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Annual General and Special meeting Jan 2018

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Annual General and Special meeting
Germain Lamonde, Founder and Executive Chairman
Philippe Morin, Chief Executive Officer

Published in: Investor Relations
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Annual General and Special meeting Jan 2018

  1. 1. Germain Lamonde, Founder and Executive Chairman Philippe Morin, Chief Executive Officer January 10, 2018 Annual General and Special Meeting
  2. 2. © 2018 EXFO Inc. All rights reserved. 2 Forward- looking statements Certain statements in this presentation, or given in response to your questions, may constitute forward-looking statements within the meaning of the Securities Act of 1934. The Private Securities Litigation Reform Act of 1995 provides “safe- harbors” for such forward-looking statements and we intend that any forward- looking statements made today be subject to the safe harbors. We caution you that any forward-looking statements are just predictions. They are not guarantees of future performance and involve risks and uncertainties. Actual results may differ materially from those projected in forward-looking statements and we invite you to review the company’s most recent filings with the Securities and Exchange Commission or Canadian securities commissions for a discussion of the factors at risk. These forward-looking statements speak only as of the date of this presentation and, unless required by law or applicable regulations, we will not be reviewing or updating the material that is contained herein. For a reconciliation of adjusted EBITDA to net earnings, refer to the Q1 2018 news release on EXFO’s website. All amounts in millions of US dollars, except otherwise noted.
  3. 3. Smooth CEO transition © 2018 EXFO Inc. All rights reserved. 3 Germain Lamonde Founder & Executive Chairman Philippe Morin Chief Executive Officer
  4. 4. FY 2017 results © 2018 EXFO Inc. All rights reserved. 4 *Adjusted EBITDA represents net earnings before interest, income taxes, depreciation and amortization, stock-based compensation costs, restructuring charges, change in fair value of cash contingent consideration and foreign exchange loss. $22.0M Adj. EBITDA* margin of 9.1% $12.9M Cash flows from operations $243.3M Revenue up 4.6%
  5. 5. Product family sales Physical : +6.6% in 2017 – Optical test leadership – 100G investment cycle Protocol: -1.7% in 2017 – Rationalized passive wireless SA portfolio $144.1 $151.9 $161.9 $80.6 $83.3 $81.9 FY 2015 FY 2016 FY 2017 Physical Protocol InmillionsofUS$ *Excludes losses on FX contracts. © 2018 EXFO Inc. All rights reserved. 5
  6. 6. Geographical sales Americas: +5.6% in 2017 – Leveraged 100G investment cycle – Headwind: consolidation tier-1 CSPs EMEA: +8.6% in 2017 – Catch-up spending among CSPs – Ontology revenue contribution Asia-Pacific: -2.9% in 2017 – Slowdown in China $119.5 $57.3 $45.3 $222.1 $127.5 $57.2 $47.9 $232.6 $134.7 $62.1 $46.5 $243.3 Americas EMEA Asia-Pacific Global FY 2015 FY 2016 FY 2017 InmillionsofUS$ *Excludes losses on FX contracts. © 2018 EXFO Inc. All rights reserved. 6 55% 26% 19%
  7. 7. © 2018 EXFO Inc. All rights reserved. 7 M&A strategy Accelerate growth, critical mass and profitability in T&M and Systems
  8. 8. - Optical RFoCPRI test capabilities for fiber-based radio access networks - First all-in-one solution to combine optical, Ethernet and RF testing - New remote RF interference monitoring for C-RAN - Deal: US$5.0M in cash + US$3.5M in stock © 2018 EXFO Inc. All rights reserved. 8 FY’17 (November 2016)
  9. 9. - Automated network topology discovery and service-chain mapping - With EXFO’s active system: real-time views of network services and related elements for root-cause analysis - Deal: All-cash valued at US$7.8M, + minor earnout (net of cash acquired) © 2018 EXFO Inc. All rights reserved. 9 FY’17 (March 2017)
  10. 10. - Complementary high-end optical test instruments for lab and manufacturing markets - Includes OSAs, tunable lasers, filters, and passive optical component test system - Deal: US$9.5M in cash (net of cash acquired) © 2018 EXFO Inc. All rights reserved. 10 FY’18 (October 2017)
  11. 11. - Provider of network and subscriber intelligence - Leading passive service assurance, analytics and professional services - Deal: 40.3% stake - Entire Astellia equity: US$30.3M © 2018 EXFO Inc. All rights reserved. 11 FY’18 (Pending)
  12. 12. Astellia update AMF green light to launch public tender offer (PTO) (Dec. 12, 2017) - All hurdles passed before launching of PTO EXFO announced opening of PTO (Dec. 15, 2017) - Offer extends 25 trading days to January 23, 2018 AMF to disclose results of PTO (Jan. 29, 2018) - EXFO seeking to acquire 100% of Astellia’s equity © 2018 EXFO Inc. All rights reserved. 12
  13. 13. © 2018 EXFO Inc. All rights reserved. 13 C$70.0M (US$54.3M) and US$ 9.0M in revolving credit facilities Usage - Astellia’s remaining equity - Working capital - General corporate purposes M&A focus - Deliver value and synergies from recent acquisitions - No meaningful acquisition in the short-term New credit facilities
  14. 14. Q1 2018 Results/Outlook Philippe Morin, CEO
  15. 15. Growth drivers © 2018 EXFO Inc. All rights reserved. 15 Fiber 5G Network virtualization Cloud
  16. 16. Major customer groups © 2018 EXFO Inc. All rights reserved. 16 Webscale companies Communications service providers Equipment manufacturers
  17. 17. Revenue $63.4M © 2018 EXFO Inc. All rights reserved. 17 Bookings $65.9M IFRS net earnings $2.7M Adjusted EBITDA* $6.1M * Adjusted EBITDA represents net earnings before interest, income taxes, depreciation and amortization, stock-based compensation costs, change in the fair value of cash contingent consideration and foreign exchange gain. Adjusted EBITDA margin of 9.6% Q1 2018 results
  18. 18. © 2018 EXFO Inc. All rights reserved. 18 Financial milestones Short-term1 (FY 2018) Medium-term (Three years) Adj. EBITDA2of $26 M (18% growth YoY) Adj. EBITDA margin of 15% 1Short-term financial milestone excludes financial results from pending Astellia acquisition. 2Adjusted EBITDA represents net earnings before interest, income taxes, depreciation and amortization, stock-based compensation costs, and foreign exchange gain or loss.
  19. 19. Questions?

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