TSX: IBG
Investor Presentation - August 2020
A S M A R T E R U R B A N F U T U R E
Technology Enhancing Profitability
August 2020
TSX: IBG
Investor Presentation - August 2020
A S M A R T E R U R B A N F U T U R ET S X : I B G
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Forward-Looking Statements
This presentation includes certain statements, estimates and projections with respect to anticipated future performance that may constitute "forward-looking"
statements. Such forward-looking statements reflect current expectations and assumptions by the Company concerning anticipated results that may or may not prove
to be correct. Forward-looking statements are not guarantees of future performance, and actual results may differ materially from those in the forward-looking
statements. Forward-looking statements involve a number of risks and uncertainties, including those discussed under "Risk Factors" in the Company's Annual
Information Form filed with the Canadian securities regulatory authorities. Investors should not place undue reliance on forward-looking statements as a prediction of
actual results. These forward-looking statements are made as of the date of this presentation.
Non-IFRS Measures
IBI Group reports its financial results in accordance with IFRS. However, in this presentation, the following non-IFRS measures are used by the Company: net
income from operating activities; net income from operating activities per share; adjusted EBITDA; adjusted EBITDA margin; free cash flow; backlog; net debt and
net debt to adjusted EBITDA ratio. Additional details for these non-IFRS measures and reference to the reconciliation to the most directly comparable IFRS measure,
where applicable, can be found in IBI’s MD&A for the year ended December 31, 2019, which is posted on IBI’s website at www.ibigroup.com, and filed with SEDAR at
www.sedar.com.
Management of the Company (“Management”) believes that these non-IFRS measures provide useful information to investors regarding the Company’s financial
condition and results of operations as they provide additional key metrics of its performance. These non-IFRS measures are not recognized under IFRS, do not have
standardized meaning prescribed under IFRS and may differ from similarly-named measures as reported by other issuers, and accordingly may not be comparable.
These measures should not be viewed as a substitute for the related financial information prepared in accordance with IFRS.
Note to Reader
Throughout this presentation, use of the term ‘Margin’ refers to percentage of net revenue.
Advisories
TSX: IBG
Investor Presentation - August 2020
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2,700+ Difference-
makers
60+ Offices
6Continents
7,000Active Projects
3 Core Sectors
of Expertise
Intelligence
Buildings
Infrastructure
• Globally-integrated design and
technology firm founded in 1974
• Specializing in providing architecture,
engineering, planning, systems and
technology services - no construction risk
• Technology-driven design firm -
Intelligence practice continues to grow and
expand margins
• A world leader in creating advanced urban
environments, with intelligent systems,
sustainable buildings and efficient infrastructure
ABOUT IBI GROUP
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CORE BUSINESS
• Design, plan and develop advanced urban systems in which people can live, work and play
• Leadership team comprised of select professional practice experts
• Diverse revenue streams derived from three integrated segments
INTELLIGENCE
INFRASTRUCTURE
BUILDINGS
Software • Systems Design • Systems
Integration • Operations • End-user Services
Architecture • Interior Design • Mechanical
Engineering Structural Engineering • Electrical
Engineering
Civil Engineering • Landscape Architecture
Planning • Transportation • Urban Design
21%Q2 2020 Revenue Contribution
51%
28%
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IBI’s Successful Pivot to TechnologyNEW STRATEGIC PLAN UNVEILED SPRING 2018
Bold strategic plan to be a technology-driven design firm comprised of four streams:
1. Delivering better results, faster: Consolidated services, including design technology, quantum design and
project management, allowing IBI to integrate cutting-edge technologies from the earliest stages of design.
2. New revenue streams: Creating and harnessing new technologies and leveraging existing technologies to
create new recurring revenue streams
3. Disruptive technologies: Implementing emerging applications and using established technologies to
transform business and revenue models by adopting a “design-as-a-service” framework
4. Smart city ecosystem: Establishing relationships with leading innovators gives access to new technologies
while providing early-stage companies with key domain knowledge and a route to market.
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CORPORATE SNAPSHOT
IBI GROUP – TSX: IBG
Shares Outstanding (FD) 37.5MM
Insider Ownership 35.7%
Market Capitalization (@$5.68/sh) ~$215MM
Q2 2020 Key Financial Highlights:
Net Debt $75.4MM
Net Revenue $99.9MM
Earnings per Share (basic & FD) $0.18
Adjusted EBITDA (net of IFRS 16 impacts) $17.1MM
As a % of net revenue 17.1%
Net Debt / Adj. EBITDA Multiple 1.8x
Market Performance 2016 - Present
17.1%Q2 2020 Adjusted EBITDA Margin1
35.7%Insider Ownership
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IBG
STN
WSP
AIF
SNC
1net of IFRS 16 impacts
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Investment ThesisPOISED FOR GROWTH DRIVEN BY TECHNOLOGY
Disrupting A&E Business Model
Revenue Growth & Margin Expansion
Growth Through Innovation
Delivering Consistent Returns
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COVID-19 ResponsePROTECTING STAKEHOLDERS & MITIGATING IMPACTS
• Rapid transition of 2,700-person global workforce to 100% remote working
• Enhanced Travel-IQ to connect truckers to essential touch points along transit routes, such as open service stations and
rest stops; updated advanced traffic management software for remote operations and implemented cashless payment
solutions for toll clients
• Developed a parametric capacity model using Quantum design for cities to determine when and where new healthcare
treatment centres should be built, including modeling staff and equipment requirements
• Global Healthcare practice established an 11-step process for implementing temporary healthcare facilities in as little as
4 weeks by converting stadiums, warehouses, and retail spaces into functional treatment facilities
• Using laser cutting and 3D-printing technology to meet demand for face shields and Personal Protective Equipment
(“PPE”) for healthcare providers in Canada, the UK, and the US
• Adjusted executive and board compensation, reducing CEO, senior leadership team and other managers’ salaries by
15%, 10% and 5%, respectively, and reduced annual board cash retainers by 10% and 15% for the Chairman
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Q2 2020 PERFORMANCE DASHBOARD*
$99.9MNet Revenue
1.8xNet Debt to
Adjusted EBITDA
vs 2.2x
3%
$518.4MBacklog as at
June 30, 2020
30%
17.1%Adjusted EBITDA
Margin1
vs 16.3%
$17.1MAdjusted EBITDA1
*Q2/20 compared to Q2/19
8%
1net of IFRS 16 impacts
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IntelligenceAT THE HEART OF OUR TRANSFORMATION TO A TECHNOLOGY-DRIVEN DESIGN FIRM
1 Excludes the impact of small dollar amounts being written-off arising from systems
improvement initiatives implemented during 2019. See 2019 MD&A for further details.
• Productivity tools and processes developed in-house
are unlocking growth in IBI’s traditional Buildings and
Infrastructure sectors
• Proven track record of delivering premium,
technology-driven solutions:
• Designing software, developing analytics tools, and
deploying traffic systems
• World-class software and systems
Gordie Howe International Bridge Mackinac Bridge
1
1
1
2019 Performance
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BuildingsRAISING THE IQ OF BUILT ENVIRONMENTS AROUND THE WORLD
• Embedding Intelligence to drive growth
• U.S. growth strategy in mixed-use and high-rise buildings
led by expertise of Toronto and Vancouver practices
• New design assignments secured in San Francisco, Los
Angeles and other U.S. cities
• Positioned to offer integrated design services to new
sectors, regions and clients
Square One District Phase 1 untitled Condo Development
2019 Performance
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InfrastructureCREATING VIBRANT, TECHNOLOGY-DRIVEN ENVIRONMENTS
• Land engineering, placemaking and transportation
services
• Private and public transportation projects
• Develop, deploy and manage transportation
services globally
• Current projects:
• Hurontario LRT
• Eglinton Crosstown LRT
• Edmonton LRT
• Tel Aviv Red LineHurontario LRT vivaNext BRT
2019 Performance
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Strong Performance Track Record
28%
51%
21%
Infrastructure
Buildings
Intelligence
Q2 2020 REGION & BUSINESS OVERVIEW
10.3%
15.9%
19.1%
Infrastructure
Buildings
Intelligence
Q2 2020 Net Revenue Contribution (%)1
Q2 2020 Operating Margin (%)1
Intelligence:
Nearing 20% Adjusted
EBITDA target by end of
2020
Q2 2020 Net Revenue by Region
1 Operating margin and net revenue contribution by division excludes allocation of corporate costs.
Intelligence:
Exceeded 20% revenue
target contribution in Q2/20
40%
18%
31%
6%5%
CanadaEast
CanadaWest
USA UK &Ireland
International
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$397.5
$518.4
$0
$150
$300
$450
$600
Q2 2019 Q2 2020
Backlog(Millions)
$15.8$17.1
$0
$3
$6
$9
$12
$15
$18
Q2 2019 Q2 2020
Adjusted EBITDA(Millions)
Robust Q2 2020 GrowthSTRONG REVENUE, EXPANDING ADJUSTED EBITDA & GROWING BACKLOG
$96.8$99.9
$60
$70
$80
$90
$100
Q2 2019 Q2 2020
Net Revenue(Millions)
• Steady growth and benefits of integrating technology showcased IBI’s strength and resiliency during COVID-19
• Healthy balance sheet with 1.8x net debt to trailing 12 months’ Adjusted EBITDA multiple at end of Q2/20
• Backlog increased 14%, 37% & 28% across Intelligence, Infrastructure and Buildings practices, respectively
~12
months
~16
months16.3%1 17.1%1
(1Adjusted EBITDA as a percentage of net revenue)
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Intelligence Practice Drives GrowthIMPROVING REVENUE WITH HEALTHY EBITDA MARGINS
$16.1$17.6
$20.7
$0
$5
$10
$15
$20
$25
2018 2019 2020
Q2 Revenue in ($M)
• Continued strong performance and increasing contribution from IBI’s global Intelligence practice
• $5.1M billed to clients for recurring software support & maintenance services in Q2/20
• 21% of total net revenue represented by Intelligence
$0
$1
$2
$3
$4
2018 2019 2020
Q2 Adjusted EBITDA ($M)
13.4%1
10.1%1
19.1%1
(1Adjusted EBITDA as a percent of revenue)
20% Adjusted EBITDA
Target by end of 2020
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MARKET TRENDS & GROWTH DRIVERS
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Growing Cities and Tech HubsGLOBAL URBANIZATION MEANS INCREASED DEMAND FOR IBI’S BUILDING AND INFRASTRUCTURE SERVICES
GLOBAL CITIES
NEED NEW
BUILDINGS &
INFRASTRUCTURE
$69.1Tneeded in
infrastructure
spend
(2017-2035)
GROWTH
IS URBAN
2.5B people will move into global cities
over the next 30 years
>80% of global GDP
generated in cities
NEW
ECONOMY IS
URBAN
800Mmore houses
needed by end
of 21st century
$200Bgrowth in
healthcare
infrastructure
(2019-2024)
216-594Mglobal students in
higher education
projected to
double by 2040
*Software developers, programmers, computer support, database and systems, technology and engineering related, computer and information system managers. See Index on page 29 for sources.
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IBI Outlook + Growth Drivers
• ~$518.4MM of work committed and under contract
for the next five years1
• ~16 months of backlog1
• Ongoing integration of technology throughout IBI
• Anticipate continued free cash flow generation to
invest in growth opportunities or launch an NCIB
MACRO TRENDS SUPPORT IBI’S POSITIVE OUTLOOK
Trends Supporting Future Growth
Urbanization
Infrastructure
Technology
1As at June 30, 2020
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TECHNOLOGY ENHANCING PROFITABILITY:
IBI’SFOUR STREAMS
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1. Delivering Better Results, FasterFOCUS ON PRODUCTIVITY ENHANCMENTS
• Integrating cutting-edge technologies from the earliest stages of
design
• Innovative BIMbot technology improves efficiencies
• Enables cross-disciplinary collaboration in the design stages
• Effectively processes data to detect potential conflicts between
underground utilities, streetscaping, transit signals and stormwater lines
• Recently completed a major portion of Metrolinx’s vivaNext bus rapid
transitway ahead of schedule due to our BIMbot software
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2. New Revenue StreamsSOFTWARE-AS-A-SERVICE SOLUTIONS DRIVE RECURRING REVENUE
Travel-IQ
• Signature white-label technology provides informed, real-time trip
planning to the public
• Helps to improve travel efficiency for transportation authorities by
encouraging travellers to avoid problem areas and informing necessary
road repairs.
InForm
• Cloud-based asset management tool serving building owners, corporate
facilities managers & transportation agencies
• Saves money by providing the tools needed to manage costs & operate
assets more efficiently
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3. Disruptive TechnologiesINCORPORATING EMERGING APPLICATIONS
• Adoption of a ‘design-as-a service’ framework is transforming
IBI’s business and revenue models
• Developed a proprietary computation modeling process called
IBI Quantum
• IBI Quantum was implemented in the design of a one-of-
a-kind residential building façade that serves as a visual
abstraction of music
• Thousands of design iterations generated
• Beats of a Pharell Williams song used to design a balcony
pattern mimicking the flow of the music
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4. Smart City EcosystemPARNTERING WITH LEADING INNOVATORS
• Leveraging like-minded partners to foster innovative new
products and solutions for urban environments
• Access to leading-edge innovation being developed within the
tech eco-environments
• Provide solutions to meet the practical needs of clients and an
important route to market for emerging companies
• Equity investment in SWTCH, focused on EV charging
• Asset purchase of Aspyr Engineering, leader in communication
technology solutions for healthcare, higher education and government
T E C H N O L O G Y P R O V I D E R
Collaborators:
Take a virtual tour of our
Smart City Sand Box
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Investment ThesisPOISED FOR GROWTH DRIVEN BY TECHNOLOGY
Disrupting A&E Business ModelThrough new business models and services
Revenue Growth & Margin ExpansionFocus on urbanization and productivity enhancement
Growth Through InnovationApplying technology to open new markets
Delivering Consistent ReturnsA long history of proven performance
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Commitment to ESGRESPONSIBLE GROWTH IS EMBEDDED IN IBI’S STRATEGY & CORPORATE CULTURE
• Actively foster a culture that
promotes diversity,
inclusion, collaboration
and caring
• Empowering the team
through internal programs:
Leadership Engagement &
Development, Employee
Recognition, Professional
Mentoring & Global Women’s
Network
• Giving back to communities,
local charities and non-profit
organizations
SOCIAL
• Regular assessment of
competency and critical
skills to take our business
to the next level
• Engaged board of
directors; ability to guide &
champion IBI’s technology-
focused practice
• Formal Code of Conduct
& Ethics Policy, which all
employees and directors
are required to review and
sign
GOVERNANCE
• Plan and execute every
project to meet the highest
environmental standards
• Seek to incorporate
resilience in our design to
better manage potential
climate events
• Working through approval
processes to design the
largest solar farm in
western Canada with
expected capability to power
25,000 homes
ENVIRONMENTAL
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contacts
Technology
Enhancing
Profitability
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Management TeamEXPERIENCE MEETS VISION
Scott Stewart
Chief Executive Officer
Stephen Taylor Chief Financial Officer
Mansoor
KazerouniGlobal Director,
Buildings
David ThomPresident
Derek Sims
Global Director,
Intelligence
Carl ClaytonGlobal Director,
Infrastructure
OPTION 03
Deepak DardaGlobal Director,
Innovation
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Board of DirectorsSTRONG STEWARDS OF CAPITAL & A VOICE FOR SHAREHOLDERS
28
Dale RichmondIndependent Director,
Chair of the Board
Paula Sinclair
Independent Director ,Chair of the Audit Committee
Claudia KrywiakIndependent Director
Michael NobregaIndependent Director
John O. Reid
Independent Director
Scott StewartCEO, IBI Group
David ThomPresident, IBI Group
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Growth is Urban: “68% of the world population projected to live in urban areas by 2050, says UN” (United Nations: May 16,
2018) https://www.un.org/development/desa/en/news/population/2018-revision-of-world-urbanizationprospects.html
Global Cities Need New Buildings and Infrastructure // Infrastructure: O’Sullivan, Mike, “Experts: Urbanization Will Worsen Housing Crisis” (VOA: October 11,
2018) https://www.voanews.com/a/experts-urbanization-will-worsenhousing-crisis/4608846.html
Global Cities Need New Buildings and Infrastructure // Housing: Badger, Emily, “Why We Should be Worried About the Rapid Growth in Global Households” (City
Lab: February 14, 2014): https://www.citylab.com/equity/2014/02/ worlds-ticking-household-bomb/8389/
Global Cities Need New Buildings and Infrastructure // Healthcare: “Healthcare infrastructure market set to grow to $200billion in five years” (Building Better
Healthcare: December 11, 2018) https://www.buildingbetterhealthcare.
co.uk/news/articlepage/Healthcare_infrastructure_market_set_to_grow_to_200billion_in_five_years/149796
Global Cities Need New Buildings and Infrastructure // Education: “Study projects dramatic growth for global higher education through 2040” (ICEF Monitor: October
3, 2018) http://monitor.icef.com/2018/10/study-projects-dramaticgrowth-global-higher-education-2040/ The New Economy is Urban: “Urban Development” (The
World Bank: October 5, 2018) https://www.worldbank.org/ en/topic/urbandevelopment/overview#1
We Are Where the Growth Is: Global Tech Hubs Report (CB Insights: May 20, 2018) https://www.cbinsights.com/ research/report/global-tech-hubs/
Index