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Morneau Shepell Reports 2017 Fourth Quarter and 2017 Financial Results

Mar 7, 2018


TORONTO, March 7, 2018 /CNW/ - Morneau Shepell Inc. (the "Company" or "Morneau Shepell") (TSX: MSI) today reported its financial results for the fourth quarter and the full year of 2017 (all amounts are in Canadian dollars, unless noted otherwise).

Fourth quarter highlights

  • Revenue increased by 6.5 per cent to $158.7 million
  • Adjusted EBITDA increased by 8.6 per cent to $29.0 million

Full year highlights

  • Revenue increased by 6.6 per cent to $631.2 million
  • Adjusted EBITDA increased by 7.6 per cent to $120.8 million
  • Profit increased by 33.0 per cent to $34.6 million

The Company delivered a solid fourth quarter, with strong growth in revenue and Adjusted EBITDA. "We were pleased by the consistent growth in the quarter across all four lines of business," said Stephen Liptrap, President and Chief Executive Officer. "In addition, our U.S. expansion strategy continues to gain momentum based on new business wins, innovative product introductions, and tuck-in acquisitions that increase our market share and competitive strength."

Commenting on 2017 overall, Liptrap said: "2017 was a year of solid growth that met our expectations and delivered strong shareholder returns. From a market perspective, we were pleased by the continuing steady growth in our core Canadian business while delivering double-digit growth in the U.S."  Importantly, in 2017, the Company completed a review of its corporate strategy and chose the focus areas that are expected to drive success for many years to come.

"As we move forward into 2018, we do so with the confidence that Morneau Shepell is well positioned strategically, operationally and financially to continue to deliver solid profitable growth."

Q4 2017 Financial Review

In thousands of

Three months ended
December 31, 2017

Three months ended
December 31, 2016

Year ended

December 31, 2017

Year ended

December 31, 2016






Adjusted EBITDA





Adjusted EBITDA





Normalized Free
Cash Flow











For the year ended December 31, 2017, the Company reported $631.2 million in revenue, an increase of $39.1 million or 6.6 per cent from $592.1 million the year before, as a result of growth from across our four core lines of business in Canada and, increasingly, in the U.S. where our market expansion strategy gained momentum.

Adjusted EBITDA of $120.8 million increased by 7.6 per cent or $8.6 million from $112.3 million in 2016, primarily due to revenue growth partially offset by an increase in salaries and other operating expenses. Adjusted EBITDA margin continued to be solid at 19.1 per cent, modestly higher than 19.0 per cent in 2016. For the fourth quarter, Adjusted EBITDA margin was 18.3 per cent compared to 17.9 per cent for the comparative quarter in 2016.

Normalized Free Cash Flow
Normalized Free Cash Flow for the year ended December 31, 2017 increased by $1.4 million to $72.3 million compared to $70.9 million for the same period in 2016. The increase was due to higher cash generated from operating activities before changes in non-cash operating working capital and EBITDA adjustments of $15.5 million, partially offset by higher current tax expense of $4.9 million and higher capital expenditures of $8.9 million.

Annual Meeting of Shareholders
Morneau Shepell announced that it will hold its 2017 Annual Meeting of Shareholders on May 8, 2018, and it established a record date of March 20, 2018 for the meeting.

Notice of Conference Call
Management of Morneau Shepell will host a conference call on March 8, 2018 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 call 416-340-2217 (participant code 6656802) in the Toronto area, or 1-800-806-5484 (participant code 6656802) 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 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, and Normalized Free Cash Flow. The Company believes that Adjusted EBITDA, Adjusted EBITDA margin, and Normalized Free Cash Flow 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. "Adjusted EBITDA margin" is defined as Adjusted EBITDA as a percentage of revenue.

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 - Corporate

For further information: Helen Reeves, 416.345.5633,

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