I N V E S T O R P R E S E N T A T I O N Q1 2012 Profile Leading - - PowerPoint PPT Presentation
I N V E S T O R P R E S E N T A T I O N Q1 2012 Profile Leading provider to financial services industry 1,200 North American bank and credit union customers Value Five technology-enabled platforms Approx. 90% recurring
I N V E S T O R P R E S E N T A T I O N
Q1 2012
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financial services industry
bank and credit union customers
platforms
revenue
Value
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Client Service Revenue Generation Efficiency Productivity Compliance
Payment Solutions Loan Registration & Recovery Loan Servicing Lending Technology Business Service Solutions
Broad Enabling Solutions
How We Help Where We Help
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Top 100 global financial technology providers
contracts with high renewal rates
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$187B annually
#1 in Canada
$120B annually
#1 in Select U.S. Markets
Growth Drivers
Growth Drivers
and commercial lending channels
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Growth Drivers
expansion
$18B portfolio 1.6M students
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Growth Drivers
3 million+ annual transactions
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20 million accountholders
Growth Drivers
services
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Leading Position Growth Drivers
2.5 million insurance claims annually
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90% 10% 40% 22% 18% 15% 5%
Increasing Revenue Diversification
Recession-resistant
2006
$318.0M
20111
$724.7M
Payment solutions Loan registration & recovery services Loan servicing Lending technology services Business service solutions
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Revenue Sharing Subscription Fees
Long-term Contracts Customer Value
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Customer” strategy
leadership while continuing strategic diversification
Shareholder and Customer Value
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since acquisition
expanding margins
banks (16% share currently)
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Tuck-under
Extend capabilities in existing areas
Platform
Provide immediate scale
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Point Of Sale
loan origination solutions (LOS)
and credit unions
Avista Mortgagebot
Recurring subscription based fees
Loan Origination Solutions Bank Consumer
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POS LOS
application
insurance)
(e.g. what rate commitments are 60 days out)
Consumer
Point of Sale Loan Processing Final underwriting Closing Secondary markets Compliance Integration
Secondary markets
“light”
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Community Bank Community Bank Community Bank
Virtualized Applications
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POS 1,000+ customers LOS 150 customers Infrastructure 300 customers
Community Banks and Credit Unions
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SaaS Recovery services Hosting of services Early stage collection Document processing Software development Technology integration LOS-POS Mortgages Credit cards Student loans Lien registration Cheque program Commercial credit
Domain Knowledge Expertise
capabilities
capacity
economics
development
D+H Capabilities Partner Selectively To…
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Financial Review
Solid performance, strategic advancement
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724.7 100 200 300 400 500 600 700 800 05 06 07 08 09 10 11 169.5 181.6 Q1 2011 Q1 2012
17.9% CAGR
1 1 US segment
Quarterly Revenue
($ millions)
Annual Revenue
($ millions)
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I N V E S T O R P R E S E N TAT I O N Q 1 2 0 1 2
74.8 38.0 34.1 14.5 8.6 Payment solutions Loan registration & recovery services Loan servicing Lending technology services Business service solutions
$ millions
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I N V E S T O R P R E S E N TAT I O N Q 1 2 0 1 2
with addition of Mortgagebot
efficiencies, process realignment, product redesign
dissipating as year unfolds
132.0 140.8 Q1 2011 Q1 2012
Consolidated Expenses
($ millions)
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181.2 50 100 150 200 05 06 07 08 09 10 11
14.8% CAGR
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39.3 41.6 Q1 2011 Q1 2012
US segment 2
Quarterly Adjusted EBITDA1
($ millions)
Annual Adjusted EBITDA1
($ millions)
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I N V E S T O R P R E S E N TAT I O N Q 1 2 0 1 2
1.8994 0.00 0.50 1.00 1.50 2.00 07 08 09 10 11
Annual Adjusted Net Income1
($ per share)
0.4275 0.3709 Q1 2011 Q1 2012
Quarterly Adjusted Net Income1
($ per share)
2 2
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I N V E S T O R P R E S E N TAT I O N Q 1 2 0 1 2
– $80M maturing June 30, 2017 – US $63 million (C $62.8 million) maturing April 12, 2021 – Unused shelf of US $37 million
– Unused facility of $142M – Additional arrangement of $150M available
(Debt to EBITDA below 2x)
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* For the period of December 20, 2001 to March 31, 2012
I N V E S T O R P R E S E N TAT I O N Q 1 2 0 1 2
Cash distributed to Owners* $15.77 Total Share Price Appreciation* 8.50 Total Shareholder Return $24.27 Average Annual Return 14.24%
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I N V E S T O R P R E S E N TAT I O N Q 1 2 0 1 2
Other Information
Common Share Price (TSX:DH) (May 8, 2012) 52 week high $20.45 52 week low $14.45 Closing Common Share Price (May 8, 2012) $19.19 Market Capitalization $1.1 billion (March 30, 2012) Common Shares Outstanding 59.2 million Average Daily Trading Volume 174,128 Annualized Dividend Per Share $1.24 Number of Employees 4,300 2011 Globe & Mail Profit Ranking 166 (out of top 1,000 public companies) 2011 FinTech Ranking (Global) 41 Contact Brian Kyle, 416-696-7700 investorrelations@dhltd.com
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I N V E S T O R P R E S E N TAT I O N Q 1 2 0 1 2
Consolidated Financial Highlights1 Q1 2012 Q1 2011 Increase/ Decrease Over prior year Revenue
181.6 169.5 7.1%
EBITDA2,3
40.8 37.5 8.9%
Adjusted net income per share2
0.3709 0.4275 (13.2%)
Net income per share
0.2521 0.6769 (62.8%)
Dividends paid per share
0.3100 0.3033 2.2%
Appendix A
I N V E S T O R P R E S E N TAT I O N Q 1 2 0 1 2
1. See MD&A for discussion of results. 2. Non-IFRS terms (see Appendix C). 3. Q1 2012 EBITDA includes $0.7 million of certain retention and incentive costs related to the acquisition of Mortgagebot. Q1 2011 EBITDA includes $1.8 million of acquisition related costs pertaining to certain transaction costs related to business acquisitions (see Appendix B for reconciliation of non-IFRS measures).
(in millions of Canadian dollars, except per share amounts, unaudited)
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Financial Highlights - By Segment1 Q1 2012 Q1 2011 Increase/ Decrease Over prior year
Canadian Segment Revenue 170.0 169.5 0.3% EBITDA4 35.5 39.1 (9.1%) U.S. Segment Revenue 11.6 nil n/m2 EBITDA4 5.3 (1.6) 431.3% Corporate Revenue nil nil n/m3 EBITDA4 nil nil n/m3 Consolidated Revenue 181.6 169.5 7.1% EBITDA4 40.8 37.5 8.9%
Appendix A (continued)
(in millions of Canadian dollars, except per share amounts, unaudited)
1. See MD&A for discussion of results. 2. n/m = not measurable as no revenue in U.S. segment in prior year (Mortgagebot acquired on April 12, 2011) 3. n/m = not measurable as nil revenues and EBITDA in the Corporate segment 4. Non-IFRS term (see Appendix C). Q1 2012 EBITDA for U.S. segment includes $0.7 million of certain retention and incentive costs related to the acquisition of
the U.S segment (see Appendix B for reconciliation of non-IFRS measures).
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Q1 2012 Adjusted Net Income – Consolidated (non-cash items and other items of note) $ Per Share Net income and Net income per share (basic and diluted) 14.9 0.2521
Appendix A (continued)
Non-cash items and Other items of note Pre-tax After-tax Per Share Non-cash items: Amortization of intangibles from acquisitions 10.9 7.8 0.1316 Amortization and fair value adjustment of derivative instruments (1.6) (1.2) (0.0206) Other items of note: Acquisition-related items 0.7 0.5 0.0078 Adjusted net income1 and Adjusted net income per share1 (basic and diluted) 22.0 0.3709
I N V E S T O R P R E S E N TAT I O N Q 1 2 0 1 2
1. Non-IFRS terms (see Appendix C).
(in millions of Canadian dollars, except per share amounts, unaudited)
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Appendix B: Reconciliation of Non- IFRS Measures
Q1 2011 EBITDA includes $1.8 million of acquisition related costs pertaining to certain transaction costs.
(in thousands of Canadian dollars, except pershare amounts, unaudited) Consolidated 2012 2011 Revenue $ 181,613 $ 169,548 Expenses 140,780 132,045 EBITDA 1,2 40,833 37,503 Amortization of capital assets and non-acquisition intangibles 6,837 5,504 Amortization of intangibles from acquisitions 10,939 8,092 Interest expense 4,821 3,989 Amortization and fair value adjustment of derivative instruments (1,645) (1,687) Income tax expense (recovery) 4,947 (14,290) Income from continuing operations 14,934 35,895 Income from discontinued operations, net of tax
Net income 14,934 36,035 Adjustments: Certain non-cash items: Amortization of intangibles from acquisitions 10,939 8,092 Amortization and fair value adjustment of derivative instruments (1,645) (1,687) Other items of note: Acquisition-related items 737 1,799 Discontinued operations, net of tax
Tax effect of above adjustments (excluding discontinued operations) (2,998) (2,133) Tax effect of corporate conversion and acquisitions
Adjusted net income1 $ 21,967 $ 22,757 Adjusted net income per share1, basic and diluted $0.3709 $0.4275 Income from continuing operations per share, basic and diluted $0.2521 $0.6743 Net income per share, basic and diluted $0.2521 $0.6769 Quarter ended March 31
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I N V E S T O R P R E S E N TAT I O N Q 1 2 0 1 2 The information presented within this presentation includes certain adjusted financial measures such as “EBITDA” (Earnings before interest, taxes, depreciation and amortization; EBITDA also excludes fair value adjustments of interest-rate swaps which are directly related to interest expense), “Adjusted EBITDA” (EBITDA excluding acquisition related items and restructuring costs), “Adjusted net income” (net income before certain non-cash charges such as amortization of intangibles from acquisitions and fair value adjustments of interest-rate swaps and certain items of note such as acquisition-related expenses and discontinued operations), and “Adjusted net income per share”, all of which are not defined terms under IFRS. These non-IFRS financial measures should be read in conjunction with the Consolidated Statements of Income. Management believes these supplementary measures provide useful additional information related to the operating results of the Corporation. Management uses these subtotals as measures of financial performance and as a supplement to the Consolidated Statements of Income. Investors are cautioned that these measures should not be construed as an alternative to using net income as a measure of profitability or as an alternative to the IFRS Consolidated Statements of Income or other IFRS statements. Further, these measures do not have any standardized meaning and D+H’s method of calculating each balance may not be comparable to calculations used by other companies bearing the same description.
Appendix C
Non-IFRS Measures
I N V E S T O R P R E S E N T AT I O N Q 1 2 0 1 2
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Forward looking statements This presentation contains certain statements that constitute forward-looking information within the meaning of applicable securities laws ("forward-looking statements"). Statements concerning D+H's objectives, goals, strategies, intentions, plans, beliefs, expectations and estimates, and the business, operations, financial performance and condition of D+H are forward- looking statements. The words "believe", "expect", "anticipate", "estimate", "intend", "may", "will", "would" and similar expressions and the negative of such expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements are subject to important assumptions, including the following specific assumptions: the ability of D+H to meet its revenue, EBITDA and Adjusted net income targets; general industry and economic conditions; changes in D+H's relationship with its customers and suppliers; pricing pressures and other competitive factors; the anticipated effect of acquisitions on the financial performance of D+H; and the expected benefits arising as a result of the acquisitions. D+H has also made certain macroeconomic and general industry assumptions in the preparation of such forward-looking statements. While D+H considers these factors and assumptions to be reasonable based on information currently available, there can be no assurance that actual results will be consistent with these forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Business, or developments in D+H's industry, to differ materially from the anticipated results, performance, achievements or developments expressed or implied by such forward-looking statements. Risks related to forward-looking statements include, among other things, challenges presented by declines in the use of personal and business cheques; D+H's dependence on a limited number of large financial institution customers and dependence on their acceptance of new programs; strategic initiatives being undertaken to meet D+H's financial objective; stability and growth in the real estate, mortgage and lending markets; as well as general market conditions, including economic and interest rate dynamics. Given these uncertainties, readers are cautioned not to place undue reliance on such forward- looking statements. The documents incorporated by reference herein also identify additional factors that could affect the
projections, beliefs and opinions, and D+H does not undertake any obligation to update forward-looking statements should assumptions related to these plans, estimates, projections, beliefs and opinions change except as required by applicable securities laws. All of the forward-looking statements made in this presentation are qualified by these cautionary statements and other cautionary statements or factors contained herein, and there can be no assurance that the actual results or developments will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, D+H.
Appendix D