Onex Reports Third-Quarter 2020 Results
13 Novembro 2020 - 9:00AM
Onex Corporation (TSX: ONEX) today announced its financial results
for the third-quarter and nine-months ended September 30, 2020 and
an update on matters following quarter end.
“Building on our portfolio improvements last
quarter, we continue to demonstrate increased momentum in our
private equity and credit portfolios, resulting in a very good
quarter for Onex,” said Gerry Schwartz, Chairman and Chief
Executive Officer of Onex. “Earlier this quarter, I was delighted
to announce Bobby Le Blanc as President of Onex, in recognition of
his leadership ability and the positive role he continues to play
in our success.”
Highlights
- Onex reported
segment net earnings for the three months ended September 30, 2020
of $515 million ($5.39 per fully diluted share), comprised of
net earnings of $492 million from its investing segment and net
earnings of $23 million from its asset and wealth management
segment.
- Onex reported
segment net earnings for the nine-months ended September 30, 2020
of $152 million ($1.55 per fully diluted share), comprised of
net earnings of $164 million from its investing segment and a net
loss of $12 million from its asset and wealth management
segment.
- Onex’ private
equity investments generated gross returns of 14% and 9% during the
three and nine-months ended September 30, 2020, respectively.
- Onex’ total
shareholder capital per fully diluted share increased by
approximately 10% in the third-quarter to $74.04 (C$98.76),
primarily driven by net increases in Onex’ private equity and
credit investments.
- In August, Onex
Partners sold approximately 32.0 million shares of SIG Combibloc
Group (SWX: SIGN) at a price of CHF 15.50 per share. Onex’ share of
the net proceeds was $162 million as a Limited Partner in Onex
Partners IV and as a co-investor.
- In August, Onex
invested $35 million in Onex Partners V as part of the Fund’s
investment in preferred shares of Emerald Holdings, Inc. (NYSE:
EEX). This attractively valued investment supports a business with
a solid collection of assets with an opportunity remaining to
improve operations.
- In September,
Onex invested $64 million in Onex Partners V as part of the fund’s
investment in Independent Clinical Services Group Ltd.
- In October, Onex
Partners agreed to make a majority investment in OneDigital, a
leading U.S. provider of employee benefits insurance brokerage and
retirement consulting services. The transaction values OneDigital
at $2.65 billion. The new equity investment of approximately $725
million will be made by Onex Partners V, Onex’ share will be
approximately $200 million.
- Onex deployed
$444 million (C$595 million) during the first ten months of 2020 by
repurchasing 9,780,411 Subordinate Voting Shares at an average cost
per share of C$60.86.
Financial
Results
For the three-months ended September 30, 2020,
total segment net earnings were $515 million ($5.39 per fully
diluted share). Investing segment earnings of $492 million ($5.17
per fully diluted share) were primarily driven by net gains on
Onex’ private equity and credit investments consistent with the
recovery in those markets during the quarter. Third-quarter asset
and wealth management segment earnings of $23 million ($0.22 per
fully diluted share) were driven by management and advisory fees as
well as an increase in unrealized carried interest.
For the nine-months ended September 30, 2020,
total segment net earnings were $152 million ($1.55 per fully
diluted share). Investing segment earnings of $164 million ($1.67
per fully diluted share) were primarily driven by a net gain on
Onex’ private equity investments which reflects the overall
resiliency and diversification of the operating businesses that
Onex has invested in. The asset and wealth management segment loss
for the nine-months ended September 30, 2020 was $12 million ($0.12
per fully diluted share) driven primarily by a net reversal of
unrealized carried interest.
Enclosed are supplementary schedules and
non-IFRS measures related to Onex’ consolidated net earnings for
the three- and nine-months ended September 30, 2020, shareholder
capital at September 30, 2020 and cash and near-cash changes for
the nine-months ended September 30, 2020. The financial statements
prepared in accordance with International Financial Reporting
Standards (IFRS), including Management’s Discussion and Analysis of
the results, are posted on Onex’ website, www.onex.com, and are
also available on SEDAR at www.sedar.com. A supplemental
information package with additional information is available on
Onex’ website, www.onex.com.
Webcast
Onex management will host a webcast to review
Onex’ third-quarter 2020 results on Friday, November 13 at 11:00
a.m. ET. The webcast will be available in listen-only mode from the
Presentations and Events section of Onex’ website,
https://ir.onex.com/events-and-presentations. A 90-day on-line
replay will be available shortly following the completion of
the event.
About Onex
Founded in 1984, Onex invests and manages
capital on behalf of its shareholders, institutional investors and
high net worth clients from around the world. Onex’ platforms
include: Onex Partners, private equity funds focused on larger
opportunities in North America and Europe; ONCAP, private equity
funds focused on middle market and smaller opportunities in North
America; Onex Credit, which manages primarily non-investment grade
debt through collateralized loan obligations, senior loan
strategies and other private credit strategies; and Gluskin Sheff’s
wealth management services including its actively managed public
equity and public credit funds. In total, Onex has approximately
$36.6 billion of assets under management, of which
approximately $6.7 billion is its own shareholder capital. With
offices in Toronto, New York, New Jersey and London, Onex and its
experienced management teams are collectively the largest investors
across Onex’ platforms.
The Onex Partners and ONCAP businesses have
assets of $36 billion, generate annual revenues of $22 billion and
employ approximately 149,000 people worldwide. Onex shares trade on
the Toronto Stock Exchange under the stock symbol ONEX. For more
information on Onex, visit its website at www.onex.com. Onex’
security filings can also be accessed at www.sedar.com.
Forward-Looking Statements
This press release may contain, without
limitation, statements concerning possible or assumed future
operations, performance or results preceded by, followed by or that
include words such as “believes”, “expects”, “potential”,
“anticipates”, “estimates”, “intends”, “plans” and words of similar
connotation, which would constitute forward-looking statements.
Forward-looking statements are not guarantees. The reader should
not place undue reliance on forward-looking statements and
information because they involve significant and diverse risks and
uncertainties that may cause actual operations, performance or
results to be materially different from those indicated in these
forward-looking statements. Except as may be required by Canadian
securities law, Onex is under no obligation to update any
forward-looking statements contained herein should material facts
change due to new information, future events or other factors.
These cautionary statements expressly qualify all forward-looking
statements in this press release.
Non-GAAP Financial Measures
This press release may contain non-GAAP
financial measures which have been calculated using methodologies
that are not in accordance with IFRS. The presentation of financial
measures in this manner does not have a standardized meaning
prescribed under IFRS and is therefore unlikely to be comparable to
similar financial measures presented by other companies. Onex
management believes these financial measures provide helpful
information to investors. Reconciliations of the non-GAAP financial
measures to information contained in the consolidated financial
statements have been presented where practical.
For
Further
InformationJill
HomenukManaging Director, Shareholder Relations and Communications
Tel: +1 416.362.7711
Supplementary
and Non-IFRS Measures
Summarized Consolidated Net
Earnings
(Loss)
(Unaudited) ($ millions except per share amounts)Three months ended
September 30, 2020 |
|
Investing(i) |
|
|
Asset
andWealthManagement(i) |
|
|
Total |
|
Segment income |
$ |
492 |
|
$ |
93 |
|
$ |
585 |
|
Segment expenses |
|
- |
|
|
(70) |
|
|
(70) |
|
Segment net earnings |
$ |
492 |
|
$ |
23 |
|
$ |
515 |
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation recovery |
|
|
|
|
|
|
|
3 |
|
Amortization of property and equipment and other intangible assets,
excluding right-of-use assets |
|
|
|
|
|
|
|
(12) |
|
Integration expense |
|
|
|
|
|
|
|
(5) |
|
Net earnings |
|
|
|
|
|
|
$ |
501 |
|
|
|
|
|
|
|
|
|
|
|
Segment net earnings per share(ii) |
$ |
5.17 |
|
$ |
0.22 |
|
$ |
5.39 |
|
Net earnings per
share |
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
|
|
$ |
5.30 |
|
Diluted |
|
|
|
|
|
|
$ |
5.29 |
|
(i) |
Refer to the unaudited interim consolidated financial statements
for segment presentation and allocation considerations. |
(ii) |
Calculated on a fully diluted basis. |
(Unaudited) ($ millions except per share amounts)Nine months ended
September 30, 2020 |
|
Investing(i) |
|
|
Asset andWealthManagement(i) |
|
|
Total |
|
Segment income |
$ |
164 |
|
$ |
182 |
|
$ |
346 |
|
Segment expenses |
|
- |
|
|
(194) |
|
|
(194) |
|
Segment net earnings (loss) |
$ |
164 |
|
$ |
(12) |
|
$ |
152 |
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation recovery |
|
|
|
|
|
|
|
108 |
|
Amortization of property and equipment and other intangible assets,
excluding right-of-use assets |
|
|
|
|
|
|
|
(35) |
|
Integration expenseImpairment of goodwill |
|
|
|
|
|
|
|
(7)(85) |
|
Net earnings |
|
|
|
|
|
|
$ |
133 |
|
|
|
|
|
|
|
|
|
|
|
Segment net earnings (loss) per share(ii) |
$ |
1.67 |
|
$ |
(0.12) |
|
$ |
1.55 |
|
Net earnings per
share |
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
|
|
$ |
1.36 |
|
Diluted |
|
|
|
|
|
|
$ |
1.36 |
|
(i) |
Refer to the unaudited interim consolidated financial statements
for segment presentation and allocation considerations. |
(ii) |
Calculated on a fully diluted basis. |
Shareholder Capital
(Unaudited) ($ millions except per share amounts)As at September
30, 2020 |
|
Investing |
|
|
Asset and
WealthManagement |
|
Total |
Total segmented assets |
$ |
6,260 |
|
$ |
780 |
|
$ |
7,040 |
|
Accounts payable and accrued liabilities |
|
- |
|
|
(33) |
|
|
(33) |
|
Accrued compensation |
|
- |
|
|
(86) |
|
|
(86) |
|
Lease and other liabilities |
|
- |
|
|
(118) |
|
|
(118) |
|
DSU hedge assets |
|
- |
|
|
(61) |
|
|
(61) |
|
Total shareholder capital(i) |
$ |
6,260 |
|
$ |
482 |
|
$ |
6,742 |
|
Shareholder capital per
share(i)(ii) |
$ |
68.74 |
|
$ |
5.30 |
|
$ |
74.04 |
|
(i) |
Shareholder capital and shareholder capital per share are non-GAAP
financial measures which have been calculated using methodologies
that are not in accordance with IFRS. A reconciliation of total
segmented assets to shareholder capital is presented in this table.
The presentation of financial measures in this manner does not have
a standardized meaning prescribed under IFRS and is therefore
unlikely to be comparable to similar financial measures presented
by other companies. Management believes that shareholder capital is
useful to investors as the metric is used, in part, to assess Onex’
performance. |
(ii) |
Calculated on a fully diluted basis using the treasury stock
method. Fully diluted shares for shareholder capital per share were
91.1 million at September 30, 2020. |
Cash and Near-Cash
The table below provides a reconciliation of the
change in cash and near-cash from December 31, 2019 to September
30, 2020.
(Unaudited) ($ millions) |
|
|
Cash and near-cash on hand at December 31, 2019(i) |
$ |
1,842 |
|
Private equity realizations |
|
582 |
|
Private equity investments |
|
(325) |
|
Real estate distributions |
|
15 |
|
Net Onex Credit strategies investment activity, including warehouse
facilities |
|
(53) |
|
Onex share repurchases, options exercised, dividends and director
DSU redemption |
|
(472) |
|
Net other, including capital expenditures, management fees,
operating costs and treasury income |
|
12 |
|
Cash and near-cash on hand at
September 30,
2020(i) |
$ |
1,601 |
|
(i) |
Includes $934 million (December 31, 2019 – $395 million) of
treasury investments, $96 million (December 31, 2019 – $97 million)
invested in an Onex Credit unlevered senior secured loan strategy
fund and $192 million (December 31, 2019 – $190 million) of
management fees. |
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