Corporate Overview November 7, 2017 company.isc.ca TSX:ISV ISC | - - PowerPoint PPT Presentation

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Corporate Overview November 7, 2017 company.isc.ca TSX:ISV ISC | - - PowerPoint PPT Presentation

Corporate Overview November 7, 2017 company.isc.ca TSX:ISV ISC | Forward-Looking Statement Forward-Looking Statement This presentation contains forward-looking information within the meaning of applicable Canadian securities legislation,


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company.isc.ca

TSX:ISV

Corporate Overview

November 7, 2017

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ISC | Forward-Looking Statement

This presentation contains forward-looking information within the meaning of applicable Canadian securities legislation, including management’s expectations and certain assumptions with respect to our registry services, corporate services and information products industry, our competitive landscape, economic conditions in Canada (in particular, Saskatchewan, Ontario and Quebec) and internationally, real estate market in Saskatchewan, economic impact of energy and resource sectors, fluctuations in the Canadian dollar and other foreign currencies, seasonality, transaction volumes, statements regarding the future financial position or results of ISC, customer growth and diversification, dividend expectations, creation of shareholder value, growth opportunities, capital and operating expectations, real gross domestic product, changes that impact our registry services, such as changes in high-value property registrations, motor vehicle sales volume and the number of active business entities, consolidated EBITDA margin, income taxes, our ability to attract and retain skilled staff, the compensation and benefits that will be paid or provided to employees, our level of customer service and expected activity in the global registry market, as well as goodwill and intangibles are material factors in preparing forward-looking statements. In addition, the words “may”, ‘‘will”, “would”, “should”, “could”, “expect”, “plan”, “intend”, “trend”, “indicate”, “anticipate”, “believe”, “estimate”, “predict”, “project”, “targets”, “strive”, “strategy”, “continue”, “likely” or “potential” or the negative or other variations of these words or other comparable words or phrases are intended to identify forward-looking statements. Forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those expressed or implied by such forward-looking information. Although ISC believes the forward-looking information contained in this release is based upon reasonable assumptions, readers are cautioned not to place undue reliance on forward-looking information as it is inherently uncertain and no assurance can be given that the expectations reflected in such information will prove to be correct. Many factors and risks could cause

  • ur actual results to differ materially from those expressed or implied by forward-looking information including those detailed in ISC’s

Annual Information Form, dated March 14, 2017, ISC’s Unaudited Interim Consolidated Financial Statements and Notes and Management’s Discussion and Analysis for the third quarter ended September 30, 2017, as well as other documents filed by ISC with Canadian securities regulators through SEDAR at www.sedar.com from time to time. Investors and others should carefully consider the above-noted factors and risks and other uncertainties and potential events. The forward-looking information in this release is made as of the date hereof and, except as required under applicable securities legislation, ISC assumes no obligation to update or revise such information to reflect new events or circumstances.

Forward-Looking Statement

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Our Business at a Glance

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Overview

Leading provider of registry and information management services for public data and records. Saskatchewan’s exclusive provider

  • f the Land Titles Registry, Land Surveys

Directory, Personal Property Registry and Corporate Registry through ASD model.

Focus on growth. Corporate services and corporate accessories

in Ontario and Quebec.

company.isc.ca TSX:ISV

4 Registry technology solutions

and expertise with registry implementations on 3 continents.

Offering solutions to manage, secure and administer information through our registry and services segments. 2016 Financial highlights

Revenue $88.4M EBITDA $29.5M EBITDA margin 33.4% FCF $18.9M Basic EPS $0.89

TSX: ISV

Market cap $318.0M 52 week high $21.30 52 week low $16.57 Dividend per share $0.80 Dividend yield 4.5% As at Nov 7, 2017

ISC | Overview

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ISC | Our Business at a Glance

We operate in two reportable segments defined by their primary type of service offering. The balance of our corporate activities and shared services functions, including the services and functions provided by our subsidiary, ERS, are reported as Corporate.

Operating Segments

Registries:

  • Saskatchewan Land Registry (includes Land Titles Registry, Land Surveys Directory and

Geomatics)

  • Saskatchewan Personal Property Registry
  • Saskatchewan Corporate Registry (includes Common Business Identifier and Business

Registration Saskatchewan Program)

  • Saskatchewan Asbestos Registry

Services:

  • ESC – Search and Registration Services
  • ESC – “Know-Your-Customer” Services
  • ESC – Corporate Supplies and Accessories

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ISC | Our Business at a Glance

Registries

End-use customers:

Individuals or businesses who directly benefit from ISC registries:

  • Individuals
  • Non-profit organizations
  • Business owners
  • Municipalities
  • Home builders
  • Financial institutions
  • Insurance companies
  • Car and equipment dealers

Channel customers:

Intermediaries who manage relationships with end users but are typically not the beneficiary of our registry services:

  • Law firms
  • Engineers
  • Surveyors
  • Agents (representing end-user customers)

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ISC | Our Business at a Glance

Services

Search & Registration:

  • Law firms
  • Financing companies

Know-Your-Customer:

  • Financial institutions

Corporate Supplies & Accessories:

  • Legal professionals

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ISC | Our Business at a Glance

Corporate

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company.isc.ca TSX:ISV

Based in Ireland Founded in 2002

Acquired by ISC

  • n Jan 23, 2017

Consulting

Implementation & support Registry implementations

  • n

3 continents

*The balance of our corporate activities and shared services functions, including the services and functions provided by our subsidiary ERS, are reported as Corporate.

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ISC | Our Business at a Glance

Revenue Model

Registries

TRANSACTION

Searches Registrations Maintenance and related services

SERVICE

Online or in person / Customized Online or in person Online or in person / Customized

REVENUE TYPE*

Flat fees (standard searches, e.g. $11 per land title search) Value-based fees (0.3% of the value of the land title) Flat fees (other registries) Flat or negotiated fees

* For a full list of our fees, go to www.isc.ca

Services

TRANSACTION

Search & Registration Know-Your-Customer Corporate Supplies & Accessories

SERVICE

Online or in person / Customized In person Online or in person / Customized

REVENUE TYPE*

Flat fees Flat fees Per unit fees

* For a full list of our fees, go to www.eservicecorp.ca/index.php/pricing-turnaround-times

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Financial Position

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ISC | Financial Position

Financial Position

  • Balance sheet

remains strong with ability to fund growth

  • pportunities.
  • Continues to support

dividend.

$38.6 M

Amount of cash on hand as at September 30, 2017

$10.5 M

Amount of 2017 dividends paid to shareholders as at September 30, 2017

$8.0 M

Free cash flow as at September 30, 2017

$32.3 M

Total debt as at September 30, 2017

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30.2 28.4 29.5 31.6 30.4 33.5

2014 2015 2016

EBITDA

  • Adj. EBITDA

ISC | Financial Position

Earnings

Consolidated EBITDA1 and consolidated adjusted EBITDA1 for the year ended December 31 (CAD$ millions)

1EBITDA, EBITDA margin, adjusted EBITDA, adjusted EBITDA margin and free cash flow are not recognized as measures under IFRS and do not have a

standardized meaning prescribed by IFRS and therefore, are not comparable to similar measures by other corporations. See section name “Non-IFRS Measures” in the Management’s Discussion & Analysis for the period ended December 31, 2016.

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Revenue / EBITDA

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$0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100

2013 2014 2015 2016

Millions

Revenue EBITDA

Annual Revenue/ EBITDA

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EBITDA / Debt

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$0 $5 $10 $15 $20 $25 $30 $35 2013 2014 2015 2016

Millions

EBITDA Long term debt (current and non-current)

Annual EBITDA/Debt

$0 $5 $10 $15 $20 $25 $30 $35 2013 2014 2015 2016

Millions

EBITDA Interest paid (per cash flow statement)

Annual EBITDA/Interest payments

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ISC | Financial Position

Multiple Lines of Revenue

Total revenue for the year ended December 31 (CAD$ millions)

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80.5 78.3 88.4

2014 2015 2016

Land Surveys Directory Geomatics Services Corporate Registry Personal Property Registry Land Titles Registry

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ISC | Financial Position

Multiple Lines of Revenue

Revenue – 3rd Quarter 2017

31.8%

EBITDA margin

$0.11

EPS (basic share)

$23.9 M

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company.isc.ca TSX:ISV

*The balance of our corporate activities and shared services functions, including the services and functions provided by our subsidiary ERS, are reported as Corporate/Other.

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ISC | Financial Position

2017 Third Quarter Financial Highlights

Thousands of CAD dollars; except earnings per share and where noted Three Months Ended Sep 30, 2017 Three Months Ended Sep 30, 2016 Nine Months Ended Sep 30, 2017 Nine Months Ended Sep 30, 2016

Revenue $23,862 $22,894 $70,004 $67,174 Net income $1,856 $3,810 $9,015 $12,584 EBITDA1 $7,579 $7,338 $22,171 $22,697 Adjusted EBITDA1 $8,673 $9,512 $24,447 $26,117 EBITDA margin1 (% of revenue) 31.8% 32.1% 31.7% 33.8% Adjusted EBITDA margin1 36.4% 41.5% 34.9% 38.9% Free cash flow1 $8,013 $5,641 $21,362 $15,254 Dividend declared per share $0.20 $0.20 $0.60 $0.60 Earnings per share2 (basic) $0.11 $0.22 $0.52 $0.72 Earnings per share, (diluted)2 $0.11 $0.22 $0.51 $0.72

1. EBITDA, EBITDA margin, adjusted EBITDA, adjusted EBITDA margin and free cash flow are not recognized as a measure reported under IFRS and do not have a standardized meaning prescribed by IFRS. See section “Non-IFRS Measures” in Management’s Discussion & Analysis for the three and nine months ended September 30, 2017. 2. The calculation of earnings per share is based on net income after tax and the weighted average number of shares outstanding during the period.

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ISC | Outlook

Outlook 2017

Continued focus on sustaining our core business while pursuing new growth opportunities. Expected consolidated annual EBITDA margin between 31% and 33%. Revised CapEx guidance of $1.0 - $2.0 million from $3.5 - $5.0 million. Temperate economic growth in Saskatchewan for Registries results similar to 2016, with modest growth for Ontario and Quebec economies to deliver moderate growth in the Services segment.

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Growth

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ISC | Growth

Market Trends

Outsourcing Business Processes & Services

Governments, legal firms and financial institutions are looking to find cost savings and focus on their core business without compromising service quality.

Increased Regulatory & Compliance Requirements

Improved workflows and automated processes help meet requirements and reduce potential business risk for clients.

Emphasis on Reliability & Security of Information

ISC has the know-how, processes, technology and proven experience to manage data authentication and security. 21

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Emerging Global Registry Market

ISC continues to believe the global registry market is an emerging sector.

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ISC | Growth

Growth Focus

Become More Efficient Internally

Grow bottom line by:

  • Cost management
  • Increased productivity

Explore New Paths Externally

  • Extend current products and services to other jurisdictions and private industries
  • Add new services or features to expand business from existing and new clients
  • Acquire companies with competencies or operations in our industry space

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ISC | Investment Proposition

Recent Developments

Increased emphasis on technology solutions

  • To complement existing Registry Operations and Services business
  • Appointment of Executive Vice President, Technology Solutions
  • Now have a team of 50+ technical resources with deep registry expertise

An expanded leadership team

  • to advance the business and future growth of the Company
  • Includes new leadership in marketing and business development

Sale of 30% stake in Dye & Durham

  • Delivers value - an $18.0 million gain on total capital deployed of $7.0 million.
  • Provides capital – the addition of $25.0 million in cash further strengthens ISC’s balance

sheet to support corporate objectives and priorities. 23

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Investment Proposition

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ISC | Investment Proposition

Investment Proposition

Strong Core Business

  • 20-year exclusive Master Service Agreement with Government of Saskatchewan,

including data license

  • Understanding of Alternative Service Delivery model and needs of governments

Emerging Diversification

  • Acquisition of ESC Corporate Services Ltd.
  • Acquisition of Enterprise Registry Solutions

Financial Position

  • Strong cash flow
  • Solid balance sheet

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Appendices

company.isc.ca TSX:ISV ISC | Appendices

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ISC | Appendices

TSX: ISV

Shares Outstanding Listing Market Cap 52-Week High 52-Week Low Dividend History Contact 17.5 million Class A Limited Voting Shares TSX: ISV $318.0 million $21.30 $16.57 $0.80 per share annually (paid quarterly) since 2013

Investor.relations@isc.ca or call toll free 1-855-341-8363

As at November 7, 2017

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RBC Steve Arthur, CFA August 7, 2013 GMP Securities Justin Keywood, CFA February 3, 2014 CIBC Stephanie Price July 15, 2014 Sentry Investments, Inc. 14.85% QV Investors Inc. 9.31% Burgundy Asset Management Ltd. 3.80% Mackenzie Financial Corporation 2.05% Mawer Investment Management Ltd. 1.00%

ISC | Appendices

Appendix A: Ownership

Top 5 Institutional Holders

Institutional Shareholder % O/S

Analyst Coverage

Institution Cover initiated on: Analyst

Ownership Distribution 36% 33% 31%

Retail Investors Institutional Investors Government of Saskatchewan 28 As at Oct 31, 2017

company.isc.ca TSX:ISV

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Kathy Hillman-Weir, Q.C. Executive Vice-President, Chief Corporate Officer and General Counsel Shawn B. Peters Executive Vice-President and Chief Financial Officer Jeff Stusek President and Chief Executive Officer Kenneth W. Budzak Executive Vice-President, Registry Operations Loren Cisyk Executive Vice-President, Technology Solutions Laurel Garven Vice-President, Business Strategy Catherine McLean Vice-President, People and Culture Dennis White Vice-President, Marketing and Business Development

Appendix B: ISC Leadership

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From left: Doug Emsley, Iraj Pourian, Scott Musgrave, Karyn Brooks, Tom Christiansen, Joel Teal, Tony Guglielmin, Michelle Ouellette, Q.C., Dion Tchorzewski

ISC | Appendices

Appendix C: Board of Directors

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ISC | Appendices

Appendix D: 2017 Q3 Consolidated Revenue

Thousands of CAD dollars Three Months Ended Sep 30, 2017 Three Months Ended Sep 30, 2016

Land Registry (Land Titles Registry, Land Surveys, and Geomatics) $14,335 $15,015 Personal Property Registry 2,531 2,670 Corporate Registry 2,237 1,860 Registries revenue 19,103 19,545 Services revenue 3,561 3,316 Other revenue 1,198 33 Total revenue $23,862 $22,894 31

company.isc.ca TSX:ISV