Investor Presentation Q4 2017 Forward Looking Statements This - - PowerPoint PPT Presentation

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Investor Presentation Q4 2017 Forward Looking Statements This - - PowerPoint PPT Presentation

Investor Presentation Q4 2017 Forward Looking Statements This document contains forward-looking statements within the meaning of applicable securities laws, such as statements concerning anticipated future events, results, circumstances,


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Investor Presentation

Q4 2017

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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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Outpacing the market

YTD-1-3-5 Year Compound Annual Return Total Return - from IPO to December 31, 2017

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Our strategy focuses on five growth pillars

To optimize the health and productivity of people – the heart of every successful organization

Our Purpose

Improving business Improving lives

Our Values

We value long-term relationships We treat others the way we want to be treated We are innovative and entrepreneurial

Our People

Ensure we have engaged talent with right skills to execute strategic plan

Our Clients

Create great client experiences

Transform how we do business and achieve best in class efficiency Collaborate across LOBs to increase client value and drive growth Drive successful execution of our core businesses Accelerate growth through US expansion Deploy new technology solutions to address macro HR trends Vision Strategy Foundation

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SLIDE 5

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Balanced Revenue Mix

34%

Employee Assistance Programs

11%

Absence Management Solutions

36%

Pension and Benefit Outsourcing

19%

Retirement, Health and Benefit Consulting

2017 Line of Business Revenue

85% Canada 15% United States

2017 Geographical Revenue

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SLIDE 6

High recurring revenue

100 200 300 400 500 600 700 2011 2012 2013 2014 2015 2016 2017

acquisition growth

  • rganic growth

recurring revenue

$592 $631

(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%
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SLIDE 7

2017 Q4 YTD results

19.1%

adjusted EBITDA margin

592.1 631.2

112.3 120.8

Revenue ($M) Adjusted EBITDA ($M)

Q4 2017 Q4 2016 Q4 2017 Q4 2016

6.6% growth 7.6% growth

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Capital Structure

54 million common shares

45% institutional, 5% management, 50% retail

~$1.3 billion Convertible debenture

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

$86 million Bank debt

$300M facility matures December 2020 Financial Covenant:

  • Bank debt to Adjusted EBITDA ≤ 3.0:1 – Currently at 1.5:1

$185 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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Investor Relations contacts:

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

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SLIDE 11

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Long history of successful acquisitions

1990-99

Coopers & Lybrand’s pension consulting and actuarial business – 1992 Sobeco from Ernst & Young to form Morneau Sobeco – 1997 Canadian pension consulting practice of Deloitte & Touche – 1998

2000-2009

Completes an IPO and becomes an income trust: Morneau Sobeco Income Fund (MSIF) – 2005 Cowan Benefits Consulting’s defined benefit pension business – 2008 Actuarial firm Leong & Associates – 2008 Shepell·fgi – making MSIF a leader in workplace health and productivity solutions - 2008

2010 - present

2010 – MSIF converts to a corporation as Morneau Shepell Inc. (MSI) 2011 – Jacques Lamarre & Associates to expand Employee Assistance presence in Quebec 2012 – SBC Systems and Mercer’s Canadian pension and benefits

  • utsourcing business

2013 – Dion Durrell’s workers’ compensation business to strengthen Absence Management Solutions practice 2014 – Group AST, largest workers’ compensation business in Quebec 2015 – Ceridian’s US Health and Welfare Administration business and Bennsinger, Dupont & Associates to enhance US Employee Assistance capability 2016 – Solareh and Longpré to enhance Employee Assistance presence in Quebec 2017 – Pro Health Group, a health and wellness company and Chestnut Global Partners (CGP) a leading global EAP provider