Piper Sandler Companies · NYSE:PIPR
Piper Sandler Companies — Investor Presentation (August 2023)
33 slides from Piper Sandler Companies's investor presentation, August 2023
Slide 1: Investor Presentation
Investor Presentation August 2023
Slide 2: Piper Sandler Investor Presentation Disclosures
Piper Sandler Investor Presentation Disclosures Cautionary notice regarding forward-looking statements This presentation contains forward-looking statements. Statements that are not historical or current facts, including statements about beliefs and expectations, are forward-looking statements. Forw
Slide 3: Contents
Contents I. Value proposition and business highlights II. Investment rationale III. Reconciliation of non-GAAP financial measures PIPER SANDLER | 3
Slide 4: Value proposition and business highlights
Section I Value proposition and business highlights
Slide 5: A leading investment bank
Year Founded: 1895 NYSE: PIPR Headquarters: Minneapolis, MN Employees: 1,700+ Offices: 60+ A leading investment bank $1.3B REVENUE LTM 2Q 2023 MIX We enable growth and success for our clients through ADJUSTED NET deep sector expertise, candid advice and a differentiated, REVENUES1 highly productive
Slide 6: Transforming our business through strategic investments
Transforming our business through strategic investments Building a Stronger and More Durable Platform ($ in millions) 2022 ADJUSTED NET REVENUES1 Cornerstone Macro 2021 Macro Research & Derivatives Trading TRS Advisors Stamford Partners Restructuring European Consumer M&A Boutique Advisory DBO Partn
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 NTM P/E Multiple2 ($ in millions) Per Employee NON-ADVISORY REVENUES ($ in thousands) $897 $1,569 13.4 ADVISORY SERVICES REVENUES 13.1 $747 11.9 10.9 $764
Slide 8: Corporate investment banking
Corporate investment banking A Decade of Investing for Growth ($ in millions) CORPORATE FINANCING REVENUES $1,365 ADVISORY SERVICES REVENUES1 $363 Revenue 10YR CAGR: 17% $886 $125 $794 $716 $141 $526 $527 $295 $493 $100 $105 $1,002 $362 $123 $297 $310 $760 $72 $653 $171 $110 $114 $426 $370 $422 $420
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 2023 Multiple Market-Leading Franchises in Significant Industry Piper Sandler 2013 Sectors Provide Resiliency Across Cycles Technology Consumer 49 MANAGING DIRECTORS 171 MANAGING Services & DIRECTORS Heal
Slide 10: Comprehensive suite of products and services
Comprehensive suite of products and services Providing the Highest Quality Advice Corporate Investment Banking Revenue Mix by Product M&A ADVISORY 4% 6% 7% • Top-ranked M&A advisor 14% 14% 14% 9% 21% • Industry-focused M&A 41% 11% 17% 24% • Advised more than 1,078 M&A transactions worth 37% more tha
Slide 11: Best-in-class connectivity to private equity buyers
Best-in-class connectivity to private equity buyers Most Active Investment Banks to Leading Private Equity Advisory Practice U.S. Private Equity2 LTM 2Q 2023 8 1 Houlihan Lokey 184 Dedicated sponsor $221M 2 Piper Sandler 147 coverage Revenues from bankers sponsors1 595+ 3 Jefferies 144 M&A transacti
Slide 12: Exceptional growth of advisory practice
Exceptional growth of advisory practice Long-Term Growth in Advisory Revenues1 Advisory Revenues 3-Year CAGR2 LTM 2Q 2023 vs. 2013 ($ in millions) LTM 2Q 2020 2021 2022 2023 CAGR 700% HLI $658 $1,615 $1,150 $1,090 18% PIPR $443 $1,026 $776 $666 15% SF $428 $856 $715 $572 10% Median 5% 319% EVR $1,75
Slide 13: Market leadership in U.S. M&A
Market leadership in U.S. M&A Top Ranked Financial Advisor in U.S. M&A Market Share Growth1 U.S. M&A1 NUMBER OF DEALS & RANKING LTM 2Q 2023 1 Houlihan Lokey 167 #3 2 Piper Sandler 131 #2 3 Lincoln International 111 #2 4 Raymond James 104 #2 5 Jefferies 102 #4 #3 #6 6 Stifel/KBW 84 180 #5 #16 #11 149
Slide 14: Market leadership in equity underwriting
Market leadership in equity underwriting Top Ranked, Book Run Equity Underwriting Economic Fee Market Share Growth1 Equity Underwriting Franchise2 TOTAL MARKET SHARE TOTAL MARKET SHARE (EX. SPACS) LTM 2Q 2023 SUB $5B MARKET SHARE SUB $5B MARKET SHARE (EX. SPACS) 3.8% 1 JPMorgan 100 3.7% 2 Goldman Sa
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) GOVERNMENT PUBLIC FINANCE REVENUES1 $188 • Local Municipalities • School Districts • State and State Agencies $143 • Infrastructure for Development $128 $124 $108 SPECIAL DISTRICTS $104 $102 $96 $92 HEALTHCA
Slide 17: Longstanding public finance leadership
Longstanding public finance leadership National Platform, Regional Expertise Negotiated and Private Placements2 LTM 2Q 2023 Seattle 1 Stifel Nicolaus & Co Inc 695 Portland Minneapolis Albany Boston 2 Piper Sandler & Co. 438 Boise Milwaukee Hartford Des Moines Harrisburg New York City 3 RBC Capital M
Slide 18: Equity institutional brokerage
Equity institutional brokerage Creating Real Value for Institutional Investors ($ in millions) Combination of top-ranked research, trading, and capital EQUITY BROKERAGE REVENUES $210 $213 markets capabilities creates a premier client destination • Delivers deep sector expertise, trading excellence,
Slide 19: One of the fastest growing equity platforms on Wall Street
One of the fastest growing equity platforms on Wall Street Meaningfully Expanded Trading Platform U.S. Cash Trading Market Share Growth1 MARKET SHARE & RANKING Piper Piper Products #13 Sandler 2013 Sandler 2023 High-Touch (Cash) Trading Program Trading Algo (No-Touch) Trading Commission 2.60% 2.49%
Slide 20: Industry-leading research
Industry-leading research Our Top-Ranked Research Analysts Offer Genuine Thought Leadership and Unique Perspectives A LEADING RESEARCH FRANCHISE No. 2 U.S. SMID cap FINANCIAL HEALTHCARE TECHNOLOGY CONSUMER ENERGY MACRO TECHNICAL coverage1 SERVICES No. 7 Total U.S. equities EQUITY RESEARCH coverage •
Slide 21: Fixed income
Fixed income Differentiated Model Providing Comprehensive Solutions to Clients One of the Largest Middle-Market Platforms ($ in millions) $234 Leads with advice in defined client verticals and FIXED INCOME REVENUES strategically utilizes capital to facilitate client needs $196 $195 • Strength of pro
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, • Public entities focused on building core franchise valu
Slide 23: Investment rationale
Section II Investment rationale
Slide 24: Investment rationale
Investment rationale Diversified firm with market leadership, broad product capabilities and scale across all business lines Track record of, and continued focus on, profitable growth Advice-driven model with low incremental operating capital needs and the capacity to generate 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 16% 17% 9% $886M LTM 2Q 2023 REVENUES 75% $1.3B 53% LTM 2Q 2023 ADVISORY CORPORATE MUNICIPAL ADJUSTED NET SERVICES FINANCING FINANCING REVENUES1 30% Institutional Brokerage Revenue Mix $380M 44%
Slide 26: Track record of, and continued focus on, profitable growth
Track record of, and continued focus on, profitable growth Adjusted Net Revenues1 Adjusted Earnings Per Diluted Share1 ($ in millions) $21.92 $1,980 10YR CAGR: 11% $1,434 10YR CAGR: 15% $1,293 $1,235 $11.26 $10.02 $825 $826 $9.13 $742 $7.36 $690 $599 $6.68 $558 $5.72 $441 $4.05 $3.09 $3.18 $2.24 201
Slide 27: Advice-driven model with low operating capital needs
Advice-driven model with low operating capital needs Decreasing Operating Capital While Growing Revenues and Investing in the Business Adjusted Assets1 Inventory Tangible Leverage Ratio1 ($ in millions) ($ in millions) ($ in millions) $1,750 $1,364 Decline: 31% 3.6 Decline: 67% Decline: 45% $1,207 2
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% 23.6% Average 21.2% Average 18.7% 19.6% 20.9% Average 17.1% 19.2% 16.9% 15.3% Average 14.6% 15.9% 12.6% 10.3% 2013 2014
Slide 29: Multiple levers to generate returns for shareholders
Multiple levers to generate returns for shareholders SHARE REPURCHASES Capital returned to shareholders through $705MM repurchases since 2013 Increase in number of common shares 12% outstanding2 since 2013 relative to a 4.1x increase in adjusted diluted earnings per share3 $163MM DIVIDENDS LTM 2Q 20
Slide 30: Reconciliation of non-GAAP financial measures
Section III Reconciliation of non-GAAP financial measures
Slide 31: Reconciliation of non-GAAP financial measures
Reconciliation of non-GAAP financial measures LTM June 30, Twelve Months Ended December 31, (Amounts in thousands) 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 Net revenues: Net revenues – U.S. GAAP basis $1,309,433 $1,425,638 $2,031,061 $1,238,213 $834,566 $740,953 $823,621 $693,214 $602,
Slide 32: Reconciliation of non-GAAP financial measures – continued
Reconciliation of non-GAAP financial measures – continued LTM June 30, Twelve Months Ended December 31, (Amounts in thousands) 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 Income tax expense: Income tax expense – U.S. GAAP basis $4,938 $33,189 $111,144 $19,192 $24,577 $18,046 $53,808 $10,9
Slide 33: Reconciliation of non-GAAP financial measures – continued
Reconciliation of non-GAAP financial measures – continued LTM June 30, Twelve Months Ended December 31, (Amounts in thousands, except per share data) 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 Net income/(loss) applicable to Piper Sandler Companies' common shareholders: Net income/(loss)
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