Letter from the Executive Chairman

Our fiscal 2018 performance reflects our extensive efforts to adjust our business mix and adopt a responsible growth model that is capable of delivering more consistent results for our shareholders.

With a newly expanded wealth management business and a refocused and aligned capital markets business, we have improved our operating leverage and achieved our goal of making our Company less susceptible to changes in our operating environment.

Excluding significant items⁽¹⁾, we estimate that our global wealth management business contributed 60% of our diluted earnings per share for fiscal 2018, making the impact of periodic market-driven challenges in our capital markets less apparent in our overall results.

As we strive to increase the long term value of our business, we have taken a prudent approach to evaluating and implementing various strategies. The acquisition of Hargreave Hale – our most significant development of the year – was financed without diluting value for our shareholders or compromising our capital strength. In our Canadian wealth management business, we have been recruiting established Investment Advisory teams on a value-accretive basis. We also made a small investment to enhance our Canadian trading operation, which we expect will provide access to new areas of growth for our capital markets and wealth management businesses over the long term. And finally, we announced our intention to increase our investment in our Australian business, which serves to strengthen alignment of this operation with our global platform while we explore opportunities to expand our wealth management business in the region.

I am pleased with the steady progress we have made to adjust our business mix and strengthen our market position across our operations. The market has also responded favourably to our strategy, and the value of our common shares on the last trading day of fiscal 2018 increased by 36% compared to a year ago.

We have a capable and committed leadership team in place and a strong group of talented men and women to support our long term strategy. On behalf of the Board of Directors, I would like to thank the senior management team and all employees of Canaccord Genuity Group for their hard work and steadfast commitment.

Equity participation continues to be an important priority. Our strategy of increasingly aligning senior officers’ compensation with the longer term performance of the business has delivered positive change across all our operations. With a fully accountable leadership team, we now have a stronger culture of partnership that permeates throughout the organization. This has helped to improve collaboration across regions and businesses and drive stronger outcomes for our clients. Consequently, we have been able to increase our productivity while simultaneously increasing our market share in many of our regions and verticals.

We are also committed to ensuring strong corporate governance as we continually strive to advance the best interests of our shareholders. We will be adding to the quality and diversity of our Board of Directors with Merri Jones, who will be nominated as an Independent Director at our upcoming Annual General Meeting of Shareholders. Merri is a highly accomplished senior corporate executive with more than four decades of multi-faceted leadership experience within the financial services industry. Additionally, Massimo Carello has decided not to stand for re-election to the Board of Directors at our upcoming Annual General Meeting of Shareholders. I would like to thank Massimo for providing valuable guidance, expertise and perspective to senior management on behalf of our shareholders over the last decade. His deep business background, his extensive network in the UK & Europe, and his courtly manner and strong engagement with the Company and its employees at all levels have served us very well.

We remain committed to representing your best interests as we continue to deliver on our business plan, with a disciplined approach to capital allocation and a steady focus on achieving sustainable growth in the areas where we know we can add the most compelling value for our clients.

David Kassie
Executive Chairman
Canaccord Genuity Group Inc.