Investor Presentation May 2020
Forward-looking These assumptions include, Statement without limitations: This document contains certain forward-looking No significant change in the current value statements with respect to the Company. These of CAD$ vs. US$ forward-looking statements, by their nature, necessarily involve risks and uncertainties that could No significant increase or decrease in cause actual results to differ materially from those revenues and operating expenses contemplated by these forward-looking statements. We consider the assumptions on which these forward- Stable market conditions looking statements are based to be reasonable, but caution the reader that these assumptions regarding future events, many of which are beyond our control, may ultimately prove to be incorrect since they are subject to risks and uncertainties that affect us. We disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities legislation. All amounts are in Canadian dollars.
Company History and Key Milestones $25 Claude Roy - CEO (1) Before non-recurring items
FY2020 Q3 Highlights Acquisition of 5-year kCentric strategic plan Technologies inc. Completed Dec. 3rd Now completed and launched Total revenue of Adjusted EBITDA (1) of $18,1M $1,6M (94% or $17,1M from B2B) (9% of revenue) (1) Before non recurring expenses of $1.4 M
FY2020 YTD Highlights Total Revenues Adjusted Profit (1) Adjusted EBITDA of FY 2020 $56,5M $1,0M $9,8M (1) 9 months B2B: $50,8M, up 3,0% 17% Margin 0,07$ / share B2C: $5,7M FY2019 (1) LTM In Millions of CAD $ Except percentages & per share amount Dec. 2019 12 MONTHS Revenues $77,3M $83,1M + B2B Platforms $67,7M $66,1M + $9,6M $17,0M B2C Marketplaces Adjusted EBITDA (2) $14,8M $22,6M + Margin 19 % 27% Adjusted Profit / Loss $2,0 $9,5M (3) + Per share $0,14 $0,64 (1) Excluding $1.8 million of non recurring expenses composed of termination benefits & prof. fees. The adoption of IFRS 16, as mentioned in note 4 of our interim condensed consolidated financial statement, had a favorable impact $1.5 million for the nine months ended December 31, 2019. (2) LTM Dec. 2019 & FY2019 excludes non recurring expenses of $3.2 & $1.9 million, respectively. As allowed by this new standard, the adjusted EBITDA of the previous period has not been (3) Before impairment of assets held for sale, net of related taxes of $ 35,1M restated to reflect the impact of IFRS 16.
B2B Businesses Cloud-based SaaS Model $67.7 $66,1 $61,2 $54,9 80%+ ARR $48,1 50% U.S. $43,4 SOURCING 900+ buyers 150,000 suppliers COMMERCE LTM 2015A 2016A 2017A 2018A 2019A 620+ eCom clients In million of CAD $
Our Mission
Our Vision Unify our strengths to create a fast-growing cloud-based commerce technology company
Enabling the Flow of Commerce Supporting over $15B in commercial transactions Value creation across the entire commercial ecosystem Powering a full range of commerce ecosystems via three key operational pillars: Strategic Sourcing - Growth B2B Marketplaces - EBITDA Unified Commerce - Growth Sourcing Diamonds & Jewelry Supply Chain Collaboration Supply Base Management Electronic Components Digital Commerce Contract Lifecycle Management Computer, IT & Telecom Components Automotive Aftermarket
5 Year Strategic Plan Our strategic Our organic Product development M&A plan growth plan strategy Increase our customer Strengthen GTM Monetization of data count and expand our through high value, geographic coverage Compounded by AI-based services strategic M&A Seek technology Accelerated cadence components that bolster Implement sales- of releases and new our existing product and driven culture features service offerings. throughout the company Obtain product Strengthen our recognition corporate development efforts to accelerate the execution of our M&A strategy.
Enabling the Flow of Commerce We create value for our customers by supporting them with optimal, pragmatic, just-right commerce technology solutions. Our customer support is best in class. We are unique in our ability to operate across the entire commercial ecosystem from procurement to commerce to B2B marketplaces.
5 Year BHAG One Employer of Tech Choice company Recognition e.g.: Top SMB Tech Company, e.g.: Gartner, Forrester, etc. One Recognized Brand Glassdoor, etc. 1,500+ $250M + EBITDA + Growth > 40% $1B Employees Valuation
M&A Strategy - Overview Acquire gradually Use equity $100M to $150M wisely of revenue + $25M to $40M of EBITDA as value increases and enables focused in our strategic pillars further financing Model predicts small , medium and large acquisitions over time Small acquisitions Medium acquisitions Large acquisitions Below 3M$ in revenue 5 to 10 M$ in revenue 20 M$ + in revenue Technology tuck-in or Market extensions or Market extensions market extensions technology platform Paid 10 to 15 x EBITDA Paid 3 to 5 x revenue Paid 10 to 15 x EBITDA
M&A Strategy – Market Data Berkery Noyes tracked 6,871 Software transactions between 2017 and 2019 46
Strategic Sourcing Overview Simplifying the sourcing process for buyers and giving suppliers access to the largest database of opportunities VALUE CREATION • NA coverage with leadership position in Canada and massive growth potential in the U.S. • Expansive customer and supplier base to grow from 3,000+ purchasing agencies & 130,000+ supplier network • Wealth of data to monetize • Strong best-of-breed CLM solution well positioned to capitalize Market Stats on rapidly expanding market • 85% ARR US$ 10B market by 2023 with +10% CAGR (1) GROWTH VECTORS Large and mid-sized companies represent 77% of market volume Vs. 23% for special • MERX conversion districts & Tier 1-2 government agencies (2) • Increased rate of US organic growth Only 31% of agencies use an external • Data Monetization strategic sourcing provider (3) • Upgrade existing client base Accelerated consolidation activities by key • Penetrate growing CLM market players to address more integrated demands of private market ARPA AI and automation present key opportunities • for accelerated value Merx - $340 / y creation and operational efficiencies • BidNet - $530 / y • CLM market set to double from ASC - $88,500 / y US$1B to US$2.5B (4)
eCommerce Overview Enabling the flow of commerce with omnichannel shopping capabilities VALUE CREATION Comprehensive offering - All-in-one ERP integrated e-commerce and e-payment solutions for SMBs - Headless commerce platform for mid to upper markets • Ability to service broad needs of customers (front-end, back-end, infrastructure, etc.) • 625+ clients to grow from, including top global brands • ≈ 60% ARR in FY20 GROWTH VECTORS Market Stats • Enterprise – Accelerate enterprise sales & marketing cadence to win net new logos • SMB – Pursue mid-market integrated e-commerce cadence to win net $10.4B US e-commerce platform market new logos by 2025 with 12-15% CAGR (1) • SMB – Accelerate – migrate to new integrated payment solutions across Valued at $12.2T globally, the B2B ERP ecosystems e-commerce platform market is 6x larger • Manage current customer base to improve margins than B2C (2) • Identify and implement product synergies to fuel cross-selling, innovation 84% of US distributors and 79% of US and productivity manufacturers expect to increase spending on e-commerce in the coming year (3) ARPA As manufacturers increasingly adopt ecommerce, they can go direct-to- • K-eCommerce - $13,200 / y consumers (4) • Orckestra - $837,700 / y
Supply Chain Collaboration Overview Optimize the collaboration between retailers and suppliers, by increasing the speed, data quality and efficiency of supply chain transactions VALUE CREATION • Tier-1 B2B/EDI network and Product data synchronization platform • Proven expertise in B2B integration and industry standards • Ability to service broad range of customers (Small, Mid-size, Large) • 25+ existing ecosystems, + 4,000 paying suppliers • High demand from retail companies seeking digital transformation • 95% ARR Market Stats GROWTH VECTORS • Win Net new Retailers with improved GTM US$ $1.4 B NA market by 2024 with • 11% CAGR Monetize existing Retailers: upsell + cross-sell • Monetize existing Suppliers: upsell + cross-sell Early adoption by retail, growing use in Healthcare, Automotive, Financial and • Grow network market share with end users and resellers High-Tech • Adapt catalogue & Web-EDI to new verticals Disruptive new commerce models driving exponential growth of supply chain EDI ARPA Increasing demand for automated and clean “data foundation” to enable rich • Catalogue - $2,000 / y data experiences: eCommerce, AI, IoT, • Web-EDI - $1,000 / y Blockchain • Network - $13,000 / y
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