Piper Sandler Companies · NYSE:PIPR
Piper Sandler Companies — Investor Presentation (March 2023)
33 slides from Piper Sandler Companies's investor presentation, March 2023
Slide 1: Investor Presentation
Investor Presentation March 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: 1,800+ Offices: 60+ A leading investment bank $1.4B REVENUE 2022 MIX We enable growth and success for our clients through ADJUSTED NET deep sector expertise, candid advice and a differentiated, REVENUES* highly productive culture
Slide 6: Transforming our business through strategic investments
Transforming our business through strategic investments Building a Stronger and More Durable Platform ($ in millions) ADJUSTED NET REVENUES* 2022 Cornerstone Macro Macro Research & Derivatives Trading Stamford Partners 2021 European Consumer M&A Boutique TRS Advisors DBO Partners Restructuring Techn
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) $936 $1,550 13.5 ADVISORY SERVICES REVENUES $656 $822 $565 $798 $478
Slide 8: Corporate investment banking
Corporate investment banking A Decade of Investing for Growth ($ in millions) $1,365 CORPORATE FINANCING REVENUES ADVISORY SERVICES REVENUES1 $363 $886 $125 $716 Average $516 Average $323 $526 $527 $295 $493 $100 $105 $1,002 $362 $123 Average $162 $310 $760 $297 $72 $110 $114 $154 $171 $426 $422 $42
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 2022 Multiple Market-Leading Franchises in Significant Industry Piper Sandler 2012 Sectors Provide Resiliency Across Cycles Technology Consumer 44 MANAGING DIRECTORS 159 MANAGING Diversified DIRECTORS Hea
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 1% 4% 5% • Top-ranked M&A advisor 14% 15% 14% 21% • Industry-focused M&A 30% 11% 24% • Advised more than 950 M&A transactions worth 51% 37% more than $37
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 Equity1 2022 8 1 Houlihan Lokey 133 Dedicated sponsor $290M 2 Jefferies 115 coverage 2022 Revenues bankers from sponsors 700+ 3 William Blair 104 M&A transactions
Slide 12: Exceptional growth of advisory practice
Exceptional growth of advisory practice Long-Term Growth in Advisory Revenues1 Advisory Revenues 2-Year CAGR2 2022 vs. 2012 ($ in millions) 757% 2020 2021 2022 CAGR PIPR $443 $1,026 $776 32% 649% HLI $658 $1,615 $1,150 32% SF $428 $856 $715 29% RJF $379 $761 $540 19% 436% 428% Median 18% 344% EVR $1
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 2022 #3 1 Houlihan Lokey 187 2 Piper Sandler 149 #2 3 Lincoln International 136 #2 4 Jefferies 123 #4 #3 5 Raymond James 120 #6 #5 180 6 Goldman Sachs & Co. 98 #11 149 7 St
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) 2022 SUB $5B MARKET SHARE SUB $5B MARKET SHARE (EX. SPACS) 3.2% 1 JPMorgan 73 3.1% 2 Jefferies 63 2.8%
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 REVENUES* $188 • Local Municipalities • School Districts • State and State Agencies $143 • Infrastructure for Development $128 $124 $108 SPECIAL DISTRICTS $104 $102 $96 HEALTHCARE $
Slide 17: Longstanding public finance leadership
Longstanding public finance leadership National Platform, Regional Expertise Negotiated and Private Placements2 2022 1 Stifel Nicolaus & Co Inc 860 2 Piper Sandler & Co 571 3 RBC Capital Markets 357 Walnut Salt Lake City Bethesda 4 Robert W Baird & Co Inc 339 Creek 5 Raymond James 338 Consistently I
Slide 18: Equity institutional brokerage
Equity institutional brokerage Creating Real Value for Institutional Investors ($ in millions) $210 Combination of top-ranked research, trading, and capital EQUITY BROKERAGE REVENUES markets capabilities creates a premier client destination $161 $154 • 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 Products 2018 2022 #14 High-Touch (Cash) Trading Program Trading Algo (No-Touch) Trading Commission 2.33% Management #25 2.03% 1.99% Derivat
Slide 20: Industry-leading research
Industry-leading research Our Top-Ranked Research Analysts Offer Genuine Thought Leadership and Unique Perspectives A LEADING RESEARCH FRANCHISE1 No. 2 U.S. SMID cap FINANCIAL HEALTHCARE TECHNOLOGY CONSUMER ENERGY MACRO TECHNICAL coverage <$5B1 SERVICES No. 6 Total U.S. equities EQUITY RESEARCH cove
Slide 21: Fixed income
Fixed income Differentiated Model Providing Comprehensive Solutions to Clients One of the Largest Middle-Market Platforms ($ 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 12% 16% $1.0B 77% 2022 REVENUES 11% 55% $1.4B 2022 ADVISORY CORPORATE MUNICIPAL ADJUSTED NET SERVICES FINANCING FINANCING REVENUES* 29% Institutional Brokerage Revenue Mix 52% $405MM 2022 ADVISOR
Slide 26: Track record of, and continued focus on, profitable growth
Track record of, and continued focus on, profitable growth Adjusted Net Revenues* Adjusted Earnings Per Diluted Share* ($ in millions) $21.92 $1,980 $1,434 $1,235 $11.26 $10.02 $825 $826 $742 $690 $7.36 $599 $6.68 $558 $5.72 $423 $441 $4.05 $3.09 $3.18 $2.03 $2.24 2012 2013 2014 2015 2016 2017 2018
Slide 27: Advice-driven model with low operating capital needs
Advice-driven model with low operating capital needs Decreasing Operating Capital While Growing Revenues and Investing in the Business Adjusted Assets* Inventory Tangible Leverage Ratio* ($ in millions) ($ in millions) ($ in millions) $1,865 $1,383 3.2 $1,455 2.4 $340 2017 2022 2017 2022 2017 2022 A
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 27.8% Average 23.2% Average 19.8% Average 18.1% Average 18.0% Average 15.6% 18.8% 16.9% Average 13.4% 10.3% 2012 2013 2014 20
Slide 29: Multiple levers to generate returns for shareholders
Multiple levers to generate returns for shareholders SHARE REPURCHASES Capital returned to shareholders through $759MM repurchases since 2012 Reduction in number of common shares 5% outstanding1 since 2012 $269MM DIVIDENDS 2022 ADJUSTED NET Capital returned to shareholders through INCOME* $337MM div
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 Twelve Months Ended December 31, (Amounts in thousands) 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 Net revenues: Net revenues – U.S. GAAP basis $1,425,638 $2,031,061 $1,238,213 $834,566 $740,953 $823,621 $693,214 $602,264 $567,841 $443,508 $4
Slide 32: Reconciliation of non-GAAP financial measures – continued
Reconciliation of non-GAAP financial measures – continued Twelve Months Ended December 31, (Amounts in thousands) 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 Income tax expense: Income tax expense – U.S. GAAP basis $33,189 $111,144 $19,192 $24,577 $18,046 $53,808 $10,926 $19,618 $25,087 $
Slide 33: Reconciliation of non-GAAP financial measures – continued
Reconciliation of non-GAAP financial measures – continued Twelve Months Ended December 31, (Amounts in thousands, except per share data) 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 Net income/(loss) applicable to Piper Sandler Companies' common shareholders: Net income/(loss) applicable t
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