Lazard, Inc. · NYSE:LAZ
Lazard — Investor Presentation (October 2010)
38 slides from Lazard's investor presentation, October 2010
Slide 1: Company Overview
Company Overview October 2010
Slide 2: Disclaimer
Disclaimer This presentation contains certain statements, estimates and forecasts with respect to future performance and events. events. These statements, estimates and forecasts are “forward “forward--looking statements” statements”.. In some cases, forwardforward--looking statements can be identif
Slide 3: Key Investment Highlights
Ke In Key Investment estment Highlights Leadership team committed to model, strategy and vision Simple model of Financial Advisory and Asset Management has proven powerful and resilient over time Performance underscores the power of our advice driven, intellectual capital, low risk model R r
Slide 4: Intellectual Capital Model – Positioned for Growth
Intellect al Capital Model – Positioned for Growth Intellectual Gro th LAZARD Established 1848 Financial Advisory Asset Management Largest global independent financial World class global institutional asset advisory firm manager Deep D and d wide id reservoir i off senior i 90% iinstitutiona
Slide 5: Global Presence, Local Relationships
Global Presence Presence, Local Relationships UNITED STATES New York, San Francisco, Chicago, CHINA Houston,, Los Angeles, g , Boston,, CANADA Hong Kong, Washington, D.C., Minneapolis, Financial Advisory – 130 MDs Beijing Charlotte UNITED KINGDOM JAPAN North America – 402 Professionals FRANCE Eu
Slide 6: Balanced Across Geography And Business Lines
Balanced Across Geography Geograph And B Business siness Lines LTM1 Revenue by Geography LTM1 Revenue by Business Line Rest of World 7% Asset Management Eu ope Europe North N th 42% 37% America Financial 56% Advisory 58% Note: Represents operating revenue from Financial Advisory and Asset Management
Slide 7: Lazard Revenue Growth: Peak to Peak (2000/2007)
Lazard Revenue Re en e Growth: Gro th: Peak to Peak (2000/2007) ($ in millions except M&A data, which is in billions) Lazard revenue growth outperformed global completed M&A volume and the MSCI World index from 2000 to 2007 $5,000 7% 4,000 $3,974 $3,703 3,000 30% 56% 2 000 2,000 $2,015 62% 57% $1,
Slide 8: Lazard Revenue Growth: Trough to Trough (2002/2009)
Lazard Revenue Re en e Growth: Gro th: Trough Tro gh to Trough Tro gh (2002/2009) ($ in millions except M&A data, which is in billions) Lazard revenue growth outperformed global completed M&A volume and the MSCI World index from 2002 to 2009 $2,000 26% 58% $1,704 , 1 500 1,500 47% $1 617 $1,617 86
Slide 9: Continued Improvement in Revenue and AUM
Continued Contin ed Impro Improvement ement in Re Revenue en e and AUM Quarterly Operating Revenue ($mm) Quarterly AUM ($bn) $600 $160 $144 $514 $135 $473 $130 $457 $120 $123 $431 $438 $403 120 $399 400 $98 $91 $153 $162 $184 $167 $81 $133 $108 $273 $107 80 200 $94 $274 $269 40 $240 $228 $244 $246 $
Slide 10: Advisory Revenue Ranks Among the Largest Firms
Ad isor Revenue Advisory Re en e Ranks Among the Largest Firms ($ in millions) % OF TOTAL LTM1 ADVISORY REVENUE REVENUE2 Goldman Sachs $2,105 6% JP Morgan Chase $1,656 3% Morgan Stanley $1,516 5% Lazard $1 083 $1,083 58% Bank of America $1,042 2% 3 Credit Suisse $1,017 5% 3 UBS $780 3% Citigroup $73
Slide 11: Opportunities For Growth
Opport nities For Growth Opportunities Gro th Revenue Growth − Global platform capturing capital shifts and M&A activity in developed and developing markets − Meeting demand for independent, unconflicted advice − Broadening range of strategic advisory services − Expanding reach in emerging geograp
Slide 12: Multiple Drivers Of Growth In Financial Advisory
M ltiple Dri Multiple Drivers ers Of Gro Growth th In Financial Ad Advisory isor Gaining market share E Expanding di traditional di i l advisory d i services i Capital Markets pital Structure − Continuing demand for independent strategic advice Restructuring Acquisitions Mergers & − High level o
Slide 13: Multiple Drivers Of Growth In Asset Management
M ltiple Dri Multiple Drivers ers Of Gro Growth th In Asset Management Winning new mandates across a broad spectrum of investment strategies around the globe W Private Client Asseet Management Neew Businesses IInstitutional Providing a wide range of investment solutions HNW − Growing percentage
Slide 14: Strong Financial And Liquidity Position
Strong Financial And Liq Liquidity idit Position ($ in millions, except per share amounts) Solid low low--risk balance sheet − Over $1 billion in cash and liquid investments − No scheduled long- long-term debt maturities before May 2015 − No principal trading or lending book Long--term debt of $
Slide 15: Financial Advisory
Financial Advisory
Slide 16: Financial Advisory Summary
Financial Ad Advisory isor Summary S mmar ($ in millions) Operating Revenue Summary $1 500 $1,500 O Operating i revenue up 14% over fi first nine i months 2009 $1,241 1,200 − Increase of $119.5 in M&A, Strat. Strat. Adv., $1,024 $990 Capital Markets and Other Adv. $973 revenue (up ( 30%) 30%), par
Slide 17: Financial Advisory Operating Revenue
Financial Ad Advisory isor Operating Revenue Re en e ($ in millions) Strong revenue growth Aggregate advisory revenue ranks among much larger firms Restructuring revenue reduces volatility through cycles $1,241 $973 $1,024 $990 $865 $769 $691 $655 $551 $533 2001 2002 2003 2004 2005 2006 2007 2
Slide 18: Diversified Financial Advisory Business
Diversified Di ersified Financial Ad Advisory isor BBusiness siness LTM1 M&A Revenue By Industry Diversified geographically with 55% in North America, 40% in Europe and 5% in Real Rest of World Estate Gov’t 5% Diversified client base2: 6% Power & − 475 total clients E Energy 8% − 177 clients > $
Slide 19: Selected Pending M&A Transactions
Selected Pending M&A Transactions1 Industrials Consumer Healthcare TMT 〉 Cognis 〉 Reckitt Benckiser 〉 Celgene 〉 VimpelCom 〉 Hochtief 〉 Burger King 〉 Johnson & JJohnson 〉 CenturyLink 〉 Anglo American 〉 Wilmar International 〉 Qualitest Pharmaceuticals Power & Energy 〉 Travis 〉 Netto 〉 Perkins Foodstor
Slide 20: Market Leading Restructuring Practice
Market Leading Restructuring Restr ct ring Practice Debtor Market Share – 25 Largest Most experienced team – advised on more Chapter 11 Bankruptcies1 than 500 restructurings worldwide over the past decade Houlihan Blackstone Lokey Largest debtor- debtor-focused restructuring group 4% 4% with ove
Slide 21: Selected Recent Restructuring And Debt Advisory Assignments
Selected Recent Restructuring Restr ct ring And Debt Advisory Ad isor Assignments Technology/ Gaming/ Real Estate/ Financial / Media/Telecom Industrials Entertainment/ p y Dev. Property Services H pit lit Hospitality Other 20
Slide 22: Asset Management
Asset Management
Slide 23: Asset Management Summary
Asset Management Summary S mmar ($ in millions) Operating Revenue Summary $800 R Recordd operating i revenue and d continued i d $717 positive net inflows $629 − 3Q10 operating revenue increased 32% $596 600 $548 over 3Q09 and nine months ended $579 3Q10 operating i revenue increased i d 48% $464
Slide 24: Assets Under Management
Assets Under Management1 ($ in billions) Improving investment performance and launch of new strategies led to $37.4 in net inflows post 2005 vs. vs $10.8 $10 8 in net outflows in the five years prior to 2005 Net inflows of $6.2 in nine months ended 3Q10 $141 $144 $130 $110 $86 $88 $91 $73 $$78 $
Slide 25: Increasingly Global Client Base
Increasingl Global Client Base1 Increasingly AUM in 2004: $86.4bn AUM Today: $143.6bn Japan Australia 3% Japan 3% Australia 11% 8% Korea Asia- Asia- Italy 1% Pacific: 1% Pacific: Germany 15% 11% Germany 7% North 9% North America 58% Europe: America 31% France Europe: 54% France 9% 31% 12% UK UK 9% 1
Slide 26: Diversified Product Mix – AUM By Product
Di ersified Prod Diversified Product ct Mi Mix – AUM By B Prod ct1 Product History of investing prudently wherever the firm finds value 15 strategies, each with over $1.5bn in AUM U.S. Fixed Alternative Income Investments Private Equity q y 2% 1% Global/Int'l 3% Fixed Income Cash 10% U.S. Equity
Slide 27: Summary Financials
Summary Financials
Slide 28: Note
Note Lazard believes that pro forma results assuming full exchange of outstanding exchangeable interests and results excluding g special p charges g provide p the most meaningful g basis for comparison among present, historical and future periods. The Company’s quarterly revenue and profits can fluc
Slide 29: Selected Financial Data
Selected Financial Data ($ in millions, except per share values) NINE MONTHS % FULL YEAR % 1 1 2010A 2009A Inc/Dec 2009A 2008A Inc/Dec Operating Revenue Financial Advisory $769.1 $676.8 14% $990.3 $1,024.0 (3%) Asset Management 578.9 391.8 48% 596.0 628.6 (5%) Core Operating Business Revenue2 1,348.
Slide 30: Operating Revenue – First 9 Mos. 2010 vs. First 9 Mos. 2009
Operating Revenue Re en e – First 9 Mos. Mos 2010 vs. s First 9 Mos. Mos 2009 ($ in millions) 2010A 2009A Increase/(Decrease) Financial Advisoryy M&A and Strategic Advisory $454.1 $356.0 $98.1 28% Restructuring 246.0 273.3 (27.3) (10%) Capital Markets & Other Advisory 69.0 47.5 21.5 45% Total 769.1
Slide 31: Net Income Summary – First 9 Mos. 2010 vs. First 9 Mos. 2009
Net Income Summary S mmar – First 9 Mos. Mos 2010 vs. s First 9 Mos. Mos 2009 ($ in millions, except per share figures) 2010A 1 2009A 1 % Increase Operating Revenue $1 368 4 $1,368.4 $1 103 2 $1,103.2 24% Net Revenue $1,310.5 $1,035.7 27% Operating Expenses: Compensation and Benefits 821.11 821 693.
Slide 32: Operating Expenses – First 9 Mos. 2010 vs. First 9 Mos. 2009
Operating Expenses E penses – First 9 Mos. Mos 2010 vs. s First 9 Mos. Mos 2009 ($ in millions) % of Operating Revenue 2010A 2009A 2010 2009 1 Compensation and Benefits $821.1 $693.7 60.0% 62.9% Other Operating Expense: Occupancy and equipment $65.0 $63.8 Marketing and business development 51.4 43.3
Slide 33: Operating Revenue – 3Q10 vs. 3Q09
Operating Revenue Re en e – 3Q10 vs. s 3Q09 ($ in millions) 2010A 2009A Increase/(Decrease) Financial Advisory M&A and Strategic Advisory $160.6 $124.7 $35.9 29% Restructuring 66.0 119.1 (53.1) (45%) Capital Markets & Other Advisory 27.8 16.4 11.4 69% Total 254.4 260.2 (5.8) (2%) Asset Management Ma
Slide 34: Net Income Summary – 3Q10 vs. 3Q09
Net Income Summary S mmar – 3Q10 vs. s 3Q09 ($ in millions, except per share figures) 2010A 2009A % Inc/(Dec) O Operating ti Revenue R $473 2 $473.2 $431 5 $431.5 10% Net Revenue $453.2 $411.7 10% Operating Expenses: C Compensation i and dBBenefits fi 282.55 282 250.99 250 13% Amortization of Intang
Slide 35: Operating Expenses – 3Q10 vs. 3Q09
Operating Expenses E penses – 3Q10 vs. s 3Q09 ($ in millions) % of Operating Revenue 2010A 2009A 2010A 2009A Compensation and Benefits $282.5 $250.9 59.7% 58.2% Operating Expense: Occupancy and equipment $22.4 $23.7 Marketing and business development 17.5 14.1 Technology and information services 18
Slide 36: Selected Quarterly Operating Results
Selected Quarterly Q arterl Operating Results Res lts ($ in millions, except per share data) Q3 10 Q2 10 Q1 10 1 Q4 09 2 Q3 09 Q2 09 Q1 09 3 Q4 08 Q3 08 4 Q2 08 Q1 08 Financial Advisory M&A and Strategic Advisory $160.6 $145.9 $147.6 $170.2 $124.7 $134.9 $96.5 $192.7 $230.9 $225.1 $166.0 Restructuri
Slide 37: Condensed Balance Sheet
Condensed Balance Sheet ($ in millions) Sept 30, December 31, 2010 2009 ASSETS Cash & Cash Equivalents $847 $917 Cash Segregated for Regulatory Purposes 24 20 Receivables 788 670 Investments 712 808 Goodwill and other intangible assets 319 318 Other Assets 434 415 Total Assets $3,124 $3,148 LIABILIT
Slide 38: LAZARD
LAZARD