Canaccord Genuity Group Inc. · TSX:CF
Canaccord Genuity — Investor Presentation (February 2023)
35 slides from Canaccord Genuity's investor presentation, February 2023
Slide 1: Canaccord Genuity Group Inc. Investor Presentation
Canaccord Genuity Group Inc. Investor Presentation February 2023
Slide 2: Forward looking statements and non-IFRS measures
Forward looking statements and non-IFRS measures This document may contain ‘‘forward-looking statements’’ (as defined under applicable securities laws). These statements relate to future events or future performance and reflect management’s expectations, beliefs, plans, estimates, intentions and sim
Slide 3: Driven to deliver superior client outcomes
/ Driven to deliver superior client outcomes / Driven to strengthen employee engagement / Driven to grow our profitability / Driven to increase shareholder value
Slide 4: About Canaccord Genuity Group Inc.
About Canaccord Genuity Group Inc. Driven to deliver superior outcomes for mid-market companies and investors $1.1 bn $ 94 bn REVENUE1 CLIENT ASSETS Comprehensive wealth management solutions Leading mid-market provider of investment helping individual investors, private clients and banking, advisory
Slide 5: Financial Highlights
Financial Highlights Continued deceleration in global markets impacted financial performance in Q3 and fiscal 2023 year to date Client Pre-tax Net Diluted Revenue1 Assets Income1,2 EPS1 Contributions from Global Wealth Management and Q3 Fiscal 2023 $382.3 M $94.4 bn $31.5 M $0.16 Capital Markets M&A
Slide 6: Defensive revenue mix provides downside protection
Defensive revenue mix provides downside protection Clear strategy to strengthen recurring revenue streams while increasing contributions from higher-margin activities Revenue1 - C$ millions Pre-tax Net Income1,2 - C$ millions Fiscal years ended March 31 Fiscal years ended March 31 9M/22 and 9M/23 en
Slide 7: Positioned for long-term success
Positioned for long-term success Using challenging periods productively to seize opportunities for targeted and disciplined growth Diversify Restructure & Refocus Balance business mix Sustainable, profitable growth Expand on our proven strengths Fiscal 2010 to 2014 Fiscal 2015 - 2016 Fiscal 2017 - 2
Slide 8: Transformed our business mix to provide stability through market cycles
Transformed our business mix to provide stability through market cycles Broad-based revenue and net income contributions without concentration in any sector or region Firmwide revenue1 Q3/23 Firmwide Revenue by Operating Division C$ millions, fiscal years ended March 31 9M/22 and 9M/23 ended Decembe
Slide 9: Established track record of steadily and sustainably improving earnings stability
Established track record of steadily and sustainably improving earnings stability We have spent years shaping our business to deliver predictable performance in uncertain times Pre-tax net income and profit margins1,2 Diluted EPS1 % and C$ millions, fiscal years ended March 31 C$ fiscal years ended
Slide 10: Disciplined expense management
Disciplined expense management Focused on improving our operating leverage to support profitability through market cycles Non-compensation expenses as a % of revenue1 Pre-tax profit margin1 Fiscal years ended March 31 Fiscal years ended March 31 9M/22 and 9M/23 ended December 31 9M/22 and 9M/23 ende
Slide 11: Improving shareholder returns
Improving shareholder returns Deploying capital in ways that increase the long-term value of our business, and optimize value for shareholders Common Share Dividends Common shares outstanding (Average diluted) C$, Fiscal years ended March 31 Fiscal years ended March 31 ✓ Q3/23 quarterly common share
Slide 12: Initiatives underpinning future growth
Initiatives underpinning future growth Talent Development Leveraging Technology Managing Risk • Drive demand for leadership and client- focused • Stay ahead of evolving market and changing client • Successfully increasing the value of our franchise talent demands means that we have more to protect R
Slide 13: Global Wealth Management
Global Wealth Management A growing contributor to firmwide earnings growth and stability Q3/23 CLIENT ASSETS Q3/23 REVENUE Q3/23 PRE-TAX NET INCOME2 Q3/23 PRE-TAX PROFIT MARGIN2 $94.4 bn $179.7 M $36.5 M 20.3% Total Client Assets Total Wealth Management Revenue1 Pre-tax net income (C$ millions) and
Slide 14: CG Global Wealth Management: Strengthening margins and earnings contributions
CG Global Wealth Management: Strengthening margins and earnings contributions Proven track record of creating substantial value in this segment (Revenue in C$ thousands, INVESTING WITH DISCIPLINE TO ADVANCE OUR AUA/AUM in C$ millions) F2018 F2019 F2020 F2021 F2022 9M/22 9M/23 LONG-TERM EARNINGS POTE
Slide 15: CG Wealth Management: Fundamental to our long-term strategy
CG Wealth Management: Fundamental to our long-term strategy Accelerating growth in key regions through Recruiting, Acquisitions and Partnerships A business model TRANSFORMATIONAL TRANSFORMATIONAL £3.8 bn in client Funds & accounts managed assets, 14,000+ by HPS investment Partners private clients, £
Slide 16: CG Wealth Management: Modern, scalable technology and infrastructure
CG Wealth Management: Modern, scalable technology and infrastructure Positioned for further acquisitions, consolidation and organic growth Core platform provider (UK & Crown State-of-the-Art Unified Managed Account Proprietary Paperless Document Dependencies) (UMA) Platform (Canada) Management Porta
Slide 17: CG Wealth Management: UK & Crown Dependencies
CG Wealth Management: UK & Crown Dependencies A top-10 wealth manager in an industry where scale matters Highlights Strategic Priorities ✓ Q3/23 revenue increased 4.8% y/y to $85.7M • Drive organic growth and margin expansion • Cross fertilization of wealth planning and investment management ✓ Q3/23
Slide 18: CG Wealth Management: Canada
CG Wealth Management: Canada Building on our success as the leading independent wealth manager in the country Highlights Strategic Priorities ✓ 9 CG Investment Advisors recognized as Canada’s Top Wealth Advisors1 with the #1 ranking • Continue to advance recruiting , client experience and organic gr
Slide 19: Wealth Management: Canada
Wealth Management: Canada Platform designed to support faster and more sustainable growth for Investment Advisors Average client assets per IA Team Illustrative revenue distribution of new client assets Fiscal years ended March 31 9M/23 nine months ended December 31 Net contribution 30% $20 bn in cl
Slide 20: CG Wealth Management: Australia
CG Wealth Management: Australia Growing CG’s national footprint in Australia Highlights Strategic Priorities ✓ Total client assets in comprehensive investment management platform increased • Continue to build upon the CGWM brand in Australia 3.7% y/y to C$5.3bn • Increase scale through targeted recr
Slide 21: CG Global Capital Markets: A powerful mid-market competitor
CG Global Capital Markets: A powerful mid-market competitor Diverse revenue streams provide stability and profitability through market cycles Q3/23 PROCEEDS RAISED Q3/23 REVENUE Q3/23 PRE-TAX NET INCOME1 Q3/23 PRE-TAX PROFIT MARGIN1 $5.0 bn $197 M $6.0 M 3.0% Total Capital Markets Revenue Pre-tax ne
Slide 22: CG Global Capital Markets: Increasing momentum and market share
CG Global Capital Markets: Increasing momentum and market share Lean and focused platform, capable of driving value for clients in all market environments (Revenue in C$ thousands) F2018 F2019 F2020 F2021 F2022 9M/22 9M/23 DIFFERENTIATED GLOBAL PLATFORM Revenue $216,106 $260,665 $204,636 $443,444 $3
Slide 23: CG Global Capital Markets
CG Global Capital Markets Disciplined mid-market focus, differentiated by scale, global capability, and stability Integrated capabilities provide unparalleled Disciplined focus in key growth sectors of the Deep regional expertise, differentiated by aftermarket support and facilitate lasting global e
Slide 24: Global Investment Banking
Global Investment Banking Unparalleled origination and placement capability 9M/23 Investment Banking Revenue by Sector • Agility allows us to harness leadership in emerging and high-growth segments while maintaining strong capability in our historic areas of strength • Focus sector mix supports resi
Slide 25: Global Advisory
Global Advisory Increased contributions support margin strength 9M/23 Advisory Revenue by Sector • Advisory contributed 46% of global capital markets revenue in 9M/23 • Strong track record of ECM activity drives complementary growth in Advisory business • M&A typically counter-cyclical to new issue
Slide 26: Global Distribution and Trading
Global Distribution and Trading Leading independent franchise for best-in-class execution capabilities • Geographically broad and deep relationships covering 3,000+ institutions • Range of multi-asset capabilities (cash equities, fixed income, electronic trading, options, risk arbitrage) • Market ma
Slide 27: CG Principles of Corporate Social Responsibility and Sustainability
CG Principles of Corporate Social Responsibility and Sustainability ESG approaches to supporting the well being of our employees, clients and communities Operate with Integrity Respect People and Communities Respect our Planet We are committed to conducting our business in We think locally and globa
Slide 28: CG in the Community
CG in the Community Schoo! Schulich ‘The Greater Boston FOOD BANK#Z.. Feotng antrn Masenchnats 9 Ronald McDonald House Charities J. Australia | of Business RAINBOW RAILROAD WOH fee CHI —_— Capitalize ace Ey SS. for KIDS SF-MARIN Healthcare | REVOLUTIONIZED SSS. FOOD BANK Food Banks : y Canada R seco
Slide 29: (TSX:CF): An Excellent Investment Proposition
(TSX:CF): An Excellent Investment Proposition Driven to create enduring value for our employees, clients and shareholders Defensive business mix drives Strong balance sheet supports our earnings power through market capacity to invest in future growth cycles Capital markets businesses Growing wealth
Slide 30: Analyst coverage
Analyst coverage Echelon Wealth Cormark Securities TD Securities Inc. Raymond James Jeff Fenwick Graham Ryding Partners Stephen Boland Rob Goff Canaccord Genuity Group Inc. is followed by the analysts listed above. Please note that any opinions, estimates or forecasts regarding the Company’s perform
Slide 31: Financial highlights
Financial highlights Q3 Fiscal 2023 Page 31
Slide 32: Financial results: Three and nine months ended December 31, 2022
Financial results1: Three and nine months ended December 31, 2022 Improved business mix contributes to earnings stability through market cycles C$ thousands (except per share data) Q3/23 Q3/22 Y/Y Change 9M 2023 9M 2022 Y/Y Change • Q3/23 quarterly revenue of $382.3 million, decrease of 30.6% year-o
Slide 33: Global Capital Markets
Global Capital Markets Three and nine months ended December 31, 2022 Capital Markets Revenue by region C$ millions, fiscal quarters (C$ thousands except Q/Q Y/Y Y/Y $487.0 Q3/23 Q2/23 Q3/22 9M 2023 9M 2022 percentages) Change Change Change $361.9 Commissions & $348.9 $324.2 $304.9 $312.0 Fees $39,80
Slide 34: Global Wealth Management
Global Wealth Management Three and nine months ended December 31, 2022 Wealth Management revenue by region1 C$ millions, fiscal quarters $199.2 $195.0 (C$ thousands except Q/Q Y/Y Y/Y $184.9 Q3/23 Q2/23 Q3/22 9M 2023 9M 2022 $180.5 $174.3 $179.7 percentages) Change Change Change $166.2 $162.2 $169.3
Slide 35: Solid Capital Position
Solid Capital Position Well capitalized for continued investment in our strategic priorities ✓ Strong, liquid balance sheet protects our ability C$ millions (except for per share amounts and number of Q2/23 Q3/23 % Change to compete efficiently shares) (As at September 30, 2022) (As at December 31,
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