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Morneau Shepell reports 2021 first quarter financial results

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Investor Relations / Canada

Morneau Shepell reports 2021 first quarter financial results


  • Strong organic growth of 7.1 per cent
  • Adjusted EBITDA increased 11.5 per cent to $52.8 million
  • 60 per cent increase in lives migrated to wellbeing platform, now totalling 5.4 million

Morneau Shepell Inc. (the "Company" or "Morneau Shepell") (TSX:MSI) today reported its financial results for the three-month period ended March 31, 2021 (all amounts are in Canadian dollars, unless noted otherwise).

The Company delivered strong organic growth of 7.1 per cent in the first quarter. Overall, revenue grew 5.8 per cent to $257.1 million and adjusted EBITDA increased by 11.5 per cent to $52.8 million.

“It was a strong quarter to start the year driven by accelerating growth of our technology-enabled product suite, increased uptake of Total Wellbeing, adoption of digital mental health solutions and additional services added to our platform such as telemedicine. We continued to convert strong sales over the past year into revenue while continuing to build our sales pipeline,” said Stephen Liptrap, President and Chief Executive Officer.

At quarter end, the Company covered some 14.3 million direct lives, including 5.4 million now on its wellbeing platform. “We ended the quarter with a record-high sales pipeline, a strong indication that our strategy is working as we continue to build our position as a global leader in total wellbeing,” said Liptrap.

On March 10, the Company announced its intention to change its name from Morneau Shepell Inc. to LifeWorks Inc. following an in-depth evaluation process and in line with its strategy and ambitions. The proposed name change, with the full endorsement of the Board, is being voted on by shareholders at the Company’s Annual and Special Meeting of Shareholders on May 14, 2021. “While the Morneau Shepell name has served our company well for many years, the LifeWorks brand reflects our leadership position in Total Wellbeing and our overarching purpose of improving lives, improving business: the idea that by improving a person’s life andwellbeing, they will be happier, healthier and ultimately more engaged and proactive at work. The LifeWorks story is about making life work for people by helping them be at their best, which supports the goal of improving how organizations perform.”

Q1 2021 Financial Review

In thousands of dollars, except per share amounts

Three months ended

March 31, 2021

Three months ended

March 31, 2020




Adjusted EBITDA



Adjusted EBITDA margin



Adjusted EBITDA per share (basic)



Normalized Free Cash Flow






Earnings per share (basic)



For the three months ended March 31, 2021, the Company reported $257.1 million in revenue, an increase of 5.8 per cent or $14.1 million over the same period last year due to strong organic growth of 7.1 per cent, mainly from the Wellbeing and Health and Productivity Solutions lines of business, partially offset by the divestiture of our benefits consulting business.

Adjusted EBITDA increased by 11.5 per cent to $52.8 million versus $47.3 million in the comparative period due to organic revenue growth and lower operating expenses in several areas such as travel. Adjusted EBITDA per share, as a result of the higher adjusted EBITDA, was $0.75 compared to $0.68. Adjusted EBITDA margin was 20.5 per cent versus 19.5 per cent in the comparative period.

Profit for the period was $10.2 million compared to profit of $38.9 million in the same period in prior year. The decrease in profit is predominantly due to the after-tax gain on the divestiture of our benefits consulting business of $33.4 million in the first quarter of 2020. Basic earnings per share for the period was $0.15 compared to $0.56 in the comparative period.

During Q1, 2021, the Company generated Normalized Free Cash Flow of $26.3 million compared to $24.2 million in the same period in 2020 primarily due to higher cash provided by operating activities, partially offset by higher capital expenditures.

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

Annual Meeting of Shareholders

The 2021 Annual and Special Meeting of the Shareholders will be held virtually onFriday, May 14, 2021 at11:00 am Eastern Time. As a result of measures designed to limit the spread of COVID-19, Morneau Shepell, for the second year running, 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

Notice of Conference Call

Management of Morneau Shepell will host a conference call on Friday, May 14, 2021 at 9 a.m. Eastern Time. The conference call is open to all those wishing to attend, with a Question and Answer period with analysts to follow the presentation. To participate in the live conference call, please call 416.340.2217 (participant code 8751838) in the Toronto area, or 1.800.806.5484 (participant code 8751838) throughout the rest of Canada and in the United States. Media are invited to join on a listen-only basis. 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 6,500 employees who work with some 24,000 client organizations that use our services in more than 160 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 operating working capital, capital expenditures 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.


Heather MacDonald

Source: Morneau Shepell