Piper Sandler Companies · NYSE:PIPR
Piper Sandler Companies — Piper Jaffray Companies — Investor Presentation (February 2017)
32 slides from Piper Sandler Companies's investor presentation, February 2017
Slide 1: Piper Jaffray Companies
February 2017 Piper Jaffray Companies
Slide 2: Caution Regarding Forward-Looking Statements
CAUTION 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. Forward-looking statements involve inherent risks and uncertai
Slide 3: Table of Contents
Table of Contents I. Company Overview II. Investment Banking and Equities III. Public Finance and Fixed Income IV. Asset Management V. Financial Information Reconciliation PIPER JAFFRAY | 3
Slide 4: Section I: Company Overview
February 2017 Section I Company Overview
Slide 5: Piper Jaffray is a leading investment bank and asset management firm
Our Firm Realize the Power of Partnership℠ Piper Jaffray is a leading investment bank and asset management firm • Reputation for client-first approach and INVESTMENT BANKING PUBLIC FINANCE AND AND EQUITIES FIXED INCOME SERVICES straightforward advice • Public Finance Investment Banking • Deep expert
Slide 6: Partnering With Clients Since 1895
Partnering With Clients Since 1895 1931 1998 Lane, Piper & Jaffray U.S. Bancorp acquires 1895 merges with Hopwood 1987 Piper Jaffray in a cash 2003 Investment Co. and transaction valued at George B. Lane gains a seat on the Piper Jaffray $730 million Piper Jaffray becomes Commercial paper is NYSE es
Slide 7: Investor Value Proposition
Investor Value Proposition • Growing annual earnings • Increasing mix of higher margin activities • Diversifying the business to produce strong results across various markets • Investing to drive growth • Gaining market share in key markets • Returning capital to our shareholders Return on Equity on
Slide 8: Transformation Progress
Transformation Progress $5.00 12.0% 11.0% Adjusted Diluted EPS (1) $4.50 Adjusted ROE (1) $4.00 9.2% 9.2% 10.0% 8.2% 8.1% $3.50 7.5% 8.0% • Simmons $3.00 • FIG Build Out • MD growth $2.50 5.5% 6.0% 4.7% 4.5% $4.42 $4.69 $2.00 $4.22 $3.56 4.0% $1.50 $2.98 $1.00 $1.87 $1.68 2.0% $1.71 $0.50 $0.00 0.0%
Slide 9: Operating Leverage = Improved Earnings
OPERATING LEVERAGE = IMPROVED EARNINGS Adjusted Revenue Trend 1 $800.0 $736.3 REVENUE GROWTH DRIVERS $663.1 $700.0 $632.4 • Improved productivity $600.0 • Internal development $480.4 $484.8 $516.4 $500.0 $441.1 • Measured hiring $430.3 • Acquisitions $400.0 $300.0 $200.0 2009 2010 2011 2012 2013 201
Slide 10: Business Mix Evolution
Business Mix Evolution Advisory and Asset Management firms attract a higher earnings’ multiple than brokerage businesses throughout a cycle Lower Quality 12X 17X Higher Quality Institutional Brokerage Equity UW Public Finance Asset Mgmt. Advisory • Low growth • Volatile • Less volatility • Fee-based
Slide 11: Diversified Revenue Mix
Diversified Revenue Mix 1 2016 • Firm diversified across multiple facets • Markets – Fixed Income & Equites • Products – Capital raising, Brokerage, Advisory & 7% Asset Management • Industry – Expertise across all major industry sectors 23% Recent investments expanded the breadth of • our diversity
Slide 12: Strategic Growth Initiatives - Updates
Strategic Growth Initiatives - Updates Energy Expansion - Simmons FIG Build Out GKST –Fixed Income Consolidation Acquisition • Expansion is meeting expectations • Team exceeding financial targets • Preeminent franchise • Accretive to earnings in the first full • Enabled us to lower risk profile of f
Slide 13: Growing Market Share
Growing Market Share Significant investments and strong relative performance in core businesses has driven market share growth in our investment banking platforms. M&A – Middle Market Fee Ranking1 ECM – Middle Market Fee Ranking2 Public Finance – Par Value Ranking3 Rank 2016 2014 Rank 2016 2014 Rank
Slide 14: Share Repurchases
SHARE REPURCHASES 3,000 20,000 18,887 18,000 2,500 16,000 15,244 14,000 2,000 12,000 1,500 10,000 8,000 1,000 6,000 4,000 500 2,000 - - 2011 2012 2013 2014 2015 2016 Shares Granted Shares Repurchased Year-end Shares Outstanding • Share purchases net of new issuance over time has reduced share count
Slide 15: Section II: Investment Banking and Equities
February 2017 Section II Investment Banking and Equities
Slide 16: Investment Banking and Equities
Investment Banking and Equities Leading Middle-Market Investment Bank Investment Banking Revenues $400 $362 • Team of 545 investment banking, sales, trading and research professionals $350 $300 • Differentiated industry sector expertise $300 • Broad range of equity and equity-linked financing $250 s
Slide 17: Investing Across Our Advisory Platform
Investing Across Our Advisory Platform We are making meaningful investments in our business and are generating growth that significantly outpaces our competitors Jul ‘13 Feb ’15 Mar ’15 Feb ‘16 Acquisition of Expansion of Debt Named 2014 Investment Acquisition of Edgeview Partners Capital Markets te
Slide 18: Trajectory to a $500 Million Investment Banking Business
Trajectory to a $500 Million Investment Banking Business We are on a clear path to generating $500 million in annual revenue as we continue to execute on current initiatives + $ 50MM 600 • DCM • Biotech M&A • Consumer Vertical $500 MM IB • Industrials and Services Diversified Expansion Practice MM •
Slide 19: Expanded Research Product
Expanded Research Product 37 MATERIALS CONSUMER UTILITIES ENERGY Senior Research Analysts Weighted INDUSTRIALS S&P 500 TECHNOLOGY HEALTHCARE 718 FINANCIALS Covered Companies • Expansion into FIG & Energy increases Research product by over 25% • PJC sector coverage includes most major sectors within
Slide 20: Section III: Public Finance and Fixed Income
February 2017 Section III Public Finance and Fixed Income
Slide 21: Long Term Public Finance Leadership
Long Term Public Finance Leadership Leading Middle-Market Tax Exempt Underwriter Sector Expertise • Team of 340 public finance and distribution professionals GOVERNMENT • Success built on local market relationships and knowledge benefitted by the • Local Municipalities strength of substantial scale
Slide 22: Consistently improving a strong franchise
Consistently improving a strong franchise 2007 2010 2014 2016 • Periods of market instability create industry consolidation opportunities Number of 18 23 36 36 Offices • We represent an attractive destination for Number of 15 18 27 28 professionals or firms and their clients States Number of • We ha
Slide 23: Long Term Public Finance Leadership
Long Term Public Finance Leadership 2016 National Long-Term Municipal Par Value National Long-Term Municipal Issues Rank Firm Par Value Rank Firm No. of Issues 1 Bank of America Merrill Lynch 48,216 1 Stifel Nicolaus & Co Inc 826 2 Citi 36,245 2 Piper Jaffray & Co 712 3 J P Morgan Securities LLC 32,
Slide 24: Diversified Fixed Income Trading Business
Diversified Fixed Income Trading Business • Scaled, multiproduct middle market business primarily focused on investment grade products • Unique expertise in municipal bond markets • Broad distribution capabilities to support public finance • Analytical services to complement trading • Strong capital
Slide 25: Fixed Income Capital Management
Fixed Income Capital Management Fixed Income Brokerage Revenue and VAR (In $MM)1 OVERALL GOALS $120 $111.5 $1.6 Reduce inventories, lower risk and improve ROC $1.5 $1.4 • Increasing turnover and reducing aging to lower $100 $92.2 $93.5 $90.5 inventories $79.7 $1.2 $80 $75.6 $76.3 • Reducing VAR whil
Slide 26: Section IV: Asset Management
February 2017 Section IV Asset Management
Slide 27: Asset Management Business
Asset Management Business • High quality, institutional-centric Asset Manager 30% • $8.7 billion in AUM US Equity • Attractive mix of products 55% • Long-tenured portfolio managers International /Alt. Equity • Distribution through multiple channels MLP • Meaningful contributor to financial 15% resul
Slide 28: Asset Management Growth Model
Asset Management Growth Model Positioned for Growth • Competitive Product Mix • First Class Infrastructure • Capacity to Integrate Additional Strategies International US Value Equity Capacity Equity Attractive Asset Constrained Class Core Infrastructure Growth Global - Legal/Compliance - Client Serv
Slide 29: Section V: Financial Information Reconciliation
February 2017 Section v Financial Information Reconciliation
Slide 30: ROE Reconciliation for Non-GAAP Measures
ROE RECONCILIATION FOR NON-GAAP MEASURES The following table sets forth a reconciliation of net income from operations and return on shareholders’ equity excluding the impact of the noted item in the relevant year. For the year ended December 31, 2016 2015 2014 2013 2012 2011 2010 2009 Average commo
Slide 31: Financial Trend Reconciliation for Non-GAAP Measures
FINANCIAL TREND RECONCILIATION FOR NON-GAAP MEASURES For the year ended December 31, (Amounts in thousands, except per share data) 2016 2015 2014 2013 2012 2011 2010 2009 Net revenues: Net revenues – U.S. GAAP basis $ 747,349 $ 672,918 $ 648,138 $ 525,195 $ 488,952 $ 432,083 $ 479,934 $ 440,916 Adju
Slide 32: Financial Trend Reconciliation for Non-GAAP Measures (Cont.)
FINANCIAL TREND RECONCILIATION FOR NON-GAAP MEASURES (Cont.) For the year ended December 31, (Amounts in thousands, except per share data) 2016 2015 2014 2013 2012 2011 2010 2009 Net income/(loss) from continuing operations applicable to Piper Jaffray Companies: Net income/(loss) from continuing ope
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