/NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES
OR DISSEMINATION IN THE UNITED
STATES/
- Annual revenues of $540.3
million, up 18% year over year
- Adjusted EBITDA of $137.5
million, up 18% year over year
- Execution of 2022 Strategic Plan underway
- Assets under management ("AUM") of $136.7 billion as at December 31, 2018; up 6% year over year
- 2018 IFRS net loss per share of $0.05, compared to net earnings per share ("EPS")
of $0.13 in 2017
-
- 2018 adjusted EPS of $1.07,
compared to $1.21 in 2017
- Quarterly dividend increase of 5%
-
- 13th dividend increase in 7 years
MONTREAL, March 22, 2019 /CNW Telbec/ - Fiera Capital
Corporation (TSX: FSZ) ("Fiera Capital" or the "Company"), a
leading independent asset management firm, today announced its
financial results for the fourth quarter and full year ended
December 31, 2018.
"The Company delivered excellent results for both the quarter
and the year, notwithstanding challenging market conditions at the
end of 2018. Most of our fund managers outperformed their
benchmarks during the year, which helped grow revenues and adjusted
EBITDA by 18%. What's more, strategic acquisitions made during the
year further diversified our offering and expanded our global
presence," said Jean-Guy Desjardins,
Chairman of the Board and Chief Executive Officer of Fiera
Capital.
"In addition, we continue to execute on our 2022 Strategic Plan
and are moving forward on our goal of becoming one of the top 100
asset managers in the world. Improving operating efficiency is one
of the fundamental pillars of the Strategic Plan, which we carry
out with achievements such as the successful streamlining of
custodians completed during the fourth quarter. Finally, we are
very pleased with the proposed acquisition of IAM, a transaction
that will significantly strengthen our private alternative
investments platform. In all, these initiatives support our
long-term objective of delivering value to both clients and
shareholders."
Assets Under
Management (in $ millions)
|
|
|
|
|
|
AUM AS
AT
|
Y-o-Y
change
|
Q-o-Q
change
|
Markets
|
December 31,
2018
|
December 31,
2017
|
September 30,
2018
|
(in
$M)
|
(%)
|
(in
$M)
|
(%)
|
Institutional
|
71,958
|
68,038
|
76,373
|
3,920
|
5.8%
|
(4,415)
|
(5.8%)
|
Private
Wealth
|
31,317
|
26,319
|
30,976
|
4,998
|
19.0%
|
341
|
1.1%
|
Retail
|
33,400
|
34,544
|
36,126
|
(1,144)
|
(3.3%)
|
(2,726)
|
(7.5%)
|
Total
|
136,675
|
128,901
|
143,475
|
7,774
|
6.0%
|
(6,800)
|
(4.7%)
|
Revenues
2018 vs 2017
Revenues increased $81.2 million in 2018, or 18%, to $540.3 million, mainly as a result of:
- additional revenues from the Fiera Capital Emerging Markets
fund created in June 2018, following
the acquisition of the rights to manage the CNR fund (the "CNR
transaction") in December 2017;
- the recent acquisitions of CGOV Asset Management ("CGOV") and
Clearwater; and
- organic growth, mostly from the institutional sector and in
Private Alternative Investments.
These increases were partially offset by lower performance fees
recorded in 2018, as well as by a loss on a foreign currency hedge,
compared to a gain for the comparable period last year.
Q4 2018 vs Q4 2017
Revenues for the fourth quarter of
2018, were $157.0 million, an
increase of $15.0 million, or 11%,
compared to $142.0 million for the
same period last year. The year-over-year increase is mainly a
result of:
- higher AUM following the acquisitions of CGOV and Clearwater in May and August 2018, respectively;
- additional revenues generated from the Fiera Capital Emerging
Markets Fund created in June 2018
following the CNR transaction; and
- organic growth, mostly from the institutional and private
wealth sectors, as well as in Private Alternative Investments.
These increases were partly offset by lower performance fees
recorded in the fourth quarter of 2018 compared to the same period
last year, as well as by a loss on a foreign currency hedge,
compared to a gain for the comparable period last year.
Q4 2018 vs Q3 2018
Revenues for the fourth quarter
ended December 31, 2018 increased by
$19.9 million, or 15%, compared to
$137.1 million in the previous
quarter, mainly as a result of:
- higher performance fees, as performance fees are generally paid
out in the second and fourth quarters; and
- a full quarter contribution from Clearwater, following the closing of the
acquisition in August 2018.
These increases were partly offset by a loss on a foreign
currency hedge recorded in the fourth quarter, compared to a gain
recorded in the third quarter of 2018.
Adjusted Earnings Before Interest, Taxes, Depreciation and
Amortization ("Adjusted EBITDA" (1))
2018 vs 2017
The Company generated $137.5 million of adjusted EBITDA in 2018
($1.45 per share, basic and diluted),
an increase of $20.7 million, or 18%,
compared to $116.8 million
($1.42 per share – basic,
$1.33 per share – diluted) in 2017.
The year-over-year increase is mainly attributable to:
- the CNR transaction of December
2017;
- the CGOV acquisition of May 2018;
and
- an increase in revenues driven by organic growth as a result of
concerted collaboration efforts between our global distribution
teams.
This was partly offset by an increase in variable compensation
related to long-term cash agreements with key investment
professionals, which aim to secure and contribute to the continued
growth in revenues and investment strategies, as well as higher
operating expenses to support the Company's growth.
Q4 2018 vs Q4 2017
Adjusted EBITDA for the fourth
quarter of 2018 was $39.3 million
($0.41 per share – basic and
diluted), representing an increase of $3.2
million, or 9%, compared to $36.1
million ($0.43 per share –
basic and diluted) for the comparable 2017 period. The increase was
primarily driven by:
- the CNR transaction of December
2017;
- the CGOV acquisition of May 2018;
and
- and increased revenues from the deployment of Private
Alternative Investment strategies.
This was partly offset by an increase in operating expenses to
support the Company's growth.
Q4 2018 vs Q3 2018
Compared to the third quarter of
2018, fourth quarter adjusted EBITDA increased by $2.7 million, or 7%, mainly driven by:
- higher margins from the CNR transaction and the CGOV
acquisitions; and
- a full quarter contribution from Clearwater, following the closing of the
acquisition in August 2018.
The increase was partially offset by higher operating expenses
to support the Company's growth.
Adjusted Net Earnings(1) and Net Earnings
(Loss)
2018 and 2017
2018 adjusted net earnings attributable
to the Company's shareholders ("adjusted net
earnings") totalled $101.2
million ($1.07 per share,
basic and diluted), compared to $99.3
million ($1.21 per share –
basic, $1.13 per share – diluted) in
2017.
2018 adjusted net earnings reflects the net loss, excluding
$74.0 million ($0.78 per share – basic and diluted) of
depreciation of property and equipment, amortization of intangible
assets and share-based compensation, as well as $32.2 million ($0.34 per share – basic and diluted) of
acquisition, restructuring, integration and other costs, an expense
related to the accretion and change in fair value of purchase price
obligations and the accretion on effective interest on convertible
bonds and the revaluation of assets held-for-sale, net of income
taxes.
The Company recorded a net loss attributable to the Company's
shareholders ("net loss") of $5.0 million in 2018 ($(0.05) per share – basic and diluted), compared
to net earnings of $10.7 million
($0.13 per share – basic,
$0.12 per share – diluted) in
2017.
The decrease in net earnings is attributable to an increased
expense relating to the accretion and change in fair value of
purchase price obligations of $18.6
million stemming from the CNR transaction, partly offset by
the improvement in operating margins driven by higher revenues as a
result of sales efforts, market appreciation and acquisitions.
Q4 2018, Q4 2017 and Q3 2018
Adjusted net earnings for
the fourth quarter of 2018 totalled $28.3
million ($0.29 per share –
basic and diluted), compared to $29.2
million ($0.35 per share –
basic and diluted), for the fourth quarter of 2017, and to
$27.5 million ($0.29 per share – basic, $0.27 per share – diluted) for the third quarter
of 2018.
Adjusted net earnings for the fourth quarter of 2018 includes
the net loss, adjusted for $19.0 million ($0.20 per share – basic and diluted) of
depreciation of property and equipment, amortization of intangible
assets and share-based compensation, as well as $11.0 million ($0.11 per share – basic and diluted) of
acquisition, restructuring, integration and other costs, an expense
related to the accretion and change in fair value of purchase price
obligations and the accretion on effective interest on convertible
bonds and the revaluation of assets held-for-sale, net of income
taxes.
The Company recorded a net loss of $1.7
million ($(0.02) per share –
basic and diluted) for the fourth quarter of 2018, compared to net
earnings of $0.8 million
($0.01 per share – basic
and diluted) for the fourth quarter of 2017, and net earnings
of $1.0 million ($0.01 per share – basic and diluted) for the
third quarter of 2018. The quarter's net loss in the fourth quarter
of 2018 was mainly attributable to the increase in expenses related
to the accretion and change in fair value of the purchase price
obligations stemming from the CNR transaction, combined with the
rise in debt interest and integration costs, partially offset by an
improvement in operating margins.
Dividend
On March 21, 2019, the Board of
Directors declared a dividend of $0.21 per Class A subordinate voting share and
Class B special voting share of Fiera Capital, a $0.01 increase. The dividend is payable on
May 1, 2019 to shareholders of record
at the close of business on April 3,
2019. The dividend is an eligible dividend for income tax
purposes.
2018 Business Highlights
- 2022 Strategic Plan underway – The execution of the 2022
Strategic Plan commenced in the fourth quarter of 2018 and the
first initiatives are already well underway. These initiatives,
whether large or small, will have an impact on our processes,
practices and corporate culture. This is a turning point that will
help properly position Fiera Capital for the coming years in order
to achieve our goal of becoming one of the top 100 asset managers
in the world.
- Fiera Capital Expands Presence in Asia with Acquisition of Clearwater Capital
Partners – August 9, 2018. The
Company closed its acquisition of Clearwater Capital Partners LLC,
an Asia focused credit and special
situations investment firm headquartered in Hong Kong. The aggregate consideration paid at
closing, subject to various post-closing adjustments, was
approximately US$14.9 million.
- Fiera Capital Acquires Leading High-Net-Worth and
Institutional Investment Firm CGOV Asset Management –
May 31, 2018. Fiera Capital closed
its acquisition of CGOV, an Ontario-based high-net-worth and institutional
investment firm with approximately C$5
billion in assets under management at closing.
- Expanded presence in the UK with acquisition of Palmer
Capital Partners Limited ("Palmer Capital") – December 21, 2018. The Company entered into a
purchase agreement with Palmer Capital to acquire an 80% interest
in Palmer Capital, marking its first acquisition of a real estate
investment management business outside of Canada and its second acquisition in the UK.
Palmer Capital has over £800 million in assets under management
with an additional £215.5 million managed through joint
ventures.
- Launch of Fiera Comox Private Equity – December 3, 2018. Fiera Comox announced the
launch of Fiera Comox Private Equity, enabling the independent
investment manager to offer clients two distinct global private
investment strategies: Agriculture and now, Private Equity.
- Milestone achievement: successfully completed the
streamlining of custodians – November
2018. The Canadian division celebrated a milestone
achievement during the fourth quarter: the successful completion of
a complex multi-phase initiative launched back in 2015 to address
the significant challenges that stemmed from having multiple
vendors administrating our investment funds. The many benefits of
this achievement include reduced operating costs across the funds,
enhanced operational, regulatory and fiduciary, compliance, and
improved client reporting. These benefits align perfectly with the
objectives of operational scalability and cost efficiency outlined
in the 2022 Strategic Plan.
- Launch of the Global Respect & Inclusion Policy –
December 17, 2018. The policy aims to
foster an inclusive and diverse culture that will drive innovation
as we pursue our goal of positioning Fiera Capital among the top
100 asset managers in the world. The Global Respect & Inclusion
Policy reflects the Company's commitment to creating a work
environment where employees embrace diversity and original thinking
while treating one another with respect.
Subsequent Events
- Strategy to efficiently deploy capital within the
Infrastructure platform – January 29,
2019. Fiera Infrastructure announced that it entered into a
long-term partnership with EllisDon, one of North America's most successful and
experienced construction capital groups, to acquire EllisDon's
interest in its existing portfolio of ten public-private projects
("PPP"). The completion of these ten projects is expected to add
approximately $100 million to Fiera
Infrastructure's AUM. Moreover, the Partnership has the right of
first offer over EllisDon's future PPP for a pre-agreed period that
has the potential to increase AUM significantly.
- Closing of the Canoe transaction – February 22, 2019. The Company completed the
closing of its previously announced transaction whereby Canoe
Financial LP ("Canoe"), a Canadian mutual fund company, has
acquired the rights to manage nine of the Company's retail mutual
funds. Canoe has also acquired the Company's ownership interest in
Fiera Capital Funds Inc., Fiera Capital's wholly owned subsidiary
and registered mutual fund dealer and retained Fiera Capital to act
as sub-advisor for four of the nine funds.
- Strengthening of the Private Alternative Investments
Platform with the acquisition of Integrated Asset Management Corp.
("IAM") – March 22, 2019. The
announced acquisition of IAM is expected to add over $3 billion in AUM and committed capital to the
Company's private alternative investments platform.
Fourth quarter and Full Year 2018 Financial and Operating
Results
The following table provides selected financial information for
the three-month period ended December 31,
2018, compared to the quarter ended September 30, 2018 and to the quarter ended
December 31, 2017, as well as for the
twelve-month periods ended December 31,
2018 and 2017, respectively.
Key Financial
Highlights (in $ thousands except for per share
data)
|
|
|
|
|
THREE-MONTH
PERIODS
ENDED
|
TWELVE-MONTH
PERIODS
ENDED
|
|
Dec. 31,
2018
|
Sep. 30,
2018
|
Dec. 31,
2017
|
Dec. 31,
2018
|
Dec. 31,
2017
|
AUM (in $
millions)
|
136,675
|
143,475
|
128,901
|
136,675
|
128,901
|
Revenues
|
|
|
|
|
|
Base management fees
and other revenues
|
139,156
|
135,935
|
110,812
|
517,183
|
424,524
|
Performance fees –
Traditional assets
|
8,309
|
1,133
|
10,039
|
13,680
|
13,379
|
Performance fees –
Alternative assets
|
9,498
|
41
|
21,195
|
9,422
|
21,193
|
Total
revenues
|
156,963
|
137,109
|
142,046
|
540,285
|
459,096
|
Expenses
|
|
|
|
|
|
SG&A(*)
and external managers expenses
|
123,000
|
107,254
|
109,861
|
427,769
|
360,630
|
All other net
expenses
|
35,536
|
28,728
|
31,101
|
117,271
|
87,754
|
|
158,536
|
135,982
|
140,962
|
545,040
|
448,384
|
Net earnings
(loss)
|
(1,573)
|
1,127
|
1,084
|
(4,755)
|
10,712
|
Attributable
to
|
|
|
|
|
|
The Company's
shareholders
|
(1,709)
|
995
|
763
|
(5,013)
|
10,671
|
Non-controlling
interest
|
136
|
132
|
321
|
258
|
41
|
Net earnings
(loss)
|
(1,573)
|
1,127
|
1,084
|
(4,755)
|
10,712
|
Earnings
|
|
|
|
|
|
Adjusted
EBITDA
|
39,322
|
36,620
|
36,056
|
137,483
|
116,753
|
Net earnings
(loss)
|
(1,573)
|
1,127
|
1,084
|
(5,013)
|
10,712
|
Adjusted net
earnings(**)
|
28,251
|
27,533
|
29,238
|
101,237
|
99,254
|
Basic per
share
|
|
|
|
|
|
Adjusted
EBITDA
|
0.41
|
0.38
|
0.43
|
1.45
|
1.42
|
Net earnings
(loss)
|
(0.02)
|
0.01
|
0.01
|
(0.05)
|
0.13
|
Adjusted net
earnings(**)
|
0.29
|
0.29
|
0.35
|
1.07
|
1.21
|
Diluted per
share
|
|
|
|
|
|
Adjusted
EBITDA
|
0.41
|
0.36
|
0.43
|
1.45
|
1.33
|
Net earnings
(loss)
|
(0.02)
|
0.01
|
0.01
|
(0.05)
|
0.12
|
Adjusted net
earnings(**)
|
0.29
|
0.27
|
0.35
|
1.07
|
1.13
|
|
(*) SG&A:
Selling, general and administrative expenses
|
(**)Adjusted net earnings and adjusted net
earnings per share have been restated to adjust for the accretion
and change in fair value of purchase price obligations. Refer to
the Non-IFRS Section of the Company's MD&A for the three and
twelve-month ended December 31, 2018.
|
Conference Call
Fiera Capital will hold a conference call at 10:30 a.m. (EDT) on Friday, March 22, 2019, to
discuss its financial results. The dial-in number to access the
conference call from Canada and
the United States is
1-888-231-8191 (toll-free), from outside North America is 1-647-427-7450, conference
ID: 2356766.
The conference call will also be accessible via webcast in the
Investors Relations section of Fiera Capital's website
(www.fieracapital.com), under Events.
A replay of the call will be available by telephone until
March 29, 2019. The telephone number
to access the replay of the call is 1-855-859-2056 (toll-free),
access code 2356766. The replay will also be available in the
Investors Relations section of the Website under Events, in the
days following the event.
Non-IFRS Measures
(1)
|
Earnings before
interest, taxes, depreciation and amortization (EBITDA), adjusted
EBITDA and adjusted EBITDA per share, adjusted net earnings and
adjusted net earnings per share are not standardized measures
prescribed by International Financial Reporting Standards ("IFRS").
These non-IFRS measures do not have any standardized meaning and
may not be comparable to similar measures presented by other
companies. Certain comparative figures have been restated to
conform with the current presentation. Please refer to the
"Non-IFRS Measures" Section of the Company's MD&A for the
definitions and the reconciliation to IFRS measures, available at
www.fieracapital.com
|
Forward-Looking Statements
This document may contain certain forward-looking statements.
These statements relate to future events or future performance, and
reflect management's expectations or beliefs regarding future
events, including business and economic conditions and Fiera
Capital's growth, results of operations, performance and business
prospects and opportunities. Such forward-looking statements
reflect management's current beliefs and are based on information
currently available to management. In some cases, forward-looking
statements can be identified by terminology such as "may", "will",
"should", "expect", "plan", "anticipate", "believe", "estimate",
"predict", "potential", "continue", "target", "intend" or the
negative of these terms, or other comparable terminology.
By their very nature, forward-looking statements involve
inherent risks and uncertainties, both general and specific, and a
number of factors could cause actual events or results to differ
materially from the results discussed in the forward-looking
statements. In evaluating these statements, readers should
specifically consider various factors that may cause actual results
to differ materially from any forward-looking statement.
These factors include, but are not limited to, market and
general economic conditions, the nature of the financial services
industry, and the risks and uncertainties detailed from time to
time in Fiera Capital's interim condensed and annual consolidated
financial statements, and its latest Annual Report and Annual
Information Form filed on www.sedar.com. These forward-looking
statements are made as of the date of this document, and Fiera
Capital assumes no obligation to update or revise them to reflect
new events or circumstances.
About Fiera Capital Corporation
Fiera Capital is a leading independent asset management firm
with approximately C$136.7 billion in
assets under management as of December 31,
2018. The Firm provides institutional, retail and private
wealth clients with access to full-service integrated money
management solutions across traditional and alternative asset
classes. Clients and their portfolios derive benefit from Fiera
Capital's depth of expertise, diversified offerings and outstanding
service. Fiera Capital trades under the ticker FSZ on the Toronto
Stock Exchange. www.fieracapital.com
In the U.S., asset management services are provided by the
Firm's U.S. affiliates who are investment advisers that are
registered with the U.S. Securities and Exchange Commission (SEC).
Registration with the SEC does not imply a certain level of skill
or training.
Additional information about Fiera Capital Corporation,
including the Firm's annual information form, is available on SEDAR
at www.sedar.com.
SOURCE Fiera Capital Corporation