Corporate Overview Corporate Overview Q3 FY 18 Q1 FY 19 - - PowerPoint PPT Presentation

Corporate Overview

Q3 FY 18

Corporate Overview

Q1 FY 19

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Forward-Looking Statements Disclaimer Certain statements made in this presentation and the related materials may contain forward-looking statements, which are not historical facts, but are based on certain assumptions and reflect Enghouse’s current expectations. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations. These risk factors are identified in Enghouse’s Annual Information Form and other periodic reports filed with applicable regulatory authorities from time to time. Enghouse disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Market and Industry Data This document contains certain statistical, market and industry data obtained from industry publications and reports. Industry publications and reports generally indicate that information has been obtained from sources believed to be reliable, but do not guarantee the accuracy and completeness of such

• information. Actual outcomes may vary materially from those forecast in such reports or publications,

and the prospect for material variation can be expected to increase as the length of the forecast period

• increases. While we believe this data to be reliable, market and industry data is subject to variations

and cannot be verified with certainty due to limits on the availability and reliability of data. Enghouse has not independently verified any of the third party data referred to in this document.

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Build a diverse enterprise software and services company through:

• Growing our interaction management solutions business
• Interactive Management Group
• Growing our network solutions and transportation management software

businesses

• Asset Management Group
• Consistently generating revenue growth and positive cash flow
• Completing selective acquisitions within existing markets and entering new

strategic software markets on an opportunistic basis

Strategy

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Enghouse Interactive Contact center software Profitable growth Revenue ~1,400 employees HQ in Canada, offices in 20+ countries

Snapshot

Enghouse Networks Telecom software Enghouse Transportation Transportation software Dual Growth Revenue

(organic & acquisitions)

Toronto Stock Exchange TSX:ENGH

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Interactive - Sector Dynamics

Digital media (chat, email and SMS) are growing rapidly but voice still accounts for in excess of 60% of all interactions, especially for more important, complex or higher value scenarios Microsoft’s changing strategy is impacting short term on-premise based business but presenting a stronger cloud opportunity for Enghouse in the future Big data and analytics technologies are being deployed to understand consumer preferences and to subsequently tailor the products and services offered and the customer experience Global contact centre market in 2018 is ~ $US9.0 billion and is forecasted to reach ~ $US10.0 billion in 2021 at a CAGR 5.7% (source: IDC 2017) Integration of contact center, artificial intelligence, CRM and analytics are required to enable customer experiences that are contextual and relevant Public cloud services adoption continues double-digit growth with some large enterprises still favouring private cloud or on-premise based solutions Mobile device and application proliferation requires a seamless transition from self-service to assisted service

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Consoles

• 2-50 seats
• Channel GTM and OEM
• On-premise

Mid-Market

• 10-500 seats
• Channel GTM
• On-premise or hosted private cloud

Enterprise

• 50-1000’s of seats
• Direct/Channel GTM
• On-premise, private cloud, or hybrid

Cloud

• True multi-tenant cloud solution
• GTM through carriers and service providers
• Public, community, or private cloud

Interactive Portfolio

Leading customer interaction solutions, in the cloud, hosted or on- premise to address specific market requirements

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Interactive Portfolio

MULTI-CHANNEL CONTACT CENTER

Contact Center Enterprise · Contact Center Service Provider · Communications Center with Skype for Business · Contact Center OnDemand · Outbound Communication Suite · Contact Center for Market Research · AI Powered Social Media Interaction

CALL RECEPTION/CALL HANDLING

Intuition Attendant Console (Avaya/Genband) · Arc Pro Attendant Console for CISCO · Operator Console for Microsoft Skype for Business · ANDTEK Console

SELF-SERVICE

Communication Portal · Mobile IVR Navigator · Knowledge Management Suite · AI Powered Chatbot Platform

QUALITY MANAGEMENT

Call Billing and Reporting (Enterprise & Cloud) · Survey Management · Quality Management Suite · Workforce Management

TELEPHONY & CRM INTEGRATION

CTI Connect · CTI for CRM · VoiceXML Test Suite · Computer Telephony · Application Development Environment · Applications for Avaya CS1000

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Networks - Sector Dynamics

Industry growth fueled by evolution to 5G and digital transformation, demand for big data, connected vehicles, cloud services, cashless society & Internet of Things (IOT) Re-thinking Customer Care to provide hyper-personalized, customer centric service Multiple sources of data increasingly becoming a strategic asset for competitive intelligence and insight Software defined networking (SDN), cloud services and network function virtualization (NFV) will continue to gain momentum The OSS BSS system and platform market is highly fragmented with 400+ vendors and open for more industry consolidation Global OSS / BSS system and platform market amounted to ~ US$29.0 billion in 2015 and is forecasted to reach ~ US$71.0 by 2024, at a CAGR

• f ~10.5% (Source – Transparency market Research)

Investment by service providers in cloud application and infrastructure technologies to enable high value, high margin enterprise business services offerings

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Networks Portfolio

Technology solutions to optimize performance for next generation network operators

OPERATIONS SUPPORT SYSTEMS

Service Assurance · Network Planning & Resource Management · Geographic Information Systems

BUSINESS SUPPORT SYSTEMS

MVNO Revenue Management · Device Management · Wholesale Revenue Management Intelligent Routing · Workflow & Order Management · Billing SaaS · Customer Experience Management

MOBILE VALUE ADDED SERVICES

VAS Consolidation · Messaging · Call Completion

NETWORK SECURITY, ROUTING & CONTROL

Network Firewalls · Diameter Signaling Controller · Public Safety

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Transportation - Sector Dynamics

Public Safety & Security, Transit and TMS markets are forecasted to reach

• ver ~ US$600 billion by 2021

Fragmented and competitive market. New technologies driving growth in systems and tangible cost benefits / savings Evolving tablet and smart phone technologies replacing traditional Mobile Data Terminals (MDT’s). LTE networks to provide interoperability across geographies Cloud computing gaining momentum and driving replacement of legacy technology systems in a space traditionally slow to adopt Economic uncertainty and rising fuel costs driving increased ridership in both public and private sectors International political focus on terrorism and natural disasters driving continued investment in transportation and public safety systems

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Transportation Portfolio

Software solutions for Public Safety, Transit and Supply Chain

TRANSIT OPERATIONS

Fixed Route & Paratransit Scheduling · Dispatch · Workflow & Driver Management · e-Ticketing · Automated Fare Collection

COMMUNICATIONS

Fixed Route · Paratransit · Operator & Fare IVR

PRIVATE TRANSPORTATION

Coach and Tour Operations Management

PUBLIC SAFETY

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

FLEET & TRANSPORTATION MANAGEMENT

Logistics Management · Order Tracking · Telematics · Container and Vehicle Tracking and Monitoring

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ANNUAL RESULTS

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Fiscal Year Results (ending Oct 31)

Note¹: Compounded annual growth rate FY14 - FY18

FY 14 FY 15 FY 16 FY 17 FY 18

$220m $279m $325m

TOTAL REVENUE

$308m $343m

FY 14 FY 15 FY 16 FY 17 FY 18

$176m $115m $136m $152m $166m 51% 52% 49% 51%

HOSTED & MAINTENANCE REVENUE

49%

FY 14 FY 15 FY 16 FY 17 FY 18

$1.02 $1.30 $1.44 $1.73 $1.94

ADJUSTED EBITDA PER SHARE

FY 14 FY 15 FY 16 FY 17 FY 18

$0.18 $0.22 $0.26 $0.30 $0.34

DIVIDEND PER SHARE (based on date of record)

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Revenue Split - FY 18

Note: % rounding applied to charts and tables throughout this corporate presentation

License 30% Hosted & Maintenance 51% Services 17% Hardware 2%

REVENUE BREAKDOWN

Interactive Management Group $189m or 55% Asset Management Group $154m or 45%

REVENUE BY BUSINESS GROUP

US 30% UK 19% EUROPE 18% CANADA 3% APAC/Others 6% SCANDINAVIA 24%

REVENUE BY GEOGRAPHY

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FY 18

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FY 18

FY 18 FY 17

% Change

Revenue $342.8m $325.4m

5.4%

Revenue by Segment Interactive Management Group $189.3m $190.7m

• 0.7%

Asset Management Group $153.6m $134.7m

14.0%

License, Hosted & Maintenance revenue $276.8m $263.0m

5.2%

Adjusted EBITDA¹ per diluted share $1.94 $1.73

12.1%

Adjusted EBITDA¹ $106.0m $94.0m

12.8%

Annual dividend - per common share, based on date of record $0.34 $0.30

13.3%

Note¹: Adjusted EBITDA: Results from operating activities adjusted for depreciation of PPE and special charges for acquisition related restructuring costs.

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FY 18

FY 18 FY 17

% change

Cash spent on dividend $18.4m $16.2m

13.6%

Cash spent on acquisitions - net of cash acquired & holdbacks $16.8m $21.3m

• 21.1%

Cash & Investments balance - beginning of period $130.3m $85.9m

51.7%

Cash & Investments balance - end of period $193.9m $130.3m

48.8%

Cash flow from operations $98.3m $83.2m

18.1%

Acquisitions Tollgrade Q2 Survox Q4 XConnect Q1 SimaTech Q1 Mobilethink Q2

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Q1 FY 19

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Q1 FY 19 (3 months)

Q1 FY 19 Q1 FY 18

% Change

Revenue $86.0m $85.1 m

1.1%

Revenue by Segment Interactive Management Group $43.5m $48.4m

(10.2%)

Asset Management Group $42.6m $36.7m

16.1%

License, Hosted and Maintenance revenue $69.5m $68.4m

1.6%

Adjusted EBITDA¹ per diluted share $0.48 $0.46

4.3%

Adjusted EBITDA¹ $26.3m $25.3m

4.0%

Quarterly dividend - per common share, based on date of record $0.09 $0.08

12.5%

Note¹: Adjusted EBITDA: Results from operating activities adjusted for depreciation of PPE and special charges for acquisition related restructuring costs.

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Q1 FY 19 (3 months)

Q1 FY 19 Q1 FY 18

% Change

Cash spent on dividend $4.9m $4.3m

14.0%

Cash spent on acquisitions - net of cash acquired & holdbacks $23.5m $4.9m

379.6%

Cash & Investments balance - beginning of period $193.9m $130.3m

48.8%

Cash & Investments balance - end of period $190.5m $145.0m

31.4%

Cash flow from operations $24.2m $23.1m

4.5%

Acquisitions Xconnect Q1 Simatech Q1 Capana Q1 Telexis Q1

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Quarterly Results

$0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY 16 FY 17 FY 18 FY 19

REVENUE

$ millions $0 $10 $20 $30 $40 $50 $60 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY 16 FY 17 FY 18 FY 19

HOSTED & MAINTENANCE REVENUE

$ millions $- $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY 16 FY 17 FY 18 FY 19

ADJUSTED EBITDA PER SHARE

$0.00 $0.02 $0.04 $0.06 $0.08 $0.10 $0.12 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY 16 FY 17 FY 18 FY 19

DIVIDEND PER SHARE

(based on date of record)

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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, drive shareholder value while minimizing shareholder dilution Economic factors are favorable for acquisitions especially for small- cap companies Target companies in the $5m - $50m revenue range preferably with strong recurring revenue

• Geographic, product or scale expansion
• Mission critical solutions
• High barriers to entry

Objective is for a cash on cash payback within 5 - 6 years

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Recent Acquisitions

XCONNECT Q1 FY 18 GERMANY SURVOX Q4 FY 17 USA SIMATECH Q1 FY 18 DENMARK

MOBILETHINK

Q2 FY 18 DENMARK CAPANA Q1 FY 19 SWEDEN TELEXIS Q1 FY 19

NETHERLANDS

PROOPTI Q2 FY 19 SWEDEN

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THANK YOU!