Sprott Inc. · TSX:SII
Sprott — Q2 2022 Earnings Presentation
18 slides from Sprott's earnings presentation, Aug 2, 2022
Slide 1: Sprott Inc. 2022 Second Quarter Results
Sprott Inc. (NYSE/TSX: SII) 2022 Second Quarter Results August 2, 2022 Contrarian. Innovative. Aligned
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 Whitney George Kevin Hibbert CEO, CFO, Sprott Inc. Sprott Inc. John Ciampaglia, CEO, Sprott Asset Management Sprott Inc. | 3
Slide 4: Q2 2022 and YTD Highlights
Q2 2022 and YTD Highlights • Strong Q2 operating results despite challenging market conditions • Continuing to build scale in ETF business o Completed acquisition of URNM o Launched Sprott ESG Gold Fund1 o Strengthened team with the addition of Steven Schoffstall as Director, ETF Product Management
Slide 5: Historical AUM summary
Historical AUM summary AUM in billions $ 21.9 0.7 0.8 1.6 1.4 2.7 0.8 3.3 1.0 3.3 0.6 0.8 16.9 0.6 0.4 1.1 15.0 0.9 12.2 0.7 1.2 6.0 6.8 3.7 Dec. 31, 2017 Dec. 31, 2018 Dec. 31, 2019 Dec. 31, 2020 Dec. 31, 2021 Jun. 30, 2022 Exchange listed products Managed equities Private strategies Non-core AUM 5
Slide 6: Segment results – 3 and 6 months ended
Segment results – 3 and 6 months ended 1 3 months ended 6 months ended (1) EBITDA is a non-IFRS measure. See slide 2 and 18. These amounts are net of corporate costs, consolidation, elimination, and non-reportable segment entries of $(2.8MM) (Q2 2021: $(3.3MM)) in the quarter, and $(5.9MM) (YTD 2021
Slide 7: Balance sheet, Cash flow and Liquidity Metrics
Balance sheet, Cash flow and Liquidity Metrics As at June 30, 2022 o On track Target return on capital employed o ROCE: 13%1 10% (“ROCE”) o Efficient use of balance sheet to generate superior returns above our cost of capital o On track Target annual free cash flow2 o Anticipated dividend payout rat
Slide 8: Physical Trusts
Physical Trusts • Maintained sales momentum in Q2 and H1 2022 despite challenging market conditions o $479 million in Q2 net sales o $1.8B in H1 sales • PHYS and SPUT continued to account for majority of new flows Physical Trust Sales (in millions) $856 $776 $579 $505 $423 $406 $410 $346 $318 $330$3
Slide 9: URNM Acquisition Expands Uranium Platform
URNM Acquisition Expands Uranium Platform o Completed URNM acquisition on April 22 o Transaction builds scale in ETF segment o Current AUM ~$820MM (as at 7/25/2022) o Record high # of shares outstanding reflects strong investor interest o Early sales have been positive despite pullback in the sector
Slide 10: Sprott ESG Gold ETF Providing Trust, Transparency and Traceability
Sprott ESG Gold ETF World’s first Gold ETF to exclusively source and refine gold from recognized ESG mining leaders.* Aligned with investor ESG goals and values: Sustainability Provenance Conflict Free Lower Supply Trusted Refining Chain Risks & Storage Providing Trust, Transparency and Traceability
Slide 11: Partners in Raising the ESG Bar
Partners in Raising the ESG Bar • A leading precious metals asset manager • Direct sourcing from ESG mining leaders • Segregated refining and vaulting Agnico Eagle,Yamana Gold and the Royal Canadian Mint are not affiliated with Sprott Asset Management. All company names included here are trademarks™
Slide 12: Managed Equities
Managed Equities • Minimal redemptions in Q2 despite weak market conditions • Absolute performance declined in line with markets in Q2 after strong Q1 • Launched Energy Transition Materials Partnership on June 30, 2022 • Renewed sub-advisory agreements Sprott Inc. | 12
Slide 13: Private Strategies
Private Strategies • Combined Lending and Streaming strategies AUM of $1.6B as of June 30, 2022 • LF2 in deployment and monitoring phase • Streaming and Royalty Fund actively deploying capital • Expected to launch additional private investment vehicles in both existing strategies and complementary n
Slide 14: Summary
Summary • Continuing to deliver strong financial results despite difficult market conditions • Maintaining strong sales momentum o $0.8B in Q2 sales o $2.2B in H1 sales • Sprott’s highly variable and resilient business model allows us to invest through cycles, irrespective of market conditions o New
Slide 15: Supplemental Financial Information
Supplemental Financial Information
Slide 16: Revenues
Revenues 3 months ended 6 months ended Q2 Q2 Q2 Q2 In millions $ 2022 2021 2022 2021 Management fees 30.6 25.1 57.8 47.5 (1.3) (0.6) (2.1) (1.2) Trailer, sub-advisor and fund expenses Direct payouts (1.3) (1.2) (2.7) (2.1) Carried interest and performance fees - - 2.0 7.9 - (0.1) (1.0) (4.7) Carried
Slide 17: Expenses
Expenses 3 months ended 6 months ended Q2 Q2 Q2 Q2 In millions $ 2022 2021 2022 2021 Compensation 19.4 15.5 41.2 38.1 Direct payouts (1.3) (1.2) (2.7) (2.1) Carried interest and performance fee payouts - internal - (0.1) (1.0) (4.7) Commission expense - internal (2.0) (3.0) (5.2) (8.3) Severance, ne
Slide 18: EBITDA and FCF reconciliation
EBITDA and FCF reconciliation 3 months ended 6 months ended Q2 Q2 Q2 Q2 In millions $ (except for per share amounts) 2022 2021 2022 2021 Net Income 0.8 11.1 7.2 14.3 Adjustments: Interest expense 0.5 0.3 1.0 0.6 Provision for income taxes 1.7 3.4 4.4 6.1 Depreciation and amortization 1.0 1.2 1.9 2.3