Slide 1: Sprott Inc. Q2 2020 Results
Sprott Inc. Q2 2020 Results August 7, 2020
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, CEO, Sprott Inc. • Whitney George, President, Sprott Inc. • John Ciampaglia, CEO, Sprott Asset Management • Kevin Hibbert, CFO, Sprott Inc. Sprott Inc. | 3
Slide 4: Gold Price Recently Set New All-Time High
Gold Price Recently Set New All-Time High • Precious metals and their related equities have broken out decisively in 2020, outperforming most asset classes • Gold recently breached $2000 and is currently trading at an all-time high YTD 2020 Returns 60% 52.37% 50% 40% 33.08% 30% 27.17% 20% 10.08% 10%
Slide 5: Q2 2020 and YTD Highlights
Q2 2020 and YTD Highlights • Total AUM has increased by 83% YTD to $17 billion as of August 4, 2020 driven by: o $1.9 billion in YTD net sales o $4.2 billion in YTD market value appreciation o Acquisition of Tocqueville gold strategies • Completed share consolidation in May and began trading on NYSE
Slide 6: AUM Summary
AUM Summary • June 30, 2020 AUM was $13.9 billion, up $3.2 billion (29%) from March 31, 2020 and $4.6 billion (50%) from December 31, 2019 • Estimated AUM as of August 4, 2020 was $17 billion, up $3.1 billion (22%) from June 30, 2020 and $7.7 billion (83%) from December 31, 2019 AUM (in $billions) 1
Slide 7: Q2 2020 Earnings Summary
Q2 2020 Earnings Summary • Adjusted base EBITDA for June 30, 2020 was $9.2 million, up $2.2 million (31%) from June 30, 2019 EBITDA (in $millions) 13 10 9.2 8 7.0 6.4 5 4.1 2.9 Q2 2019 2.3 3 1.3 1.6 Q2 2020 0.8 0.2 -3 -2.2 -2.6 -5 Exchange Listed Managed Lending Brokerage Corporate Total Products Eq
Slide 8: Exchange Listed Products: Physical Bullion Trusts
Exchange Listed Products: Physical Bullion Trusts Investor demand in Q2 was very strong and has continued in Q3 • AUM as of August 4, 2020: +79% from December 31, 2019 • Year-to-date sales to August 4, 2020: +$2.3 billion • Trusts have been fully invested despite disruption to supply chain Total Phy
Slide 9: Managed Equities
Managed Equities Assets have rebounded since Q1 selloff • Most funds up 30%-50% YTD • Flagship Sprott Gold Equity Fund (U.S. mutual fund) - up 104% since March low Well-Positioned to capture new flows • Relative performance across product suite has improved with small/mid cap stocks playing catch up
Slide 10: The Rotation Into Gold Equities is Still to Come
The Rotation Into Gold Equities is Still to Come • Investors have sought safety in gold billion but have not yet allocated into gold equities • Sprott expects a meaningful rotation into the sector as risk appetite improves The HUI-Gold Ratio Measures Investor Sentiment on Gold Stocks (1) 0.70 0.62 0
Slide 11: Outlook for Miners Diverging From S&P
Outlook for Miners Diverging From S&P Earnings Per Share (EPS) Estimates are Up ~108% for Gold Miners GOLD EPS: 20.00 2.40 Represents 19.48 ~108% increase 2.19 19.50 2.20 19.00 2.00 18.50 1.80 18.00 1.60 17.50 1.40 17.00 S&P EPS: 16.50 Represents 1.20 ~16% drop 16.35 16.00 1.05 1.00 1/1/19 2/1/19 3/
Slide 12: Private Strategies
Private Strategies Lending • LF II has $365MM in signed loan agreements with $278MM deployed • Activity has increased since the end of Q2 with strong pipeline of new opportunities Project Participation • New streaming and royalty strategy launched in 2019 with $200MM lead order Sprott Inc. | 12
Slide 13: NYSE Listing
NYSE Listing NYSE listing was successfully completed in June 2020 • Increases access to US-based investors • Creates cross-marketing opportunities between clients and shareholders • Improves trading efficiency • Expected to enhance liquidity $50.00 2,000,000 Sprott begins trading on NYSE $40.00 1,60
Slide 14: Growth Initiatives
Growth Initiatives • Prepared to invest in sales given inflow opportunities • Exploring new mining commodity exchange listed products to capitalize on existing brand and client awareness • Pursuing international distribution relationships • Selectively reviewing acquisition opportunities in managed
Slide 15: Summary
Summary • Gold now a mandatory portfolio insurance allocation for both retail and institutional investors • Global economy and debt burden require “easy money” over the long term • Financial repression, currency depreciation and yield curve control leave gold as more attractive store of value • Oppo
Slide 16: Supplemental Financial Information
Supplemental Financial Information
Slide 17: Revenues
Revenues Q2 Q2 In $millions 2020 2019 Total Net Revenues 28.3 15.0 Key revenue highlights: Net fees 15.5 9.9 Net Commissions 3.8 1.9 Finance income 0.7 3.4 Gains (losses) on investments 8.1 (0.4) Sprott Inc. | 17
Slide 18: Expenses
Expenses Q2 Q2 In $millions 2020 2019 Total Expenses 16.2 13.7 Key expense highlights: Compensation (1) 8.3 5.5 Selling, general & administrative 3.0 3.3 (1) See ‘Compensation’ in the key performance indicators (non-IFRS financial measures) section of the MD&A. Sprott Inc. | 18
Slide 19: EBITDA Reconciliation
EBITDA Reconciliation Q2 Q2 In $millions (except for per share amounts) 2020 2019 Net Income 10.5 1.6 Per share (1) 0.43 0.06 Adjustments: Interest expense 0.4 0.2 Provision (recovery) for income taxes 1.6 (0.3) Depreciation and amortization 1.0 0.8 EBITDA 13.5 2.3 Other Adjustments: (Gains) losses