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Altus Analytics Investor Update
June 26, 2019
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Presentation Agenda
June 26, 2019
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1. Altus Analytics Growth Strategy Robert Courteau, Chief Executive Officer
2. Altus Analytics Cloud Transition Carl Farrell, President
3. Altus Analytics Financial Outlook Angelo Bartolini, Chief Financial Officer
4. Summary and Q&A
Q&A open to analysts & institutional investors
All other inquiries please contact Investor Relations:
altusgroup.com
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Caution Regarding Forward-Looking Statements
This presentation contains certain statements that constitute forward-looking information within the meaning of applicable securities laws (“forward-looking statements”), including without limitations, the
statements contained in section entitled "Altus Analytics Financial Outlook”. Statements concerning Altus Group Limited’s (“Altus” or the “Company”) objectives, goals, strategies, priorities, intentions,
plans, beliefs, expectations and estimates, and the business, operations, financial performance and condition of Altus are forward-looking statements. The words “believe”, “expect”, “anticipate”, “estimate”,
“intend”, “may”, “will”, “would”, “could”, “should”, “continue”, “plan”, “goal”, “objective”, and similar expressions and the negative of such expressions are intended to identify forward-looking statements,
although not all forward-looking statements contain these identifying words.
Certain material factors and assumptions were applied in providing these forward-looking statements. Forward-looking information involves numerous assumptions including the following specific
assumptions: the ability of Altus to meet its “Revenue”, “Recurring Revenue” and “Adjusted EBITDA Margins” targets, assumptions on Altus Analytics bookings growth, retention rates, growth in its Data
Solutions and Appraisal Management businesses, assumptions on the Argus Software revenue model, license sales, subscription renewal rates, cloud conversion (including timing and rate), assumptions
on other Altus Analytics contributors, expenses, operating leverage, and foreign exchange. Projections may be impacted by macroeconomic factors, in addition to other factors not controllable by the
Company. Altus has also made certain macroeconomic and general industry assumptions in the preparation of such forward-looking statements. Management believes that the expectations reflected in
forward-looking statements are based upon reasonable assumptions; however, Management can give no assurance that actual results will be consistent with these forward-looking statements. Not all
factors which affect the forward-looking information are known, and actual results may vary from the projected results in a material respect, and may be above or below the forward-looking information
presented in a material respect.
Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Altus’ actual results, performance or achievements, or developments in its industry, to differ
materially from the anticipated results, performance, achievements or developments expressed or implied by such forward-looking statements. Risks related to forward-looking statements include, among
other things, risks relating to cloud adoption and conversion, pricing pressure, risks relating to Altus’ Appraisal Management business and demand for implementation services; as well as general market
conditions, including economic and exchange rate dynamics. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. The Company's most
recently filed Annual Information Form and the most recently filed annual MD&A for the year ended December 31, 2018, available on SEDAR at www.sedar.com, also identify additional factors that could
affect the operating results and performance of the business. Forward-looking statements are based on management’s current plans, estimates, projections, beliefs and opinions, and Altus does not
undertake any obligation to update forward-looking statements should assumptions related to these plans, estimates, projections, beliefs and opinions change except as required by applicable securities
laws. All of the forward-looking statements made in this presentation are qualified by these cautionary statements and other cautionary statements or factors contained herein, and there can be no
assurance that the actual results or developments will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, Altus.
altusgroup.com
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Non-IFRS Measures
This presentation makes reference to certain non-IFRS financial measures. These non-IFRS financial measures are not recognized measures under IFRS, do not have a standardized meaning prescribed
by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement IFRS measures by
providing further understanding of operations from Management’s perspective. Accordingly, non-IFRS measures should never be considered in isolation nor as a substitute to using net income as a
measure of profitability or as an alternative to the IFRS consolidated statements of revenues, net income, cash flows or other IFRS statements. Management presents non-IFRS measures, specifically
“Recurring Revenue”, “Adjusted EBITDA” and "Adjusted EBITDA Margin” as it believes these supplementary disclosures provide useful additional information related to the operating results of Altus
Analytics and uses these measures of financial performance as a supplement to the consolidated statements of income of this business.
See "Non-IFRS measures" in Altus Group‘s MD&A for the three month ended March 31, 2019 for a more complete description of “Adjusted EBITDA Margin”, for a reconciliation of Adjusted EBITDA to its
most directly comparable IFRS measure and for a discussion of Altus Analytics “Recurring Revenue”, including its definition.
Executive Summary
Robert Courteau, Chief Executive Officer
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Executive Summary
Creating value for our customers and the CRE industry
Increasing long-term growth potential with high-growth, high-margin model with predictable revenues
• Targeting to transition Altus Analytics to +90% recurring revenue model by 2021
• In Q3, all ARGUS Enterprise (AE) sales to net new customers are expected to be cloud subscriptions & over time migrating on-premise ARGUS software customers to cloud subscriptions
• Strong recurring revenue base sustains y/y Altus Analytics revenue growth during key transition years in 2019 & 2020
• Leveraging past development investments, revenue growth and controlled expenses supports margin expansion, targeting 30+% by 2023
• Setting 5-year goal to double revenues by 2023
Increasing long-term growth potential with high-growth, high-margin model with predictable revenues
Targeting transition of Altus Analytics to 90+% recurring revenue model by 2021
Migrating on-premise ARGUS software customers to cloud subscriptions
Executing on our Plan:
Client & industry demand
Product readiness
Compelling economic benefits
Established recurring revenue base eases transition
Confidence in transition
Mitigates competitive threats
Furthers data strategy
Altus Analytics Growth Strategy Robert Courteau, Chief Executive Officer
Cloud transition supports higher wallet share expansion, new customer growth & geographic expansion
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Evolution of ARGUS Software Strategy
SET THE ARGUS ENTERPRISE (AE) STANDARD GLOBALLY
Wave 1 Wave 2 Wave 3
North America DCF Upgrade
AE N.A. Market Standard
UK ValCap Upgrade
Continental Europe Adoption
Go Global
Multi-Product, Integrated
Solutions, Enterprise
Agreements
CROSS SELL + UPSELL
Same Client Application Sale & SME
Strong re-purchase rates from current AE customers (adding more seats and/or functionality)
INNOVATE
New Applications & Partnerships ARGUS in the Cloud Data Monetization
New Markets & Applications
2013 -
Curr
ent
2015 -
Cu
rre
nt
2018 -
Cu
rre
nt
Upgrade Sale Multi-Product Sale Global Solution
Move the market to a single
ARGUS Enterprise standard
Establish ARGUS Enterprise
for global adoption
Establish a platform solution
with multiple global asset &
investment management
capabilities
Move to the Cloud
Unlock power of data
Strategic objectives driving strategy:
1
2
3
4
5
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“ARGUS Everywhere” Go To Market Plan
ARGUS as a multi-
department standard -
from acquisitions to
finance, broadened use
across organization
Sustained trend in clients
deploying more seats and
adding modules
~4K ARGUS Enterprise
client calling card
Focus on Germany,
France and Asia in 2019,
creating local value
through local functionality
(network effect led by
biggest CRE firms)
Focus on global, multi-
product contracts for
end-to-end client needs
(currently less than 5
clients have bought multi-
products globally)
Driving value through
enhanced functionality via
cloud applications that
enhance workflow, data
aggregation & partner
data flow)
Focus on Top 200 clients
to deploy ARGUS
Enterprise everywhere
globally (currently less
than 10 have deployed
globally)
Cross-Sell / Up-Sell Market Expansion Integrated Offerings New Cloud Products Global Deployment
Increasing wallet share & crossing borders with multiple capabilities
Leveraging Appraisal Management Client Growth & Expansion
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Significant Market Opportunity
Top 200 Global &
Net New Customer
Growth Opportunity
• Geographic Expansion
• AE Global Deployment
• Multi-Product Enterprise Sales
• Leveraging Appraisal Management
Client Growth & Expansion
Future
Opportunities
• Data Monetization
• New CRE Market Verticals
Wallet Share Expansion
Opportunity with +6,500
Software Customer Base
• Add-on Sales
• Monetizing Cloud Migration
• New Solutions & Applications
Wide TAM Multiple Avenues for Growth Supports 2023 Goal
03
01
02 <15% global market
penetration leaves plenty
of room for growth
Cloud transition to facilitate
higher wallet share expansion
Upside
*Based on ~4K AE customers and ~30K companies identified worldwide that are engaged in CRE who Altus Group could target as customers for AA solutions – includes Owner Operators,
Investors, Lenders and Service Providers; excludes multifamily and developers, and other financial management client type.
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Strong Foundation for Next Phase of Growth
Exceptional Customer & Industry Validation
Unmatched Altus
Analytics Client Base
6,500+ software clients (~4K on AE) – GLOBAL
100+ data benchmarking & attribution clients (Appraisal Management) – US, EUROPE, ASIA
500+ Canadian market data customers
Trusted by the World’s
Largest CRE Firms
Relationships with 225/350 top global asset managers
Serving 10 of the world’s largest service providers
Prevailing Industry
Standards
ARGUS Enterprise property & portfolio valuation analysis market standard – US, CANADA & UK
(taught in over 200 universities worldwide)
Appraisal Management benchmarking standard for open-end funds – US
Largest national CRE market data provider – CANADA
Strong Recurring
Revenues with Superior
Retention Rates
70+% of total Altus Analytics revenues are recurring & shifting to subscription contracts
~95% renewal rates for software maintenance (~97% on AE)
All data presented on this slide is based on internal data and/or management estimates
Altus Analytics Cloud Transition Carl Farrell, President
Significant customer value proposition to drive cloud adoption throughout 2019 & 2020, with a target to migrate majority of ARGUS Enterprise users to the cloud by 2023
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Extending ARGUS Enterprise to ARGUS Cloud
No migration
Supports existing implementations
Preserves investment and value
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Extending ARGUS Enterprise to ARGUS Cloud
NEW CLOUD APPS
Continuous development of cloud functionality
Enhanced additional functionality for new and seasoned AE users
Enhance and deliver new cloud applications to address key business areas
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Continue to Extend ARGUS Cloud Eco-structure
3rd PARTY APPS NEW CLOUD APPS
Enhance and deliver new cloud applications to address key business areas
Connect all ARGUS solutions
Building a global asset and investment management solution connecting all software applications & data on one single cloud-based platform
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Cloud Benefits for Customers
Simple migration, no new implementation
Transparent internal business collaboration
Extensive reporting and benchmarking capabilities
Access to new cloud functionality and new apps
The potential to utilize future data aggregation to gain market insight
Reduced IT infrastructure/hosting costs
Compelling economic & operating
benefits for customers
Storage Calc Engine Integrations
Data Input Collaboration Reporting &
Analytics Workflows
Front End
Back End
3rd PARTY APPS NEW CLOUD APPS
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Customer Adoption Example
What’s the industry trend?
- Large global customers want a global data standard across their organizations to better utilize their internal data
What ARGUS Cloud solves for:
- Going to ARGUS Cloud provides customers with a single data instance and the ability to drive global business consistency
- Drives cost reduction, consistent business processes, more business insights, supports business agility
- Will provide customers with global reporting and benchmarking functionality, plus future industry data aggregation
Upside for Altus Group:
- To drive new license sales of AE in EMEA and on a global ARGUS Cloud contract, while providing a global platform to sell additional ARGUS products
Based on current prospects:
CUSTOMER PROFILE
Large, global service provider
CURRENT USE OF ARGUS ENTERPRISE
North America & Asia, not EMEA
CUSTOMER DESIRE
Global data standards across their
organization to drive improved performance
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AE Transition to Cloud and Subscription
As of July 2019 Mid-Term
• ADD-ON : Buy additional users as
Cloud licenses, upgrade existing users
to Cloud
• RENEWAL : Upgrade existing users to
Cloud
EXISTING
CUSTOMER
NEW
CUSTOMER
• ADD-ON : Buy additional AE licenses
as perpetual
• RENEWAL : Retain maintenance
contract
• NEW : Buy new users as Cloud
licenses
• ADD-ON : Buy additional users as
Cloud licenses, upgrade existing users
to Cloud
• RENEWAL : Upgrade existing users to
Cloud
• ADD-ON : Buy additional AE licenses
as on premise subscription
• RENEWAL : Retain maintenance
contract
• NEW : Buy new users as Cloud
licenses
• ADD-ON : Buy additional users as
Cloud licenses, upgrade existing users
to Cloud.
• RENEWAL : Upgrade existing users to
Cloud
• NEW : Buy new users as Cloud
licenses
Long-Term Cloud Deployment
On Premise Deployment
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New Market Opportunity: Data Driven Insights
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Brought Back Into
ARGUS Workflow
AE Data
Integration
Platform
1
2
4
5
3
• Brings high value data that can be reported, benchmarked, aggregated and used to drive high value analytics for customers
• Utilizes the cleanest CRE industry data in an automated environment on a single platform
• Potential to become the data integration and data standard platform for the global CRE industry
AE Data
Published to
the Cloud Aggregated
from Multiple
Organizations
Combined
with 3rd
Party Data
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Cloud Enables Higher Operating Efficiencies
Speed of development and innovation
An environment that is flexible, scalable and has strong integration capability
One product platform
Lower cost of customer support
Simplified 3rd party integration
Reduced internal infrastructure costs over time
Access to AE data for potential new products & capabilities
Compelling economic & operating benefits for both Altus Group and our Shareholders
Altus Analytics Financial Outlook Angelo Bartolini, Chief Financial Officer
Strong recurring revenue base sustains y/y Altus Analytics revenue growth during key transition years in 2019 & 2020
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Solid Track Record of Execution
46+% revenue growth
16+% CAGR in recurring
revenues*, which represent
70+% of total AA revenues
37+% adj. EBITDA* growth,
with an avg. 3 yr. adj.
EBITDA margin of 26%
~4K AE customers, including
~ 1k AOD customers
~97% retention rates
for AE software
95+% growth in EMEA &
APAC revenues; 22% of
total in 2018
From 2015 – 2018:
*Non-IFRS measure, see Slide 4 for more information.
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Lower Risk Transition
0%
20%
40%
60%
80%
100%
2017 2018 2019 2020 2021 2022 2023
70% recurring revenue
in 2017 targeting growth
to 90% by 2021
Perpetual license sales
currently represent only
15% of total AA
revenues
Full Subscription Model
Transition to Subscription
Point in Time License Model
Data & Appraisal Management
Over Time Subscription &
Maintenance
Perpetual & Point in Time
Subscription
Services
RECURRING
NON-RECURRING
AA
Re
ve
nu
e E
vo
luti
on
Pe
rce
nt to
To
tal A
A R
eve
nu
es
$73 M
$45 M
$36 M
$15 M
$78 M
$49 M
$41 M
$16 M
ACTUAL
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$150
$200
$250
$300
$350
$400
$450
2017 2018 2019 2020 2021 2022 2023
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Altus Analytics Long Term Financial Potential
No dip in 2020 during
transition due to high
existing over time revenue
base
Margin expansion,
targeting 30+% adj.
EBITDA margins* by 2023
23% 17- 20% 24 - 26% >30%
KEY ASSUMPTIONS:
• ~15% bookings growth
• Mid 90% retention
• Mid-teen growth in Data & Appraisal
Management
KEY ASSUMPTIONS:
• ~5% bookings growth
• Mid 90% retention
• Mid-single digit growth in Data
& Appraisal Management
2023
TARGET
REVENUE
$400M
26-30%
NATURAL ECONOMIC BENEFIT
Stacking effect of switch to
subscriptions (assumes flat growth
in all other AA revenue streams)
To
tal A
A R
eve
nu
es
C$
M
Adj. EBTIDA
Margin* Targets 17- 21%
*Non-IFRS measures, see Slide 4 for more information.
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Improving Visibility During the Transition
New Metrics Currently Planned
Over Time Revenues
(consistent with IFRS 15)
• Includes software subscription revenue (excluding any up front Right of Use
revenue), maintenance, data subscription and appraisal management
• Excludes perpetual license sales, software services, due diligence from appraisal
management, and any upfront Right of Use revenues even if sold on subscription
Cloud Adoption Rates • % of base on cloud
Software Retention Rates • % of customer base and revenue retained upon renewal
Geographic Revenues • Total revenue by major region – Americas, EMEA and APAC
Key Metric for Tracking Growth
Recurring Revenues
• Includes revenues related to software & data subscriptions, maintenance for
perpetual licenses and appraisal management solutions, where the contract value
for software subscriptions is recognized ratably over the contract term
• Excludes perpetual license sales, software services, and due diligence from
appraisal management
2019
2020
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2019 Key Transition Year
$197 - $205 FY 2019 Revenue Range ($M)
7% - 12% Year-over-Year Revenue Growth Range
16% - 19% Year-over-Year Recurring Revenue* Growth Range
17% - 20% Adjusted EBITDA Margin* Range
ALTUS ANALYTICS 2019 FINANCIAL PERFORMANCE GUIDANCE GUIDANCE:
*Non-IFRS measures, see Slide 4 for more information.
Summary Robert Courteau, Chief Executive Officer
Transition to cloud subscriptions enhances economic value and increases the long-term growth potential with a high-growth, high-margin model with predictable revenues
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Altus Analytics 5-Year Growth Ambitions
~$200M Revenues
Standalone Solutions and
Services
6,500 Software Customers
On-Premise Software
70+% Recurring Revenues*
7% - 12% Revenue Growth;
sub 20% adj. EBITDA Margins*
2019
Reach $400M Total Revenues
by end of 2023
Integrated Software, Data and Service
Delivery
8,000+ Software Customers & Platform
for the Industry
Complete Cloud Solution Portfolio
90+% Recurring Revenues*
Double-Digit Revenue Growth;
30+% EBITDA Margins*
2023 *Non-IFRS measures, see Slide 4 for more information.
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Disclaimer
This documentation is a presentation of general background information about Altus Group’s activities current as the date of the presentation. It is information in a summary form and does not purport to
be complete. It is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular
investor. These should be considered, with or without professional advice, when deciding if an investment is appropriate.
The information contained in this presentation does not purport to be all-inclusive or to contain all the information that an investor may desire to have in evaluating whether or not to make an investment
in Altus Group. The information has not been independently verified and is subject to material updating, revision and further amendment, and is qualified entirely by reference to Altus Group’s publicly
disclosed information. Without limiting the generality of the foregoing, the selected financial information included in this presentation is qualified in its entirety by, and should be read together with Altus
Group’s Consolidated Audited Financial Statements for the year ended December 31, 2018, Altus’ unaudited interim condensed consolidated financial statements for the three months ended March 31,
2019 and the accompanying MD&A, all of which are available on SEDAR at www.sedar.com.
No representation or warranty, express or implied, is made or given by or on behalf of Altus Group or any of its affiliates or subsidiary undertakings or any of the directors, officers or employees of any
such entities as to the accuracy, completeness or fairness of the information or opinions contained in this presentation and no responsibility or liability is accepted by any person for such information or
opinions. In furnishing this presentation, Altus Group does not undertake or agree to any obligation to provide the participants with access to any additional information or to update this presentation or
to correct any inaccuracies in, or omissions from, this presentation that may become apparent. No person has been authorised to give any information or make any representations other than those
contained in this presentation and, if given and/or made, such information or representations must not be relied upon as having been so authorised. The information and opinions contained in this
presentation are provided as at the date of this presentation. The contents of this presentation are not to be construed as legal, financial or tax advice. Each prospective investor should contact his, her
or its own legal adviser, independent financial adviser or tax adviser for legal, financial or tax advice.
This presentation does not constitute or form part of any offer or invitation for the sale or purchase of securities or any of the assets, business or undertaking described herein nor shall it or any part of it
form the basis of or be relied on in connection with, or act as any inducement to enter into, any contract or commitment whatsoever. Recipients of this presentation who are considering acquiring
securities of Altus are reminded that any such purchase or subscription must not be made on the basis of the information contained in this presentation but are referred to the entire body of publicly
disclosed information regarding Altus.
All currency throughout this presentation are in Canadian dollars unless otherwise expressly stated.