Fiera Capital Reports Second Quarter 2024 Results
(in $ thousands except where otherwise indicated) |
Q2 |
Q1 |
Q2 |
|
YTD |
YTD |
2024 |
2024 |
2023 |
|
2024 |
2023 |
|
End of period AUM (in $ billions) |
158.9 |
165.2 |
164.2 |
|
158.9 |
164.2 |
Average AUM (in $ billions) |
159.1 |
164.8 |
164.5 |
|
162.0 |
164.2 |
|
|
|
|
|
|
|
IFRS Financial Measures |
|
|
|
|
|
|
Total revenues |
164,786 |
168,115 |
159,843 |
|
332,901 |
316,934 |
Base management fees |
149,343 |
151,537 |
149,793 |
|
300,880 |
297,221 |
Net earnings 1 |
4,895 |
7,645 |
10,484 |
|
12,540 |
7,967 |
|
|
|
|
|
|
|
Non-IFRS Financial Measures |
|
|
|
|
|
|
Adjusted EBITDA 2 |
45,284 |
45,395 |
45,468 |
|
90,679 |
84,291 |
Adjusted EBITDA margin 2 |
27.5 % |
27.0 % |
28.4 % |
|
27.2 % |
26.6 % |
Adjusted net earnings 1,2 |
24,872 |
26,089 |
28,708 |
|
50,961 |
52,252 |
LTM Free Cash Flow 2 |
121,148 |
71,847 |
45,198 |
|
121,148 |
45,198 |
|
|
|
|
|
|
|
Note: Certain totals, subtotals and percentages may not reconcile due to rounding. |
"We were pleased to conclude the second quarter with senior management and a number of board members acquiring all the equity of the Company previously held by Fédération des caisses
"Equity markets continued their strong performance in the second quarter of 2024 which, combined with growth in base management fees in Private Markets, resulted in a 3% year-over-year increase in total revenues. Net cash generated by operating activities also improved both quarter-over-quarter and year-over-year, with LTM Free Cash Flow ending the quarter at
Assets Under Management (in $ millions, unless otherwise indicated)
By Platform |
|
New |
Lost |
Net Contributions |
Net Organic |
Market and Other4 |
|
Public Markets, excluding AUM sub-advised by PineStone |
98,999 |
926 |
(2,042) |
(1,914) |
(3,030) |
549 |
96,518 |
Public Markets AUM sub-advised by |
47,309 |
51 |
(4,512) |
(557) |
(5,018) |
907 |
43,198 |
Public Markets - Total |
146,308 |
977 |
(6,554) |
(2,471) |
(8,048) |
1,456 |
139,716 |
Private Markets |
18,857 |
370 |
(63) |
(41) |
266 |
23 |
19,146 |
Total |
165,165 |
1,347 |
(6,617) |
(2,512) |
(7,782) |
1,479 |
158,862 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By Distribution Channel |
|
New |
Lost |
Net Contributions |
Net Organic |
Market and Other4 |
|
Institutional |
87,998 |
904 |
(1,386) |
(929) |
(1,411) |
956 |
87,543 |
Financial Intermediaries |
62,860 |
90 |
(4,944) |
(1,119) |
(5,973) |
358 |
57,245 |
Private Wealth |
14,307 |
353 |
(287) |
(464) |
(398) |
165 |
14,074 |
Total |
165,165 |
1,347 |
(6,617) |
(2,512) |
(7,782) |
1,479 |
158,862 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By Platform |
|
New |
Lost |
Net Contributions |
Net Organic |
Market and Other4 |
|
Public Markets, excluding AUM sub-advised by PineStone |
97,984 |
1,644 |
(2,225) |
(2,966) |
(3,547) |
2,081 |
96,518 |
Public Markets AUM sub-advised by |
45,231 |
135 |
(7,253) |
(705) |
(7,823) |
5,790 |
43,198 |
Public Markets - Total |
143,215 |
1,779 |
(9,478) |
(3,671) |
(11,370) |
7,871 |
139,716 |
Private Markets |
18,478 |
972 |
(95) |
(94) |
783 |
(115) |
19,146 |
Total |
161,693 |
2,751 |
(9,573) |
(3,765) |
(10,587) |
7,756 |
158,862 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By Distribution Channel |
|
New |
Lost |
Net Contributions |
Net Organic |
Market and Other4 |
|
Institutional |
88,605 |
1,930 |
(4,117) |
(2,008) |
(4,195) |
3,133 |
87,543 |
Financial Intermediaries |
59,084 |
342 |
(5,016) |
(1,169) |
(5,843) |
4,004 |
57,245 |
Private Wealth |
14,004 |
479 |
(440) |
(588) |
(549) |
619 |
14,074 |
Total |
161,693 |
2,751 |
(9,573) |
(3,765) |
(10,587) |
7,756 |
158,862 |
- AUM decreased by
$6.3 billion or 3.8% compared toMarch 31, 2024 reflecting negative net organic growth of$7.8 billion , partly offset by a favourable market impact for both fixed income and equity mandates of$1.5 billion . Negative net organic growth included$8.0 billion in Public Markets, partly offset by positive net organic growth in Private Markets of$0.3 billion , primarily from new mandates.- Negative net organic growth included
$5.0 billion of outflows connected to AUM sub-advised byPineStone Asset Management Inc. ("PineStone"), of which, to our knowledge,$4.4 billion related to AUM that transferred directly to PineStone. - The decrease in the quarter was largely driven by net outflows from a large Financial Intermediary client in
Canada , including the previously announced transfer of assets from PineStone sub-advised AUM, as well as outflows in Fixed Income related to an existing mandate. - Public Markets, excluding AUM sub-advised by PineStone and Fixed Income mandates transferred from the large Canadian Financial Intermediary client, was effectively flat quarter-over-quarter.
- Negative net organic growth included
- AUM decreased by
$2.8 billion or 1.7% compared toDecember 31, 2023 reflecting negative net organic growth of$10.6 billion , partly offset by a favourable market impact of$7.9 billion , primarily from equity mandates. Negative net organic growth included$11.4 billion in Public Markets, partly offset by positive net organic growth in Private Markets of$0.8 billion , primarily from new mandates.- Negative net organic growth included
$7.8 billion of outflows connected to AUM sub-advised by PineStone, of which, to our knowledge,$7.1 billion related to AUM that transferred directly to PineStone.
- Negative net organic growth included
Second Quarter Financial Highlights
- Revenue decreased by
$3.3 million or 2.0% compared to Q1 2024, primarily due to lower share of earnings in joint ventures and associates and base management fees in Public Markets, partly offset by higher commitment and transaction fees in Private Markets. Revenue increased by$5.0 million or 3.1% compared to Q2 2023, primarily due to higher other revenues and base management fees in Private Markets. - Adjusted EBITDA was essentially flat quarter-over-quarter and year-over-year.
- Adjusted net earnings decreased by
$1.2 million or 4.6% compared to Q1 2024, primarily due to lower revenues and higher income tax expense, partly offset by lower selling, general, and administrative ("SG&A") expenses, excluding share-based compensation. Adjusted net earnings decreased by$3.8 million or 13.2% compared to Q2 2023, primarily due to higher SG&A, excluding share-based compensation. - Net earnings attributable to the Company's shareholders decreased by
$2.7 million or 35.5% compared to Q1 2024, primarily due to lower revenues and higher income tax expense, partly offset by lower SG&A. Net earnings attributable to the Company's shareholders decreased by$5.6 million or 53.3% compared to Q2 2023, primarily due to higher SG&A, partly offset by higher revenues. - LTM free cash flow increased by
$75.9 million or 167.9% compared to the corresponding period of 2023. The increase was mainly due to higher cash generated by operating activities before the impact of working capital, from higher LTM net earnings, and a positive impact from changes in non-cash working capital, primarily from lower settlements of accounts payable and cash settled share-based liabilities, the collection of performance fees, and the timing of prepaids.
Year-to-Date Financial Highlights
- Revenue increased by
$16.0 million or 5.0% compared to the corresponding period of 2023, primarily due to higher share of earnings in joint ventures and associates, other revenues, and base management fees in Private Markets, partly offset by lower base management fees in Public Markets and commitment and transaction fees. - Adjusted EBITDA increased by
$6.4 million or 7.6% compared to the corresponding period of 2023, primarily due to higher share of earnings in joint ventures and associates, higher other revenues, and lower sub-advisory fees, partly offset by higher employee compensation costs and higher travel and marketing, largely connected to the ongoing regional expansion in the US, EMEA, andAsia . - Adjusted net earnings decreased by
$1.3 million or 2.5% compared to the corresponding period of 2023, primarily due to higher SG&A, excluding share-based compensation. - Net earnings attributable to the Company's shareholders increased by
$4.5 million or 56.3% compared to the corresponding period of 2023, primarily due to higher revenues and a$6.2 million provision for certain claims recorded in the prior year, partly offset by higher SG&A.
Second Quarter Business Highlights
Senior Management Acquired Shares Previously Held by Desjardins
On
Subsequent to
Normal Course Issuer Bid ("NCIB")
The Company announces that the
Under the NCIB that will expire
The Board of Directors of the Company believes that the repurchase of Class A Shares, which the Company may carry out from time to time, represents a responsible investment and the NCIB will provide
Purchases under the NCIB will be made on the open market through the facilities of the TSX and through Canadian alternative trading systems, as well as outside the facilities of the TSX pursuant to exemptions available under applicable securities legislation or exemption orders issued by securities regulatory authorities. The price that the Company will pay for the Class A Shares will be the market price of such shares at the time of the acquisition as per the requirements of the market where the trade is made and applicable securities laws, except for purchases effected outside the facilities of the TSX pursuant to exemptions available under applicable securities legislation or exemption orders issued by securities regulatory authorities which will be at a discount to the prevailing market price.
The average daily trading volume (the "ADTV") of the Class A Shares over the last six complete calendar months was 270,496 Class A Shares. Accordingly, under TSX rules and policies,
Dividend Declared
On
Additional details relating to the Company's operating results can be found in the Company Management's Discussion and Analysis for the three and six-month periods ended
Conference Call
Live
The conference call will also be accessible via webcast on the Investor Relations section of
Replay
An audio replay of the call will be available until
The webcast will remain available for three months following the call and can be accessed on the Investor Relations section of
Footnotes
1) |
Attributable to the Company's shareholders. |
|
|
2) |
Earnings before interest, taxes, depreciation and amortization ("EBITDA"), Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBITDA per share, Adjusted net earnings, Adjusted net earnings per share (basic and diluted), and Last Twelve Months ("LTM") Free Cash Flow are not standardized measures prescribed by International Financial Reporting Standards ("IFRS"), and are therefore unlikely to be comparable to similar measures presented by other companies. We have included non-IFRS measures to provide investors with supplemental measures of our operating and financial performance. We believe non-IFRS measures are important supplemental metrics of operating and financial performance because they highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS measures. Securities analysts, investors and other interested parties frequently use non-IFRS measures in the evaluation of issuers, many of which present non-IFRS measures when reporting their results. Management also uses non-IFRS measures in order to facilitate operating and financial performance comparisons from period to period, to prepare annual budgets and to assess our ability to meet our future debt service, capital expenditure and working capital requirements. |
|
|
|
For a description of the Company's non-IFRS Measures, please refer to page 53 of the Company's Management's Discussion and Analysis for the three and six-month periods ended |
Reconciliation to EBITDA and Adjusted EBITDA (in $ thousands except per share data)
|
FOR THE THREE MONTHS ENDED |
FOR THE SIX-MONTH |
|||
|
2024 |
2024 |
2023 |
2024 |
2023 |
Net earnings |
6,578 |
9,766 |
11,921 |
16,344 |
11,173 |
Income tax expense |
2,531 |
1,000 |
5,140 |
3,531 |
5,287 |
Amortization and depreciation |
12,603 |
12,842 |
13,435 |
25,445 |
27,148 |
Interest on long-term debt and debentures |
12,431 |
11,703 |
11,215 |
24,134 |
21,808 |
Interest on lease liabilities, foreign currency revaluation and other financial charges |
2,087 |
2,922 |
(2,370) |
5,009 |
(1,580) |
EBITDA |
36,230 |
38,233 |
39,341 |
74,463 |
63,836 |
Restructuring, acquisition related and other costs |
5,140 |
4,493 |
3,448 |
9,633 |
11,458 |
Accretion and change in fair value of purchase price obligations and other |
(680) |
(1,119) |
(2,024) |
(1,799) |
(2,505) |
Share-based compensation |
4,813 |
3,773 |
3,951 |
8,586 |
6,458 |
Loss (gain) on investments, net |
(222) |
13 |
157 |
(209) |
(1,130) |
Other expenses (income) |
3 |
2 |
595 |
5 |
6,174 |
Adjusted EBITDA |
45,284 |
45,395 |
45,468 |
90,679 |
84,291 |
Adjusted EBITDA Margin |
27.5 % |
27.0 % |
28.4 % |
27.2 % |
26.6 % |
Per share basic |
0.42 |
0.43 |
0.44 |
0.85 |
0.82 |
Per share diluted |
0.42 |
0.42 |
0.37 |
0.83 |
0.80 |
Weighted average shares outstanding - basic (thousands) |
106,584 |
106,458 |
103,720 |
106,515 |
102,903 |
Weighted average shares outstanding - diluted (thousands) |
109,023 |
108,698 |
122,875 |
108,957 |
105,806 |
Reconciliation to Adjusted Net Earnings (in $ thousands except per share data)
|
FOR THE THREE MONTHS ENDED |
FOR THE SIX-MONTH |
|||
|
2024 |
2024 |
2023 |
2024 |
2023 |
Net earnings attributable to the Company's shareholders |
4,895 |
7,645 |
10,484 |
12,540 |
7,967 |
Amortization and depreciation |
12,603 |
12,842 |
13,435 |
25,445 |
27,148 |
Restructuring, acquisition related and other costs |
5,140 |
4,493 |
3,448 |
9,633 |
11,458 |
Accretion and change in fair value of purchase price obligations and |
(412) |
(913) |
(1,712) |
(1,325) |
(1,940) |
Share-based compensation |
4,813 |
3,773 |
3,951 |
8,586 |
6,458 |
Other expenses (income) |
3 |
2 |
595 |
5 |
6,174 |
Tax effect of above-mentioned items |
(2,170) |
(1,753) |
(1,493) |
(3,923) |
(5,013) |
Adjusted net earnings |
24,872 |
26,089 |
28,708 |
50,961 |
52,252 |
Per share – basic |
|
|
|
|
|
Net earnings |
0.05 |
0.07 |
0.10 |
0.12 |
0.08 |
Adjusted net earnings |
0.23 |
0.25 |
0.28 |
0.48 |
0.51 |
Per share – diluted |
|
|
|
|
|
Net earnings |
0.04 |
0.07 |
0.09 |
0.12 |
0.08 |
Adjusted net earnings |
0.23 |
0.24 |
0.24 |
0.47 |
0.49 |
Weighted average shares outstanding - basic (thousands) |
106,584 |
106,458 |
103,720 |
106,515 |
102,903 |
Weighted average shares outstanding - diluted (thousands) |
109,023 |
108,698 |
122,875 |
108,957 |
105,806 |
Free Cash Flow Reconciliation (in $ thousands)
|
FOR THE THREE MONTHS ENDED |
|||||||
|
Q2 |
Q1 |
Q4 |
Q3 |
Q2 |
Q1 |
Q4 |
Q3 |
|
2024 |
2024 |
2023 |
2023 |
2023 |
2023 |
2022 |
2022 |
Cash flow from operations before the impact |
37,218 |
34,641 |
70,265 |
46,180 |
39,828 |
30,109 |
41,364 |
37,148 |
Changes in non-cash operating working |
15,807 |
(60,389) |
(12,666) |
33,528 |
(25,705) |
(43,572) |
25,358 |
(11,462) |
Net cash generated by (used in) operating |
53,025 |
(25,748) |
57,599 |
79,708 |
14,123 |
(13,463) |
66,722 |
25,686 |
Settlement of purchase price obligations and |
(1,500) |
— |
— |
— |
(1,500) |
— |
— |
(3,476) |
Proceeds on promissory note |
1,521 |
1,501 |
1,500 |
1,510 |
1,460 |
1,536 |
1,497 |
1,455 |
Distributions received from joint ventures and |
8,137 |
3,326 |
1,723 |
1,617 |
502 |
4,252 |
2,513 |
3,621 |
Dividends and other distributions to Non- |
(6,215) |
— |
(3,167) |
— |
(5,895) |
— |
10 |
— |
Lease payments |
(3,038) |
(4,718) |
(4,690) |
(3,837) |
(4,925) |
(4,510) |
(4,607) |
(4,396) |
Interest paid on long-term debt and |
(12,775) |
(13,995) |
(6,299) |
(12,174) |
(12,019) |
(10,379) |
(9,713) |
(8,191) |
Other restructuring costs |
2,685 |
1,569 |
2,075 |
1,226 |
452 |
1,180 |
1,056 |
470 |
Acquisition related and other costs |
— |
32 |
420 |
130 |
341 |
716 |
527 |
153 |
Free Cash Flow |
41,840 |
(38,033) |
49,161 |
68,180 |
(7,461) |
(20,668) |
58,005 |
15,322 |
LTM Free Cash Flow |
121,148 |
71,847 |
89,212 |
98,056 |
45,198 |
67,891 |
58,944 |
92,472 |
|
|
3) |
Net Organic Growth represents the sum of new mandates, lost mandates and net contributions. |
4) |
Market and Other includes the impact of market changes, income distributions and foreign exchange. |
Forward-Looking Statements
This document contains forward-looking statements relating to future events or future performance and reflecting management's expectations or beliefs regarding future events including business and economic conditions, outlook and trends and
By their very nature, forward-looking statements involve numerous assumptions, inherent risks and uncertainties, both general and specific, and the risk that predictions, forecasts, projections, expectations or conclusions will not prove to be accurate. As a result, the Company does not guarantee that any forward-looking statement will materialize and readers are cautioned not to place undue reliance on these forward-looking statements. A number of important factors, many of which are beyond
The preceding list of risk factors is not exhaustive. When relying on forward-looking statements in this document and any other disclosure made by
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