TRANSACT IN THE DIGITAL ECONOMY N o v e m b e r 1 3 , 2 0 1 8 1 INVESTOR PRESENTATION
Forward-looking statement This document contains certain forward-looking statements with respect to the Company. These forward-looking statements, by their nature, necessarily involve risks and uncertainties that could cause actual results to differ materially from those contemplated by these forward-looking statements. We consider the assumptions on which these forward-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. These assumptions include, without limitations: + No significant change in the current value of CAD$ vs. US$ + No significant increase or decrease in revenues and operating expenses + Stable market conditions 2 INVESTOR PRESENTATION
Our Mission 3 INVESTOR PRESENTATION
Company Overview 1996 524 Global Employee Connecting buyers & Created in 1996, Workforce sellers through Public since 2000, various platforms MDF.TO as at November 12, 2018 Lon ongueuil, , Can anada Lav aval, , Can anada Al Albany, New Yor York $153M $80,9M $0,10 $23,4M* Market Quarterly dividend Capitalisation per share FY 2018 Atlanta, Atla , Ge Georgia ia Shenzh zhen, , Chin ina Revenue & Adjusted EBITDA* as at November 12, 2018 *FY 2018 Adjusted EBITDA includes $2.0 M of non recurring costs 4 INVESTOR PRESENTATION
World-wide Locations Longueuil, Canada Albany, New York Laval, Canada Ottawa, Canada Shenzhen, China Copenhagen, Danemark Atlanta, Georgia 5 INVESTOR PRESENTATION
Historical Results Revenue Adjusted EBITDA 28,6 28,6 80,9 27,5 77,7 73,0 25,2 * 70,2 24,3 23,4 65,4 60,7 53,8 17,4 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY12 FY13 FY14 FY15 FY16 FY17 FY18 *FY 2018 Adjusted EBITDA includes $2.0 M of non recurring costs Cash flow from Operations Earnings per Share $1,00 $1,05 $1,06 $24,1 $0,97 $23,7 $22,2 $22,3 $0,80 $18,0 $17,9 $0,69 $0,58 $12,3 $0,48 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 2018 EPS includes a non-cash, non-recurring income tax expense of $1.4 million ($0.09 per share) following the U.S. tax reform enacted on Jan.1 2018. 6 INVESTOR PRESENTATION
FY-2019 Focus 7 INVESTOR PRESENTATION
Our Solutions MARKETPLACES STRATEGIC SOURCING UNIFIED COMMERCE SOURCING SUPPLY CHAIN CLASSIFIED ADS COLLABORATION DIAMONDS & JEWLERY SUPPLY BASE DIGITAL MANAGEMENT ELECTRONIC COMMERCE COMPONENTS ONLINE AUTOMATIVE CONTRACT RECRUITING AFTERMARKET MANAGEMENT ONLINE DATING 8 INVESTOR PRESENTATION
Strategic Sourcing: Main Brands Canada USA CAD/USA • 2,000 buyers • 1,200 agencies • 40+ clients • 70,000 suppliers • 63,000 suppliers • Contract Life cycle management • Strong public & • Presence in 30 solutions private presence States across Canada • Cross selling & Integration opportunities Revenue type: 90% recurring 82% recurring 90% recurring 9 INVESTOR PRESENTATION
Strategic Sourcing Supply Base Contract Spend management management Analysis Sourcing RFx: Vendor Repository Data cleansing • • • • database Creation Alert Categorization • • • Vendor • Management Contract Analytics • • • qualification creation Publication Notification • • Performance • Requisitions • Bid evaluation Dashboard • • management management Award Decision • • Vendor • Approval • publication Support certification workflows 10 INVESTOR PRESENTATION
Strategic Sourcing : Growth Initiatives Increase Buyer Content Implement value added Supplier Services Contract Management Growth 11 INVESTOR PRESENTATION
Supply Chain Collaboration Enable trading relationships Apparel & General Merchandise between retailers and manufacturers Unique Combined Offering Private Catalogue • Automotive Business Network (EDI VAN Tier-1) • 90%+ Recurring revenues (75% US$) • 4,100+ Retailers & Suppliers • Healthcare 12 INVESTOR PRESENTATION
Supply Chain – Growth Initiatives Introduce multi-retailer Web EDI solution for small vendors • Implement product data compliance and managed services • practice to clients Support retailers addressing the challenges of the digital • transformation with new value added services Our solutions accelerate time-to-market, with richer and more standardized product data, that retailers can quickly promote on any sales channel, especially online. 13 INVESTOR PRESENTATION
Digital Commerce Cloud-based commerce solutions offering mid-size, enterprise Retailers and Brands a Single Platform to drive unified customer experiences online and in-store. Flexible, open and globally available solution on Microsoft Azure. 14 INVESTOR PRESENTATION
Main Product Offering Digital Commerce Commerce Orchestration TM Mobile Store Experience Mgmt (DCXM) Platform Fulfillment The API-first commerce platform Create engaging shopping Turn your stores into local that makes omnichannel retail work experiences for your customers that fulfillment centres convert to more sales A cloud platform that enables leading Make all your inventory brands to create unique shopping Cloud-based experience management accessible online, and leverage experiences for any channel, device, or that works with our Commerce your local stores to ensure Orchestration TM Platform to deliver application. customers get the products they tailored web and mobile shopping want, when and where they want experiences for your customers. them. 15 INVESTOR PRESENTATION
Addressable Market Size • Target market: $9,4B world-wide spending on digital commerce platform software by 2020 • E-Commerce CAGR: >15% over the next five years (1) • Current Trends: Moving to Cloud and API-First “ headless ” platforms, enabling personalized and “ Experience Commerce” • Geographical reach: World-wide (1) Source: Gartner Report, “Magic Quadrant for Digital Commerce 2018.” 16 INVESTOR PRESENTATION
Retail & Brand Manufacturing enabling top brands 17 INVESTOR PRESENTATION
B2C Marketplaces Present in key life events & moments • LesPAC: buy & sell • Jobboom: Find a job & manage your career • Réseau Contact: Find love & build relationships 18 INVESTOR PRESENTATION
Growth Strategy • Increased platform content: Freemium model (launched 03/2017) • Monetize added content: New visibility tools, such as: Showcase / T ags Discovery tools (Alerts, Favourite, Comparisons) Automatic renewal Focus on SMBs that want to sell online, e. g.: Recurring monthly options Priority ranking Geographical banner targeting 19 INVESTOR PRESENTATION
Growth Strategy Update • Ads published increased 15% Year over Year. • New SMB visibility tools / Features for SMBs performing well • Consumer behavior A I triggered content suggestions 20 INVESTOR PRESENTATION
Growth Strategy Update • Content increased 4% (Q2-FY19 vs Q2-FY18) • Integration in Google Jobs • Evolution of the business platform for: Employers to improve recruitment processes: Assisted Recruitment Recurring employer packages 21 INVESTOR PRESENTATION
Financial Highlights Second Quarter FY-2019 ended September 30 th , 2018 22 INVESTOR PRESENTATION
Q2 FY-2019 Highlights • Revenues of $20,3M | + 1,1% • Adjusted EBITDA of $6,6M | 33% Margin • Profit of $3,2M | $0,21 / Share • Cash flow from operations of $2,7M 23 INVESTOR PRESENTATION
Quarterly Results 21,1 20,5 20,3 20,5 20,0 33% 30% 27% 28% 25% 6,6 6,1 5,6 5,5 5,3 3,2 2,4 2,1 1,7 1,0 Q2-FY18 Q3-FY18 Q4-FY18 Q1-FY19 Q2-FY19 Revenue Adjusted EBITDA Profit Adjusted EBITDA margin In M of Canadian $ 24 INVESTOR PRESENTATION
Financial Position • Healthy balance sheet • Strong adjusted EBITDA margin • High cash flow from operations • Net debt / adjusted EBITDA @ 0.6X* • Liquidity of $64M + accordion feature of $40M* *LTM Adjusted EBITDA as per lenders agreement, net debt as of September 30, 2018 & accordion feature subject to lenders approval 25 INVESTOR PRESENTATION
M&A Guidelines • North American location • Ethical and diversified business sectors • Strong business models High profitability Recurring | Transactional revenues Sustainable competitive advantage • Web technology • Acquisition target Companies between $5M - $25M in annual revenues Aligned to take advantage of our resources (Technical, Financial, HR) 26 INVESTOR PRESENTATION
Ownership • 14,8 million shares outstanding • Alignment of interests Directors & Officers own 28% of all shares o/s Claude Roy, President & CEO, currently holding 24% 27 INVESTOR PRESENTATION
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