Slides
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CIBC Conference - Toronto May 22, 2025 Investor Presentation
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Caution Regarding Forward Looking Statements 2© 2024 Calian Group Ltd. Certain information included in this document is forward-looking and is subject to important risks and uncertainties. The results or events predicted in these statements may differ materially from actual results or events. Such statements are generally accompanied by words such as “intend”, “anticipate”, “believe”, “estimate”, “expect” or similar statements. Factors which could cause results or events to differ from current expectations include, among other things: the impact of price competition; scarce number of qualified professionals; the impact of rapid technological and market change; loss of business or credit risk with major customers; technical risks on fixed price projects; general industry and market conditions and growth rates; international growth and global economic conditions, and including currency exchange rate fluctuations; and the impact of consolidations in the business services industry. For additional information with respect to certain of these and other factors, please see the Company’s most recent annual report and other reports filed by Calian with the Ontario Securities Commission. Calian disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. No assurance can be given that actual results, performance or achievement expressed in, or implied by, forward-looking statements within this disclosure will occur, or if they do, that any benefits may be derived from them.
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Calian FY24 Snapshot 3© 2024 Calian Group Ltd. 49% commercial 32% international 30% products 51% government 68% Canadian 70% services Revenue segmentation Customers Geography Offering $747M 2024 Revenues 15% Learning 29% ITCS 28% Health 28% Advanced technologies 5,800 Workforce Ottawa Head office $542M Market cap CGY TSX +40 years History
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Serving Key Customers 4© 2024 Calian Group Ltd. Space Health Defence
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Investment Thesis © 2024 Calian Group Ltd. 5 Capitalizing on Strong Industry Tailwinds Showcasing a Track Record of Execution Leveraging Robust Operating FCF Maintaining a Solid Balance Sheet Creating Shareholder Value 1 2 3 4 5
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© 2024 Calian Group Ltd. 6 1. Capitalizing on Strong Industry Tailwinds
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7© 2024 Calian Group Ltd. Defence, Space and Health are Poised to Grow Defence • Pressure on Canada to increase defence spending to 2% of GDP • Ongoing conflicts in Europe • Canada’s recent budget increase in border security • NATO countries increasing defence spending Space • Advancements in technology • Increased private investment • Global connectivity and internet infrastructure • Geopolitical and national security interests • Space exploration and resource mining Health • Aging global population • Advancements in medical technology • Growth of chronic diseases and mental health issues • Health insurance and policy changes • Global focus on preventive care
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8© 2024 Calian Group Ltd. Doubling Down on Near-Term Defence Opportunity 185 228 235 271 330 363 2020 2021 2022 2023 2024 LTM Q2-25 Calian Defence Revenues (M$) 14% CAGR US China Russia Germany UK India Saudi Arabia France Japan South Korea Australia Italy Israel Ukraine Poland World’s 15 Largest Defence Budgets ~$US 2.0 Trillion 2024 $968B $235B$146B C$41B $81B Source International Institute for Strategic Studies
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9© 2024 Calian Group Ltd. Calian FY24 Defence Industry Exposure ~$330M FY24 Defence Revenues ~44% FY24 % of Total Revenues Segment FY24 Revenues FY24 % Defence Revenues Description ITCS $214M ~15-20% Delivers IT professional services to both private and government customers operating in the Defence space Health $212M ~65-70% Delivers primary care and occupational health services to the Canadian Armed Forces Advanced Tech. $208M ~20-25% Provides engineering services, solutions and communication products to large defence prime contractors or the government Learning $113M ~95-100% Provides military training for the Canadian Armed Forces and NATO member countries Total $747M ~$330M LTM Q2-25: $363M in defence revenues, or 49%
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© 2024 Calian Group Ltd. 10 2. Showcasing a Track Record of Execution
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Double-Digit Revenue & Adj. EBITDA CAGR 11© 2024 Calian Group Ltd. 275 305 343 432 518 582 659 747 2017 2018 2019 2020 2021 2022 2023 2024 Revenues (in millions of $) 24 27 29 38 56 69 70 92 2017 2018 2019 2020 2021 2022 2023 2024 Adj. EBITDA1,2 (in millions of $) 1 This is a Non-Gaap measure. Please refer to the MD&A. 2 Certain comparative figures have been reclassified to align with the current year’s presentation. Please refer to the MD&A. 15% CAGR 21% CAGR Growing profitably
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Focusing on Doubling Adj. EBITDA1 Over 3 Years 12© 2024 Calian Group Ltd. 659 113 228 1000 FY23 Organic Growth Acquisitions + Growth FY26 Revenue Bridge1 (in millions of $) 66 11 39 9 125 FY23 Organic Growth Acquisitions Margin Expansion FY26 Adj. EBITDA1 Bridge2 (in millions of $) Note: 5% was used for organic growth and 10% for acquisition growth Note: A margin of 10% was used on organic growth and 17% on acquisitions 1 This is a non-GAAP measure. Please refer to the MD&A. The adjusted EBITDA from FY23 to FY26 represents the previous definition of adjusted EBITDA. 2 This 3-year financial model is meant to provide the financial market with a general direction of how Calian plans to reach $1 billion in revenues and $125 million in adjusted EBITDA by the end of FY26. These are aspirational goals and not guidance. The model is dependent on several factors including general market conditions and ability to complete acquisitions. Please refer to the caution regarding forward-looking statements at the beginning of this presentation. Revenue Bridge2 (in millions of $) Adj. EBITDA1 Bridge2 (in millions of $)
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13© 2024 Calian Group Ltd. 3-Yr Strategic Plan - Capital Deployed for M&A Acquisition Purchase Price (M$) Revenue (M$) Adj. EBITDA1 (M$) Adj. EBITDA1 Margin (%) Multiple Decisive 50 40 8 20% 6.3x MDA Nuclear Assets 8 8 2.5 31% 3.2x Mabway 32 35 8 23% 4.0x AMS 21.5 40 4.5 11% 4.8x Total 111.5 123 23 21% 4.8x Targets 250-300 210-250 36-43 17% 6x-8x % Target achieved (at midpoint) 41% 53% 59% Above Below
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14© 2024 Calian Group Ltd. Short-Term Headwinds in ITCS Delayed procurement decisions by the Canadian government due to the elections Delayed procurement decisions by U.S. commercial customers due to longer than anticipated refresh cycles and tariffs Increased costs due to the transition of our cybersecurity platform Investments for future growth 1 2 3 4 Challenges are more cost-related than revenue driven
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15© 2024 Calian Group Ltd. Starting a Portfolio Review Explore options for non-core assets Refine our go-to-market approach Double-down on high-growth areas Optimize our cost structure Reassess our capital allocation priorities 1 2 3 4 5 Capture significant tailwinds in defence, health and space
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© 2024 Calian Group Ltd. 16 3. Leveraging Robust Operating FCF
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OFCF Conversion Rate From Adj. EBITDA > 75% 17© 2024 Calian Group Ltd. 1 This is a non-GAAP measure. Please refer to the MD&A. 2 Certain comparative figures have been reclassified to align with the current year’s presentation. Please refer to the MD&A. 34 44 55 54 72 2020 2021 2022 2023 2024 Operating Free Cash Flow (OFCF)1,2 (in millions of $) 88% 79% 80% 76% 78% 2020 2021 2022 2023 2024 OFCF Conversion1,2 (in %) 38 56 69 70 92 2020 2021 2022 2023 2024 Adj. EBITDA1,2 (in millions of $) Not a capital intensive business
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Allocating Capital Primarily to Acquisitions 18© 2024 Calian Group Ltd. 8 11 26 35 57 73 77 100 2017 2018 2019 2020 2021 2022 2023 2024 Investments in Business (in millions of $) Acquisitions Capex 9 9 9 10 12 13 15 19 2017 2018 2019 2020 2021 2022 2023 2024 Return to Shareholders (in millions of $) Dividends Share Repurchases Planning to repurchase 6% of float in FY25
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19© 2024 Calian Group Ltd. Acquisition of Advanced Medical Solutions (AMS) Financial Highlights Strategic Rationale ▪ Increases service offerings into primary care, paramedicine and air & ground ambulance ▪ Expands and strengthens geographic footprint and competitive position in northern Canada ▪ Diversifies customer base into the industrial sector ▪ Provides cross selling opportunities for both government and industrial customers ▪ Ability to leverage indigenous community partnerships to support future federal and defence contracts ▪ Better positions Calian to benefit from the federal government’s plan to invest in the North $21.5M Purchase Price Upfront $5.0M Earnout ~$40M Revenues 4.8x Multiple Upfront
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© 2024 Calian Group Ltd. 20 4. Maintaining a Solid Balance Sheet
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Net Debt to Adj. EBITDA < 1.0x 21© 2024 Calian Group Ltd. 24 79 43 34 52 64 2020 2021 2022 2023 2024 Q2-25 Cash & Cash Equivalents (in millions of $) 0 0 8 38 90 121 2020 2021 2022 2023 2024 Q2-25 Total Debt (in millions of $) 0.0x 0.0x 0.0x 0.1x 0.4x 0.7x 0.0x 0.5x 1.0x 1.5x 2.0x 2.5x 3.0x 2020 2021 2022 2023 2024 Q2-25 Net Debt to Adj. EBITDA1 (ratio) 2.5x Threshold 1 This is a non-GAAP measure. Please refer to the MD&A. Solid balance sheet to pursue growth
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Benefitting From Solid Backlog & New Contracts 22© 2024 Calian Group Ltd. 1.3 1.3 1.3 1.2 1.2 1.1 2020 2021 2022 2023 2024 Q2-25 Backlog (in billions of $) 554 447 699 580 785 875 2020 2021 2022 2023 2024 LTM Q2-25 New Contract Signings (in millions of $) The AMS acquisition will add ~$250M to the backlog in Q3
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© 2024 Calian Group Ltd. 23 5. Creating Shareholder Value
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KPIs per Share are Growing 24© 2024 Calian Group Ltd. $2.48 $2.78 $3.70 $4.15 $4.84 $4.57 $6.02 $4.76 2018 2019 2020 2021 2022 2023 2024 LTM Q2- 25 OFCF1,2 / diluted share (in $) $3.50 $3.61 $4.23 $5.28 $6.07 $5.98 $7.68 $6.59 2018 2019 2020 2021 2022 2023 2024 LTM Q2-25 Adj. EBITDA1,2/diluted share (in $) $2.37 $2.56 $2.77 $3.89 $4.15 $3.81 $4.86 $3.92 2018 2019 2020 2021 2022 2023 2024 LTM Q2-25 Adj. EPS Diluted1,2 (in $) 1 This is a non-GAAP measure. Please refer to the MD&A. 2 Certain comparative figures have been reclassified to align with the current year’s presentation. Please refer to the MD&A. We are yielding strong returns 15% Yield 11% Yield 9% Yield
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25© 2024 Calian Group Ltd. Director, Investor Relations ir@calian.com Jennifer McCaughey, CFA, F.CIRI