Piper Sandler Companies · NYSE:PIPR
Piper Sandler Companies — Investor Presentation (August 2022)
31 slides from Piper Sandler Companies's investor presentation, August 2022
Slide 1: Investor Presentation
Investor Presentation August 2022
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 $1.8BB REVENUE LTM 2Q 2022 MIX We enable growth and success for our clients through ADJUSTED NET deep sector expertise, candid advice and a differentiated, REVENUES* highly productive
Slide 6: Transforming our business through strategic investments
Transforming our business through strategic investments Building a Stronger and More Durable Platform ($ in millions) 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 $1,666 ($ in thousands) $1,004 14.0 ADVISORY SERVICES REVENUES $863 $656 $798 $565 $5
Slide 8: A proven acquirer
A proven acquirer Driving Significant Growth through Strategic Combinations Highlights ($ in millions, except per share data) $1,781 2020 Sandler O'Neill Generated record revenues in back-to-back years since joining $769 our platform 2020 The Valence Group Surpassed their 3YR average $589 revenues p
Slide 9: Corporate investment banking
Corporate investment banking A Decade of Investing for Growth ($ in millions) $1,365 CORPORATE FINANCING REVENUES ADVISORY SERVICES REVENUES $363 $1,178 $193 $716 Average $516 Average $323 $526 $527 $295 $493 $100 $105 $1,002 $986 $362 $123 Average $162 $297 $310 $72 $110 $114 $154 $171 $426 $422 $4
Slide 10: A scaled and diversified platform
A scaled and diversified platform Piper Sandler 2022 Multiple Market-Leading Franchises in Significant Industry Piper Sandler 2012 Sectors Provide Resiliency Across Cycles Technology Consumer 44 MANAGING DIRECTORS 153 MANAGING Diversified DIRECTORS Healthcare Industrials & Services Oilfield Services
Slide 11: 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% 19% 21% • Industry-focused M&A 30% 7% 24% • Advised more than 1,000 M&A transactions worth 51% 37% more than $3
Slide 12: The best connectivity to private equity buyers
The best connectivity to private equity buyers Most Active Investment Banks to Leading Private Equity Advisory Practice U.S. Private Equity1 1 William Blair 162 8 Dedicated 2 Houlihan Lokey 147 sponsor $488M+ coverage LTM2 Revenues 3 Jefferies 143 bankers from sponsors 540+ M&A transactions 4 Baird
Slide 13: Exceptional growth of advisory practice
Exceptional growth of advisory practice Growth in Advisory Services Revenues1 (LTM 2Q 2022 vs. 2013) U.S. M&A < $1B (LTM 2Q 2022)2 1 Houlihan Lokey, Inc. 249 1216% 2 Jefferies LLC 175 3 Piper Sandler 166 4 Raymond James 150 5 William Blair & Company 147 612% 6 Lincoln International LLC 137 533% 7 Ro
Slide 14: 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 $2.0B+ Lever 4 Corporate Development Lever 3 Corporate Lever 2 Increased Transaction Development Lever 1 & Fee Size Product Share Gains • “Close to the Core” Corporate acquis
Slide 15: Public finance
Public finance Leading Middle-Market Tax-Exempt Underwriter Sector Expertise ($ in millions) GOVERNMENT PUBLIC FINANCE REVENUES* $188 • Local Municipalities $183 • School Districts • State and State Agencies $143 • Infrastructure for Development $128 $108 SPECIAL DISTRICTS $104 $102 $96 HEALTHCARE $
Slide 16: Longstanding public finance leadership
Longstanding public finance leadership Negotiated and Private Placements National Platform, Regional Expertise (LTM 2Q 2022)3 1 Stifel Nicolaus & Co Inc 950 2 Piper Sandler & Co 798 Salt Lake City Bethesda 3 RBC Capital Markets 499 Walnut Creek 4 Raymond James 428 5 D A Davidson & Co 424 Baton Rouge
Slide 17: Equity institutional brokerage
Equity institutional brokerage Creating Real Value for Institutional Investors ($ in millions) Combination of top-ranked research, trading, and $177 EQUITY BROKERAGE REVENUES capital markets capabilities creates a premier client $161 $154 destination • Delivers deep sector expertise, trading excelle
Slide 18: Best-in-class equity sales and trading platform
Best-in-class equity sales and trading platform Meaningfully Expanded Trading Platform Piper Sandler 2012 Piper Sandler 2022 HIGH-TOUCH (CASH) TRADING Deep sector expertise combined with trading excellence that minimizes market impact and reduces trading costs PROGRAM TRADING Qualitative and quantit
Slide 19: Fixed income
Fixed income Differentiated Model Providing Comprehensive Solutions to Clients One of the Largest Middle-Market Platforms ($ in millions) $234 Leads with advice in defined client verticals and FIXED INCOME REVENUES $215 strategically utilizes capital to facilitate client needs $196 • Strength of pro
Slide 20: 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 Providing holistic approach to balance sheet management, • Public entities focused on building core franchise value for financial institu
Slide 21: Investment rationale
SECTION II. Investment rationale
Slide 22: 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 23: Diversified firm with broad product capabilities
Diversified firm with broad product capabilities Adjusted Net Revenue Mix Investment Banking Revenue Mix 14% $1.4BB LTM 2Q 2022 20% 74% REVENUES 12% 57% $1.8BB LTM 2Q 2022 ADVISORY CORPORATE MUNICIPAL ADJUSTED NET SERVICES FINANCING FINANCING REVENUES* Institutional Brokerage Revenue Mix 22% 45% $39
Slide 24: Track record of, and continued focus on, profitable growth
Track record of, and continued focus on, profitable growth Adjusted Net Revenues* Adjusted Earnings Per Diluted Share* ($ in millions) $21.92 $1,980 $1,781 $18.23 $1,235 $10.02 $825 $826 $742 $7.36 $690 $6.68 $599 $558 $5.72 $423 $441 $4.05 $3.09 $3.18 $2.03 $2.24 2012 2013 2014 2015 2016 2017 2018
Slide 25: Advice-driven model with low operating capital needs
Advice-driven model with low operating capital needs Decreasing Operating Capital While Growing Revenues and Investing in the Business Adjusted Assets* Inventory Tangible Leverage Ratio* ($ in millions) ($ in millions) ($ in millions) $1,865 $1,383 3.2 $1,289 2.1 $422 2017 2Q 2022 2017 2Q 2022 2017
Slide 26: Disciplined cost management driving operating leverage
Disciplined cost management driving operating leverage Prudently Manage Costs to Drive Margin Across Market Cycles Adjusted Non-Compensation Ratio* Adjusted Operating Margin* 27.8% Average 23.2% 25.1% Average 19.8% Average 18.1% Average 18.0% Average 15.6% Average 13.4% 12.7% 10.3% 2012 2013 2014 20
Slide 27: Multiple levers to generate returns for shareholders
Multiple levers to generate returns for shareholders SHARE REPURCHASES Capital returned to shareholders through $736MM repurchases since 2012 Reduction in number of common shares 7% outstanding1 since 2012 $326MM DIVIDENDS LTM 2Q 2022 ADJUSTED NET Capital returned to shareholders through INCOME* $31
Slide 28: Reconciliation of non-GAAP financial measures
SECTION III. Reconciliation of non-GAAP financial measures
Slide 29: Reconciliation of non-GAAP financial measures
Reconciliation of non-GAAP financial measures LTM June 30, 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 $1,796,642 $2,031,061 $1,238,213 $834,566 $740,953 $823,621 $693,214 $602,264 $567,84
Slide 30: 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) 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 Income tax expense: Income tax expense – U.S. GAAP basis $87,168 $111,144 $19,192 $24,577 $18,046 $53,808 $10,926 $19,
Slide 31: 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) 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 Net income/(loss) applicable to Piper Sandler Companies' common shareholders: Net income/(loss)
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