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company.isc.ca TSX:ISV
Corporate OverviewNovember 7, 2017
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, fluctuations in the Canadian dollar and other foreign
currencies, 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, our level of customer service and expected activity in the global
registry market, 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 Unaudited Interim Consolidated Financial Statements and Notes and Management’s
Discussion and Analysis for the third quarter ended September 30, 2017, 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
Our Business at a Glance
3company.isc.ca TSX:ISV
Overview
Leading provider of registry and information management services for public data and records.
Saskatchewan’s exclusive provider of the Land Titles Registry, Land Surveys Directory, Personal Property Registry and Corporate Registry through ASD model.
Focus on growth.
Corporate services and corporate accessories in Ontario and Quebec.
company.isc.ca TSX:ISV 4
Registry technology solutions and expertise with registry implementations on 3 continents.
Offering solutions to manage, secure and administer information through our registry and services segments.
2016 Financial highlightsRevenue $88.4MEBITDA $29.5MEBITDA margin 33.4%FCF $18.9MBasic EPS $0.89
TSX: ISVMarket cap $318.0M52 week high $21.3052 week low $16.57Dividend per share $0.80Dividend yield 4.5%
As at Nov 7, 2017
ISC | Overview
5company.isc.ca TSX:ISV
ISC | Our Business at a Glance
We operate in two reportable segments defined by their primary type of service offering. The balance of our corporate activities and shared services functions, including the services and functions provided by our subsidiary, ERS, are reported as Corporate.
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
6company.isc.ca TSX:ISV
ISC | Our Business at a Glance
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)
7company.isc.ca TSX:ISV
ISC | Our Business at a Glance
Services
Search & Registration:- Law firms- Financing companies
Know-Your-Customer: - Financial institutions
Corporate Supplies & Accessories:- Legal professionals
8company.isc.ca TSX:ISV
ISC | Our Business at a Glance
Corporate
9company.isc.ca TSX:ISV
Based in Ireland
Founded in 2002
Acquired by ISC on Jan 23, 2017
Consulting Implementation & support
Registry implementations
on 3 continents
*The balance of our corporate activities and shared services functions, including the services and functions provided by our subsidiary ERS, are reported as Corporate.
ISC | Our Business at a Glance
Revenue Model
RegistriesTRANSACTION
Searches
Registrations
Maintenance and related services
SERVICE
Online or in person / Customized
Online or in person
Online or in person / Customized
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
Online or in person / Customized
In person
Online or in person / Customized
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
10company.isc.ca TSX:ISV
Financial Position
11company.isc.ca TSX:ISV
ISC | Financial Position
Financial Position
• Balance sheet remains strong with ability to fund growth opportunities.
• Continues to support dividend.
$38.6 MAmount of cash on hand as at September 30, 2017
$10.5 MAmount of 2017 dividends paid to shareholders as at September 30, 2017
$8.0 MFree cash flow as at September 30, 2017
$32.3 MTotal debt as at September 30, 2017
12company.isc.ca TSX:ISV
30.2
28.4
29.5
31.6
30.4
33.5
2014 2015 2016
EBITDA Adj. EBITDA
ISC | Financial Position
EarningsConsolidated EBITDA1 and consolidated adjusted EBITDA1
for the year ended December 31(CAD$ 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.
13company.isc.ca TSX:ISV
Revenue / EBITDA
14company.isc.ca TSX:ISV
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
$100
2013 2014 2015 2016
Mill
ion
s
Revenue EBITDA
Annual Revenue/ EBITDA
EBITDA / Debt
15company.isc.ca TSX:ISV
$0
$5
$10
$15
$20
$25
$30
$35
2013 2014 2015 2016
Mill
ion
s
EBITDA Long term debt (current and non-current)
Annual EBITDA/Debt
$0
$5
$10
$15
$20
$25
$30
$35
2013 2014 2015 2016
Mill
ion
s
EBITDA Interest paid (per cash flow statement)
Annual EBITDA/Interest payments
ISC | Financial Position
Multiple Lines of RevenueTotal revenue for the year ended December 31(CAD$ millions)
16
80.578.3
88.4
2014 2015 2016
Land Surveys Directory
Geomatics
Services
Corporate Registry
Personal Property Registry
Land Titles Registry
company.isc.ca TSX:ISV
ISC | Financial Position
Multiple Lines of RevenueRevenue – 3rd Quarter 2017
31.8%EBITDA margin
$0.11EPS (basic share)
$23.9 MTotal revenue
17company.isc.ca TSX:ISV
*The balance of our corporate activities and shared services functions, including the services and functions provided by our subsidiary ERS, are reported as Corporate/Other.
ISC | Financial Position
2017 Third Quarter Financial HighlightsThousands of CAD dollars; except earnings per share and where noted
Three Months EndedSep 30, 2017
Three Months EndedSep 30, 2016
Nine Months EndedSep 30, 2017
Nine Months EndedSep 30, 2016
Revenue $23,862 $22,894 $70,004 $67,174
Net income $1,856 $3,810 $9,015 $12,584
EBITDA1 $7,579 $7,338 $22,171 $22,697
Adjusted EBITDA1 $8,673 $9,512 $24,447 $26,117
EBITDA margin1 (% of revenue) 31.8% 32.1% 31.7% 33.8%
Adjusted EBITDA margin1 36.4% 41.5% 34.9% 38.9%
Free cash flow1 $8,013 $5,641 $21,362 $15,254
Dividend declared per share $0.20 $0.20 $0.60 $0.60
Earnings per share2 (basic) $0.11 $0.22 $0.52 $0.72
Earnings per share, (diluted)2 $0.11 $0.22 $0.51 $0.72
1. EBITDA, EBITDA margin, adjusted EBITDA, adjusted EBITDA margin and free cash flow are not recognized as a measure reported under IFRS and do not have a standardized meaning prescribed by IFRS. See section “Non-IFRS Measures” in Management’s Discussion & Analysis for the three and nine months ended September 30, 2017.
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.
18company.isc.ca TSX:ISV
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%.
Revised CapEx guidance of $1.0 - $2.0 million from $3.5 - $5.0 million.
Temperate economic growth in Saskatchewan for Registries results similar to 2016, with modest growth for Ontario and Quebec economies to deliver moderate growth in the Services segment.
19company.isc.ca TSX:ISV
20company.isc.ca TSX:ISV
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.
21company.isc.ca TSX:ISV
Emerging Global Registry MarketISC continues to believe the global registry market is an emerging sector.
ISC | Growth
Growth Focus
Become More Efficient InternallyGrow bottom line by:
- Cost management
- Increased productivity
Explore New Paths Externally- Extend current products and services to other jurisdictions and private industries
- Add new services or features to expand business from existing and new clients
- Acquire companies with competencies or operations in our industry space
22company.isc.ca TSX:ISV
ISC | Investment Proposition
Recent Developments
Increased emphasis on technology solutions • To complement existing Registry Operations and Services business• Appointment of Executive Vice President, Technology Solutions• Now have a team of 50+ technical resources with deep registry expertise
An expanded leadership team • to advance the business and future growth of the Company• Includes new leadership in marketing and business development
Sale of 30% stake in Dye & Durham • Delivers value - an $18.0 million gain on total capital deployed of $7.0 million.• Provides capital – the addition of $25.0 million in cash further strengthens ISC’s balance
sheet to support corporate objectives and priorities.
23company.isc.ca TSX:ISV
Investment Proposition
company.isc.ca TSX:ISV 24
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- Acquisition of ESC Corporate Services Ltd.
- Acquisition of Enterprise Registry Solutions
Financial Position - Strong cash flow
- Solid balance sheet
25company.isc.ca TSX:ISV
26
Appendices
company.isc.ca TSX:ISV
ISC | 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
$318.0 million
$21.30
$16.57
$0.80 per share annually (paid quarterly) since 2013
[email protected] or call toll free 1-855-341-8363
As at November 7, 2017
27company.isc.ca TSX:ISV
RBC Steve Arthur, CFA August 7, 2013
GMP Securities Justin Keywood, CFA February 3, 2014
CIBC Stephanie Price July 15, 2014
Sentry Investments, Inc. 14.85%
QV Investors Inc. 9.31%
Burgundy Asset Management Ltd. 3.80%
Mackenzie Financial Corporation 2.05%
Mawer Investment Management Ltd. 1.00%
ISC | Appendices
Appendix A: Ownership
Top 5 Institutional Holders
Institutional Shareholder % O/S
Analyst Coverage
Institution Cover initiated on:Analyst
Ownership Distribution
36%
33%
31% Retail Investors
Institutional Investors
Government of Saskatchewan
28
As at Oct 31, 2017
company.isc.ca TSX:ISV
29
Kathy Hillman-Weir, Q.C.Executive Vice-President, Chief Corporate Officer and General Counsel
Shawn B. PetersExecutive Vice-President and Chief Financial Officer
Jeff StusekPresident and Chief Executive Officer
Kenneth W. BudzakExecutive Vice-President, Registry Operations
Loren CisykExecutive Vice-President, Technology Solutions
Laurel GarvenVice-President, Business Strategy
Catherine McLeanVice-President, People and Culture
Dennis WhiteVice-President, Marketing and Business Development
Appendix B: ISC Leadership
company.isc.ca TSX:ISV
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
30company.isc.ca TSX:ISV
ISC | Appendices
Appendix D: 2017 Q3 Consolidated Revenue
Thousands of CAD dollarsThree Months Ended
Sep 30, 2017Three Months Ended
Sep 30, 2016
Land Registry (Land Titles Registry, Land Surveys, and Geomatics)
$14,335 $15,015
Personal Property Registry 2,531 2,670
Corporate Registry 2,237 1,860
Registries revenue 19,103 19,545
Services revenue 3,561 3,316
Other revenue 1,198 33
Total revenue $23,862 $22,894
31company.isc.ca TSX:ISV