Piper Sandler Companies · NYSE:PIPR
Piper Sandler Companies — Investor Presentation (May 2024)
33 slides from Piper Sandler Companies's investor presentation, May 2024
Slide 1: Investor Presentation
Investor Presentation May 2024
Slide 2: Piper Sandler Investor Presentation Disclosures
Piper Sandler Investor Presentation Disclosures Cautionary notice regarding forward-looking statements and non-GAAP financial measures This presentation contains forward-looking statements. Statements that are not historical or current facts, including statements about beliefs and expectations, are
Slide 3: Contents
Contents 1. Value proposition and business highlights 2. Investment rationale 3. Reconciliation of non-GAAP financial measures pipersandler.com | 3
Slide 4: Value proposition and business highlights
01 Value proposition and business highlights
Slide 5: A leading investment bank
A leading investment bank $1.4B We enable growth and success for our clients through deep sector expertise, candid advice and a differentiated, highly productive culture. Revenue LTM 1Q 2024 Mix ADJUSTED NET REVENUES 1 • Diversified firm with market leadership across businesses, deep expertise in fo
Slide 6: Transforming our business through strategic investments
Transforming our business through strategic investments Building a stronger and more durable platform ADJUSTED NET REVENUES1 2021 2020 TRS Advisors Sandler O’Neill Restructuring Financial Services Investment Bank; Advisory Piper Jaffray becomes Piper Sandler 2022 The Valence Group Cornerstone Macro
Slide 7: Elevating the earnings power of our platform
Elevating the earnings power of our platform Consistently Growing our Platform Compelling Valuation ADJUSTED NET REVENUES1 ADJUSTED NET REVENUES1 PER EMPLOYEE NTM P/E MULTIPLE2 ($ in millions) ($ in thousands) NON-ADVISORY REVENUES ADVISORY SERVICES REVENUES 13.2 12.2 12.1 12.5 $1,608 $1,012 $1,380
Slide 8: Corporate investment banking
Corporate investment banking A decade of investing for growth Revenues & Managing Director Headcount ($ in millions) $1,365 CORPORATE FINANCING REVENUES ADVISORY SERVICES REVENUES1 $363 Revenue 10YR CAGR: 11% $886 $871 $828 $125 $157 $716 $131 $526 $527 $295 $493 $100 $105 $1,002 $362 $123 $297 $310
Slide 9: Creating a scaled and diversified platform through organic and acquisitive growth
Creating a scaled and diversified platform through organic and acquisitive growth Piper Sandler Piper Sandler 2014 2024 Technology Consumer 51 171 Managing Directors Managing Directors Services & Healthcare Industrials Oilfield Services Since 2014 Added sector and product expertise Grown revenues, p
Slide 10: Comprehensive suite of products and services
Comprehensive suite of products and services Providing the highest quality advice M&A ADVISORY Corporate Investment Banking Revenue Mix by • Top-ranked M&A advisor Product • Industry-focused M&A 5% 4% 8% 7% 14% 14% • Advised more than 1,050 M&A transactions worth more M&A AND EQUITY 21% 14% 10% 11%
Slide 11: Best-in-class connectivity to private equity buyers
Best-in-class connectivity to private equity buyers Leading Private Equity Advisory Practice Most Active Investment Banks to U.S. Private Equity2 LTM 1Q 2024 8 1 Houlihan Lokey 205 Dedicated sponsor coverage $355M Revenues from 2 Piper Sandler 184 bankers sponsors1 590+ M&A transactions with 3 Jeffe
Slide 12: Exceptional growth of advisory practice
Exceptional growth of advisory practice Long-Term Growth in Advisory Revenues1 Advisory Revenues 4-Year CAGR2 LTM 1Q 2024 vs. 2014 ($ in millions) LTM 1Q 2020 2021 2022 2023 CAGR 2024 334% HLI $658 $1,615 $1,150 $1,076 $1,107 14% PIPR $443 $1,026 $776 $709 $726 13% 267% PJT $872 $763 $824 $1,027 $1,
Slide 13: Market leadership in U.S. M&A
Market leadership in U.S. M&A U.S. M&A Market Share Growth1 Top Ranked Financial Advisor in U.S. M&A1 NUMBER OF DEALS & RANKING LTM 1Q 2024 #3 1 Houlihan Lokey, Inc. 182 2 Piper Sandler & Co 123 #2 3 Jefferies LLC 121 4 Raymond James 104 #2 #2 #2 5 Lincoln International LLC 100 #4 #3 #6 6 William Bl
Slide 14: Market leadership in equity underwriting
Market leadership in equity underwriting Equity Underwriting Economic Fee Market Share Growth1 Top Ranked, Book Run TOTAL MARKET SHARE Equity Underwriting Franchise2 TOTAL MARKET SHARE (EX. SPACS) LTM 1Q 2024 SUB $5B MARKET SHARE SUB $5B MARKET SHARE (EX. SPACS) 1 BofA Securities 113 4.0% 2 JPMorgan
Slide 15: Path to $2 billion of corporate investment banking revenues
Path to $2 billion of corporate investment banking revenues Growth as a core competency: the same playbook as the last decade $2.0B+ Lever 4 Corporate Development Lever 3 Corporate Lever 2 Increased Transaction Development Lever 1 & Fee Size Product Share Gains • “Close to the Core” Corporate acquis
Slide 16: Public finance
Public finance Leading Middle-Market Tax-Exempt Underwriter Sector Expertise ($ in millions) $188 GOVERNMENT PUBLIC FINANCE REVENUES1 • Local Municipalities • School Districts $143 $128 • State and State Agencies $124 • Infrastructure for Development $104 $108 $102 $96 $96 $99 SPECIAL DISTRICTS $73
Slide 17: Longstanding public finance leadership
Longstanding public finance leadership National platform, regional expertise Negotiated and Private Placements2 Seattle LTM 1Q 2024 Portland 1 Stifel Nicolaus & Co Inc 718 Minneapolis Albany Boise Boston Milwaukee Hartford 2 Piper Sandler & Co 418 Sacramento New York City Des Moines Harrisburg Phila
Slide 18: Equity institutional brokerage
Equity institutional brokerage Creating real value for institutional investors Combination of top-ranked research, trading, and capital Equity Brokerage Revenues markets capabilities creates a premier client destination $210 $210 $205 ($ in millions) • Delivers deep sector expertise, trading excelle
Slide 19: One of the fastest growing equity platforms on Wall Street
One of the fastest growing equity platforms on Wall Street Meaningfully Expanded Trading Platform U.S. Cash Trading Market Share Growth1 MARKET SHARE & RANKING Piper Sandler Piper Sandler Products 2014 2024 #12 High-Touch (Cash) Trading Program Trading Algo (No-Touch) Trading Commission 2.62% Manage
Slide 20: Industry-leading research
Industry-leading research Our top-ranked research analysts offer genuine thought leadership and unique perspectives No. 2 A Leading Research Franchise U.S. SMID cap FINANCIAL coverage1 SERVICES HEALTHCARE TECHNOLOGY CONSUMER ENERGY MACRO TECHNICAL No. 6 Total U.S. equities Equity Research coverage2
Slide 21: Fixed income
Fixed income Differentiated model providing comprehensive solutions to clients Leads with advice in defined client verticals and One of the Largest Middle-Market Platforms strategically utilizes capital to facilitate client needs ($ in millions) • Strength of product expertise and analytics driving
Slide 22: Diversified mix of clients and products provides durability across market cycles
Diversified mix of clients and products provides durability across market cycles Providing an Integrated, End-to-End Solution Client Base • Financial institutions (banks, credit unions) Providing holistic approach to balance sheet management, focused • Public entities on building core franchise valu
Slide 23: Investment rationale
02 Investment rationale
Slide 24: Investment rationale
Investment rationale Diversified firm with Track record of, and Advice-driven model with market leadership, broad continued focus on, low incremental operating product capabilities and profitable growth capital needs and the scale across all business capacity to generate lines significant cash flows
Slide 25: Diversified firm with broad product capabilities
Diversified firm with broad product capabilities Adjusted Net Revenue Mix Investment Banking Revenue Mix 9% ADVISORY 16% SERVICES 28% $970M CORPORATE FINANCING LTM 1Q 2024 REVENUES MUNICIPAL FINANCING 75% $1.4B LTM 1Q 2024 ADJUSTED 54% NET REVENUES1 Institutional Brokerage Revenue Mix 18% EQUITY 45%
Slide 26: Track record of, and continued focus on, profitable growth
Track record of, and continued focus on, profitable growth Adjusted Net Revenues1 Adjusted Earnings Per Diluted Share1 ($ in millions) $21.92 $1,980 $1,434 $1,375 $1,330 10YR CAGR: 12% 10YR CAGR: 9% $1,235 $11.26 $10.02 $9.71 $825 $826 $9.28 $742 $690 $7.36 $599 $6.68 $558 $5.72 $4.05 $3.09 $3.18 20
Slide 27: Advice-driven model with low operating capital needs
Advice-driven model with low operating capital needs Decreasing operating capital while growing revenues and investing in the business Adjusted Assets1 Inventory ($ in millions) ($ in millions) $1,616 $2,072 Decline: 47% Decline: 73% $1,105 $442 2014 1Q 2024 2014 1Q 2024 Tangible Leverage Ratio1 Adj
Slide 28: Disciplined cost management driving operating leverage
Disciplined cost management driving operating leverage Prudently manage costs to drive margin across market cycles Adjusted Non-Compensation Ratio1 Adjusted Operating Margin2 28.4% Average 21.2% Average 18.7% 20.9% 18.7% 18.2% Average 17.1% 19.2% 16.9% 16.9% 15.3% 16.4% Average 14.6% 10.3% 2014 2015
Slide 29: Multiple levers to generate returns for shareholders
Multiple levers to generate returns for shareholders SHARE REPURCHASES $764M Capital returned to shareholders through repurchases since 2014 Increase in number of common shares outstanding2 10% since 2014 relative to a 3.1x increase in adjusted diluted earnings per share3 $174M DIVIDENDS LTM 1Q 2024
Slide 30: Reconciliation of non-GAAP financial measures
03 Reconciliation of non-GAAP financial measures
Slide 31: Reconciliation of non-GAAP financial measures
Reconciliation of non-GAAP financial measures LTM Mar. 31, Twelve Months Ended December 31, (Amounts in thousands) 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 Net revenues: Net revenues – U.S. GAAP basis $1,393,118 $1,347,967 $1,425,638 $2,031,061 $1,238,213 $834,566 $740,953 $823,621 $69
Slide 32: Reconciliation of non-GAAP financial measures – continued
Reconciliation of non-GAAP financial measures – continued LTM Mar. 31, Twelve Months Ended December 31, (Amounts in thousands) 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 Income tax expense: Income tax expense – U.S. GAAP basis $34,094 $23,613 $33,189 $111,144 $19,192 $24,577 $18,046 $53,
Slide 33: Reconciliation of non-GAAP financial measures – continued
Reconciliation of non-GAAP financial measures – continued LTM Mar. 31, Twelve Months Ended December 31, (Amounts in thousands, except per share data) 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 Net income/(loss) applicable to Piper Sandler Companies' common shareholders: Net income/(loss)
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