Investor Presentation Q1 2019 Forward Looking Statements This - - PowerPoint PPT Presentation

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Investor Presentation Q1 2019 Forward Looking Statements This - - PowerPoint PPT Presentation

Investor Presentation Q1 2019 Forward Looking Statements This document contains forwardlooking statements within the meaning of applicable securities laws, such as statements concerning anticipated future events, results, circumstances,


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SLIDE 1

Investor Presentation

Q1 2019

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SLIDE 2

Forward Looking Statements

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This document contains “forward‐looking statements” within the meaning of applicable securities laws, such as statements concerning anticipated future events, results, circumstances, performance ,or expectations that are not historical facts. The use of words such as “may,” “will,” “expect,” “believe,” or other words of similar effect may indicate a forward‐looking statement. These statements are not guarantees of future performance and are subject to numerous risks and uncertainties, including those described in the firm’s publicly filed documents (available on SEDAR at sedar.com) and in Morneau Shepell (the Company’s) MD&A under the heading “Risks and Uncertainties.” Those risks and uncertainties include current economic conditions, income tax matters, the ability to maintain profitability and manage growth, reliance on information systems and technology, reputational risk, dependence on key clients, and reliance on key professionals. Many of these risks and uncertainties can affect the Company’s actual results and could cause actual results to differ materially from those expressed or implied in any forward‐looking statement made by the Company or on the Company’s behalf. Given these risks and uncertainties, investors should not place undue reliance on forward‐ looking statements as a prediction of actual results. All forward‐looking statements in this document are qualified by these cautionary statements. These statements are made as of the current date and, except as required by applicable law, the Company undertakes no obligation to publicly update or revise any forward‐looking statement, whether as a result of new information, future events or otherwise. Additionally, the Company undertakes no obligation to comment on analyses, expectations, or statements made by third parties in respect of the Company, its financial or

  • perating results, or its securities.
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SLIDE 3

Outpacing the market

1‐3‐5 Year Compound Annual Return Total Return – Last 5 Years (as at March 31, 2019)

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1-Year 3-Year 5-Year MSI 9.2% 20.9% 17.5% S&P/TSX 8.1% 9.7% 5.4% S&P Low Volatility Index 9.4% 8.3% 8.8%

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SLIDE 4

To optimize the health and productivity of people – the heart

  • f every successful organization

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Our purpose: Improving lives. Improving business. Our values: We value long‐term relationships. We treat others the way we want to be treated. We are innovative and entrepreneurial. Our clients: Create great client experiences. Our people: Ensure we have engaged talent with right skills to execute our strategic plan. Our communities: Improving social well‐being.

Vision Strategy Foundation

Transform our operations to be more scalable and focus on year over year improvement Leader in design and delivery

  • f HR solutions

Own the total well‐being space and provide a continuum of care Accelerate growth through U.S. and global expansion Technology enabled HR services delivered through our integrated cloud‐based platform

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SLIDE 5

Confidential – Not for Distribution

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Balanced Revenue Mix – Q1 2019

44%

Well‐Being

12%

Health & Productivity Solutions

30%

Pension and Benefit Outsourcing

14%

Retirement Solutions

Line of Business Revenue

23%

United States

73% Canada

Geographical Revenue

4%

International

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SLIDE 6

High recurring revenue

100 200 300 400 500 600 700 800

2011 2012 2013 2014 2015 2016 2017 (w IFRS 15) 2018

acquisition growth

  • rganic growth

recurring revenue

$592 $625

(million)

$419 $365 $471

Percentage indicates proportion of total revenue that is recurring from prior year 98% 98% 98%

$536

98%

$567

95% 97%

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98% 97%

$722

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SLIDE 7

Q1 2019 results

21.8%

adjusted EBITDA margin

167.5 204.7

33.6 44.7

Revenue ($M) Adjusted EBITDA ($M)

2019 2018 2019 2018

22.2% growth 33.2% growth

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SLIDE 8

Capital Structure

64 million common shares

52% institutional, 4% management, 44% retail

~$1.8 billion Convertible debenture

Due June 2021, 4.75% rate, $25.10 conversion price

$86 million Bank debt

$500M facility matures July 2023 Financial Covenant:

  • Bank debt to Adjusted EBITDA ≤ 4.0:1 – Currently at 2.5:1

$384 million

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SLIDE 9

Investment Summary

Strong recurring revenue Strong cash flows

Consistent margins Successful acquisitions Best in class client satisfaction Talented team of employees

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SLIDE 10

Investor Relations contacts:

Scott Milligan smilligan@morneaushepell.com Stephen Liptrap sliptrap@morneaushepell.com