FNV — Franco-Nevada Corporation

Summary of Franco-Nevada Corporation Q4 2025 Earnings Call

1. Key Financial Results and Metrics:

• Record Earnings: Franco-Nevada reported a 75% increase in annual earnings, totaling over $1 billion, with a 60% earnings margin.
• Revenue Growth: Revenue surged by 64% year-over-year, reaching $2.3 billion for the full year, with Q4 revenue hitting a record $597.3 million (up 86% from Q4 2024).
• GEOs Sold: Total GEOs sold for 2025 were 519,106, slightly exceeding the guidance range of 495,000 to 525,000. Precious metal GEOs sold were 440,140.
• Adjusted EBITDA: Increased by 74% year-over-year, totaling $1.9 billion, with an adjusted EBITDA margin of 91%.
• Dividend Increase: A 16% increase in dividend was announced, marking the 19th consecutive increase.

2. Strategic Updates and Business Highlights:

• Acquisitions: Franco-Nevada added six long-dated assets to its portfolio, contributing to future production growth. Recent acquisitions include interests in Canadian assets and the Bullabulling project in Australia.
• Sustainable Mining Recognition: The company was recognized as one of the 100 most sustainable corporations globally.
• Exploration Investments: $250 million earmarked for exploration in Canadian assets, with expectations for increased exploration on global holdings.
• Cobre Panama Potential: The potential restart of the Cobre Panama project could significantly enhance future production, pending government approvals.

3. Forward Guidance and Outlook:

• 2026 GEO Guidance: Expected GEOs sold to range from 510,000 to 570,000, with 90% from precious metals. The guidance assumes a $70 per barrel oil price, with sensitivity to higher prices noted.
• Long-Term Outlook: By 2030, Franco-Nevada anticipates selling 555,000 to 615,000 GEOs, driven by contributions from new mines and expansions.
• Organic Growth: Approximately 13% organic growth is built into the 2026-2030 outlook, excluding contributions from Cobre Panama.

4. Bad News, Challenges, or Points of Concern:

• Cobre Panama Uncertainty: The timeline for approvals and the restart of operations at Cobre Panama remains uncertain, which could impact future GEO contributions.
• Depletion Costs: Increased depletion costs were noted due to higher stream ounces sold, which could affect profitability margins.
• Market Volatility: The cyclical nature of commodities and potential geopolitical risks could impact future performance.

5. Notable Q&A Insights:

• South Arturo Performance: Strong performance expected to continue into 2026, but a decline is anticipated starting in 2027.
• Cascavel Stream Buyback: The ounces from the stream buyback are not included in current guidance, with further disclosure expected as details are finalized.
• Oil Price Sensitivity: A $5 increase in WTI oil price could lead to a 7% increase in energy revenue.
• Publicly Traded Equity Investments: Franco-Nevada holds $1.1 billion in equity investments, primarily as long-term holdings to support associated companies, with potential liquidity options if favorable.

Overall, Franco-Nevada's strong financial performance and strategic growth initiatives position it well for continued success, despite some uncertainties related to specific projects and market conditions.