Fiera Capital (FSZ) Q4 2023 earnings summary

Executive summary

• FY 2023 revenue was $686.6M, adjusted EBITDA was $205.9M and adjusted net earnings were $126.1M; year-end AUM was $161.7B, up $3.2B YoY.

• Q4 AUM rose $6.4B QoQ to $161.7B as $11.6B of favourable market impact partly offset $5.0B of negative organic growth, primarily PineStone-related outflows.

• Strong Q4 performance fees lifted revenue and profitability; FY free cash flow covered dividend payments as net debt was reduced.

Financial highlights

• Q4 revenue was $211.0M, up 14.2% YoY; performance fees increased $20M to $42M while base management fees remained $147M.

• Q4 adjusted EBITDA was $77.6M, up 47.0% YoY, with a 36.8% margin versus 28.6%; FY adjusted EBITDA was $205.9M, up 7.4%.

• Q4 net earnings attributable to shareholders were $39.4M versus $2.5M; adjusted net earnings were $50.2M versus $33.1M.

• FY net earnings were $58.5M versus $25.4M; adjusted net earnings were $126.1M versus $121.8M.

• Q4 diluted EPS was $0.30 and adjusted diluted EPS was $0.37; FY adjusted diluted EPS was $1.00 versus $1.17.

Outlook and guidance

• 2024 growth plans include expanding sales and distribution resources across four regions, entering new markets and opening additional offices, including in Switzerland and Abu Dhabi.

• A large Canadian Financial Intermediary client is expected to redirect another $3.1B of PineStone-sub-advised AUM in H1 2024; other lost mandates transferring directly to PineStone could reduce AUM by $2B–$3B annually.

• $1.0B of committed, undeployed Private Markets capital at year-end provides a pipeline for future investment opportunities.