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Morneau Shepell reports 2020 second quarter financial results

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Corporate / Investor Relations / Canada

Morneau Shepell reports 2020 second quarter financial results



  • Revenue increased by 15.8 per cent to $246.2 million
  • Adjusted EBITDA increased by 13.5 per cent to $52.1 million
  • Highest annual client satisfaction and employee engagement results in Company history
  • Announced comprehensive action plan on inclusion and diversity

TORONTO, Aug. 6, 2020 /CNW/ - Morneau Shepell Inc. (the "Company" or "Morneau Shepell") (TSX: MSI) today reported its financial results for the three-month period ended June 30, 2020 (all amounts are in Canadian dollars, unless noted otherwise).

In the second quarter compared to the same period last year, the Company delivered growth of 15.8 per cent in revenue to $246.2 million and 13.5 per cent in adjusted EBITDA to $52.1 million.

"We are very pleased with our results in the second-quarter," said Stephen Liptrap, President and Chief Executive Officer. "Due to the efforts of our people and the investments we have made in our infrastructure over many years, all our operations and systems are performing at pre-pandemic levels. Going forward, our sales pipeline remains strong, a reflection of the confidence our clients have in our solutions for the total wellbeing needs of their people and families during difficult times."

Year-to-date, the Company reported $489.2 million in revenue, an increase of 17.2 per cent over the same period last year, along with adjusted EBITDA of $99.4 million, up 9.7 per cent. 

In the quarter, the Company reported the highest client satisfaction and employee engagement levels in its history. Liptrap noted that in the quarter the Company also built on its commitment to inclusion and diversity by comprehensively updating its action plan in this area. The plan aligns with the multi-stakeholder priorities in the intensifying worldwide movement to fight systemic racism and discrimination in society.

"As we navigate an unprecedented convergence of transformational events affecting all our markets – the COVID-19 pandemic, the related economic challenges, and the anti-racism movement – we're proving that we're both a resilient and a socially responsible Company committed to making a real difference in the world," Liptrap said. "By aligning everything we do to our purpose of improving lives and improving business, the impact we have extends to the larger goal of improving communities."

Q2 2020 Financial Review 

In thousands of Canadian
dollars, except per share

Three months

June 30, 2020

Three months

June 30, 2019

Six months
ended June 30,

Six months
ended June 30,






Adjusted EBITDA





Adjusted EBITDA margin





Adjusted EBITDA per share





Normalized Free Cash Flow










Earnings per share (basic)





For the three months ended June 30, 2020, the Company reported $246.2 million in revenue, an increase of 15.8 per cent or $33.5 million over the same period last year, primarily due to the mid-year 2019 acquisition of Mercer's standalone, large market, health and defined benefit pension plan administration business in the United States, offset by the divestiture of the Company's benefits consulting business earlier this year.

Adjusted EBITDA increased by 13.5 per cent to $52.1 million from $45.9 million compared to the same period last year. Adjusted EBITDA margin was 21.2 per cent in Q2, 2020, which was slightly below 21.6 per cent in Q2, 2019. Adjusted EBITDA per share (basic) for the quarter was $0.75, up 8.7 per cent from the same period last year.

Profit for the period was $8.3 million compared to profit of $6.3 million in the same period in prior year. Earnings per share (basic) for the period was $0.12 compared to $0.10 in the comparative period.

During Q2, 2020, the Company generated Normalized Free Cash Flow of $30.8 million compared to $27.6 million in Q2, 2019. The increase is mainly due to higher cash provided by operating activities.

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

Second-Quarter Results Review – Notice of Conference Call
Management of Morneau Shepell will host a conference call on Friday, August 7 at 10:00 a.m. Eastern Time to review the Company's Q2 2020 results. The call is open to all those wishing to attend, with a Question and Answer period to follow the presentation. In order to participate in the live conference call, please call 416-340-2217 (participant code 6420526#) in the Toronto area, or 1-800-898-3989 (participant code 6420526#) 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