Enghouse - Corporate Presentation Corporate Overview Q2 FY20 Enghouse - Corporate Presentation Q3 FY 18 Q4 FY 19 1
Forward-Looking Statements Disclaimer Certain statements made in this presentation and the related materials may contain forward-looking statements, which are not historical facts, but are based on certain assumptions and reflect Enghouse’s current expectations. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current These risk factors are identified in Enghouse’s Annual Information Form and other expectations. periodic reports filed with applicable regulatory authorities from time to time. Enghouse disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Market and Industry Data This document contains certain statistical, market and industry data obtained from industry publications and reports. Industry publications and reports generally indicate that information has been obtained from sources believed to be reliable, but do not guarantee the accuracy and completeness of such information. Actual outcomes may vary materially from those forecast in such reports or publications, and the prospect for material variation can be expected to increase as the length of the forecast period increases. While we believe this data to be reliable, market and industry data is subject to variations and cannot be verified with certainty due to limits on the availability and reliability of data. Enghouse has not independently verified any of the third party data referred to in this document. 2
Strategy Two-pronged growth strategy focused on internal growth and acquisitions The Company is organized around two business segments delivering solutions for remote work, visual computing and communications for next generation software defined networks: ➢ Interactive Management Group (“IMG”) ▪ Contact center and Video collaboration ➢ Asset Management Group (“AMG”) ▪ Networks Group providing communication solutions for Telecom service providers and cable operators ▪ Transportation Group providing software solutions for Transit, Public Safety, and Supply Chain Completing selective acquisitions within existing markets and entering new strategic software markets on an opportunistic basis 3
Snapshot HQ in Canada, offices in Toronto Stock Exchange Dual Growth Revenue 25+ countries TSX:ENGH (organic & acquisitions) Enghouse Interactive Enghouse Networks Enghouse Transportation Contact center software Telecom software Transportation software ~1,800 employees Revenue Profitable growth 4
Interactive Portfolio Solutions that transform customer engagement OMNI-CHANNEL CALL RECEPTION/CALL VIDEO INTERACTION CONTACT CENTER HANDLING Healthcare Mid-market Contact Center Mid-market Attendant Console Financial Institutions Enterprise Video Collaboration Enterprise Contact Center Enterprise Attendant Console Cloud Contact Center Cloud Attendant Console AI Powered Social Media Directory Integration Video Enabled Contact Center TELEPHONY, VIDEO & CRM SELF-SERVICE QUALITY MANAGEMENT INTEGRATION AI Powered Multi-channel Self-service Call Billing and Reporting Mobile Self-service Platform Interaction Recording and Analysis CRM Integration Knowledge Management Survey Management Telephony Application Enablement Workforce Management Video Application Enablement AI Powered Business Insights VoiceXML Application Test 5
Networks Portfolio Technology solutions enabling network & digital transformation for 5G operators NETWORK VISUALIZATION NETWORK OPERATIONS Network Inventory, Planning & e.AI Resource Management OSS Geographic Information Systems Performance Management Network Operations Centre Fiber Planning & Design Network Correlation Service Assurance Coverage Portals Customer Care NETWORK MONETIZATION REVENUE GENERATION MVNO Billing Solutions Cloud IPTV Video Solutions IoT Monetization & Billing Wholesale Revenue Management Mobile VAS Consolidation Managing, monetizing & protecting networks in digital transformation 6
Transportation Portfolio Software solutions for Transit, Public Safety, and Supply Chain TRANSIT OPERATIONS COMMUNICATIONS PRIVATE TRANSPORTATION Fixed Route & Demand Response Fixed Route Coach and Tour Operations Management Scheduling & Dispatch Demand Response Driver Management Operator & Fare IVR e-Ticketing Automated Fare Collection PUBLIC SAFETY FLEET MANAGEMENT Emergency Control & Dispatch Logistics Management (1st responders) Order Tracking Non-Emergency Patient Transport Telematics Container Tracking and Monitoring 7
A NNUAL R ESULTS 8
Fiscal Year Results (ending Oct 31) TOTAL REVENUE HOSTED & MAINTENANCE $386m $343m $220m $325m $191m $308m $178m $279m $166m $142m 57% 56% 55% 51% 54% FY 15 FY 16 FY 17 FY 18 FY 19 FY 15 FY 16 FY 17 FY 18 FY 19 ADJUSTED EBITDA DIVIDEND PER SHARE $0.40 ( based on date of record) PER SHARE $0.34 $2.10 $1.94 $0.30 $1.73 $0.26 $1.44 $0.22 $1.30 FY 15 FY 16 FY 17 FY 18 FY 19 FY 15 FY 16 FY 17 FY 18 FY 19 Note¹: Compounded annual growth rate FY15 - FY19 9
Q2 FY20 & YTD 10
Q2 FY20 Q2 FY20 Q2 FY19 % % Q2 FY20 Q2 FY19 Change Change YTD YTD Revenue $140.9m $89.2m $251.6m $175.2m 58.0% 43.5% Revenue - Interactive Management $89.9m $44.5m $152.8m $88.0m 102.0% 73.6% Group Revenue - Asset Management Group $51.0m $44.7m $98.8m $87.3m 14.1% 13.2% Hosted and Maintenance revenue $72.0m $49.5m $136.4m $100.3m 45.6% 36.0% Adjusted EBITDA¹ per diluted share $0.89 $0.49 $1.53 $0.97 81.6% 57.7% $84.6m $53.5m Adjusted EBITDA¹ $49.3m $27.2m 81.3% 58.1% Dividend - per common share, based on date of $0.11 $0.09 $0.22 $0.18 22.2% 22.2% record Cash (received)/spent on acquisitions - net of ($1.2m) $3.2m $48.2m $26.7m (139.0%) 80.8% cash acquired & holdbacks Cash & Investments balance - end of period $168.1m $205.5m $168.1m $205.5m (18.2%) (18.2%) Operating cash flow - before working capital $50.0m $29.0m $85.2m $56.1m 72.5% 51.8% adjustments Note¹: Adjusted EBITDA: Results from operating activities adjusted for depreciation of PE and ROU assets and special charges for acquisition related restructuring costs. 11
Quarterly Results REVENUE HOSTED & MAINTENANCE REVENUE $ millions $ millions $160 $80 $140 $70 $120 $60 $100 $50 $80 $40 $60 $30 $40 $20 $20 $10 $0 $0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY 17 FY 18 FY 19 FY 20 FY 17 FY 18 FY 19 FY 20 DIVIDEND PER SHARE ADJUSTED EBITDA PER SHARE (based on date of record ) $1.00 $0.14 $0.90 $0.80 $0.12 $0.70 $0.10 $0.60 $0.08 $0.50 $0.40 $0.06 $0.30 $0.04 $0.20 $0.02 $0.10 $- $0.00 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY 17 FY 18 FY 19 FY 20 FY 17 FY 18 FY 19 FY 20 12
Acquisition Strategy Established track record of value creation through acquisitions To consistently generate positive operating cash flows to fund further growth, drive shareholder value while minimizing shareholder dilution Economic factors are favorable for acquisitions especially for small- cap companies Target companies in the $5m - $50m revenue range preferably with strong recurring revenue ▪ Geographic, product or scale expansion ▪ Mission critical solutions ▪ High barriers to entry Objective is for a cash on cash payback within 5 - 6 years 13
Recent Acquisitions CAPANA VIDYO EPTICA Q1 FY 19 Q3 FY 19 Q4 FY 19 DIALOGIC TELEXIS PROOPTI ESPIAL Q1 FY 20 Q1 FY 19 Q2 FY 19 Q3 FY 19 SWEDEN USA FRANCE USA NETHERLANDS SWEDEN CANADA 14
T HANK Y OU ! 15
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