Investors Presentation mdf.to - November 2020 - mdf commerce
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Investors Presentation
mdf.to
November 2020
Forward-looking Statement
This document contains certain forward-looking statements with respect to the Company. These forward-looking statements, by their nature,
necessarily involve risks and uncertainties that could cause actual results to differ materially from those contemplated by these forward-
looking statements. We consider the assumptions on which these forward-looking statements are based to be reasonable, but caution the
reader that these assumptions regarding future events, many of which are beyond our control, may ultimately prove to be incorrect since
they are subject to risks and uncertainties that affect us.
We disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future
events or otherwise, except as required by applicable securities legislation.
All amounts are in Canadian dollar.
These assumptions include, without limitations:
• No significant change in the current value of CAD$ vs. US$
• No significant increase or decrease in revenues and operating expenses
• Stable market conditions
November 2020 | TSX: MDF 2
Management team
Luc Filiatreault
President and Chief Executive Officer
Shared Services
Julie Bélanger Paul Bourque Hélène Hallak André Leblanc Camil Rousseau Catherine Roy
Vice President, Human Chief Financial Vice President, Corporate Vice President, Marketing Chief Technology Vice President,
Resources Officer Dev. & Chief Legal Officer and Public Affairs Officer Transformation
Platforms
Mark Eigenbauer Louis Mousseau Andreanne Simon Jean-Michel Stam
President, Strategic Sourcing President, e-Commerce President, Supply Chain President, e-Marketplaces
November 2020 | TSX: MDF 3
September 2019 March 2020 July 2020
⚫ Luc joins with the mandate of bringing mdf ⚫ COVID-19 start – Work from home ⚫ Launch of M&A roadmap exercise
back to growth mode ⚫ Launch of new MRR credit facility project
⚫ Logic is now a new ecommerce partner
April 2020
October 2019 ⚫ Hiring of Orckestra VP Sales
⚫ COVID-19 contingency planning
⚫ Restructuring of Management team
⚫ Surge in grocery ecommerce
⚫ Third investor virtual roadshow August 2020
November 2019 ⚫ Reporting of first SAAS KPI quarter
⚫ Hiring of Supply Chain VP Sales ⚫ Signing of first Strategic Sourcing customer in
⚫ First investor roadshow in 5+ years (Montreal, May 2020 Europe – NHS
Toronto, Calgary, Vancouver)
⚫ Hiring of K-eCommerce VP Sales
⚫ First earnings call in a very long time
⚫ Raised $16M bought deal September 2020
⚫ Hiring of VP of HR
⚫ AGM
December 2019 ⚫ Launch new Merx.com platform
⚫ Rebranding of Company
⚫ Acquisition of new ecommerce Company ⚫ mdf presents at TSX Technology Investor Day
⚫ New board member from California
⚫ Launch of rebranding project (Renegade)
June 2020 October 2020
February 2020 ⚫ Launch of IR Strategy ⚫ $50M secured credit agreement
⚫ Presentation of 5-year Strategic Plan in Global ⚫ Launch of strategic planning execution review ⚫ $48M bought deal offering
Townhall to all mdf employees ⚫ Launch of Future Office Work Group ⚫ V5 update of SMB ecommerce software
⚫ Second Investor roadshow
⚫ Partnership with KPMG
⚫ Hiring of VP Product Strategy for Strategic
Sourcing November 2020 | TSX: MDF 4
Q1
Q2Highlights
F2021 Metrics dd
text
+14% +54%
Total Revenue Growth Unified
$20.8M Commerce
Over previous Q2 reporting
YoY period
+11% $2.3M
Total MRR Growth Adj EBITDA
$88M*
Over previous Q2 Liquidity
reporting period (11%)
November 2020 | TSX: MDF 5
* As at September 30,2020 on a pro forma basis including new financing & November share issuance
Year over Year MRR* Growth
16 CAD 10% YoY 11% YoY
9% YoY
16 CAD
15 CAD
4% YoY
Millions
15 CAD
Deferred
Revenue
14 CAD
14 CAD +32%
13 CAD
FY19 FY20 FY19 FY20 FY20 FY21 FY20 FY21
Q3 Q4 Q1 Q2
* MRR are composed of subscription and support revenues that are recurring in nature.
Therefore, they exclude one-time fees, professional fees and other types of non-recurring revenues. November 2020 | TSX: MDF 6
Platforms
mdf
% Rev ARR Substitute -
Platform Focus Offer Market Competitors commerce
LTM LTM Disrupt
Advantage
Periscope
Breadth of
eProcurement software Bonfire
Strategic Public Entities and offering and
39 Growth and eTendering with $29M eSolutions Fragmented
Sourcing Large Enterprise Scope of
300k+ participants Negometrix
Network
Mercell
Enterprise and
Commerce Tools Adobe
End to End eCommerce mid-sized retail – Price, Speed,
Unified Elastic Path Oracle
41 Growth for mid-market to Growing $20M Flexibility, richer
Commerce Big Commerce Salesforce
Enterprise specialization feature set
SPS Commerce SAP
in groceries
Marketplaces for
End-User, some
Diamonds, electronic Fragmented Fragmented Established
eMarketplaces 20 Earnings marketplaces local, $13M
parts, automotive, jobs, by vertical by vertical brands
other int’l
dating
% revenue & ARR based on last twelve-month ended September 30,2020 November 2020 | TSX: MDF 7
Strategic Sourcing
Strategic Sourcing Acquisition
Vendor Registry – Closing date: November 16
Purchase price - $5.25M US Location – Knoxville Tennessee Activity – Strategic Sourcing
SaaS Based with subscription model Enhancements to existing Strategic Sourcing activities
• Public Sector Focused • + 5% MRR - ARR
• Over 400 active gov’t agencies – 70,000 active suppliers • + 35% supplier base
• Presence in 14 new states + strong combined presence • + 13% buyer base
in 10 more • + 50% geographic coverage in the US
• Over 100 agencies pay for advanced modules • Revenue run rate currently over 100k per month
• 68% FY18 growth and projected over 30% this year • Doubles the US sales team and adds critical DEV resources
November 2020 | TSX: MDF 9
Strategic Sourcing – New Platform Footprint
Existing agencies
Vendor Registry
November 2020 | TSX: MDF 10Strategic Sourcing
Platform
SaaS eProcurement platform One of the largest supplier
connecting 3,500 buyers to networks in North America
300,000+ suppliers
Market – US$10B market by 2023 with +10%CAGR (1), massive market
opportunity
Organic Growth Plan
• Adding more US sales capabilities and cross-sell/up-sell resources
for current base
• Investing in new AI features to extend product for cross-selling & increase
contract stickiness
M&A Growth Plan – Fragmented market ready for consolidation –
Many accretive US acquisitions
Q2 F21 KPIs : 93% MRR, +5% YOY Revenue Growth , +4% Sequential
November 2020 | TSX: MDF 11
(1) Source: MarketWatch – Procurement Software Market Valuation - October 15, 2018Strategic Sourcing
Platform
Recent product updates
to MERX.com
• Vastly improved UX
• Easier to navigate and understand scope
of offer and engage with the platform
• Optimized for mobile
• Optimization of pricing and packaging structure
• Specific goal of increasing ARPU and higher
conversion rate for free membership to paid
• New registration flow in BETA testing
• Easier process to increase conversion rates
from visitor to client
November 2020 | TSX: MDF 12
(1) Source: MarketWatch – Procurement Software Market Valuation - October 15, 2018Strategic Sourcing Platform
Current Customers Notable wins Customer Acquisition - Q2
3,500 buyers and 300,000+ supplier network • Caterpillar defense • 66 new active buyers
• Red Deer College • 6,000 new suppliers
• VR contribution: +70,000 suppliers +400 buyers
November 2020 | TSX: MDF 13Strategic Sourcing MRR Growth
Strategic Sourcing MRR
7,6 CAD
7,4 CAD
7,2 CAD
7,0 CAD
Millions
6,8 CAD
6,6 CAD
6,4 CAD
6,2 CAD
6,0 CAD
Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21
November 2020 | TSX: MDF 14Unified Commerce
Covid Update
• COVID-19 continues to impact consumer
behavior as online shopping surges around
the world
• 62% expect ongoing impact of Covid for 7+
months
• Second wave ongoing in NA and other
European markets in which mdf commerce
is active
• Expect higher volumes of usage, especially
from grocery vertical
• Holiday season, including Black Friday also
contributors to volume
*: Source: EY Future Consumer Index , October 22, 2020
November 2020 | TSX: MDF 16Unified Commerce
Platform
End-to-end seamless Extends from enterprise
omnichannel ecommerce platform to SMB
Proven agility for rapidly 52% surge with COVID-19
evolving eCommerce landscape Pandemic
Market – US$ 10.4B US eCommerce market by 2025 (1) with 12-15% CAGR,
B2B Valued at US$ 12.2T globally (2)
Organic Growth Plan
• Expanding sales capabilities with a focus on US markets & cross-selling
• Product Development: Improved deployment speed, agility, scalability & feature set
• Adding AI recommendation features, and more advanced BI.
M&A growth plan – Acquiring to further disrupt legacy players like Oracle, SAP, Adobe
& consolidate competitors e.g. k-eCommerce
Q2 F21 KPIs: 58% MRR - +54% YOY total revenue Growth.
November 2020 | TSX: MDF 17
(1) Source: Research & Markets, Digital Commerce Software Market – Growth, Trends, and Forecast (2020-2025), Jan 2020
(2) Source: Research & Markets, Global E-commerce Software Market Size…and Forecasts, 2018 To 2026, Sept 2018;Unified Commerce Platform
Current Customers Customer Acquisition - Q2
650+ clients including SQDC, Sobey’s, IGA, SMB: 161 new clients
Black&Decker, Subway, BRP, Groupon, Sports Experts. Enterprise: 2 new mandates - FGL (Sports Expert) and new client
Grafton Apparel - New grocery client: major implementation ongoing
November 2020 | TSX: MDF 18Unified Commerce MRR + Revenue Growth
Unified Commerce MRR + Revenue Growth
Millions 10,00 $
9,1 9,1
9,00 $
8,00 $
7,5
7,00 $
6,1
5,8 5,9 5,9
6,00 $ 5,8
5,4
5,2 5,3
5,1
5,0
5,00 $
4,6
4,4
3,8 3,9
4,00 $ 3,7
3,6
3,4 3,5
3,2
3,00 $
Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21
FY18 FY19 FY20 FY21
MRR UC Revenue UC
November 2020 | TSX: MDF 19Capital Markets
Comparable Valuations
Median EV/Sales 13.2x; MDF 1.87x
(2020) Mkt Cap - Enterprise Value -
Company Revenue - CA$ (M) EBITDA - CA$ (M) EV/Sales EV/EBITDA
CA$ (M) CA$ (M)
Shopify Inc. (NYSE:SHOP) 159,517.9 152,662.6 4,599.86 657.5 33.19x 232.19x
BigCommerce Holdings, Inc. (NasdaqGM:BIGC) 7,337.0 7,718.7 202.06 ( 43.49) 38.20x NM
Kinaxis Inc. (TSX:KXS) 5,883.2 5,626.2 319.9 72.14 17.59x 77.99x
Lightspeed POS Inc. (TSX:LSPD) 4,759.1 4,545.7 242.02 ( 31.02) 18.78x NM
SPS Commerce, Inc. (NasdaqGS:SPSC) 4,225.8 3,910.3 436.41 120.21 8.96x 32.53x
Tecsys Inc. (TSX:TCS) 587.5 571.9 121.31 13.67 4.71x 41.85x
Pivotree Inc. (TSXV:PVT) 226.3 249.1 - - - -
mdf commerce inc. (TSX:MDF) 210.1 220.0 83.25 7.92 2.64x 27.79x
Median 4,759.1 4,545.7 280.96 42.9 18.19x 59.92x
Compared to its direct peer group in digital commerce, mdf commerce trades at:
• 85% discount to the median EV/Sales multiples
• 53% discount to median EV/EBITDA multiples.
As we expand awareness & demonstrate performance, we believe the market should revalue the stock closer
to the median going forward – which is good for shareholders.
November 2020 | TSX: MDF 21
Data sources: S&P Capital IQ Mergermarket; CRM - Customer Relationship Management; SEC – Security; PYMT - Payment/Financials ; ISS - Industry Specific Software;
HCM - Human Capital Management; ERP - Enterprise Resource Planning; SCM - Supply Chain Management; IS - Internet Software.Reasons to Invest
mdf commerce is already
a major Digital Commerce
platform, managing 76% recurring
$Billions annually for gov't, revenue with high
enterprise, and SMBs margins, low
churn and free
cashflow
COVID-19 has
accelerated a global
shift to Digital
Positioned to Commerce Disrupting the Unified
dominate US$10B Transforming into a SaaS
Commerce space
Strategic Sourcing growth company like
with an integrated
market Shopify and BigCommerce,
path from back-office
but with free cash flow and
to front-office
significantly lower valuation
November 2020 | TSX: MDF 22Toll Free 877 677-9088 Phone 450 449-0102 1111 St-Charles Street West, East Tower, Suite 255 Longueuil, Québec Canada J4K 5G4 mdfcommerce.com
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