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I N V E S T O R P R E S E N T A T I O N Q1 2012 Profile Leading - PowerPoint PPT Presentation

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I N V E S T O R P R E S E N T A T I O N Q1 2012 Profile Leading provider to financial services industry 1,200 North American bank and credit union customers Value Five technology-enabled platforms Approx. 90% recurring

  1. I N V E S T O R P R E S E N T A T I O N Q1 2012

  2. Profile  Leading provider to financial services industry  1,200 North American bank and credit union customers Value  Five technology-enabled platforms  Approx. 90% recurring revenue I N V E S T O R P R E S E N TAT I O N Q 1 2 0 1 2 2

  3. Profile Broad Enabling Solutions Where We Help How We Help Payment Solutions Client Service Loan Registration Revenue Generation & Recovery Efficiency Loan Servicing Productivity Lending Technology Compliance Business Service Solutions I N V E S T O R P R E S E N TAT I O N Q 1 2 0 1 2 3

  4. Strengths TRUST  Trusting customer relationships  Serve customers´ customers  Diversified revenue, long-term contracts with high renewal rates Top 100 global financial  #1 market positions technology providers  Proven technological capabilities  Specialized skill sets include M&A  Long-term track record I N V E S T O R P R E S E N TAT I O N Q 1 2 0 1 2 4

  5. Lending Technology Services # 1 in Canada # 1 in Select U.S. Markets Growth Drivers Growth Drivers  Mortgage activity Channel adoption   Expansion in retail Multi-channel adoption  and commercial lending channels  Market penetration New on-line offerings  $187B $120B annually annually I N V E S T O R P R E S E N TAT I O N Q 1 2 0 1 2 5

  6. Loan Servicing # 1 in Canada Growth Drivers  Student loans  Geographic expansion $18B portfolio 1.6M students  Professional services I N V E S T O R P R E S E N TAT I O N Q 1 2 0 1 2 6

  7. Loan Registration and Recovery Services # 1 in Canada Growth Drivers  Vehicle loans  Customer adoption  Customer penetration 3 million+ annual transactions  Evolving business model  Connectivity services I N V E S T O R P R E S E N TAT I O N Q 1 2 0 1 2 7

  8. Payment Solutions # 1 in Canada Growth Drivers  Enhancement services  New account 20 million accountholders openings I N V E S T O R P R E S E N TAT I O N Q 1 2 0 1 2 8

  9. Business Service Solutions Leading Position Growth Drivers  Consumer activity  Customer programs 2.5 million insurance claims annually I N V E S T O R P R E S E N TAT I O N Q 1 2 0 1 2 9

  10. Profile Increasing Revenue Diversification 2011 1 2006 $318.0M $724.7M 40% 90% 5% 22% 15% 10% 18% Payment solutions Loan registration & recovery services Recession-resistant Loan servicing Lending technology services Business service solutions 1. Revenue for 2011 is pro forma: includes revenue of Asset and Mortgagebot as if part of D+H at the start of 2011. I N V E S T O R P R E S E N TAT I O N Q 1 2 0 1 2 10

  11. A High Degree of Recurring Revenue Revenue $ Sharing Long-term Contracts Customer Value Subscription Fees I N V E S T O R P R E S E N TAT I O N Q 1 2 0 1 2 11

  12. Growth Plan  Maintain “Follow Your Customer” strategy  Grow market leadership while Shareholder and continuing strategic Customer diversification Value  Drive efficiency I N V E S T O R P R E S E N TAT I O N Q 1 2 0 1 2 12

  13. Organic Growth: Payment Solutions I N V E S T O R P R E S E N TAT I O N Q 1 2 0 1 2 13

  14. Organic Growth: Lending Technology  85+ new customers since acquisition  Strong and expanding margins  6,000 community banks (16% share currently) I N V E S T O R P R E S E N TAT I O N Q 1 2 0 1 2 14

  15. Acquisition Strategy Platform Tuck-under Provide immediate scale Extend capabilities in existing areas I N V E S T O R P R E S E N TAT I O N Q 1 2 0 1 2 15

  16. Most Recent Acquisition  Profitable and growing business  Leading provider of cloud-based loan origination solutions (LOS)  150 community banks and credit unions Mortgagebot Avista Loan Point Of Origination Consumer Bank Sale Solutions Recurring subscription based fees I N V E S T O R P R E S E N TAT I O N Q 1 2 0 1 2 16

  17. US Mortgage Value Chain Consumer • Ability to capture information on the borrower • Multi-channel capability • Provide product selection based on borrower needs Point of Sale POS • Calculate state and local fees “light” • Data validation to ensure application quality • Presents compliance disclosures required at application • Connection to credit providers for credit scoring • Underwriting – connection to Fannie/Freddie • Required documentation tracking Loan Processing • Product/pricing/eligibility engine • Order third party services (appraisals, flood, title LOS insurance) • Document imaging Final underwriting • Document validation • Closing documents created Closing • Scheduling of closing activity Secondary markets • Secondary markets pipeline management (e.g. what rate commitments are 60 days out) Compliance • Manages compliance with HMDA and other regulations Integration • Integration with back end core service providers • Post-closing tracking Secondary markets I N V E S T O R P R E S E N TAT I O N Q 1 2 0 1 2 17

  18. New Strategic Investment Community Bank Community Bank Virtualized Community Applications Bank I N V E S T O R P R E S E N TAT I O N Q 1 2 0 1 2 18

  19. Powerful Combination POS LOS Infrastructure 1,000+ 150 300 customers customers customers 6,000+ Community Banks and Credit Unions I N V E S T O R P R E S E N TAT I O N Q 1 2 0 1 2 19

  20. Partnering Strategy Partner Selectively To… D+H Capabilities Domain  Expand best-in-class Expertise Knowledge capabilities SaaS LOS-POS  Augment global delivery Recovery services Mortgages capacity Hosting of services Credit cards  Achieve offshore Early stage collection Student loans economics Document processing Lien registration Software development Cheque program  Supplement application development Technology integration Commercial credit I N V E S T O R P R E S E N TAT I O N Q 1 2 0 1 2 20

  21. Financial Review Solid performance, strategic advancement I N V E S T O R P R E S E N TAT I O N Q 1 2 0 1 2 21

  22. Expanding Performance Annual Revenue Quarterly Revenue ($ millions) ($ millions) 17.9% CAGR 800 724.7 181.6 169.5 700 600 500 400 300 200 100 0 1 1 05 06 07 08 09 10 11 Q1 2011 Q1 2012 US segment 1. Calculated under IFRS; previous periods under Canadian GAAP I N V E S T O R P R E S E N TAT I O N Q 1 2 0 1 2 22

  23. Q1 Canadian Segment Revenue $ millions Payment solutions 74.8 Loan registration & 38.0 recovery services Loan servicing 34.1 Lending technology 14.5 services Business service 8.6 solutions I N V E S T O R P R E S E N TAT I O N Q 1 2 0 1 2 23

  24. Cost Management Consolidated Expenses ($ millions) 140.8  Cost increased year-over-year 132.0 with addition of Mortgagebot  Includes spending on efficiencies, process realignment, product redesign  Transformational costs dissipating as year unfolds Q1 2011 Q1 2012 I N V E S T O R P R E S E N TAT I O N Q 1 2 0 1 2 24

  25. Expanding Performance Quarterly Adjusted EBITDA 1 Annual Adjusted EBITDA 1 ($ millions) ($ millions) 14.8% CAGR 200 181.2 41.6 39.3 150 100 50 0 2 2 Q1 2011 Q1 2012 05 06 07 08 09 10 11 US segment 1. Adjusted EBITDA is a non-IFRS term (see Appendix C). 2. Calculated under IFRS; previous periods under Canadian GAAP. I N V E S T O R P R E S E N TAT I O N Q 1 2 0 1 2 25

  26. Profitability Measures Quarterly Adjusted Net Income 1 Annual Adjusted Net Income 1 ($ per share) ($ per share) 1.8994 2.00 0.4275 0.3709 1.50 1.00 0.50 0.00 2 2 07 08 09 10 11 Q1 2011 Q1 2012 1. Adjusted Net Income and Adjusted Net Income Per Share are non-IFRS terms (see Appendix C). 2. Calculated under IFRS; previous periods under Canadian GAAP. I N V E S T O R P R E S E N TAT I O N Q 1 2 0 1 2 26

  27. Conservative Debt Position  Long-term credit facilities and multi-year bond provide certainty Total bonds $142.8M (at Mar. 31, 2012)  – $80M maturing June 30, 2017 – US $63 million (C $62.8 million) maturing April 12, 2021 – Unused shelf of US $37 million Total credit facility $213M (at Mar. 31, 2012)  – Unused facility of $142M – Additional arrangement of $150M available  Flexibility maintained following recent acquisition/investment (Debt to EBITDA below 2x) On May 3, 2012, Avista acquired for US $40 million  On April 24, 2012, Compushare investment of US $9.8 million   Strong financial capacity for growth I N V E S T O R P R E S E N TAT I O N Q 1 2 0 1 2 27

  28. Solid Return On Investment Since IPO Cash distributed to Owners* $15.77 Total Share Price Appreciation* 8.50 Total Shareholder Return $24.27 Average Annual Return 14.24% * For the period of December 20, 2001 to March 31, 2012 I N V E S T O R P R E S E N TAT I O N Q 1 2 0 1 2 I N V E S T O R P R E S E N TAT I O N Q 1 2 0 1 2 28

  29. Other Information Common Share Price (TSX:DH) 52 week high $20.45 (May 8, 2012) 52 week low $14.45 Closing Common Share Price $19.19 (May 8, 2012) Market Capitalization $1.1 billion (March 30, 2012) Common Shares Outstanding 59.2 million Average Daily Trading Volume 174,128 Annualized Dividend Per Share $1.24 Number of Employees 4,300 2011 Globe & Mail Profit Ranking 166 (out of top 1,000 public companies) 2011 FinTech Ranking (Global) 41 Brian Kyle, 416-696-7700 Contact investorrelations@dhltd.com I N V E S T O R P R E S E N TAT I O N Q 1 2 0 1 2 29

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