CI Financial Corp.

ladies and gentlemen thank you for standing by welcome to the ci financial first quarter 2024 earnings conference call all lines have been placed on mute during a presentation portion of the call with an opportunity for question and answer at the end if you would like to ask a question please press start followed by one on your telephone keypad i would now like to have this conference call over to our host tat mccalpine ceo of ci financial please go ahead

Good morning, everyone, and welcome to CI Financial's first quarter earnings call. Joining me is our CFO, Amit Muni. Together, we will cover the following. An overview of the highlights of the quarter, a review of our financial performance during the quarter, a discussion on our near-term obligations and the progress separating our Canadian businesses and Corriant, an update on the progress against our 2024 strategic initiatives, and we will take your questions. Our adjusted EPS of 86 cents per share is up 6% quarter over quarter, reflecting the strength in capital markets, growth in the U.S. business, and the benefit of recent share repurchases. Adjusted EBITDA per share, attributable to shareholders, increased 16% from the first quarter last year and 6% quarter over quarter to a record of $1.60 per share. We generated free cash flow of $1.01 per share. Capital allocation remained active during the quarter. We deployed $51 million to settle existing M&A liabilities. We returned $31 million to shareholders through our dividend, and this was the first quarter that investors benefited from the 11% dividend increase that we announced last year. In April, we completed the $85 million substantial issuer bid announced in February, repurchasing approximately 4.9 million shares. The board also declared a dividend of 20 cents per share payable in October, reflecting the normal cadence of declaring dividends one quarter ahead. Our Canadian retail asset management business experienced 1.3 billion in redemptions in the quarter, driven by three factors. One, 40% of our assets are in balance funds, which is the category with the highest redemptions in the industry in the quarter. Two, investors began to anticipate the Bank of Canada cutting rates which resulted in slowing allocations to cash-like products. And three, the first quarter is normally a slower flow quarter for CI. Our wealth businesses in both Canada and the U.S. continue to generate positive inflows in the first quarter, again highlighting the strength and resiliency of those businesses. We continue to execute against our three strategic priorities to modernize asset management, expand wealth management, and globalize the company. Investment performance across the platform remains strong, with nearly three-quarters of our AUM outperforming our peers on a three-year basis. The sustained strong performance highlights the impact that the transformation we made from a series of competing boutiques into an integrated global asset manager has had for our clients. We improved the positioning of our product offering, which resulted in 13 fund mergers and the launch of several innovative products, including our global AI ETF earlier this week. We continue to have success growing and servicing high and ultra high net worth clients in Canada, and CI's Northwood Family Office was named the best multifamily office in Canada by Family Wealth Report. Corian had another strong quarter, delivering adjusted EBITDA growth of 8% compared to the fourth quarter. I'll now turn the call over to Amit to discuss our financial results.

Thank you, Kurt, and good morning, everyone. Turning to slide four, our global assets ended the quarter up 7% to $474 billion, driven by positive markets across all three segments, as well as net inflows into our U.S. and Canadian wealth segments. Turning to our financial results on the next slide, I'll focus my comments on our adjusted results. Adjusted net income for the quarter increased to $133 million, or 86 cents per share. Adjusted EBITDA also increased to $246 million for the quarter, and our adjusted EBITDA margin was 41.4%. Turning to the next slide, I'll highlight the segment results. Asset management EBITDA increased to $160 million and margins were 61.3%. Canada wealth EBITDA was roughly flat at $20 million and margins were 9.1%. The slight decreases in margins were due to seasonal expenses related to compensation. Also recall we noted last quarter that margins in Q4 were slightly elevated due to year-end adjustments to incentive compensation. In the U.S., Pre-NCI EBITDA increased 8% to 108 million, and margins expanded to 43%. EBITDA increased 26% from the first quarter of last year, which is greater than the investor group's preferred return. Turning to the next slide, I'll walk through the changes in revenue. Revenues on a comparable basis increased 5% to 699 million, Asset management revenues were up 7 million as the effect of net outflows and fairly flat fee capture were offset by higher average AUM due to positive markets. Canada and U.S. wealth management fees increased due to higher asset levels from positive flows and positive markets. There were no acquisitions during the quarter. Turning to the next slide, we can review major changes in our expenses. On a comparable basis, total expenses increased 5%. SG&A increased primarily due to seasonal taxes from bonus payments for last year. Advisor and dealer fees increased due to higher revenue earned in our Canada wealth segment. Interest expense increased due to additional borrowings to fund acquisition-related obligation payments and the substantial issuer bid. Depreciation and amortization increased due to higher depreciation of hardware and computer equipment as part of integration and new leased office space at Coriant. Looking forward for the next few quarters, we anticipate interest in lease finance expenses to be in the range of $50 to $51 million in the second quarter due to higher balances on our credit facility due to settling of acquisition-related payments and U.S. lease costs. We also anticipate higher depreciation and amortization, reflecting the impact from integration capital expenditures. Lastly, SG&A costs in our Canada wealth segment are expected to be in the 1 to 2 million range higher in Q2 as part of investing in our custody platform. We expect cost synergies from these investments in early 2025. More information is in the appendix of the presentation. Turning to slide 9, we can review our debt and leverage. Net debt was $3.6 billion for the quarter due to payoffs of our acquisition-related liabilities and negative non-cash currency mark-to-market on our U.S.-denominated debt. Our net leverage was 3.5 times on a reported basis. The fair value market value of our debt at the end of the quarter was $2.9 billion, which results in a net leverage ratio of 2.8 times. Thank you, and let me turn the call back to Kurt.