Alithya Group inc.

Good morning, ladies and gentlemen, and welcome to Alicia's fourth quarter and fiscal 2022 financial results. I would now like to turn the meeting over to Rachel Andrews, Vice President, Communications and Marketing at Alicia. Please go ahead, Ms. Andrews.

Good morning everyone and thank you once again for joining us for Alicia's fourth quarter and fiscal 2022 results conference call. The press release and MD&A with complete financial statements and our related notes were issued this morning and are now posted on our website. The webcast presentation can also be found on our website in the investors section. Before we begin, I'd like to specify that this conference call is intended for the financial community. Also, please be advised that this call will contain statements that are forward-looking and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated. For more information, please refer to the cautionary note in our presentation and to the forward-looking statements and risk and uncertainty section of our MD&A available on our website. All figures discussed on today's call are in Canadian dollars, unless otherwise stated, and we may refer to certain indicators that are non-IFRS measures. Please refer to the cautionary note in our presentation and to the non-IFRS measures section of our MD&E for more details. Presenting this morning are Paul Raymond, Aletheia's President and Chief Executive Officer, as well as Claude Cibot, our Chief Financial Officer. Now, I would like to turn the call over to Paul Raymond. Paul.

thank you and good morning everyone bonjour i'm very pleased to be here with you this morning to speak about another quarter of record revenues for alivia to close out our 2022 fiscal year the quarter was marked by industry leading growth in revenues and adjusted EBITDA both on a sequential basis and year over year on that note before i dive deeper into the drivers behind our fourth quarter numbers i'd like to take a moment to discuss our latest transaction the acquisition of Datum Consulting Group, which is expected to close on July 1st. As you have seen in the past, we continue to adhere to a very disciplined approach to mergers and acquisitions. Our strategy remains focused on a balanced approach to organic growth and on acquiring quality companies at the right time for the right price. Again, we look for complementary companies that can leverage our platform to accelerate growth and generate synergies from our scale. The acquisition of Datum really epitomizes that strategy, and there are three main takeaways from the transaction that I would like to share with you. First and foremost, Datum is a leader in specialized digital transformation services and software that primarily targets the insurance industry and public sectors, which are two staples of Aletheia's existing operations. As Aletheia continues to penetrate deeper into the global insurtech market, The acquisition of Datum adds six of the top 10 health insurers in the United States to our growing client base. Additionally, I spoke earlier about the importance of synergies. The acquisition of Datum adds a suite of 14 intellectual property-based products to our toolbox, which greatly enhances our flexibility in addressing an even wider range of customer projects. And finally, Datum generates a growing proportion of revenues from its SaaS offering or SaaS as a service, which will bolster Aletheia's offer of cloud-based solutions that are always in growing demand. Now back to our fourth quarter performance. We closed out the year with another quarter of record revenue, and our signed contracts continue to feed a healthy pipeline of projects. So we head into fiscal 2023 with a solid book-to-bill ratio of 2.4 for the past 12 months. Furthermore, with the announcements of three acquisitions in our last two quarters alone, this will also add to our bookings going forward. In the past quarters, we spoke a great deal about the relevance of bookings which translate into future revenue. In the fourth quarter, our past bookings contributed to a record $120 million in revenue, or a 54% increase over the same quarter in fiscal 2021. We are very proud of this industry-leading achievement. At the same time, Q4 was another exceptionally strong quarter in terms of new bookings, particularly in the manufacturing and healthcare verticals in the United States and the financial services in Canada. Those new bookings have replenished our healthy pipeline as we head into fiscal 2023, allowing us to maintain our momentum. Also, we are more than happy to have welcomed to Aletheia more than 120 new customers throughout the fiscal year. Now, on a regional basis, Aletheia experienced 63% revenue growth across our Canadian operations. That is a significant number driven by general post-pandemic recovery in many sectors of the economy and the accelerating need for a trusted digital transformation partner. Part of that growth is also attributable to Aletheia's acquisition of R3D in April 2021, with synergies reached through the completion of the company's administrative integration into Aletheia's operations in Q3. and revenue generated by two long-term contracts signed with Beneva and Québécois as part of that acquisition. On that note, I'm pleased to inform you that after one year of doing business with these two major clients, we are on track in generating more than $60 million in billable hours promised per year. Of note, future bookings from Beneva and Québécois contracts will not be included unless the contractual revenue minimums are exceeded. Organic growth was also the name of the game in the United States, where Aledia experienced a 40% year-over-year increase in revenues, particularly, as previously mentioned, in the manufacturing and healthcare verticals. Our U.S. growth included a $5 million revenue contribution from the newly acquired Vitalis, and that from only two months on the books in the quarter. We are also encouraged by the continued growth and momentum of both our Oracle and Microsoft practices in the U.S., particularly the latter which is now generating returns on substantial bookings reported in previous quarters. Our dedicated team successfully completed 21 go-lives of enterprise cloud implementations. Internationally, our European operations also experienced a record quarter with a year-over-year organic increase in revenues of 55%. That performance is an encouraging sign of a healthy business in a region where our customers were particularly hard hit by the pandemic. And as we continue to leverage synergies across all of our operations, the Aletheia Digital Solutions Center, headquartered in the province of Quebec, and by extension our Morocco hub, have stepped in to assist our office in France in addressing its growing portfolio of new projects. Filling that void of technical expertise remains one of the biggest challenges at the forefront of a competitive IT industry, along with lingering global uncertainties and inflationary pressures. Accordingly, Accelerated growth sometimes forces us to reluctantly hire subcontractors in order to fulfill our growing pipeline of projects, and that in turn has a negative impact on our gross margins. That being said, the harmonization of our internal training initiatives, our recruitment campaigns, our new offshore offices, and our organizational culture is strengthening our ability to hire and maintain the best available talent, which provides us with confidence and optimism as we enter fiscal 2023. Indeed, our customers can now count on more than 3,700 professionals to drive their digital projects, and this is not including the 150 new colleagues we are about to welcome on July 1st with the expected closing of the data map transaction. At the same time, we experienced an important growth in the number of permanent employees during fiscal 2023, namely an increase of almost 30%. Please turn to slide six to discuss our gross margin objectives. Given our new critical mass and growing maturity, in Q4, we started accelerating our efforts to drive cost efficiencies and synergies across the company and achieve industry standard SG&A targets. Also, as explained in our strategic 2022-2024 plan, we are continuing our initiatives to transition to higher value services, to hire more permanent employees, and to acquire complementary companies with higher margin profiles. I would now like to turn the meeting over to Claude Sibaud, Alitza's Chief Financial Officer, who will expand on the financial highlights that I have outlined. Claude?