Sprott Inc. · TSX:SII
Sprott — Investor Presentation (March 2021)
28 slides from Sprott's investor presentation, March 2021
Slide 1: Sprott Inc. Investor Presentation
Sprott Inc. Investor Presentation March 2021 NYSE/TSX:SII
Slide 2: Advisories: Forward-Looking Statements
Advisories Forward-Looking Statements Certain statements in this presentation contain forward-looking information and forward-looking statements (collectively, "forward-looking statements") within the meaning of applicable Canadian and U.S. securities laws. The use of any of the words “expect”, “ant
Slide 3: Advisories: Non-IFRS Financial Measures
Advisories Non-IFRS Financial Measures This presentation contains certain non-IFRS financial measures and key performance indicators, including EBITDA, Adjusted EBITDA, Adjusted base EBITDA, AUM, uncalled committed capital, and operating margin. Sprott measures the success of its business using thes
Slide 4: Corporate Overview
Corporate Overview • A global leader in precious metals investment management • An alternative asset manager offering strategies across the spectrum of mining investments Publicly-listed Based in on Toronto with $17.4B NYSE >150 In AUM (1) & TSX professionals globally (Ticker: SII) (1) As of Decembe
Slide 5: Specialized Asset Manager with Royalty Co. Attributes
Specialized Asset Manager with Royalty Co. Attributes Sprott’s business model provides shareholders with increasing operating income from gold asset management activities: • Stable and growing revenues from physical trusts business • Significant upside potential through managed equities platform • G
Slide 6: The Global Leader in Precious Metals Investments
The Global Leader in Precious Metals Investments $17.4B in AUM(1) Exchange Listed Managed Lending Brokerage Products Equities $12.2B AUM $2.8B AUM $1.0B AUM • Physical Bullion Trusts • Flagship U.S. mutual • Bespoke credit • Capital raising and (NYSE Arca Listed) fund is Sprott Gold investments to m
Slide 7: Executive Leadership
Executive Leadership Strong alignment between management, shareholders and clients o Significant employee equity ownership o Portfolio managers and sponsors are material investors in all strategies • Compensation model is share-based and includes fund performance component • All funds operate in acc
Slide 8: Track Record of Sector Consolidation
Track Record of Sector Consolidation Since 2016, Sprott has added $6 billion in AUM through three significant transactions 2016 2017 2018 2020 Consolidates Sells Diversified Acquires Acquires Central GoldTrust into Assets to Focus on Central Fund of Tocqueville Gold Sprott Physical Gold Precious Met
Slide 9: Investment Strategies
Investment Strategies Sprott
Slide 10: Exchange Listed Products: Overview
Exchange Listed Products: Overview Sprott manages more than $12.2 billion through 6 exchange-listed strategies 4 2 closed-end funds mining equity ETFs • Highly-scalable platform o Approximately 150,000 clients o Significant leverage to precious metals prices o Well-positioned to add complementary st
Slide 11: Exchange Listed Products: Physical Bullion Trusts
Exchange Listed Products: Physical Bullion Trusts Physical Physical Physical Physical Silver Gold & Silver Trust Platinum & Palladium Gold Trust Trust Trust PHYS CEF PSLV SPPP $4.9B AUM $4.4B AUM $2.4B AUM $0.1B AUM 3rd Largest Bullion Manager in North America All figures as at December 31, 2020 Spr
Slide 12: Exchange Listed Products: Physical Bullion
Exchange Listed Products: Physical Bullion • Investor demand in Q4 remained robust • AUM as of December 31, 2020: +80% from December 31, 2019 • Year-to-date sales: +$2.8 billion AUM (in $billions) Total Physical Trust AUM 2020 YTD Physical Trust Sales (in millions) Sources of growth (in millions) +
Slide 13: Managed Equities: Overview
Managed Equities: Overview Sprott’s gold investment team is one of the largest and most experienced in the sector • Sprott acquired the Tocqueville Gold Strategies in January 2020 to create an industry leader in gold equity investments • In-house technical team provides additional research and due d
Slide 14: Sprott Lending Strategy: Overview
Sprott Lending Strategy: Overview Track Record • Sprott manages dedicated private resource lending funds for institutional clients including pensions, sovereign wealth funds and foundations • Highly-specialized, difficult to replicate strategy • Focused on providing loan facilities and streams to co
Slide 15: Brokerage: Overview
Brokerage: Overview • Private client and investment dealer business in US and Canada • Valuable product seeding capability Conversion to fee- Institutional and based model underway corporate advisory Growing profitability and underwriting Sprott Inc. | 15
Slide 16: Environmental, Social and Governance (ESG) Highlights
Environmental, Social and Governance (ESG) Highlights • ESG one of many critical aspects of Sprott’s investment process • Sprott has signed the UN Principles for Responsible Investing and is a member of the Responsible Investment Association (RIA) of Canada • Sprott will use commercially reasonable
Slide 17: Financial Highlights
Financial Highlights Sprott
Slide 18: Historical Performance Summary
Historical Performance Summary 1-year performance 5-year performance + 88% 11% + 224% 11% AUM AUM Return on capital Return on capital from Dec 31, 2015 from Dec 31, 2019 as at Dec 31, 2020 as at Dec 31, 2020 2020: $17.4 billion 2020: $17.4 billion 2019: 7% 2015: 2% 2015: $5.4 billion 2019: $9.3 bill
Slide 19: Historical Performance Summary (Continued)
Historical Performance Summary (Contined) (in millions of dollars) Sources of adjusted base EBITDA growth over the last five years (1) (2) (3) (4) (1) Inorganic growth: Acquisition of CFCL and Tocqueville gold strategies. Organic growth: enhancement and build out of our global marketing, sales and a
Slide 20: AUM Summary
AUM Summary 17.4 1.3 1.0 2.8 9.3 0.7 7.8 0.8 0.7 6.9 0.4 1.0 0.7 5.8 0.8 5.4 12.2 0.8 0.7 0.2 2.9 1.1 2.5 6.8 6.0 3.3 3.7 2.1 Dec. 31, 2015 Dec. 31, 2016 Dec. 31, 2017 Dec. 31, 2018 Dec. 31, 2019 Dec. 31, 2020 CAGR: 26% Exchange Listed Products Managed Equities Lending Other Sprott Inc. | 20
Slide 21: Earnings Summary
Earnings Summary (in millions of dollars unless otherwise noted) Current Earnings Growth(1) Historical Operating Margin Growth 14 44.2 12.0 12 49% 10 9.2 30.9 31.3 8.2 7.6 7.4 29.0 8 6.9 7.0 6 4 18.2 13.0 2 - Q1 Q2 Q3 Q4 Q1 Q2 Q3 3% '19 '19 '19 '19 '20 '20 '20 2015 2016 2017 2018 2019 2020 2015 2016
Slide 22: Balance Sheet & Liquidity
Balance Sheet & Liquidity 11% Generated $70MM $82MM in $39.8MM in free committed credit return on capital co-investments cash flows facility Generating superior Including net Generating superior Available to fund return on investment performance fees returns and cash flow. organic and inorganic for
Slide 23: Fee Based Business Analysis
Fee Based Business Analysis Our fee based businesses accounted for 86% of our total business segment EBITDA in 2020 (in millions of dollars) Adjusted Base EBITDA sensitivity to a 10% change in average AUM Sprott Inc. | 23
Slide 24: Conclusion
Conclusion Sprott
Slide 25: Growth Opportunities
Growth Opportunities Deeper Distribution Tuck-in New penetration of in new acquisitions Strategies U.S. market geographies U.S. investors are Expanding Tuck-in acquisitions Potential to add among the world’s presence in of complementary new strategies in least exposed to gold Europe and Asia funds o
Slide 26: Contact Information
Contact Information Glen Williams Managing Director, Investor and Institutional Client Relations; Head, Corporate Communications T 416 943 4394 [email protected] Sprott Inc. | 26
Slide 27: Appendices
Appendices Sprott
Slide 28: Non-IFRS Financial Measures Reconciliation
Non-IFRS Financial Measures Reconciliation (in millions $, unless otherwise noted) 3 months ended 12 months ended Dec. 31 Dec. 31 Dec. 31 Dec. 31 2020 2019 2020 2019 Net income for the periods 6.7 1.4 27.0 10.2 Adjustments: Interest expense 0.3 0.3 1.2 1.0 Provision for income taxes 2.6 0.9 7.7 2.7