Sprott Inc. · TSX:SII
Sprott — Q4 2020 Earnings Presentation
19 slides from Sprott's earnings presentation, Feb 26, 2021
Slide 1: Sprott Inc. 2020 Annual Results
Sprott Inc. 2020 Annual Results February 26, 2021
Slide 2: Forward-looking Statements
Forward-looking Statements Certain statements in this presentation or the accompanying oral remarks contain forward-looking information and forward-looking statements (collectively referred to herein as the "Forward-Looking Statements") within the meaning of applicable Canadian and U.S. securities l
Slide 3: Speakers
Speakers Peter Grosskopf, Whitney George, CEO, President, Sprott Inc. Sprott Inc. John Ciampaglia, Kevin Hibbert CEO, CFO, Sprott Asset Sprott Inc. Management Sprott Inc. | 3
Slide 4: Precious Metals Universe is Thriving
Precious Metals Universe is Thriving • Gold outperformed all major asset classes in 2020 o Silver leading the way in 2021 • Precious metals increasingly sought as counter-balance to frothy financial markets • Sprott is addressing a large and growing market by providing investors with access to a glo
Slide 5: SII 2020 Highlights
SII 2020 Highlights 2020 was a pivotal year for Sprott • Each segment capitalized on strong markets and produced growing financial returns • All businesses upgraded talent • Divisions are cross-fertilizing on ideas, relationships, distribution Listed on the Included in Named to the Record AUM NYSE T
Slide 6: 5-Year Review
5-Year Review • Over the past 5 years, Sprott has repositioned the business to focus on its core strengths in precious metals • The result has been significant improvements in all key financial metrics • As of December 31, 2020, Sprott’s AUM was at a record high of $17.4B + 224% + 241% + 9% 81% AUM
Slide 7: AUM Summary
AUM Summary • AUM reached a record $17.4 billion, up $1.1 billion (7%) from September 30 and up $8.1 billion (88%) from December 31, 2019 AUM (in $billions) Sprott Inc. | 7
Slide 8: Earnings Summary (3 months ended)
Earnings Summary (3 months ended) • Adjusted base EBITDA was $14.8 million in the quarter, up $7.3 million (98%) from the prior period EBITDA (in $millions) 14.8 9.5 7.4 Q4 2020 4.6 3.3 2.4 2.5 2.5 Q4 2019 1.8 0.8 2.0 4.0 (1) Exchange listed Managed Lending Brokerage Corporate Total products equitie
Slide 9: Earnings Summary (12 months ended)
Earnings Summary (12 months ended) • Adjusted base EBITDA was $44.2 million on a full year basis, up $15.2 million (52%) from 2019 EBITDA (in $millions) 44.2 30.6 29.0 18.0 YTD 2020 10.8 10.7 7.3 8.1 YTD 2019 3.2 3.3 7.3 13.7 (1) Exchange listed Managed Lending Brokerage Corporate Total products equ
Slide 10: Exchange Listed Products: Physical Bullion Trusts
Exchange Listed Products: Physical Bullion Trusts • 2020 AUM: +80% from December 31, 2019 • 2020 Net Sales: $2.8 billion • Q4 2020 Net Sales :+$200MM Total Physical Trust AUM Physical Trust Net Sales (in Total billions) Physical Trust AUM 2020(in YTDmillions) Physical Trust Sales (in millions) (in m
Slide 11: Silver Shining in 2021
Silver Shining in 2021 • 2021 sales shifting to Sprott Physical Silver Trust (PSLV) : PSLV AUM (in millions) ~$900MM YTD • PSLV assets have increased by $4.0 $1.3B since end of Q3 $3.5 • A new wave of retail investors have $3.0 taken an interest in physical silver $2.5 • The fundamentals are compell
Slide 12: Managed Equities
Managed Equities Shifting from Defense to Offense • Performance improved in H2 2020 o Several funds generated performance fees in 2020 • Sales trending up; redemptions trending down • In January, U.S. mutual fund had first positive net sales month since acquisition • Expanding sales coverage and dig
Slide 13: Private Strategies
Private Strategies • Private strategies currently have ~$1B in AUM • LF2 delivering outstanding returns to LPs o $325MM in capital deployed • Streaming and royalty strategy participated in 3 transactions in 2020 o Strong pipeline of new deals • Onboarding large new clients • 2021 expected to be a tr
Slide 14: Executive Transition
Executive Transition • Rick Rule to retire from executive positions, effective March 15, 2021 • Will remain a director and the largest shareholder of Sprott • Rick will act as an advisor to certain investment strategies and serve in an ongoing marketing role Sprott Inc. | 14
Slide 15: 2021 Focus
2021 Focus Focused on Driving Sustainable Growth Fundamentals in place for a Increasing focus on sustained bull market in precious sales/marketing to support metals managed equities Planning 2021 product Pursuing international distribution launches in all key segments partnerships to extend global r
Slide 16: Supplemental Financial Information
Supplemental Financial Information
Slide 17: Revenues
Revenues 3 months ended 12 months ended In millions $ 2020 2019 2020 2019 Total net revenues 29.7 17.0 104.3 64.3 Key revenue highlights: Net fees 26.2 11.4 76.3 42.1 Net commissions 4.0 3.9 16.6 11.2 Finance income 1.6 2.5 4.0 11.4 Gains (losses) on investments (3.1) (1.3) 5.1 (1.1) Sprott Inc. | 1
Slide 18: Expenses
Expenses 3 months ended 12 months ended In millions $ 2020 2019 2020 2019 Total expenses 20.4 14.6 69.6 51.3 Key expense highlights: Net compensation 11.8 7.4 39.9 26.0 Selling, general & administrative 2.4 3.0 11.6 12.5 Sprott Inc. | 18
Slide 19: EBITDA Reconciliation
EBITDA Reconciliation 3 months ended 12 months ended In millions $ (except for per share amounts) 2020 2019 2020 2019 Net Income 6.7 1.4 27.0 10.2 Per share (1) 0.27 0.06 1.10 0.42 Adjustments: Interest expense 0.3 0.3 1.2 1.0 Provision for income taxes 2.6 0.9 7.7 2.7 Depreciation and amortization