Investor Presentation Q3 2018 Forward Looking Statements This - - PowerPoint PPT Presentation

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Investor Presentation Q3 2018 Forward Looking Statements This - - PowerPoint PPT Presentation

Investor Presentation Q3 2018 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

Q3 2018

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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

YTD‐1‐3‐5 Year Compound Annual Return Total Return – Last 5 Years (as at September 30, 2018)

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2018 YTD 1-Year 3-Year 5-Year MSI 24.2% 34.3% 25.7% 20.1% S&P/TSX 1.4% 5.9% 9.7% 7.8% S&P Low Volatility Index

  • 0.9%

2.0% 8.5% 9.7%

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SLIDE 4

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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 – Proforma (post Lifeworks)

46%

Well‐Being

9%

Absence Management Solutions

30%

Pension and Benefit Outsourcing

15%

Retirement, Health and Benefit Consulting

Line of Business Revenue

22%

United States

75% Canada

Geographical Revenue

3%

International

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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

2018 Q3 YTD results

19.4%

adjusted EBITDA margin

468.3 521.5

90.9 101.3

Revenue ($M) Adjusted EBITDA ($M)

YTD 2018 YTD 2017 YTD 2018 YTD 2017

11.4% growth 11.4% growth

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SLIDE 8

Capital Structure – post LifeWorks

64 million common shares

52% institutional, 4% management, 44% retail

~$1.7 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 2.7:1

$388 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