Igm Financial Inc. · TSX:IGM
Igm Financial — Q2 2015 Earnings Presentation
45 slides from Igm Financial's earnings presentation, Aug 6, 2015
Slide 1: IGM Financial Q2, 2015 Results
IGM FINANCIAL Q2, 2015 Results August 6, 2015
Slide 2: IGM Financial – Conference Call Participants
IGM Financial – Conference Call Participants Murray J. Taylor Jeffrey R. Carney Kevin E. Regan President & CEO, President & CEO, Executive Vice-President Investors Group Mackenzie & CFO, IGM Financial Co - President & CEO, Co - President & CEO, IGM Financial IGM Financial 2
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: Highlights
1. Highlights 2. Investors Group 3. Mackenzie Investments 6
Slide 7: IGM Financial Earnings
IGM Financial Earnings IGM Financial’s Operating Earnings were $198.5 million during Q2, 2015, and Operating Earnings Per Share were 80 cents. Change Q2, Q1, Q2, Last Last 2014 2015 2015 Year Quarter 1 Operating Earnings ($ millions) 203.9 200.3 198.5 (2.7%) (0.9%) 1 Operating Earnings per share (
Slide 8: IGM Financial Gross Sales
IGM Financial Gross Sales IGM Financial had mutual fund gross sales of $3.9 billion during Q2, 2015 and $8.4 billion year to date. IGM Financial Investment Product Gross Sales ($ Millions) Three Months Ended June 30, 2015 Six Months Ended June 30, 2015 Investors IGM Investors IGM 1 1 Group Mackenz
Slide 9: IGM Financial Net Sales
IGM Financial Net Sales IGM Financial had mutual fund net redemptions of $497 million during Q2, 2015 and net sales of $41 million year to date. IGM Financial Investment Product Net Sales ($ Millions) Three Months Ended June 30, 2015 Six Months Ended June 30, 2015 Investors IGM Investors IGM 1 1 G
Slide 10: IGM Financial Assets Under Management
IGM Financial Assets Under Management IGM Financial’s mutual fund assets under management increased by 3.6% during the last year to $129.7 billion. IGM Financial Ending Assets Under Management ($ Billions) Change Jun 30, Sep 30, Dec 31, Mar 31, Jun 30, Last Last 2014 2014 2014 2015 2015 Year Quart
Slide 11: Industry Long Term Mutual Fund Assets
Industry Long Term Mutual Fund Assets During Q2, 2015, industry long term mutual fund assets decreased by 0.3%. Q3, 2015 Canadian Mutual Fund Industry Q2, 2015 at July 31 Long Term Mutual Fund Assets Under Management Mutual Fund Long Term Assets (0.3%) ($ Billions) Equity Markets: 1,300 Canada (S&
Slide 12: Industry Sales by Distribution Emphasis
Industry Sales by Distribution Emphasis The advice channel experienced a 13.7% increase in gross sales during the second quarter of 2015. Industry Mutual Fund Sales by Primary Distribution Emphasis Total Funds ($ Billions) Three Months Ended June 30 Six Months Ended June 30 2014 2015 % Change 2014
Slide 13: Industry Net Sales by Asset Class – Advice Channel
Industry Net Sales by Asset Class – Advice Channel The advice channel experienced strong net sales in the balanced category. Advice Channel Mutual Fund Net Sales ($ Billions) Q2, 2013 Q3, 2013 Q4, 2013 Q1, 2014 Q2, 2014 Q3, 2014 Q4, 2014 Q1, 2015 Q2, 2015 Income-Oriented 1.1 (0.9) (0.5) 0.4 0.8 0.
Slide 14: Recent Research & Regulatory Developments
Recent Research & Regulatory Developments Client Relationship Model Phase 2 (CRM2) • Investors Group has added performance reporting to most clients statements as of June 30, 2015, two years ahead of requirements under CRM2. CSA Discussion Papers and Research • To gain more insights on certain topic
Slide 15: Recent Research & Regulatory Developments
Recent Research & Regulatory Developments CSA / Brondesbury Group – Report issued publicly June 11, 2015 • Mandate: Determine if the use of fee-based vs. commission-based compensation1 changes the nature of advice and investment outcomes over the long term. • Report was comprehensive and objective.
Slide 16: IGM Financial Assets Under Management
IGM Financial Assets Under Management Average mutual fund assets under management were 6.3% higher during Q2, 2015 relative to Q2, 2014 and increased by 1.1% relative to Q1, 2015. IGM Financial Assets Under Management ($ Billions) 160 Average Assets Under Management ($ Billions) Total Mutual 150 T
Slide 17: IGM Financial Assets Under Management
IGM Financial Assets Under Management Average mutual fund assets under management were 6.3% higher during Q2, 2015 relative to Q2, 2014, total average AUM increased by 4.9%. Average Assets Under Management ($ Billions) 142.3 146.5 145.6 138.9 140.1 Sub-advisory, institutional & other Record High 1
Slide 18: IGM Financial Operating Earnings
IGM Financial Operating Earnings IGM Financial’s Operating Earnings were $198.5 million, a decrease of 2.7% relative to Q2, 2014. 1 Operating Earnings ($ Millions) 219.7 203.9 208.1 200.3 198.5 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 1. Please refer to slide 4 for a discussion of adjustments. 18
Slide 19: IGM Financial Operating Earnings Per Share
IGM Financial Operating Earnings Per Share IGM Financial’s Operating Earnings Per Share were 80 cents during the quarter. 1 Operating Earnings per Share ($ Diluted) 0.87 0.81 0.83 0.80 0.80 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 1. Please refer to slide 4 for a discussion of adjustments. 19
Slide 20: Investors Group
1. Highlights 2. Investors Group 3. Mackenzie Investments 20
Slide 21: Investors Group Consultant Network
Investors Group Consultant Network Investors Group had a Consultant network of 5,176 at June 30, 2015. This represents the highest level in the history of the company. Number of Investors Group Consultants As at December 31 (unless otherwise indicated) Record High 5,145 5,156 5,176 5,011 4,871 4,6
Slide 22: Investors Group Mutual Fund Gross Sales
Investors Group Mutual Fund Gross Sales Investors Group had gross sales of $1.9 billion during Q2, 2015 and $4.3 billion year to date. Three months ended June 30 Six months ended June 30 ($ Millions) ($ Millions) Up 13.5% Record Up 9.3% Record High High 1,894 4,259 1,669 3,898 2014 2015 2014 2015
Slide 23: Investors Group Mutual Fund Redemption Rate
Investors Group Mutual Fund Redemption Rate Investors Group’s twelve month trailing redemption rate on long term mutual funds was 8.5% at June 30, 2015, well below the industry average. 1 Quarterly Annualized Redemption Redemption Rate on Long Term Mutual Funds Rate on Long Term Mutual Funds (Last
Slide 24: Investors Group Mutual Fund Net Sales
Investors Group Mutual Fund Net Sales Investors Group had net sales of $27 million during the second quarter and $615 million year to date. Three months ended June 30 Six months ended June 30 ($ Millions) ($ Millions) Up $66 million Up $244 million 615 27 371 (39) 2014 2015 2014 2015 24
Slide 25: Investors Group LTM Mutual Fund Sales
Investors Group LTM Mutual Fund Sales Investors Group has experienced continuing sales momentum. Mutual Fund Gross Sales and Redemptions (Last Twelve Month Trailing - $ Billions) Redemption Rate 8.0 14% Gross Sales ($B) Record 7.5 High 13% Redemptions ($B) 7.0 12% Redemption rate on long-term f un
Slide 26: Investors Group Client Experience
Investors Group Client Experience New Client Performance and Rate of Return Reporting • Investors Group added multi-period account rate of return reporting to most client statements for June 30, 2015, two full years ahead of its CRM2 deadline. • During 2009, Investors Group began capturing the neces
Slide 27: Investors Group Client Experience Survey
Investors Group Client Experience Survey Ongoing surveys of our clients indicate a strong appreciation of the value of advice and service provided by our Consultants. New Clients Existing Clients Twelve months ended June 30, 2015 Twelve months ended June 30, 2015 96% 96% 93% 93% 93% 91% 88% 85% Sa
Slide 28: Investors Group Insurance and Mortgage Distribution
Investors Group Insurance and Mortgage Distribution Investors Group individual insurance product sales increased by 4.3% year to date 2015. New Annualized Insurance Premiums Mortgage Fundings Six months ended June 30 Six months ended June 30 ($ Millions) ($ Millions) 1,058 35.9 35.5 983 967 32.1 G
Slide 29: Investors Group Mutual Fund Assets Under Management
Investors Group Mutual Fund Assets Under Management The average balance of mutual fund assets under management was 7.4% higher during Q2, 2015 relative to Q2, 2014. Average Assets Under Management ($ Billions) Record 75.5 76.8 High 71.5 73.1 72.5 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 29
Slide 30: Investors Group Operating Segment – EBIT
Investors Group Operating Segment – EBIT Investors Group’s Earnings before Interest & Taxes increased by 2.6% during Q2, 2015 relative to Q2, 2014. 1 Earnings before Interest & Taxes ($ Millions) 207.1 196.9 185.1 190.7 189.9 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 1. Please refer to slide 4 for a discussio
Slide 31: Investors Group Operating Segment – EBIT
Investors Group Operating Segment – EBIT Investors Group’s Earnings before Interest & Taxes were $189.9 million during Q2, 2015, up 2.6% relative to 2014. Three months ended June 30 ($ Millions, unless otherwise indicated) 2014 2015 Change Average mutual fund assets under management ($ billions) 7
Slide 32: Investors Group Highlights
Investors Group Highlights 1. Consultant Network Growth • Continued expansion of the Consultant network with four new region offices announced in 2015 – two in Montreal, one in Peterborough and one in Edmonton. These additions will expand our network to 114 region offices across Canada. • The Consul
Slide 33: Mackenzie Investments
1. Highlights 2. Investors Group 3. Mackenzie Investments 33
Slide 34: Mackenzie Mutual Fund Gross Sales
Mackenzie Mutual Fund Gross Sales Mackenzie Investments had mutual fund gross sales of $1.7 billion during the quarter and $3.7 billion year to date, excluding rebalancing. Three months ended June 30 Six months ended June 30 ($ Millions) ($ Millions) 1,855 4,098 1,724 141 3,828 Institutional 141 r
Slide 35: Mackenzie Mutual Fund Gross Sales by Asset Class
Mackenzie Mutual Fund Gross Sales by Asset Class Continued sales momentum into Mackenzie’s balanced mutual funds. 1,2 Gross Sales Mix of Long Term Mutual Funds by Asset Class 10% 9% 11% 5% Sector / other 27% 35% 31% 39% 40% 32% 36% 33% Equity 39% 37% 44% 29% 43% 33% 39% 42% 16% 26% 29% 36% 44% 44%
Slide 36: Mackenzie Mutual Fund Redemption Rate
Mackenzie Mutual Fund Redemption Rate Mackenzie’s twelve month trailing redemption rate on long term mutual funds was 14.1% at June 30, 2015. 1 Redemption Rate on Long Term Mutual Funds (Last Twelve Month Trailing % of Average Assets Under Management) 24% 20% Industry, peer companies of 16% 15.5%
Slide 37: Mackenzie LTM Mutual Fund Sales
Mackenzie LTM Mutual Fund Sales Mackenzie’s mutual fund gross sales stabilized during Q2, 2015. 1 Mutual Fund Gross Sales and Redemptions 1 (Last Twelve Month Trailing - $ Billions) Redemption Rate 8.0 20% Gross Sales ($B) Redemptions ($B) 7.0 18% Redemption rate on long-term f unds (%) 6.0 16% 5.
Slide 38: Mackenzie Total Investment Product Net Sales
Mackenzie Total Investment Product Net Sales Mackenzie had total investment product net sales of $84 million during Q2, 2015, excluding the re-assignment of sub-advisory responsibilities on four fixed income mandates ($10.3 billion) and identified fund allocation changes. Three months ended June 3
Slide 39: Mackenzie Investment Performance
Mackenzie Investment Performance 60% of mutual funds managed by Mackenzie reside in funds with a 3, 4 or 5 star Morningstar rating. 1 Morningstar Ratings – Proportion of Morningstar-Rated Funds As at June 30, 2015 45% 40% 36% 37% 27% Mackenzie All Morningstar-Rated 15% 1 & 2 Stars 3 Stars 4 & 5 St
Slide 40: Mackenzie Investment Performance
Mackenzie Investment Performance 58% of mutual fund assets managed by Mackenzie reside in funds with first or second quartile rankings over the ten year period. 1 Mackenzie Mutual Funds in First or Second Quartile As at June 30, 2015 58% 57% 43% % of assets under 38% management 34% % of funds 29%
Slide 41: Mackenzie Assets Under Management
Mackenzie Assets Under Management The average balance of mutual fund assets under management was 4.3% higher during Q2, 2015 relative to Q2, 2014. Average Assets Under Management ($ Billions) 73.6 71.7 69.4 71.2 69.8 Institutional, sub- 1 advised & other Record High 48.5 49.3 48.3 50.5 50.6 Mutual
Slide 42: Mackenzie Operating Segment – EBIT
Mackenzie Operating Segment – EBIT Mackenzie’s Earnings before Interest and Taxes were $54.0 million during Q2, 2015. 1 Earnings before Interest & Taxes ($ Millions) 69.2 65.9 56.9 53.0 54.0 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 1. Please refer to slide 4 for a discussion of adjustments. 42
Slide 43: Mackenzie Operating Segment – EBIT
Mackenzie Operating Segment – EBIT Mackenzie’s Earnings before Interest and Taxes were $54.0 million during Q2, 2015. 1 Three months ended June 30 ($ Millions, unless otherwise indicated) 2014 2015 Change Average assets under management ($ billions) Total 69.4 71.7 3.4% Mutual funds 48.5 50.6 4.3%
Slide 44: Mackenzie Developments
Mackenzie Developments 1. Sponsorship Initiative • Mackenzie announced a new, six-year agreement with the PGA TOUR, making Mackenzie the umbrella sponsor of PGA TOUR Canada. The Tour was renamed the Mackenzie Tour – PGA TOUR Canada with the season-opening event in Vancouver. 2. New Product Launches
Slide 45: Investor Day 2015
IGM Financial Investor Day INVESTOR DAY 2015 Announcing IGM Financial’s inaugural Investor Day • Morning of November 20, 2015 in Toronto, Canada • Opportunity to hear from IGM Financial’s senior leadership as well as operating company management • Discuss long-term strategy and priorities in the con