33 slides from Data Communications Management's investor presentation, August 2024
Slide 1: Data Communications Management Corp. Investor Presentation
DATA COMMUNICATIONS MANAGEMENT CORP. INVESTOR PRESENTATION DCM - TSX | DCMDF – OTCQX August 2024
Slide 2: Forward-Looking Statements and Information Disclosure
FORWARD-LOOKING STATEMENTS INFORMATION DISCLOSURE. Forward-looking Statements Non-IFRS Measures Certain statements in this presentation constitute <forward-looking= statements This presentation includes certain non-IFRS measures as supplementary that involve known and unknown risks, uncertainties an
Slide 3: About Us
ABOUT US. DATA COMMUNICATIONS MANAGEMENT CORP. DCM - TSX | DCMDF – OTCQX
Slide 4: About Us: We Help Clients Simplify Complex Marketing
HEAD OFFICE: Brampton, Ontario FOUNDED: 1959 ABOUT US. MARKET CAPITALIZATION: WE HELP CLIENTS SIMPLIFY ~$165.4MM (basic) ~$178.8MM (f.d.) COMPLEX MARKETING PRESIDENT & CEO: COMMUNICATIONS AND Richard Kellam OPERATIONS WORKFLOW. LISTING: DCM - TSX since 2004 DCMDF – OTCQX since 2021
Slide 5: DCM at a Glance
+400 Enterprise DCM AT clients SCALE 20 Facilities across A GLANCE. 1750 Canada, U.S. Employees 2023 Revenue $473.8M GROWTH (+63.5% vs. 2022) PROFITABILITY • Long-term client contracts 2023 Adj. EBITDA • High retention rate $53.4M (+30.3% vs. 2022) Free cash flow $16.5M (+31.9% vs. 2022) CAD $ Milli
Slide 6: What We Do
WHAT WE DO. WE PROVIDE TECH-ENABLED MARKETING WORKFLOW SOLUTIONS. PERSONALIZED COMMUNICATIONS BUSINESS PROCESS OUTSOURCING MARKETING SOLUTIONS
Slide 7: Canada's 2nd Largest Print & Marketing Communications Company
WHAT WE DO. CANADA’S 2ND LARGEST PRINT & MARKETING COMMUNICATIONS COMPANY.
Slide 8: 400 Enterprise Clients
400 ENTERPRISE Handling massive complexity Serving diverse industry verticals CLIENTS. High retention rate (>95%)
Slide 9: Key Market Trends
KEY MARKET TRENDS. Growth of Industry Martech consolidation solutions to Data address Increasingly metrics - complex enterprise Hyper- Outsourcing performance demands personalization workflows of non-core & analytics functions
Slide 10: A Large, Fragmented Canadian Commercial Print Market
A LARGE, FRAGMENTED CANADIAN COMMERCIAL PRINT MARKET.
Slide 11: Transformational Acquisition
TRANSFORMATIONAL ACQUISITION
Slide 12: Acquired Our Largest Competitor Moore Canada Corporation
ACQUIRED OUR LARGEST COMPETITOR MOORE CANADA CORPORATION IN APRIL 2023 ALMOST DOUBLING OUR REVENUE ~2x REVENUE PAID ~$100M, NET OF REAL ESTATE ASSET SALES
Slide 13: Synergies Ahead of Plan
SYNERGIES* AHEAD OF PLAN Revenue Operational Organizational Procurement Maintaining objective of $30M - $35M in annualized synergies, focused on achieving full run-rate savings over the next 12 months * <Annualized synergies= have not been prepared in accordance with IFRS Accounting Standards, nor h
Slide 14: Net Debt
NET DEBT * LOWER BY -48.3% SINCE MCC ACQUISITION Net debt down by $70.2M vs. MCC acquisition April 24, 2023 Acquisition at initial purchase price, net of cash on hand, plus prior net debt. * Net debt is a non-IFRS measure, for a reconciliation to its most comparable IFRS Accounting Standards measure
Slide 15: Financial Performance
FINANCIAL PERFORMANCE
Slide 16: Revenue
$447.7M REVENUE. $273.8M $235.3M CAD $ Millions 2021 2022 2023
Slide 17: Gross Profit
$118.9M $84.2M GROSS PROFIT. $69.5M CAD $ Millions 2021 2022 2023
Slide 18: Adjusted EBITDA
$53.4M $41.0M ADJUSTED EBITDA* $33.6M CAD $ Millions 2021 2022 2023 * Adjusted EBITDA is a non-IFRS measure, for a reconciliation to its most comparable IFRS Accounting Standards measure, net income, see <Non-IFRS Accounting Standards Measures=
Slide 19: On Path to Return to +30% Gross Margins
ON PATH TO RETURN TO +30% GROSS MARGINS Pre-Acquisition - Pro Forma Post-Acquisition 28.9% 28.3% 27.3% 26.5% 25.4% 25.7% 25.3% 24.6% 2021* 2022* Q1 2023* Q2 2023** Q3 2023 Q4 2023 Q1 2024 Q2 2024 Consolidated GM% Operating efficiency initiatives drove 80 basis point gross margin improvement from Q2
Slide 20: Revenue per Associate
Revenue per Associate* HEADCOUNT AT END OF PERIOD REVENUE PER ASSOCIATE (THOUSANDS) 1859 $300.9 $293.0 $302.4 $303.5 1787 1673 $255.2 $240.6 1,433 $225.2 $231.7 1,221 1,078 922 910 2018 2019 2020 2021 2022 April 24 2023 Q2 2024 2018 2019 2020 2021 2022 April 24 2023 Q2 2024 2023* YTD 2023* YTD *Tota
Slide 21: What's Next?
WHAT’S NEXT?
Slide 22: 2024 Strategic Priorities
2024 STRATEGIC PRIORITIES MCC Gross Profit Growing our Generate Higher Integration Improvement Business Levels of FCF • Plant consolidation • Strategic revenue • Expanding product / • Focus on margin • Harmonize back- management services offerings improvement & overhead office systems • Lower overhe
Slide 23: M&A Strategy
M&A STRATEGY HIGH VALUE MARKETING TECHNOLOGY PRINT SERVICES SOLUTIONS • Strategic fit: • Complementary • Workflow • Clients services & clientele • Marketing • Capabilities • Vertical integration technology • Growth to leverage our print • Margin capabilities
Slide 24: Investment Highlights
INVESTMENT HIGHLIGHTS
Slide 25: Capitalization and Ownership
CAPITALIZATION AND OWNERSHIP Capitalization <DCM= on TSX Ownership summary (Fully diluted) Recent Share Price (August 26, 2024) $2.99 Directors and Officers 52 week high/low $3.85/$2.42 (26.7%) Common Shares Outstanding 55.3M Options ($1.18 average ex. price) 4.2M ESOP (excl. Officers) (2.7%) Warran
Slide 26: Investment Highlights
INVESTMENT HIGHLIGHTS Leading position in the Canadian market Focused on profitable growth Track record of debt reduction and cash flow generation MCC integration and synergy realization ahead of plan Future growth enhanced by new technology product launches and M&A Experienced leadership team that
Slide 27: Contact Information
For more information, please visit www.datacm.com or for investor, media and corporate development inquiries reach out to: CONTACT RICHARD KELLAM JAMES LORIMER INFORMATION President & CEO Chief Financial Officer rkellam@datacm.com jlorimer@datacm.com +1 (416) 451-1117 +1 (905) 494-4101 DCM – TSX | D
Slide 28: Non-IFRS Accounting Standards Measures
NON-IFRS ACCOUNTING STANDARDS MEASURES
Slide 29: EBITDA and Adjusted EBITDA Reconciliation
EBITDA AND ADJUSTED EBITDA RECONCILIATION The following table provides reconciliations of net (loss) income to EBITDA and of net (loss) income to Adjusted EBITDA for the periods noted, following adoption of <net fair value (gains) losses on financial liabilities at fair value through profit or loss=
Slide 30: EBITDA and Adjusted EBITDA Reconciliation
EBITDA AND ADJUSTED EBITDA RECONCILIATION The following table provides reconciliations of net (loss) income to EBITDA and of net (loss) income to Adjusted EBITDA for the periods noted, following adoption of <net fair value (gains) losses on financial liabilities at fair value through profit or loss=
Slide 31: Adjusted Net Income Reconciliation
ADJUSTED NET INCOME RECONCILIATION The following table provides reconciliations of net income to Adjusted net income and a presentation of Adjusted net income per share for the periods noted. See <Non-IFRS Accounting Standards measures= section in our most recent interim and annual filings on SEDAR+
Slide 32: Adjusted Net Income Reconciliation
ADJUSTED NET INCOME RECONCILIATION The following table provides reconciliations of net income to Adjusted net income and a presentation of Adjusted net income per share for the periods noted. . See <Non-IFRS Accounting Standards measures= section in our most recent interim and annual filings on SEDA
Slide 33: Thank You
oe THANK YOU