- Diluted EPS of $0.81, adjusted EPS1 of
$0.78
- Pre-tax income of $219.0 million, adjusted
EBITDA1 of $251.0 million
- Operating cash flow of $141.2 million, free cash flow1 of
$176.4 million
- Total assets of $333.7 billion, a
year-over-year increase of 12%
- Completed acquisitions of two U.S. RIAs
with $7.7 billion in combined assets
- Completed acquisition of Northwood Family
Office, a Canadian leader in the family office segment
- Repurchased 4.1 million shares for $59.8 million
- Paid quarterly dividend of $0.18 a share,
totalling $34.7 million
All financial amounts in Canadian dollars at
June 30, 2022, unless stated otherwise. Financial amounts for the
quarter are unaudited.
CI Financial Corp. (“CI”) (TSX: CIX, NYSE: CIXX) today released
financial results for the quarter ended June 30, 2022.
“These results validate our corporate strategy and capital
allocation policies,” said Kurt MacAlpine, CI Chief Executive
Officer. “Our expansion in wealth management in the United States
and Canada has added stability and diversification to our business,
with our U.S. operations making increasing contributions to
revenues and earnings. Despite continued volatility in capital
markets, we achieved year-over-year growth in overall EBITDA,
earnings per share and free cash flow per share.1
“While the Canadian fund industry had total redemptions of $19
billion during the quarter, our flows in Canadian retail asset
management were relatively stable, supported by improving overall
investment performance and several successful product launches,”
Mr. MacAlpine said.
“We continue to advance our U.S. wealth management strategy,
both through acquisitions of selected, high-quality RIAs and
through an array of initiatives to capture synergies, expand our
services and support to clients, and foster organic growth. The
success of these programs can be seen in the attractive, growing
margins of our U.S. business.”
Operating and financial data
highlights
[millions of dollars, except share
amounts]
As of and for the quarters
ended
Jun. 30, 2022
Mar. 31, 2022
Dec. 31, 2021
Sep. 30, 2021
Jun. 30, 2021
Total AUM and Client Assets:
Asset Management AUM
116,065
136,271
144,247
139,380
138,187
Canada Wealth Management assets
74,128
78,957
80,633
76,859
75,521
U.S. Wealth Management assets
143,520
145,768
151,339
96,974
83,764
Total assets
333,712
360,996
376,219
313,213
297,472
Asset Management Net Inflows:
Retail
(381)
(861)
142
684
530
Institutional
(3,203)
(264)
(331)
(126)
(360)
Australia
(122)
(305)
82
159
(33)
Closed Business
(160)
(203)
(195)
(146)
(194)
U.S. Asset Management
(195)
402
260
250
413
Total
(4,060)
(1,231)
(42)
821
356
IFRS
Results
Net income attributable to
shareholders
156.2
138.1
123.7
43.8
117.6
Diluted earnings per share
0.81
0.70
0.62
0.22
0.57
Pretax income
219.0
185.8
175.1
82.4
166.6
Pretax margin
38.6 %
29.3 %
28.3 %
15.9 %
31.7 %
Operating cash flow before the change in
operating assets and liabilities
141.2
207.7
179.2
135.2
158.1
Adjusted
Results
Adjusted net income
149.1
166.8
171.0
159.2
153.0
Adjusted diluted earnings per share
0.78
0.85
0.86
0.79
0.74
Adjusted EBITDA
251.0
272.9
277.2
258.1
242.3
Adjusted EBITDA margin
44.5 %
46.5 %
47.7 %
47.0 %
48.4 %
Free cash flow
176.4
201.6
187.1
180.9
164.1
Average shares outstanding
191,151,896
196,111,771
196,816,227
199,321,002
203,039,536
Ending shares outstanding
189,037,762
192,987,082
197,422,270
197,443,135
201,327,517
Total debt
3,688
3,530
3,776
3,408
3,350
Net debt
3,538
3,352
3,453
2,655
2,461
Net debt to adjusted EBITDA
3.5
3.0
3.1
2.6
2.5
- Free cash flow, net debt, adjusted net income, adjusted
earnings per share and adjusted EBITDA are not standardized
earnings measures prescribed by IFRS. For further information, see
“Non-IFRS Measures” note below.
Financial highlights
Net income grew to $156.2 million in the quarter from $138.1
million in the first quarter. Excluding non-operating items,
adjusted net income declined to $149.1 million in the quarter from
$166.8 million in the first quarter of 2022 as higher earnings in
CI’s U.S. and Canadian wealth businesses were more than offset by
lower earnings from the Asset Management segment due to the
pressure on global financial assets.
Second quarter total net revenues declined 10.6% to $566.7
million in the quarter from $633.8 million in the first quarter of
2022. Excluding non-operating items, adjusted total net revenue
fell 3.9% to $598.3 million, primarily driven by lower revenues
from the Asset Management segment due to lower average AUM.
Second quarter total expenses declined 22.4% to $347.7 million
in the quarter from $448.0 million in the first quarter of 2022.
Excluding non-operating items, adjusted total expenses were
essentially unchanged at $386.0 million, reflecting disciplined
cost controls in a challenging operating environment, partially
offset by the impact of acquisitions that closed during the
quarter.
Capital allocation
In the second quarter of 2022, CI repurchased 4.1 million shares
at a cost of $59.8 million, for an average cost of $14.67 per
share, and paid $34.7 million in dividends at a rate of $0.18 per
share.
The Board of Directors declared a quarterly dividend of $0.18
per share, payable on January 13, 2023 to shareholders of record on
December 30, 2022. The annual dividend rate of $0.72 per share
represented a yield of 4.9% on CI’s closing share price of $14.67
on August 10, 2022.
Second quarter business highlights
- CI announced its intention to sell up to 20% of its U.S. wealth
management business via a U.S. initial public offering (“IPO”). CI
stated that it intends to use the net proceeds from the IPO to pay
down debt, and that a final decision on the IPO size, conditions
and timing is pending and will be subject to market
conditions.
- CI completed the acquisitions of two registered investment
advisors (“RIAs”): Corient Capital Partners, LLC, of Newport Beach,
California, which serves ultra-high-net-worth individuals and
families across the United States, and Galapagos Partners, LP of
Houston, a multi-family office serving wealthy families and
individuals. Both transactions closed on April 29, 2022.
- CI Private Wealth US, LLC applied for a charter to establish
and operate a South Dakota trust company, which, when granted, will
allow CI’s wealth management business to offer administrative trust
solutions.
- CI completed the acquisition of Toronto-based Northwood Family
Office Ltd., giving CI a leading presence in the country’s
multi-family office segment. The transaction was completed on April
1, 2022.
- In the latest initiatives to modernize CI’s asset management
business, CI Global Asset Management (“CI GAM”) continued to
enhance and broaden its product lineup. The firm introduced a
private infrastructure investment solution managed by HarbourVest
Partners, a global leader in private markets investing. CI GAM also
launched CI Galaxy Blockchain ETF, CI Galaxy Metaverse ETF and CI
Floating Rate Income Fund (ETF Series).
- Additionally, CI GAM claimed compliance with the Global
Investment Performance Standards (“GIPS®”) from CFA Institute. The
GIPS standards are universal and voluntary standards based on the
fundamental principles of full disclosure and fair representation
of investment performance.
- CI’s success in implementing innovative technologies and
processes across its organization was recognized through a 2022
Digital Transformation Award (Large Private Sector category) from
IT World Canada.
- CI joint venture Axia Real Assets launched a new U.S. real
estate fund, the Axia U.S. Grocery Net Lease Fund II LP, through a
private placement. The investment vehicle will be used to acquire a
portfolio of dominant net lease grocery real estate assets across
the U.S.
Analysts’ conference call
CI will hold a conference call with analysts today at 9:00 a.m.
EDT, led by Chief Executive Officer Kurt MacAlpine and Chief
Financial Officer Amit Muni. A live webcast of the call and slide
presentation can be accessed here, or through the Investor
Relations section of CI’s website.
Alternatively, investors may listen to the discussion through
the following numbers (access code: 884850):
- Canada toll-free: 1-833-950-0062
- United States toll-free: 1-844-200-6205
- United States (New York local): 1-646-904-5544
- All other locations: 1-929-526-1599.
A recording of the webcast will be archived on CI’s Investor
Relations site.
About CI Financial
CI Financial Corp. is an integrated global wealth and asset
management company. CI’s primary asset management businesses are CI
Global Asset Management (CI Investments Inc.) and GSFM Pty Ltd.,
and it operates in Canadian wealth management through CI Assante
Wealth Management (Assante Wealth Management (Canada) Ltd.), CI
Private Counsel LP, Aligned Capital Partners Inc., Northwood Family
Office Ltd., CI Direct Investing (WealthBar Financial Services
Inc.), and CI Investment Services Inc.
CI’s U.S. wealth management businesses consist of Barrett Asset
Management, LLC, Balasa Dinverno Foltz LLC, Bowling Portfolio
Management LLC, Brightworth, LLC, BRR OpCo, LLC (Budros, Ruhlin
& Roe), The Cabana Group, LLC, Corient Capital Partners, LLC,
CPWM, LLC (Columbia Pacific Wealth Management), Columbia Pacific
Advisors, LLC, Congress Wealth Management LLC, Dowling &
Yahnke, LLC, Doyle Wealth Management, LLC, Galapagos Partners, LP,
GLASfunds, LLC, Gofen & Glossberg, LLC, Matrix Capital
Advisors, LLC, McCutchen Group LLC, OCM Capital Partners, LLC,
Portola Partners Group LLC, Radnor Financial Advisors, LLC,
RegentAtlantic Capital, LLC, The Roosevelt Investment Group, LLC,
RGT Wealth Advisors, LLC, R.H. Bluestein & Co., Segall Bryant
& Hamill, LLC, Stavis & Cohen Private Wealth, LLC, and
Surevest LLC.
CI is listed on the Toronto Stock Exchange under CIX and on the
New York Stock Exchange under CIXX. Further information is
available at www.cifinancial.com.
Commissions, trailing commissions, management fees and expenses
all may be associated with an investment in mutual funds and
exchange-traded funds (ETFs). Please read the prospectus before
investing. Important information about mutual funds and ETFs is
contained in their respective prospectus. Mutual funds and ETFs are
not guaranteed; their values change frequently, and past
performance may not be repeated. You will usually pay brokerage
fees to your dealer if you purchase or sell units of an ETF on
recognized Canadian exchanges. If the units are purchased or sold
on these Canadian exchanges, investors may pay more than the
current net asset value when buying units of the ETF and may
receive less than the current net asset value when selling
them.
This press release contains forward-looking statements
concerning anticipated future events, results, circumstances,
performance or expectations with respect to CI Financial Corp.
(“CI”) and its products and services, including its business
operations, strategy and financial performance and condition and
its intention to conduct an IPO of its US wealth management
business. Forward-looking statements are typically identified by
words such as “believe”, “expect”, “foresee”, “forecast”,
“anticipate”, “intend”, “estimate”, “goal”, “plan” and “project”
and similar references to future periods, or conditional verbs such
as “will”, “may”, “should”, “could” or “would”. These statements
are not historical facts but instead represent management beliefs
regarding future events, many of which by their nature are
inherently uncertain and beyond management’s control. Although
management believes that the expectations reflected in such
forward-looking statements are based on reasonable assumptions,
such statements involve risks and uncertainties. The material
factors and assumptions applied in reaching the conclusions
contained in these forward-looking statements include that CI will
proceed with the IPO, that all outstanding acquisitions will be
completed and their asset levels will remain stable, that the
investment fund industry will remain stable and that interest rates
will remain relatively stable. Factors that could cause actual
results to differ materially from expectations include, among other
things, general economic and market conditions, including interest
and foreign exchange rates, global financial markets, the risk that
the IPO may not occur in its expected timeframe or at all, changes
in government regulations or in tax laws, industry competition,
technological developments and other factors described or discussed
in CI’s disclosure materials filed with applicable securities
regulatory authorities from time to time. The foregoing list is not
exhaustive and the reader is cautioned to consider these and other
factors carefully and not to place undue reliance on
forward-looking statements. Other than as specifically required by
applicable law, CI undertakes no obligation to update or alter any
forward-looking statement after the date on which it is made,
whether to reflect new information, future events or otherwise.
This communication is provided as a general source of
information and should not be considered personal, legal,
accounting, tax or investment advice, or construed as an
endorsement or recommendation of any entity or security discussed.
Individuals should seek the advice of professionals, as
appropriate, regarding any particular investment. Investors should
consult their professional advisors prior to implementing any
changes to their investment strategies.
CI Global Asset Management is a registered business name of CI
Investments Inc.
CONSOLIDATED STATEMENT OF
INCOME
For the three-month period ended June
30
2022
2021
[in thousands of Canadian dollars, except
per share amounts]
$
$
REVENUE
Canada asset management fees
404,279
441,139
Trailer fees and deferred sales
commissions
(123,952)
(137,685)
Net asset management fees
280,327
303,454
Canada wealth management fees
130,103
119,901
U.S. wealth management fees
168,949
71,400
Other revenues
21,210
17,982
Foreign exchange gains (losses)
(32,864)
8,174
Other gains (losses)
(1,069)
3,830
Total net revenues
566,656
524,741
EXPENSES
Selling, general and administrative
239,521
173,936
Advisor and dealer fees
99,711
93,412
Interest and lease finance
36,235
24,249
Amortization and depreciation
11,909
9,702
Amortization of intangible assets from
acquisitions
27,436
11,669
Transaction, integration, restructuring
and legal settlements
4,587
17,543
Change in fair value of contingent
consideration
(74,977)
22,410
Other
3,230
5,258
Total expenses
347,652
358,179
Income before income taxes
219,004
166,562
Provision for (recovery of) income
taxes
Current
46,835
54,764
Deferred
13,901
(6,614)
60,736
48,150
Net income for the period
158,268
118,412
Net income attributable to
non-controlling interests
2,057
792
Net income attributable to
shareholders
156,211
117,620
Basic earnings per share attributable
to shareholders
$0.82
$0.58
Diluted earnings per share attributable
to shareholders
$0.81
$0.57
Other comprehensive income (loss), net
of tax
Exchange differences on translation of
foreign operations
17,662
(10,475)
Total other comprehensive income (loss),
net of tax
17,662
(10,475)
Comprehensive income for the
period
175,930
107,937
Comprehensive income attributable to
non-controlling interests
2,996
792
Comprehensive income attributable to
shareholders
172,934
107,145
CONSOLIDATED BALANCE SHEET
As at
As at
June 30, 2022
December 31, 2021
[in thousands of Canadian dollars]
$
$
ASSETS
Current
Cash and cash equivalents
154,844
230,779
Client and trust funds on deposit
1,462,148
1,199,904
Investments
37,981
131,772
Accounts receivable and prepaid
expenses
247,057
272,962
Income taxes receivable
12,556
3,607
Total current assets
1,914,586
1,839,024
Capital assets, net
54,687
52,596
Right-of-use assets
140,266
142,606
Intangibles
6,471,980
6,185,237
Deferred income taxes
45,887
56,901
Other assets
439,440
383,187
Total assets
9,066,846
8,659,551
LIABILITIES AND EQUITY
Current
Accounts payable and accrued
liabilities
283,796
369,081
Current portion of provisions and other
financial liabilities
321,062
572,432
Redeemable non-controlling interests
598,130
—
Dividends payable
68,054
71,072
Client and trust funds payable
1,467,614
1,202,079
Income taxes payable
12,841
19,035
Current portion of long-term debt
314,573
444,486
Current portion of lease liabilities
20,390
20,216
Total current liabilities
3,086,460
2,698,401
Long-term debt
3,373,540
3,331,552
Provisions and other financial
liabilities
248,414
379,641
Deferred income taxes
484,511
480,777
Lease liabilities
150,921
153,540
Total liabilities
7,343,846
7,043,911
Equity
Share capital
1,742,376
1,810,153
Contributed surplus
35,374
28,368
Deficit
(72,182)
(226,715)
Accumulated other comprehensive loss
(12,629)
(23,289)
Total equity attributable to the
shareholders of the Company
1,692,939
1,588,517
Non-controlling interests
30,061
27,123
Total equity
1,723,000
1,615,640
Total liabilities and equity
9,066,846
8,659,551
STATEMENT OF CASH FLOWS
For the three-month period ended June
30
2022
2021
[in thousands of Canadian dollars]
$
$
OPERATING ACTIVITIES (*)
Net income for the period
158,268
118,412
Add (deduct) items not involving cash
Other (gains) losses
1,069
(5,307)
Change in fair value of contingent
consideration
(74,977)
22,410
Contingent consideration recorded as
compensation
670
939
Recognition of vesting of redeemable
non-controlling interests
(3,420)
—
Equity-based compensation
6,325
6,660
Amortization and depreciation
39,345
21,371
Deferred income taxes
13,901
(6,614)
Loss on repurchases of long-term debt
—
212
Cash provided by operating activities
before net change in operating assets and liabilities
141,181
158,083
Net change in operating assets and
liabilities
22,929
(27,989)
Cash provided by operating
activities
164,110
130,094
INVESTING ACTIVITIES
Purchase of investments
(78)
(1,384)
Proceeds on sale of investments
71
6,194
Additions to capital assets
(5,553)
(1,255)
Decrease (increase) in other assets
13,287
(41,780)
Additions to intangibles
(2,713)
(2,113)
Cash paid to settle acquisition
liabilities
(38,626)
(45,468)
Acquisitions, net of cash acquired
(155,828)
(371,958)
Cash used in investing
activities
(189,440)
(457,764)
FINANCING ACTIVITIES
Repayment of long-term debt
—
(16,514)
Issuance of long-term debt
85,000
1,075,460
Repurchase of long-term debt
—
(4,779)
Repurchase of share capital
(59,248)
(132,043)
Payment of lease liabilities
(5,110)
(4,203)
Issuance of redeemable non-controlling
interest
9,577
—
Net distributions to non-controlling
interest
(1,348)
(580)
Dividends paid to shareholders
(34,748)
(36,728)
Cash provided by (used in) financing
activities
(5,877)
880,613
Net increase (decrease) in cash and
cash equivalents during the period
(31,207)
552,943
Cash and cash equivalents, beginning of
period
186,051
248,394
Cash and cash equivalents, end of
period
154,844
801,337
(*) Included in operating activities are
the following:
Interest paid
55,574
30,281
Income taxes paid
54,951
46,401
ASSETS UNDER MANAGEMENT AND NET
FLOWS
[billions of dollars]
Quarters ended
Jun. 30, 2022
Mar. 31, 2022
Dec. 31, 2021
Sep. 30, 2021
Jun. 30, 2021
Beginning AUM
136.3
144.2
139.4
138.2
132.6
Gross inflows
4.8
4.9
5.2
5.1
6.1
Gross outflows
8.7
6.6
5.5
4.5
6.1
Net inflows/(outflows)
(3.9)
(1.6)
(0.3)
0.6
(0.1)
Acquisitions
—
—
—
—
0.2
Market move and FX
(16.3)
(6.3)
5.2
0.6
5.5
Ending AUM
116.1
136.3
144.2
139.4
138.2
Proprietary AUM
30.8
34.5
36.2
34.7
34.5
Non-proprietary AUM
85.3
101.8
108.0
104.7
103.7
Average assets under management
125.4
138.2
143.0
141.1
135.9
Annualized organic growth
(11.4) %
(4.6) %
(0.9) %
1.6 %
(0.2) %
Gross management fee/average AUM
1.31 %
1.30 %
1.30 %
1.31 %
1.31 %
Net management fee/average AUM
0.89 %
0.88 %
0.88 %
0.88 %
0.88 %
Net
Inflows
Retail
(0.4)
(0.9)
0.1
0.7
0.5
Institutional
(3.2)
(0.3)
(0.3)
(0.1)
(0.4)
Closed business
(0.2)
(0.2)
(0.2)
(0.1)
(0.2)
Total Canada net inflows
(3.7)
(1.3)
(0.4)
0.4
—
Australia
(0.1)
(0.3)
0.1
0.2
—
Total net inflows/(outflows)
(3.9)
(1.6)
(0.3)
0.6
(0.1)
RETAIL (ex Closed Business)
[billions of dollars]
Quarters ended
Jun. 30, 2022
Mar. 31, 2022
Dec. 31, 2021
Sep. 30, 2021
Jun. 30, 2021
Beginning AUM
108.4
114.6
110.4
109.1
103.9
Net Flows
(0.4)
(0.9)
0.1
0.7
0.5
Market Move / FX
(12.9)
(5.3)
4.1
0.6
4.5
Acquisitions
___
___
___
0.2
___
Ending AUM
95.1
108.4
114.6
110.4
109.1
Average AUM
101.4
109.6
113.8
111.8
106.8
INSTITUTIONAL
[billions of dollars]
Quarters ended
Jun. 30, 2022
Mar. 31, 2022
Dec. 31, 2021
Sep. 30, 2021
Jun. 30, 2021
Beginning AUM
12.7
13.3
13.0
13.0
12.7
Net Flows
(3.2)
(0.3)
0.3
(0.1)
(0.4)
Market Move / FX
(1.1)
(0.3)
0.6
0.1
0.7
Acquisitions
___
___
___
___
___
Ending AUM
8.4
12.7
13.3
13.0
13.0
Average AUM
10.2
12.9
13.2
13.3
13.0
AUSTRALIA
[billions of dollars]
Quarters ended
Jun. 30, 2022
Mar. 31, 2022
Dec. 31, 2021
Sep. 30, 2021
Jun. 30, 2021
Beginning AUM
6.6
7.3
7.0
6.9
7.1
Net Flows
(0.1)
(0.3)
0.1
0.1
(0.0)
Market Move / FX
(1.4)
(0.4)
0.2
0.0
(0.2)
Acquisitions
___
___
___
___
___
Ending AUM
5.1
6.6
7.3
7.0
6.9
Average AUM
5.8
7.0
7.1
7.0
7.1
CLOSED BUSINESS
[billions of dollars]
Quarters ended
Jun. 30, 2022
Mar. 31, 2022
Dec. 31, 2021
Sep. 30, 2021
Jun. 30, 2021
Beginning AUM
8.6
9.1
9.0
9.1
8.9
Net Flows
(0.2)
(0.2)
(0.2)
(0.2)
(0.2)
Market Move / FX
(0.9)
(0.3)
0.3
(0.0)
0.4
Acquisitions
___
___
___
___
___
Ending AUM
7.5
8.6
9.1
8.9
9.1
Average AUM
8.0
8.7
9.0
9.0
9.0
AUM BY ASSET CLASS
[billions of dollars]
Quarters ended
Jun. 30, 2022
Mar. 31, 2022
Dec. 31, 2021
Sep. 30, 2021
Jun. 30, 2021
Balanced
50.9
59.4
62.1
60.3
60.3
Equity
41.4
49.3
52.3
50.1
49.8
Fixed income
11.7
13.1
14.2
14.1
13.9
Alternatives
3.6
4.9
5.7
5.0
4.3
Cash/Other
3.4
3.0
2.7
2.8
2.9
Total Canada asset management
111.0
129.7
137.0
132.4
131.3
Australia
5.1
6.6
7.3
7.0
6.9
Total asset management segment
116.1
136.3
144.2
139.4
138.2
CANADA WEALTH MANAGEMENT CLIENT
ASSETS
[billions of dollars]
Quarters ended
Jun. 30, 2022
Mar. 31, 2022
Dec. 31, 2021
Sep. 30, 2021
Jun. 30, 2021
Beginning client assets
79.0
80.6
76.9
75.5
71.1
Acquisitions
2.4
—
—
—
—
Net flows and market move
(7.2)
(1.7)
3.8
1.3
4.5
Ending client assets
74.1
79.0
80.6
76.9
75.5
Average client assets
77.7
79.0
78.9
77.0
73.1
Wealth management fees/average client
assets
0.91 %
0.95 %
0.93 %
0.94 %
0.91 %
U.S. WEALTH MANAGEMENT CLIENT
ASSETS
[billions of dollars]
Quarters ended
Jun. 30, 2022
Mar. 31, 2022
Dec. 31, 2021
Sep. 30, 2021
Jun. 30, 2021
Beginning billable client assets
141.2
146.4
96.1
82.9
30.7
Acquisitions
7.1
1.1
49.3
10.1
49.5
Net flows and market move
(9.5)
(6.3)
1.0
3.1
2.7
Ending billable client assets
138.8
141.2
146.4
96.1
82.9
Unbillable client assets
4.8
4.6
4.9
0.9
0.8
Total client assets
143.5
145.8
151.3
97.0
83.8
Fees/beginning billable client assets1
0.48 %
0.46 %
0.50 %
0.52 %
0.71 %
- 2Q/21 adjusted for the timing of Segall Bryant & Hamill
acquisition.
NON-IFRS MEASURES
In an effort to provide additional information regarding our
results as determined by IFRS, we also disclose certain non-IFRS
information which we believe provides useful and meaningful
information. Our management reviews these non-IFRS financial
measurements when evaluating our financial performance and results
of operations; therefore, we believe it is useful to provide
information with respect to these non-IFRS measurements so as to
share this perspective of management. Non-IFRS measurements do not
have any standardized meaning, do not replace nor are superior to
IFRS financial measurements and may not be comparable to similar
measures presented by other companies. The non-IFRS financial
measurements include:
- Adjusted net income and adjusted basic and diluted earnings per
share
- Adjusted EBITDA and adjusted EBITDA margin
- Free cash flow
- Net debt.
These non-IFRS measurements exclude the following revenues and
expenses which we believe allows investors a consistent way to
analyze our financial performance, allows for better analysis of
core operating income and business trends and permits comparisons
of companies within the industry, normalizing for different
financing methods and levels of taxation:
- gains or losses related to foreign currency fluctuations on our
cash balances
- costs related to our acquisitions including:
- amortization of intangible assets
- change in fair value of contingent consideration
- related advisory fees
- contingent consideration classified as compensation per
IFRS
- restructuring charges including organizational expenses for the
establishment of CIPW
- legal provisions for a class action related to market
timing
- certain gains or losses in assets and investments
- costs related to issuing or retiring debt obligations
- expenses associated with CIPW redeemable units.
Further explanations of these Non-IFRS measures can be found in
the “Non-IFRS Measures” section of Management’s Discussion and
Analysis dated August 11, 2022 available on SEDAR at www.sedar.com
or at www.cifinancial.com.
ADJUSTED NET INCOME AND ADJUSTED
EARNINGS PER SHARE
[millions of dollars, except per share
amounts]
Quarters ended
Jun. 30, 2022
Mar. 31, 2022
Jun. 30, 2021
Net Income
158.3
137.5
118.4
Amortization of intangible assets from
acquisitions
27.4
24.1
12.0
Change in fair value of contingent
consideration
(75.0)
3.1
22.4
Contingent consideration recorded as
compensation
0.7
18.2
0.9
Non-controlling interest
reclassification
0.9
0.9
—
CIPW adjustments
3.1
13.2
—
FX (gains)/losses
32.9
(11.5)
(8.2)
Transaction, integration, restructuring
and legal
4.6
3.8
17.5
Other (gains)/losses
(1.2)
—
(1.4)
Bond redemption costs
—
—
0.2
Total adjustments1
(6.7)
51.7
43.6
Tax effect of adjustments
5.6
(11.5)
(8.2)
Less: Non-controlling interest
8.1
10.9
0.8
Adjusted net income
149.1
166.8
153.0
Adjusted earnings per share
0.78
0.85
0.75
Adjusted diluted earnings per
share
0.78
0.85
0.74
- Adjustment effects on income statement line items: bond
redemption costs are included in other expense, CIPW adjustments
and contingent consideration recorded as compensation are included
in SG&A, amortization of intangible assets from acquisitions,
change in fair value of contingent consideration, FX
(gains)/losses, other (gains)/losses, and bond redemption costs are
included in the line items of the same description.
EBITDA, ADJUSTED EBITDA AND ADJUSTED
EBITDA MARGIN
[millions of dollars, except per share
amounts]
Quarters ended
Jun. 30, 2022
Mar. 31, 2022
Jun. 30, 2021
Pretax income
219.0
185.8
166.6
Amortization of intangible assets from
acquisitions
27.4
24.1
12.1
Depreciation and other amortization
11.9
11.4
9.7
Interest and lease finance expense
36.2
35.9
24.2
EBITDA
294.6
257.1
212.6
Change in fair value of contingent
consideration
(75.0)
3.1
22.4
Contingent consideration recorded as
compensation
0.7
18.2
0.9
Non-controlling interest
reclassification
0.9
0.9
—
CIPW adjustments
3.1
13.2
—
FX (gains)/losses
32.9
(11.5)
(8.2)
Transaction, integration, restructuring
and legal
4.6
3.8
17.5
Other (gains)/losses
(1.2)
—
(1.4)
Bond redemption costs
—
—
0.2
Total adjustments
(34.1)
27.7
31.6
Non-controlling interest
9.5
11.9
1.9
Adjusted EBITDA
251.0
272.9
242.3
Reported net revenue
566.7
633.8
524.7
Less: FX gains/(losses)
(32.9)
11.5
8.2
Less: Non-Operating Other
gains/(losses)
1.2
—
1.4
Less: NCI revenues
34.8
35.5
15.0
Adjusted net revenue
563.5
586.8
500.2
Adjusted EBITDA margin
44.5 %
46.5 %
48.4 %
FREE CASH FLOW
[millions of dollars]
Quarters ended
Jun. 30, 2022
Mar. 31, 2022
Jun. 30, 2021
Cash provided by operating activities
164.1
154.8
130.1
Net change in operating assets and
liabilities
(22.9)
52.9
28.1
Operating cash flow before the change
in operating assets and liabilities
141.2
207.7
158.1
FX (gains)/losses
32.9
(11.5)
(8.2)
Transaction, integration, restructuring
and legal
4.6
3.8
17.5
Other (gains)/losses
—
—
—
Total adjustments
37.5
(7.7)
9.3
Tax effect (recovery) of adjustments
(5.7)
1.2
(1.4)
Less: Non-controlling interest
(3.4)
(0.4)
1.9
Free cash flow
176.4
201.6
164.1
NET DEBT
Quarters ended
[millions of dollars]
Jun. 30, 2022
Mar. 31, 2022
Dec. 31, 2021
Sep. 30, 2021
Jun. 30, 2021
Current portion of long-term debt
314.6
225.3
444.5
74.2
—
Long-term debt
3,373.5
3,304.7
3,331.6
3,334.2
3,350.2
3,688.1
3,530.0
3,776.0
3,408.4
3,350.2
Less:
Cash and short-term investments
154.8
186.1
230.8
653.9
801.3
Marketable securities
18.1
20.3
116.9
122.5
121.1
Add:
Regulatory capital and non-controlling
interests
22.4
28.8
25.0
23.1
33.4
Net Debt
3,537.5
3,352.4
3,453.4
2,655.1
2,461.2
Adjusted EBITDA
251.0
272.9
277.2
258.1
242.3
Adjusted EBITDA, annualized
1,006.9
1,106.6
1,099.8
1,024.1
971.9
Gross leverage (Gross debt/Annualized
adjusted EBITDA)
3.7
3.2
3.4
3.3
3.4
Net leverage (Net debt/Annualized adjusted
EBITDA)
3.5
3.0
3.1
2.6
2.5
SUMMARY OF QUARTERLY RESULTS
[millions of dollars, except per share
amounts]
IFRS Results
Adjusted Results
For the quarters ended
For the quarters ended
Jun. 30, 2022
Mar. 31, 2022
Dec. 31, 2021
Sep. 30, 2021
Jun. 30, 2021
Jun. 30, 2022
Mar. 31, 2022
Dec. 31, 2021
Sep. 30, 2021
Jun. 30, 2021
Revenues
Asset management fees
404.3
437.6
464.9
460.9
441.1
404.3
437.6
464.9
460.9
441.1
Trailer fees and deferred sales
commissions
(124.0)
(135.3)
(143.6)
(143.4)
(137.7)
(124.0)
(135.3)
(143.6)
(143.4)
(137.7)
Net asset management fees
280.3
302.3
321.3
317.5
303.5
280.3
302.3
321.3
317.5
303.5
Canada wealth management fees
130.1
138.2
134.9
132.5
119.9
130.1
138.2
134.9
132.5
119.9
U.S. wealth management fees
168.9
164.5
120.9
108.1
71.4
168.9
164.5
120.9
108.1
71.4
Other revenues
21.2
21.6
27.3
11.2
18.0
21.2
21.6
27.3
11.2
18.0
FX gains/(losses)
(32.9)
11.5
3.1
(50.3)
8.2
—
—
—
—
—
Other gains/(losses)
(1.1)
(4.4)
11.9
(1.1)
3.8
(2.3)
(4.4)
(4.9)
(1.1)
2.5
Total net revenues
566.7
633.8
619.3
517.9
524.7
598.3
622.3
599.4
568.2
515.2
Expenses
Selling, general & administrative
239.5
259.6
214.6
201.9
173.9
235.7
228.2
212.5
197.7
173.0
Advisor and dealer fees
99.7
106.9
104.8
103.4
93.4
99.7
106.9
104.8
103.4
93.4
Other
3.2
3.2
5.7
6.5
5.3
2.4
2.4
5.7
6.5
5.0
Interest and lease finance expense
36.2
35.9
32.5
31.6
24.2
36.2
35.9
32.5
31.6
24.2
Depreciation and other amortization
11.9
11.4
10.9
10.3
9.7
11.9
11.4
10.4
10.0
9.4
Amortization of intangible assets from
acquisitions
27.4
24.1
18.2
16.4
11.7
—
—
—
—
—
Transaction, integration, restructuring
and legal
4.6
3.8
13.6
3.9
17.5
—
—
—
—
—
Change in fair value of contingent
consideration
(75.0)
3.1
43.9
61.4
22.4
—
—
—
—
—
Total expenses
347.7
448.0
444.2
435.5
358.2
386.0
384.8
365.9
349.2
305.1
Pretax income
219.0
185.8
175.1
82.4
166.6
212.3
237.5
233.4
219.0
210.1
Income tax expense
60.7
48.3
51.3
37.0
48.2
55.1
59.7
62.5
58.1
56.4
Net income
158.3
137.5
123.7
45.4
118.4
157.2
177.8
171.0
160.9
153.7
Non-controlling interest
2.1
(0.6)
—
1.6
0.8
8.1
10.9
—
1.6
0.8
Net income attributable to
shareholders
156.2
138.1
123.7
43.8
117.6
149.1
166.8
171.0
159.2
153.0
Basic earnings per share
0.82
0.70
0.63
0.22
0.58
0.78
0.85
0.87
0.80
0.75
Diluted earnings per share
0.81
0.70
0.62
0.22
0.57
0.78
0.85
0.86
0.79
0.74
RESULTS OF OPERATIONS – ASSET
MANAGEMENT SEGMENT
[millions of dollars, except per share
amounts]
IFRS Results
Adjusted Results
For the quarters ended
For the quarters ended
Jun. 30, 2022
Mar. 31, 2022
Dec. 31, 2021
Sep. 30, 2021
Jun. 30, 2021
Jun. 30, 2022
Mar. 31, 2022
Dec. 31, 2021
Sep. 30, 2021
Jun. 30, 2021
Revenues
Asset management fees
408.9
442.5
469.6
465.6
445.5
408.9
442.5
469.6
465.6
445.5
Trailer fees and deferred sales
commissions
(131.9)
(143.9)
(152.6)
(152.4)
(146.3)
(131.9)
(143.9)
(152.6)
(152.4)
(146.3)
Net asset management fees
277.0
298.6
316.9
313.2
299.3
277.0
298.6
316.9
313.2
299.3
Other revenues
5.6
10.2
19.9
3.2
12.2
5.6
10.2
19.9
3.2
12.2
FX gains/(losses)
(32.8)
11.4
(1.4)
(19.0)
1.2
—
—
—
—
—
Other gains/(losses)
(1.1)
(4.4)
12.0
(1.1)
3.8
(2.3)
(4.4)
(4.8)
(1.1)
2.5
Total net revenues
248.7
315.8
347.5
296.3
316.5
280.2
304.4
332.1
315.3
313.9
Expenses
Selling, general & administrative
97.3
96.8
108.7
109.6
104.9
97.3
96.8
108.7
109.6
104.9
Other
—
—
(0.5)
1.6
0.2
—
—
(0.5)
1.6
0.2
Interest and lease finance expense
1.0
1.0
0.5
0.5
0.6
1.0
1.0
0.5
0.5
0.6
Depreciation and other amortization
5.0
5.0
5.4
5.5
5.5
5.0
5.0
5.4
5.5
5.5
Amortization of intangible assets from
acquisitions
0.6
0.6
0.6
0.6
0.6
—
—
—
—
—
Transaction, integration, restructuring
and legal
2.3
(0.9)
10.4
0.4
14.6
—
—
—
—
—
Change in fair value of contingent
consideration
(3.9)
4.0
14.2
1.9
10.0
—
—
—
—
—
Total expenses
102.3
106.5
139.3
120.2
136.4
103.3
102.8
114.1
117.2
111.1
Pretax income
146.4
209.3
208.1
176.1
180.1
176.9
201.6
218.0
198.1
202.8
Non-IFRS adjustments
Pretax income
146.4
209.3
208.1
176.1
180.1
176.9
201.6
218.0
198.1
202.8
Amortization of intangible assets from
acquisitions
0.6
0.6
0.6
0.6
0.6
—
—
—
—
—
Depreciation and other amortization
5.0
5.0
5.4
5.5
5.5
5.0
5.0
5.4
5.5
5.5
Interest and lease finance expense
1.0
1.0
0.5
0.5
0.6
1.0
1.0
0.5
0.5
0.6
EBITDA
153.0
215.9
214.7
182.7
186.7
183.0
207.6
223.9
204.1
208.8
Contingent consideration recorded as
compensation (included in SG&A)
(3.9)
4.0
14.2
1.9
10.0
—
—
—
—
—
FX (gains)/losses
32.8
(11.4)
1.4
19.0
(1.2)
—
—
—
—
—
Transaction, integration, restructuring
and legal
2.3
(0.9)
10.4
0.4
14.6
—
—
—
—
—
Other (gains)/losses
(1.2)
—
(16.8)
—
(1.4)
—
—
—
—
—
Total adjustments
30.0
(8.3)
9.2
21.4
22.1
—
—
—
—
—
Less: Non-controlling interest
0.3
0.4
0.1
0.5
0.2
0.3
0.4
0.1
0.5
0.2
Adjusted EBITDA
182.7
207.2
223.8
203.6
208.6
182.7
207.2
223.8
203.6
208.6
RESULTS OF OPERATIONS – CANADA WEALTH
MANAGEMENT SEGMENT
[millions of dollars, except per share
amounts]
IFRS Results
Adjusted Results
For the quarters ended
For the quarters ended
Jun. 30, 2022
Mar. 31, 2022
Dec. 31, 2021
Sep. 30, 2021
Jun. 30, 2021
Jun. 30, 2022
Mar. 31, 2022
Dec. 31, 2021
Sep. 30, 2021
Jun. 30, 2021
Revenues
Canada wealth management fees
175.6
185.7
184.3
181.7
166.5
175.6
185.7
184.3
181.7
166.5
Other revenues
21.3
17.1
16.0
14.8
13.9
21.3
17.1
16.0
14.8
13.9
FX gains/(losses)
—
0.1
0.8
0.7
0.7
—
—
—
—
—
Other gains/(losses)
—
—
(0.1)
—
—
—
—
(0.1)
—
—
Total net revenues
196.9
202.9
201.1
197.2
181.1
196.9
202.8
200.3
196.5
180.4
Expenses
Selling, general & administrative
45.5
41.4
39.9
37.8
35.7
45.3
41.4
39.9
37.8
35.7
Advisor and dealer fees
135.9
145.6
145.2
143.5
131.3
135.9
145.6
145.2
143.5
131.3
Other
2.6
2.9
3.2
1.8
1.3
1.7
2.0
3.2
1.8
1.3
Interest and lease finance expense
(0.1)
0.2
0.2
0.2
0.1
(0.1)
0.2
0.2
0.2
0.1
Depreciation and other amortization
2.8
2.5
2.3
2.4
2.5
2.8
2.5
2.3
2.4
2.5
Amortization of intangible assets from
acquisitions
2.1
1.6
1.5
1.7
1.3
—
—
—
—
—
Transaction, integration, restructuring
and legal
0.4
0.8
0.1
0.1
—
—
—
—
—
—
Change in fair value of contingent
consideration
(0.6)
—
—
—
—
—
—
—
—
—
Total expenses
188.5
195.0
192.6
187.5
172.3
185.6
191.7
191.0
185.7
171.0
Pretax income
8.4
7.9
8.5
9.7
8.8
11.4
11.1
9.3
10.8
9.5
Non-IFRS adjustments
Pretax income
8.4
7.9
8.5
9.7
8.8
11.4
11.1
9.3
10.8
9.5
Amortization of intangible assets from
acquisitions
2.1
1.6
1.6
1.8
1.4
—
—
0.1
0.1
0.1
Depreciation and other amortization
2.8
2.5
2.3
2.4
2.5
2.8
2.5
2.3
2.4
2.5
Interest and lease finance expense
(0.1)
0.2
0.2
0.2
0.1
(0.1)
0.2
0.2
0.2
0.1
EBITDA
13.1
12.1
12.6
14.0
12.8
14.0
13.8
11.9
13.5
12.2
Change in fair value of contingent
consideration
(0.6)
—
—
—
—
—
—
—
—
—
Contingent consideration recorded as
compensation
0.1
—
—
—
—
—
—
—
—
—
CIPW adjustments (included in
SG&A)
0.1
—
—
—
—
—
—
—
—
—
FX (gains)/losses
—
(0.1)
(0.8)
(0.7)
(0.7)
—
—
—
—
—
Transaction, integration, restructuring
and legal
0.4
0.8
0.1
0.1
—
—
—
—
—
—
NCI reclassification (included in
Other)
0.9
0.9
—
—
—
—
—
—
—
—
Total adjustments
0.8
1.6
(0.7)
(0.6)
(0.6)
—
—
—
—
—
Less: Non-controlling interest
1.0
0.9
(1.5)
0.7
0.5
1.0
0.9
(1.5)
0.7
0.5
Adjusted EBITDA
13.0
12.9
13.5
12.8
11.6
13.0
12.9
13.5
12.8
11.6
RESULTS OF OPERATIONS – U.S. WEALTH
MANAGEMENT SEGMENT
[millions of dollars, except per share
amounts]
IFRS Results
Adjusted Results
For the quarters ended
For the quarters ended
Jun. 30, 2022
Mar. 31, 2022
Dec. 31, 2021
Sep. 30, 2021
Jun. 30, 2021
Jun. 30, 2022
Mar. 31, 2022
Dec. 31, 2021
Sep. 30, 2021
Jun. 30, 2021
Revenues
U.S. wealth management fees
168.9
164.5
120.9
108.1
71.4
168.9
164.5
120.9
108.1
71.4
Other revenues
4.5
4.8
1.3
2.6
0.9
4.5
4.8
1.3
2.6
0.9
FX gains/(losses)
—
—
3.7
(31.9)
6.3
—
—
—
—
—
Total net revenues
173.4
169.2
125.9
78.8
78.6
173.5
169.2
122.2
110.7
72.3
Expenses
Selling, general & administrative
112.8
136.9
80.8
68.8
46.9
109.2
105.5
78.7
64.6
46.0
Other
0.7
0.4
2.9
3.1
3.5
0.7
0.4
2.9
3.1
3.5
Interest and lease finance expense
0.6
0.5
0.4
0.4
0.2
0.6
0.5
0.4
0.4
0.2
Depreciation and other amortization
4.1
3.9
3.1
2.5
1.7
4.1
3.9
3.1
2.5
1.7
Amortization of intangible assets from
acquisitions
24.7
21.9
16.1
14.1
9.8
—
—
—
—
—
Transaction, integration, restructuring
and legal
2.0
3.9
3.1
3.4
2.9
—
—
—
—
—
Change in fair value of contingent
consideration
(70.5)
(0.9)
29.7
59.5
12.4
—
—
—
—
—
Total expenses
74.4
166.5
136.1
151.7
77.4
114.6
110.3
85.2
70.5
51.4
Pretax income
99.0
2.7
(10.2)
(72.9)
1.2
58.9
59.0
37.0
40.2
20.9
Non-IFRS adjustments
Pretax income
99.0
2.7
(10.2)
(72.9)
1.2
58.9
59.0
37.0
40.2
20.9
Amortization of intangible assets from
acquisitions
24.7
21.9
16.5
14.4
10.1
—
—
0.5
0.3
0.3
Depreciation and other amortization
4.1
3.9
3.1
2.5
1.7
4.1
3.9
3.1
2.5
1.7
Interest and lease finance expense
0.6
0.5
0.4
0.4
0.2
0.6
0.5
0.4
0.4
0.2
EBITDA
128.4
29.1
9.9
(55.6)
13.2
63.5
63.4
41.0
43.4
23.1
Change in fair value of contingent
consideration
(70.5)
(0.9)
29.7
59.5
12.4
—
—
—
—
—
Contingent consideration recorded as
compensation (included in SG&A)
0.6
18.2
2.1
4.2
0.9
—
—
—
—
—
CIPW adjustments (included in
SG&A)
3.0
13.2
—
—
—
—
—
—
—
—
FX (gains)/losses
—
—
(3.7)
31.9
(6.3)
—
—
—
—
—
Transaction, integration, restructuring
and legal
2.0
3.9
3.1
3.4
2.9
—
—
—
—
—
Total adjustments
(64.9)
34.3
31.1
99.0
9.9
—
—
—
—
—
Less: Non-controlling interest
8.2
10.9
1.0
1.7
1.0
8.2
10.9
1.0
1.7
1.0
Adjusted EBITDA
55.4
52.5
40.0
41.7
22.1
55.4
52.5
40.0
41.7
22.1
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220811005280/en/
Investor Relations Jason Weyeneth, CFA Vice-President,
Investor Relations & Strategy 416-681-8779 jweyeneth@ci.com
Media Canada Murray Oxby Vice-President, Communications
416-681-3254 moxby@ci.com
United States Jimmy Moock Managing Partner, StreetCred
610-304-4570 jimmy@streetcredpr.com ci@streetcredpr.com
CompX (AMEX:CIX)
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CompX (AMEX:CIX)
Graphique Historique de l'Action
De Mar 2022 à Mar 2023
