Mr. Jean-Guy Desjardins reports

FIERA CAPITAL REPORTS FOURTH QUARTER 2023 RESULTS

Fiera Capital Corp. has released its financial results for the fourth quarter and fiscal year ended Dec. 31, 2023.

"Although 2023 started with uncertain headwinds, we are very pleased with full-year results and the improvement over the previous fiscal year with assets under management ending $6.4-billion higher than the previous quarter and $3.2-billion higher year-on-year. Impressively, 98 per cent of our Public Market assets exceeded their 5-year performance benchmarks, and we wrapped up the year by being recognized as a Top Performer, at the 2023 Global Manager Research Awards." said Jean-Guy Desjardins, Chairman of the Board and Global Chief Executive Officer. We have already started 2024 with a solid plan for growth and increased sales and distribution resources in each of our four key regions as we look to develop new business opportunities including opening additional offices as we enter new markets."

"The strength in financial markets in the fourth quarter combined with outperformance in several of our investment strategies resulted in a year-over-year increase in total revenues. Driven in part by strong performance fees during the quarter, we saw an improvement in our adjusted EBITDA margin to 30 per cent for the year. The significant increase in our adjusted EBITDA and adjusted net earnings also enabled us to further reduce our net debt in the fourth quarter and to generate a last twelve-month free cash flow which covered our dividend payments for 2023." said Lucas Pontillo, Executive Director and Global Chief Financial Officer. "With that, I am pleased to report that the Board of Directors has approved a dividend of 21.5 cents per share, payable on April 11, 2024."

AUM increased by $6.4-billion or 4.1 per cent compared with September 30, 2023:

• A favourable market impact for both fixed income and equity mandates in the second half of the quarter of $11.6-billion was partly offset by negative net organic growth of $5-billion during the quarter.
• Included in the negative net organic growth of $5-billion was $3.2-billion of outflows related to AUM sub-advised by PineStone. To our knowledge, of this $3.2-billion of outflows, $2.6-billion related to a large Canadian Financial Intermediary client of which approximately $2.4-billion was transferred directly to PineStone and $0.2-billion related to lost mandates which did not transfer directly to PineStone, and $0.6-billion related to ongoing client relationships where clients simply rebalanced their overall investment in strategies sub-advised by PineStone. The large Financial Intermediary client in Canada is also expected to redirect an additional $3.1-billion of AUM sub-advised by PineStone during the first half of 2024, as part of their ongoing transfer of assets to PineStone.

AUM increased by $3.2-billion or 2.0 per cent compared with Dec. 31, 2022:

• A favourable market impact increased AUM by $17.6-billion on a year-to-date basis, which was partly offset by negative net organic growth of $13.3-billion. Negative net organic growth for the year included $13.6-billion in Public Markets partly offset by positive net organic growth in Private Markets, primarily from net new mandates. 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 $0.6-billion.
• Negative net organic growth included $10.7-billion of outflows connected to AUM sub-advised by PineStone, of which, to our knowledge, $6.3-billion related to AUM that transferred directly to PineStone, $3-billion related to lost mandates which did not transfer to PineStone and $1.4-billion ongoing client relationships where clients simply rebalanced their overall investment in strategies sub-advised by PineStone. Of the $10.7-billion of outflows connected to AUM sub-advised by PineStone, $4.9-billion related to a large Canadian Financial Intermediary client, of which approximately $3.5-billion was transferred directly to PineStone. Excluding this client, management expects the AUM reduction from lost mandates transferring directly to PineStone to be in the range of $2 to $3-billion per year.

Fourth Quarter Financial Highlights

• Revenue increased by $52.3-million, or 33.0 per cent compared with Q3 2023. The increase was driven by higher performance fees in both Public and Private Markets, primarily from Europe, higher share of earnings in joint ventures, as well as higher commitment and transaction fees. Base management fees in Public Markets were slightly lower due to lower average AUM but were essentially offset by higher base management fees in Private Markets.
• • Revenue increased by $26.3-million, or 14.2 per cent compared with Q4 2022. The increase was primarily due to higher performance fees in Public and Private Markets, higher other revenues, and higher share of earnings in joint ventures, partly offset by lower commitment and transaction fees. Base management fees were relatively flat.
• Adjusted EBITDA increased by $33.7-million or 76.8 per cent compared with Q3 2023, primarily due to higher revenue from performance fees, partly offset by the connected higher sub-advisory fees, higher variable compensation and higher professional fees.
  • Adjusted EBITDA increased by $24.8-million, or 47.0 per cent compared with Q4 2022, primarily due to higher revenue from performance fees and lower professional fees, partly offset by higher variable compensation costs and sub-advisory fees.
• Adjusted net earnings increased by $26.5-million compared with Q3 2023, primarily due to higher revenues and favourable foreign exchange revaluation, partly offset by higher SG&A, excluding share-based compensation and higher income tax expense.
  • Adjusted net earnings increased by $17.1-million, or 51.7 per cent compared with Q4 2022, primarily due to higher revenues and favourable foreign exchange revaluation, partly offset by higher income tax expense, higher interest on long-term debt and debentures, and higher SG&A, excluding share-based compensation.
• Net earnings attributable to the company's shareholders increased by $28.3-million compared with Q3 2023, primarily due to higher revenues, insurance proceeds received during the quarter, the reversal of a claims provision and favourable foreign exchange revaluation. These increases in earnings were partly offset by higher SG&A, higher income tax expense, along with higher restructuring, acquisition related and other costs.
  • Net earnings attributable to the company's shareholders increased by $36.9-million compared with Q4 2022, primarily due to higher revenues, insurance proceeds received, the timing of provisioning and reversals of certain claims, and lower severance recorded in restructuring, acquisition related and other costs. These increases in earnings were partly offset by higher income tax expense.
• LTM free cash flow increased by $30.3-million or 51.4 per cent compared with the corresponding period of 2022. The increase was mainly due to higher cash generated by operating activities and lower cash used in the settlement of purchase price obligations, partly offset by lower distributions received from joint ventures and associates and higher interest paid on long-term debt and debentures.

Year-to-Date Financial Highlights

The company's financial highlights reflect the following major items for the year ended Dec. 31, 2023 compared with the year ended Dec. 31, 2022:

• Revenue increased by $5.2-million, primarily due to higher base management fees in Private Markets from higher average AUM, higher performance fees, and higher other revenues, partly offset by 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.
• Adjusted EBITDA increased by $14.1-million, or 7.4 per cent primarily due to higher revenues, lower employee compensation costs, lower sub-advisory fees and lower professional fees, partly offset by higher travel and marketing costs.
• Adjusted net earnings increased by $4.3-million, or 3.5 per cent primarily due to higher revenues, lower SG&A, excluding share-based compensation, and favourable foreign exchange revaluation, partly offset by higher interest on long-term debt and higher income tax expense.
• Net earnings attributable to the company's shareholders increased by $33.1-million. Items which impacted the year ended Dec. 31, 2023 compared with the same period last year included:
  • A higher contribution from adjusted EBITDA of $14.1-million;
  • Insurance proceeds of $4.4-million received during the year related to a certain claim
  • A provision expense of $3.7-million in the current year compared with a provision expense of $16-million in the prior year related to certain claims; and
  • A gain on sale of funds to New York Life investments of $5.1-million, in connection with the strategic distribution partnership entered into in the first quarter of 2023.
  • Interest on lease liabilities, foreign exchange revaluation and other financial charges was $7.1-million lower, primarily due to favourable foreign exchange revaluation.
  • Amortization and depreciation was $3.7-million lower due to certain intangible assets being fully amortized in the prior year.
  • Partly offset by $12.1-million of higher interest on long-term debt and debentures and $9.5-million of higher income tax expense.

Subsequent to Dec. 31, 2023

Leadership Announcements

The company appointed Maxime Menard as President and CEO, Fiera Canada and Global Private Wealth, effective January 8, 2024. Mr. Menard will collaborate closely with the Public Markets and Private Markets leadership teams to ensure alignment with the company's strategic priorities. This completes the build-out of our regionalized distribution model which will drive closer proximity to clients, better knowledge of local markets and executive leadership for all employees in such regions. With expanded regional capabilities, Fiera Capital has a solid plan for growth by increasing sales and distribution resources, including entering into and opening offices in new key markets in order to develop additional business opportunities.

Dividend Declared

On February 27, 2024, the Board of Directors declared a quarterly dividend of $0.215 per Class A Share and Class B Share, payable on April 11, 2024 to shareholders of record at the close of business on March 14, 2024. The dividend is an eligible dividend for income tax purposes.

Additional details relating to the company's operating results can be found in the company Management's Discussion and Analysis for the three months and year ended Dec. 31, 2023 available on our Investor Relations web page under Financial Documents - Quarterly Results - Management's Discussion and Analysis.

Conference Call

Live

Fiera Capital will hold a conference call at 10:00 a.m. (ET) on Wednesday, February 28, 2024, 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.

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 March 6, 2024 by dialing 1-888-390-0541 (toll free), access code 504770 followed by the number sign (#).

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 Corporation

Fiera Capital is a leading independent asset management firm with a growing global presence. The company delivers customized and multi-asset 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 our mission of being at the forefront of investment management science to create sustainable wealth for clients. Fiera Capital trades under the ticker FSZ on the Toronto Stock Exchange.

We seek Safe Harbor.