IBI Group Inc T.IBG.DB.E

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IBI Group Inc. is a global design and technology company. The Company offers a range of services, including architectural controls, architecture, bridge engineering, civil engineering, construction management, data analytics, design technology, development engineering, economics/financial analysis, electrical engineering, energy solutions, engineering, environmental assessment, geomatics/land surveying, highway and road design, and indigenous engagement and relations. The Company¿s services also include interiors, land use planning, landscape architecture, mechanical engineering, municipal infrastructure, operations and maintenance, parametric design, placemaking, planning and urban design, public outreach, research and development, software development, systems engineering, traffic engineering, transit planning, transportation engineering, visualization, water resources management, and water/wastewater. The Company has over 60 offices in major urban centers across the globe.

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IBI Group Inc

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Post by retiredcfon May 09, 2022 9:02am

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Post# 34666304

TD 2

IBI Group Inc.

(IBG-T) C$12.49

Strong Q1/22 and Guidance Increased; 2026 Targets Introduced Event

IBI Group reported better-than-expected Q1/22 adj. EBITDA and increased its 2022 net revenue guidance to $473mm (from ~$457mm), which is 3% above pre- quarter consensus of $461mm.
Separately, at its 2022 Annual General Meeting (AGM took place following the Q1/22 results conference call), management provided a preview of its new 2022-2026 strategic direction. Notably, management introduced several 2026 financial targets that we view favourably (note that IBI's strategic plan will be fully unveiled at the company's investor event on September 22, 2022).

Impact: POSITIVE

IBI reported Q1/22 adjusted EBITDA of $18.9mm (15.6% margin; +60bps y/y), vs. consensus of $16.6mm (14.8%) and our estimate of $16.4mm (14.6%). Net revenue was $120.8mm (+10.9% y/y) vs. consensus of $112.3mm and our estimate of $112.1mm. Organic net revenue growth was strong at +9.3% y/y.
Q1/22 backlog was $661mm, +6% q/q and +13% y/y.
IBI increased its 2022 net revenue guidance to $473mm (was ~$457mm). This

implies 6.4% y/y growth vs. 10.9% y/y growth achieved in Q1/22.
2022-2026 Plan: By 2026, IBI targets realizing net revenue of $940mm (with $300mm of the forecast growth coming from acquisitions) and EBITDA of $130mm–$160mm. IBI also targets doubling its annual recurring revenue to $40mm+, and achieving a leverage ratio of 1.0x.
We have increased our estimates (reflects the Q1/22 beat and modestly higher revenue/margin expectations over our forecast period). However, we have slightly lowered our target valuation multiple (given recent sector multiple compression), which results in our $17.50 target price being unchanged.

TD Investment Conclusion

We remain constructive on IBI's outlook. We expect the company to deliver continued organic revenue growth, complemented by margin expansion potential (supported by growth in IBI's Intelligence practice over time), while we also see acquisition growth (from future potential acquisitions — not in our forecasts) as offering possible upside to our estimates. We view the stock's valuation as attractive vs. other engineering services peers. We reiterate our BUY rating