Data Communications Management Corp. · TSX:DCM
Data Communications Management — Q1 2013 Earnings Presentation
36 slides from Data Communications Management's earnings presentation, May 2013
Slide 1: We do what we say we will do
We do what we say we will do. We do what we say we will do. 1 Investor Presentation May 2013
Slide 2: Forward-Looking Statements
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 stateme
Slide 3: Agenda
Agenda DATA’s Strategic Growth Plan Q1 Results Dividends Value proposition and capabilities Industry Dynamics – The data supports our growth plan Social Responsibility Investor Highlights Summary We do what we say we will do. 3
Slide 4: DATA's Strategic Growth Plan
DATA…at a glance DATA’s Strategic Growth Plan Launched February 2011 Our Goals In 2011 stabilize financial results. In 2012 began sustainable growth in the markets we have defined; • Document Management • Marketing Communications • Expansion into the U.S. with existing clients In 2013 and beyond, gr
Slide 5: DATA's Growth Plan: Launch New Products and Services
DATA’S DATA’sGrowth Plan Growth 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 Communicatio
Slide 6: Strong Core Fueling New Growth
DATA’S Growth Plan Strong Core…Fueling DATA…at 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”)
Slide 7: Relentless Cost Savings
DATA’S Growth Plan Strong Core…Fueling DATA…at a glance New Growth Relentless Cost Savings Achieved savings of ~ $4 - $5 million annually from 2009 to 2012. Intend to increase this rate of savings in 2013. • Multi-year plan to reduce costs in all aspects of our business, partially offset by investme
Slide 8: New Mission Statement
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 peop
Slide 9: Results of the Strategic Growth Plan
Results of the Strategic Growth Plan We do what we say we will do. 9
Slide 10: Financial Results
Financial Results Early 2011 - growth plan was implemented Revenue and Adjusted EBITDA stabilized in 2011. Revenue and gross profit grew in 2012, while Adjusted EBITDA declined due to investment in our growth strategy. We do what we say we will do. 10
Slide 11: New Talent to Support Growth
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,
Slide 12: New Products and Services: Web Based Direct Marketing
New Products and Services Web Based Direct Marketing – Launched September 2011 Direct Marketing via email, 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. We d
Slide 13: New Products and Services: FSA Group and FSA Datalytics
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%) inte
Slide 14: New Products and Services: Document Process Management
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, sc
Slide 15: New Products and Services: Marketing Campaign Management
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 f
Slide 16: New Products and Services: Managed Business Communications Services
New Products and Services Managed Business Communications Services – Launched Q4 2012 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 a
Slide 17: U.S. Expansion
U.S. Expansion U.S. expansion with selected existing clients – Launched Q4 2012 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,
Slide 18: 2013 Financial Results: Q1 Revenue
2013 Financial Results Q1 Revenue decreased 4.4% vs. 2012 Revenue Q1 100.0 75.0 C$ Millions 50.0 86.7 82.9 25.0 0.0 Q1 2012 Q1 2013 We do what we say we will do. 18
Slide 19: 2013 Financial Results: Q1 Gross Profit
2013 Financial Results Q1 Gross Profit decreased 6.5% vs. 2012 Q1 Gross Profit 30.0 C$Milllions 20.0 10.0 23.2 21.7 0.0 Q1 2012 Q1 2013 We do what we say we will do. 19
Slide 20: 2013 Financial Results: Q1 Adjusted EBITDA
2013 Financial Results Q1 Adjusted EBITDA decreased due to investment in our growth strategy. Q1 Adjusted EBITDA 9.0 7.0 C$Millions 5.0 7.7 7.4 3.0 1.0 Q1 2012 Q1 2013 We do what we say we will do. 20
Slide 21: 2013 Financial Results: Balance Sheet
2012 2013Financial FinancialResults Results Balance Sheet March 31, 2013 December 31, 2012 Selected Balance Sheet Information (C$ millions) (C$ millions) Cash & Equivalents - - Net Working Capital 42.78 43.75 Revolving Bank Facility 55.62 57.55 Convertible Debentures 42.40 42.31 Total shareholder/un
Slide 22: Dividends
Dividends Dividends Dividend of $0.30 (annualized value) as of January 1, 2013 Our dividend policy is intended to create a 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 2012. • Reduce debt to
Slide 23: Value Proposition and Capabilities
Value Proposition and Capabilities We do what we say we will do. 23
Slide 24: Value Proposition
Value Proposition Customer Value Proposition DATA offering Customer Value Document Management solutions Reduce costs Marketing Communications Build revenue Stable operational and financial platform Avoid risk Managed Business Communications Services All of the above Market Differentiation Superior e
Slide 25: Strong Document Management Market Position
Value Proposition Strong Document Management Market Position Over $150 million in annual Document Management revenue We provide services for the total document lifecycle Destruction Printing Archiving (paper or electronic) Creative / Design Destruction Printing Archiving Document (paper or electroni
Slide 26: Strong Marketing Communications Market Position
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 Marketing Design and Campaign Copy Management Call Center Consumer & Services
Slide 27: 'Blue Chip' Customers
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 We do what we say we will do. 27
Slide 28: Strong Core: Product Mix Leverages Industry Growth
Strong Core Value Proposition Strong current product mix to leverage industry growth areas DATA’s Product Mix aligns with industry growth areas: (see slide 29 - 32 for industry data) Labels Digital Marketing Solutions Digital Document Management Document Process Outsourcing We do what we say we will
Slide 29: Industry Dynamics
Industry Dynamics Research data supports our strategic plan… We do what we say we will do. 29
Slide 30: Evolving to Blended Digital & Paper Solutions
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 manageme
Slide 31: There's Growth If You Know Where to Look
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% Direc
Slide 32: Opportunity for the Right Companies
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
Slide 33: Social Responsibility
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 www.datagroup.ca We do what we say we will do. 33
Slide 34: Investor Highlights Summary
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 o
Slide 35: For more information
For more information: Michael Suksi PRESIDENT AND CEO 905.494.4006 [email protected] Paul O’Shea CFO 905.494.4002 [email protected] www.datagroup.ca TSX symbols: DGI (shares) and DGI.DB.A (debentures) We do what we say we will do. 35
Slide 36: We do what we say we will do
We do what we say we will do. We do what we say we will do. 36
DATA Communications Management — Q1 2013 Earnings Presentation on 6ix