corporate overview€¦ · 14/03/2017 · rbc steve arthur, cfa august 7, 2013 gmp securities...

Corporate OverviewMarch 14, 2017

company.isc.ca TSX:ISV

ISC | Forward-Looking Statement

This presentation contains forward-looking information within the meaning of applicable Canadian securities legislation, including

management’s expectations and certain assumptions with respect to our registry services, corporate services and information products

industry, our competitive landscape, economic conditions in Canada (in particular, Saskatchewan, Ontario and Quebec) and internationally,

real estate market in Saskatchewan, economic impact of energy and resource sectors, seasonality, transaction volumes, statements

regarding the future financial position or results of ISC, customer growth and diversification, dividend expectations, creation of shareholder

value, growth opportunities, capital and operating expectations, real gross domestic product, changes that impact our registry services,

such as changes in high-value property registrations, motor vehicle sales volume and the number of active business entities, consolidated

EBITDA margin, income taxes, our ability to attract and retain skilled staff, the compensation and benefits that will be paid or provided to

employees and our level of customer service, as well as goodwill and intangibles are material factors in preparing forward-looking

statements. In addition, the words “may”, ‘‘will”, “would”, “should”, “could”, “expect”, “plan”, “intend”, “trend”, “indicate”, “anticipate”,

“believe”, “estimate”, “predict”, “project”, “targets”, “strive”, “strategy”, “continue”, “likely” or “potential” or the negative or other

variations of these words or other comparable words or phrases are intended to identify forward-looking statements. Forward-looking

information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially

from those expressed or implied by such forward-looking information. Although ISC believes the forward-looking information contained in

this release is based upon reasonable assumptions, readers are cautioned not to place undue reliance on forward-looking information as it

is inherently uncertain and no assurance can be given that the expectations reflected in such information will prove to be correct. Many

factors and risks could cause our actual results to differ materially from those expressed or implied by forward-looking information

including those detailed in ISC’s Annual Information Form, dated March 14, 2017, ISC’s Audited Consolidated Financial Statements and

Notes and Management’s Discussion and Analysis for the fourth quarter and year ended December 31, 2016, as well as other documents

filed by ISC with Canadian securities regulators through SEDAR at www.sedar.com from time to time. Investors and others should carefully

consider the above-noted factors and risks and other uncertainties and potential events. The forward-looking information in this release is

made as of the date hereof and, except as required under applicable securities legislation, ISC assumes no obligation to update or revise

such information to reflect new events or circumstances.

Forward-Looking Statement

2company.isc.ca TSX:ISV

ISC | Our Business at a Glance

Our Business at a Glance



We operate in two reportable segments defined

by their primary type of service offering.

Operating Segments

Registries: - Saskatchewan Land Registry (includes Land Titles Registry, Land Surveys Directory and

Geomatics)- Saskatchewan Personal Property Registry- Saskatchewan Corporate Registry (includes Common Business Identifier and Business

Registration Saskatchewan Program)- Saskatchewan Asbestos Registry

Services: - ESC – Search and Registration Services- ESC – “Know-Your-Customer” Services- ESC – Corporate Supplies and Accessories



Registries

End-use customers:Individuals or businesses who directly benefit from ISC registries:

- Individuals - Non-profit organizations - Business owners - Municipalities- Home builders - Financial institutions- Insurance companies - Car and equipment dealers

Channel customers: Intermediaries who manage relationships with end users but are typically not the beneficiary of our registry services:

- Law firms - Engineers- Surveyors - Agents (representing end-user customers)



Services

Search & Registration:- Law firms- Financing companies

Know-Your-Customer: - Financial institutions

Corporate Supplies & Accessories:- Legal professionals



Revenue Models

RegistriesTRANSACTION

Searches

Registrations

Maintenance and related services

SERVICE

Online or in person / Customized

Online or in person


REVENUE TYPE*

Flat fees (standard searches,

e.g. $11 per land title search)

Value-based fees (0.3% of the

value of the land title)

Flat fees (other registries)

Flat or negotiated fees

* For a full list of our fees, go to www.isc.ca

ServicesTRANSACTION

Search & Registration

Know-Your-Customer

Corporate Supplies & Accessories

SERVICE


In person


REVENUE TYPE*

Flat fees

Flat fees

Per unit fees

* For a full list of our fees, go to www.eservicecorp.ca/index.php/pricing-turnaround-times


ISC | Financial Position

Financial Position



Financial Position

• Balance sheet remains strong with ability to fund growth opportunities.

• Continues to support dividend.

$33.7 MAmount of cash on hand as at Dec 31, 2016

$14.0 MAmount of 2016 dividends paid to shareholders as at Dec 31, 2016

$6.3 MCapEx in 2016

$23.4 MTotal long-term debt as at Dec 31, 2016


30.2

28.4

29.5

31.6

30.4

33.5

2014 2015 2016

EBITDA Adj. EBITDA


EarningsConsolidated EBITDA1 and consolidated adjusted EBITDA1

for the year ended December 31(CAD$ millions)

1EBITDA, EBITDA margin, adjusted EBITDA, adjusted EBITDA margin and free cash flow are not recognized as measures under IFRS and do not have a standardized meaning prescribed by IFRS and therefore, are not comparable to similar measures by other corporations. See section name “Non-IFRS Measures” in the Management’s Discussion & Analysis for the period ended December 31, 2016.



Multiple Lines of RevenueTotal revenue for the year ended December 31(CAD$ millions)

11

80.578.3

88.4

2014 2015 2016

Land Surveys Directory

Geomatics

Services

Corporate Registry

Personal Property Registry

Land Titles Registry



Multiple Lines of RevenueRevenue – 4th Quarter 2016

32.2%EBITDA margin

$0.17EPS (basic share)

$21.2 MTotal revenue


57%

3%1%

11%

11%

16%

1%

Land Titles Registry

Geomatics

Land Surveys Directory

Personal Property Registry

Corporate Registry

Services


2016 Q4 and YE Financial HighlightsThousands of CAD dollars; except earnings per share and where noted

Three Months EndedDec 31, 2016

Three Months EndedDec 31, 2015

Year EndedDec 31, 2016

Year EndedDec 31, 2015

Revenue $ 21,201 $ 22,579 $ 88,375 $ 78,318

Net income and total comprehensive income $ 2,919 $ 4,567 $ 15,503 $ 15,917

EBITDA1 $ 6,833 $ 8,188 $ 29,529 $ 28,363

Adjusted EBITDA1 $ 7,336 $ 8,625 $ 33,454 $ 30,386

EBITDA margin1 (% of revenue) 32.2% 36.3% 33.4% 36.2%

Adjusted EBITDA margin1 34.6% 38.2% 37.9% 38.8%

Free cash flow1 $ 3,611 $ 6,689 $ 18,865 $ 21,489

Dividend declared per share $ 0.20 $ 0.20 $ 0.80 $ 0.80

Earnings per share2 (basic) $ 0.17 $ 0.26 $ 0.89 $ 0.91

Earnings per share, (diluted)2 $ 0.17 $ 0.26 $ 0.87 $ 0.90

1. EBITDA, EBITDA margin, adjusted EBITDA, adjusted EBITDA margin and free cash flow are not recognized as a measure under IFRS and do not have a standardized meaning prescribed by IFRS. See section name “Non-IFRS Measures” in Management’s Discussion & Analysis for the three months and year ended Dec 31, 2016.

2. The calculation of earnings per share is based on net income after tax and the weighted average number of shares outstanding during the period.


ISC | Outlook

Outlook 2017

Continued focus on sustaining our core business while pursuing new growth opportunities.

Expected consolidated annual EBITDA margin between 31% and 33%.

Economic conditions in Saskatchewan comparable to 2016, with stability or softening of growth for central Canada.


ISC | Growth

Growth


ISC | Growth

Market Trends

Outsourcing Business Processes & ServicesGovernments, legal firms and financial institutions are looking to find cost savings and focus on their core business without compromising service quality.

Increased Regulatory & Compliance RequirementsImproved workflows and automated processes help meet requirements and reduce potential business risk for clients.

Emphasis on Reliability & Security of InformationISC has the know-how, processes, technology and proven experienceto manage data authentication and security.


ISC | Growth

Growth Focus

Become More Efficient InternallyGrow bottom line by:

- Cost management

- Increased productivity

Explore New Paths Externally- Extend current services to other jurisdictions and private industries

- Add new services or features to expand business from existing clients

- Acquire companies with competencies or operations in our industry space


ISC | Investment Proposition

Investment Proposition


ISC | Investment Proposition

Investment Proposition

Strong Core Business- 20-year exclusive Master Service Agreement with Government of Saskatchewan,

including data license

- Understanding of Alternative Service Delivery model and needs of governments

Emerging Diversification- Investment in Dye & Durham Corp.

- Acquisition of ESC Corporate Services Ltd. and Enterprise Registry Solutions

Financial Position- Strong cash flow

- Solid balance sheet


ISC | Appendices

Appendices


ISC | Appendices

TSX: ISV

Shares Outstanding

Listing

Market Cap

52-Week High

52-Week Low

Dividend History

Contact

17.5 million Class A Limited Voting Shares

TSX: ISV

$334.25 million

$20.00

$13.85

$0.80 per share annually (paid quarterly) since 2013

[email protected] or call toll free 1-855-341-8363

As at March 14, 2017


RBC Steve Arthur, CFA August 7, 2013

GMP Securities Justin Keywood, CFA February 3, 2014

CIBC Stephanie Price July 15, 2014

Sentry Investments, Inc. 14.88%

QV Investors Inc. 9.28%

Burgundy Asset Management Ltd. 3.93%

Mawer Investment Management Ltd. 1.59%

I.G. Investment Management Ltd. 1.43%

ISC | Appendices

Appendix A: Ownership

Top 5 Institutional Holders

Institutional Shareholder % O/S

Analyst Coverage

Institution Cover initiated on:Analyst

Ownership Distribution

37%

32%

31% Retail Investors

Institutional Investors

Government of Saskatchewan

22

As at March 6, 2017


Jeff Stusek President & Chief Executive Officer

ISC | Appendices

Appendix B: Management

Kenneth W. BudzakVP Operations & Customer Experience

Kathy Hillman-Weir, Q.C.VP Corporate Affairs & General Counsel, Chief Privacy Officer

Shawn B. PetersVP Finance & Technology and Chief Financial Officer


From left: Doug Emsley, Iraj Pourian,

Scott Musgrave, Karyn Brooks, Tom

Christiansen, Joel Teal, Tony Guglielmin,

Michelle Ouellette, Q.C., Dion Tchorzewski

ISC | Appendices

Appendix C: Board of Directors


ISC | Appendices

Appendix D: 2016 Q4 Consolidated Revenue

Thousands of CAD dollarsThree Months Ended

Dec 31, 2016Three Months Ended

Dec 31, 2015Year Ended

Dec 31, 2016Year Ended

Dec 31, 2015

Land Registry (Land Titles Registry, Land Surveys, and Geomatics)

$ 13,038 $ 14,816 $ 54,921 $ 56,871

Personal Property Registry 2,273 2,407 9,947 9,981

Corporate Registry 2,254 2,038 9,082 8,133

Registries $ 17,565 $ 19,261 $ 73,950 $ 74,985

Services 3,427 3,166 13,639 3,166

Other 209 152 786 167

Total Revenue $ 21,201 $ 22,579 $ 88,375 $ 78,318


corporate overview€¦ · 14/03/2017 · rbc steve arthur, cfa august 7, 2013 gmp securities...

Documents