Investor Presentation
Q4 2017
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,
Investor Presentation
Q4 2017
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
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 livesOur Values
We value long-term relationships We treat others the way we want to be treated We are innovative and entrepreneurialOur People
Ensure we have engaged talent with right skills to execute strategic planOur Clients
Create great client experiencesTransform 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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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
High recurring revenue
100 200 300 400 500 600 700 2011 2012 2013 2014 2015 2016 2017
acquisition 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%$567
95% 97%6
98%2017 Q4 YTD results
adjusted EBITDA margin
592.1 631.2
112.3 120.8
Revenue ($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:
$185 million
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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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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
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