Post on 07-Aug-2020
TSX: IBG
Investor Presentation - March 2019
A S M A R T E R U R B A N F U T U R E
Technology Enhancing Profitability
March 2019
TSX: IBG
Investor Presentation - March 2019
A S M A R T E R U R B A N F U T U R ET S X : I B G
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This presentation includes certain statements, estimates and projections with respect to anticipated future
performance that may constitute "forward-looking" statements. Such forward-looking statements reflect
current expectations and assumptions by the Company concerning anticipated results that may or may not
prove to be correct. Forward-looking statements are not guarantees of future performance, and actual results
may differ materially from those in the forward-looking statements. Forward-looking statements involve a
number of risks and uncertainties, including those discussed under "Risk Factors" in the Company's Annual
Information Form filed with the Canadian securities regulatory authorities. Investors should not place undue
reliance on forward-looking statements as a prediction of actual results. These forward-looking statements are
made as of the date of this presentation.
Advisories
TSX: IBG
Investor Presentation - March 2019
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IBI GROUP• IBI Group is a globally integrated design and technology firm founded in 1974
• We design every aspect of a truly integrated city for people to live, work, and play with expertiseorganized into three sectors:
Software Systems Design Systems Integration
Operations End-user Services
NTELLIGENCE
Architecture Interior Design Mechanical Engineering
Structural Engineering Electrical Engineering
UILDINGS
NFRASTRUCTURECivil Engineering Landscape Architecture Planning
Transportation Urban Design
18%2018 Revenue Contribution
52%
30%
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Investor Presentation - March 2019
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Corporate Snapshot
IBI GROUP – TSX: IBG
Shares Outstanding (FD) 38.0MM
Insider Ownership 36.5%
Market Capitalization (@$4.20/sh) ~$140MM
2018 Key Financial Highlights:
Ending Net Debt $107.3MM
Net Revenue $368.3MM
Earnings per Share (FD) $0.54
Adjusted EBITDA $36.5MM
As a % of net revenue 9.9%
Net Debt / EBITDA Ratio 2.94x
Market Performance 2016 - Present
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500
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S&P/TSX Index
IBG
STN
WSP
9.9%2018 Adjusted EBITDA Margin
36.5%Insider Ownership
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Investor Presentation - March 2019
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Investment ThesisPOISED FOR GROWTH DRIVEN BY TECHNOLOGY
Disrupting Traditional A&E Business Model
Targeting Revenue Growth & Margin Expansion
Capturing Market Share Through Innovation
Delivering Consistent Returns
TSX: IBG
Investor Presentation - March 2019
A S M A R T E R U R B A N F U T U R ET S X : I B G
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2018 RESULTS OVERVIEW
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Investor Presentation - March 2019
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2018 Year in Review CRITICAL YEAR DEFINED BY IBI’S PIVOT TO TECHNOLOGY
Smart Cities Platform Launch (March)Combining big data and analytics to support improved efficiency and decision-
making for cities
A Smarter Urban Future (May) IBI Strategic Plan rollout for Technology Pivot
GreenOwl Mobile Acquisition (May) Accelerator for mobile applications
Smart Cities Sandbox Launch (May) Engage tech ecosystem to source new technologies, products & partnerships
InForm by IBI Group Launch (June) Asset management solution for transportation & buildings
BlueIQ Launch (Oct) Real-time software solution for urban water utilities
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Investor Presentation - March 2019
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Strong Performance Track Record
19%
39%
30%
7%
9%
CanadaWest
CanadaEast
USA UK &Ireland
International30%
52%
18%
Infrastructure
Buildings
Intelligence
2018 REGION & BUSINESS OVERVIEW
10.1%
12.9%
16.3%
Infrastructure
Buildings
Intelligence
2018 Revenue Contribution(%)2
2018 Operating Profit (%)1
Intelligence:
20% Adjusted EBITDA
Target by 2020
U.S. improving profitability &
EBITDA margins thru ‘18;
IBI targeting ~10% US
EBITDA margins by end of ‘19
2018 Revenue by Region
1Operating profit by division excludes allocation of corporate costs2Intelligence practice contribution to net revenue increased 13% from 2017 to 2018
Intelligence:
20% Revenue Contribution
Target by 2020
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Investor Presentation - March 2019
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Robust Q4 2018 GrowthSTRONGER Q4 NET REVENUE & ADJUSTED EBITDA
1Adjusted EBITDA as a percent of revenue
$86.9
$92.4
$0
$20
$40
$60
$80
$100
Q4/2017 Q4/2018
Net Revenue in Millions
$7.6$8.2
$0
$2
$4
$6
$8
$10
Q4/2017 Q4/2018
Adjusted EBITDA in Millions
8.8%1 8.8%1
• Quarterly results reflect continued strength in the Canadian operating segment
• IBI’s transformational pivot to a technology driven design firm will continue to improve margins and provide a
platform for growth
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Investor Presentation - March 2019
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Intelligence Practice Drives 2018 SuccessIMPROVING REVENUE WITH HEALTHY EBITDA MARGINS
354.1
361.4
368.3
$345
$350
$355
$360
$365
$370
2016 2017 2018
FY Revenue in Millions
For the year ended December 31, 2018:
• Continued strong performance from IBI’s global Intelligence practice
• IBI reinvested ~1% of revenue in “pivot” initiatives which are expected to contribute to future margin growth
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
2016 2017 2018
FY EBITDA in Millions
11.1%1 11.2%1
9.9%1
(1Adjusted EBITDA as a percent of revenue)
8 – 12% Adjusted EBITDA
Target Guidance
U.S. business
improvements through ‘18
expected to boost ‘19
EBITDA margins
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Investor Presentation - March 2019
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Evolution of the U.S. Business STABILIZATION AND REFOCUSING OF U.S. OPERATIONS YIELDS POSITIVE RESULTS
• 2018 transition to new leadership in the U.S. and closer collaboration
with Canadian operations
• Impact of efforts demonstrated in Q4 ’18 - expect U.S. performance
will continue to improve through 2019
• Strategy to follow Canadian Buildings / Infrastructure clients seeking
opportunities in major U.S. cities, particularly high-rise mixed use
market along West Coast, Salt Lake City and the Carolinas
• Transitioning U.S. operations from standalone businesses to fully-
integrated operations further strengthens capabilities in various
offices-$1,938
-$929
-$1,984
$270
$2,004
Steady Improvements in U.S. Adjusted
EBITDA Q4 ‘17 to Q4 ’18 ($MM)
Q4 2018
Q3 2018
Q2 2018
Q1 2018
Q4 2017
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Investor Presentation - March 2019
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MARKET TRENDS & GROWTH DRIVERS
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Investor Presentation - March 2019
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IBI Outlook + Growth Drivers
• ~$374MM total annual revenue forecast
• ~$385MM of work committed and under
contract for the next five years
• 12 months of backlog
• New product launches in 2019, including
applications & services in traveler
information space
MACRO TRENDS SUPPORT IBI’S POSITIVE OUTLOOK
2019 Outlook Trends Supporting Future Growth
Urbanization
Infrastructure
Technology
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Urbanization TrendsGLOBAL URBANIZATION MEANS INCREASED DEMAND FOR IBI’S BUILDING AND INFRASTRUCTURE SERVICES
Cre
dit: S
ourc
e: U
nite
d N
atio
ns W
orld
Urb
aniz
atio
n P
rospects
(2014)
1,000
3,000
1950 1990 2020 2030 2040 2050
5,000
1970 1980 2000 20101960
6,000
4,000
2,000
7,000
World p
opula
tion (
mill
ions)
Rural
Urban2008
~1MM new Canadian immigrants
expected (2019 – 2021)
• Need ~330,000 housing units, schools,
healthcare, transportation & other
infrastructure areas
IBI leading ~55 major urban planning
projects
• ~5,000 acres of redevelopment across
Canada
Steady work for Buildings &
Infrastructure expected
• With smart solutions platform for smart
buildings, infrastructure and mobility
>80% of global GDP
generated in cities
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Investor Presentation - March 2019
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Adding Revenue Streams with TechnologyCORE BUSINESS LINES PRESENT NEW OPPORTUNITIES FOR INTELLIGENCE
• Suite of Smart products (Smart City / Smart Community / Smart Building) add revenue streams and
opportunity to capture more of the lifecycle costs of assets designed by IBI
• Building and Infrastructure clients provide excellent gateways to market for Intelligence practice
• Add further value to existing clients through new technology-based products or services and drive
Intelligence growth
• Additional technology products for Buildings and Infrastructure clients represent new recurring revenue
streams for Intelligence practice
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Investor Presentation - March 2019
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Capitalizing on the Growth DriversFOCUSING ON FOUR STREAMS TO ENHANCE TECHNOLOGY USE AND DRIVE PROFIT MARGINS
S T R E A M 1
PROTOTYPING
THE FUTURE
TRANSFORMING
BUSINESS
MODELS
CATALYZING
CORE GROWTH
ACTIVATING
URBAN
INNOVATION
S T R E A M 2 S T R E A M 3 S T R E A M 4
Smart City SandboxIncorporating Emerging
Technologies into the
Business, Including:
5G, Big Data, Autonomous
Vehicles, AI, Blockchain
VR/AR
Business and Market
Plan Strategies for:
Smart City Platform
Asset Management
Water/Energy Optimizer
Robotic Software/Bots
(internal and client-facing)
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Investor Presentation - March 2019
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AutomationCATALYZING CORE GROWTH
• Digitalization strategy to apply technology and improved processes to core professional business to
increase efficiency, enhance creative quality and drive operating profit
• Automation of Building Information Modeling (BIM) and Intelligence
• Custom-designed BIMbot / ChatBots to improve quality and increase efficiency throughout the design process
• Robotic process adoption
• Implementing suite of automation tools to enhance corporate operations and improve staff productivity and
engagement
Corporate
Operations
Design
Practice
Consulting
Services
Bots for Business
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Investor Presentation - March 2019
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BlueIQ by IBI Group
• Intelligent, real-time software solution
• Uses predictive analytics to determine
cost-effective and energy efficient ways
for urban water utilities to operate water
distribution systems
• Facilitates energy conservation and
reduced operating costs
TRANSFORMING BUSINESS MODELS
BlueIQ is currently saving the City of Toronto >$1MM a year
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InForm by IBI GroupTRANSFORMING BUSINESS MODELS
• Cloud-based asset management tool serving building owners,
corporate facilities managers & transportation agencies
• Saves money by providing the tools needed to manage costs &
operate more efficiently
InForm Buildings: lower costs and streamline operations by
creating digital twins of assets that incorporate BIM and
maintenance data
InForm Transportation: manage linear infrastructure assets,
(cameras, signs, signals & sensors) for highway operations
InForm Office: interact with 3-D office models, providing depth of
building data and ease of use unique to asset management market
InForm Buildings
InForm Transportation
InForm Office
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Investor Presentation - March 2019
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Smart City PlatformTRANSFORMING BUSINESS MODELS
• Equip city staff and residents with the necessary
tools to make rapid and informed decisions
• Software-as-a-Service solution, hosting a suite of tools
and dashboards, combining predictive analytics gleaned
from IoT sensors, control devices and existing city networks
• Public engagement module allows connection with
city residents through apps, email and social media,
fostering a two-way dialogue between residents and
service operators
• Built on the fundamental principles of open data and sharing,
the Platform is designed to connect stakeholders with needed
services, information and insights
• Applicable to Smart Communities and Smart Buildings
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Incorporating Emerging TechnologiesPROTOTYPING THE FUTURE
SAMSUNG SOLUIONS CENTER, WASHINGTON, DC
Parametric Design• Computational analytics applied to specific buildings and the city itself, creating a
pool of data and algorithms to solve complex problems
Accessibility and Efficiency for Airport Connections• Parametric design used at major airport to optimize routing of a pedestrian tunnel
between terminals
Charge Stations for Electric Fleets• Computational analytics used to determine the optimal location of charging
stations for a future electric bus fleet
Designing for Solar• Parametric model applied to determine the optimal location for solar panel
installation in building design to generate the greatest cost savings
Machine Learning for Automated Highway Tolls• Increased accuracy of vehicle identification leads to increased revenue streams
and cost savings
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Investor Presentation - March 2019
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A Network of CollaborationACTIVATING URBAN INNOVATION
Smart City Sandbox
• Smart city-themed accelerator, bringing innovative
new products and systems to urban environments to
improve residents’ quality of life through smart
mobility, smart buildings and civic engagement
• Establishes a unique industry innovation ecosystem
with partners joining professional domain knowledge,
business acumen and the latest in technology
T E C H N O L O G Y P R O V I D E R
Collaborators:
A Network
of Partners
Curated Programming
& Services
Space
Data & Technology
Sandbox
Accelerator
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Investor Presentation - March 2019
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IBI Strategic Pivot to TechnologyNEW STRATEGIC PLAN UNVEILED SPRING 2018
Bold, four-stream plan to transform the firm, infusing technology deeper in our design practice, launching new
products with new business models, and working with partners to activate urban innovation
Mission: To assist cities to make better informed decisions in the increasingly densified and
monitored urban environments
Positive impact demonstrated in 2018 with increased contribution from Intelligence and strong operating profit
margins of 16.3%. Continue building on existing strengths through 2019 by:
1. Leveraging technology to increase efficiency & productivity
2. Establishing new services and business relationships
3. Establishing teams focused on emerging technologies
4. Continuing to engage with the tech ecosystem
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Investor Presentation - March 2019
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Investment ThesisPOISED FOR GROWTH DRIVEN BY TECHNOLOGY
Disrupting Traditional A&E Business ModelThrough the application of technology
Targeting Revenue Growth & Margin ExpansionIntelligence practice 20% of overall revenue & 20% EBITDA margin in the sector by 2020
Capturing Market Share Through InnovationAdding value for existing clients through new technology-based products/services
Delivering Consistent Returns40+ year track record of success in core business
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Investor Presentation - March 2019
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contacts
INVESTORS
Stephen Taylor, CFO
IBI Group Inc.
55 St. Clair Avenue West
Toronto, ON M4V 2V7
Tel: 416 596-1930
Technology
Enhancing
Profitability
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Investor Presentation - March 2019
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Management TeamEXPERIENCE MEETS VISION
Scott Stewart
Chief Executive Officer
Stephen Taylor Chief Financial Officer
Mansoor
KazerouniGlobal Director,
Buildings
David ThomPresident
Derek Sims
Global Director,
Intelligence
Carl ClaytonGlobal Director,
Infrastructure
OPTION 03
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Board of DirectorsSTRONG STEWARDS OF CAPITAL & A VOICE FOR SHAREHOLDERS
27
Dale RichmondIndependent Director,
Chair of the Board
Lorraine BellIndependent Director ,
Chair of the Audit Committee
Claudia KrywiakIndependent Director
Michael NobregaIndependent Director
John O. ReidIndependent Director
Scott StewartCEO, IBI Group
David ThomPresident, IBI Group