Houlihan Lokey, Inc. · NYSE:HLI
Houlihan Lokey — Q4 2020 Earnings Presentation
26 slides from Houlihan Lokey's earnings presentation, May 12, 2020
Slide 1: Investor Presentation
Investor Presentation May 2020
Slide 2: Disclaimers
Disclaimers Forward Looking Information This presentation contains forward-looking statements. All statements other than statements of historical facts contained in this presentation may be forward- looking statements. The words “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “i
Slide 3: Our Culture
Our Culture Employee DNA Firm’s DNA Ownership and Controls Analytically Driven Broad-Based, Long-Term Partnership Culture Client Service and Solution Driven Employee Ownership Not a “Star” Culture Entrepreneurially Motivated Sophisticated Corporate Consensual Decision-Making Desiro
Slide 4: A Leading Independent Global Investment Bank
A Leading Independent Global Investment Bank Expertise Global Integrated Platform Growth Fiscal Years 2015–2020 Mergers and Acquisitions Seamlessly Combining Industry and Revenues CAGR1 of 11% Capital Markets Advisory Product Expertise Worldwide Unadjusted² Net Income CAGR¹ of 18% Financ
Slide 5: Principal Investment Highlights
Principal Investment Highlights Strong Track Record of Growth and Profitability Low Revenues and Earnings Volatility Through Economic Cycles High Quality Earnings Long-Tenured Management Team Differentiated, Cyclically-Balanced Business Model Market Fundamentals Are Favorable for Indepen
Slide 6: Our Three Primary Business Segments
Our Three Primary Business Segments Our business is diversified across clients, services, industries, and geographies as well as cyclically balanced, allowing us to succeed in both bull and bear markets. Corporate Financial Financial and Finance Restructuring Valuation Advisory Out-of-Court and Form
Slide 7: Diversified Revenues Base
Diversified Revenues Base Balanced Client Mix1 More than 1,000 clients served annually Public For FY 2020: Companies Private Equity – No single transaction fee represented more than 3% of our and and Other Government revenues Owned Institutional 40% – No individual banker was responsible for mor
Slide 8: Market Leader in All Three Business Segments
Market Leader in All Three Business Segments Top U.S. M&A Advisor Top Global Restructuring Top Global Fairness Opinion Advisor Advisor CY 2019 Financial Advisors by Number Of CY 2019 Global Distressed Debt and Global M&A Fairness Advisors: Announced U.S. M&A Deals Bankruptcy Restructuring Deals or C
Slide 9: Strong Growth Since Going Public
Strong Growth Since Going Public Consolidated Revenues and E.P.S Growth1 Revenue Growth by Business Segment1 CAGR $1,200 $3.50 $650 12.6% $1,150 $3.25 $600 $1,100 $3.00 $550 $1,050 $1,000 $2.75 $500 $950 $2.50 $450 $900 $2.25 $400 $850 $800 $2.00 $350 11.6% $750 $1.75 $300 $700 $250 $1.50 $650 $1.25
Slide 10: Organic Growth Strengthened by Strategic Acquisitions
Organic Growth Strengthened by Strategic Acquisitions Growth in Managing Director Headcount Growth Through Expansion of Products 198 190 2000–2009 2010–Present 170 169 173 Private Equity Coverage Debt and Equity Capital Markets 10% CAGR 146 Advisory Distressed M&A 125 Industry Build-Out and
Slide 11: Comprehensive Coverage and Global Scale
Comprehensive Coverage and Global Scale 1,491 Global Employees in 22 Locations North America Europe and Middle East Asia-Pacific Atlanta Miami Amsterdam Madrid Beijing Sydney Chicago Minneapolis Dubai Milan Hong Kong Tokyo Dallas New York Frankfurt Paris Singapore Houston San Francisco London Los An
Slide 12: Strong Partnership Culture With Experienced Leadership
Strong Partnership Culture With Experienced Leadership Deep and Experienced Management Team Long Tenure Results in Collaborative Culture Scott L. Beiser CEO Tenured High Banker 36 years with Houlihan Lokey Management Team Retention 31-year average tenure 13-year average tenure Irwin N. Gold of Manag
Slide 13: Overview of Business Segments
Overview of Business Segments
Slide 14: Corporate Finance Business – M&A
Corporate Finance Business – M&A Corporate Finance business is a leader Our market share in the U.S. mid-cap The mid-cap space is meaningfully less in the U.S. mid-cap space, which space is less than 3%, based on the volatile than the large-cap space, which represented approximately 98% of M&A
Slide 15: Corporate Finance Business – M&A
Corporate Finance Business – M&A Closed global mid-cap¹ M&A volume has Global M&A revenues in our corporate We continue to increase market share a 5-year (2014–2019) CAGR of 0.6% and finance business have a 5-year (2014– as a result of companies choosing to a 3.9% decline in the last 3-year (2
Slide 16: Corporate Finance Business – Capital Markets
Corporate Finance Business – Capital Markets We believe we are one of the largest capital markets groups at non-balance sheet banks, raising capital for both sponsors and corporate clients. Over 40 dedicated professionals across eight offices in five countries Raised ~$11.5 billion across ~55 tr
Slide 17: Financial Restructuring Business
Financial Restructuring Business Top Global Restructuring Advisor Deepest bench in the industry, with 45 Managing Directors and 2019 Global Distressed Debt and Bankruptcy Restructuring Deals 237 total finance professionals as of March 31, 2020 A true global player, having closed transactions in
Slide 18: Financial and Valuation Advisory Business
Financial and Valuation Advisory Business Services Offered Diversified Revenues Stream Operating Philosophy Transaction Opinions More than 1,000 fee events each Have chosen to focus on high value- Financial Reporting Opinions year added advice as opposed to Portfolio Valuations commodity s
Slide 19: Financial Sponsors Group
Financial Sponsors Group Houlihan Lokey has one of the largest Financial Sponsors Group focused on mid and large-cap funds. Broad and Deep Financial Sponsor Group In-Depth Data on Buyer Behavior HL has 19 senior officers dedicated to the sponsor Knowledge of and database on financial sponsor com
Slide 20: Robust Long Term Growth Opportunities
Robust Long Term Growth Opportunities We will continue to grow our talent pool through: The development and Opportunistic hires Acquisitions and joint maturation of bankers ventures Growth will be driven by: Corporate Finance Financial Restructuring Financial and Valuation Advisory Continued
Slide 21: Financial Overview
Financial Overview
Slide 22: Strong Top-Line Growth and Disciplined Expense
Strong Top-Line Growth and Disciplined Expense Long history of revenues growth through various Revenues market cycles 11% CAGR 5-year (FY 2015 to FY 2020) revenues CAGR of 11% $1,084 $1,159 Resilient business mix consisting of cyclical and $872 $963 $679 $694 countercyclical elements Leader in
Slide 23: Business Segment Financials
Business Segment Financials Revenues by Business Segment $1,159 11% CAGR $1,084 14% $963 15% $872 15% 15% 30% 29% $681 $694 30% 15% 17% 35% 31% 29% 56% 56% 55% 50% 54% 54% 2015 2016 2017 2018 2019 2020 Corporate Finance Financial Restructuring Financial and Valuation Advisory Note: Fiscal year ended
Slide 24: Reconciliation of GAAP to Adjusted Financials
Reconciliation of GAAP to Adjusted Financials (Unaudited) Three Months Ended March 31, Year Ended March 31, (In thousands, except per share data) 2020 2019 2020 2019 Revenues $ 302,694 $ 291,378 $ 1,159,368 $ 1,084,385 Employee compensation and benefits Employee compensation and benefits (GAAP) $ 18
Slide 25: Our Mission and Our Vision
Our Mission We help our clients achieve superior outcomes by providing thoughtful, caring advice while acting with honor and integrity. We are strategic in our approach to growth and are committed to creating lasting value for our shareholders. We maintain an intellectually stimulating, fair, and fu
Slide 26: HL.com
CORPORATE FINANCE FINANCIAL RESTRUCTURING FINANCIAL AND VALUATION ADVISORY HL.com