Altus Group Limited · TSX:AIF
Altus — Q4 2023 Earnings Presentation
33 slides from Altus's earnings presentation, Feb 22, 2024
Slide 1: Q4 & FY 2023 Earnings Call & Webcast
Q4 & FY 2023 Earnings Call & Webcast TSX: AIF | February 22, 2024
Slide 2: Forward-looking information & statements
Forward-looking information & statements Certain information in this presentation may constitute “forward-looking information” within the meaning of applicable securities legislation. All information contained in this press release, other than statements of current and historical fact, is forward- l
Slide 3: Agenda
Agenda 1. CEO opening remarks 2. Financial overview 4. 2024 business outlook 5. Technology roadmap update 6. CEO closing remarks 7. Q&A Jim Hannon Pawan Chhabra David Ross Camilla Bartosiewicz Chief Executive Officer Chief Financial Officer Chief Technology Officer Chief Communications Officer 3
Slide 4: CEO opening remarks
CEO opening remarks Jim Hannon Chief Executive Officer
Slide 5: Growing in a dynamic CRE market
Growing in a dynamic CRE market FY 2023 PERFORMANCE Continued Analytics Expanded Analytics Added New Bookings* Recurring Revenue* earnings & margin at Analytics growth 26.1% CC* y/y (Adjusted EBITDA) $94.5M, including $64.5M of 13.2% (CC* y/y) 17.5% (as reported) 360 bps as reported y/y (Adjusted Re
Slide 6: Continued focus on free cash flow
Continued focus on free cash flow NET CASH PROVIDED BY • 2023 Net Cash Provided by Operating $77.1M O P E R AT I N G A C T I V I T I E S : Activities reflects higher interest paid on $71.4M borrowings 7.3% $24.5 $12.5 • Lower capex as significant investments in modernizing systems conclude y/y, as r
Slide 7: Financial overview
Financial overview Pawan Chhabra Chief Financial Officer
Slide 8: 2023 in review
2023 in review C O N S O L I D AT E D P E R F O R M A N C E $772.8M 2.2% $135.0M 4.2% $0.23 1,233.9% 7.0% excluding the $33.2M Revenue impact of UK tax annuity Adjusted EBITDA Basic EPS CC* CC* as reported $10.2M $11.1M $1.64 13.2% $0.22 1,218.9% Profit Adjusted EPS* Diluted EPS vs. 2022 ($0.9M), as
Slide 9: Consolidated Q4 2023 performance
Consolidated Q4 2023 performance Q4 2023 Q4 2022 y/y change Revenues $191.6 $183.8 2.8% *CC Profit (Loss) -$0.1 -$8.8 98.4% Basic EPS $-0.00 -$0.20 98.4% Diluted EPS $-0.00 -$0.20 98.4% Adjusted EBITDA* $34.2 $34.9 3.4% *CC Adjusted EBITDA Margin* 17.8% 19.0% 120 bps Adjusted EPS* $0.46 $0.44 4.5% N
Slide 10: Growing revenues & expanding margins at Analytics
Growing revenues & expanding margins at Analytics Q4 2023: C$M $120 27.3% 30% As reported CC* 26.9% 23.9% 23.8% 24.5% $100 25% Revenue $103.2M 7.4% 6.1% 21.4% 19.5%19.1%18.8% $80 18.0% 20% 16.0% 16.8% Recurring 15.9% 15.0% 14.8%14.0% Revenue* $93.0M 8.4% 7.0% $60 15% $40 10% Adjusted EBITDA $28.1M 9
Slide 11: Growing Analytics recurring revenue base
Growing Analytics recurring revenue base C$ (M) C$M Recurring Revenue* $100 $93 Q4 2023: $89 $87 $90 $86 $85 $93.0M 7.0% $80 $77 $71 $70 $68 $60 $60 $55 $50 FY 2023: $50 $43 $41 $43 $43 $40 $354.6M 13.2% $40 $30 $20 $10 28.4% 3-year CAGR ~90% of FY 2023 Analytics revenues were recurring $0 Q1 Q2 Q3
Slide 12: Expanding Analytics margins
Expanding Analytics margins Adjusted EBITDA Margin* 30% 26.9% 27.3% 25% Q4 2023: 24.5% 24.3% 23.9% 23.8% 20% 20.7% 21.4% 27.3% 40 bps 16.6% 16.8% 15% FY 2023: 14.0% 10% 410 bps y/y 360 bps y/y 24.3% 360 bps 5% 0% FY 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 FY 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 FY 2023
Slide 13: Steady ARGUS Cloud adoption
Steady ARGUS Cloud adoption Cloud Adoption Rate* 80% 74% 70% 72% 70% 67% 64% 60% 55% 50% 44% 52% +10M Valuation models on ARGUS Cloud 42% +1M 40% Unique properties 10 % points on ARGUS Cloud 29% 30% 26% 22% 20% 14% 8% 10% Steady ongoing adoption, 10% 6% consistent with standard technology adoption c
Slide 14: Adding new bookings at Analytics
Adding new bookings at Analytics C$M C$ (M) New Bookings* Q4 2023 RECURRING NEW BOOKINGS*: $40 $34.2 $18.2M 12.6% total $35 $31.1 total $28.0 $26.9 $30 total total $26.3 $24.6 total $23.5 total $22.2 $25 $21.3 $22.1 $20.5 total $21.4 total Q4 2023 NEW BOOKINGS*: total total total total $20 $20.8 $15
Slide 15: Steady Property Tax performance
Steady Property Tax performance C$M $100 45.8% 50% Q4 2023: 45.0% $90 40.7% 45% $80 37.6% 40% As reported CC* 31.8% $70 31.4% 31.5% 30.3% 35% 29.2% $60 25.8% 30% Revenue $60.5M 8.4% 5.9% $50 22.8% 22.6% 22.0% 25% $40 17.7% 20.8% 20% Adjusted 20.3% EBITDA $13.3M 7.6% 10.5% $30 15% $20 10% Adjusted $1
Slide 16: Appraisals & Development Advisory performance
Appraisals & Development Advisory performance C$M Q4 2023: $35 25% $30 19.9% 19.5% As reported CC* 20% 17.4% $25 14.6%13.9% Revenue $28.0M 12.5% 12.4% 14.1% 13.7% 13.7% $20 15% 10.9% 9.9% 9.8% 10.1% 10.0% 10.1% $15 9.0% 10% Adjusted 8.0% EBITDA $2.3M 59.6% 59.6% $10 5% $5 Adjusted EBITDA 8.0% 940 bp
Slide 17: Balance sheet enables continued investment in growth
Balance sheet enables continued investment in growth HEALTHY BALANCE SHEET ANTICIPATED REVS TRANSACTION IMPACT $41.9 M CASH POSITION $725 M • Available borrowing capacity (contingent on REVS*) $308.6 M BANK DEBT ~4.0x • Anticipated funded debt to EBITDA ratio at close (below 4.5x capacity) 2.06x FUN
Slide 18: 2024 business outlook
Jim Hannon 2024 business outlook Chief Executive Officer
Slide 19: 2024 business outlook
2024 business outlook FY 2024 business outlook: • 8 – 12% Recurring Revenue* growth (excluding REVS) ANALYTICS • 400 – 500 bps of Adjusted EBITDA margin* expansion • Low-to-mid single digit revenue growth PROPERTY TAX • 50 – 200 bps Adjusted EBITDA margin* expansion • Low single digit revenue growth
Slide 20: Technology roadmap update
Technology roadmap David Ross Chief Technology Officer update
Slide 21: Focused on enhancing our clients' performance
Focused on enhancing our clients’ performance Offer PORTFOLIO Q4 PORTFOLIO Q2 MARKET INSIGHTS Q3 VALUATION category: PERFORMANCE PERFORMANCE Addressing the data Enhancing portfolio & Increasing valuation Improving decision pain point asset management speed & breadth quality intelligence • CRE data i
Slide 22: Closing remarks
Closing remarks Jim Hannon Chief Executive Officer
Slide 23: Question period
Question period For additional inquiries please email IR@altusgroup.com
Slide 24: Appendix
a AltusGroup Appendix
Slide 25: Business segment contribution
Business segment contribution 25
Slide 26: Resilient business model provides stability
Resilient business model provides stability APAC, 4% Appraisals & Development Advisory 15% Canada, Trusted by the largest CRE leaders EMEA, Diversified 22% 25% Equity Debt Valuers & Banks revenue base Property Tax Analytics Investors Investors Appraisers 34% 51% FY 2023 U.S., 49% Developers Corporat
Slide 27: Selected financial information
Selected financial information Selected Financial Information Year ended December 31, In thousands of dollars, except for per share amounts 2023 2022 Revenues $ 772,843 $ 735,451 Canada 25% 27% U.S. 49% 45% EMEA 22% 24% Asia Pacific 4% 4% Adjusted EBITDA* $ 135,041 $ 135,322 Adjusted EBITDA margin*
Slide 28: Reportable segment performance
Reportable segment performance Revenues Quarter ended December 31, Year ended December 31, Constant Constant In thousands of dollars 2023 2022 % Change Currency % 2023 2022 % Change Currency % Change Change Analytics $ 103,190 $ 96,061 7.4% 6.1% $ 392,913 $ 346,103 13.5% 9.4% Property Tax 60,524 55,
Slide 29: Reconciliation of Profit (Loss) to Adjusted EBITDA and Adjusted Earnings
Reconciliation of Profit (Loss) to Adjusted EBITDA and Adjusted Earnings Quarter ended December 31, Year ended December 31, (1) Management uses the non-GAAP occupancy costs calculated on In thousands of dollars, except for per share amounts 2023 2022 2023 2022 a similar basis prior to the adoption o
Slide 30: Debt, leverage & liquidity
Debt, leverage & liquidity Quarter end Cash position Total bank debt Funded debt to EBITDA Net debt to Adjusted Liquidity as at December 31, 2023: ratio EBITDA ratio* Q4 2023 $41.9 M $308.6 M 2.06x 1.98x Cash $41.9 M Q3 2023 $44.7 M $314.1 M 2.08x 1.98x Q2 2023 $43.1 M $335.8 M 2.19x 2.10x Bank Cred
Slide 31: Summary of consolidated quarterly results
Summary of consolidated quarterly results 2023 2022 In thousands of dollars, except for Fiscal 2023 Dec 31 Sep 30 Jun 30 Mar 31 Fiscal 2022 Dec 31 Sep 30 Jun 30 Mar 31 per share amounts Results of Operations Revenues $ 772,843 $ 191,574 $ 185,232 $ 205,213 $ 190,824 $ 735,451 $ 183,762 $ 177,691 $ 2
Slide 32: Non-GAAP and other measures definitions
Non-GAAP and other measures definitions Altus Group uses certain non-GAAP financial measures, non-GAAP ratios, total of segments measures, capital management measures, and supplementary and other financial measures as defined in National Instrument 52-112 - Non-GAAP and Other Financial Measures Disc
Slide 33: Non-GAAP and other measures definitions
Non-GAAP and other measures definitions Net debt to Adjusted EBITDA leverage ratio: Altus Group uses Net debt to Adjusted EBITDA leverage ratio as a measure of its ability to service debt and other long-term obligations. How it’s calculated: Net debt (total borrowings less cash and cash equivalents,