Investor Presentation Q Transforming Supply Chains for Value Creation

Transcription

1 Investor Presentation Q Transforming Supply Chains for Value Creation

2 Looking Forward Statements The statements in this presentation relating to matters that are not historical fact are forward looking statements that are based on management's beliefs and assumptions. Such statements are not guarantees of future performance, and are subject to a number of uncertainties, including but not limited to future economic conditions, the markets that Tecsys Inc. serves, the actions of competitors, major new technological trends and other factors beyond the control of Tecsys Inc., which could cause actual results to differ materially from such statements. All names, trademarks, products and services mentioned are registered or unregistered trademarks of their respective owners. 2

3 End-to-end Integrated Supply Chain Management Solutions SUPPLIERS PARTNERS CUSTOMERS ENTERPRISE SYSTEMS Collaboration Demand Planning Procurement & Inventory Warehouse Transportation Sales Order to Cash Point of Use Financial Management 3 RD Party Billing ANALYTICS E X E C U T E A D A P T S C A L E E X P A N D 3

4 Healthcare 50% of new acct bookings 44% of total revenue 600+ customers sites 50,000+ users Complex Distribution 50% of new acct bookings 56% of total revenue Visionary Provider of SCM Technology Heavy Equipment Dealers Health Systems 3PL Providers Wine and Spirits 4

5 Market Size (USD Million) Solid Sustaining Growth in Complex Distribution CAGR 14.1% CAGR ( ) 17.4% $1.5B Market in % Service Software 14% SCM Growth through 2019* Source: International Warehouse Logistics Association (IWLA), Warehousing Education and Research Council (WERC), American Production and Inventory Control Society (APICS), European Logistics Association (ELA), Company Websites, Expert Interviews, White Papers, and MarketsandMarkets Analysis 5

6 Visual Logistics Visual images and instructions delivered via RF Cloud-based OneSprint WMS system in the cloud for faster implementation Mobile-Enabled Delivery management designed for mobile Building Market Leadership through Innovation 6

7 Leveraging Technology and Expertise in a New Vertical Drivers: Regulatory Compliance Mergers & Acquisitions Healthcare SCM The next wave of sector-wide process improvement Affordable Care Act Sustaining Operating Margin

8 SCM Impact on Healthcare Costs Procurement Warehouse Management Transportation Management Point-of-Use Management Demand Planning Nursing Units Perioperative Cath Labs Laboratories Pharmacies 5-15% in SCM savings improves Operating Margin by 3-8% 8

9 Extending our Reach in Health Systems Health Systems Market Share Base Account Penetration 500 Target Health Systems 94% Market Opportunity: $9.6B 6% 17% Opportunity with Current Base: $610M+ 38% of Total Bookings 83% 9 Market Opportunity Current Share Market Opportunity

10 Tecsys and UNC 12 Hospitals 2,675 Staffed Beds 249 Operating Rooms 56 Clinics 9.5 Billion in Patient Revenue 3.5 Billion in Total Revenue Signed a LOI to merge with Carolinas HealthCare System; the combined entities operate over 50 hospitals 10

11 Why We Win Tecsys brings to the table a very important flexibility it allows us schedule and allocate resources more efficiently. Tecsys visibility gives us optimal performance at the six-sigma level with less than 5% obsolescence in our supply chain. We anticipate between $8 and $13 million in savings. With the deployment of Tecsys SMS we have been able to capture $14 to $16 million in revenue per year. One of the top 5 U.S. health systems 45 acute care and specialty hospitals 700 physician practices and outpatient facilities Not-for-profit community-based health system 9 hospitals, 10,000 employees 11

12 Steady Revenue Growth Millions $80.0 $70.0 $60.0 Total Revenue Recurring Revenue Recurring revenue % $70.7 $67.5 $68.4 $57.3 * 100.0% 90.0% 80.0% Growth Drivers Cloud, Maint. and Sub. Revenue (4-year CAGR 12%) Healthcare revenue (4-year CAGR 27%) $50.0 $ % $40.0 $30.0 $20.0 $17.1 $19.3 $23.3 $26.3 $ % 50.0% $10.0 $ % 36.8% 38.2% 33.7% 34.5% % 30.0% 12

13 Predictable Professional Services Revenue Service Revenue Includes PS, EBS and ATS Proportion of PS revenue from Base Account in the last 5 years 83%* 13 * Base account revenue for PS divided by total PS revenue

14 Healthcare Revenue Growth In $CAD Millions Total Revenue 4-year CAGR 11% Healthcare Revenue 4-year CAGR 27% 14

15 Financial Highlights Q2, 2019 Q2, 2018 % YoY Q2, 2019 TTM Q2, 2018 TTM % YoY $ % $ % $ % $ % $ % $ % Revenue $18, % $18, % $ % $70, % $70, % $ % Cost of sales $8, % $8, % $40 0.5% $35, % $34, % $ % Gross margin $9, % $9, % $72 0.8% $34, % $35, % ($710) -2.0% Sales & Marketing $4, % $3, % $ % $14, % $15, % ($714) -4.7% General and Administration $1, % $1, % $ % $6, % $5, % $ % Research and Development $2, % $2, % $ % $10, % $5, % $5, % Operating expenses $8, % $7, % $ % $31, % $26, % $5, % Earnings from operations $ % $1, % ($771) -48.3% $3, % $9, % ($5,728) -63.3% Net earnings $ % $1, % ($760) -56.0% $3, % $7, % ($3,956) -55.8% EBITDA $1, % $2, % ($762) -34.9% $5, % $11, % ($5,909) -51.4% * EPS (basic) $0.05 $0.10 ($0.05) -50.0% $0.24 $0.57 ($0.33) -57.9% Bookings $16,226 $11,453 $4, % $53,620 $47,037 $6, % ** Backlog $51,657 $42,350 $9, % $51,657 $42,350 $9, % ** 15 * Refer to 2018 Annual Report MD&A Non-IFRS Performance Measure ** Refer to 2018 annual report MD&A for definition

16 Acquisition of OrderDynamics Description Cloud-based Distributed Order Management software 50 employees Based in Richmond Hill, Ontario Key customers include: Ubisoft, Sephora, Uniqlo, Golf Town, Kmart Australia, Khiels Key Metrics Purchase Price: $13.4 M Revenue forecast (March 31, 2019): $7M Revenue forecast growth FY19/FY18: ~30% EBITDA (March 31, 2019): ($2M) Rationale of the transaction Acquisition of a complementary technology Expand omnichannel distribution capabilities for E-commerce companies that have high growth potential Leverage OD s global presence (especially in Europe and Australia) Strenghten Tecsys offering for the 3PL and retail market SaaS-based business model Leverage their growing SI partners 16

17 Key Strengths Focus Customization Expertise Selected markets with deep pockets Solutions to the right problem Differentiated technology providing unequalled efficiency and visibility Tailored solutions to fit clients needs perfectly Seamlessly integrated Experienced workforce Clear understanding of sector specific issues 17

18 Continued Recognition by Gartner 4 Tecsys customers in top 5 - Gartner s Top 25 Healthcare Supply Chains Visionary for 5 years consecutively The vendor offers very differentiated capabilities, domain expertise and customer experience in healthcare provider SCM, with more than 60% of its bookings now in that industry. It also is pursuing a notably unique vision for Omni- Channel concepts applied to pharmacy SCM. The core WMS requirements in these environments are not dramatically different from other industries; however, Tecsys has distinguished itself by adding specialized capabilities, such as integrating WMS upstream into hospitals for automatic replenishment. C. Dwight Klappich Research VP, Supply Chain 18

19 Near-term Growth Strategies Healthcare Additional POU solutions Expand into pharmacy Expand into home care Complex Distribution Leverage new leadership with dedicated sales team Revitalize and simplify products Base Accounts Grow revenue as a percentage of total revenue Mergers & Acquisitions Strategic tuck-in acquisitions

20 Tracking Our Progress 8% -12% Topline Growth Continue Growing Total Bookings Enhanced Operating Leverage 40% Target Annualized Recurring Revenue 20

21 Corporate Overview $182M Market Cap 13.1M S/O Symbol TCS 22 Dividend per Year 30% Insider Ownership Beacon Securities EdgePoint Brokerage Cormark Securities Echelon Partners Institutional Fiera FTQ Coverage GMP IA Securities Holders Mawer Pembroke LB Securities Stableview 21

22 Questions & Answers Thank you