MONTREAL, May 8, 2024
/CNW/ - Fiera Capital Corporation (TSX: FSZ) ("Fiera Capital" or
the "Company"), a leading independent asset management firm, today
announced its financial results for the first quarter ended
March 31, 2024. Financial references
are in Canadian dollars unless otherwise indicated.
(in $ thousands
except where otherwise indicated)
|
Q1
|
Q4
|
Q1
|
2024
|
2023
|
2023
|
End of period
AUM (in $ billions)
|
165.2
|
161.7
|
164.7
|
Average AUM
(in $ billions)
|
164.8
|
158.4
|
163.9
|
|
|
|
|
IFRS Financial
Measures
|
|
|
|
Total
revenues
|
168,115
|
210,972
|
157,091
|
Base management
fees
|
151,537
|
147,371
|
147,428
|
Net earnings (loss)
1
|
7,645
|
39,418
|
(2,517)
|
|
|
|
|
Non-IFRS Financial
Measures
|
|
|
|
Adjusted EBITDA
2
|
45,395
|
77,621
|
38,823
|
Adjusted EBITDA
margin 2
|
27.0 %
|
36.8 %
|
24.7 %
|
Adjusted net
earnings 1,2
|
26,089
|
50,163
|
23,544
|
LTM Free Cash Flow
2
|
71,847
|
89,212
|
67,891
|
"Following a strong close to 2023, we are pleased to start
2024 with overall AUM growth of $3.5
billion during the first quarter," said Jean-Guy Desjardins, Chairman of the Board and
Global Chief Executive Officer. "We continue to drive forward with
our regional distribution strategy, which has begun to deliver
positive organic growth for some of our public equity and private
market strategies. Amidst ongoing economic uncertainties, we
continue to deliver innovative investment solutions and capitalize
on promising new prospects in every region we serve, positioning us
for continued growth and success."
"Equity markets continued their strong performance in the
first quarter of 2024 which, combined with growth in base
management fees in Private Markets, resulted in a good
year-over-year increase in total revenues. This, along with our
continued prudent approach to cost management, enabled us to
generate an adjusted EBITDA margin of 27%, a marked improvement
from the same period last year." said Lucas
Pontillo, Executive Director and Global Chief Financial
Officer. "I am pleased to announce that the Board of Directors has
approved a dividend of 21.5 cents per
share, payable on June 20,
2024."
Assets Under Management (in $ millions, unless otherwise
indicated)
By
Platform
|
December 31,
2023
|
New
|
Lost
|
Net
Contributions
|
Net Organic
Growth3
|
Market
and
Other4
|
March 31,
2024
|
Public Markets,
excluding AUM sub-advised by PineStone
|
97,984
|
718
|
(182)
|
(1,053)
|
(517)
|
1,532
|
98,999
|
Public Markets AUM
sub-advised by PineStone
|
45,231
|
84
|
(2,741)
|
(147)
|
(2,804)
|
4,882
|
47,309
|
Public Markets -
Total
|
143,215
|
802
|
(2,923)
|
(1,200)
|
(3,321)
|
6,414
|
146,308
|
Private
Markets
|
18,478
|
602
|
(32)
|
(52)
|
518
|
(139)
|
18,857
|
Total
|
161,693
|
1,404
|
(2,955)
|
(1,252)
|
(2,803)
|
6,275
|
165,165
|
By Distribution
Channel
|
December 31,
2023
|
New
|
Lost
|
Net
Contributions
|
Net Organic
Growth3
|
Market
and
Other4
|
March 31,
2024
|
Institutional
|
88,605
|
1,025
|
(2,731)
|
(1,077)
|
(2,783)
|
2,176
|
87,998
|
Financial
Intermediaries
|
59,084
|
253
|
(72)
|
(51)
|
130
|
3,646
|
62,860
|
Private
Wealth
|
14,004
|
126
|
(152)
|
(124)
|
(150)
|
453
|
14,307
|
Total
|
161,693
|
1,404
|
(2,955)
|
(1,252)
|
(2,803)
|
6,275
|
165,165
|
- AUM increased by $3.5 billion or
2.2% compared to December 31, 2023
reflecting a favourable market impact of $6.4 billion, primarily from equity mandates,
partly offset by negative net organic growth of $2.8 billion. Negative net organic growth
included $3.3 billion in Public
Markets, partly offset by positive net organic growth in Private
Markets of $0.5 billion, primarily
from new mandates.
- Negative net organic growth included $2.8 billion of outflows connected to AUM
sub-advised by PineStone, of which, to our knowledge, $2.7 billion related to AUM that transferred
directly to PineStone.
- In fiscal 2023, a large Financial Intermediary client withdrew
$4.9 billion of AUM, of which
approximately $3.5 billion was
transferred to PineStone. There were no transfers to PineStone
related to this client in the current quarter. As previously
announced, they are expected to redirect approximately $3 billion of AUM by the end of the second
quarter, as part of their ongoing transfer of assets to PineStone.
Excluding this, management expects the AUM reduction from lost
mandates transferring directly to PineStone to be in the range of
$3 to $4
billion this year.
First Quarter Financial Highlights
- Revenue increased by $11.0
million, or 7.0% compared to Q1 2023. The increase was
primarily due to higher share of earnings in joint ventures and
associates, higher base management fees in Private Markets, and
higher other revenues. These increases were partly offset by lower
commitment and transaction fees and performance fees in Private
Markets.
- Adjusted EBITDA increased by $6.6
million, or 17.0% compared to Q1 2023, primarily due to
higher share of earnings in joint ventures and associates, base
management fees, and other revenues, partly offset by higher
variable compensation.
- Adjusted net earnings increased by $2.6
million, or 11.1% compared to Q1 2023, primarily due to
higher revenues, partly offset by higher SG&A, excluding
share-based compensation, higher interest on lease liabilities,
foreign exchange revaluation and other financial charges, and
higher interest on long-term debt and debentures.
- Net earnings attributable to the Company's shareholders
increased by $10.1 million compared
to Q1 2023. The increase was primarily due to higher revenues, a
provision for certain claims recorded in the same period last year,
and lower restructuring, acquisition related and other costs,
partly offset by higher SG&A and higher interest on lease
liabilities, foreign exchange revaluation and other financial
charges.
- LTM Free Cash Flow increased by $3.9
million or 5.7% compared to Q1 2023. The increase was mainly
due to the settlement of purchase price obligations and puttable
financial instrument liability in fiscal 2022, partly offset by
lower distributions from joint ventures and associates, higher
interest paid on long-term debt and debentures, and higher
dividends paid to non-controlling interests.
- LTM Free Cash Flow decreased by $17.4
million or 19.5% compared to the previous quarter. The
decrease was primarily due to changes in non-cash working capital,
primarily from higher settlements of accounts payable, mainly
related to bonuses and income taxes paid during the first quarter,
delays in collecting performance fees from the prior quarter, and
the timing of prepaids.
Subsequent to March 31,
2024
Dividend Declared
On May 7,
2024, the Board declared a quarterly dividend of
$0.215 per Class A subordinate voting
share and Class B special voting share, payable on June 20, 2024 to shareholders of record at the
close of business on May 20, 2024.
The dividend is an eligible dividend for income tax purposes.
Fiera Holdings Receives Sale Notice from Desjardins
On
April 23, 2024, Fiera Holdings Inc.
("Fiera Holdings"), as general partner of Fiera Capital L.P.
("Fiera LP"), which holds approximately 20.7% of the outstanding
shares of the Company as of the date of this press release, was
notified by Desjardins Financial Holding Inc., an indirect
wholly-owned subsidiary of Fédération des caisses Desjardins du
Québec ("Desjardins"), that Desjardins wishes to sell all of
the units of Fiera LP and all of the shares of Fiera Holdings that
it holds (the "Offered Securities"). The Offered Securities
represent 7,257,960 Class A subordinate voting shares of the
Company (the "Class A Shares"), or 6.8% of the total number of
outstanding shares of the Company.
The sale of the Class A Shares that the Offered Securities
represent is subject to the terms of the limited partnership
agreement of Fiera LP.
Senior management of the Company is currently considering making
an offer, together with a financial partner, to acquire the Offered
Securities from Desjardins. There can be no assurance that such
transaction will materialize.
Additional details relating to the company's operating results
can be found in the Company Management's Discussion and Analysis
for the three months ended March 31,
2024 available on our Investor Relations web page under
Financial Documents - Quarterly Results - Management's
Discussion and Analysis.
Conference Call
Live
Fiera Capital will hold a conference call at
10:00 a.m. (ET) on Wednesday,
May 8, 2024, to discuss its financial results. The dial-in
number to access the conference call from Canada and the United States is
1-888-390-0620 (toll-free) and 1-416-764-8651 from outside
North America.
The conference call will also be accessible via webcast in the
Investor Relations section of Fiera Capital's website, under
Events and Presentations.
Replay
An audio replay of the call will be available
until May 15, 2024 by dialing 1-888-390-0541 (North American
toll free), access code 906241 followed by the number sign
(#).
The webcast will remain available for three months following the
call and can be accessed in the Investor Relations section of Fiera
Capital's website under Events and Presentations.
Footnotes
1)
|
Attributable to the
Company's shareholders.
|
|
|
2)
|
Earnings before
interest, taxes, depreciation and amortization ("EBITDA"), Adjusted
EBITDA, Adjusted EBITDA margin and Adjusted EBITDA per share,
Adjusted net earnings and 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 its
ability to meet future debt service, capital expenditure and
working capital requirements.
|
|
|
|
For a description of
the Company's non-IFRS Measures, please refer to page 41 of the
Company's Management's Discussion and Analysis for the three months
ended March 31, 2024 which is available on SEDAR+ at
www.sedarplus.ca. For a
reconciliation of the Company's non-IFRS Measures, refer to the below tables:
|
Reconciliation to EBITDA and Adjusted EBITDA (in $
thousands)
|
FOR THE THREE MONTHS
ENDED
|
|
March
31,
2024
|
December
31,
2023
|
March
31,
2023
|
Net earnings
(loss)
|
9,766
|
42,864
|
(748)
|
Income tax
expense
|
1,000
|
11,985
|
147
|
Amortization and
depreciation
|
12,842
|
13,406
|
13,713
|
Interest on long-term
debt and debentures
|
11,703
|
11,710
|
10,593
|
Interest on lease
liabilities, foreign exchange revaluation and other financial
charges
|
2,922
|
(1,220)
|
790
|
EBITDA
|
38,233
|
78,745
|
24,495
|
Restructuring,
acquisition related and other costs
|
4,493
|
3,100
|
8,010
|
Accretion and change
in fair value of purchase price obligations and other
|
(1,119)
|
106
|
(481)
|
Share-based
compensation
|
3,773
|
2,474
|
2,507
|
(Gain) loss on
investments, net
|
13
|
(124)
|
(1,287)
|
Other expenses
(income)
|
2
|
(6,680)
|
5,579
|
Adjusted
EBITDA
|
45,395
|
77,621
|
38,823
|
Per share
basic
|
0.43
|
0.73
|
0.38
|
Per share
diluted
|
0.42
|
0.56
|
0.38
|
Weighted average shares
outstanding - basic (thousands)
|
106,458
|
106,116
|
102,750
|
Weighted average shares
outstanding - diluted (thousands)
|
108,698
|
139,543
|
102,750
|
Reconciliation to Adjusted Net Earnings (in $
thousands)
|
FOR THE THREE MONTHS
ENDED
|
|
March
31,
2024
|
December
31,
2023
|
March
31,
2023
|
Net earnings (loss)
attributable to the Company's shareholders
|
7,645
|
39,418
|
(2,517)
|
Amortization and
depreciation
|
12,842
|
13,406
|
13,713
|
Restructuring,
acquisition related and other costs
|
4,493
|
3,100
|
8,010
|
Accretion and change in
fair value of purchase price obligations and other, and effective
interest on debentures
|
(913)
|
364
|
(228)
|
Share-based
compensation
|
3,773
|
2,474
|
2,507
|
Other expenses
(income)
|
2
|
(6,680)
|
5,579
|
Tax effect of
above-mentioned items
|
(1,753)
|
(1,919)
|
(3,520)
|
Adjusted net
earnings attributable to the Company's shareholders
|
26,089
|
50,163
|
23,544
|
Per share –
basic
|
|
|
|
Net earnings
(loss)
|
0.07
|
0.37
|
(0.02)
|
Adjusted net
earnings
|
0.25
|
0.47
|
0.23
|
Per share –
diluted
|
|
|
|
Net earnings
(loss)
|
0.07
|
0.30
|
(0.02)
|
Adjusted net
earnings
|
0.24
|
0.37
|
0.23
|
Weighted average shares
outstanding - basic (thousands)
|
106,458
|
106,116
|
102,750
|
Weighted average shares
outstanding - diluted (thousands)
|
108,698
|
139,543
|
102,750
|
Reconciliation to LTM Free Cash Flow (in $ thousands)
|
FOR THE THREE MONTHS
ENDED
|
|
Q1
|
Q4
|
Q3
|
Q2
|
Q1
|
Q4
|
Q3
|
Q2
|
|
2024
|
2023
|
2023
|
2023
|
2023
|
2022
|
2022
|
2022
|
Cash flow from
operations before the impact of working
capital
|
34,641
|
70,265
|
46,180
|
39,828
|
30,109
|
41,364
|
37,148
|
38,444
|
Changes in non-cash
operating working capital items
|
(60,389)
|
(12,666)
|
33,528
|
(25,705)
|
(43,572)
|
25,358
|
(11,462)
|
8,409
|
Net cash generated
by (used in) operating activities
|
(25,748)
|
57,599
|
79,708
|
14,123
|
(13,463)
|
66,722
|
25,686
|
46,853
|
Settlement of purchase
price obligations and puttable financial instrument
liability
|
—
|
—
|
—
|
(1,500)
|
—
|
—
|
(3,476)
|
(23,901)
|
Proceeds on promissory
note
|
1,501
|
1,500
|
1,510
|
1,460
|
1,536
|
1,497
|
1,455
|
1,375
|
Distributions received
from joint ventures and associates, net of investments
|
3,326
|
1,723
|
1,617
|
502
|
4,252
|
2,513
|
3,621
|
4,338
|
Dividends and other
distributions to Non-Controlling Interest
|
—
|
(3,167)
|
—
|
(5,895)
|
—
|
10
|
—
|
(1,753)
|
Lease
payments
|
(4,718)
|
(4,690)
|
(3,837)
|
(4,925)
|
(4,510)
|
(4,607)
|
(4,396)
|
(4,221)
|
Interest paid on
long-term debt and debentures
|
(13,995)
|
(6,299)
|
(12,174)
|
(12,019)
|
(10,379)
|
(9,713)
|
(8,191)
|
(8,299)
|
Other restructuring
costs
|
1,569
|
2,075
|
1,226
|
452
|
1,180
|
1,056
|
470
|
160
|
Acquisition related and
other costs
|
32
|
420
|
130
|
341
|
716
|
527
|
153
|
680
|
Free Cash
Flow
|
(38,033)
|
49,161
|
68,180
|
(7,461)
|
(20,668)
|
58,005
|
15,322
|
15,232
|
LTM Free Cash
Flow
|
71,847
|
89,212
|
98,056
|
45,198
|
67,891
|
58,944
|
92,472
|
109,828
|
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 comments
with respect to the possibility that senior management make an
offer to purchase the Offered Securities, business and economic
conditions, outlook and trends and Fiera Capital's growth, results
of operations, performance, business prospects and opportunities
and new initiatives. Forward-looking statements may include
comments with respect to Fiera Capital's objectives, strategies to
achieve those objectives, expected financial results, outlook for
Fiera Capital's businesses and for the Canadian, American,
European, Asian and other global economies. Such statements reflect
management's current beliefs and are based on factors and
assumptions it considers to be reasonable based on information
currently available to management and may typically be identified
by terminology such as "consider", "believe", "expect", "aim",
"goal", "plan", "anticipate", "estimate", "may increase", "may
fluctuate", "predict", "potential", "foresee", "forecast",
"project", "continue", "target", "intend" or the negative of these
terms or other comparable terminology and similar expressions of
future or conditional verbs, such as "may", "will", "should",
"would" and "could."
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
Fiera Capital's control, could cause actual events or results to
differ materially from the predictions, forecasts, projections,
expectations, or conclusions expressed in such forward-looking
statements which include, but are not limited to, risks related to
investment performance and investment of the assets under
management ("AUM"), AUM concentration related to strategies
sub-advised by PineStone, key employees, asset management industry
and competitive pressure, reputational risk, regulatory compliance,
information security policies, procedures and capabilities,
litigation risk, insurance coverage, third-party relationships,
indebtedness, market risk, credit risk, inflation, interest rates
and recession risks, ownership structure and potential dilution and
other factors described in the Company's Annual Information Form
for the year ended December 31, 2023
under the heading "Risk Factors and Uncertainties" or discussed in
other materials filed by the Company with applicable securities
regulatory authorities from time to time which are available on
SEDAR+ at www.sedarplus.ca.
The preceding list of risk factors is not exhaustive. When
relying on forward-looking statements in this document and any
other disclosure made by Fiera Capital, investors and others should
carefully consider the preceding factors, other uncertainties and
potential events. Fiera Capital does not undertake to update or
revise any forward-looking statements, whether written or oral,
that may be made from time to time by it or on its behalf in order
to reflect new information, future events or circumstances or
otherwise, except as required by applicable laws.
About Fiera Capital Corporation
Fiera Capital is a leading independent asset management firm
with a growing global presence. The Company delivers customized and
multi-asset solutions across public and private market asset
classes to institutional, financial intermediary and private wealth
clients across North America,
Europe and key markets in
Asia. Fiera Capital's depth of
expertise, diversified investment platform and commitment to
delivering outstanding service are core to our mission of being at
the forefront of investment management science to create
sustainable wealth for clients. Fiera Capital trades under the
ticker FSZ on the Toronto Stock Exchange.
Headquartered in Montreal,
Fiera Capital, with its affiliates in various jurisdictions, has
offices in over a dozen cities around the world, including
New York (U.S.), London (UK), and Hong Kong (SAR).
Each affiliated entity (each an "Affiliate") of Fiera Capital
only provides investment advisory or investment management services
or offers investment funds in the jurisdictions where the Affiliate
is authorized to provide services pursuant to an exemption from
registration and/or the relevant product is registered.
Fiera Capital does not provide investment advice to U.S. clients
or offer investment advisory services in the U.S. In the U.S.,
asset management services are provided by Fiera Capital's
affiliates who are investment advisers that are registered with the
U.S. Securities and Exchange Commission (SEC) or exempt from
registration. Registration with the SEC does not imply a certain
level of skill or training. For details on the particular
registration of, or exemptions therefrom relied upon by, any Fiera
Capital entity, please consult
https://www.fieracapital.com/en/registrations-and-exemptions.
Additional information about Fiera Capital, including the
Company's Annual Information Form, is available on SEDAR+ at
www.sedarplus.ca.
SOURCE Fiera Capital Corporation