NowVertical Group Inc.

Good morning, everybody. We will, it's 7.30 now or 9.30 Eastern time. We will begin our webinar. Really, I could just start out and say, well, thank you that you, you know, I'm pleased that you could join us for our first quarter 2024 financial webinar. I'm Glenn Nelson, Vice President of Investor Relations and Communication. And with us today, we have Sandeep Minderata, our CEO, Christine Nelson, our Interim CFO, and Andre Garber, our Chief Development Officer. All three will be available to answer questions at the end of the webinar. And just to give you an idea of the format, the webinar today will begin with some opening comments from Sandeep on our results. Then we'll hear from Andre Garber around our recent acquisition or our recent disposition of Allegiant, and as well as Christine Nelson will provide some insights into the financials. I would like to remind you all today that some of the things that we will present are non-IFRS. You can find those measures or a reconciliation to the closest IFRS measure in our MDMA that we filed on CDAR Plus last night. Also, a recording of this webinar will be available on our website in our investor relations section after the call. With that, I would like to also remind everyone that we may contain some forward-looking statements. These statements are as of management's use of today and may not be reflective at any other date. So with that, I would like to pass it over to Sandeep.

Thank you very much, Glenn, and a very warm welcome to everyone. I'm thrilled to have you join us today. For our Q1 24 updates, this is the agenda that we will be using. I'll be taking you through the now vertical overview. This is for any of our new investors joining us today. And just a quick reminder for our existing stakeholders. And Then we will go into the Q1 2024 strategic updates, what kind of developments have been happening, what we have been working on. So I'll share some of these updates with you. And finally, I'll hand it over to Christine Nelson, who's our interim CFO, to share with you some of the financial results from Q1. With that in mind, let's just get into what is the now vertical equation in the market. And it's quite interesting where our positioning is, the position of operating in a very strong and rapidly growing artificial intelligent market. And we know that the demand for these AI solutions are increasing quite rapidly and the pressure on the CEOs is growing so significantly to deliver the business outcomes using the AI technology to gain that competitive edge in the market. And what that also creates is The problem for the organizations to really adopt these technologies at the pace at which the leadership wants them to do it There are some of the organizational complexities that you would have. There are these ever-growing data complexities in every business that we come across. Then you have got the growth in the AI technology landscape and that is bringing in more complexity because of the lack of knowledge and understanding of this technology, the in-house capabilities in these organizations. And if you look at that whole intersection of it, which is how do you deliver that AI, the return on investment from your investment in the artificial intelligence technologies? This is exactly where the problems are being faced by these large enterprises. This is where Now Vertical operates. We bring in this value to our clients. The value we bring to them is that we help our clients transform data into tangible business value with artificial intelligence. And we do it fast. That's where we are operating in the market space. What this equates into for us is it has given us a very credible portfolio of 250 plus clients globally. And these are some of the household names that you would see that are on the screen. Out of these 250 clients, there are about 100 plus enterprise clients that we are dealing with, which is quite phenomenal for the size of the business that we have. And out of these clients, there is one very interesting metric that we have, which is 30 plus of our clients have delivered a customer lifetime value of more than $5 million for us over their lifetime of the engagement with us, which is quite phenomenal. But at the same time, the question is raised, you know, what about the rest of the clients? And this just presents the massive opportunity of us being able to grow all of our enterprise clients and all the clients that we work with to the customer lifetime value of $5 million or higher. And that's a wonderful opportunity space for Now Vertical. If you now look at the shift in the strategic direction that we are going through, what are we transitioning ourselves to? This is going from the inorganic, aggressive acquisition led strategy to focus on the very organic growth, which is helping us build that sustainable platform and the foundation. And this is where we are going from being a business that was led by the acquisitions that collected a lot of data businesses to being that one brand and one business. And this is the platform that we are moving to build. This platform of one brand, one business. This platform that will leverage the combined integrated strength of all the acquired businesses This platform that is going to be driven by sustainability and profitability. And at the same time, this platform is going to help us create the foundation for the future in organic growth as well. And we have talked about these four pillars, the four drivers, if you like, of our integration strategy. And what we would like to do is take you through some more details, deep dive into this integration strategy, give you more clarity around what this integration strategy means for Now Vertical. What kind of actions we have taken in each one of these pillars? What are our future plans? And we are going to do this via a webinar that we will be press releasing the date for. Most likely this date is going to be the end of June. And we really, I recommend and invite you to that webinar where we will be bringing a lot more details about what this integration strategy is going to look like for NowVertical in the coming months and quarters. Jumping straight into the Q1 strategic updates, as you know, this is our transition quarter. A lot of changes have happened in this quarter. This is going to be our transition year as well. I just want to give you some updates on the areas of the changes that we are bringing about. And of course, the very first one that I would like to talk about, the changes that we brought about in Q1 are around the leadership and the governance. As you know, this is a new management team within Now Vertical. I joined as the chief exec of Now Vertical Group in January. Christine Nelson took over as the interim CFO in January. We have got Santiago, who's the EVP of LATAM. We have got Mostafa, who came in from Smartlytics, and he is now the EVP of products and tech. We have also promoted Shailesh Malia, who is now the EVP of solutions and services and focused on the growth of our strategic accounts in North America and EMEA. We also promoted Pankaj Khag, who is now responsible for the projects and the delivery. So he's the EVP of products and delivery and focused on North America and India. And there's a lot of integration work we have already done there. There were significant changes we brought about within the board of Now Vertical as well. Dave Sharon, he and Chris Ford, they joined us earlier in the year on the board as the non-exec members. I joined the board as well as the member of the executive team earlier this year. And we have also got David Doughty who has joined the board recently. And as you know, Andre Garber resigned from his board position, but he is acting as the chief development officer and still actively involved in many aspects of our business and the growth. Another important area, which is the go-to-market strategy. As we are changing our strategy, it's very important to articulate our position very clearly to the market space, because this is going to be our foundation of the organic growth. One of the things we are doing is we have already completed this consolidation, which is organizing ourselves around two markets. So we are no longer operating as the individual business units, those 12 businesses that have been acquired. We have now organized ourselves into two markets, that's LATAM, and the other market is North America and EMEA. It not only brings the significance of the revenue in the markets, but it also drives the accountability and focus in those markets for the leadership team. The other important and very critical aspect is our proposition strategy. As we are bringing all these business units together, it was critical for us to bring all of these best solutions and services that we have been delivering across the business. And we are joining them up, keeping in mind which ones are carrying the best potential of getting the traction from our clients in both the markets. And this is the solutions and services catalog that we are building up, which is then going to be reflected not only on all of our digital assets like website or social media, but all of the collaterals are going to be carrying these solutions and services catalog as the proposition. This is also going to be enabling the strategic accounts growth team. A lot of work has already happened, and we will be sharing this work soon. and how it's shaping up and what shape it has taken in the webinar, like I mentioned about the integration strategy. Some of the other strategic integration and restructuring that we have done. One is the corporate restructuring. I talked about this earlier in the month when we were delivering the results for 2023. This corporate restructuring of the streamline our costs and how we are organized in the corporate structure, which was the original roll-up strategy, this has changed quite significantly for us, and we are optimizing the cost in the corporate function. At the same time, we have completely restructured our products function. What used to be just a software assets within now vertical, now has transformed into a proper product structure, which again is gonna be integrated properly within both the markets and the solutions and services. So this has resulted in the cost benefit, the annualized cost benefit of about $3.1 million. This is coming down from $7.4 million of cost that we had in corporate structure and the product function. We have done a lot of renegotiations on the original SPAs after they were acquired as businesses. This was very critical for us because the integration and the collaboration of these business units within the integrated world was reliant on how the SPAs were structured earlier or not structured. The other notes were related completely to the performance of the individual business units. And where we want to see is the incentives of the leadership team and the management team being linked with the long-term value creation. And that's what we have been able to bring about with the SBA renegotiations. Some more work needs to be done here. But if you remember, this has given us the cost or it has given us the benefit of deferring our liabilities in tune of $2.6 million to 2025. This has come down from $5.1 million deferred liability we had when we started the year 2024. Another part is the operator-first structure. This is driving our integration strategy quite nicely. We are bringing in the operators of the business, the owners of the business who were very successfully running their business in each of the markets. This is giving us enhanced agility and the decision making capability already. And we know that these are the people who are very focused on the growth of the business and we are seeing the benefits already. And Christine will be sharing some of these numbers with you. Allegiant sale, something we announced earlier this week. Really proud of this decision and the management team and the board supporting this decision for us to move away from the non-core side of our business. And I think this really presents the right opportunity for us to grow the core business in the future. One of the things I would like to mention is that there is a lot that has happened in Q1, as you can see. And there's so much behind each one of the aspects of these three areas that I have mentioned. And when the new management team took over, they had to immediately get into the action mode. And at the same time, they had to look at the planning for the integration strategy as well. And we are transforming the business. As you know, the transformation of any of these business has the potential of bringing a lot of distractions for the team. What I'm glad to report is even though a lot of work has happened here, the leadership team and the management team stayed committed to deliver the run rate, the revenue run rate of 2023. Christine is going to be sharing that in a minute with you. But what I would like to do before we hand it over to Christine is let Andre take the stage and talk about briefly our Allegiant sale. Andre.

Thanks, Sandeep. So we're thrilled to have completed the sale of our Allegiant business unit. And in addition to what Sandeep just mentioned, you can find more information in a video we which is accessible on our website. It does go into more detail on the sale rationale. And these deals don't happen overnight. So with that, we do want to thank everyone involved, including the Allegiant Business Unit CEO, Angel Diaz, who's a rock star, and the Allegiant executive team. We ran a planned process over a number of months to execute this disposition and could not have happened without a team effort. When we originally bought Allegiant, we paid about $2.3 million of our own cash. And so looking at the multiples, we paid about less than three times EBITDA on acquisition on their ending 21 EBITDA. And looking on exit, just on the gross closing proceeds alone, our exit multiple is 6x. But when you add in all of the contingencies and post-closing payments on a gross basis, our exit multiple ends up being approximately 8.8x 2023 EBITDA. It also nets about a 50% IRR since we acquired the Allegiant business in April 2022. So we're quite happy about the terms. Obviously, on this slide, you know, it shows a $3.8 million approximate debt pay down, which significantly reduces our global consolidated debt position, margin enhancements by, you know, getting rid of this sort of lower margin business as well. And we're really excited to see what the buyer does with this business, you know, building on the really strong pipeline and backlog we've developed since owning Allegiant for the last couple of years. And with that, I'll pass it over to Christine Nelson.