Skip to main content
Morneau Shepell reports 2020 first quarter financial results

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

Corporate / Investor Relations / Canada

Morneau Shepell reports 2020 first quarter financial results





  • The Company was fully operational following deployment of its business-continuity pandemic plan
  • Launched WellCan, a unique mental health service for all Canadians
  • Revenue increased by 18.7 per cent to $243.0 million
  • Adjusted EBITDA increased by 5.8 per cent to $47.3 million

TORONTO, May 7, 2020 /CNW/ - "The global COVID-19 pandemic has created unprecedented action by governments and businesses around the world and has impacted the daily lives and routines of people across the globe. Our business is the business of wellbeing, and as such, everything we are doing in response to the pandemic is focused on the wellbeing of people: our people, our clients' people, and society at large. We know that people's mental health and wellbeing is being strained due to the many necessary inconveniences, high anxiety and an increased risk of isolation. Our team is working tirelessly to help those in need," said Stephen Liptrap, President and Chief Executive Officer.

"I really can't say enough about the commitment and resiliency of our people during this unprecedented crisis we are all facing," continued Liptrap. "In addition to continuing to support clients at pre-pandemic levels, we launched a number of important initiatives in response to an important societal need. Our unique Mental Health Index for Canada, the United States, the United Kingdom and Australia tracks a wide range of factors about the state of mental health and wellbeing in the workplace. The data from The Mental Health Index are important resources for society and we hope it will help others, including governments, focus on solutions that are needed." 

In addition, in April, the Company created and launched WellCan – a unique public service initiative to support Canadians through the COVID-19 pandemic. More than 50 partners, including some of Canada's largest companies have joined together in this moment to help Canadians.

The WellCan website and mobile application offer every Canadian access to a broad range of free resources to support their mental health and wellbeing.

Q1 Financial Results
Morneau Shepell Inc. (the "Company" or "Morneau Shepell") (TSX:MSI) today reported its financial results for the three-month period ended March 31, 2020 (all amounts are in Canadian dollars, unless noted otherwise).

In the first quarter the Company delivered year-over-year growth of 18.7 per cent in revenue and 5.8 per cent in Adjusted EBITDA with solid Adjusted EBITDA margins of 19.5 per cent.

"Our first-quarter results are in line with our expectations," said Stephen Liptrap, President and Chief Executive Officer. "We are pleased with our performance, particularly given the economic shutdown across North America, beginning in March, related to the COVID-19 pandemic.

Q1 2020 Financial Review

In thousands of dollars, except per share amounts

Three months ended

March 31, 2020

Three months ended

March 31, 2019




Adjusted EBITDA



Adjusted EBITDA margin



Adjusted EBITDA per share



Normalized Free Cash Flow






Earnings per share




For the three months ended March 31, 2020, the Company reported $243.0 million in revenue, an increase of 18.7 per cent or $38.3 million over the same period last year. The increase is primarily due to the Mercer acquisition, net of the divestiture of our benefits consulting business and strong organic growth in the United States.

Adjusted EBITDA increased by 5.8 per cent to $47.3 million this quarter from $44.7 million in Q1, 2019. Adjusted EBITDA per share of $0.68 remains unchanged versus Q1 2019 as growth in Adjusted EBITDA was offset by an increase in shares outstanding due to the conversion of the convertible debentures.

Adjusted EBITDA margin was 19.5% versus 21.8% in the comparative period. This margin percentage is in line with what we have experienced since the Mercer acquisition.

In the quarter, the Company completed the sale of its benefits consulting practice to HUB International Limited (HUB), a leading global insurance broker, for a purchase price of $70.0 million subject to working capital adjustments and holdback conditions being satisfied. The Company realized a gain on the sale of $39.8 million (pre-tax), which was excluded from our adjusted EBITDA.

Profit was $38.9 million for the quarter, compared to $8.7 million in Q1, 2019. The increase in profit is predominantly due to the gain on disposition of the Company's benefits consulting business. Earnings per share for the period was $0.56 compared to $0.13 in the comparative period.

During Q1, 2020, the Company generated Normalized Free Cash Flow of $20.9 million compared to $24.0 million in Q1, 2019. Excluding the impact of capital expenditures related to Mercer integration of $6.5 million, normalized free cash flow increased by $3.4 million due to cash provided by operating activities.

On April 17, 2020, the Company entered into an amended and restated Credit Facility Agreement. The Company obtained an incremental $100 million of committed capacity for one year and improved the debt to Adjusted EBITDA financial covenant to remain at 4:1 until maturity of the credit agreement.

The Company is maintaining its policy of paying a monthly dividend of 6.5 cents per share.

Annual Meeting of Shareholders – Notice of Webcast
The 2020 Annual and Special Meeting of the Shareholders will be held virtually on Friday, May 8, 2020 at 11:00 am E.T. As a result of measures designed to limit the spread of COVID-19, Morneau Shepell reconsidered its typical approach to annual meetings of its shareholders. This year the Company is holding a virtual annual and special meeting. Shareholders who choose to attend the meeting will do so by accessing a live audio webcast of the meeting via the Internet. Shareholders and duly appointed proxyholders can access the meeting by visiting

First-Quarter Results Review – Notice of Conference Call
Management of Morneau Shepell will host a conference call on May 8, 2020 at 9:00 a.m. Eastern Time to review the Company's Q1 2020 results. The 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 416.340.2217 (participant code 3473587) in the Toronto area, or 1.800.806.5484 (participant code 3473587) throughout the rest of Canada and in the United States. A replay of the call will be available via the Morneau Shepell website at

About Morneau Shepell Inc.
Morneau Shepell is a leading provider of technology-enabled HR services that deliver an integrated approach to employee wellbeing through our cloud-based platform. Our focus is providing world-class solutions to our clients to support the mental, physical, social and financial wellbeing of their people. By improving lives, we improve business. Our approach spans services in employee and family assistance, health and wellness, recognition, pension and benefits administration, retirement consulting, actuarial and investment services. Morneau Shepell employs approximately 6,000 employees who work with some 24,000 client organizations that use our services in 162 countries. 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 Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBITDA per share and Normalized Free Cash Flow. The Company believes that these are useful supplemental measures to assist our investors in assessing our financial performance. See the Company's MD&A for more details. These financial measures do not have any standard meaning prescribed by International Financial Reporting Standards and therefore may not be comparable to similar measures presented by other issuers.


"Adjusted EBITDA" is defined as profit before finance costs, income tax expenses, depreciation, amortization, impairment losses, and certain unusual expenditures.


"Adjusted EBITDA Margin" is defined as Adjusted EBITDA as a percentage of revenue.


"Adjusted EBITDA per share" is defined as Adjusted EBITDA divided by the weighted average number of common shares.


"Normalized Free Cash Flow" is defined as cash provided by operating activities, adjusted for changes in non-cash operating working capital, capital expenditures, current income taxes (net of income taxes paid), and certain unusual 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 Company'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.

SOURCE Morneau Shepell Inc.

For further information:, 1-855-622-3327