17 13 20 10 0 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 2) T
Slide 26: Deploying Capital to Maximize Shareholder Return
Deploying Capital to Maximize Shareholder Return 1 Acquisitions 2 Dividends 3 Capex1 (in millions of $) (in millions of $) (in millions of $) 13 66 12 8 7 10 7 49 9 9 6 5 29 21 5 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 1) Capex = Equipment and application software
Slide 27: Describing M&A Strategy
Describing M&A Strategy • Profitable & growing • Dedicated M&A team • Strategic fit (complementary/scale) • Pipeline: ~10 deals/quarter • Cultural fit • Target closing: ~2-3 deals/year (larger transactions) • Disciplined valuation (do not overpay) • Individual bids & competitive bids Comfortable wit
Slide 28: Completing EBITDA Accretive Acquisitions
Completing EBITDA Accretive Acquisitions TRANSACTION VALUE DATE ACQUISITION SEGMENT GEOGRAPHY (in millions) TOTAL UPFRONT EARNOUT EARNOOUT PAID Q2-22 Computex ITCS U.S. $38.0 $38.0 $0.0 n/a Q1-22 SimFront Learning Canada $15.0 $9.0 $6.0 YES (on track for 2) Q2-21 Dapasoft ITCS Canada $83.0 $50.0 (ca
Slide 29: Performing Post Acquisition
Performing Post Acquisition Actions How? • Ability to identify good targets and 9 >$200M 5X complete successful deals Acquisitions Capital deployed Avg. multiple paid upfront (avg. of 2 deals/year) (increasing from <$5M to $80M) (trailing EBITDA) • Deal structure that enables growth • Identification
Slide 30: Acquiring Hawaii Pacific Teleport (HPT)
Acquiring Hawaii Pacific Teleport (HPT) Financial Highlights Rationale • Acquire the assets for up to C$62M (US$46M) • Blue chip roster of long-term customers (low including C$47M (US$35M) at closing and earn- churn rate) outs of up to C$15M (US$11M) based on the • Trusted relationships with satelli
Slide 31: Maintaining Dividend Payment History
Maintaining Dividend Payment History Dividends & Dividends/Share Dividend Yield Dividend/OFCF1&2 (in millions of $ & in dollars) (in %) (in %) 14 13 68% 1.80 12 12 1.60 3.7% Target range: 10 1.40 3.2% 51% 25%-30% 10 9 9 1.20 8 1.12 1.12 1.12 1.12 1.12 36% 1.00 2.0% 35% 6 0.80 1.7% 1.8% 27% 4 0.60 0.
Slide 32: Optimizing Capex Spending While Growing
Optimizing Capex Spending While Growing Equipment & Application Capitalized R&D1 R&D Expensed Software1 (in millions of $) (in millions of $) (in millions of $) 1.8 5.4 7.4 4.7 5.0 7.1 5.4 1.2 1.1 4.6 3.0 2.0 0.4 1.4 0.2 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 1) C
Slide 33: Ramping Up Deals in Equity Investments
Ramping Up Deals in Equity Investments ECO System Investments Example • Geographical expansion and entry into new • Field Effect Cyber Range – a simulation-based cyber security markets necessitates greater partnership training platform used to grow individual skills, rehearse and eco-system to bring
Slide 34: Funding Growth
Funding Growth 34
Slide 35: Maintaining a Strong Balance Sheet
Maintaining a Strong Balance Sheet Total Debt Cash & Cash Equivalents Net Liquidity (in millions of $) (in millions of $) (in millions of $) 79 159 13 5X Avg. multiple paid upfront 115 (trailing EBITDA) 8 43 84 62 24 22 44 17 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022
Slide 36: Ensuring Available Liquidity
Ensuring Available Liquidity Credit Facility Cash & Cash Equivalents Cash Available (in millions of $) (in millions of $) (in millions of $) 79 40 40 40 40 43 84 24 62 159 22 17 44 115 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 Used Unused Accordian Net Liquidity Acco
Slide 37: Leveraging Capital Structure
Leveraging Capital Structure Capital Structure Bought Deals (Equity) Operating FCF/share1 (in millions of $) (in $) (in millions of $) $4.16 80 8 5X 69 $3.27 $3.08 Avg. multiple paid upfront (trailing EBITDA) $2.19 305 $1.66 292 Pursue strategic growth 13 initiatives and for general 200 corporate &
Slide 38: Four-Piston Engine (Operating Segments)
Four-Piston Engine (Operating Segments) 38
Slide 39: ITCS – FY22 Snapshot
ITCS – FY22 Snapshot ~475 8% / 102% 17% $205M $97M Workforce Organic/Acquisitive Growth EBITDA % New Contract Signings Backlog 26% XaaS and Cyber MDR REVENUE SEGMENTATION 31% Customers Geography Offering IT Solution $173M Provider ~65% ~45% 36% 2022 Revenues Commercial International Products ~35% ~5
Slide 40: ITCS – Financial Performance
ITCS – Financial Performance Revenues Gross Profit & Margin Adj. EBITDA1 & Margin1 (in millions of $) (in millions of $, except margin) (in millions of $, except margin) 173 70.0 50.0%35.0 25.0% 61.1 29.5 45.0% 60.0 30.0 40.0% 20.0% Computex 50.0 35.3% 17.1% 35.0%25.0 acquisition 40.0 30.0%20.0 15.0
Slide 41: ITCS – Business Description
ITCS – Business Description 43% 31% 26% On-demand Talent and Government Solutions IT Solution Provider XaaS & Cyber MDR PROBLEM SOLVED: PROBLEM SOLVED: PROBLEM SOLVED: • Talent Scarcity • Cloud Transformation • IT & Cyber Scale • Physical Security • Hybrid Work • Geographic Coverage • Government Com
Slide 42: Health – FY22 Snapshot
Health – FY22 Snapshot ~1,550 -14% / 0% 17% $154M $707M Workforce Organic / Acquisitive Growth EBITDA % New Contract Signings Backlog 4% In-store Health Clinics 18% REVENUE SEGMENTATION Pharmaceutical Industry Solutions Customers Geography Offering 78% ~42% ~5% 0% $167M Healthcare Commercial Interna
Slide 43: Health – Financial Performance
Health – Financial Performance Revenues Gross Profit & Margin Adj. EBITDA1 & Margin1 (in millions of $) (in millions of $, except margin) (in millions of $, except margin) 195 55.0 40 50.0% 30.0% 47.8 34.8 163 167 45.0% 35 45.0 41.6 25.0% 40.0% 30 28.3 35.0 32.4 35.0% 23.4 116 25 20.0% 30.0% 18.5 99
Slide 44: Health – Business Description
Health – Business Description 78% 18% 4% Healthcare Professional Services Pharmaceutical Industry Solutions In-store Health Clinics Manage a network of more than 2,800 Provide clinical trial management services, Design, build and manage all in-store healthcare professionals delivering primary specia
Slide 45: Advanced Tech. – FY22 Snapshot
Advanced Tech. – FY22 Snapshot ~925 -10% / 0% 14% $184M $168M Workforce Organic / Acquisitive Growth EBITDA % New Contract Signings Backlog 22% Defense REVENUE SEGMENTATION Customers Geography Offering $150M 53% ~79% ~70% 62% Space Commercial International Products 2022 Revenues ~21% ~30% 38% 25% Go
Slide 46: Advanced Tech. – Financial Performance
Advanced Tech. – Financial Performance Margin increase due Revenues Gross Profit & Margin Adj. EBITDA1 & Margin1 (in millions of $, except margin) to mix (in millions of $, except margin) (in millions of $) 167 50.0 25.0 30.0% 150 45.0 41.6 43.3 50.0% 21.0 20.9 20.7 153 40.0 20.0 17.7 25.0% 34.0 40.
Slide 47: Advanced Tech. – Business Description
Advanced Tech. – Business Description 53% 25% 22% Space Terrestrial Defence Global leader in the provision of sophisticated ground-based Provides solutions oriented to a variety of markets. Defence engineering services, solutions and products. solutions to the satellite industry for over 55 years. •
Slide 48: Learning – FY22 Snapshot
Learning – FY22 Snapshot ~1,375 7% / 16% 18% $154M $328M Workforce Organic / Acquisitive Growth EBITDA % New Contract Signings Backlog 10% Commercial REVENUE SEGMENTATION 15% Global Customers Geography Offering Defence 75% ~10% ~15% 4% $92M Domestic Commercial International Products 2022 Revenues De
Slide 49: Learning – Financial Performance
Learning – Financial Performance Revenues Gross Profit & Margin Adj. EBITDA1 & Margin1 (in millions of $) (in millions of $, except margin) (in millions of $, except margin) 92 25.0 23.3 50.0% 18.0 16.9 30.0% 45.0% 16.0 75 20.0 17.3 40.0% 14.0 25.0% Simfront 12.4 62 63 35.0% 58 acquisition 12.0 15.0
Slide 50: Learning – Business Description
Learning – Business Description 75% 15% 10% Domestic Defence Global Defence Commercial Provides simulation-based training for Provides a range of military training for Develops and delivers more engaging, • VCCI – Virtual Command the Canadian Armed Forces. This includes NATO member countries, includ
Slide 51: Q2-23 Results
Q2-23 Results 51
Slide 52: Q2-23 Consolidated Results
Q2-23 Consolidated Results $147M $1.2B 6% 13% Gross New Contract Signings Backlog Organic Growth Acquisitive Growth Revenues Gross Profit & Margin Adj. EBITDA1 & Margin1 (in millions of $) (in millions of $, except margin) (in millions of $, except margin) 169 60 40.0% 150 161 52 20.0 19.1 142 148 5
Slide 53: Q2-23 ITCS
Q2-23 ITCS $61M $110M -4% 57% Gross New Contract Signings Backlog Organic Growth Acquisitive Growth Revenues Gross Profit & Margin Adj. EBITDA1 & Margin1 (in millions of $, except margin) (in millions of $, except margin) (in millions of $) 30 65.0% 14.0 35.0% 69 12.4 25.1 60.0% 25 12.0 55.0% 30.0%
Slide 54: Q2-23 Health
Q2-23 Health $25M $681M -4% -% Gross New Contract Signings Backlog Organic Growth Acquisitive Growth Revenues Gross Profit & Margin Adj. EBITDA1 & Margin1 (in millions of $, except margin) (in millions of $, except margin) (in millions of $) 10.0 40.0% 35.0% 14.0 9.0 45 44 8.0 30.0% 40 12.0 11.3 8.0
Slide 55: Q2-23 Advanced Technologies
Q2-23 Advanced Technologies $48M $157M 18% -% Gross New Contract Signings Backlog Organic Growth Acquisitive Growth Gross Profit & Margin Adj. EBITDA1 & Margin1 Revenues (in millions of $, except margin) (in millions of $, except margin) (in millions of $) 47 13.7 45.0% 7.0 14 11.9 6.0 5.7 27.0% 40
Slide 56: Q2-23 Learning
Q2-23 Learning $13M $299M 16% -% Gross New Contract Signings Backlog Organic Growth Acquisitive Growth Gross Profit & Margin Adj. EBITDA1 & Margin1 Revenues (in millions of $, except margin) (in millions of $) (in millions of $, except margin) 29 6.0 40.0% 26 9.0 5.4 5.4 25 8.2 32.0% 8.0 5.0 22 22 6
Slide 57: Q2-23 – Cash Flow
Q2-23 – Cash Flow Operating Free Cash Flow (OCFC)1&2&3 Working Capital Adj. EBITDA2 (in millions of $, except margin) (in millions of $) (in millions of $) 14.1 120% 14.0 13.1 +$6M 19.1 12.0 12.1 100% 16.8 16.8 10.2 10.7 12.4 16.1 85% 14.3 10.0 80% 8.0 78% 74% 8.0 64% 4.1 63% 60% 6.0 40% 4.0 Q2-22 Q
Slide 58: Q2-23 – Capital Deployment
Q2-23 – Capital Deployment Acquisitions Dividends Capex1 (in millions of $) (in millions of $) (in millions of $) 48 3 3 3 3 +$3M 3 2 2 2 2 1 4 3 3 6 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 1) Capex = Equipment and application software + Capitalized
Slide 59: Q2-23 Balance Sheet
Q2-23- Balance Sheet Total Debt Cash & Cash Equivalents Net Liquidity (in millions of $) (in millions of $) (in millions of $) 25 130 59 58 124 115 126 114 51 43 46 8 8 8 0 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 1) Net Liquidity= Unused portion of c
Slide 60: FY23 – Guidance Reiterated
FY23 – Guidance Reiterated Revenues Adj. EBITDA1 Adj. Net Profit1 (in millions of $) (in millions of $) (in millions of $) 630-680 70-75 46-50 582 518 66 44 432 52 37 343 37 24 27 19 2019 2020 2021 2022 2023E 2019 2020 2021 2022 2023E 2019 2020 2021 2022 2023E 1) This is a non-GAAP measure. Please r
Slide 61: Overview of Calian
Overview of Calian 61
Slide 62: Calian – FY22 Snapshot
Calian – FY22 Snapshot 40 years 4,500 Ottawa $649M CGY History Workforce Head Office Market Cap TSX 30% 26% ITCS Advanced Technologies REVENUE SEGMENTATION Customers Geography Technology $582M 53% 29% 27% 2022 Revenues Commercial International Products 47% 71% 73% Government Canada Services 16% 29%
Slide 63: Key Milestones in 40-Year History
Key Milestones in 40-Year History 1982 1993 1996 2015 2019 2021 Calian Technology Acquisition Acquisition KevIn Ford Calian Acquisition Ltd. Established Skywave Pricon Staffing becomes announces Dapasoft/iSecurity Initial Public Services President and 4-segment (start of ITCS CEO structure Bought de
Slide 64: Senior Leadership Team
Senior Leadership Team Kevin Ford Patrick Houston Michele Bedford Sean Hamer Sue Ivay Michael Muldner CEO CFO & Corporate Secretary CCO CTO CHRO CIO Patrick Thera Derek Clark TBD Don Whitty Advanced Technologies Health IT & Cyber Solutions Learning Capable and experienced leadership team 64
Slide 65: Four-Piston Engine
Four-Piston Engine 30% 29% 26% 16% FY22 ITCS HEALTH ADVANCED TECHNOLOGIES LEARNING REVENUES $173M $167M $150M $92M SUB-SEGMENTS ▪ On-demand Talent & Gov. ▪ Healthcare Professional ▪ Space (53%) ▪ Domestic Defence (75%) Solutions (43%) Services (78%) ▪ Defence (22%) ▪ Global Defence (15%) ▪ IT Soluti
Slide 66: Global Footprint
Global Footprint Our four-piston engine is gaining a growing global footprint 66
Slide 67: Recent News
Recent News • May 10/23 – Calian announces the resignation of Sacha Gera, President ITCS (ITCS) • March 9/23 – Calian enters into definitive purchase agreement to acquire US Satellite Communications Provider Hawaii Pacific Teleport (Advanced Tech) • Feb. 24/23 - Calian recognized as an Elite 150 on
Slide 68: Capital Market Profile
Capital Market Profile CGY $80.00 400,000 $65.17 TSX Close 350,000 $70.00 300,000 7 $60.00 $54.24 Analysts 250,000 52-week Low $50.00 200,000 11.7M 150,000 $71.58 $40.00 # Shares 52-week High 100,000 $30.00 50,000 16,076 $764M $20.00 0 Avg. Daily Volume 2-Apr-18 2-Oct-18 2-Apr-19 2-Oct-19 2-Apr-20 2
Slide 69: Inaugural ESG Report
Inaugural ESG Report Calian ESG efforts aligned to several United Nations SDGs 69
Slide 70: Thank you
See CALIAN . Thank you ir@calian.com