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Morneau Shepell reports 2017 second quarter financial results; Michele Trogni appointed to Board of Directors

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Corporate / Investor Relations / Canada

Morneau Shepell reports 2017 second quarter financial results; Michele Trogni appointed to Board of Directors



  • Revenue increased by 7.7 per cent to $160.8 million
  • Adjusted EBITDA increased by 7.8 per cent to $31.8 million
  • Profit increased by 54.4 per cent to $12.5 million

TORONTO, Aug. 10, 2017 /CNW/ - Morneau Shepell Inc. (the "Company" or "Morneau Shepell") (TSX:MSI) today reported its financial results for the three-month and six-month periods ended June 30, 2017 (all amounts are in Canadian dollars, unless noted otherwise).

"We're pleased that our second quarter results showed solid revenue and profit growth over the comparable period last year, driven by a strong sales pipeline and strong client wins across all of our lines of business," said Stephen Liptrap, President and Chief Executive Officer.

On a year-to-date basis, the Company reported $318.7 million in revenue, an increase of 6.8 per cent over the prior year. Also on a year-to-date basis, Adjusted EBITDA, at $62.8 million, is up 7.7 per cent, and profit at $20.6 million is up 36.5 per cent over the prior year.

"We continue to see solid improvement to our results on a year-to-date basis," added Liptrap. "The strengthening momentum in our business today owes much to our ability to execute on our focused growth strategy in the dynamically evolving HR sector."  

At the Company's Board meeting on August 10, Michele Trogni, a prominent U.S. technology executive, was appointed to the Board of Directors. Michele Trogni was Executive Vice President of Consolidated Markets and Solutions for IHS Markit until May 2017. In this role she was responsible for all Markit's Managed Services businesses, along with Product Design and Engineering, and Technology, Media and Telecoms. Prior to joining Markit in 2013, Michele had over 25 years of experience in banking, most recently acting as Group Chief Information Officer for UBS and, prior to that, as head of UBS investment bank operations. She holds a BA (Hons) in Accounting from Northumbria University and is a qualified accountant (ACCA).

"We're thrilled to have Michele join our Board as she brings a wealth of U.S. market experience and deep insight into how every industry – including the HR solutions sector – is being revitalized because of the disruptive forces of high-tech innovation," said Jill Denham, Chair of the Board. "We look forward to working with Michele as we continue to build out Morneau Shepell's capabilities as a technology and innovation leader in serving our clients in North America and globally – a key dimension of our growth strategy."

Q2 2017 Financial Review

In thousands of dollars

Three months

June 30, 2017

Three months

June 30, 2016

Six months

June 30, 2017

Six months

June 30, 2016






Adjusted EBITDA





Adjusted EBITDA margin





Normalized Free Cash Flow











For the three months ended June 30, 2017, the Company reported $160.8 million in revenue, an increase of 7.7 per cent or $11.6 million from the same period in 2016. Organic revenue growth was 7.1 per cent.

Total operating expenses (excluding depreciation and amortization expenses) were $131.2 million in Q2, 2017, compared to $123.8 million in Q2, 2016.

Adjusted EBITDA increased by 7.8 per cent to $31.8 million.

Adjusted EBITDA margin was 19.8 per cent – the same level as the comparative period last year.

Profit was $12.5 million for the quarter, compared to $8.1 million in Q2, 2016.

During Q2, 2017, the Company generated Normalized Free Cash Flow of $15.9 million compared to $18.6 million in Q2, 2016.

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

Notice of Conference Call
Management of Morneau Shepell will host a conference call on Friday, August 11, 2017, at 10:00 a.m. ET. The conference 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 416.340.2217 (participant code 9553340) in the Toronto area, or 1.800.806.5484 (participant code 9553340) throughout the rest of Canada. A replay of the call will be available via the Morneau Shepell Web site at

About Morneau Shepell
Morneau Shepell is the only human resources consulting and technology company that takes an integrated approach to employee assistance, health, benefits and retirement needs. The Company is the leading provider of employee and family assistance programs, the largest administrator of retirement and benefits plans and the largest provider of integrated absence management solutions in Canada. As a leader in strategic HR consulting and innovative pension design, the Company helps clients solve complex workforce problems and provides integrated productivity, health and retirement solutions.  Established in 1966, Morneau Shepell serves approximately 20,000 clients, ranging from small businesses to some of the largest corporations and associations.  With more than 4,000 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 Adjusted EBITDA, Adjusted EBITDA margin, Normalized Free Cash Flow and Organic Revenue. The Company believes that Adjusted EBITDA, Adjusted EBITDA margin, Normalized Free Cash Flow and Organic Revenue 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.

  1. "Adjusted EBITDA" is defined as profit before finance costs, income tax expenses, depreciation, amortization, impairment losses, and certain unusual expenditures.
  2. "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.
  3. "Organic Revenue" is defined as revenue excluding acquisitions not in the comparative period and divestitures, and the U.S. Health Exchange outsourcing business.

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.

SOURCE Morneau Shepell Inc.

For further information: Helen Reeves, 416.345.5633,