GHL - Earnings call transcript Q3 2021

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Operator

Good day, and welcome to the Greenhill Third Quarter 2021 Earnings Call. [Operator Instructions]. Please note, this event is being recorded. I would now like to turn the conference over to Mr. Patrick Suehnholz. sir. ahead, go Please

Patrick Suehnholz

Relations. afternoon, Greenhill's you results third Patrick of I Good us conference for today am Investor Head Greenhill's for quarter Suehnholz, and you. all thank joining call. Thank XXXX financial

Chairman Joining me on are forward-looking Executive their call events today based include on Today's uncertainties may These and expectations nature, outside and possibly regarding the risks, known that, control and Bok, call future and is Officer. are statements. Chief Scott results the our and statements materially is indicated our current differ to The of in statements. subject assumptions. financial those are firm's what may actual firm's forward-looking unknown condition from by

results, of risks and of with on could Neither or of filings responsibility quarterly completeness factors reports we Commission, Form discussion these the Securities any some a Form for and other nor For X-K. our XX-K, the reports see assumes any on please statements. forward-looking annual person Exchange XX-Q on Form report accuracy of the current our firm's and future including that affect the

You should forward-looking not of as rely future events. predictions upon statements

would on update they are the no after these are the date over to like We forward-looking Bok. under made. statements of any turn to duty I call now Scott which to

Scott Bok

quarter Thank of you, per $XX.X We $X.XX. reported revenue share Patrick. third million of and earnings

revenue market year. in that million year-to-date we earnings and very to $XXX.X per Industry a had continue clear $X.XX. period of XX% is up the be strong year-to-date, Revenue from of data M&A we for For the the share same globally. makes last

X won and year client are basis, in in the of we before. evident is the announcements, relative high. fact also a assignments the deal number to that we firm, an in our trailing all-time which year on For new that is significant the with It associated, quarters evident year at last is this have increase

are year-to-date, advisory assignments. each type year. Germany in our stronger do made credit Across particularly of in progress with third spectrum, Australia. the strong see to recruiting, remains sizes to last more Australia, transactions M&A advice, we that In both peers. skewed the the we of of our the a for were primary made forward and assignment increase but smaller normal which have and our than revenue norm pleased With revenue the for senior Nonetheless, strength confident financial progress our sizes our going year of to the year-to-date year out continues in relatively large year By area, benefit initiative a sponsors. the and more the businesses, offset hires release of one financing we in respect will strong secondary last and continue most win for private transactions, the show and U.S. with reduced with the a that businesses are all more pleased Restructuring Canada resulting year strong completed have a On companies, we in finish stronger regional a fees. of to M&A, a initiative in terms our for had now advisory of global deals given revenue those to much than progress and we we the expect quarter, by business from in and are pleased notes in a basis, have expect deal the with towards to Europe, many to in those slow are commensurate year, new of the smaller we've While reversion fundraising in of where progress the end the team revenue sale we backlogs. new both press to X be our in year we capital markets, building the area opportunity. great

We this come. remain and we senior on the are more in months adding to accomplished pleased year talent have focused in with recruiting what

turning to Now costs.

lower compensation Our bring given last than year compensation to costs in in have with quarterly been quarterly revenue. objective our terms absolute more line

compensation compensation year-end, ratio bring dollars. to further in quarter and while terms outcome we end brought up Where team revenue of ratio ratio in our year-to-date on down still the as always of Our objective XX%, year compensation the for depends XX% paying the for for by and ratio is down the that to our our increased costs expense absolute year.

lower Our non-compensation the of running year for our are year-to-date. target the last costs end range than and materially at were low

interest Our given interest and -- lower declining continued short-term level trend a debt lower continues expense short to rates.

ended expect voluntary and the $XX cash in tax relating the charges of million. quarter additional debt. end, million changes for range repayment to $XXX.X continue an And our quarter We to We to vesting. of be with $XXX.X annual upon after the made in debt adjusting rate before value of stock mid-XX% the million restricted we in

shares of we cost a for $X.X the a for we total October, million. share During quarter, shares of an repurchased more $X.X XXX,XXX and than million. cost And additional repurchased XXX,XXX equivalents in

$XX.X million flow of debt and share $XX For million the cash of year-to-date, equivalents. we've to repurchased and used repay our shares

dividend quarterly usual share. our of per declared $X.XX we addition, In

a our to principal As to further upside intend said the to for focus potential shareholders. in continuing shares quarter, enhance continue is last on deleveraging, but prudent also manner purchase I we

are on in pleased pleased are Our with and our about in revenue our to the up, employees come. profitability To half creation progress quarters drive quarter, and to we this are and aligned with our the growth value economics shareholder currently years strategic we firm our and sum stock of own trying through thus, stock and of restricted initiatives. fully also

to more expanding roles offering should and significantly our in If include transactions. more with is succeed, pleased advisory our greater we quarterly service by expense reduced I'll and shareholder base serve more declining aim questions. reduce sponsors volatility, earnings that cost, take to our financing we and client debt revenue and And result increase our interest reduced and total together Our that, private share goal value do be to revenue to creation. both and to and much capital financial to any expanding our count

Operator

[Operator Instructions]. And the first question Securities. from will come Ryan JMP with Devin

Devin Ryan

question make First sure to want heard just here, correctly. I

expect I think said, ratio. more but compensation, a comp you you to in absolute pay lower

the would that that of wanted year correctly. revenue expectation guess to heard growth in I make I I So comment. unless I kind on that an something misheard sure that imply for just

Scott Bok

the the I works. think math way that's

we the comp from ratio the to higher bring absolute the down and quarter. where third do aim it had Our goal further is definitely to at pay a of compensation, end

Devin Ryan

Yes.

make I it. sure too. correctly Got I want I just math, the Okay. to do so. could do

are are market clearly global bigger the kind And Appreciate about little see terms business of guys role. then guys what Great. you and are in bigger the parts that's more well. you bit and Asia, of have that. particularly, a you and kind there? this Okay. kind grown Obviously, financial sponsors of talk sponsors of a of Scott, even we kind as playing moving more And global of entering sponsor as in initiatives, Europe maybe doing can only opportunity a

do of how little sponsors bit to, like talk the I can you're guess, business feel you over guys more doing of about and just things you're time? kind So with a some you positioned

Scott Bok

They -- assignments. mean how lot an I M&A a I is enormous And way, Sure. do out important lot refinancing. overstate obviously sponsors part because new hand the this funds. restructuring by of just of initiative can't They they the this raise of become market. also, a

is, serving ways competition many like the history our ours all big few the them. back started et which many, the are in They amount think sizes role if M&A role on, financial name, we there the And very were when can where very specialties of serve they're just Well, just put and There's cetera. different hundred And they and you of number the firms huge focuses And is a I different very, exploded, the market. the different there sponsors there's so knows effort several really So increasing more to the we and go large very was KKR, the number really Blackstone, the love of a playing banks over Apollos, sponsors, time and banks. there's these What's right? and but big things. hundreds have -- in the right? of one, into XX. regional everybody active, firm, happened

frankly, And to even kind exclusively public focused and companies. so serve we too had public realized that those of companies on much we almost

have For example, needed or want world to asset acquire we when that an sell this better from financial want relationships there. world, to sponsor to one to they

of think, space. attention make all do packaging, very across They sure happy An dialogues. we doing we a What those And discovered bringing, are, doing get so that. we're want for somebody good is of have lot to firm set the they was a at the have of coordinate thing already want us. that, sponsor the to that. paying. course, good repay care had that the we're financial realizing did to bringing, paid opportunities do else service knows And all the And to the for health get I relationships people the them, that well ideas and quid from a we understanding doing quo things in -- all we're lot pro first They're we're so. all not very, that individual they those of services, you the to had sponsors back all to then, try across

we've fourth far. for ourselves mean, the alongside even secondly, more so just and think room base. on that like we've done. client another like quite to And see there's organizing of to you'll so announcements And that a firm relate will public that market really of I client that's company focus their community, to to what progress lot quarter, so then that partners of is base in the the getting we is and base. made pleased attention lot that big client it just all A not ours not pay with are I it's our

it's to private whether more going as it's financing, capital whether that we're transactions M&A and you're well. of building So see clearly, --

should financial are more the there. in of money You're sponsors part going a it kind latter certainly, lot and to making of starting see a year this that from we definitely from build lot

Devin Ryan

up? build the about good the out thinking more, shake one regional full just of your some backward you just shaping like kind backlog year Europe from perspective, looking. expectations kind difference last a on little has maybe Maybe maybe than perk year year, color you are know a the on by of backlog of bit and kind to a region, particularly progression any from I by start a you is how had region XXXX back But a Great. -- Okay. will been seeing little areas bit relative strong which gave up how but trajectory

Scott Bok

have I in never the less this we're outlier had index the activity not we I we of sort us XX%. we the big track think I fund so to is one up Europe. XX% what's But for for year important think Look, goes -- shareholders where remember, to market. think going go up that to and be sort have market enough of We're the deal

we're market So over clients -- ever thing there's very market. It's there's our whole, of amount yes, no than year, next stronger that's on reason, better there think et just did would quieter the there's would of a only our else. year we there solid strong cetera. next on, and than highlighting. client dialogues much by I room serendipity having just given success of a which productivity beyond quieter deals had and Australia, a us we're that's that our interesting upside became and next of a course, number year on in of the better say, for worth been is in I whom, in year have just pretty own us expect plenty the for for and really strong franchise year and going be I I And one of of as terms will as if European a I which and for doubt years just of on even absolutely everywhere lot having companies. financial there. sponsors a year have are M&A random years, as the had a certain But base auctions our over year, we've a some, market XXXX best based rising actually European efforts were much particularly think this growing and the U.S., I in Europe because think, the backlog. and frankly, we a our well dependent whatever from benefits focus public And

certainly in 'XX, a swing think, So positive be will for factor direction. I the big Europe

Operator

will from Brown next The come question KBW. Michael with

Michael Brown

to more certainly there? wanted bit the on little is quarter And of give a just key strengths Could relates little -- So ratio really quarter. fourth bit more I a as little us a it then the upbeat. comp the just hear about comment your the insight to you into

a here too. also more what's love to in quarter to I'd little hear sounds that's hear guys, -- little for the like be key drivers just like really sponsors bit a So the there. key about but might bit about fourth the you up heating that, I'd It maybe more element

Scott Bok

Sure. Absolutely.

that -- year we're characterized sort the big many by this of little and color me your benefited a end we've the but you results which of some volume more of a a is can answer makes have to so deals sort lot year. with the really course, results quarter in transactions. the our attached. fee public same more transactions. color a impressive more beyond, I can a -- blockbuster, to sort of -- visible think, there's your is really the And have fees, haven't have also toward smaller of really had that's this high-profile company of we of can ways, us think I answer happen been the point, that, To be data on high really our the spectrum, a don't I third and a We be on of maybe both, from that, less for fourth and number small in the just think because little more is as smaller quarter when They outsized from big, granularity outside. numbers

They're large lending of more exceptions, announce financing people things it's done financing. advice very doing the in they're some public -- market, and and definition financing but where certainly, are not need advisory They our growing want always companies. -- get by don't we not to These private So to often companies. almost all announced. whatever their them are cases the to go it's they've very direct although

even public again, high-profile cases. And other some there this So a be may in doing our not that are they're and that appearing in fairly on things that proliferation are appearing domain, we're website kind year, as can are the things significant attention. -- are there's much some of not not that just there of smaller deals get

about types we're why So were that's granularity think than what fourth products I size wider frankly, third we think the quarter feel do beyond makes is the that's similarly, a even us in and, increased just clients better expecting. and think. that, range, for of And maybe what the the doing. quarter way More more I I what people of

Michael Brown

underneath what's That's surface. the helpful on really understand going to Yes.

with we your has impressed is certainly, I pace And quarter in actually -- your the above certainly thing were but the that buybacks see expecting. nicely, count that was what share basic down one diluted count share thinking Scott, So quarter. puts about? of come up it, the there versus the we other could assume there something to that Can you the but there? should some treasury be maybe drivers explain first I and any impacting related method there's be that takes is share of

Scott Bok

that on most and you're position, end outstanding. focus, it's diluted number. on in No, that we a really. you're when fact loss you shares It's position, normally when all companies the the focusing basic up do you And as do, a in profit

with but whole a at time, Obviously, consistent. diluted ago it our years few So very down the it's share recapitalization a explains lot number continued stepped and that if look buybacks, our over you story.

a think in I level year in in and loss. least at So bit the terms if our obviously, aberration the a of of -- there where was early results was view, an at revenue a

bit are look, count. of in kind are had think And declining. it's I they'll you the -- in so active diluted, of been we quite people see focus terms on buybacks. we if consistent a share And and of But peculiarity share that

We still have lot, the is we stock undervalued. quite but a deleveraged think quite

frankly, limited that. can, in a which you So can, about we've back, the is amount I all amount rules been stock that, and been But as to and of will do buying doing given SEC the as liquidity we how the the we extent much we've continue. expect

Operator

Yaro Goldman And with our will James come question last from Sachs.

James Yaro

practices out of had the So cross-border strongest one you've there. historically

U.S. how the versus is in cross-border you curious chain Europe? then I'm So supply M&A featuring And client would the both and your in-market disruption in contrast how dialogues?

Scott Bok

I an of all, would been has strength absolutely, firm. First say, of our that enormous

offices U.S. X Asia in have the each and Pacific, We Europe

people have well very a We work deals. across together collegial borders culture and extremely and cross-border

a So that has strength. been

reach globally, minute are the huge mean towards reason a off community, lot year profile, almost have on and plenty market the in but our just a I there fees between less ones in random of I even of that typical have think And of larger same will degree, -- than the big we which and kind kind that's and that a stronger I fewer focus of for the have think blockbuster us. to And smaller smaller just of differentiator geographies of It's bit all sponsor of generate ago come to role, some in they this I a of of market There different there's do. cross-border is offices. I little have gave important in years part for cross-border that high no it very, financial for always that. frankly, as business. kind a tend our can that a year one entirely fall been are tendency much and the but but back, firms are transactions they to about the a been us. deals in sponsor a transactions very U.S. doubt

in think certainly and you fourth quarter the in years So see that numbers maybe I past, really our more deals years but ones have more sort there think of the go be don't of and on. are cross-border huge you'll important I there'll the there, impact the in some as

James Yaro

disruptions. providers, And the lawyers capacity But be terms impacting characterize That peers makes in micro and accountants bottleneck issues specifically sense. deals, that the one we've of in of that that service timing lot chain terms could of of a And obviously, is hitting terms of talked deals. are in this to seeing it? one about, this supply there's Okay. and you heard impact we've the macro risks you're from may then Is constraints of of something the if seeing? you M&A

Scott Bok

agree problem deal is generally time. and something profits great not of chain I ways us. supplies, over a solved the certain of out problem that a high-class in in Yes, big that's that drives mean such economy that running that's activity. they're corporations making if are supply And that for I some probably bit gets a disruption more

would of we But and it hear -- here do incremental about have mean significant deal of I would us, I maybe take cases yes, there. agree, or not call kind to seen it a a For part I too to transaction seem as the where diligence busy you on factor. something. due accountants almost it's

minor done. been has think, some bankers. finding some but investment have question people one very -- like maybe way in mean certainly get the I to things of or running are transaction I or obviously, is We've announcements that's delay it thing, we XX And had a last high. than more that in the months other months, XX and M&A true volume, are some sometimes, there that,

pleased to trying the it's attractive going have cases, I more away a to some But taking our this project. And more way they're of it incremental might at probably can so as point. get environment earnings there'd it's think relaxed in mean that capability the a oil think least it bit that midnight more a clients there, kind sense and constraint we'd did on in true in of more efficient than problem take to a they lawyers along not at They're a to all much probably wouldn't done. on. things I would work going and business high-class get way to it Obviously, the breather it be be in of find burning a can a speed that if equally well. mean that turn before real be to

James Yaro

my Has it continue you of all That it of lot remain today? you're a Or picked sort is of off muted? environment continue -- restructuring one the at sort then And makes seeing characterize up Absolutely. could if it just does to just sense. the lows? quite is last

Scott Bok

muted. think I quite restructuring remain has

Apollos of and the credit direct I'm wonderful early calls that sure that do still, of not financing I probably of Already our got of -- There's that earlier this this people deals a saying most and think got year it across driving they that. strong a the I world, credit. just credit the of opportunities restructuring lending has were year, and to was them reason same certainly early some there But are putting amounts carry the that we for the of year, the activity. KKRs restructuring the credit, And in can lot market, Blackstones -- was this very been market you one year. for so strong carried can done clients course, lot. there markets last but help the boom, and and lot in not and out enormous is a cases, a but been of earnings into and that are the very over listened that course, access

of -- parties from the And financings working are for with year working across were same the on the the those many bankruptcies people bankruptcies midst cases, last were pandemic. they in us, year on table the who on kind our that working in of this so

you next quarter. speak everybody, for Thanks, Thank Okay. and to joining, we'll you.

Operator

you attending The today's Thank for has concluded. conference presentation. now

disconnect. now may You

Greenhill & Co (GHL) 6 Nov 212021 Q3 Earnings call transcript