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Morneau Shepell Reports 2013 First Quarter Financial Results

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Investor Relations / Canada

Morneau Shepell Reports 2013 First Quarter Financial Results

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

Continuing a path of solid, steady growth

TORONTO, ON, May 13, 2013 – Morneau Shepell Inc. (the "Company" or "Morneau Shepell") (TSX: MSI) today reported its financial results for the three-month period ending March 31, 2013 (all amounts are in Canadian dollars, unless noted otherwise).


  • An 11.3% increase in revenue, with contributions from all four lines of business versus the comparative period in 2012
  • A 12.0% increase in adjusted EBITDA to $21.6 million versus the comparative period
  • The integration of Mercer Canada’s Pension and Benefits Outsourcing operations with Morneau Shepell’s existing Administrative Solutions practice going well and continues on schedule

“The momentum of 2012 was sustained through the first quarter of 2013, successfully translating into growth in all four of the Company’s lines of business,” said Bill Morneau, Executive Chairman of Morneau Shepell. “Looking ahead, we expect our growth to continue, keeping us on the trajectory planned and in line with our historical performance.”


“We had a solid first quarter of 2013 and experienced strong revenue and adjusted EBITDA growth versus the comparative quarter in 2012,” said Alan Torrie, President and CEO of Morneau Shepell. “Our margin is consistent with prior years and historical Q1 performance. The Mercer integration is going well. We also continue our success in new client development, while growing our existing client relationships.”

Q1 2013 Financial Review


In millions of dollars

Three months ended March 31, 2013

Three months ended March 31, 2012







Adjusted EBITDA



Adjusted EBITDA margin



Normalized Free Cash Flow







For the three-month period ended March 31, 2013, the Company reported $115.7 million in revenue, an increase of $11.7 million or 11.3 per cent from $104.0 million for the same period in 2012.  Total operating expenses (excluding depreciation and amortization) were $95.5 million for the first quarter of 2013, compared to $87.8 million for the first three months of 2013.  Profit was $7.0 million for the period ended March 31, 2013, compared to $4.4 million for the same period last year.


Adjusted EBITDA increased by $2.3 million or 12.0 per cent to $21.6 million, compared to $19.3 million for the same period in 2012.  The increase is primarily due to growth in revenue partially offset by an increase in salaries and other operating expenses.  Adjusted EBITDA margin improved slightly from the same quarter last year at 18.6 percent.


Normalized Free Cash Flow for the three months ended March 31, 2013, decreased by $0.5 million to $12.7 million compared to $13.2 million for the same period in 2012. The decrease is primarily due to increased current income taxes and capital expenditures offset by higher Adjusted EBITDA.


Annual Meeting of Shareholders

The Annual General Meeting of Shareholders is taking place on May 14, 2013 at The Trump Hotel in Toronto, Ontario. The meeting will begin at 11:45 a.m. ET with the formal meeting beginning at 12:30 p.m.


Notice of Conference Call

Management of Morneau Shepell is hosting a conference call on Tuesday, May 14, 2013, at 10:30 a.m. ET.  The conference call is open to all those wishing to attend, with a question and answer period to follow. In order to participate in the live conference call, please call 416.695.7806 (participant code 4066907) in the Toronto area, or 1.888.789.9572 (participant code 4066907) throughout the rest of Canada. A replay of the call will be available via the Morneau Shepell website at


About Morneau Shepell Inc.

Morneau Shepell is the largest company in Canada offering human resources consulting and outsourcing services. The Company is the leading provider of Employee and Family Assistance Programs, as well as the largest administrator of pension and benefits plans in Canada. Through health and productivity, administrative, and retirement solutions, Morneau Shepell helps clients reduce costs, increase employee productivity, and improve their competitive position. Established in 1966, Morneau Shepell serves more than 8,000 clients, ranging from small businesses to some of the largest corporations and associations in North America. With approximately 3,000 employees in offices across North America, Morneau Shepell provides services to organizations across Canada, in the United States, and around the globe. Morneau Shepell is a publicly-traded company on the Toronto Stock Exchange (TSX: MSI). For more information, visit


Financial Measures

To assist investors in assessing the Company's financial performance, this news release also makes reference to certain financial measures such as EBITDA, Adjusted EBITDA, and Normalized Free Cash Flow. The Company believes that EBITDA, 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.


  1. "Adjusted EBITDA" is defined as profit before finance costs, income tax expenses, depreciation, amortization, impairment losses, and certain non-recurring expenditures.
  2. "Normalized Free Cash Flow" is defined as cash provided by operating activities, adjusted for changes in noncash operating working capital, capital expenditures, current income taxes (net of income taxes paid), and certain non-recurring expenditures.


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:

Michele Kumara

Helen Reeves