CI Financial Reports Financial Results for the Third Quarter of 2023

• Diluted EPS of ($0.08), adjusted EPS¹ of $0.81
• EBITDA of $109.5 million, adjusted EBITDA attributable to shareholders¹ of $237.8 million
• Operating cash flow of $99.9 million, free cash flow¹ of $179.4 million
• Total assets of $421.0 billion, up 22.2% from a year ago
• Repurchased 8.8 million shares, effectively completing normal course issuer bid
• Announcing substantial issuer bid to repurchase up to $100 million in shares
• Rebranded U.S. wealth management business to Corient, giving it a unified identity
• Acquired Intercontinental Wealth Advisors of San Antonio, Texas, adding $2.3 billion in assets
• Paid $30.5 million in dividends at $0.18 per share; to increase to $0.20 a share in January
• Subsequent to quarter-end, completed acquisitions of Coriel Capital of Montreal and Windsor Wealth Management of Indianapolis

 All financial amounts in Canadian dollars as at September 30, 2023, unless stated otherwise.

CI Financial Corp. (“CI”) (TSX: CIX) today released financial results for the quarter ended September 30, 2023.

“The benefits of CI’s ongoing strategic transformation are demonstrated in our results and in the successful execution of important initiatives across our business lines,” said Kurt MacAlpine, CI Chief Executive Officer.

“The Canadian wealth management business is making increasingly meaningful contributions to our earnings. The conversion of the Aligned Capital assets to the CI Investment Services custody platform in late July has had an immediate impact, with this segment’s adjusted EBITDA¹ attributable to shareholders increasing 24% from the previous quarter.

“Also this month, we completed the acquisition of Coriel Capital of Montreal,” Mr. MacAlpine said. “Coriel complements our Northwood Family Office and CI Private Wealth businesses, giving us an even stronger presence in the Canadian ultra-high-net-worth wealth management sector.

“Our U.S. wealth management segment continues to show steady growth in revenues and earnings, reflecting the strength of that business. We continue to make selected acquisitions, adding high-quality businesses while expanding our geographic reach.

“The rebranding of CI Private Wealth U.S. to Corient this summer was very well received and was an important step in integrating those operations and positioning Corient for continued growth as one of the largest private wealth firms in the U.S.,” Mr. MacAlpine said.

“Our Canadian asset management business is achieving exceptional investment performance. For the three and five-years ending September 30, 2023, 75% and 80% of assets under management, respectively, delivered above-average results.² This is the best relative performance over these key time periods in the last several years and is a convincing validation of the changes we have made to transform our investment management function into a single, integrated, globally focused team.

“We repurchased 8.8 million shares in the third quarter, with the result that we have repurchased virtually all of the shares allowed under our normal course issuer bid, which expires in June 2024,” Mr. MacAlpine said. “Therefore, today we are announcing a substantial issuer bid, under which CI will offer to purchase up to $100 million of its outstanding common shares. We are taking this step because we believe that CI shares remain drastically undervalued.”

Operating and financial data highlights

1. Free cash flow, net debt, adjusted net income, adjusted earnings per share, adjusted EBITDA, adjusted net revenues and adjusted expenses are not standardized earnings measures prescribed by IFRS. For further information, see “Non-IFRS Measures” note below.
2. Reflects percentage of CI Global Asset Management assets under management that are ranked first or second quartile over the three and five-year periods ending September 30, 2023. The ranking includes Series F mutual funds only. The Morningstar Absolute Quartile Rankings are compiled by sorting the funds by returns relative to the mutual funds within the same peer group and range from 1 to 4 for all time periods covered and can change monthly. The top-performing 25% of funds in each fund category are assigned a ranking of 1, the next 25% a 2, etc.
3. Includes $31.8 billion, $32.8 billion, $33.0 billion, $31.9 billion and $33.0 billion of assets managed by CI and held by clients of advisors with CI Assante Wealth Management, CI Private Counsel (CIPC) and Aligned Capital Partners as at September 30, 2023, June 30, 2023, March 31, 2023, December 31, 2022 and September 30, 2022, respectively.
4. Includes $19.7 billion, $5.4 billion, $5.0 billion, $4.6 billion and $4.2 billion of assets advised by CI and held by clients of advisors with Assante, CIPC, CI Direct Investing and Aligned Capital as at September 30, 2023, June 30, 2023, March 31, 2023, December 31, 2022 and September 30, 2022, respectively. Prior to July 2023, custody assets were historically not included as part of reported assets for Canada wealth management or consolidated total assets.
5. Month-end USD/CAD exchange rates of 1.3582, 1.3248, 1.3515, 1.3540 and 1.3813 for September 2023, June 2023, March 2023, December 2022 and September 2022, respectively.
6. Includes 100% of flows from CI’s minority investments in Columbia Pacific Advisors, OCM Capital Partners, The Cabana Group and GLASfunds Holdings.

Financial highlights

Third quarter net loss attributable to shareholders was $12.4 million compared to net income attributable to shareholders of $51.0 million in the second quarter of 2023. Excluding non-operating items, adjusted net income attributable to shareholders¹ was $132.8 million in the third quarter, down 2.4% from the second quarter.

Third quarter total net revenues decreased 20.6% to $616.5 million in the quarter from $776.1 million in the second quarter of 2023. Excluding non-operating items, adjusted total net revenues¹ grew 2.3% to $669.6 million, driven by growth in the U.S. Wealth Management segment due to acquisitions during the quarter, as well as by the Canadian Wealth Management segment due to higher average assets. Asset Management segment revenues declined driven by lower interest income and other gains/(losses).

Third quarter total expenses decreased 10.2% to $595.9 million in the quarter from $663.6 million in the second quarter of 2023. Excluding non-operating items, adjusted total expenses¹ were up 1.3% to $445.8 million, reflecting higher SG&A due to U.S. segment acquisitions during the quarter as well as higher stock-based compensation.

Capital allocation

In the third quarter of 2023, CI repurchased 8.8 million shares at a cost of $145.3 million, for an average cost of $16.52 per share, and paid $30.5 million in dividends at a rate of $0.18 per share. The annual dividend rate of $0.72 per share represented a yield of 5.3% on CI’s closing share price of $13.64 on November 8, 2023.

The Board of Directors of CI (the “Board”) declared a quarterly dividend of $0.20 per share, payable on April 15, 2024 to shareholders of record as of March 28, 2024. As announced in August 2023, the Board declared a $0.02 increase to the quarterly dividend to $0.20 per share, payable on January 15, 2024 to shareholders of record as of December 29, 2023.

Substantial issuer bid

The Board has approved the commencement of a substantial issuer bid (the “Offer”), pursuant to which CI will offer to purchase up to $100 million in value of its outstanding common shares from holders for cash, at a single price per share (not less than $13.64 per share and not more than $15.28 per share).

The Offer will proceed by way of a “modified Dutch auction”. Shareholders wishing to tender to the Offer will be entitled to do so pursuant to: (i) auction tenders in which they will specify the number of shares being tendered at a price of not less than $13.64 and not more than $15.28 per share in increments of $0.25 per share other than an increment from $13.64 to $13.78, or (ii) purchase price tenders in which they will not specify a price per share, but will rather agree to have a specified number of shares purchased at the single purchase price determined by the modified Dutch auction.

The Offer will not be conditional upon any minimum number of shares being tendered, but will be subject to other conditions and CI will reserve the right, subject to applicable laws, to withdraw or amend the Offer, if, at any time prior to the payment for deposited shares, certain events occur as will be described in the formal offer to purchase and issuer bid circular and other related documents (the “Offer Documents”) .

Details of the Offer, including instructions for tendering shares to the Offer and the factors considered by the Board in making its decision to approve the Offer, will be included in the Offer Documents. The Offer is expected to commence and the Offer Documents are expected to be mailed to shareholders and filed on SEDAR+ at www.sedarplus.com, on or about November 10, 2023. Shareholders should carefully read the Offer Documents prior to making a decision with respect to the Offer.

CI has engaged National Bank Financial Inc. (“NBF”) to act as dealer manager and financial advisor in connection with the Offer. CI has also engaged Computershare Investor Services Inc. to act as depositary for the Offer.

None of CI, its Board, NBF or the depositary makes any recommendation to any shareholder as to whether to deposit or refrain from depositing shares under the Offer, or in the case of auction tenders, at what price to deposit shares under the Offer. Shareholders are urged to evaluate carefully all information in the Offer, consult their own financial, legal, investment and tax advisors, and make their own decisions as to whether to deposit shares under the Offer, and, if so, how many shares to deposit and at what price(s). The disclosure in this press release regarding the Offer is for informational purposes only and does not constitute an offer to buy or the solicitation of an offer to sell shares. The solicitation and the offer to buy shares will only be made pursuant to the Offer Documents.

Third quarter business highlights

• Effective August 1, 2023, CI rebranded CI Private Wealth (U.S.) as Corient, which is derived from “client oriented.” The Corient brand better reflects the firm’s extensive capabilities as a national integrated private wealth company and is being used by all company offices across the U.S. Corient is the trade name for Corient Private Wealth LLC.
• CI acquired Intercontinental Wealth Advisors, LLC, a registered investment advisor (“RIA”) with offices in San Antonio, Texas and Ft. Lauderdale, Florida. The transaction, which closed in July 2023, added approximately $2.3 billion in assets to the Corient business.
• In July 2023, CI converted client assets at Aligned Capital Partners to the CI Investment Services (“CIIS”) custody and clearing platform. The conversion increased custody assets at CIIS to $23.4 billion as at September 30, 2023 from $9.1 billion as at June 30, 2023.
• CI Global Asset Management (“CI GAM”) introduced two private markets investment solutions, providing access to accredited investors to this important asset class through convenient one-ticket investments. The two mandates, a growth fund and an income fund, provide Canadian investors with access to global best-in-class alternative asset managers.
• CI GAM’s other product enhancements during the quarter included a series of changes to simplify and strengthen the competitiveness of its lineup of money market funds, including launching two money market ETFs.

Following quarter-end:

• CI acquired Coriel Capital Inc., a Montreal-based wealth management firm serving ultra-high-net-worth Canadians. The woman-led firm manages approximately $1.3 billion in client assets. The transaction was announced in August 2023 and closed on November 1, 2023.
• In October 2023, CI acquired Windsor Wealth Management Inc., an Indianapolis-based RIA providing comprehensive financial planning and investment managements services to high-net-worth clients. It has approximately $1.9 billion in assets under management.
• CI GAM introduced the First Home Savings Account, a registered plan that allows first-time homebuyers to save and invest, on a tax-free basis, for the down payment on a home, subject to certain limits.

Analysts’ conference call

CI will hold a conference call with analysts today at 9:00 a.m. EST, led by Mr. MacAlpine and Chief Financial Officer Amit Muni. A live webcast of the call and slide presentation can be accessed here, or through the Investor Relations section of CI’s website.

Alternatively, investors may listen to the discussion through the following numbers (access code: 331926):

• Canada toll-free: 1-833-950-0062
• United States toll-free: 1-833-470-1428
• All other locations: 1-929-526-1599.

A recording of the webcast will be archived on CI’s Investor Relations site.

About CI Financial

CI Financial Corp. is a diversified global asset and wealth management company operating primarily in Canada, the United States and Australia. Founded in 1965, CI has developed world-class portfolio management talent, extensive capabilities in all aspects of wealth planning, and a comprehensive product suite.

CI operates in three segments:

• Asset Management, which includes CI Global Asset Management, which operates in Canada, and GSFM Pty Ltd., which operates in Australia.
• Canadian Wealth Management, which includes the operations of CI Assante Wealth Management, Aligned Capital Partners, CI Private Wealth (Canada), Northwood Family Office, CI Direct Investing and CI Investment Services.
• U.S. Wealth Management, which includes Corient Private Wealth, an integrated wealth management firm providing comprehensive solutions to ultra-high-net-worth and high-net-worth clients across the United States.

CI is headquartered in Toronto and listed on the Toronto Stock Exchange (TSX: CIX). To learn more, visit CI’s website or LinkedIn page.

Commissions, trailing commissions, management fees and expenses all may be associated with an investment in mutual funds and exchange-traded funds (ETFs). Please read the prospectus before investing. Important information about mutual funds and ETFs is contained in their respective prospectus. Mutual funds and ETFs are not guaranteed; their values change frequently, and past performance may not be repeated. You will usually pay brokerage fees to your dealer if you purchase or sell units of an ETF on recognized Canadian exchanges. If the units are purchased or sold on these Canadian exchanges, investors may pay more than the current net asset value when buying units of the ETF and may receive less than the current net asset value when selling them.

This press release contains “forward-looking information” within the meaning of applicable Canadian securities law. Forward looking information may relate to CI’s future outlook and anticipated future events, results, circumstances, performance or expectations and its products and services, including its business operations, strategy and financial performance and condition. Forward-looking statements are typically identified by words such as “believe”, “expect”, “foresee”, “forecast”, “anticipate”, “intend”, “estimate”, “goal”, “plan” and “project” and similar references to future periods, or conditional verbs such as “will”, “may”, “should”, “could” or “would”. These statements are not historical facts but instead represent management’s beliefs regarding future events, many of which are by their nature inherently uncertain and beyond management’s control. These statements include, without limitation, statements regarding CI’s intentions and expectations with respect to the Offer, the terms and conditions of the Offer, the number and aggregate dollar amount of Shares to be purchased for cancellation under the Offer, the expected Expiration Date of the Offer and purchases thereunder and the effects and benefits of purchases under the Offer. Although management believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, such statements involve risks and uncertainties. The material factors and assumptions applied in reaching the conclusions contained in the forward-looking statements include beliefs that asset levels will remain stable, that the investment fund industry and wealth management industry will remain stable and that interest rates will remain relatively stable. In addition, factors that could cause actual results to differ materially from expectations include, among other things, general economic and market conditions, including interest and foreign exchange rates, global financial markets, changes in government regulations or in tax laws, industry competition, technological developments and other factors described or discussed in CI’s disclosure materials filed with applicable securities regulatory authorities from time to time. The foregoing list is not exhaustive and the reader is cautioned to consider these and other factors carefully and not to place undue reliance on forward-looking statements. Additional information about the risks and uncertainties of the CI’s business and material risk factors or assumptions on which information contained in forward‐looking statements is based is provided in the CI’s disclosure materials, including CI’s most recently filed annual information form and any subsequently filed interim management’s discussion and analysis, which are available under CI’s profile on SEDAR+ at www.sedarplus.com. Other than as specifically required by applicable law, CI undertakes no obligation to update or alter any forward-looking statement after the date on which it is made, whether to reflect new information, future events or otherwise.

Undue reliance should not be placed on forward-looking information. The forward-looking information in this press release is based on our opinions, estimates and assumptions in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors that we currently believe are appropriate and reasonable in the circumstances. Despite a careful process to prepare and review the forward-looking information, there can be no assurance that the underlying opinions, estimates and assumptions will prove to be correct. Further, forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including but not limited to, those described in this press release. The belief that the investment fund industry and wealth management industry will remain stable and that interest rates will remain relatively stable are material factors made in preparing the forward-looking information and management’s expectations contained in this press release and that may cause actual results to differ materially from the forward-looking information disclosed in this press release. In addition, factors that could cause actual results to differ materially from expectations include, among other things, general economic and market conditions, including interest and foreign exchange rates, global financial markets, the impact of the coronavirus pandemic, changes in government regulations or in tax laws, industry competition, technological developments and other factors described or discussed in CI Financial’s disclosure materials filed with applicable securities regulatory authorities from time to time. Additional information about the risks and uncertainties of CI’s business and material risk factors or assumptions on which information contained in forward‐looking information is based is provided in CI’s disclosure materials, including CI’s most recently filed annual information form and any subsequently filed interim management’s discussion and analysis, which are available under our profile on SEDAR+ at www.sedarplus.com.

There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward looking information, which speaks only as of the date made. The forward-looking information contained in this press release represents our expectations as of the date of this news release and is subject to change after such date. CI Financial disclaims any intention or obligation or undertaking to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable law.

This communication is provided as a general source of information and should not be considered personal, legal, accounting, tax or investment advice, or construed as an endorsement or recommendation of any entity or security discussed. Individuals should seek the advice of professionals, as appropriate, regarding any particular investment. Investors should consult their professional advisors prior to implementing any changes to their investment strategies.

CI Global Asset Management is a registered business name of CI Investments Inc.

NON-IFRS MEASURES

In an effort to provide additional information regarding our results as determined by IFRS, we also disclose certain non-IFRS information which we believe provides useful and meaningful information. Our management reviews these non-IFRS financial measurements when evaluating our financial performance and results of operations; therefore, we believe it is useful to provide information with respect to these non-IFRS measurements so as to share this perspective of management. Non-IFRS measurements do not have any standardized meaning, do not replace nor are superior to IFRS financial measurements and may not be comparable to similar measures presented by other companies. The non-IFRS financial measurements include:

• Adjusted net income and adjusted basic and diluted earnings per share
• Adjusted EBITDA and adjusted EBITDA margin
• Free cash flow
• Net debt.

These non-IFRS measurements exclude the following revenues and expenses which we believe allows investors a consistent way to analyze our financial performance, allows for better analysis of core operating income and business trends and permits comparisons of companies within the industry, normalizing for different financing methods and levels of taxation:

• gains or losses related to foreign currency fluctuations on our cash balances
• costs related to our acquisitions including:
  • amortization of intangible assets
  • change in fair value of contingent consideration
  • related advisory fees
  • contingent consideration classified as compensation per IFRS
• restructuring charges including organizational expenses for the establishment of Corient and CIPW
• legal provisions for a class action related to market timing
• certain gains or losses in assets and investments
• costs related to issuing or retiring debt obligations
• expenses associated with Corient and CIPW redeemable units.

Further explanations of these Non-IFRS measures can be found in the “Non-IFRS Measures” section of Management’s Discussion and Analysis dated November 9, 2023 available on SEDAR at www.sedar.com or at www.cifinancial.com.