Canaccord Genuity Group Inc. · TSX:CF
Canaccord Genuity — Investor Presentation (August 2019)
27 slides from Canaccord Genuity's investor presentation, August 2019
Slide 1: Investor Presentation
Investor Presentation AUGUST, 2019
Slide 2: Forward-looking statements
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 similar statements concerning anticipated future eve
Slide 3: Driven to deliver superior client outcomes
/ Driven to deliver superior client outcomes / Driven to strengthen employee engagement / Driven to become more profitable / Driven to increase shareholder value Page 3
Slide 4: A leading independent financial services firm with a global presence
A leading independent financial services firm with a global presence WEALTH MANAGEMENT CAPITAL MARKETS HOW WE Comprehensive wealth management DIFFERENTIATE Provides leading investment banking, solutions to help individual investors, equity research and sales and trading private clients and charities
Slide 5: Focusing our business for long-term value creation
Focusing our business for long-term value creation Diversify Restructure & Refocus Balance business mix Sustainable, profitable growth 2010 to 2014 2015 - 2016 2017 - 2018 2019 and beyond • Expand global footprint • Align global business leaders • Significantly grow global wealth • Redeploy capital
Slide 6: On track for a solid fiscal year
On track for a solid fiscal year Revenue - C$ millions Net Income1 - C$ millions Fiscal years ended March 31 Fiscal years ended March 31 Q1/20 ended June 30 Q1/20 ended June 30 $1,191 $107 $1,023 $82 $788 $880 $49 $326 $31 ($6) 2016 2017 2018 2019 Q1/20 2016 2017 2018 2019 Q1/20 Diluted EPS – adjust
Slide 7: Build a dominant independent wealth management and capital markets business
Build a dominant independent wealth management and capital markets business • Add scale through acquisitions and recruiting • Drive significant margin improvement and increase profitability • Grow recurring revenues from fee-based services • Increase specialization in existing areas of strength • Di
Slide 8: Fully independent investment planning and wealth management services and solutions
Fully independent investment planning and wealth management services and solutions UK & Europe: London, Jersey, Guernsey, Isle of Man, Blackpool, Overview Lancaster, Llandudno, Norwich, Nottingham, Southampton, • Increased client assets to over $67 billion from $33 billion in fiscal 2016 Worcester,
Slide 9: Mission 2022
Trailing 12 months Mission 2022 At December 31, 2018 At June 30, 2019 $60 bn $80 bn Client $68 bn Assets Client Assets • Recruiting • Acquisitions & Tuck-ins $461 M $600 M $478 M Revenue1 Revenue1 • Increase fee-based contributions • Grow share of wallet 20% 17% Pre-tax Pre-tax 18% profit profit mar
Slide 10: A Top 10 wealth manager in an industry where scale matters
A Top 10 wealth manager in an industry where scale matters Client Assets C$ and GBP£, billions ⚫ Focused on mass-affluent investors and intermediaries $46.4 $45.2 $45.6 $43.8 $44.9 $44.2 ⚫ Excellent model for the growth and business mix we aim to achieve in other $40.8 $41.2 geographies ⚫ Capable of
Slide 11: Successful track record of integrating new businesses
Successful track record of integrating new businesses • Announced Q4 F2019; Closed May, 2019 • Wealth management, financial planning and select private client investment management services • Client portfolios valued at approximately £1 billion • January, 2019 • Expands Midlands presence and financi
Slide 12: On track to become leading independent Canadian wealth management business
On track to become leading independent Canadian wealth Client Assets management business C$ billions • Focused on mass affluent clients seeking wealth creation and wealth $20.7 $21.2 management $18.9 $19.7 $18.3 • Scale, capabilities and economics give us competitive advantages in attracting $15.6 *
Slide 13: Recruiting environment increasingly favourable as banks increase limitations on IAs
Recruiting environment increasingly favourable as banks increase limitations on IAs Significant opportunity to grow market share of full- service retail brokerage assets / Canada’s full-service retail brokerage segment represents $1.3 tn1 (C$, billions) in client assets. / As banks commoditize wealt
Slide 14: Moving toward delivering stability and sustainable profitability through market cycles
Moving toward delivering stability and sustainable profitability through market cycles Income (loss) before income taxes - Adjusted1 C$ millions, fiscal quarters $36.9 $34.8 $36.0 $31.7 $24.9 $13.2 $20.4 $10.7 $5.8 ($1.9) ($3.2) ($6.4) Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 Q4/1
Slide 15: Dominant independent investment bank on every measure
Dominant independent investment bank on every measure Unparalleled origination and placement ⚫ #1 ranked Canadian equity underwriter1 for calendar 2019 to date capability ⚫ Fiscal 2019 ranked 1st for number of transactions and 2nd for total proceeds raised Canadian Equity Transactions1 ⚫ Fiscal 2019
Slide 16: A significant and growing contributor to our global success
A significant and growing contributor to our global success U.S. Trading, Advisory, ECM and Corporate Access capabilities are integral to Canaccord Genuity’s global capital markets Strategic combination creates a top-tier platform mid-market M&A franchise • Aligned business focused in key sectors: T
Slide 17: Global capabilities provide a significant competitive advantage in mid-market focus sectors
Global capabilities provide a significant competitive advantage in mid-market focus sectors Lean and focused Increasing global product Strong emphasis on Focused on increasing platform placement cross-selling M&A in all our key markets Specialization in core Expanding alternative Increased trading f
Slide 18: Independence allows us to adjust our business mix and stay competitive
Independence allows us to adjust our business mix and stay competitive as client demands change Capital markets revenue by region Capital markets revenue by activity Q1 2020 Q1 2020 FOCUSED WHERE WE CAN BE MOST RELEVANT TO OUR CLIENTS Commissions AND PROVIDE SUPERIOR REVENUE Canada and fees Investme
Slide 19: Creating a lower risk business model with growing contributions from wealth management
Creating a lower risk business model with growing contributions from wealth management Revenue by business segment EPS contribution by business segment - Adjusted1,2 Q1/20 Q1/20 / Stable wealth 41% management 57% foundation enhances 43% earnings stability 59% throughout market cycles Wealth Manageme
Slide 20: Committed to driving value for clients, employees and shareholders
Committed to driving value for clients, employees and shareholders Shares are attractively valued Driving earnings power by transforming business mix and growing global wealth management Creating a more predictable business with consistency of earnings Strong balance sheet supports our capacity to i
Slide 21: Analyst coverage
Echelon Wealth Cormark Securities TD Securities Inc. Jeff Fenwick Graham Ryding Partners Rob Goff Canaccord Genuity Group Inc. is followed by the analysts listed above. Please note that any opinions, estimates or forecasts regarding Canaccord Genuity's performance made by these analysts are theirs a
Slide 22: Q1 Fiscal 2020 Financial highlights
Financial highlights Q1 Fiscal 2020 cg/
Slide 23: Improved business mix contributing to earnings stability and growth
Improved business mix contributing to earnings stability and growth • First quarter revenue of $325.5 million, up 19% y/y • Completed acquisition Thomas Miller Wealth Management and private client investment management business, adding • Q1/20 adjusted pre-tax net income1 increased 31% y/y £1 billio
Slide 24: Capital markets revenue and pre-tax net income
Revenue by Activity Pre-tax net income1 and profit margin1 C$ millions, fiscal quarters $40 25% $30 20% $200 15% Pre-tax net income Pre-tax profit margin $150 $20 C$ millions 10% $100 $10 5% $0 $50 0% -$10 $0 -5% -$20 -10% Commissions & Fees Investment Banking Advisory Trading Interest & Other Pre-t
Slide 25: Wealth management revenue and pre-tax net income
Revenue by region Pre-tax net income1 and profit margin1 C$ millions $25 20% $120 18% $20 16% Pre-tax profit margin Pre-tax net income 14% $80 $15 12% C$ millions 10% $10 8% $40 6% $5 4% 2% $0 0% $0 UK & Europe Canada Pre-tax net income Pre-tax profit margin Sequential Y /Y Q1/20 Q4/19 Change Q1/19
Slide 26: Profitability growing faster than expenses as business activity increases
Profitability growing faster than expenses as business activity increases Compensation ratio1 Non-compensation ratio1 64.4% 64.4% 64.2% 34.1% 34.7% 34.2% 61.5% 61.5% 33.0% 59.8% 58.7% 60.7% 59.7% 59.1% 59.9% 58.3% 30.7% 28.6% 28.3% 27.1% 27.6% 27.1% 25.1% 23.9% Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4
Slide 27: Well capitalized for continued investment in key priorities
Well capitalized for continued investment in key priorities • Able to support increasing business activities and invest in opportunities to capture additional market share • Strong, liquid balance sheet • Prepared for evolving regulatory environment • $40 million Substantial issuer Bid to expire on
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