Altus Group Hosts Investor Update Conference Call Today and Provides Financial Outlook for its Altus Analytics Business
TORONTO (June 26, 2019) – Altus Group Limited (“Altus Group” or “the Company”) (TSX: AIF), a leading provider of software, data solutions and independent advisory services to the global commercial real estate industry, is hosting an investor update conference call and live webcast today with investors and financial analysts. The conference call and webcast will begin promptly at 4:30 pm ET and is expected to conclude at approximately 6:30 pm ET. The event will include an update of the Company’s Altus Analytics business, as it pertains to its cloud and subscription strategy, including 2019 guidance for Altus Analytics and a five-year revenue goal. A copy of the related presentation will be made available at 4:30 pm at: https://www.altusgroup.com/wp-content/uploads/2019/06/Altus-Group-Investor-Update-Presentation-June-26-2019.pdf
“With the release of our enhanced ARGUS Cloud platform in July, we are accelerating our strategy to transition our Altus Analytics revenue to target over 90% recurring by the end of 2021, which increases the predictability of future revenues and leads to a higher overall economic value model,” said Robert Courteau. “Given the strength of our operating model, by 2021 we expect to be on a path to return to best in class margin and revenue performance.”
Highlights from the presentation are outlined below:
- The July release of ARGUS Cloud will offer enhanced client value, including: 1) simple migration to a cloud environment that doesn’t require re-implementation; 2) consistent business processes and transparent internal business collaboration, supported by extensive reporting and benchmarking capabilities across their portfolios; 3) global data standardization across customer’s organizations to better utilize data; 4) access to new applications and new cloud functionality (including an Application Interface Toolkit targeted for the third quarter 2019); and 5) reduced IT infrastructure and hosting costs.
- Over the next two quarters the Company will continue to operate on a hybrid selling model, offering both perpetual and subscription contracts; as of July all ARGUS Enterprise sales to net new customers will be cloud subscriptions, and in 2020 the Company expects a high majority of its new sales will be of a subscription variety. Over the next three years, the Company expects to migrate current on-premise customers to a cloud environment.
- Strong 70+% Altus Analytics recurring revenue base is expected to sustain year-over-year Altus Analytics revenue growth during key transition years in 2019 & 2020. Leveraging past investments and the combination of normalizing development activity onto one cloud platform, prudent management of expenses, and revenue growth is expected to support an adjusted EBITDA margin target to over 30% by 2023.
- Provided Altus Analytics revenue guidance for 2019 of 7%-12% revenue growth (16%-19% recurring revenue growth) to achieve full year revenue performance between $197 – $205 million; adjusted EBITDA margins for the full year are expected to be between 17-20%, reflecting the run-rate of the 2018 investments and the shift to subscriptions in the second half of the year.
- Set a five-year goal to double Altus Analytics revenues to $400 million by 2023.
The Company also reinforced its record revenue performance expectations for its global Property Tax business in 2019.
The investor presentation used during the call and webcast will be made available on Altus Group’s Investor Relations section of the website, altusgroup.com, and the details for the call and live webcast are as follows:
Investor Update Conference Call & Webcast
|Date:||Wednesday, June 26, 2019|
|Time:||4:30 p.m. (ET)|
|Webcast:||altusgroup.com (under Investor Relations)|
|Live Call:||1-800-273-9672 (toll-free) or 416-340-2216 (Toronto area)|
|Replay:||A replay of the call will be available via the webcast at altusgroup.com.|
About Altus Group Limited
Altus Group Limited is a leading provider of software, data solutions and independent advisory services to the global commercial real estate industry. Our businesses, Altus Analytics and Altus Expert Services, reflect decades of experience, a range of expertise, and technology-enabled capabilities. Our solutions empower clients to analyze, gain insight and recognize value on their real estate investments. Headquartered in Canada, we have approximately 2,500 employees around the world, with operations in North America, Europe and Asia Pacific. Our clients include some of the world’s largest real estate industry participants. Altus Group pays a quarterly dividend of $0.15 per share and our shares are traded on the TSX under the symbol AIF.
For more information on Altus Group, please visit: www.altusgroup.com.
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
This press release contains certain statements that constitute forward-looking information within the meaning of applicable securities laws (“forward-looking statements”). Statements concerning Altus Group Limited’s (“Altus” or the “Company”) objectives, goals, strategies, priorities, intentions, plans, beliefs, expectations and estimates, and the business, operations, financial performance and condition of Altus are forward-looking statements. The words “believe”, “expect”, “anticipate”, “estimate”, “intend”, “may”, “will”, “would”, “could”, “should”, “continue”, “plan”, “goal”, “objective”, and similar expressions and the negative of such expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.
Certain material factors and assumptions were applied in providing these forward-looking statements. Forward-looking information involves numerous assumptions including the following specific assumptions: the ability of Altus to meet its “Revenue”, “Recurring Revenue” and “Adjusted EBITDA Margins” targets, assumptions on Altus Analytics bookings growth, retention rates, growth in its Data Solutions and Appraisal Management businesses, assumptions on the Argus Software revenue model, license sales, subscription renewal rates, cloud conversion (including timing and rate), assumptions on other Altus Analytics contributors, expenses, operating leverage, and foreign exchange. Projections may be impacted by macroeconomic factors, in addition to other factors not controllable by the Company. Altus has also made certain macroeconomic and general industry assumptions in the preparation of such forward-looking statements. Management believes that the expectations reflected in forward-looking statements are based upon reasonable assumptions; however, Management can give no assurance that actual results will be consistent with these forward-looking statements. Not all factors which affect the forward-looking information are known, and actual results may vary from the projected results in a material respect, and may be above or below the forward-looking information presented in a material respect.
Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Altus’ actual results, performance or achievements, or developments in its industry, to differ materially from the anticipated results, performance, achievements or developments expressed or implied by such forward-looking statements. Risks related to forward-looking statements include, among other things, risks relating to cloud adoption and conversion, pricing pressure, risks relating to Altus’ Appraisal Management business and demand for implementation services; as well as general market conditions, including economic and exchange rate dynamics. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. The Company’s most recently filed Annual Information Form and the most recently filed annual MD&A for the year ended December 31, 2018, available on SEDAR at www.sedar.com, also identify additional factors that could affect the operating results and performance of the business. Forward-looking statements are based on management’s current plans, estimates, projections, beliefs and opinions, and Altus does not undertake any obligation to update forward-looking statements should assumptions related to these plans, estimates, projections, beliefs and opinions change except as required by applicable securities laws. All of the forward-looking statements made in this presentation are qualified by these cautionary statements and other cautionary statements or factors contained herein, and there can be no assurance that the actual results or developments will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, Altus.
This press release makes reference to certain non-IFRS financial measures. These non-IFRS financial measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement IFRS measures by providing further understanding of operations from Management’s perspective. Accordingly, non-IFRS measures should never be considered in isolation nor as a substitute to using net income as a measure of profitability or as an alternative to the IFRS consolidated statements of revenues, net income, cash flows or other IFRS statements. Management presents non-IFRS measures, specifically “Recurring Revenue”, “Adjusted EBITDA” and “Adjusted EBITDA Margin” as it believes these supplementary disclosures provide useful additional information related to the operating results of Altus Analytics and uses these measures of financial performance as a supplement to the consolidated statements of income of this business.
See “Non-IFRS measures” in Altus’ MD&A for the three month ended March 31, 2019 for a more complete description of “Adjusted EBITDA Margin”, for a reconciliation of Adjusted EBITDA to its most directly comparable IFRS measure and for a discussion of Altus Analytics “Recurring Revenue”, including its definition.
Camilla BartosiewiczBartosiewicztoronto-hqVice President, Investor Relations