(in $ thousands except where | Q3 | Q2 | Q3 | YTD | YTD | |
2023 | 2023 | 2022 | 2023 | 2022 | ||
End of period AUM (in $ billions) | 155.3 | 164.2 | 158.3 | 155.3 | 158.3 | |
Average AUM (in $ billions) | 160.7 | 164.5 | 161.6 | 163.0 | 167.4 | |
IFRS Financial Measures | ||||||
Total revenues | 158,740 | 159,843 | 160,554 | 475,674 | 496,742 | |
Base management fees | 147,645 | 149,793 | 145,649 | 444,866 | 455,411 | |
Net earnings 1 | 11,067 | 10,484 | 8,666 | 19,034 | 22,844 | |
Non-IFRS Financial Measures | ||||||
Adjusted EBITDA 2 | 43,942 | 45,468 | 45,248 | 128,233 | 139,013 | |
Adjusted EBITDA margin 2 | 27.7 % | 28.4 % | 28.2 % | 27.0 % | 28.0 % | |
Adjusted net earnings 1,2 | 23,651 | 28,708 | 23,875 | 75,903 | 88,682 | |
LTM Free Cash Flow 2 | 98,056 | 45,198 | 92,472 | 98,056 | 92,472 | |
Note: Certain totals, subtotals and percentages may not reconcile due to rounding |
"The end of the third quarter saw a significant shift in market sentiment resulting in a reversal in equity market performance and a large shift in the yield curve impacting bond markets. Unfavorable markets resulted in a reduction of
"We remain pleased with our operating performance in the face of market volatility, which has shown a year-over-year increase in base management fees. This performance along with our positive free cash flow enabled us to reduce our debt, as well as significantly improve our last twelve-month free cash flow in the third quarter." said
Assets Under Management (in $ millions, unless otherwise indicated)
By Platform | New | Lost | Net Contributions | Net Organic | Market and Other4 | Strategic5 |
| |
Public Markets, excluding AUM | 95,208 | 438 | (391) | (412) | (365) | (3,159) | — | 91,684 |
Public Markets AUM sub-advised | 50,096 | 91 | (3,104) | (84) | (3,097) | (1,609) | (520) | 44,870 |
Public Markets - Total | 145,304 | 529 | (3,495) | (496) | (3,462) | (4,768) | (520) | 136,554 |
Private Markets | 18,893 | 215 | (163) | (248) | (196) | 66 | — | 18,763 |
Total | 164,197 | 744 | (3,658) | (744) | (3,658) | (4,702) | (520) | 155,317 |
By Distribution Channel | New | Lost | Net Contributions | Net Organic | Market and Other4 | Strategic5 |
| |
Institutional | 89,857 | 351 | (2,358) | (360) | (2,367) | (3,181) | (520) | 83,789 |
Financial Intermediaries | 60,276 | 182 | (1,131) | (81) | (1,030) | (1,487) | — | 57,759 |
Private Wealth | 14,064 | 211 | (169) | (303) | (261) | (34) | — | 13,769 |
Total | 164,197 | 744 | (3,658) | (744) | (3,658) | (4,702) | (520) | 155,317 |
By Platform |
| New | Lost | Net Contributions | Net Organic | Market and Other4 | Strategic5 |
|
Public Markets, excluding AUM | 91,046 | 2,511 | (2,572) | (1,031) | (1,092) | 1,730 | — | 91,684 |
Public Markets AUM sub-advised | 49,219 | 122 | (6,698) | (955) | (7,531) | 3,702 | (520) | 44,870 |
Public Markets - Total | 140,265 | 2,633 | (9,270) | (1,986) | (8,623) | 5,432 | (520) | 136,554 |
Private Markets | 18,241 | 1,394 | (546) | (477) | 371 | 151 | — | 18,763 |
Total | 158,506 | 4,027 | (9,816) | (2,463) | (8,252) | 5,583 | (520) | 155,317 |
By Distribution Channel |
| New | Lost | Net Contributions | Net Organic | Market and Other4 | Strategic5 |
|
Institutional | 84,330 | 2,473 | (4,002) | (1,009) | (2,538) | 2,517 | (520) | 83,789 |
Financial Intermediaries | 60,275 | 737 | (5,024) | (632) | (4,919) | 2,403 | — | 57,759 |
Private Wealth | 13,901 | 817 | (790) | (822) | (795) | 663 | — | 13,769 |
Total | 158,506 | 4,027 | (9,816) | (2,463) | (8,252) | 5,583 | (520) | 155,317 |
- AUM decreased by
$8 .9 billion or 5.4% compared toJune 30, 2023 :- An unfavourable market impact reduced AUM by
$4 .5 billion, which included$3.0 billion related to fixed income mandates. In addition, organic growth was negative$3 .7 billion during the quarter. The sale of three Public Markets funds that were sub-advised by PineStone to New York Life Investments also reduced AUM by$0 .5 billion and income distributions from Private Markets funds reduced AUM by$0 .2 billion. - Included in the negative net organic growth of
$3.7 billion was$3.1 billion of outflows related to AUM sub-advised by PineStone. Of this$3.1 billion of outflows, approximately$1.1 billion was transferred directly to PineStone and$1.8 billion related to lost mandates as a result of clients exiting these strategies entirely. The remaining$0.2 billion related to negative net contributions where clients rebalanced their portfolios to reduce their allocation to these strategies.- For the three months ended
September 30, 2023 , of the$1.8 billion related to lost mandates as a result of clients exiting their position entirely, approximately$0.7 billion related to National Bank Investments Inc.
- For the three months ended
- An unfavourable market impact reduced AUM by
- AUM decreased by
$3 .2 billion or 2.0% compared toDecember 31, 2022 :- While a favourable market impact increased AUM by
$6 .0 billion on a year-to-date basis, this amount was offset by negative net organic growth of$8 .3 billion, primarily in Public Markets. In addition, the sale of three Public Markets funds that were sub-advised by PineStone to New York Life Investments impacted AUM by$0 .5 billion, and income distributions from Private Markets funds reduced AUM by$0 .4 billion. - Negative net organic growth included
$7.5 billion of outflows connected to AUM sub-advised by PineStone, of which approximately$3.9 billion related to AUM that transferred directly to PineStone, while$2.6 billion related to lost mandates as a result of clients exiting these strategies entirely. The remaining$1.0 billion related to negative net contributions where clients rebalanced their portfolios to reduce their allocation to these strategies.- For the nine months ended
September 30, 2023 , of the$7.5 billion of outflows connected to AUM sub-advised by PineStone,$2.2 billion related to National Bank Investments Inc., of which approximately$1.0 billion was transferred directly to PineStone. - National Bank Investments Inc. is also expected to withdraw its remaining
$5.6 billion in AUM sub-advised by PineStone by early 2025. - Going forward, excluding the AUM outflows related to National Bank Investments Inc., management expects the AUM reduction from lost mandates transferring directly to PineStone to be in the range of
$1 to$3 billion per year.
- For the nine months ended
- While a favourable market impact increased AUM by
Third Quarter Financial Highlights
The Company's financial highlights reflect the following major items for the third quarter of 2023:
- Revenue decreased by
$1.1 million , or 0.7% compared to Q2 2023. The decrease was due to lower base management fees in Public Markets and lower commitment and transaction fees, which were partly offset by higher performance fees in Public and Private Markets, higher other revenues, and higher base management fees in Private Markets.- Revenue decreased by
$1.9 million , or 1.2% compared to Q3 2022. The decrease was primarily due to lower share of earnings in joint ventures and associates, and lower commitment and transaction fees from lower deal activity, which were partly offset by higher base management fees, performance fees, and other revenues.
- Revenue decreased by
- Adjusted EBITDA decreased by
$1.6 million or 3.5% compared to Q2 2023, primarily due to lower revenues, which were offset by lower associated sub-advisory fees and continued curbed discretionary spending holding selling, general and administration expenses relatively flat.- Adjusted EBITDA decreased by
$1.3 million or 2.9% compared to Q3 2022, primarily due to lower revenues and slightly higher overall selling, general and administration expenses which were muted by lower sub-advisory fees and contained discretionary spending.
- Adjusted EBITDA decreased by
- Adjusted net earnings decreased by
$5.0 million , or 17.4% compared to Q2 2023, primarily due to lower revenues, unfavourable foreign exchange, and higher interest on long-term debt, which were partly offset by lower income tax expense.- Adjusted net earnings was essentially flat compared to Q3 2022, as lower revenues and higher interest on long-term debt and debentures were offset by lower income tax expense and lower foreign exchange expense.
- Net earnings attributable to the Company's shareholders increased by
$0.6 million compared to Q2 2023, primarily due to a gain on sale of funds in connection with the New York Life Investments partnership and lower income tax expense, which were partly offset by unfavourable foreign exchange and lower revenues.- Net earnings attributable to the Company's shareholders increased by
$2.4 million compared to Q3 2022 primarily due to the gain on sale of funds and lower income tax expense, which were partly offset by higher interest on long-term debt, higher accretion and fair value change on purchase price obligations, and lower revenues.
- Net earnings attributable to the Company's shareholders increased by
- LTM free cash flow increased by
$5 .6 million compared to Q3 2022. The increase was mainly due to higher cash generated by operating activities, primarily from changes in non-cash working capital, which was partly offset by lower LTM net earnings. In addition, lower cash was used in the settlement of purchase price obligations, which was partly offset by higher interest on debt and lower distributions from joint ventures and associates.
Year-to-Date Financial Highlights
The Company's financial highlights reflect the following major items for the nine-month period ended
- Revenue decreased by
$21.0 million or 4.2%, primarily due to lower base management fees in Public Markets from lower average AUM, lower share of earnings in joint ventures and associates, and lower commitment and transaction fees, partly offset by higher base management fees in Private Markets. - Adjusted EBITDA decreased by
$10.8 million , or 7.8% primarily due to lower revenues, partly offset by lower employee compensation costs and sub-advisory fees. - Adjusted net earnings decreased by
$12.8 million , or 14.4% primarily due to lower revenues and higher interest on long-term debt and debentures, partly offset by lower SG&A, excluding share-based compensation, favourable foreign exchange revaluation, and lower income tax expense. - Net earnings attributable to the Company's shareholders decreased by
$3.8 million . Items which impacted the nine-month period endedSeptember 30, 2023 compared to the same period last year included:- A lower contribution from adjusted EBITDA of
$10.8 million ; - A provision of
$6.3 million related to certain claims in the current year; and - A
$10.3 million increase in interest on long-term debt, due to rising interest rates
- A lower contribution from adjusted EBITDA of
- Partly offset by:
- A gain on sale of funds of
$5.1 million in connection with the New York Life Investments partnership; and - favourable foreign exchange.
- A gain on sale of funds of
Third Quarter Business Highlights
Strategic Transactions
In connection with the Company's previously announced strategic distribution partnership with New York Life Investments ("NYLIM"), on
Subsequent to
Leadership Announcements
As part of the Company's global expansion strategy, the Company appointed
These appointments allow us to expand and strengthen our presence in
Dividend Decared
On
Additional details relating to the company's operating results can be found on our Investor Relations web page under Financial Documents - Quarterly Results - Management's Discussion and Analysis.
Conference Call
Live
The conference call will also be accessible via webcast in the Investor Relations section of Fiera Capital's website, under Events and Presentations.
Replay
An audio replay of the call will be available until
The webcast will remain available for three months following the call and can be accessed in the Investor Relations section of
Footnotes
1) Attributable to the Company's shareholders.
2) Earnings before interest, taxes, depreciation and amortization ("EBITDA"), Adjusted EBITDA, Adjusted EBITDA margin and Adjusted EBITDA per share, Adjusted net earnings and Adjusted net earnings per share (basic and diluted), and Last Twelve Months ("LTM") Free Cash Flow are not standardized measures prescribed by International Financial Reporting Standards ("IFRS"), and are therefore unlikely to be comparable to similar measures presented by other companies. We have included non-IFRS measures to provide investors with supplemental measures of our operating and financial performance. We believe non-IFRS measures are important supplemental metrics of operating and financial performance because they highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS measures. Securities analysts, investors and other interested parties frequently use non-IFRS measures in the evaluation of issuers, many of which present non-IFRS measures when reporting their results. Management also uses non-IFRS measures in order to facilitate operating and financial performance comparisons from period to period, to prepare annual budgets and to assess its ability to meet future debt service, capital expenditure and working capital requirements.
FOR THE THREE MONTHS ENDED | FOR THE NINE-MONTH | ||||
2023 | 2023 | 2022 | 2023 | 2022 | |
Net earnings | 12,236 | 11,921 | 9,849 | 23,409 | 27,055 |
Income tax expense | 2,353 | 5,140 | 6,172 | 7,640 | 8,448 |
Amortization and depreciation | 13,381 | 13,435 | 13,679 | 40,529 | 42,548 |
Interest on long-term debt and | 12,485 | 11,215 | 8,550 | 34,293 | 24,015 |
Interest on lease liabilities, foreign | 3,805 | (2,370) | 6,039 | 2,225 | 6,964 |
EBITDA | 44,260 | 39,341 | 44,289 | 108,096 | 109,030 |
Restructuring, acquisition related | 1,511 | 3,448 | 2,772 | 12,969 | 11,933 |
Accretion and change in fair value | (537) | (2,024) | (2,626) | (3,042) | 983 |
Share-based compensation | 3,423 | 3,951 | 1,749 | 9,881 | 18,169 |
Loss (gain) on investments, net | 419 | 157 | (950) | (711) | 554 |
Gain on sale of funds | (5,139) | — | — | (5,139) | — |
Other expenses (income) | 5 | 595 | 14 | 6,179 | (1,656) |
Adjusted EBITDA | 43,942 | 45,468 | 45,248 | 128,233 | 139,013 |
Per share basic | 0.41 | 0.44 | 0.44 | 1.24 | 1.36 |
Per share diluted | 0.31 | 0.37 | 0.43 | 1.19 | 1.34 |
Weighted average shares | 105,921 | 103,720 | 102,906 | 103,646 | 102,382 |
Weighted average shares | 141,294 | 122,875 | 104,512 | 107,739 | 104,005 |
Reconciliation to Adjusted Net Earnings (in $ thousands)
FOR THE THREE MONTHS ENDED | FOR THE NINE-MONTH | ||||
2023 | 2023 | 2022 | 2023 | 2022 | |
Net earnings attributable to the | 11,067 | 10,484 | 8,666 | 19,034 | 22,844 |
Amortization and depreciation | 13,381 | 13,435 | 13,679 | 40,529 | 42,548 |
Restructuring, acquisition related and | 1,511 | 3,448 | 2,772 | 12,969 | 11,933 |
Accretion and change in fair value of | (340) | (1,712) | (2,339) | (2,280) | 2,571 |
Share-based compensation | 3,423 | 3,951 | 1,749 | 9,881 | 18,169 |
Gain on sale of funds | (5,139) | — | — | (5,139) | — |
Other expenses (income) | 5 | 595 | 14 | 6,179 | (1,656) |
Tax effect of above-mentioned items | (257) | (1,493) | (666) | (5,270) | (7,727) |
Adjusted net earnings attributable | 23,651 | 28,708 | 23,875 | 75,903 | 88,682 |
Per share – basic | |||||
Net earnings | 0.10 | 0.10 | 0.08 | 0.18 | 0.22 |
Adjusted net earnings | 0.22 | 0.28 | 0.23 | 0.73 | 0.87 |
Per share – diluted | |||||
Net earnings | 0.09 | 0.09 | 0.08 | 0.18 | 0.22 |
Adjusted net earnings | 0.18 | 0.24 | 0.23 | 0.70 | 0.85 |
Weighted average shares | 105,921 | 103,720 | 102,906 | 103,646 | 102,382 |
Weighted average shares | 141,294 | 122,875 | 104,512 | 107,739 | 104,005 |
Reconciliation to LTM Free Cash Flow (in $ thousands)
FOR THE THREE MONTHS ENDED | ||||||||
Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | |
2023 | 2023 | 2023 | 2022 | 2022 | 2022 | 2022 | 2021 | |
Net cash generated by (used in) operating | 79,708 | 14,123 | (13,463) | 66,722 | 25,686 | 46,853 | (25,951) | 97,226 |
Settlement of purchase price obligations and | — | (1,500) | — | — | (3,476) | (23,901) | — | — |
Proceeds on promissory note | 1,510 | 1,460 | 1,536 | 1,497 | 1,455 | 1,375 | 1,334 | 1,319 |
Distributions received from joint ventures and | 1,617 | 502 | 4,252 | 2,513 | 3,621 | 4,338 | 6,330 | 2,256 |
Dividends and other distributions to NCI | — | (5,895) | — | 10 | — | (1,753) | (1,425) | (19) |
Lease payments, net of lease inducements | (3,837) | (4,925) | (4,510) | (4,607) | (4,396) | (4,221) | (4,306) | (4,822) |
Interest paid on long-term debt and | (12,174) | (12,019) | (10,379) | (9,713) | (8,191) | (8,299) | (7,427) | (6,636) |
Other restructuring costs | 1,226 | 452 | 1,180 | 1,056 | 470 | 160 | 418 | 883 |
Acquisition related and other costs | 130 | 341 | 716 | 527 | 153 | 680 | 1,412 | 1,326 |
Free Cash Flow | 68,180 | (7,461) | (20,668) | 58,005 | 15,322 | 15,232 | (29,615) | 91,533 |
LTM Free Cash Flow | 98,056 | 45,198 | 67,891 | 58,944 | 92,472 | 109,828 | 145,257 | 135,012 |
3) Net Organic Growth represents the sum of New, Lost and Net Contributions.
4) Market and Other includes the impact of market changes, income distributions and foreign exchange.
5) Relates to the sale of three Public Markets funds that were sub-advised by PineStone to New York Life Investments, in connection with the strategic distribution partnership.
Forward-Looking Statements
This document contains forward-looking statements relating to future events or future performance and reflecting management's expectations or beliefs regarding future events including business and economic conditions and
By their very nature, forward-looking statements involve numerous assumptions, inherent risks and uncertainties, both general and specific, and the risk that predictions, forecasts, projections, expectations or conclusions will not prove to be accurate. As a result, the Company does not guarantee that any forward-looking statement will materialize and readers are cautioned not to place undue reliance on these forward-looking statements. A number of important factors, many of which are beyond
The preceding list of important factors is not exhaustive. When relying on forward-looking statements in this document and any other disclosure made by
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