Slide 1: Investor Presentation
Investor Presentation February 2021
Slide 2: Safe Harbor
Safe Harbor This presentation contains certain statements, estimates and forecasts with respect to future performance and events. These statements, estimates and forecasts are “forward-looking statements.” In some cases, forward-looking statements can be identified by the use of forward- looking ter
Slide 3: Our Firm
Our Firm Lazard’s mission is to provide trusted financial advice and investment solutions to our clients. We have built a global network of relationships with key decision makers in business, government and investing institutions. We operate as a local firm in local markets and serve clients with ou
Slide 4: Leadership and Diversification
Leadership and Diversification Anticipating and meeting the evolving needs of clients Asset Management Financial Advisory Locally established Global Global platform built teams with global Equities M&A over decades of perspective Multi- $56B commitment to local Regional Restructuring markets I
Slide 5: Long-term Investment Thesis
Long-term Investment Thesis Lazard is a uniquely diversified, global financial advisory and investment manager with an established track record of performance Distinctive culture Seasoned expertise and people provide a and innovative insights sustainable foundation attract clients across through mac
Slide 6: Our Purpose is Serving Clients
Our Purpose is Serving Clients Culture is central to delivering for our clients and our long-term success “We aim to provide Clients first – Our success is derived from an ability to provide a unique perspective preeminent advice with unparalleled execution” Deliver excellence – Insight, innovation
Slide 7: Investor Highlights
Investor Highlights The Lazard Difference Investment Highlights Financial Strategy 6
Slide 8: The Lazard Difference
The Lazard Difference A firm built across centuries, structured around the needs of our clients Forward Thinking Premier Quality Brand of People 7
Slide 9: Premier Brand
Premier Brand Lazard is known globally for excellence, discretion, integrity and results One of the most Lazard’s top-tier brand A formidable reputation influential financial allows it to punch above its in the world’s boardrooms" institutions in the world" weight class" Showing bigger Success built
Slide 10: Quality of People
Quality of People Unique assemblage of experience, expertise, interests and characteristics 80+ Nationalities 25+ Average years of experience (MDs) 14 Average years of tenure (MDs) As of December 31, 2020 Experience Expertise Interests Characteristics 9
Slide 11: Forward Thinking
Forward Thinking Culture of innovation PIONEERING LEGACY CONTINUING INNOVATION EVOLUTION | | | 19th century 20th century 21st century • Private Banking • M&A • Capital Structure Advisory • Foreign Exchange • Restructuring • Structured Credit Advisory • International Equity • Emerging Markets Debt •
Slide 12: Technology Driven
Technology Driven We are well-positioned for the hybrid work environment Remote collaboration Infrastructure & Analytics Customer-centric solutions Optimizing workflow connectivity Virtual network access Data privacy Real-time engagement through Secure remote-access Multi-factor authentication p
Slide 13: Proven Stability
Proven Stability The Lazard Difference Investment Highlights • Proven Stability • High Performance • Significant Opportunities for Growth Financial Strategy 12
Slide 14: Strong Operating Revenue Generation
Strong Operating Revenue Generation Significant scale provides stable platform through cycle $ in millions $3,000 $2,755 2,750 $2,655 $2,546 $2,524 2,500 $2,340 $2,380 $2,344 2,250 $2,015 $2,034 $1,979 $1,971 2,000 $1,884 1,506 1,388 1,357 1,403 1,750 $1,675 $1,571 $1,618 1,207 1,280 1,301 1,500 $1,
Slide 15: Lower Revenue Volatility than Peers
Lower Revenue Volatility than Peers Unique combination of stable businesses minimizes volatility over time OPERATING REVENUE VOLATILITY ( 2010-2020) 1 0.51 0.34 0.18 0.13 0.11 2 2 2 2 Bulge Bracket Traditional AM Independent FA Alt. AM Peer samples do not include firms that no longer exist, which, i
Slide 16: Stable Asset Management Business
Stable Asset Management Business Assets Under Management provides stability to long-term revenue generation Average AUM1 ($ in billions) $250 $241 $234 $227 $225 200 $196 $196 $195 $174 $152 $156 150 $131 $137 $123 $104 $97 100 50 0 1 Average Assets under management as of December 31 each year 15
Slide 17: High Performance
High Performance The Lazard Difference Investment Highlights • Proven Stability • High Performance • Significant Opportunities for Growth Financial Strategy 16
Slide 18: High Performance
High Performance Performance across businesses leads to strong results $2.52bn $849mn $259bn FY operating revenue Record quarterly Record year-end assets 2020 operating revenue under management Q4 2020 Q4 2020 $365mn $509mn $336mn FY return of capital to Record Financial Advisory Asset Management sh
Slide 19: Increasing Market Share
Increasing Market Share Market share has grown significantly since Lazard’s IPO FINANCIAL ADVISORY MARKET SHARE 1 ACTIVE AUM MARKET SHARE 2 Lazard 9th 6th Rank +25% 8.7% +64% 0.41% 7.0% 0.25% 2005 2020 2005 2020 3 Source: Company filings, BCG reports. 1 Calculated as a percentage of the top ten fina
Slide 20: Financial Advisory Performance
Financial Advisory Performance Significant growth in earnings from operations Operating Revenue Earnings from Operations, ($ in millions) Awarded Basis ($ in millions) $1,600 $500 $1,403 1,400 400 1,200 1,000 300 800 200 600 400 100 200 0 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Slide 21: Asset Management Performance
Asset Management Performance Doubling of AUM since financial crisis and stable fees drive earnings AUM1 Earnings from Operations, ($ in billions) Awarded Basis ($ in millions) $259 $250 $600 500 200 400 150 300 100 200 50 100 0 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Slide 22: Significant Opportunities for Growth
Significant Opportunities for Growth The Lazard Difference Investment Highlights • Proven Stability • High Performance • Significant Opportunities for Growth Financial Strategy 21
Slide 23: Growth Framework
Growth Framework Stable foundation and high performance create multiple growth opportunities Inorganic growth • Addition of independent teams • Acquisitions Ongoing investments • Selective hiring • Seeding new strategies • Technology infrastructure Organic growth • Investment platform extensions • N
Slide 24: Investing in Financial Advisory Growth
Investing in Financial Advisory Growth Increasing our total addressable market by scaling the franchise 2006 – 2017 Built inbound and outbound M&A 2016 advisory team in China Acquired banking boutique to serve growing Canadian business Minneapolis Toronto Beijing Chicago 2013 – 2017 Tokyo Expanded p
Slide 25: Asset Management Team Additions
Asset Management Team Additions Integral part of successful growth strategy 2020 • Bottom Billion • Coherence Long/ Short Credit 2018 • Digital Health • International 2015 Equity Value • European 2010 Long/Short • EM Core Equity Equity • EM Debt 2005 • Japanese Equity 2019 • Korean Equity • Labs (XA
Slide 26: Financial Advisory Diversity of Revenues
Financial Advisory Diversity of Revenues Sophisticated, local financial expertise, paired with global execution capabilities Mergers & Public & Shareholder Restructuring Sovereign Acquisition Private Capital Advisory Advisory Advisory Advisory Advisory • Activism • Chapter 11 • Public/private • Equi
Slide 27: Ability to Innovate, Scale Investment Strategies
Ability to Innovate, Scale Investment Strategies New strategies represent more than half of our total AUM NEW STRATEGIES 1 AS % OF TOTAL AUM 58% 54% 50% 49% 45% 46% 40% 35% 30% 28% 23% 19% 20% 15% 5% 5% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Note: Data exclud
Slide 28: Investment Strategies Scaled in Recent Years
Investment Strategies Scaled in Recent Years Demonstrated ability to seed new portfolios and scale quickly Strategy/Platform Inception Current AUM ($B) Quantitative Equity Platform 2008 >$21 International Strategic Equity 2001 ~$20 Global Listed Infrastructure 2005 ~$15 Scaled Strategies Emerging Ma
Slide 29: Sustainable Investing Framework
Sustainable Investing Framework Complex global issues create secular opportunities for active investment Delivering a unique approach to sustainable investment Integrated research Bespoke, fundamental analysis is vital to identify and value material ESG issues Global platform and sector expert
Slide 30: Financial Strategy
Financial Strategy The Lazard Difference Investor Highlights Financial Strategy 29
Slide 31: Discipline on Costs
Discipline on Costs Consistency in compensation and non-compensation expenses while increasing investment 80% Target ranges1 established in 2012 Comp: Mid to high-50s percentage range 72% Non-comp: 16% to 20% 70% 70% 68% 67% 62% 62% 59.4% 58.2% 56.3% 56.0% 56.2% 55.6% 55.8% 57.7% 59.8% 60% 50% 40% 3
Slide 32: Focus on Operating Margins
Focus on Operating Margins Increased revenues and cost management has resulted in significant impact on operating margin, awarded basis 25.1% 20.4% 12.7% 2005-2009 2010-2014 2015-2020 Average Average Average 31
Slide 33: Operating Margin Growth
Operating Margin Growth Operating margin, awarded basis increased in both businesses since 2005 FINANCIAL ADVISORY ASSET MANAGEMENT 41% 28% 38% 21% 28% 19% '05-'09 '10-'14 '15-'20 '05-'09 '10-'14 '15-'20 Average Average Average Average Average Average Segment results exclude expenses not directly as
Slide 34: Capital Management Strategy
Capital Management Strategy Commitment to shareholder value creation Gradually increase common dividend over time Repurchase shares to offset dilution from year-end share-based compensation Retain appropriate cash balance to support operations, accruals consistent with our business, and regula
Slide 35: Strong Balance Sheet and Liquidity
Strong Balance Sheet and Liquidity Disciplined leverage profile and consistent access to capital markets provides flexible balance sheet to navigate varying market environments Balanced Debt Profile with Long-term Maturities ($ in millions) Strong liquidity profile $200 Current cash and cash equiv
Slide 36: Significant Cash Generation
Significant Cash Generation Significant capital return to shareholders in addition to offsetting dilution from stock-based compensation $ in millions $1,200 $1,023 $1,000 $268 $850 $800 $692 $716 $253 $584 $600 $273 $261 $396 $416 $424 $227 $400 $102 $341 $365 $95 $236 $206 $66 $151 $146 $154 $168 $
Slide 37: Strong Capital Returns to Shareholders
Strong Capital Returns to Shareholders Balancing dividend growth and share repurchases through the cycle 1 Annual Dividends Share Repurchases2 (Shares in millions) 3.5 4.1 3.4 8.6 7.0 12.2 13.7 2.9 $3.00 Diluted Weighted Average Shares Outstanding 3 135.4 134.1 133.3 132.9 132.7 $1.30 $1.20 2.00 $1.
Slide 38: Supplemental Financial Information
Supplemental Financial Information
Slide 39: Corporate Structure & Tax Reform Considerations
Corporate Structure & Tax Reform Considerations Bermuda corporation with common stock traded on the NYSE ─ Corporate governance structure consistent with U.S. peers and files annual proxy statement Corporate • Files 10-Ks and 10-Qs with SEC, including IRS Employer Identification Number Structure ─ P
Slide 40: U.S. GAAP Selected Financial Information
Unaudited U.S. GAAP Selected Financial Information ($ in millions) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Net revenue $1,301 $1,494 $1,918 $1,557 $1,531 $1,905 $1,830 $1,912 $1,985 $2,300 $2,354 $2,333 $2,644 $2,826 $2,587 $2,566 % Growth 15% 28% (19%) (2%) 2
Slide 41: Reconciliation of U.S. GAAP Net Revenue to Operating Revenue
Unaudited Reconciliation of U.S. GAAP Net Revenue to Operating Revenue ($ in millions) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Net revenue - U.S. GAAP Basis $1,301 $1,494 $1,918 $1,557 $1,531 $1,905 $1,830 $1,912 $1,985 $2,300 $2,354 $2,333 $2,644 $2,826 $2,58
Slide 42: Reconciliation of U.S. GAAP Compensation to Adjusted/Awarded Compensation
Unaudited Reconciliation of U.S. GAAP Compensation to Adjusted/Awarded Compensation ($ in millions) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Compensation and benefits expense - U.S. GAAP basis $699 $891 $1,123 $1,128 $1,309 $1,194 $1,169 $1,351 $1,279 $1,314 $1
Slide 43: Reconciliation of Non-Compensation Expense to Non-Compensation, As Adjusted
Unaudited Reconciliation of U.S. GAAP Non-Compensation Expense to Non-Compensation, As Adjusted ($ in millions) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Non-Compensation expense - U.S. GAAP basis $260 $275 $376 $404 $404 $468 $425 $437 $490 $467 $1,051 $475 $30
Slide 44: Reconciliation of U.S. GAAP Net Income to Net Income, As Adjusted
Unaudited Reconciliation of U.S. GAAP Net Income to Net Income, As Adjusted ($ in millions, except per share values) 2012 2013 2014 2015 2016 2017 2018 2019 2020 Net income attributable to Lazard Ltd - U.S. GAAP Basis $84 $160 $427 $986 $388 $254 $527 $287 $402 Adjustments: Charges pertaining to sta
Slide 45: Earnings from Operations – As Adjusted/Awarded
Earnings from Operations – As Adjusted/Awarded ($ in millions) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 As Adjusted Operating Revenue $1,358 $1,571 $2,015 $1,675 $1,618 $1,979 $1,884 $1,971 $2,034 $2,340 $2,380 $2,344 $2,655 $2,755 $2,546 $2,524 Compensation an
Slide 46: Supplemental Segment Information
Non-GAAP - Unaudited Supplemental Segment Information ($ in millions) 1 1 1 2 Financial Advisory Asset Management Corporate 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 Operating Revenue $1,301 $1,388 $1,506 $1,357 $1,403 $1,031 $1,240 $1,242 $1,159 $1,111 $2,344 $2,655
Slide 47: Reconciliation of Operating Income to Earnings from Operations, Awarded Basis
Unaudited Reconciliation of U.S. GAAP Operating Income to Earnings from Operations, Awarded Basis ($ in millions) Financial Advisory Asset Management Corporate Total 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 Net Revenue - U.S. GAAP Basis $1,3
Slide 48: Reconciliation of Operating Income to Earnings from Operations, Awarded Basis
Unaudited Reconciliation of U.S. GAAP Operating Income to Earnings from Operations, Awarded Basis ($ in millions) Financial Advisory 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Net Revenue - U.S. GAAP Basis $865 $973 $1,240 $1,023 $987 $1,120 $992 $1,049 $981 $1,207 $1,280 Adjustments (a)
Slide 49: Reconciliation of Operating Income to Earnings from Operations, Awarded Basis
Unaudited Reconciliation of U.S. GAAP Operating Income to Earnings from Operations, Awarded Basis ($ in millions) Asset Management 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Net Revenue - U.S. GAAP Basis $466 $553 $725 $615 $602 $850 $897 $896 $1,039 $1,135 $1,111 Adjustments (a): Revenu
Slide 50: Estimated Future Amortization of Historical Deferrals
1 Estimated Future Amortization of Historical Deferrals ($ in millions) 2019A 2020A 2021E 2022E 2023E 2015 Grants 8 – – – – 2016 Grants 53 6 – – – 2017 Grants 96 56 14 – – 2018 Grants 191 93 78 10 – 2019 Grants 18 198 105 75 10 2020 Grants – 29 211 110 75 2021 Grants – – TBD TBD TBD Other 2 2 TBD TB
Slide 51: Endnotes related to non-GAAP adjustments
Endnotes related to non-GAAP adjustments 1 For the years ended December 31, 2013 and 2012, represents charges pertaining to cost saving initiatives including severance and benefit payments, acceleration of unrecognized amortization of deferred incentive compensation previously granted to individuals
Slide 52: Endnotes related to non-GAAP adjustments (continued)
Endnotes related to non-GAAP adjustments (continued) 13 For the year ended December 31, 2013, represents charges related to the refinancing of the Company’s 7.125% Senior Notes maturing on May 15, 2015 and the issuance of $500 million of 4.25% Senior Notes maturing on November 14, 2020. The charges
Slide 53: Endnotes related to non-GAAP adjustments (continued)
Endnotes related to non-GAAP adjustments (continued) 21. For the nine month period ended December 31, 2015, represents the recognition of deferred tax assets of $1,217 million, net of accrual of $962 million for the tax receivable agreement. For the three month period ended December 31, 2015, repres