Skip to main content
Morneau Shepell Reports 2011 Financial Results

A transformational journey. LifeWorks becomes TELUS Health. Visit our About Us page to learn more.

Investor Relations / Canada

Morneau Shepell Reports 2011 Financial Results

Not for distribution to U.S. news wire services or for dissemination in the U.S.

TORONTO, Ontario, March 7, 2012 – Morneau Shepell Inc. (the “Company” or “Morneau Shepell”) (TSX: MSI) today reported its financial results for 2011 (all amounts are in Canadian dollars, unless noted otherwise).



  • Record revenue of $365 million and $97.4 million for the year and quarter ended December 31, 2011.
  • Adjusted EBITDA(1) of $70.1 million for full year and $18 million for the fourth quarter.
  • Reflects 9% growth year over year.

“In 2011, we benefited from the initiatives we put in place this year and last, which drove record growth in revenue and earnings,” said Bill Morneau, Executive Chairman of Morneau Shepell. “This momentum is carrying on in 2012 and we expect continued growth in line with our longer term historical trends.”

“In 2011 we had significant achievements in both winning large mandates and positioning ourselves for success in the future,” added Alan Torrie, President and CEO. “These include our disability management contract with Canada Post, our retainer to provide the pension administration technology platform for the Government of Alberta, and the white-label pension administration services we are delivering to the small and mid-size clients of TD Bank. As well, we introduced of a number of innovative new client services including our new MyEAP smartphone app, and introduction of video counselling.”


2011 Financial Review


In thousands of dollars

Fourth quarter ended December 31, 2011 (Unaudited)

Fourth quarter ended December 31, 2010 (Unaudited)

Twelve months ended December 31, 2011 (Unaudited)

Twelve months ended December 31, 2010 (Unaudited)


 $  97,477

 $  87,018

$ 364,988

$ 335,194

Adjusted EBITDA(1)

$ 17,995

$ 16,494

$ 70,088

$ 64,268

Adjusted EBITDA(1) margin











For the twelve months ended December 31, 2011 (“F2011”), the Company reported $365.0 million in revenue, a 8.9 percent increase from $335.2 million for the twelve months ended December 31, 2010 (“F2010”). Total operating expenses (excluding depreciation and amortization) totalled $295.5 million in F2011, compared with $278.9 million in F2010. Profit in F2011 was $24.9 million, compared with $21.4 million in F2010.

Adjusted EBITDA(1) of $70.1 million increased by 9.1 percent over $64.3 million in F2010 due to increased revenue. Adjusted EBITDA(1)  margin was 19.2 percent, consistent with F2010.


Normalized Free Cash Flow

For F2011, the Company generated cash provided by operating activities of $54.9 million compared to $42.4 million in F2010. Normalized Free Cash Flow(2)  for F2011 decreased to $40.8 million, compared to $44.6 million in F2010. The Normalized Payout Ratio(3) for F2011 was 91.7 percent compared to 101.1 percent for F2010. The Payout Ratio(4)  for F2011 was 108.2 percent , which compares with 129.4 percent  in 2010.


Annual Meeting of Shareholders

Morneau Shepell announced that it will hold its 2012 Annual General Meeting on May 15, 2012 in Vancouver, British Columbia, and it established a record date of March 19, 2012 for the meeting.


Notice of Conference Call

Management of Morneau Shepell will host a conference call today, Wednesday, March 7, 2012, at 2:00 p.m. EST. The conference call is open to all those wishing to attend, with a Question & Answer period to follow the presentation. In order to participate in the live conference call, please call 416-695-7806 (participant code 8508656) in the Toronto area, or 1-888-789-9572 (participant code 8508656) throughout the rest of Canada. A replay of the call will be available via the Morneau Shepell Web site at


About Morneau Shepell Inc.

Morneau Shepell Inc. is the largest Canadian-based firm offering benefits and pension consulting, outsourcing, as well as health management services. The company works with clients to develop end-to-end insights and solutions that integrate with their business strategies to achieve results. Through Benefits and Health Solutions Consulting, Pension Consulting, Health Management, Administration Solutions and Shepell•fgi Employee and Family Assistance Programs, Morneau Shepell helps clients reduce costs, increase employee productivity, and improve their competitive positions by supporting their employees' financial security, health and well-being.

Established in 1966, Morneau Shepell serves over 8,000 clients, ranging from small businesses to some of the largest corporations and associations in North America. With approximately 2,600 employees in offices across North America, we provide services to organizations across Canada, in the United States and around the globe.

Financial Measures

To assist investors in assessing the Company's financial performance, this news release also makes reference to certain financial measures such as Adjusted EBITDA and Normalized Free Cash Flow. The Company believes that Adjusted EBITDA and Normalized Free Cash Flow and their respective payout ratios are useful supplemental measures of performance as they are generally used by Canadian businesses as indicators of financial performance. See the footnotes to the "Results of Operations" chart in the Company's MD&A for more details. These financial measures do not have any standard meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other issuers.


"Adjusted EBITDA" is defined as profit before finance costs, income taxes (recovery), depreciation, amortization, impairment losses, and expenditures.


"Normalized Free Cash Flow" is defined as cash from operating activities, adjusted for changes in non-cash operating working capital, capital expenditures and certain expenditures.


"Normalized Payout Ratio" is defined as dividends divided by Normalized Free Cash Flow.


“Payout Ratio” is defined as dividends divided by Free Cash Flow.


The 2010 comparative figures have been adjusted for interest expense related to the change in fair value of LP Units and LTIP awards, to increase comparability with current period results.


Forward-Looking Statements

This news release 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. 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 Company's publicly filed documents (available on SEDAR at and in the firm's MD&A under the heading "Risks and Uncertainties". Those risks and uncertainties include ability to maintain profitability and manage growth, reliance on information systems and technology, reputational risk, dependence on key clients, reliance on key professionals and economic conditions. Many of these risks and uncertainties can affect the firm's actual results and could cause the Company's actual results to differ materially from those expressed or implied in any forward-looking statement made by the Company or on the firm'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 news release are qualified by these cautionary statements. These statements are made as of the date of this news release 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 operating results or its securities.

For further information:

Investor Relations
Morneau Shepell Inc.