EX-99.1 2 dex991.htm INNERWORKINGS, INC. INVESTOR DAY PRESENTATION InnerWorkings, Inc. Investor Day Presentation
Investor Day
November 20, 2008
Exhibit 99.1


Safe Harbor
This presentation contains statements relating to future results. These
statements are forward-looking statements under the federal
securities laws. We can give no assurance that any future results
discussed in these statements will be achieved. Any forward-looking
statements represent our views only as of today and should not be
relied upon as representing our views as of any subsequent date.
These statements are subject to a variety of risks and uncertainties
that could cause our actual results to differ materially from the
statements contained in this presentation. For a discussion of
important factors that could affect our actual results, please refer to
the most recent Form 10-K, including the "Risk Factors" section, we
filed with the SEC.


Investor Day Agenda
Introductions / Welcome
Strategic Overview
Growth Strategy
Panel: Customer and Supplier
Technology
Financial Performance


Speakers
Steven Zuccarini
Chief Executive Officer
Eric Belcher
President and Chief Operating Officer
Joe Busky
Chief Financial Officer
Ryan Irwin
Executive Vice President, Sales


Key Messages
Innovative low-cost / high-service business model gaining traction
in increasingly cost focused marketplace
Track record of strong financial results and effective capital
allocation
Significant market opportunity in $170B and growing U.S. print
industry
Proprietary technology and broad, diverse supplier network
Deep domain knowledge and procurement management expertise
Near-
and long-term future bright as companies seek to maximize
print related budgets


Strategic Overview
Eric Belcher
President and Chief Operating Officer


Strategic Overview
Company Snapshot
Market Overview
Core Differentiation: Technology and People
Shareholder Value


InnerWorkings
will be the first multi-billion dollar business process
outsourcing
company
dedicated
solely
to
handling
clients’
print
procurement and print management activities
Company Characteristics
Technology-driven professional
services firm
»
Headquarters: Chicago
»
Offices: 25
»
Employees: 768
»
Founded: November 2001
»
IPO: August 2006
»
Revenue CAGR of more than 100
percent since beginning operations
in 2002
Customer Value Proposition
»
Outsource non-core business
function
»
Low-cost provider with quality focus
»
Proprietary technology and
database
»
Dedicated support with domain
expertise
»
Across 60+ categories of print and
print-related products and services
InnerWorkings
Snapshot


$170 Billion North America
Commercial Print Market
»
39,300 highly customized print manufacturing
plants in the U.S.
»
Top 10 printers account for less than 17% of
market share
»
30% of industry capacity unused
»
“1/3-1/3-1/3”
concept dominates
»
Outsourcing non-core business activities
continues to gain market acceptance
»
Enterprise print management is in its infancy
»
As low-cost provider, current economic
conditions create additional opportunity for
InnerWorkings
Large and Inefficient Market
InnerWorkings
Addressable Market
(>$100B)
Small Office
Home Office
Long-Run
Gravure


Core Differentiation
Combination of Technology and People
»
Domain expertise
Over 60 categories
»
Extensive print procurement experience
Over 300 procurement experts with average 10
years experience
»
On-site presence
51 FTEs at clients’
locations
»
Aligns specifications to small group of optimal suppliers
in overall network (7,000+ total)
»
Capitalizes on open capacity pricing through targeted
bidding system


Commitment to Shareholder Value


Sales Growth Strategy
Ryan Irwin
Executive Vice President, Sales


InnerWorkings’
solutions address outsourced print procurement and
management needs of companies of all sizes
Transactional
»
Primarily small-
and medium-sized
companies
»
Sold on job-by-job basis
»
Higher margins, higher commissions
»
Sales reps have strong print
backgrounds and a keen focus on
establishing lasting relationships
with print buyers
Enterprise Sales Focus
Enterprise
»
Large, complex corporations with
decentralized spend
»
Contract-based terms (recurring
revenue)
»
Lower margins, lower commissions
»
Business development professionals
have very sophisticated sales skills
and focus on C-level executives
INWK
Emphasis
Going Forward


Company Evolution
Transactional Focus
Company
founded
2001
2009+
2003
2005
2007
John Deere
becomes first
major
enterprise
account
(3 on-site
FTEs)
Separate Business
Development
Department
formed 
2008
Focus on
expanding
market
coverage
within major
corporations
Large Corporation Enterprise Focus
2002
2004
2006
Operations
begin
First clients
are small-
and
middle-market
companies
Many new major
corporations sign
BPO contracts
Business
model
refined,
validated


Enterprise Performance
Currently 137 enterprise, contract-based
customers
3
6
7
10
13
17
20
22
22
27
28
34
36
43
51
0
10
20
30
40
50
60
On-Site Personnel
Number of Customers Generating Revenue of Over
$1 Million Annually
0
10
20
30
40
50
60
70
2004
2005
2006
2007
2008 Est
52-58
40
25
14
6


Enterprise Performance:
What to Expect Going Forward
Expectation for quarterly enterprise wins to increase
from 4-6 to 6-8
Continued aggressive expansion of Business
Development team
Significant increase in coverage of large corporations
Additional on-site physical presence at major
corporations throughout the United States, Canada and
the United Kingdom
Long-term, organic enterprise sales revenue growth
rate of approximately 20 percent per year


Acquisition Strategy
Eric Belcher
President and Chief Operating Officer


Why Acquire?
Regional print distributors are the best source of talent
Procurement backgrounds versus manufacturing
Strong local customer relationships
Entrepreneurial energy
InnerWorkings
is
the only credible active buyer in the marketplace
Highly selective
Focus on small distributors which are easily integrated
Accelerate “acquired”
company’s profitable growth when combined
with our scale and resources
Structure of these relationships places activity somewhere
between M&A and recruiting


Location Overview: Today
InnerWorkings
offices
On-site location
Fulfillment Center
Memphis
Davenport
Durham
Pittsburgh
Richmond
Akron
Fort Wayne
Toronto
Phoenix
Minneapolis
New York
Grand
Rapids
Maui
Honolulu
Los Angeles
San Francisco
Kansas City
Chicago
Dallas
Carol Stream
Philadelphia
Birmingham
Naperville
Hilo
East Brunswick
Grover Beach
Monterey
Sacramento
Santa Clara
Detroit
Santa Rosa
Quality Control Staff
Hong Kong
Beijing
Shanghai
Atlanta
Greenville
Des Plaines


Location Overview: Future
InnerWorkings
offices
On-site location
Fulfillment Center
Memphis
Davenport
Durham
Pittsburgh
Richmond
Akron
Fort Wayne
Toronto
Phoenix
Minneapolis
New York
Grand
Rapids
Maui
Honolulu
Los Angeles
San Francisco
Kansas City
Chicago
Dallas
Carol Stream
Philadelphia
Birmingham
Naperville
Hilo
East Brunswick
Grover Beach
Monterey
Sacramento
Santa Clara
Detroit
Santa Rosa
Quality Control Staff
Hong Kong
Beijing
Shanghai
Atlanta
Greenville
Des Plaines


Integration Critical to Success
Integration Activity
Timing of Implementation
Joint Sales Calls
Begin Immediately
Financial Controls
Begin Immediately
PPM4 Technology
3-4 months
Rebranding
to InnerWorkings
Within 1 year
Cultural Integration
Ongoing
1
2
3
4
5


“Acquisition”
Performance
Outstanding results to-date
Have historically paid approximately 5.0x EBITDA with 40-60%
down at time of purchase
On
average,
“acquired”
companies
have
yielded
20%
better
bottom-line performance under our leadership
Healthy pipeline
Contact with over 400 companies to date
More than 200 are sizable regional players


Technology


Differentiated Technology Solution
Procurement tool
Only one of its kind in the world
Two primary databases
Detailed supplier equipment profiles
Massive historical pricing repository
Barriers to entry
Patent-protection
Volume of data (would take years to replicate)


PPM4: Key Functions
Supplier Recommendations
Equipment Search
PPM4Caster
All modules leverage and contribute to one of the largest
independent repositories of equipment profiles and price
data for print suppliers
Supplier Portal


PPM4 Technology:
Recent Initiatives
Recent
Initiatives
New platform released in June allows for virtually unlimited
scalability
Historical baseline module to establish job-by-job savings analysis
Customer-facing applications for order submission and placement
and job status
Staff of over 30 developers (associated CAPEX less than 1% of
revenue)
Development
Priorities
Short-term: PPM4 to generate automated bid based on historical
pricing database
Longer-term: Dictate (versus solicit) market prices on a per-job
basis


Financial Performance
Joe Busky
Chief Financial Officer


Demonstrating Consistent Quarterly
Performance
FYE: December 31
Revenue
($MM)
3Q 2008
»
Record revenue:
$122.0 million
»
Revenue growth over   
3Q 2007: 69%
»
Seven new enterprise
accounts
»
Gross margin: 24.2%
»
Net income: $5.8
million
$22.4
$58.9
$87.2
$35.1
$67.3
$105.3
$41.8
$72.1
$122.0
$22.2
$61.2
$90.0
$0.0
$10.0
$20.0
$30.0
$40.0
$50.0
$60.0
$70.0
$80.0
$90.0
$100.0
$110.0
$120.0
$130.0
$140.0
1Q06
1Q07
1Q08
2Q06
2Q07
2Q08
3Q06
3Q07
3Q08
4Q05
4Q06
4Q07


Solid Balance Sheet
2005
2006
Liquidity at September 30, 2008: $72.2
Growing
Cashflow
from
Operations
Cash conversion rate: 28 days
Summary Financial Condition
Use of Cash
»
Acquire complementary
businesses
»
Expand sales force
»
Working capital to fund our organic
growth
»
Early pay discounts with certified
supplier program
($MM)
Strong return on invested capital of 13%
Low CAPEX As
% of Revenue
2007
2008 YTD
$0.8
($9.7)
$8.2
$14.7
1.3%
0.8%
0.8%
1.4%


2009 Revenue Guidance
Growth strategy remains unchanged:
Enterprise organic sales focus
Small, regional tuck-in acquisitions


2009 Revenue Guidance
Growth strategy remains unchanged:
Enterprise organic sales focus
Small, regional tuck-in acquisitions
Guidance reflects organic growth only


2009 Revenue Guidance
Growth strategy remains unchanged:
Enterprise organic sales focus
Small, regional tuck-in acquisitions
Guidance reflects organic growth only
Acquisitive growth will be additive


2009 Revenue Guidance
Growth strategy remains unchanged:
Enterprise organic sales focus
Small, regional tuck-in acquisitions
Guidance reflects organic growth only
Acquisitive growth will be additive
Run-rate at the end of 2008 will be approximately $500 million


2009 Revenue Guidance
Growth strategy remains unchanged:
Enterprise organic sales focus
Small, regional tuck-in acquisitions
Guidance reflects organic growth only
Acquisitive growth will be additive
Run-rate at the end of 2008 will be approximately $500 million
Assumes current difficult macroeconomic conditions throughout 2009


2009 Revenue Guidance
Growth strategy remains unchanged:
Enterprise organic sales focus
Small, regional tuck-in acquisitions
Guidance reflects organic growth only
Acquisitive growth will be additive
Run-rate at the end of 2008 will be approximately $500 million
Assumes current difficult macroeconomic conditions throughout 2009
As such, organic growth in 2009 is assumed to be 10 percent


2009 Revenue Guidance
Growth strategy remains unchanged:
Enterprise organic sales focus
Small, regional tuck-in acquisitions
Guidance reflects organic growth only
Acquisitive growth will be additive
Run-rate at the end of 2008 will be approximately $500 million
Assumes current difficult macroeconomic conditions throughout 2009
As such, organic growth in 2009 is assumed to be 10 percent
Our 2009 revenue guidance is $530
million to $560 million.


2009 EPS Guidance
Represents an approximate 20 percent increase over 2008
operational EPS
Assumptions:
Net interest expense increases significantly versus 2008 due to new
capital structure
D&A increases versus 2008 due to acquisitions made in 2008
Impeded by difficult macroeconomic conditions
Our 2009 EPS guidance is $0.41 to
$0.44 per share.


Key Messages
Innovative low-cost / high-service business model gaining traction
in increasingly cost focused marketplace
Track record of strong financial results and effective capital
allocation
Significant market opportunity in $170B and growing U.S. print
industry
Proprietary technology and broad, diverse supplier network
Deep domain knowledge and procurement management expertise
Near-
and long-term future bright as companies seek to maximize
print related budgets