Mr. Jean-Guy Desjardins reports

FIERA CAPITAL REPORTS FIRST QUARTER 2023 RESULTS

Fiera Capital Corp. has released its financial results for the first quarter ended March 31, 2023.

"AUM [assets under management] in the first quarter of 2023 benefited from market appreciation and organic growth in private markets. I am pleased that our investment strategies continue to deliver excellent investment performance to our clients despite the volatile markets, with 91 per cent and 83 per cent of equity and fixed income strategies beating their benchmark over a one-year period, respectively," said Jean-Guy Desjardins, chairman of the board and chief executive officer. "We continue to make progress with our distribution strategy, and while this quarter's net flows were impacted by losses in the financial intermediaries channel, I am optimistic about our future momentum in the channel, particularly in light of the announcement of our distribution partnership with New York Life Investments this quarter."

"While revenues decreased from the previous quarter due to performance fees recognized in Q4 2022, base management fees were in-line quarter-over-quarter. We continue to maintain a prudent approach to cost management as we remain vigilant in the face of an uncertain market environment in the year ahead," said Lucas Pontillo, executive director and global chief financial officer. "Our Q1 2023 LTM [last 12 months] free cash flow also improved from the previous quarter. As such, I am pleased to announce that the board of directors has approved a dividend of 21.5 cents per share, payable on June 19, 2023."

Assets under management

• AUM of $164.7-billion increased by $6.2-billion, or 3.9 per cent, compared with Dec. 31, 2022, primarily due to a favourable market impact, partly offset by negative net organic growth in public markets, mainly from one large global and international equity mandate within the company's financial intermediaries clients.
• AUM decreased by $9.8-billion, or 5.6 per cent, compared with March 31, 2022, due to a decrease in public markets AUM from negative net organic growth, driven mainly from lost mandates and client rebalancings in the global and international equity strategies, which were partly offset by an increase in private markets AUM from positive net organic growth.

First quarter financial highlights

The company's financial highlights reflect the following major items for the first quarter of 2023:

• Revenues of $157.1-million decreased by $15.2-million, or 8.8 per cent compared with Q1 2022, driven by lower base management fees in public markets due to lower average AUM, partly offset by higher base management fees in private markets.
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $38.8-million decreased by $8.5-million, or 18 per cent, compared with Q1 2022 due to a decrease in revenues, partly offset by a decrease in compensation costs and subadvisory fees.
• Adjusted net earnings of $23.5-million decreased by $9.8-million, or 29.4 per cent, compared with Q1 2022, primarily due to lower adjusted EBITDA and higher interest on long-term debt and debentures.
• Net loss of $2.5-million decreased by $5.9-million compared with net earnings of $3.4-million in Q1 2022. The decrease was primarily due to lower adjusted EBITDA and the impact of the following:
  • Higher other expenses of $6-million, primarily due to a provision for certain claims recorded in the current quarter;
  • Higher restructuring, acquisition-related and other costs of $4.2-million. In response to the current economic environment, the company continued its efforts of streamlining its operations, resulting in the recognition of $6.1-million of termination costs during the first quarter of 2023; and
  • Higher interest on long-term debt and debentures of $3-million, primarily due to rising interest rates, partly offset by interest rate swaps.
• These decreases in net earnings (loss) were partly offset by lower depreciation and amortization of $1.7-million, due to certain intangible assets being fully amortized.
• LTM free cash flow of $67.9-million decreased by $77.4-million, or 53.3 per cent, compared with Q1 2022. The decrease was mainly due to lower cash generated by operating activities and settlements of purchase price obligations and puttable financial instrument liabilities in the second and third quarter of fiscal 2022.

First quarter business highlights

Strategic distribution partnership announced

The company has expanded its United States footprint through a new strategic distribution partnership with New York Life Investments, a well-recognized and respected global investment manager. The agreement, announced on March 13, 2023, contains certain exclusivity rights in the U.S. retail intermediary channel for various investment strategies managed by Fiera Capital Inc. (FCI), Fiera Comox Partners Inc. and the Fiera U.K. Atlas Global Companies team. It will also expand the distribution of FCI's tax-efficient fixed-income separately managed account (SMA) strategies, as well as its U.S. growth equity team's flagship small-mid-cap growth and small-cap growth SMA strategies.

Leadership change

On Jan. 21, 2023, Jean-Guy Desjardins, founder and executive chairman of the company, was reappointed chief executive officer. As part of the announcement, a newly constituted executive committee was formed, comprising Mr. Desjardins and the following executives:

• John Valentini, executive director and president, Fiera private markets;
• Jean Michel, executive director, president and chief investment officer, Fiera public markets;
• Peter Stock, executive director and president, Fiera private wealth;
• Lucas Pontillo, executive director, global chief financial officer;
• Gabriel Castiglio, executive director, global chief legal officer and corporate secretary.

Dividend declared

On May 9, 2023, the board of directors declared a quarterly dividend of 21.5 cents per Class A share and Class B share, payable on June 19, 2023, to shareholders of record at the close of business on May 22, 2023. The dividend is an eligible dividend for income tax purposes.

Additional details relating to the company's operating results can be found on the company's investor relations website under financial documents -- quarterly results -- management's discussion and analysis.

Conference call

Live

Fiera Capital will hold a conference call at 10 a.m. (ET) on Wednesday, May 10, 2023, to discuss its financial results. The dial-in number to access the conference call from Canada and the United States is 1-888-390-0620 (toll-free) and 1-416-764-8651 from outside North America (access code: 91952362).

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 May 17, 2023, by dialling 1-888-309-0541 (toll-free), access code 952362 followed by the pound key.

The webcast will remain available for three months following the call and can be accessed in the investor relations section of Fiera Capital's website under events and presentations.

About Fiera Capital Corp.

Fiera Capital is a leading independent asset management firm with a growing global presence and approximately $164.7-billion in assets under management as of March 31, 2023. The company delivers customized and multiasset solutions across public and private market asset classes to institutional, financial intermediary and private wealth clients across North America, Europe and key markets in Asia. Fiera Capital's depth of expertise, diversified investment platform and commitment to delivering outstanding service are core to its mission of being at the forefront of investment management science to create sustainable wealth for clients.

Headquartered in Montreal, Fiera Capital, with its affiliates in various jurisdictions, has offices in over a dozen cities around the world, including New York (United States), London (United Kingdom) and Hong Kong (Special Administrative Region).

Each affiliated entity of Fiera Capital only provides investment advisory or investment management services or offers investment funds in the jurisdictions where the affiliate and/or the relevant product is registered or authorized to provide services pursuant to an exemption from registration.

In the U.S., asset management services are provided by the company's affiliates who are investment advisers that are registered with the U.S. Securities and Exchange Commission (SEC) or exempt from registration. Registration with the SEC does not imply a certain level of skill or training.

We seek Safe Harbor.