- Net revenue increased 13% with 7.6% organic growth
- 22% growth in EPS (fully diluted)
- 15.9% Adjusted EBITDA1 (net of IFRS 16) margin
- Net debt1 to Adjusted EBITDA2 multiple of less than 1 times
The Company’s second quarter 2021 results are highlighted by a 13% increase in net revenue, which totaled
In Q2 2021, the Company reported net income of
“I am very pleased with IBI’s performance through the first half of 2021, including growing net revenue by 13% both in Q2 and in the first six months over the same periods in 2020. Organic growth in Q2 2021 totaled 7.6%, and was 7.2% in the first half of 2021, while our debt metrics have now fallen below one times,” said
Q2 2021 Highlights:
- IBI’s backlog increased 17% year-over-year, totaling
$604 million (17 months) atJune 30, 2021 , an increase of$86 million overJune 30, 2020 , as a result of an improved pace of securing work. - Net revenue increased 13% over Q2 2020, totaling
$113.2 million and was 4% higher than the preceding quarter, with growth largely stemming from Infrastructure and Buildings sector increases, while Intelligence remained relatively stable despite ongoing challenges with COVID-19 in certain global technology hubs. In the first half of 2021, net revenue totaled$222.1 million , a 13% increase over the same period in 2020. - Adjusted EBITDA1 net of IFRS 16 impacts was
$18.0 million (15.9% of net revenue) for the quarter, 5% higher than$17.1 million (17.1% of net revenue) in Q2 2020 and 10% above$16.4 million (15.0% of net revenue) generated in Q1 2021. For the first six months of 2021, the Company generated Adjusted EBITDA1 net of IFRS 16 impacts of$34.4 million , 11% higher than$31.1 million recorded in the first half of 2020. - Net debt1 at
June 30, 2021 was$44.2 million , resulting in a 0.9 times net debt to trailing 12 months’ Adjusted EBITDA2 ratio, reflecting the impact of IBI’s ongoing focus on strengthening the balance sheet by directing free cash flow to debt reduction. - IBI believes that an optimal capital allocation strategy includes directing free cash flow and borrowing capacity towards strategic acquisitions that promote growth, as well as new products and technologies that can improve the efficiency of the business. The Company is currently reviewing an active pipeline of potential acquisition opportunities.
- The Company’s days sales outstanding (“DSO”) at quarter end totaled 58 days and was five days and seven days lower than Q1 2021 and Q2 2020, respectively, reflecting the Company’s diligence in reviewing contract assets and accounts receivable and its commitment to accelerated billings.
- IBI’s Intelligence practice recorded net revenue of
$19.2 million which represented 17% of total net revenue in Q2 2021, 3% lower than Q1 2021 and 7% lower than Q2 2020, reflecting the impact of US to Canadian dollar foreign exchange rates as well as some ongoing COVID-19 related activity curtailment in certain countries. Adjusted EBITDA1 from Intelligence was$4.2 million , representing 22.1% of net revenue, 5% and 9% lower than the previous quarter and Q2 2020, respectively. - Billing to clients related to recurring software support and maintenance in Q2 2021 was consistent with Q2 2020 at
$5.1 million but would have totaled$5.5 million if the impact of foreign exchange were excluded. Similarly, through the first half of 2021,$10.4 million was billed, 1% higher than the same period in 2020, and would have totaled$11.0 million absent the foreign exchange impact. - IBI’s Buildings sector recorded net revenue of
$56.5 million , a 6% increase over Q1 2021 and 11% higher than Q2 2020, with Adjusted EBITDA1 net of IFRS 16 impacts of$12.3 million (21.7% of net revenue), 13% and 22% higher than the preceding quarter and Q2 2020, respectively. Infrastructure generated net revenue of$37.2 million in the quarter, 6% higher than Q1 2021 and 32% higher than in Q2 2020, while Adjusted EBITDA1 net of IFRS 16 impacts of$7.2 million (19.3% of net revenue) was 36% higher than Q1 2021 and 76% above the same period in 2020. - Net income in Q2 2021 increased to
$8.3 million ($0.22 per basic and diluted share), 93% and 23% higher than Q1 2021 and Q2 2020, respectively. In the first six months of 2021, net income totaled$12.6 million , 2% higher than the comparable period of 2020.
Financial Highlights
(in thousands of Canadian dollars except per share amounts)
THREE MONTHS ENDED | SIX MONTHS ENDED | ||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||
Number of working days | 63 | 63 | 125 | 126 | |||||||||
Gross revenue | $ | 141,356 | $ | 123,915 | $ | 274,288 | $ | 245,081 | |||||
Less: Subconsultants and direct costs | 28,147 | 24,017 | 52,177 | 48,502 | |||||||||
Net revenue | $ | 113,209 | $ | 99,898 | $ | 222,111 | $ | 196,579 | |||||
Net income | $ | 8,301 | $ | 6,756 | $ | 12,598 | $ | 12,340 | |||||
Basic earnings per share | $ | 0.22 | $ | 0.18 | $ | 0.34 | $ | 0.33 | |||||
Diluted earnings per share | $ | 0.22 | $ | 0.18 | $ | 0.33 | $ | 0.33 | |||||
Adjusted EBITDA1 net of IFRS 16 impacts | $ | 18,001 | $ | 17,093 | $ | 34,370 | $ | 31,128 | |||||
Adjusted EBITDA1 net of IFRS 16 impacts as a percentage of net revenue | 15.9% | 17.1% | 15.5% | 15.8% | |||||||||
Cash flows provided by operating activities | $ | 14,873 | $ | 16,594 | $ | 26,881 | $ | 16,584 |
Notes:
1 See “Definition of Non-IFRS Measures” in the MD&A.
Q2 2021 Review
Continued momentum from the Buildings and Infrastructure sectors contributed to IBI growing net revenue in the second quarter of 2021 by more than 13% year-over-year, increasing Adjusted EBITDA1 net of IFRS 16 impacts by over 5%, which represents 15.9% of net revenue, and reducing net debt1 to less than one times Adjusted EBITDA1 for bank covenant purposes. IBI’s Intelligence sector posted slightly lower net revenue and Adjusted EBITDA1 relative to the previous quarter and the same period in 2020 given the ongoing impact of COVID-19 in certain technology-centric regions such as
The significant financial flexibility IBI has secured by focusing on debt reduction, cash collections and margin improvement has positioned the Company with free cash flow that can be allocated to value-creating initiatives such as accretive acquisitions, share buybacks through the normal course issuer bid implemented at the end of the quarter, and ongoing organic growth. With strong cash collections during the quarter, DSO continued to decline through Q2 2021, and was five days and seven days lower than Q1 2021 and the same quarter in 2020, respectively. IBI continued to reduce debt, and at
Throughout the first half of 2021, IBI has continued to benefit from new business steadily coming in the door, which has contributed to the ongoing backlog increase, which stood at
As part of IBI’s strategic plan update and development for 2022 through 2024, management undertook a host of stakeholder engagement initiatives through the second quarter, conducting interviews with more than 50 key internal and external stakeholders of IBI to obtain their views, comments and insights. IBI anticipates rolling out a new strategic plan in the first quarter of 2022 and wishes to thank all participants for their valuable contributions in the support of this important initiative that will help to shape the future of the Company.
Business Sector Summary Highlights
Intelligence
During Q2 2021, Intelligence generated
The Company’s Q2 2021 recurring software support and maintenance billings to clients totaled
Intelligence sector wins during the quarter include participation in a cross-disciplinary consortium to provide cyber testing and certification services for smart transportation in Isreal; updates to IBI’s advanced traffic management system (ATMS) and Travel-IQ™ traveler information solutions in
IBI was also pleased to welcome the newest member to the Smart City Sandbox in Q2 2021, Multiplex, which brings territory expertise in construction along with expert knowledge and guidance on the future of construction and technology innovation demands within that space.
Buildings
Net revenue from the Company’s Buildings sector grew to
The Buildings sector accounts for the majority of IBI’s new business to date in 2021, as the provinces of
Infrastructure
Net revenue from IBI’s Infrastructure practice increased to
The Infrastructure sector has continued to be active and a meaningful contributor to the Company’s backlog. In addition to providing design services on road alignments, traffic diversions, and road furniture modifications required to support the new subway stations and alignment for Vancouver’s
2021 Guidance and Outlook
In light of the Company’s performance to date and outlook for the balance of 2021, IBI is increasing its forecast total net revenue guidance from approximately
As at
Investor Conference Call & Webcast
The Company will host a conference call on
To listen to the live webcast of the conference call, please enter the following URL into your web browser: https://produceredition.webcasts.com/starthere.jsp?ei=1478254&tp_key=62727614af.
Q2 2021 Conference Call Details:
Date:
Time:
Dial In:
Dial In: Toronto Local / International: 416-764-8688
Replay:
Replay: Toronto Local / International: 416-764-8677
Replay Passcode: 599323#
A recording of the conference call will be available within 24 hours following the call on the Company’s website. The conference call replay will be available until
About
For additional information, please contact:
Tel: 416-596-1930
www.ibigroup.com
Forward-Looking Statements
Certain statements in this news release may constitute “forward-looking” statements which involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company and its subsidiary entities, including
The factors used to develop revenue forecast in this news release include the total amount of work the Company has signed an agreement with its clients to complete, the timeline in which that work will be completed based on the current pace of work the company achieved over the last 12 months and expects to achieve over the next 12 months. The Company updates these assumptions at each reporting period and adjusts its forward-looking information as necessary.
Non-IFRS Measures
The Company uses certain terms in this news release and within the MD&A, such as ‘adjusted EBITDA’, ‘net income and earnings per share from operating activities’, and ‘working capital measured in number of days of gross billings’ which do not have a standardized or prescribed meaning under International Financial Reporting Standards (IFRS), and, accordingly these measurements may not be comparable with the calculation of similar measurements used by other companies. For a reconciliation of each non-IFRS measure to its nearest IFRS measure, please refer to the “Definition of Non-IFRS Measures” section in the MD&A for applicable definitions, calculations, rationale for use and reconciliations to the most directly comparable measure under IFRS. Non-IFRS measures are provided as supplementary information by which readers may wish to consider the Company's performance but should not be relied upon for comparative or investment purposes.
1 Non-IFRS measure. See “Definition of Non-IFRS Measures” in the MD&A.
2 Adjusted EBITDA for bank covenant purposes.
Source:
2021 GlobeNewswire, Inc., source