Piper Sandler Companies · NYSE:PIPR
Piper Sandler Companies — Investor Presentation (December 2022)
30 slides from Piper Sandler Companies's investor presentation, December 2022
Slide 1: Investor Presentation
Investor Presentation December 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 $1.7BB REVENUE LTM 3Q 2022 MIX We enable growth and success for our clients through ADJUSTED NET deep sector expertise, candid advice and a differentiated, REVENUES* highly productive
Slide 6: Transforming our business through strategic investments
Transforming our business through strategic investments Building a Stronger and More Durable Platform ($ 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 $1,631 ($ in thousands) $984 13.5 ADVISORY SERVICES REVENUES $841 $656 $798 $565 $478
Slide 8: Corporate investment banking
Corporate investment banking A Decade of Investing for Growth ($ in millions) $1,365 CORPORATE FINANCING REVENUES ADVISORY SERVICES REVENUES $363 $1,100 $154 $716 Average $516 Average $323 $526 $527 $295 $493 $100 $105 $1,002 $947 $362 $123 Average $162 $297 $310 $72 $110 $114 $154 $171 $426 $422 $4
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% 15% 21% • Industry-focused M&A 30% 10% 24% • Advised more than 1,000 M&A transactions worth 51% 37% more than $
Slide 11: 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 Equity2 LTM 3Q 2022 8 1 Jefferies 171 Dedicated sponsor $488M+ 2 William Blair 166 coverage LTM1 Revenues bankers from sponsors 600+ 3 Houlihan Lokey 163 M&A transacti
Slide 12: Exceptional growth of advisory practice
Exceptional growth of advisory practice Growth in Advisory Services Revenues1 U.S. M&A < $1B2 LTM 3Q 2022 vs. 2013 LTM 3Q 2022 1 Houlihan Lokey, Inc. 230 1164% 2 Jefferies LLC 168 3 Piper Sandler & Co 162 4 Raymond James 152 5 Lincoln International LLC 148 554% 6 JPMorgan 128 505% 7 William Blair &
Slide 13: 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 $2.0B+ Lever 4 Corporate Development Lever 3 Corporate Lever 2 Increased Transaction Development Lever 1 & Fee Size Product Share Gains • “Close to the Core” Corporate acquis
Slide 14: Public finance
Public finance Leading Middle-Market Tax-Exempt Underwriter Sector Expertise ($ in millions) GOVERNMENT PUBLIC FINANCE REVENUES* $188 • Local Municipalities $167 • School Districts • State and State Agencies $143 • Infrastructure for Development $128 $108 SPECIAL DISTRICTS $104 $102 $96 HEALTHCARE $
Slide 15: Longstanding public finance leadership
Longstanding public finance leadership National Platform, Regional Expertise Negotiated and Private Placements3 LTM 3Q 2022 1 Stifel Nicolaus & Co Inc 934 2 Piper Sandler & Co 671 Salt Lake Walnut Creek City Bethesda 3 RBC Capital Markets 439 4 D A Davidson & Co 392 5 Robert W Baird & Co Inc 387 Bat
Slide 16: Equity institutional brokerage
Equity institutional brokerage Creating Real Value for Institutional Investors ($ in millions) Combination of top-ranked research, trading, and EQUITY BROKERAGE REVENUES capital markets capabilities creates a premier client $196 destination $161 • Delivers deep sector expertise, trading excellence,
Slide 17: Best-in-class equity sales and trading platform
Best-in-class equity sales and trading platform Meaningfully Expanded Trading Platform Piper Sandler 2012 Piper Sandler 2022 HIGH-TOUCH (CASH) TRADING Deep sector expertise combined with trading excellence that minimizes market impact and reduces trading costs PROGRAM TRADING Qualitative and quantit
Slide 18: Fixed income
Fixed income Differentiated Model Providing Comprehensive Solutions to Clients One of the Largest Middle-Market Platforms ($ in millions) $234 Leads with advice in defined client verticals and FIXED INCOME REVENUES strategically utilizes capital to facilitate client needs $196 $196 • Strength of pro
Slide 19: 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 20: Investment rationale
Section II Investment rationale
Slide 21: 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 22: Diversified firm with broad product capabilities
Diversified firm with broad product capabilities Adjusted Net Revenue Mix Investment Banking Revenue Mix 12% $1.3BB 18% 76% LTM 3Q 2022 12% REVENUES 58% $1.7BB LTM 3Q 2022 ADVISORY CORPORATE MUNICIPAL ADJUSTED NET SERVICES FINANCING FINANCING REVENUES* Institutional Brokerage Revenue Mix 24% 50% $39
Slide 23: Track record of, and continued focus on, profitable growth
Track record of, and continued focus on, profitable growth Adjusted Net Revenues* Adjusted Earnings Per Diluted Share* ($ in millions) $21.92 $1,980 $1,677 $15.92 $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 $2.24 2012 2013 2014 2015 2016 2017 2018
Slide 24: Advice-driven model with low operating capital needs
Advice-driven model with low operating capital needs Decreasing Operating Capital While Growing Revenues and Investing in the Business Adjusted Assets* Inventory Tangible Leverage Ratio* ($ in millions) ($ in millions) ($ in millions) $1,865 $1,383 3.2 $1,386 2.2 $441 2017 3Q 2022 2017 3Q 2022 2017
Slide 25: 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% 23.2% Average 18.1% Average 18.0% Average 15.6% Average 13.4% 14.2% 10.3% 2012 2013 2014 20
Slide 26: Multiple levers to generate returns for shareholders
Multiple levers to generate returns for shareholders SHARE REPURCHASES Capital returned to shareholders through $758MM repurchases since 2012 Reduction in number of common shares 8% outstanding1 since 2012 $284MM DIVIDENDS LTM 3Q 2022 ADJUSTED NET Capital returned to shareholders through INCOME* $32
Slide 27: Reconciliation of non-GAAP financial measures
Section III Reconciliation of non-GAAP financial measures
Slide 28: Reconciliation of non-GAAP financial measures
Reconciliation of non-GAAP financial measures LTM Sept. 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 $1,682,830 $2,031,061 $1,238,213 $834,566 $740,953 $823,621 $693,214 $602,264 $567,8
Slide 29: Reconciliation of non-GAAP financial measures – continued
Reconciliation of non-GAAP financial measures – continued LTM Sept. 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 $71,825 $111,144 $19,192 $24,577 $18,046 $53,808 $10,926 $19
Slide 30: Reconciliation of non-GAAP financial measures – continued
Reconciliation of non-GAAP financial measures – continued LTM Sept. 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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