We do what we say we will do.

Transcription

1 We do what we say we will do. Investor Presentation March

2 Forward-Looking Statements Certain statements in this document are forward-looking statements, which reflect management s current beliefs and expectations regarding the DATA Group s future growth, results of operations, performance, and business prospects and opportunities. Forward-looking statements involve risks and uncertainties related to factors that could cause actual results to differ materially from anticipated results, including those factors discussed in the DATA Group s periodic filings with Canadian securities regulatory authorities. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forwardlooking statements prove incorrect, actual results may vary materially from those described in this document. Unless required by applicable securities law, the DATA Group does not intend and does not assume any obligation to update these forwardlooking statements. 2

3 Agenda DATA s Strategic Growth Plan Q4 & YTD Results Dividends Value proposition and capabilities Industry Dynamics The data supports our growth plan Social Responsibility Investor Highlights Summary 3

4 DATA at a glance DATA s Strategic Growth Plan Launched February 2011 Our Goals In 2011 stabilize financial results. In 2012 begin sustainable growth in the markets we have defined; Document Management Marketing Communications Expansion into the U.S. with existing clients In 2013 and beyond, grow Adjusted EBITDA through revenue growth and increased cost savings. Pay a sustainable common share dividend of 40% - 60% of free cash flow. In 2013 this represents $0.30 per share on an annualized basis. 4

5 DATA S DATA s Growth Plan Plan Launch New Products and Services Through greenfield start up as well as acquisitions Acquisitions will be immediately accretive In the areas of electronic communication, digital print and outsourcing services for Document Management and Marketing Communications Leverage our current assets to sell the new products and services; Strong blue chip customer relationships National presence Experience with developing customized solutions New products and services generally require less capital cost than traditional printing 5

6 DATA S Growth Plan Strong DATA at Core Fueling a glance New Growth Continuous Improvement in our core business Aggressive sales effort to win market share Winning new business ~ $20 million annually Stable customer relationships Due to our strong customer service ( We do what we say we will do ) and the critical nature of our service 6

7 DATA S Growth Plan Strong DATA at Core Fueling a glance New Growth Relentless Cost Savings Achieved savings of ~ $4 - $5 million annually from 2009 to Intend to increase this rate of savings, beginning in Multi-year plan to reduce costs in all aspects of our business, partially offset by investment in our growth strategy. 7

8 DATA S Growth Plan New Mission Statement DATA is a communications management company. We excel by providing exceptionally innovative and reliable marketing and document management solutions in electronic and print media. We begin by understanding our client s needs. Then we combine our talented people and progressive technology to provide solutions that grow revenue, reduce costs and avoid risk. 8

9 Results of the Strategic Growth Plan 9

10 Financial Results Early growth plan was implemented Revenue and Adjusted EBITDA stabilized in Revenue and gross profit grew in 2012, while Adjusted EBITDA declined due to investment in our growth strategy. 10

11 New Talent to Support Growth Significant change in Senior Management to support the growth strategy New Chief Executive Officer New VP Sales and Marketing (DATA East division) New Chief Information Officer New VP of Digital and Direct Marketing New VP, Strategic Services (DATA East division) New VP, Digital Print Operations & Marketing Campaign Management New VP, Document Process Management 11

12 New Products and Services Web Based Direct Marketing Launched September 2011 Direct Marketing via , web pages, mobile messaging. Creative design and copy writing services for marketing programs. Compliments our existing direct mail services. Steady growth in sales volume since inception. 12

13 New Products and Services FSA Group and FSA Datalytics Acquired November 2011 Acquired The Fulfillment Solutions Advantage Inc. ( FSA ) Markham, Ontario based direct marketer. Focused on digitally printed direct mail, fulfillment and related call center services. Acquired a 70% (now 82.35%) interest in FSA Datalytics Canada Inc. ( Datalytics ) Provides data analysis services for smart direct marketing programs (i.e., predictive purchasing behaviour of consumers, social media monitoring of marketing programs, etc.). Helps direct marketing programs send relevant, effective marketing offers to consumers who are most likely to respond positively., Expands DATA s marketing communications services and fits well with our web based direct marketing and creative design services. $19.4 million in annual revenue 13

14 New Products and Services Document Process Management Launched September 2012 Outsourcing of document intensive business functions from our customers to DATA. New revenue opportunity for DATA by adding services that address entire document lifecycle. Workflow automation, call center services, scanning, archiving and storage of completed documents. Excellent fit with current Document Management Services offering and customer base. Research indicates strong demand and future category growth. Low capital expenditure requirements. First clients won and sales funnel expanding. 14

15 New Products and Services Marketing Campaign Management Launched October 2012 Software that automates marketing campaign planning and development. This creates collaborative workflow between our clients, their advertising agencies, and fulfillment of the campaign by DATA. New revenue opportunity for DATA by adding services that address entire marketing campaign workflow. Makes our client s more competitive by helping create more effective campaigns, faster campaign development and by reducing their costs. Excellent fit with current product/service offering and customer base. Research indicates strong demand and future category growth. Low capital expenditure requirements. First client won. 15

16 New Products and Services Managed Business Communications Services Launched Q All of DATA s new products and services, bundled together with our traditional print management services, into a comprehensive offering. Delivers cost reduction and revenue enhancement for our clients. Marketed as a single source, multi-year outsourcing solution. Addresses management of administrative documents and marketing communications requirements of our clients. Creates expanded, consultative, long term relationship between DATA and existing clients in areas that are aligned with our growth strategy. Low capital expenditure requirements. Several significant client wins in 2012 that will impact

17 U.S. Expansion U.S. expansion with selected existing clients Launched Q Expand relationship with existing clients who have U.S. operations by offering our Managed Business Communications Services on a North American basis. Allows DATA to expand into the U.S. with the support of multi-year, single sourcing agreements with known clients. Provides a solution for our clients that addresses their broader business needs all of North America. Low capital expenditure requirements. First client won and implemented. This is a large Canadian financial institution with significant U.S. operations. DATA established a location in the Chicago area and began shipments to locations across the U.S. 17

18 C$ Millions 2012 Financial Results Q4 Revenue decreased 3% vs Revenue Q Q Q

19 C$ Millions Financial Financial Results Results 2012 revenue increased 1.3% vs Revenue

20 C$Milllions 2012 Financial Results Q4 Gross Profit up 3% vs Q4 Gross Profit Q Q

21 C$ Millions Financial Results 2012 Gross Profit up 4.5% vs Gross Profit

22 C$Millions 2012 Financial Results Q4 Adjusted EBITDA increased 5.1% Q4 Adjusted EBITDA Q Q

23 C$ Millions Financial Results Results 2012 Adjusted EBITDA decrease due to investment in our growth strategy, partially offset by increased Gross profit Adjusted EBITDA Q Q

24 2012 Financial Results Results Balance Sheet Selected Balance Sheet Information Dec. 31, 2012 (C$ millions) December 31, 2011 (C$ millions) Cash & Equivalents Net Working Capital Revolving Bank Facility Convertible Debentures Total shareholder/unit holder equity Senior Debt/Adjusted EBITDA ratio of 1.96 at December 31,

25 Dividends Dividends Dividend of $0.30 (annualized value) as of January 1, 2013 Our recent dividend change is intended to create an improved balance between our strategic financial goals and ultimately, to drive investor value; Continue to invest in the growth strategy as we have in 2011 and Reduce debt to achieve a healthier and more sustainable balance sheet. Be positioned to make strategic acquisitions. Maintain a dividend payout to our shareholders over the longer term that is between 40% and 60% of free cash flow. Dividend will be paid quarterly beginning in Monthly dividend of $ was paid for Q4,

26 Value Proposition and Capabilities 26

27 Value Proposition Customer Value Proposition DATA offering Document Management solutions Marketing Communications Stable operational and financial platform Managed Business Communications Services Customer Value Reduce costs Build revenue Avoid risk All of the above Market Differentiation Superior economic value delivered in terms of cost saving and revenue enhancement for our clients. DATA s range of products and services, and geographic scope of services, are the key drivers of this. Outstanding customer service; on time, full delivery of promises made. We do what we say we will do. 27

28 Value Proposition Strong Document Management Market Position Over $150 million in annual Document Management revenue We provide services for the total document lifecycle Destruction Archiving (paper or electronic) Destruction Archiving (paper or electronic) Data entry / extraction Filing (paper or electronic) Scanning Data entry / completed documents extraction Scanning Mailing completed documents Send for approval or filling Mailing out Filling out Send for approval or filling out Filling out Printing Printing Creative / Design Document Creative prep and / review Design Document Administrative prep costs and review Administrative Warehousing / costs Archiving Warehousing Fulfillment / / Archiving Distribution Inventory Fulfillment / obsolescence Distribution Inventory obsolescence 28

29 Value Proposition Strong Marketing Communications Market Position Approximately $70 million in annual Marketing revenue We provide services for the total direct marketing and marketing promotional print lifecycle. Creative Design and Copy Marketing Campaign Management Call Center Services MARKETING Consumer & Social Media Data Analysis Fulfillment Fulfillment Printed Marketing Material E-Marketing web pages, , mobile 29

30 Value Proposition Blue Chip Customers Multi-year, multi-product contractual relationships Majority of top 25 customers > 10 year relationships No single customer > 10% of our total revenue 30

31 Value Proposition Strong Core Strong current product mix to leverage industry growth areas DATA s Product Mix aligns with industry growth areas: (see slide for industry data) Labels Digital Marketing Solutions Digital Document Management Document Process Outsourcing 31

32 Industry Dynamics Research data supports our strategic plan 32

33 Industry Dynamics Evolving to blended digital & paper solutions, professional services and document outsourcing Increase in digitization Blending electronic and paper based solutions Increase in Professional Services Document Management technology solutions Marketing Services (content management, data analysis, creative design, program management) Increase in outsourcing of document related functions In-house printing, graphic design, scanning, archiving, call centers Decline in long run printed products Phone books, newspapers, catalogues, magazines, forms Sources: Infotrends: U.S. Document Outsourcing Market Forecast (November 2010) Infotrends: Evolution of Document Process Outsourcing (February 2011) 33

34 Industry Dynamics There s growth if you know where to look! E-marketing growing 20% Outsourcing of document related processes growing 14.5% Digital colour printing growing 9% Data and content management growing 5.2% Pressure sensitive labels growing 4.8% Document print outsourcing growing 2.2% Direct mail growing 2% Sources: Kodak: Canadian Media Directors Council Media Digest, Statistics Canada Infotrends: U.S. Document Outsourcing Market Forecast (November 2010) Infotrends: Evolution of Document Process Outsourcing (February 2011) Converting Quarterly: AWA Label Release Liner Industry (September 2010) 34

35 Industry Dynamics Opportunity for the right companies Customers are seeking help with increasingly complex, blended electronic and paper options Opportunity for trusted, innovative, single-source providers to expand Add new products and services for existing clients Take market share from slower moving competitors Sources: Infotrends: U.S. Document Outsourcing Market Forecast (November 2010) Infotrends: Evolution of Document Process Outsourcing (February 2011) 35

36 Social Responsibility We are committed to employment equity We are committed to the environment We are committed to maintaining a safe workplace We support charities in our communities For more information on our programs visit 36

37 Investor Highlights Summary Strategic Growth Plan Grow profitability through revenue growth and cost reduction. Revenue growth fueled by; new product development, bundled solutions, selective U.S. expansion, acquisitions. Cost reduction program launched in late 2012 that accelerates the rate of cost reduction compared to the previous three years. Moderate cap-ex requirements. Revised Financial Strategy for 2013 $0.30 annual dividend for 2013, paid quarterly. Longer term policy to pay 40% - 60% of free cash flow in common share dividends. Reduce debt. TSX symbols Shares: DGI million shares outstanding Debentures: DGI.DB.A 37

38 For more information: Michael Suksi PRESIDENT AND CEO Paul O Shea CFO poshea@datagroup.ca TSX symbols: DGI (shares) and DGI.DB.A (debentures) 38

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