stability through diversity focused on growth€¦ · health centre, healthpartners) ... cyber...

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Stability through diversityFocused on growth

© Calian Group Ltd. Proprietary Information and Confidential

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Investment Value Proposition

36 years in business

69 consecutive profitable quarters

Dividend stream ~3-4% yield + share value growth

2018 TSR 9%; last 3 years annualized: 35%

Investing in innovation

Strong backlog - $1.3B

Strong balance sheet

Strong management team

Organic and acquisitive growth strategy

Clear and differentiated value proposition in diverse markets

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Diverse Service Offerings

Information Technology

TrainingHealth Engineering ContractManufacturingMarkets Served

• Department of National Defence

• Correctional Services

• Canadian Border Services

• Federal, Provincial & Municipal Police

• Oil & Gas industry

• Department of National Defence

• Indigenous Communities

• Nuclear

• Federal, provincial and municipal government departments

• Financial institutions

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Calian Health

Clinician Services Clinic Management Health Practice Management

SpecializedPsychologicalAssessments

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Calian Training

Emergency Management Solutions (EMS) Custom Training Solutions (CTS)

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Calian IT Professional Services

Cyber Security Practice

SAP Consulting Practice

IT Development and Support

Services

IT Consulting Services

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Calian Systems Engineering

ProductsGround Systems Gateways & Planning Nuclear

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Calian Contract Manufacturing

DefenceCommercial Test

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Four Pillar Growth Strategy

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Growth Opportunities in Key Markets

AgTech EmergencyManagement

Cyber Security Health Care Satellite

$10B$180B $240B

$355B

$170B

12.4% 5.5% 9.5% 2.7% 2%

GroundEquipment

7%

$130B

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Corporate Social Responsibility

Military Family Doctor Network (~1,600 family members)

Award-winning veteran-friendly employer

Support for military family health research (CIMVHR)

Community and charitable support (e.g., United Way, the Ottawa Hospital Foundation, the Royal Ottawa Mental Health Centre, HealthPartners)

ISO 26000 social responsibility standard

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Innovation

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SED: Innovation is in our DNA

Innovation has always played a key role at CALIAN SED

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Core Building Blocks

Develop core building blocks to meet common project requirements

Better Systems Solutions at a Compelling Price

Mon-A-Co Equipment Management

4

2

3

14

16

15

5

8

12

76

3.0

3.0

3.0

1

1.3

1.3

3.6

3.6

3.6

3.6

3.6

3.6

3.0

3.0

3.0

3.0

3.0

3.0

3.0

3.0

9

10 11

3.0 3.0

1-1 1-2

2-2

3-2

4-24-1

3-1

2-1

10-1

6-1

5-1

7-1

9-1

11-1

8-1

10-2

8-2

6-2

5-2

7-2

9-2

11-2

13

Antenna De-Ice

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Aggregating a Market Requirement into a Product that has Compelling Value

Look for that Inflection Point

Develop our own productsWhere innovation is needed

over existing solutions

Where we can make an entrance and take over market share

Decimator Spectrum Analyser

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M&A: Opportunities to Leap Forward

Internal capabilities

Outside companies

The proverbial “1 + 1 = 3”

Mergers and Acquisitions

New opportunities

New markets Increased market

share

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Innovation Cycle

Aggregating a market requirement into a product that has compelling value

Two examples of innovation:

DOCSIS Remote-PHY Technology

AgTech innovator IntraGrain

Innovation

Project

Core

Product

Acquisition

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DOCSIS InnovationDOCSIS Innovation

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What is a Cable Network?

Cableheadend

Satellitesignals

Opticalnodes Amp

Homes

Coax cable

Coax cable

AmplifiersCoax

Up to 2,000 homesPer optical node

Fiber-opticalcables

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What is the Cable Market Today?

Cable network operators (MSOs)

Equipment vendors

Technology vendors

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What is DOCSIS?

Data Over Cable Service Interface Specification

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What is our DOCSIS Story?

Satellite communications networks expertise Manufacturing capability Traction in DOCSIS test equipment Inflection point: DOCSIS 3.1

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What is DOCSIS 3.1?

Gigabit Ethernet Lower latency, higher quality Remote PHY Full Duplex

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What’s our Innovation?

DOCSIS test equipment DOCSIS Remote PHY technology

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What’s our Competitive Advantage?

Strong team Compelling technology baseSuite of powerful business relationships spanning the

community

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What’s our Strategy?

Technology and product development; IP licencing Investment opportunities Focus on products and technology for equipment vendorsBuilding relationships with key cable operatorsDOCSIS technology for other markets (e.g., 5G and satellite)

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Kyle Folk, President

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Can we grow more

food in 50 years

than in all of

history?

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Grow more

Increase Efficiencies

Reduce Waste

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GRAIN SPOILAGE

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Developing countries lose far more to spoilage than we do in North America

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© Calian Group Ltd. Proprietary Information and Confidential

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203,000

148,000

72,000 80,000

503,000

SK AB MB REST OF CAD TOTAL

Bins in Service (est. based on 5,000 bushel average per bin)

Approximately 3% being served

0 2E+10 4E+10 6E+10 8E+10 1E+11

WORLD MARKET

CANADIAN MARKET

CURRENT CUSTOMERS

Bushels

Bushels

Only 0.07% of the world has been served

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PartneringAcquiringDeveloping

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We help the world communicate, innovate,

lead healthy lives and stay safe.

Agriculture affects each and every one of us multiple times a day. It is our very basis for survival and yet in many countries we seem to take it for granted.

Not only is this a massive opportunity for Calian, it’s a social responsibility.

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Financial Report

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Consolidated Financials FY 2018 Year ended Sept 30

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HISTORICAL REVENUES

-

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

2000 2005 2010 2015 2018 2019

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Growth achievements

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

2005 2010 2015 2018

TSR

2005-20159.4%

2015-201834.9%

-

0.50

1.00

1.50

2.00

2.50

2005 2010 2015 2018

BASIC EPS

2005-20152.8%

2015-201820.1%

-

5,000

10,000

15,000

20,000

25,000

30,000

2005 2010 2015 2018

EBITDA

2015-201815.7%

2005-20151.4%

-

50,000

100,000

150,000

200,000

250,000

300,000

350,000

2005 2010 2015 2018

REVENUE2015 -2018

8.6%

2005 -20153.6%

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FY2015 - FY2018 Performance Highlights

EarningsPer ShareEBITDA

9% avg annual

$242M

2015

$17M

2015

$1.33

2015

$305M

2018

$25M

2018

$2.13

2018Revenue

16% avg annual

20% avg annual

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Three-year share price performance

2015 to 2018

Annualized TSR FY2015-2018

35%

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Investments

R&D in product development

Operating costs: Increased marketing investment Invested in business development and market research Invested in subject matter experts – cyber, emergency response

preparedness Invested in M&A support and back office to support growth

2017: > $4M 2018: > $4M 2019F: > $3M

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Mergers and Acquisitions

Acquiree Date Acquired Description of BusinessService

LineEarn-Out

Achievement

Manufacturer of agriculture products with IoT capabilities

Contract Manufacturing On trackIntragrain November 2018

Specialized psychological assessmentsHealth

No earn-out. On target with

forecastPriorityOne July 2018

Management of medical clinics

Health Yr1 and Yr2: 122%Primacy March 2012

Dedicated partner in IT and Information Security

Cyber Resilience

OfficeOn trackSecure Tech June 2018

Provision of IT cyber security professionals

Cyber Resilience

OfficeYr1 and Yr2:

100%DWP June 2014

Nuclear safety and emergency preparedness and response

EmergencyManagement

Services

Yr1: 136%, Yr2: on trackISR May 2017

Provision of engineering services

EngineeringServices

Yr1 and Yr2: 102%Amtek April 2014

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Financial StrengthDec 2018

ASSETS:Cash, net $ 8.4Receivables 65.6Work in Process 16.6Other Current Assets 7.4

98.0Capital Assets 13.0Goodwill 26.0Intangibles and Investment 14.1

$ 151.1LIABILITIES AND SHARHOLDERS’ EQUITY:

Payables and Other $ 43.6Unearned Revenue 8.1Total Liabilities 51.7Shareholders’ Equity 99.4

$ 151.1

-

200

400

600

800

1,000

1,200

1,400

1,600

2008 2010 2012 2014 2016 2018

Backlog (millions)

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Looking forward – As of February 6, 2019

FY2019 HI FY2019 LO FY2018

Revenues $ 360.0 $ 330.0 $ 305.0% increase [18% - 8%]

5% from recent acquisitions

EBITDA $ 30.0 $ 28.0 $ 25.3% increase [20% - 10%]

Net Earnings per Share * $ 2.40 $ 2.10 $ 2.13% increase [13% - -1%]

* EPS impacted by acquisition interest accretion

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Stability through diversityFocused on growth