Canaccord Genuity Group Inc. (CF) Earnings Call Transcript & Summary

Thank you. Please vote now. [Voting]

Our final item of business, which is new this year, is a nonbinding advisory resolution on the approach to executive compensation disclosed in our management information circular. The Board considers this to be an important part of our shareholder engagement process, and we commit to reviewing the results of the vote when considering further decisions related to executive compensation. I propose an ordinary resolution in the form set out in the proxy and the information circular. Jackie, have we received any comments or questions online?

We have not, Chair. Thank you.

Great. Please vote now then. [Voting]

That concludes the official portion of our annual meeting. I will pause for a moment while voting concludes. [Voting]

Thank you. I now declare voting on all matters closed and declare the formal meeting concluded.

Before I pass things over to Dan, I'd like to say a few words about the advancements we have made as an organization. First and foremost, I am immensely proud of our employees across the company for their collective efforts throughout what continues to be a historic period for our business and our industry. The exceptional financial and operating results that we have delivered reflect the culmination of their long-standing commitment to and execution of the consistent strategy that we set for our business all while upholding our strong culture of partnership and shareholder alignment. In a year of record revenue and profitability, we have proven that our platform can support substantially increased business activities over a relatively fixed cost base. As a result, we have established a higher foundation from which to grow our long-term earnings. Underpinning our earnings growth is a strong and properly managed balance sheet and a disciplined risk management framework. The Board has made it a strong priority to deploy capital in ways that increase the long-term value of our business and optimize value for our fellow shareholders. While substantially higher capital markets activities increased the demands on our capital throughout the fiscal year, we remained active in our share buyback programs, and we look forward to continued buybacks over the coming year. The continued growth and profitability of our global wealth management businesses has supported steady dividend growth over the past 3 years with our most substantial increases taking place in fiscal 2021. We also reduced our average diluted common share count by 15% over the fiscal year. By committing to investing in our people and strengthening our culture, we have enhanced our operational resilience and made CG an increasingly stronger business. We will always be firmly rooted in our core CG values, but we also recognize that our company and our industry have evolved. We are acutely aware that generating sustainable value for our shareholders requires us to advance our strategic priorities in ways that provide benefits for both business and our communities. The Board is committed to operating with a greater consciousness of our impact on our people, our communities and the planet. Despite the distance between us, we have continued to make excellent progress in advancing our diversity and inclusion priorities across the organization. We have articulated our commitment to the advancement of women, and we have also taken a clear stand against discrimination and racism in all its forms through numerous activities, including our involvement with the Black North Initiative and various LGBTQ organizations. Our efforts are more than a social imperative. We know that our best long-term performance as an organization can only come from an inclusive culture, one that attracts the most talented people and welcomes diverse perspectives and ideas while supporting them in achieving their ambitions. As our company has evolved, the Board has continued to prioritize strong governance and diverse perspectives. I'd like to officially welcome Jo-Anne O'Connor, our incoming independent director. With this appointment, our Board of Directors now has 40% female representation with 50% female representation at the independent level. Jo-Anne brings more than 35 years of financial services and leadership experience. She joins the Board at an exciting time for Canaccord Genuity, and we very much look forward to working with her as we further our growth and progress on behalf of our stakeholders. On behalf of my fellow directors, I would also like to thank Dan and our global operating committee for everything they have done to lead our business through the pandemic while continuing to position our company for the future. Our resilience is a testament to the outstanding efforts of this group and the teams that they lead. And finally, thank you to everyone that has joined us today. We appreciate your continued support. With that, I will turn things over to our President and CEO, Dan Daviau.

Thank you, David, and welcome, everyone. Jo-Anne, it is my pleasure to officially welcome you to the Board of Directors. I'll echo David's comments that we look forward to the benefit of your experience and insights as we continue to generate lasting value for our shareholders. I'd like to begin by extending my deep appreciation to our entire CG team. Your unwavering commitment to helping our clients and each other through an extended period of dislocation has been instrumental to the outstanding results that we continue to see in our business. You've all played a critical role in helping our clients navigate pandemic-related challenges but also in identifying opportunities to innovate and enhance the client experience while increasing the value of our business. In fiscal 2021, we delivered our strongest financial performance on record with record contributions from both our capital markets and wealth management segments. What is equally impressive is the breadth and quality of the operating performance that was achieved across the organization. Over the fiscal year, we operated at a higher level than any other period in our history when measured by employee productivity, revenue, net income, profit margins and earnings per share. Our stable global franchise and enhanced profit margins have allowed us to deliver stronger value for our shareholders. Factoring in the redemption of our convertible debentures, our fiscal 2021 capital deployment initiatives will result in a return of $192 million to CF shareholders and debenture holders. As David mentioned, we increased our dividend twice over the fiscal year, and the Q1 dividend we announced this week has remained in line with the levels set forth in our fourth quarter. Without a doubt, the extraordinary market backdrop that benefited small and mid-cap industries and investors was an important element of the revenue and profitability growth that we have been able to achieve over the fiscal year. Most importantly, by helping our clients achieve positive outcomes, we have captured market share across regions and verticals, further entrenching our position as a leading mid-market investment bank and wealth management firm in each of our key geographies. While 2021 was undoubtedly an outlier year for our capital markets activities, our global wealth management businesses continued to deliver impressive growth and margin improvement. And this was also evidenced in the first quarter results that were released on Tuesday. Our strength as an organization is rooted in our clear understanding of what we want to be and how we want to get there. We set out to make CG the brand that entrepreneurs know will provide the best support at every stage of the business cycle, and we believe we've achieved this. Next week, we are hosting our 41st Annual Global Growth Conference, and it will be our second year hosting this event in an entirely virtual environment. Despite the change in format, there has been no change in our commitment to providing an unparalleled experience for our clients. We've set another new record for participation with over 600 growth companies, innovators and entrepreneurs presenting from across North America, the U.K. and Europe and Australia. Like you, we look forward to a return to normal life, reuniting with friends and family and the freedom to travel and meet with colleagues and clients again. But we know that the recovery doesn't just mean returning to past practices. We are taking the valuable lessons learned and countless ways we've adapted and innovated and moving forward to something better. Environmental, social and governance considerations will continue to play an important role in our long-term strategy as we remain steadfast in our commitment to a sustainable future. We are also taking a leadership role in helping our clients achieve their sustainability goals through our offerings in both capital markets and wealth management. Technology played a critical role in our resilience through the pandemic, and it will continue to be critical in our long-term growth. We have been driving digital transformation throughout the organization for several years with a particular emphasis on our wealth management businesses and the infrastructure that supports our firm-wide business and risk management activities. Leveraging technology not only helps us improve our client offering and conduct business more efficiently, but also provides us with sophisticated and reliable insights that enable faster and better decisions. While the pandemic is not totally behind us, and we expect that certain market tailwinds will moderate in coming quarters, it is impossible not to get excited about the outlook for our business. We have a sustainably stronger global wealth management franchise and a market-leading capital markets franchise in our core sectors and geographies with compelling prospects for expanding our product capabilities. Several factors point towards the continuance of a supportive marketplace for growth and value stocks in our core mid-market sectors. While ECM and trading activity levels have begun to moderate, we are delivering on a strong pipeline of higher-margin advisory activities. Perhaps most importantly, we begin the fiscal year with fewer common shares outstanding on a fully diluted basis. And we expect continued buyback activity over the coming year, which will support enhanced earnings per share in any market backdrop. Put simply, the business we have built is clearly demonstrating that we will have higher highs in buoyant markets and higher lows in softer markets. We remain committed to operating a highly focused business that is thoughtful in the way it deploys capital and one where all employees are aligned with shareholders in their incentives. Our strong financial position provides us with the flexibility to operate effectively and harness opportunities for growth as we help our clients manage through any new market challenges. I am confident that the strategic decisions that we have made to transform our business mix, coupled with disciplined investments in our growth and relentless dedication of our teams, will continue to deliver sustainable long-term value for our fellow shareholders. In closing, I'd like to thank our Board of Directors for their wise counsel and support as we navigated the unique confluence of challenges and opportunities throughout this historic period. And to my fellow shareholders, thank you for your continued support. In everything we do, we are driven to increase the long-term value of our business and create enduring value for our shareholders. And with that, David, Don and I will be pleased to take your questions.

There are no questions, Chair.

David, are you...

Yes. That concludes the AGM. So thank you very much, everyone.

Thank you.