CORPORATE OVERVIEW. November 16, 2018

Transcription

1 CORPORATE OVERVIEW November 16, 2018

2 ALITHYA GROUP INC. Company Overview > North American strategy and digital technology leader > Specialized in designing and building innovative and efficient digital solutions for complex business challenges > 2,000 professionals > Activities and offices in Canada, the United States and Europe > Over 2,000 clients > Founded in

3 A GROWTH STRATEGY A proven consolidator with a history of successful integrations and strong organic growth 11 professionals 1992 Origin of the company 200 professionals 1998 to 2005 Growing presence in Canada and in France 2011 Management Buy-out 2012 Sinapse Acquisition (public sector experience) 1,000 professionals 2016 Pro2p Acquisition (Oracle expertise) 2015 Acquisition of TELUS professional services and of OSI Consulting Group (IT and recruitment expertise) 2,000 professionals 2018/2019 Acquisition of Edgewater, i.e. Fullscope and Ranzal (Microsoft and Oracle 2017 expertise) SWI Acquisition (Energy, Finance, BI and Analytics expertise) 3

4 INTEGRATED OFFERING > Microsoft solutions > Enterprise Resource Planning (ERP) > Customer Relationship Management (CRM) > Business Intelligence > Oracle solutions > Enterprise Resource Planning (ERP Cloud) > Enterprise Performance Management (EPM Cloud) > Enterprise Business Suite (EBS) > Integrated Analytics > Strategy > Strategic Consulting > Organizational Performance > Enterprise and Business Architecture > Co-Management > Custom solutions > Remote Digital Solutions Center > System Integration > Business Analytics & Machine Learning > Cloud Transition > Agile Development 4

5 BUSINESS SECTORS Banking, Investment and Insurance Transportation Energy Professional services Manufacturing, Retail and Distribution Healthcare Telecommunications Government 5

6 STRATEGY SERVICES Strategic Consulting Enterprise and business architecture Strong Brand Recognition >Governance >Strategic Planning >Digital transformation >Technology Positioning >Enterprise Architecture >Business and Process Architecture >Change Management >Program Management >Investment Management >Risk Management Organizational performance Co-Management Diversified Verticals >Financial services >Government >Technology >Healthcare >Telecommunications >Construction 6

7 ORACLE EBS, EPM, ERP AND ANALYTICS SOLUTIONS Enterprise Management Software (EPM) Strong Brand Recognition Enterprise Resource Planning (ERP) PLATINUM PARTNER Cloud Select North America PLATINUM PARTNER Cloud Select GOLD PARTNER NORTH AMERICA PARTNER Outstanding Achievement in Big Data 100 Most Promising Big Data Solutions Providers Enterprise Business Solutions (EBS) Analytics Diversified Verticals >Consumer Packaged Goods >Manufacturing >Energy >Oil and Gas >Financial Services >Technology >Healthcare 7

8 MICROSOFT ERP, CRM AND BI SOLUTIONS Enterprise Resource Planning (ERP) Strong Brand Recognition 1 3x Microsoft Canada Impact Award Winner Cloud Partner of the Year 20+ Microsoft Partner Awards Customer Relationship Management (CRM) Business Intelligence (BI) Diversified Verticals >Consumer Packaged Goods >Life Sciences >Chemicals >Manufacturing >Professional Services >Distribution >Technology >Financial Services 8

9 CUSTOM SOLUTIONS Remote Digital Solutions Center System Integration and Development Business Analytics Expertise and specializations >AI Analytics >Machine Learning >Comprehensive Data Strategy and Management >Web and cloud computing development Diversified Verticals >Finance, investment and insurance >Energy >Telecommunications >Transportation >JAVA/.Net and Agile communities of practice >DevOps approach >Healthcare >Retail and distribution >Government 9

10 EDGEWATER AND ALITHYA RECENT 6MTH RESULTS ALITHYA 6M Revenue C$ 78.7 M Gross Margin C$ 16.7 M Gross margin (%) 21.2% Adjusted EBITDA C$ 2.7 M EDGEWATER 6M Revenue US$ 51.7 M Gross Margin US$ 19.9 M Gross margin (%) 38.5% Adjusted EBITDA US$ 3.1 M Announced Synergies US$ 2.5 M Pro Forma EBITDA US$ 5.6 M Pro Forma EBITDA C$ C$ 7.4 M COMBINED ALYA + EDGW 6M Pro Forma EBITDA C$ C$ 10.2 M Basic Shares Oustanding 55.6 M 6M Pro Forma EBITDA/Sh. C$ C$0.183 ALITHYA 6Mth Gross Margin improved by C$1.3M, from C$15.3M to C$16.7M From 19.6% to 21.2% Adjusted Operating Expenses, including direct costs, only increased 0.6% EDGEWATER Q3 Non-Consulting Revenue stabilizing 6Mth Gross Margin improved from 37.9% to 38.5% Q3 SG&A Expenses declining See Divisional EBITDA details next page OTHER NOTES 12Mth announced synergies of US$5.0M, or US$2.5M for 6M Adjusted EBITDA is before all non-recurring and non-operational expenses Shares Outstanding reflect recent private placement of C$52.8M Approx. 2.1 M Options O/S 10

11 EDGEWATER S LAST QUARTER (SEPT. 30, 2018) In Thousands US$ EPM Total revenue $ 11,993 $ 12,992 $ 350 $ $ 25,335 Operating income (loss) $ 896 $ 2,067 $ 10 $ (4,191 ) $ (1,218 ) Depreciation and amortization expense $ 446 $ 171 $ $ 10 $ 627 EBITDA $ 1,342 $ 2,238 $ 10 $ (4,181 ) $ (591 ) ERP Classic Segment Segment Consulting Corporate Consolidated EBITDA EPM + ERP $ 3,580 Out of US$4.2M of quarterly corporate expenses (above), our announced synergies are only US$5.0M per year Extracted from EDGW s Sept. 30, Q filing 11

12 EXPECTED COST SYNERGIES US$5M OF IDENTIFIED NEAR-TERM RUN RATE COST AND OPTIMIZATION SYNERGIES (1) Operational Optimization Combined Corporate Overhead > Cost management, efficiency improvements and productivity enhancements across the combined entity s operations > Alithya to absorb Edgewater s current corporate functions including back office human resources, financial, customer relationship management onto one common platform that spans geographies after 6 months > 75%+ of synergies expected to be realized within 6 months of closing (1) > 100% of synergies expected to be realized within 12 months of closing (1) > Non-recurring integration costs of approximately US$3.6M (1) 1) Synergies are estimates based on the current expectations of Alithya and Edgewater. No assurance can be given that the combined company will achieve the expected synergies and Alithya's and Edgewater's expectations may change. See also the disclaimer relating to forward looking statements on page 3 of this presentation. Actual performance of the combined company may differ materially and investors should not rely on this information in making any investment decisions. 12

13 CROSS-SELLING OPPORTUNITIES REVENUE UPSIDE POTENTIAL FROM CROSS-SELLING OPPORTUNITIES Product Cross-Selling Opportunities Pan-North American Platform for Further Growth Breadth of Offering ERP BI / ANALYTICS PROJECT MANAGEMENT STRATEGIC CONSULTING EPM CRM Strategic Partners 13

14 ANNUAL AND MID-TERM FINANCIAL TARGETS NTM Pro forma target (1) Targets for the next 3 to 5 years NTM NET REVENUE TARGET (1) : C$300M - C$320M (NTM GROSS REVENUE TARGET (1) : C$340M - C$360M) NTM ADJUSTED EBITDA TARGET (1) : C$22M - C$24M 2x ADJUSTED EBITDA MARGIN OF 9% - 13% DOUBLE REVENUE BY EXECUTING ITS DISCIPLINED BUILD AND BUY STRATEGY MARGIN EXPANSION DRIVEN BY ECONOMIES OF SCALE AND COMPLEMENTARY VALUE- ADDED SERVICES IN TRADITIONAL AND NICHE MARKETS 1) Next Twelve Months period starts on transaction close of November 1, 2018; Pro forma figures include full year contribution of the combination. Note: Long-term targets are estimates based on the current expectations of Alithya and Edgewater. No assurance can be given that the combined company will achieve the expected long-term targets and Alithya's and Edgewater's expectations may change. See also the disclaimer relating to forward looking statements on page 3 of this presentation. Actual performance of New Alithya may differ materially from these targets and investors should not rely on such targets in making any investment decision. Following exchange rate applied: C$ = 0.78 US$. All numbers in C$. 14

15 A EXPERIENCED EXECUTIVE TEAM Paul Raymond President and CEO > Oversees strategy, organizational development and accelerated growth at Alithya > Recipient of 2016 Entrepreneur of the Year Award from EY Québec in the I.T. category > Held several key senior management positions at a large IT firm > Ran part of a large IT firm U.S. Operations for 11+ years based out of Boston > Member of OIQ and Institute of Corporate Directors > President of the Québec Technology Association Claude Rousseau Chief Operating Officer Robert Lamarre Chief Information Officer > Responsible for the execution of Alithya s strategic plan and leads all business units of Alithya including Québec, Canada and internationally > Strong operational expertise and background in information technology > Held a series of key executive positions at national telecommunication companies > Responsible for the execution of Alithya s strategic plan, digital technology, integration of acquisitions and real estate > Held various senior management positions at a large IT firm over a 20+ year period > Was in charge of the operations for the North East business unit of a large IT firm > Significant acquisition integration expertise Claude Thibault Chief financial officer Nathalie Forcier Chief Legal Officer & Corporate Secretary > Responsible for the execution of Alithya s strategic plan and manages the Company s finances > Strong financial experience with both public and private companies operating in diversified industries in Canada > Held many senior roles for companies in the Technology, Manufacturing and Industrial construction services sectors. > Responsible for the execution of Alithya s strategic plan and legal matters pertaining to business and labour law > Strong expertise in Corporate Law, Mergers & Acquisitions, Securities and Intellectual Property > Held senior legal positions for large technology and IT firms 15

16 INVESTMENT HIGHLIGHTS = 1 ENHANCED VALUE PROPOSITION WITH HIGHLY COMPLEMENTARY EXPERTISE AND BROAD OFFERING ACROSS MULTIPLE VERTICALS AND PARTNERS, INCLUDING BOTH MICROSOFT AND ORACLE PRODUCTS 4 PROVEN CONSOLIDATOR WITH A HISTORY OF SUCCESSFUL EXECUTION AND INTEGRATION OF M&A TRANSACTIONS IN A HIGHLY FRAGMENTED INDUSTRY 2 ATTRACTIVE NEAR-TERM VALUE CREATION THROUGH SIGNIFICANT COST SYNERGIES STEMMING FROM THE OPTIMIZATION OF CORPORATE FUNCTIONS 5 HIGHLY SPECIALIZED SKILLSET AND KNOWLEDGE BASE PROVIDE TAILORED, HIGH-END SOLUTIONS IN BOTH TRADITIONAL AND NICHE MARKETS 3 EXPANDED GEOGRAPHIC PRESENCE WITH PAN NORTH- AMERICAN DELIVERY MODEL PROVIDES FOR AMPLE REVENUE UPSIDE AND CROSS-SELLING OPPORTUNITIES WITH NEW AND EXISTING CLIENTS 6 SEASONED MANAGEMENT TEAM WITH TRACK RECORD OF SUCCESSFUL ORGANIC AND EXTERNAL GROWTH 16

17 THANK YOU!