Corporate Presentation

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1 Corporate Presentation November 2018 THE FUTURE OF TRUCKING

2 Company Overview Leading Technology-Infused Transportation Company Value Proposition & Business Description Technology is transforming the transportation industry and Titanium will continue to be at the leading edge of this modernization Disruption in the industry will allow for significant consolidation; Titanium has a proven M&A track record Trucking (asset based ~60%) and Logistics (brokerage ~40%) businesses operate mainly out of Bolton with additional terminals throughout Ontario Mainly truckload business servicing manufacturers and raw material suppliers, US cross-border and domestic shipping (~65/35), fleet of ~450 power units and 1,500 trailers Shareholder Detail Financial Snapshot Stock Ticker Market Capitalization 1 Enterprise Value 2 Revenue Run Rate 3 EBITDA Run Rate 3 Share Price History TSXV:TTR $58.6 million $104.8 million $180 million $20 million Current 1 : $1.60 Employees hold a significant number of shares within the Other Institutional & Retail category, showing stakeholder alignment 1. Based on closing share price on November 7, Enterprise value is defined as market capitalization plus net debt. Net debt is defined as bank indebtedness, loans payable, finance lease liabilities, net of cash, finance lease receivables and assets held for sale. 3. Indicative of current size of the Company, not to be interpreted as a projection. Does not take into account potential organic or acquisition growth. 2

3 Management Team Diverse Backgrounds with Information Technology and Continuous Improvement Focus 2002 Founded as a logistics broker 2005 Purchased first truck 2007 Zzen Group makes private equity investment 2015 Commenced trading on the TSX-V 2016 Moved into new head office 2017 Implemented share purchase plan Ted Daniel Founder & CEO Kasia Malz CFO Marilyn Daniel Founder & COO Co-founder of Titanium, along with COO, Marilyn Daniel Background in both computer science and finance allow for the effective integration of the Company s IT and financial growth strategy 10 years prior experience in turnarounds and restructurings provide for Titanium s effective M&A integration process CPA, CA with a BA (Computer Science) and Honours BA (Business and Administrative Studies) from York University Involved with Titanium since the start of its M&A strategy (2011), joined as CFO to take Titanium public (2014) Background in valuations, tax and due diligence allow for quality acquisition selection Background in computer programming, financial control systems and financial reporting provide for advanced analytics, streamlining of accounting processes and strong internal controls CPA, CA with a Masters of Accounting and Honours Bachelor of Mathematics from the University of Waterloo Co-founder of Titanium with 15 years experience in the trucking industry Detailed process focus and depth of trucking experience provides for superior safety and driver retention standards and thorough acquisition analysis and integration Serves on the board of directors of the Ontario Trucking Association (OTA) and on the Northbridge Insurance Best Practices Council and has completed her NATMI Director of Safety Certification from the University of Florida and level II of the CITT logistics management program Holds an Honours BA from the University of Toronto 3

4 Customers and Geography Diversified Customer and Industry Base Bracebridge Sudbury North Bay Bolton Brockville Napanee Trenton Brantford Windsor >70% of freight is shipped within the shaded 500mi radius Head Office Other Terminals Parking Yards Diversified customer base of over 1,000 4

5 Short Term Outlook Increasing Demand, Decreasing Supply Strong Rate Environment Strong PMI 1 is closely correlated with Titanium cross border demand for truckload freight US Canada freight flows increased by 2.4% between August 2017 and August Trucking volumes are expected to grow at an average of 2.2% per year between 2019 and and to a total industry tonnage size of 21.7 billion in 5 years Driver shortage in the industry has continued to increase with no viable short term solution 4 US electronic logging device ( ELD ) mandate decreased capacity by an estimated 2.5% 5 during 2018; Canadian ELD mandate to be effective end of 2019 FTR continues to predict year over year rate improvements and a positive trucking environment into The Institute for Supply Management s Purchasing Managers Index ( PMI ) indicates whether the manufacturing economy is expanding or contracting. A reading above 50 percent indicates the manufacturing economy is generally expanding. 2. Source: Bureau of Transportation Statistics, TransBorder Freight Data 3. Source: ATA Freight Transportation Forecast 2017 to See chart on bottom left. Source: FTR Transportation Intelligence November 2018 Trucking Update 5. Source: FTR Transportation Intelligence 5

6 Secular Changes Long term Disruption is coming to the Trucking Industry Increasing Barriers to Entry Customer demands are increasing, requiring a greater need for technology: greater demand for information, increasing requirements for just-in-time deliveries, broader integration into supply chain (blockchain technology) Regulatory environment is more challenging, making it difficult for smaller carriers to continue: electronic logging devices (ELDs), more stringent driver training standards (MELT), increased security and regulation at the border Insurance underwriters leaving trucking, making it more difficult to start-up: customer insurance requirements are increasing, driver scarcity making safety standards more difficult to maintain, cost of insurance/claims increasing Equipment costs are rising and will continue to rise with the development of new technology: electric trucks, anticollision and lane departure technology, gap control and platooning systems, autonomous trucks Titanium s sophisticated IT systems and innovative team allow for the development of creative customer solutions Titanium s in-depth knowledge of relevant regulatory requirements allow for effective planning of operational improvements Titanium s strong safety record and top quality drivers allow for superior and cost effective insurance with minimal claims and risk Titanium s borrowing power and superior asset utilization allow for a young fleet and investment in the newest technology Titanium Thrives On Disruption 6

7 Financial Growth Titanium Invested at a time when many carriers Divested Revenue Growth (C$ millions) EBITDA Growth (C$ millions) CAGR 1 of 32.5% CAGR 1 of 46.9% Weaker industry conditions in 2016/2017 resulted in slower growth but allowed Titanium to strategically align itself: Titanium implemented an employee and driver share purchase plan and enhanced recruiting processes to further improve leading industry driver retention and allow for significant organic growth Titanium invested in new equipment and BlackBerry radar tracking technology to allow for improved EBITDA margins through reduced repair and fuel costs and improved equipment utilization Titanium moved into new larger head office to allow for Logistics salesforce growth and Trucking M&A growth Titanium augmented its management team, which will allow the company to easily double in size Titanium developed new analytical tools that allow for better and faster decision making Titanium invested in new IT infrastructure and technology to allow for further efficiencies and enhanced security 1. CAGR excludes 2018 run rate 7

8 Consolidation Opportunities Transportation is Ripe for Consolidation I Increasing barriers to entry are making it more difficult for smaller carriers to compete II In Canada, there are over 65,000 asset-based trucking companies, 41.1% of which are in Ontario 1 III The top 100 carriers in Canada make up less than 6% of all trucks in Canada 2 IV 97.3% of US trucking companies operate fewer than 20 trucks 3 V There were 284 global transportation M&A deals in 2017 (total deal value of $126 billion) 4 VI Titanium has a proven track record of M&A (10 acquisitions in 7 years) 1. Source: Transport Canada, Transportation in Canada 2016 Comprehensive Report 2. Source: Transport Canada, Transportation in Canada 2016 Comprehensive Report and Today s Trucking 3. Source: US Department of Transportation 4. Source: PWC 8

9 M&A History and Criteria Proven Track Record of Consolidation and Expansion April 2011: Acquired Flexmor Industries ($13mm revenue) Feb. 2013: Acquired Flatliners Express ($3mm revenue) April 2013: Acquired Gary Jackson Transport ($4mm revenue) Sept. 2013: Acquired JTS Inc. ($11mm revenue) Asset Characteristics Valuation Criteria Good tangible value/price ratio Van or flatbed carriers, full truckload and with hard assets Located in Ontario or Eastern/Mid US Historical growth, customer concentration, quality of rates/drivers, age of equipment Synergistic and/or new customer base and/or geographic location 2014 July 2014: Acquired Cain Express ($9mm revenue) Oct. 2014: Acquired Georgian Bay Transport ($4mm revenue) What Titanium will NOT buy Brokerages Bad tangible value/price ratio, high amounts of goodwill Higher risk of revenue loss following acquisition 2015 March 2015: Acquired Muskoka Transport ($30mm revenue) Dec. 2015: Acquired ProNorth Transportation ($10mm revenue) 2016 June 2016: Acquired the Windsor Terminal 2017 Oct. 2017: Acquired Xpress Group ($15mm revenue) Acquisition Valuation Metrics Acquisition Consideration Adjusted net book value (retained earnings) plus assumption of rolling stock debt Adjusted EBITDA valuation multiple Historical acquisition multiple range of 3.5x 5.0x adjusted EBITDA Equity component preferred to ensure vendor alignment Balance mixture of cash, earn-outs, vendor take-back loans (VTBs), and promissory notes Assumption of equipment debt 9

10 Technology Partners Investing in the Future Superior asset utilization Optimized and customized reporting Proactive maintenance Improved trip planning and logistics 10

11 Titanium Strategy Building a $500+ Million Revenue Company Continue to invest in infrastructure and talent to create sustainable growth Broaden customer base and geographic reach through M&A strategy Leverage improving IT capabilities to remain on the leading edge of innovation BUILD A $500+ MILLION REVENUE COMPANY 11

12 We re Going Places