Q2 Investors Presentation mdf

Investors Presentationmdf.to

November 2020

Forward-looking Statement

November 2020 | TSX: MDF 2

This document contains certain forward-looking statements with respect to the Company. These forward-looking statements, by their nature,

necessarily involve risks and uncertainties that could cause actual results to differ materially from those contemplated by these forward-

looking statements. We consider the assumptions on which these forward-looking statements are based to be reasonable, but caution the

reader that these assumptions regarding future events, many of which are beyond our control, may ultimately prove to be incorrect since

they are subject to risks and uncertainties that affect us.

We disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future

events or otherwise, except as required by applicable securities legislation.

All amounts are in Canadian dollar.

These assumptions include, without limitations:

• No significant change in the current value of CAD$ vs. US$

• No significant increase or decrease in revenues and operating expenses

• Stable market conditions

Management team


Luc FiliatreaultPresident and Chief Executive Officer

Paul Bourque Chief Financial

Officer

Hélène HallakVice President, Corporate

Dev. & Chief Legal Officer

André LeblancVice President, Marketing

and Public Affairs

Camil RousseauChief Technology

Officer

Catherine Roy Vice President,

Transformation

Julie Bélanger Vice President, Human

Resources

Andreanne SimonPresident, Supply Chain

Jean-Michel StamPresident, e-Marketplaces

Louis MousseauPresident, e-Commerce

Mark EigenbauerPresident, Strategic Sourcing

Shared Services

Platforms

July 2020

⚫ Launch of M&A roadmap exercise

⚫ Launch of new MRR credit facility project

⚫ Logic is now a new ecommerce partner

⚫ Hiring of Orckestra VP Sales

August 2020

⚫ Reporting of first SAAS KPI quarter

⚫ Signing of first Strategic Sourcing customer in

Europe – NHS

February 2020

⚫ Presentation of 5-year Strategic Plan in Global

Townhall to all mdf employees

⚫ Second Investor roadshow

⚫ Hiring of VP Product Strategy for Strategic

Sourcing

June 2020

⚫ Launch of IR Strategy

⚫ Launch of strategic planning execution review

⚫ Launch of Future Office Work Group

May 2020

⚫ Hiring of K-eCommerce VP Sales

⚫ Raised $16M bought deal

⚫ Hiring of VP of HR

⚫ Launch new Merx.com platform

⚫ mdf presents at TSX Technology Investor Day

April 2020

⚫ COVID-19 contingency planning

⚫ Surge in grocery ecommerce

⚫ Third investor virtual roadshow

November 2019

⚫ Hiring of Supply Chain VP Sales

⚫ First investor roadshow in 5+ years (Montreal,

Toronto, Calgary, Vancouver)

⚫ First earnings call in a very long time

October 2019

⚫ Restructuring of Management team

December 2019

⚫ Acquisition of new ecommerce Company

⚫ Launch of rebranding project (Renegade)

March 2020

⚫ COVID-19 start – Work from home

September 2020

⚫ AGM

⚫ Rebranding of Company

⚫ New board member from California

September 2019

⚫ Luc joins with the mandate of bringing mdf

back to growth mode

October 2020

⚫ $50M secured credit agreement

⚫ $48M bought deal offering

⚫ V5 update of SMB ecommerce software

⚫ Partnership with KPMG



+14% Total Revenue

$20.8M

YoY

+54%Growth Unified

CommerceOver previous Q2 reporting

period

Q1 HighlightsQ2 F2021 Metrics dd

text

+11% Total MRR Growth

Over previous Q2

reporting period

$2.3M Adj EBITDA

(11%)

$88M*Liquidity

* As at September 30,2020 on a pro forma basis including new financing & November share issuance

Year over Year MRR* Growth


Deferred

Revenue

+32%13 CAD

14 CAD

14 CAD

15 CAD

15 CAD

16 CAD

16 CAD

FY19 FY20 FY19 FY20 FY20 FY21 FY20 FY21

Q3 Q4 Q1 Q2

Mill

ions 4% YoY

9% YoY

10% YoY 11% YoY

* MRR are composed of subscription and support revenues that are recurring in nature.

Therefore, they exclude one-time fees, professional fees and other types of non-recurring revenues.

Platforms


Platform% Rev

LTMFocus Offer Market

ARR

LTMCompetitors

Substitute -

Disrupt

mdf

commerce

Advantage

Strategic

Sourcing39 Growth

eProcurement software

and eTendering with

300k+ participants

Public Entities and

Large Enterprise$29M

Periscope

Bonfire

eSolutions

Negometrix

Mercell

Fragmented

Breadth of

offering and

Scope of

Network

Unified

Commerce41 Growth

End to End eCommerce

for mid-market to

Enterprise

Enterprise and

mid-sized retail –

Growing

specialization

in groceries

$20M

Commerce Tools

Elastic Path

Big Commerce

SPS Commerce

Adobe

Oracle

Salesforce

SAP

Price, Speed,

Flexibility, richer

feature set

eMarketplaces 20 Earnings

Marketplaces for

Diamonds, electronic

parts, automotive, jobs,

dating

End-User, some

marketplaces local,

other int’l

$13MFragmented

by vertical

Fragmented

by vertical

Established

brands

% revenue & ARR based on last twelve-month ended September 30,2020

StrategicSourcing

Strategic Sourcing Acquisition


Purchase price - $5.25M US Location – Knoxville Tennessee Activity – Strategic Sourcing

SaaS Based with subscription model

• Public Sector Focused

• Over 400 active gov’t agencies – 70,000 active suppliers

• Presence in 14 new states + strong combined presence

in 10 more

• Over 100 agencies pay for advanced modules

• 68% FY18 growth and projected over 30% this year

Enhancements to existing Strategic Sourcing activities

• + 5% MRR - ARR

• + 35% supplier base

• + 13% buyer base

• + 50% geographic coverage in the US

• Revenue run rate currently over 100k per month

• Doubles the US sales team and adds critical DEV resources

Vendor Registry – Closing date: November 16

Strategic Sourcing – New Platform Footprint


Existing agencies

Vendor Registry

Strategic Sourcing Platform

SaaS eProcurement platform

connecting 3,500 buyers to

300,000+ suppliers


(1) Source: MarketWatch – Procurement Software Market Valuation - October 15, 2018

Market – US$10B market by 2023 with +10%CAGR (1), massive market

opportunity

Organic Growth Plan

• Adding more US sales capabilities and cross-sell/up-sell resources

for current base

• Investing in new AI features to extend product for cross-selling & increase

contract stickiness

M&A Growth Plan – Fragmented market ready for consolidation –

Many accretive US acquisitions

Q2 F21 KPIs : 93% MRR, +5% YOY Revenue Growth , +4% Sequential

One of the largest supplier

networks in North America


Recent product updates

to MERX.com

• Vastly improved UX

• Easier to navigate and understand scope of offer and engage with the platform

• Optimized for mobile

• Optimization of pricing and packaging structure

• Specific goal of increasing ARPU and higher conversion rate for free membership to paid

• New registration flow in BETA testing

• Easier process to increase conversion rates from visitor to client


(1) Source: MarketWatch – Procurement Software Market Valuation - October 15, 2018

Current Customers



3,500 buyers and 300,000+ supplier network

Customer Acquisition - Q2• 66 new active buyers

• 6,000 new suppliers

• VR contribution: +70,000 suppliers +400 buyers

Notable wins• Caterpillar defense

• Red Deer College


Strategic Sourcing MRR Growth

6,0 CAD

6,2 CAD

6,4 CAD

6,6 CAD

6,8 CAD

7,0 CAD

7,2 CAD

7,4 CAD

7,6 CAD

Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21

Mill

ions

Strategic Sourcing MRR

UnifiedCommerce

Covid Update


• COVID-19 continues to impact consumer behavior as online shopping surges around the world

• 62% expect ongoing impact of Covid for 7+ months

• Second wave ongoing in NA and other European markets in which mdf commerce is active

• Expect higher volumes of usage, especially from grocery vertical

• Holiday season, including Black Friday also contributors to volume

*: Source: EY Future Consumer Index , October 22, 2020

Unified Commerce Platform

End-to-end seamless

omnichannel ecommerce platform

November 2020 | TSX: MDF 17(1) Source: Research & Markets, Digital Commerce Software Market – Growth, Trends, and Forecast (2020-2025), Jan 2020

(2) Source: Research & Markets, Global E-commerce Software Market Size…and Forecasts, 2018 To 2026, Sept 2018;

Market – US$ 10.4B US eCommerce market by 2025 (1) with 12-15% CAGR,

B2B Valued at US$ 12.2T globally (2)

Organic Growth Plan

• Expanding sales capabilities with a focus on US markets & cross-selling

• Product Development: Improved deployment speed, agility, scalability & feature set

• Adding AI recommendation features, and more advanced BI.

M&A growth plan – Acquiring to further disrupt legacy players like Oracle, SAP, Adobe

& consolidate competitors e.g. k-eCommerce

Q2 F21 KPIs: 58% MRR - +54% YOY total revenue Growth.

Proven agility for rapidly

evolving eCommerce landscape52% surge with COVID-19

Pandemic

Extends from enterprise

to SMB


Unified Commerce Platform

650+ clients including SQDC, Sobey’s, IGA,

Black&Decker, Subway, BRP, Groupon, Sports Experts.

SMB: 161 new clients

Customer Acquisition - Q2

Enterprise: 2 new mandates - FGL (Sports Expert) and new client

Grafton Apparel - New grocery client: major implementation ongoing

Current Customers

Unified Commerce MRR + Revenue Growth


3,2

3,4 3,53,6 3,7

3,8 3,9

4,4

5,25,4

5,3

4,6

5,05,1

5,8 5,8 5,9 5,9

6,1

7,5

9,1 9,1

3,00 $

4,00 $

5,00 $

6,00 $

7,00 $

8,00 $

9,00 $

10,00 $

Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21

FY18 FY19 FY20 FY21

Mill

ions

Unified Commerce MRR + Revenue Growth

MRR UC Revenue UC

Capital Markets

Comparable Valuations


Median EV/Sales 13.2x; MDF 1.87x

Data sources: S&P Capital IQ Mergermarket; CRM - Customer Relationship Management; SEC – Security; PYMT - Payment/Financials ; ISS - Industry Specific Software;

HCM - Human Capital Management; ERP - Enterprise Resource Planning; SCM - Supply Chain Management; IS - Internet Software.

Company(2020) Mkt Cap -

CA$ (M)

Enterprise Value -

CA$ (M)Revenue - CA$ (M) EBITDA - CA$ (M) EV/Sales EV/EBITDA

Shopify Inc. (NYSE:SHOP) 159,517.9 152,662.6 4,599.86 657.5 33.19x 232.19x

BigCommerce Holdings, Inc. (NasdaqGM:BIGC) 7,337.0 7,718.7 202.06 ( 43.49) 38.20x NM

Kinaxis Inc. (TSX:KXS) 5,883.2 5,626.2 319.9 72.14 17.59x 77.99x

Lightspeed POS Inc. (TSX:LSPD) 4,759.1 4,545.7 242.02 ( 31.02) 18.78x NM

SPS Commerce, Inc. (NasdaqGS:SPSC) 4,225.8 3,910.3 436.41 120.21 8.96x 32.53x

Tecsys Inc. (TSX:TCS) 587.5 571.9 121.31 13.67 4.71x 41.85x

Pivotree Inc. (TSXV:PVT) 226.3 249.1 - - - -

mdf commerce inc. (TSX:MDF) 210.1 220.0 83.25 7.92 2.64x 27.79x

Median 4,759.1 4,545.7 280.96 42.9 18.19x 59.92x

Compared to its direct peer group in digital commerce, mdf commerce trades at:

• 85% discount to the median EV/Sales multiples

• 53% discount to median EV/EBITDA multiples.

As we expand awareness & demonstrate performance, we believe the market should revalue the stock closer

to the median going forward – which is good for shareholders.

Reasons to Invest


COVID-19 has

accelerated a global

shift to Digital

Commerce

mdf commerce is already

a major Digital Commerce

platform, managing

$Billions annually for gov't,

enterprise, and SMBs

76% recurring

revenue with high

margins, low

churn and free

cashflow

Transforming into a SaaS

growth company like

Shopify and BigCommerce,

but with free cash flow and

significantly lower valuation

Positioned to

dominate US$10B

Strategic Sourcing

market

Disrupting the Unified

Commerce space

with an integrated

path from back-office

to front-office

Toll Free 877 677-9088

Phone 450 449-0102

1111 St-Charles Street West, East Tower, Suite 255

Longueuil, Québec Canada J4K 5G4

mdfcommerce.com

Q2 Investors Presentation mdf

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