Igm Financial Inc. · TSX:IGM
Igm Financial — Q1 2016 Earnings Presentation
30 slides from Igm Financial's earnings presentation, May 6, 2016
Slide 1: IGM Financial Q1, 2016 Results
IGM FINANCIAL Q1, 2016 Results May 6th, 2016
Slide 2: IGM Financial – Conference Call Participants
IGM FINANCIAL – CONFERENCE CALL PARTICIPANTS Paul W. Hancock Kevin E. Regan Jeffrey R. Carney Murray J. Taylor Vice-President, Executive Vice- President & CEO, President & CEO, Finance and Investor President & CFO, Mackenzie Investors Group Relations IGM Financial Co - President & Co - President & C
Slide 3: Caution Concerning Forward Looking Statements
CAUTION CONCERNING FORWARD LOOKING STATEMENTS Certain statements in this report other than statements of historical fact, are forward-looking statements based on certain assumptions and reflect IGM Financial’s current expectations. Forward-looking statements are provided to assist the reader in unde
Slide 4: Non-IFRS Financial Measures and Additional IFRS Measures
NON-IFRS FINANCIAL MEASURES AND ADDITIONAL IFRS MEASURES • Net earnings available to common shareholders, which is an additional measure in accordance with IFRS, may be subdivided into two components consisting of: – Operating earnings available to common shareholders; and – Other items, which inclu
Slide 5: Documents Incorporated by Reference
DOCUMENTS INCORPORATED BY REFERENCE This summary document and webcast are meant to discuss, not to serve as a substitute for, information included in these documents. The reader is hereby cautioned to refer to the following documents relating to IGM Financial’s results: 1. Documents related to IGM F
Slide 6: Agenda for Today's Call
AGENDA FOR TODAY’S CALL 1. IGM Highlights 2. Mackenzie Investments 3. Investors Group 6
Slide 7: IGM Financial Highlights of First Quarter Results
IGM FINANCIAL HIGHLIGHTS OF FIRST QUARTER RESULTS • Operating Earnings were $167.0MM versus $200.3MM last year and Financial $198.2MM during the prior quarter Results • Operating Earnings Per Share for the quarter were $0.69 versus $0.80 last year and $0.81 during the prior quarter Mutual Fund • Q1/
Slide 8: Operating Environment
OPERATING ENVIRONMENT • The S&P TSX Composite Index staged a strong rally from its January Financial lows gaining 3.7%, in contrast most major global equity indices declined over the quarter Markets • Canadian dollar strength negatively impacted foreign equity returns • Industry long-term mutual fun
Slide 9: Mackenzie Investments
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Slide 10: Mackenzie First Quarter Review
MACKENZIE FIRST QUARTER REVIEW Company Highlights 1) Continued improvement in investment performance led by Ivy, Growth and Global Equity & Income boutiques 2) Announced changes to Cundill boutique portfolio management team 3) Launched four actively managed fixed income ETFs 4) Management appointmen
Slide 11: Mutual Fund Flows
MUTUAL FUND FLOWS 1 Quarterly Mutual Fund Flows ($ Billions) 1.97 1.84 2.0 1.71 1.49 1.59 1.5 1.0 • Mutual fund gross sales of Gross Sales 0.5 $1.84B were down 6.7% Net Sales - relative to Q1 2015 (0.5) (0.11) (0.09) (0.18) (0.19) (0.20) (1.0) • Mutual fund net redemptions Q1/15 Q2/15 Q3/15 Q4/15 Q1
Slide 12: Flows – Mutual Fund Gross Sales by Asset Class
FLOWS – MUTUAL FUND GROSS SALES BY ASSET CLASS Total Mutual Fund Gross Sales (Three months ended March 31 - $ Millions) 2015 2016 $ Change % Change • Foreign equity gross sales remain strong, increasing Income-oriented 343 206 (137) (39.9%) 10.1% relative to the prior Balanced year Symmetry 477 344
Slide 13: Flows – Total Investment Product Net Sales
FLOWS – TOTAL INVESTMENT PRODUCT NET SALES Total Investment Product Net Sales (Three months ended March 31 - $ Millions) 2015 2016 $ Change • Total mutual fund net sales Income-oriented (50) (247) (197) decreased $92MM Balanced Symmetry 330 139 (191) • $123MM improvement in Other (90) (52) 38 Total
Slide 14: Investment Boutiques – Performance & Flows
INVESTMENT BOUTIQUES – PERFORMANCE & FLOWS Mutual Fund Assets by Morningstar Rating at Mar 31, 2016 ($MM) 1 10,000 7,500 1 or 2 Star 3 Star 4 or 5 Star 5,000 2,500 0 % 4 or 5 0% 6% 92% 49% 99% 63% 84% 0% 4% 0% 63% 32% 1% Fixed Managed Value-Oriented Quality Growth-Oriented Core & Dividend Income Pro
Slide 15: Investment Performance – Mutual Funds
INVESTMENT PERFORMANCE – MUTUAL FUNDS 1 Mackenzie Mutual Funds in First or Second Quartile (Proportion of Assets) 57% 51% 39% 42% 42% December 31, 2015 37% 34% 32% March 31, 2016 1 Year 3 Year 5 Year 10 Year 1 Morningstar Ratings – Proportion of Morningstar-Rated Assets (As at March 31, 2016) 40% 38
Slide 16: Average Total AUM & Fee Rates
AVERAGE TOTAL AUM & FEE RATES 80.1 78.7 Annualized Net 76.5 Revenue Rate 71.0 72.1 (bps)1 • Q1/16 change in average AUM versus Q4 2015: 73.6 71.7 − Mutual funds down 3.6% 62.2 61.7 Average Total AUM ($B) 59.8 50.5 50.6 49.2 Institutional2 − Institutional down 1.2% 48.5 46.7 Mutual Funds − Proportion
Slide 17: Mackenzie EBIT
MACKENZIE EBIT ($ Millions, unless otherwise indicated) • Net revenue down 5.4% Change Relative to: Prior Prior Q1/15 Q4/15 Q1/16 Year Quarter compared to Q4 2015 due to Average AUM ($ billions): lower AUM and net revenue Total 73.6 61.7 59.8 (18.8%) (3.1%) Mutual funds 50.5 48.5 46.7 (7.4%) (3.6%)
Slide 18: Investors Group
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Slide 19: Investors Group First Quarter Review
INVESTORS GROUP FIRST QUARTER REVIEW Company Highlights 1) Consultant network at record high 2) Continued momentum in the HNW segment 3) Expanding competitive product offering 4) Solid investment performance in volatile environment 5) Senior management transition 19
Slide 20: Consultant Network Growth
CONSULTANT NETWORK GROWTH 5,321 • Consultant network at 66% 5,321, up 66% from Q2 2004 < 4 years 3,207 experience • Number of Consultants with CFP or F.Pl. designations stands at 1,546, with an additional 779 Consultants enrolled in these programs > 4 years experience • Three new region offices to b
Slide 21: Trend in Flows
TREND IN FLOWS Quarterly Gross and Net Sales Trends ($ Billions) 2.5 2.37 2.27 1.89 1.81 1.82 2.0 1.5 Gross Sales • Gross sales during the 1.0 0.59 0.47 0.5 0.03 0.14 0.00 Net Sales quarter of $2.27B were down - 4.1% compared to Q1 2015 (0.5) Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Quarterly Annualized • Net
Slide 22: HNW Segment – Key Growth Focus
HNW SEGMENT – KEY GROWTH FOCUS 1 Mutual Fund Gross Sales in HNW Series • Mutual fund gross sales in (Last Twelve Month Trailing - $ Billions) HNW series1 were $549MM in 2.5 Q1 2016, a 28% increase relative to the prior year 2.0 1.9 1.8 • 7.2% of mutual fund assets in 1.5 unbundled fee structures, up
Slide 23: Insurance & Mortgage Business
INSURANCE & MORTGAGE BUSINESS New Annualized Insurance Premiums (Three months ended March 31 - $ Millions) 16.6 18.0 • New individual insurance Group Insurance product sales increased 10.8% in Q1 2016 13.9 Individual 12.5 Insurance • New mortgage business in 2015 2016 Q1 2016 was $627MM, up 39.4% co
Slide 24: Investment Performance
INVESTMENT PERFORMANCE Client Account Rate of Return Experience (%) Quarterly 15 Median Client Rate of Return • Client account rate of return 10 for up to five years now 5 appears on quarterly 90% of clients 1.4 had returns statements - 0.0 (0.9) within this (3.1) range (5) • Median client account r
Slide 25: Investment Performance Based on Gross Returns Relative to Benchmarks
INVESTMENT PERFORMANCE BASED ON GROSS RETURNS RELATIVE TO BENCHMARKS March 31, 2016 1Y 3Y 5Y 10Y 5.1 4.4 -1.6 -0.3 • Majority of mandates have -0.2 -1.9 -1.2 1.9 0.1 0.0 -1.8 -2.3 -1.3 -1.3 1.7 0.2 -3.3 -2.2 Canadian Equities -0.7 12.2 -1.8 1.3 -1.0 8.5 -3.0 0.4 1.5 5.5 -6.8 1.2 3.2 3.4 1.0 outperfo
Slide 26: Average Mutual Fund AUM & Fee Rates
AVERAGE MUTUAL FUND AUM & FEE RATES 209.2 209.9 208.8 209.0 208.8 • Q1 2016 average mutual fund AUM declined 2.3% compared to Q4/15 76.8 75.5 75.4 75.3 73.5 • Proportion of mutual fund AUM in HNW series increased to 37.8% in Q1 20161 • Management & administration fee rate relatively unchanged compar
Slide 27: Investors Group EBIT
INVESTORS GROUP EBIT ($ Millions, unless otherwise indicated) Change Relative to: • Management and Q1/15 Q4/15 Q1/16 Prior Year Prior Quarter administration fees decline Average mutual fund AUM ($ billions) 75.5 75.3 73.5 (2.5%) (2.3%) compared to Q4 2015 reflects lower average mutual fund Revenues
Slide 28: Recent Regulatory Developments
RECENT REGULATORY DEVELOPMENTS • Meetings held with five provincial securities commissions Dialogue with (Quebec, Ontario, BC, Alberta and Manitoba) between Provincial Security December and April to share perspectives on the industry and Commissions provide an overview of IGM Financial and Investors
Slide 29: Executive Leadership Transition
EXECUTIVE LEADERSHIP TRANSITION • Effective May 6, 2016, Murray Taylor will retire as Co - President & CEO of IGM Financial and President & CEO of Investors Group after 12 years of serving as CEO of Investors Group and 40 years of service to the Power Group of companies • Jeff Carney becomes the sol
Slide 30: Q&A
ISM, Q&A 30