Corporate Overview - Enghouse Systems...Software licenses 45,108 45,691-1% 30,198 Hosted and...

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Corporate Overview June, 2013

Transcript of Corporate Overview - Enghouse Systems...Software licenses 45,108 45,691-1% 30,198 Hosted and...

Page 1: Corporate Overview - Enghouse Systems...Software licenses 45,108 45,691-1% 30,198 Hosted and maintenance service 71,608 58,526 22% 47,404 Professional services 18,083 15,734 15% 13,900

Corporate Overview June, 2013

Page 2: Corporate Overview - Enghouse Systems...Software licenses 45,108 45,691-1% 30,198 Hosted and maintenance service 71,608 58,526 22% 47,404 Professional services 18,083 15,734 15% 13,900

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Snapshot

Publicly listed (TSX:ESL), global software and services

company focused on specific market segments

Business Segments

– Interactive Group

• Customer interaction software solutions

– Asset Management Group

• Transportation Division - Public transit and transportation software

• Networks Division - Software and services for telecom providers

Dual-growth strategy based on organic expansion and accretive

acquisitions

Financial Snapshot 1st Half FY 13 1st Half FY 12

– Revenue $86.5m $62.0m

– Adjusted EBITDA $0.77/sh $0.60/sh

– Dividend $0.13/sh $0.10/sh

Page 3: Corporate Overview - Enghouse Systems...Software licenses 45,108 45,691-1% 30,198 Hosted and maintenance service 71,608 58,526 22% 47,404 Professional services 18,083 15,734 15% 13,900

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Build a larger, more diverse enterprise software and services

company through:

– Growing our existing live and self-service solutions business

• Interactive Management Group

– Growing our existing network solutions and transportation management

software businesses

• Asset Management Group

– Consistently generating income and positive cash flow

– Completing selective acquisitions within existing markets and entering new

growth software markets

Strategy

Page 4: Corporate Overview - Enghouse Systems...Software licenses 45,108 45,691-1% 30,198 Hosted and maintenance service 71,608 58,526 22% 47,404 Professional services 18,083 15,734 15% 13,900

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Interactive Portfolio

CIM Enterprise

cloud or on-premise

Sin

gle

-site

Multi-site

Scale

Informal Formal Formality

Leading solutions to maximize the value of customer

interaction, spanning unified communications, contact center

and self-service

CCU Service Provider hosted, multi-tenant

Zeacom SME

on-premise

Operator

Console on-premise

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Transportation Portfolio

TRANSIT OPERATIONS Fixed Route & Para-transit scheduling · Dispatch · Workflow / Driver

Management

Fixed Route & Para-transit IVR · Web Based Trip Planning

COMMUNICATIONS

Coach and Tour Operations Management

PRIVATE TRANSPORTATION

Software solutions for transportation and fleet management

Emergency Control Center & Dispatch (Police, Fire, Ambulance) · Non

Emergency Patient Transport

PUBLIC SAFETY

FLEET & TRANSPORTATION MANAGEMENT Logistics Management · Order Tracking · Telematics · Container and Vehicle

Tracking and Monitoring

Page 6: Corporate Overview - Enghouse Systems...Software licenses 45,108 45,691-1% 30,198 Hosted and maintenance service 71,608 58,526 22% 47,404 Professional services 18,083 15,734 15% 13,900

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Networks Portfolio

Network Planning · Engineering · Inventory · Business Intelligence

GIS & NETWORK ANALYTICS

INTELLIGENT NETWORK PLATFORM

Least Cost Routing · Toll Free · Wholesale · Value Added Services

Infrastructure Management · Site Build-out · Workflow · Property Rentals

NETWORK ROLLOUT

Billing · Order Management · Workflow · Provisioning

SERVICE DELIVERY CLOUD

NUMBER PORTABILITY

Global NP Data · Routing · Applications

Technology solutions to optimize performance for next

generation network operators

Page 7: Corporate Overview - Enghouse Systems...Software licenses 45,108 45,691-1% 30,198 Hosted and maintenance service 71,608 58,526 22% 47,404 Professional services 18,083 15,734 15% 13,900

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ANNUAL RESULTS

Page 8: Corporate Overview - Enghouse Systems...Software licenses 45,108 45,691-1% 30,198 Hosted and maintenance service 71,608 58,526 22% 47,404 Professional services 18,083 15,734 15% 13,900

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FY 12 Highlights

FY 2012 FY 2011

Revenue - a year over year increase of 11% $136.4m $122.6m

Revenue by Segment

Interactive Management Group $119.1m $109.7m

Asset Management Group $17.3m $12.9m

License revenue - large 3rd party license sale in FY11 $45.1m $45.7m

Recurring revenue - a year over year increase of 22% $71.6m $58.5m

R & D expense as a % of revenue 15.9% 13.0%

Adjusted EBITDA¹ per diluted share - an increase of 7% $1.35 $1.26

Note¹ : Adjusted EBITDA: net income before depreciation, amortization of acquired software and customer relationships, finance

income/expenses, other income, the provision for income tax and special charges for acquisition restructuring and transaction costs.

Page 9: Corporate Overview - Enghouse Systems...Software licenses 45,108 45,691-1% 30,198 Hosted and maintenance service 71,608 58,526 22% 47,404 Professional services 18,083 15,734 15% 13,900

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FY 12 Highlights

FY 2012 FY 2011

Adjusted EBITDA¹ - an increase of 9% over FY 11 $35.1m $32.2m

Cumulative annual dividend - per common share, based

on date of record, an increase of 28% over FY 11 $0.23 $0.18

Cash spent on annual dividend $5.9m $4.5m

Cash spent on acquisitions (net of cash acquired) $32.5m $16.8m

Cash balance - beginning of period $99.6m $78.2m

Cash balance - end of period $83.7m $99.6m

Acquisitions

CustomCall Data Systems, Inc. March 1st

Zeacom Group Limited June 1st

Note¹ : Adjusted EBITDA: net income before depreciation, amortization of acquired software and customer relationships, finance

income/expenses, other income, the provision for income tax and special charges for acquisition restructuring and transaction costs.

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Revenue Distribution

US 46%

UK 26%

EUROPE 15%

CANADA 6%

APAC 7%

REVENUE BY GEOGRAPHY

FY 2012

INTERACTIVE

GROUP

ASSET

MANAGEMENT GROUP

REVENUE BY BUSINESS SEGMENT

FY 2012

17m

119m

License

33%

Recurring

53%

Services

13%

Hardware 1%

REVENUE BREAKDOWN

FY 2012

Page 11: Corporate Overview - Enghouse Systems...Software licenses 45,108 45,691-1% 30,198 Hosted and maintenance service 71,608 58,526 22% 47,404 Professional services 18,083 15,734 15% 13,900

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Fiscal Year Results

FY 08 FY 09 FY10 FY11 FY 12

53m

78m

94m

123m

136m

TOTAL REVENUE

FY 08 FY 09 FY10 FY11 FY 12

30m

41m

47m

59m

72m

57% 53% 50% 53%

RECURRING REVENUE

48%

FY 08 FY 09 FY 10 FY 11 FY 12

$0.50

$0.68

$0.85

$1.26

$1.35 ADJUSTED EBITDA

PER SHARE

FY 08 FY 09 FY 10 FY 11 FY 12

$0.10 $0.11

$0.14

$0.18

$0.23

DIVIDEND PER SHARE

(based on date of record)

Page 12: Corporate Overview - Enghouse Systems...Software licenses 45,108 45,691-1% 30,198 Hosted and maintenance service 71,608 58,526 22% 47,404 Professional services 18,083 15,734 15% 13,900

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Balance Sheet October 31 October 31

FY 2012 FY 2011

$59,544 $65,624

24,108 33,967

31,368 23,006

3,853 3,479

118,873 126,076

3,365 1,543

42,637 29,709

64,358 44,242

10,477 9,548

$239,710 $211,118

$26,053 $22,686

2,008 3,520

1,676 1,267

1,621 2,442

35,935 28,933

67,293 58,848

13,241 9,525

- 420

1,236 1,404

81,770 70,197

55,751 52,134

2,847 2,970

99,371 84,782

(29) 1,035

157,940 140,921

$239,710 $211,118

Short-term investments

Assets

Current assets:

Cash and cash equivalents

Deferred income taxes

Accounts receivable, net

Prepaid expenses and other assets

Non-current assets:

Property, plant and equipment

Acquired software and customer relationships

Goodwill

Non-current liabilities:

Total assets

Liabilities

Current liabilities:

Trade payables

Income taxes payable

Dividends payable

Accrued provisions

Deferred revenue

Total liabilities and equity

Deferred income tax liabilities

Long-term income taxes payable

Deferred revenue

Total liabilities

Shareholders’ Equity

Share capital

Contributed surplus

Retained earnings

Accumulated other comprehensive (loss) gain

Total equity

Page 13: Corporate Overview - Enghouse Systems...Software licenses 45,108 45,691-1% 30,198 Hosted and maintenance service 71,608 58,526 22% 47,404 Professional services 18,083 15,734 15% 13,900

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Income Statement

2012 2011 Chg % 2010

Revenue (GAAP)

Software licenses 45,108 45,691 -1% 30,198

Hosted and maintenance service 71,608 58,526 22% 47,404

Professional services 18,083 15,734 15% 13,900

Hardware 1,569 2,608 -40% 2,706

136,368 122,559 11% 94,208

Direct costs

Software licenses 4,115 5,208 -21% 4,363

Services 31,410 26,635 18% 22,429

Hardware 1,134 1,966 -42% 1,845

36,659 33,809 8% 28,637

Revenue, net of direct costs 99,709 88,750 12% 65,571

Operating expenses

Selling, general and administrative 43,069 40,861 5% 31,446

Research and development 21,492 15,678 37% 12,477

Amortization of property, plant and equipment 1,386 1,102 26% 1,331

Special charges 544 1,775 -69% -

66,491 59,416 12% 45,254

Results from operating activities 33,218 29,334 13% 20,317

Amortization of acquired SW and CR (10,974) (10,291) 7% (8,458)

Finance income 987 692 43% 434

Finance expenses (269) (201) 34% (170)

Other income 145 956 -85% 1,145

Income before income taxes 23,107 20,490 13% 13,268

Provision for recovery of income taxes 2,234 (2,575) -187% 3,030

Net income for the period 20,873 23,065 -10% 10,238

Earnings per share

Basic 0.82$ 0.91$ -10% 0.41$

Diluted 0.80$ 0.90$ -11% 0.40$

For the year ended October 31

Page 14: Corporate Overview - Enghouse Systems...Software licenses 45,108 45,691-1% 30,198 Hosted and maintenance service 71,608 58,526 22% 47,404 Professional services 18,083 15,734 15% 13,900

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1ST HALF RESULTS

Page 15: Corporate Overview - Enghouse Systems...Software licenses 45,108 45,691-1% 30,198 Hosted and maintenance service 71,608 58,526 22% 47,404 Professional services 18,083 15,734 15% 13,900

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1ST Half FY 13 Highlights

1H FY 13 1H FY 12

Revenue - an increase of approx. 40% over 1H FY 12 $86.5m $62.0m

Revenue by Segment

Interactive Management Group $72.9m $55.2m

Asset Management Group $13.6m $6.8m

License revenue - an increase of 36% over 1H FY 12 $28.7m $21.1m

Recurring revenue - an increase of approx. 38% over

1H FY 12 $44.0m $32.0m

R & D expense as a % revenue 17.9% 16.6%

Adjusted EBITDA¹ per diluted share - an increase of

28% over 1H FY 12 $0.77 $0.60

Note¹ : Adjusted EBITDA: net income before depreciation, amortization of acquired software and customer relationships, finance

income/expenses, other income, the provision for income tax and special charges for acquisition restructuring and transaction costs.

Page 16: Corporate Overview - Enghouse Systems...Software licenses 45,108 45,691-1% 30,198 Hosted and maintenance service 71,608 58,526 22% 47,404 Professional services 18,083 15,734 15% 13,900

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1ST Half FY 13 Highlights

1H FY 13 1H FY 12

Adjusted EBITDA¹ - an increase of 29% over 1H FY 12 $20.3m $15.7m

Quarterly dividend (cumulative) - per common share,

based on date of record $0.13 $0.10

Cash spent on dividend $3.4m $2.5m

Cash spent on acquisitions (net of cash acquired) $16.8m $5.8m

Cash balance - beginning of period $83.7m $99.6m

Cash balance - end of period $80.9m $100.4m

Acquisitions

Visionutveckling Nov 1st

Albatross Dec 1st

CustomCall March 1st

Locus March 1st

Note¹ : Adjusted EBITDA: net income before depreciation, amortization of acquired software and customer relationships, finance

income/expenses, other income, the provision for income tax and special charges for acquisition restructuring and transaction costs.

Page 17: Corporate Overview - Enghouse Systems...Software licenses 45,108 45,691-1% 30,198 Hosted and maintenance service 71,608 58,526 22% 47,404 Professional services 18,083 15,734 15% 13,900

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Quarterly Results

$0.0

$2.0

$4.0

$6.0

$8.0

$10.0

$12.0

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

FY 10 FY 11 FY 12 FY 13

ADJUSTED EBITDA

$ millions

$0.0

$5.0

$10.0

$15.0

$20.0

$25.0

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

FY 10 FY 11 FY 12 FY 13

RECURRING REVENUE

$ millions

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45

$50

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

FY 10 FY 11 FY 12 FY 13

REVENUE

$ millions

$0.000

$0.010

$0.020

$0.030

$0.040

$0.050

$0.060

$0.070

$0.080

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

FY 10 FY 11 FY 12 FY 13

DIVIDEND PER SHARE

(based on date of record)

Page 18: Corporate Overview - Enghouse Systems...Software licenses 45,108 45,691-1% 30,198 Hosted and maintenance service 71,608 58,526 22% 47,404 Professional services 18,083 15,734 15% 13,900

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Balance Sheet Q2 FY 13 April 30,

2013 October 31,

2012

Assets Current assets: Cash and cash equivalents $ 60,059 $ 59,544 Short-term investments 20,881 24,108 Accounts receivable, net 34,674 31,368 Income tax receivable 369 - Prepaid expenses and other assets 5,785 3,853

121,768 118,873 Non-current assets: Property, plant and equipment 4,007 3,365 Intangibles 126,488 106,995 Deferred income taxes 9,327 10,477

Total assets $ 261,590 $ 239,710

Liabilities

Current liabilities: Trade payables $ 34,616 $ 26,053 Income taxes payable - 2,008 Dividends payable 2,076 1,676 Accrued provisions 2,531 1,621 Deferred revenue 41,331 35,935

80,554 67,293 Non-current liabilities: Deferred income tax liabilities 14,876 13,241 Deferred revenue 1,350 1,236

Total liabilities 96,780 81,770

Shareholders’ Equity

Share capital 57,615 55,751 Contributed surplus 2,781 2,847 Retained earnings 103,953 99,371 Accumulated other comprehensive gain (loss) 461 (29)

Total shareholders’ equity 164,810 157,940

Total liabilities and shareholders’ equity

$ 261,590

$ 239,710

Page 19: Corporate Overview - Enghouse Systems...Software licenses 45,108 45,691-1% 30,198 Hosted and maintenance service 71,608 58,526 22% 47,404 Professional services 18,083 15,734 15% 13,900

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Income Statement 1st Half FY 13

Page 20: Corporate Overview - Enghouse Systems...Software licenses 45,108 45,691-1% 30,198 Hosted and maintenance service 71,608 58,526 22% 47,404 Professional services 18,083 15,734 15% 13,900

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Acquisition Strategy

Established track record of value creation through acquisitions

To consistently generate positive operating cash flows to fund

further growth and drive shareholder value

Economic factors favorable for acquisitions especially for

small-cap companies

Target companies in the $5m - $50m revenue range preferably

with strong recurring revenue

Objective is for a cash payback within 5 - 6 years

Page 21: Corporate Overview - Enghouse Systems...Software licenses 45,108 45,691-1% 30,198 Hosted and maintenance service 71,608 58,526 22% 47,404 Professional services 18,083 15,734 15% 13,900

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Recent Acquisitions

Q1 FY 2013

CosmoCom

April 1, 2011

Q2 FY 2011

(Interactive)

CustomCall

March 1, 2012

Q2 FY 2012

(Networks)

Zeacom

June 1, 2012

Q3 FY 2012

(Interactive)

Visionutveckling

Nov 1, 2012

Q1 FY 2013

(Interactive)

Albatross

Dec 1, 2012

Q1 FY 2013

(Networks)

Locus

March 1, 2013

Q2 FY 2013

(Transportation)

Page 22: Corporate Overview - Enghouse Systems...Software licenses 45,108 45,691-1% 30,198 Hosted and maintenance service 71,608 58,526 22% 47,404 Professional services 18,083 15,734 15% 13,900

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THANK YOU!