Invesco Ltd · NYSE:IVZ
Invesco — Q1 2011 Earnings Presentation
49 slides from Invesco's earnings presentation, Apr 27, 2011
Slide 1: Invesco first-quarter 2011 results
Invesco first-quarter 2011 results Martin L. Flanagan President and Chief Executive Officer Loren M. Starr Chief Financial Officer Mark Armour Senior Managing Director, Invesco Institutional April 27, 2011
Slide 2: Forward-looking statements
Forward-looking statements This presentation, and comments made in the associated conference call today, may include “forward-looking statements.” Forward-looking statements include information concerning future results of our operations, expenses, earnings, liquidity, cash flow and capital expendit
Slide 3: Discussion topics
Discussion topics First-quarter overview Focus on our global institutional business Financial results Questions Appendix 2
Slide 4: First quarter overview
First quarter overview Continued momentum in our business • Long-term investment performance is strong across the enterprise • Positive trend in long-term net flows – strong long-term net flows across all distribution channels • Active share repurchase program – purchased 2.1 million shares for $53.
Slide 5: Summary of first-quarter 2011 results
Summary of first-quarter 2011 results • March 31, 2011 AUM of $641.9bn versus $616.5 billion as of December 31, 2010 Assets under • 1Q11 average AUM was $630.2 billion versus $616.0 billion for management 4Q10 • Total net inflows of $9.2 billion • Net long-term inflows of $6.6 billion Flows • Instit
Slide 6: Quarterly flows
Quarterly flows • Positive momentum in long-term flows driven by continued strength in gross sales Quarterly long-term flows ($ billions) Total AUM AUM ex-ETF/UIT/Passive ETF/UIT/Passive AUM 48.0 40.4 36.8 32.1 29.0 30.4 29.6 19.0 27.6 24.6 25.5 21.6 19.6 18.8 15.2 15.8 18.2 16.5 17.8 12.2 12.5 10.8
Slide 7: Distribution channels
Distribution channels Quarterly long-term flows • Momentum in retail and institutional gross sales drove positive net flows for the firm • 4 consecutive years of positive flows in private wealth management Quarterly long-term flows ($ billions) Retail(a) Institutional(b) Private Wealth Management(c)
Slide 8: Investment performance – overview
Investment performance – overview Aggregate Performance Analysis – Asset Weighted • Strong overall peer group performance (asset-weighted) – 55%, 77%, and 79% of assets are in the top half of peer groups for the 1-, 3-, and 5-year time periods as of March 31, 2011. Percent of assets in top half of p
Slide 9: Investment performance highlights
Investment performance highlights • 94% or greater of US Value Equity AUM are in the top half of peer groups and beating benchmarks for 3 and 5 years • 64% and 96% of US Core Equity AUM are beating benchmarks and 69% and 63% AUM rank in the top half of peer groups for 3 and 5 years • 94% or greater
Slide 10: Solid execution on acquisition-related milestones
Solid execution on acquisition-related milestones Key Milestone Initial Estimate Actual Result Integration of systems and people At close At close Achievement of annual run rate ≈$70 million within 12 ≈$85 million 5 months post- cost synergies months post close close Product line up rationalization
Slide 11: Discussion topics
Discussion topics First-quarter overview Focus on our global institutional business Financial results Questions Appendix 10
Slide 12: Invesco's institutional business is well-positioned globally
Invesco’s institutional business is well-positioned globally By delivering investment excellence and meeting the needs of clients and consultants, we will further differentiate Invesco in a highly competitive institutional market and further build our business UK and Europe US, Canada, & Latin $27
Slide 13: Providing strong investment capabilities is our primary focus
Providing strong investment capabilities is our primary focus Alternatives • Strong team with over a 27-year history of managing real estate Real Estate investments • Excellent long-term investment returns from both capital appreciation and income • Experienced team, singular focus, and global platf
Slide 14: By better meeting client needs, we will continue to grow our business
By better meeting client needs, we will continue to grow our business Institutional quarterly long-term flows ($ billions) 10.7 10.0 6.7 7.2 5.4 4.8 4.2 3.8 3.9 2.6 2.4 1.9 0.7 -0.5 -0.1 -1.8 -3.3 -4.1 -4.1 -4.7 -5.6 -5.5 -8.1 -8.3 2Q09 3Q09 4Q09 1Q10 2Q10* 3Q10 4Q10* 1Q11 Gross sales Gross redempti
Slide 15: Discussion topics
Discussion topics First-quarter overview Focus on our global institutional business Financial results Questions Appendix 14
Slide 16: Total assets under management – 1Q11 vs. 4Q10
Total assets under management – 1Q11 vs. 4Q10 ($ billions) 1Q-11 4Q-10 % Change Beginning Assets $616.5 $604.5 2.0% Long-Term Inflows 48.0 40.4 18.8% Long-Term Outflows (41.4) (57.4) (27.9)% Long-Term Net flows 6.6 (17.0) N/A Net flows in Inst. Money Market Funds 2.6 (1.6) N/A Market Gains and Losse
Slide 17: Non-GAAP operating results – 1Q11 vs. 4Q10
Non-GAAP operating results – 1Q11 vs. 4Q10 ($ millions) 1Q-11 4Q-10 % Change Adjusted Revenues Investment Management Fees 816 799 2.1% Service and Distribution Fees 199 202 (1.6)% Performance Fees 4 19 (79.7)% Other 33 35 (5.5)% Third-Party Distribution, Service and Advisory Expenses (300) (293) 2.3
Slide 18: Estimated net revenue yield reconciliation
Estimated net revenue yield reconciliation BPS 51 +0.9 50 49.5 (1.0) 49 (0.7) 48 (0.5) 47.7 (0.3) (0.2) 47 46 4Q10 4Q10 Low Performance Day Count “Substantially Service, Dist. (B- Asset Mix 1Q11 Net Fee Outflow Fee Decline Impact Invested” Alt. Fee Share) & Other Net Revenue Rate Impact Revenue Reve
Slide 19: Low revenue yield products & incremental margins
Low revenue yield products & incremental margins STABLE VALUE INST. MONEY MARKET INVESCO POWERSHARES* Ending 1Q11 AUM: $42.0 billion Ending 1Q11 AUM: $66.9 billion Ending 1Q11 AUM: $35.4 billion 1Q11 net flows: +$3.1billion 1Q11 net flows: +$2.6 billion 1Q11 net flows: +$2.7 billion Trailing 12M net
Slide 20: First quarter overview
First quarter overview Continued momentum in our business • Long-term investment performance is strong across the enterprise • Positive trend in long-term net flows – strong long-term net flows across all distribution channels • Active share repurchase program – purchased 2.1 million shares for $53.
Slide 21: Discussion topics
Discussion topics First-quarter overview Focus on our global institutional business Financial results Questions Appendix 20
Slide 22: Discussion topics
Discussion topics First-quarter overview Focus on our global institutional business Financial results Questions Appendix 21
Slide 23: Investment performance
Investment performance % of AUM above 1st quartile By investment objective* benchmark 2nd quartile Equities U.S. Core U.S. Growth U.S. Value Sector 100% 100% 100% 100% 96% 96% 95% 87% 75% 64% 60% 63% 61% 55% 23% 91% 1% 94% 57% 48% 35% 53% 31% 60% 48% 65% 38% 46% 25% 16% 22% 7% 12% 8% 10% 3% 3% 3% 1-
Slide 24: Investment performance
Investment performance % of AUM above 1st quartile By investment objective* benchmark 2nd quartile Equities Global ex-U.S. and Balanced Global Emerging markets Balanced 100% 100% 100% 93% 92% 80% 82% 78% 69% 3% 64% 65% 54% 66% 30% 43% 68% 19% 60% 33% 15% 24% 30% 28% 22% 21% 13% 10% 12% 4% 1-yr 3-yr
Slide 25: Commitment to investment excellence
Commitment to investment excellence Source: Invesco. All data as of March 31, 2011. The listed centers do not all provide products or services that are available in all jurisdictions, nor are their products and services available on all platforms. All entities listed are wholly owned, indirect subsi
Slide 26: We are diversified as a firm
We are diversified as a firm Delivering a diverse set of solutions to meet client needs By client domicile By channel By asset class PWM 3% Balanced 7% Money Canada Market 4% 11% U.S. 68% Institutional Equity U.K. Retail 36% 47% 15% 61% Fixed Europe Income 6% 22% Asia 7% Alternative 13% 1-Yr 1-Yr 1-
Slide 27: Non-GAAP operating results – quarterly
Non-GAAP operating results – quarterly ($ millions) 1Q-11 4Q-10 % Change* 3Q-10 2Q-10 1Q-10 4Q-09 3Q-09 2Q-09 Investment Management Fees 816 799 2.1% 749 653 618 628 587 516 Service and Distribution Fees 199 202 (1.6)% 192 139 113 111 112 100 Performance Fees 4 19 (79.7)% 3 4 1 7 4 8 Other 33 35 (5.
Slide 28: US GAAP operating results – quarterly
US GAAP operating results – quarterly ($ millions) 1Q-11 4Q-10 % Change* 3Q-10 2Q-10 1Q-10 4Q-09 3Q-09 2Q-09 Investment Management Fees 792 774 2.4% 726 628 594 612 570 502 Service and Distribution Fees 199 202 (1.6)% 192 139 113 111 112 100 Performance Fees 4 19 (79.7)% 3 4 1 7 4 8 Other 33 34 (4.7
Slide 29: Total assets under management - quarterly
Total assets under management - quarterly ($ billions) 1Q-11 4Q-10 % Change 3Q-10 2Q-10 1Q-10 2.0% $557.7 $457.7 $459.5 Beginning Assets $616.5 $604.5 Long-Term Inflows 48.0 40.4 18.8% 36.8 45.3 32.1 Long-Term Outflows (41.4) (57.4) (27.9)% (31.9) (31.4) (28.5) Long-Term Net flows 6.6 (17.0) N/A 4.9
Slide 30: Total assets under management – by asset class
Total assets under management – by asset class Fixed Money ($ billions) Total Equity Income Balanced Market Alternative September 30, 2010 $604.5 $294.4 $130.8 $41.3 $69.9 $68.1 Long-Term Inflows 40.4 20.3 10.6 2.5 0.4 6.6 Long-Term Outflows (57.4) (44.5) (6.2) (1.9) (0.4) (4.4) Long-Term Net flows
Slide 31: Total assets under management – by asset class
Total assets under management – by asset class Fixed Money ($ billions) Total Equity Income Balanced Market Alternative March 31, 2010 $457.7 $198.5 $79.4 $40.7 $72.6 $66.5 Long-Term Inflows 45.3 33.9 5.4 2.1 0.6 3.3 Long-Term Outflows (31.4) (19.4) (4.7) (2.2) (0.4) (4.7) Long-Term Net flows 13.9 1
Slide 32: Total assets under management – by channel
Total assets under management – by channel ($ billions) Total Retail Institutional PWM September 30, 2010 $604.5 $359.3 $229.0 $16.2 Long-Term Inflows 40.4 29.6 10.0 0.8 Long-Term Outflows (57.4) (30.0) (26.7) (0.7) Long-Term Net flows (17.0) (0.4) (16.7) 0.1 Net flows in Inst. Money Market Funds (1
Slide 33: Total assets under management – by channel
Total assets under management – by channel ($ billions) Total Retail Institutional PWM March 31, 2010 $457.7 $243.6 $198.5 $15.6 Long-Term Inflows 45.3 23.0 21.2 1.1 Long-Term Outflows (31.4) (25.4) (5.5) (0.5) Long-Term Net flows 13.9 (2.4) 15.7 0.6 Net flows in Inst. Money Market Funds (0.9) - (0.
Slide 34: Total assets under management – by client domicile
Total assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Europe Asia September 30, 2010 $604.5 $400.0 $26.7 $89.8 $33.6 $54.4 Long-Term Inflows 40.4 27.6 0.5 3.3 5.0 4.0 Long-Term Outflows (57.4) (26.2) (1.7) (3.3) (4.1) (22.1) Long-Term Net flows (17.0) 1.4
Slide 35: Total assets under management – by client domicile
Total assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Europe Asia March 31, 2010 $457.7 $290.4 $29.2 $83.9 $27.0 $27.2 Long-Term Inflows 45.3 18.9 0.6 4.7 3.3 17.8 Long-Term Outflows (31.4) (21.3) (1.8) (3.7) (3.2) (1.4) Long-Term Net flows 13.9 (2.4) (1.
Slide 36: AUM – ETF, UIT and passive – by asset class
Assets under management – ETF, UIT and passive – by asset class Fixed Money ($ billions) Total Equity Income Balanced Market Alternative September 30, 2010 $89.9 $57.5 $17.1 $0.0 $0.0 $15.3 Long-Term Inflows 15.8 9.3 4.3 - - 2.2 Long-Term Outflows (30.4) (28.4) (0.6) - - (1.4) Long-Term Net flows (1
Slide 37: AUM – ETF, UIT and passive – by asset class
Assets under management – ETF, UIT and passive – by asset class Fixed Money ($ billions) Total Equity Income Balanced Market Alternative March 31, 2010 $55.7 $34.3 $4.5 $0.0 $0.0 $16.9 Long-Term Inflows 26.6 24.4 0.8 - - 1.4 Long-Term Outflows (11.9) (9.7) (0.2) - - (2.0) Long-Term Net flows 14.7 14
Slide 38: AUM – ETF, UIT and passive – by channel
Assets under management – ETF, UIT and passive – by channel ($ billions) Total Retail Institutional PWM September 30, 2010 $89.9 $66.7 $23.2 $0.0 Long-Term Inflows 15.8 12.9 2.9 - Long-Term Outflows (30.4) (11.8) (18.6) - Long-Term Net flows (14.6) 1.1 (15.7) - Net flows in Inst. Money Market Funds
Slide 39: AUM – ETF, UIT and passive – by channel
Assets under management – ETF, UIT and passive – by channel ($ billions) Total Retail Institutional PWM March 31, 2010 $55.7 $49.6 $6.1 $0.0 Long-Term Inflows 26.6 10.6 16.0 - Long-Term Outflows (11.9) (11.9) - - Long-Term Net flows 14.7 (1.3) 16.0 - Net flows in Inst. Money Market Funds - - - - Mar
Slide 40: AUM – ETF, UIT and passive – by client domicile
Assets under management – ETF, UIT and passive – by client domicile Continental ($ billions) Total U.S. Canada U.K. Europe Asia September 30, 2010 89.9 70.5 $0.0 $0.0 $1.1 $18.3 Long-Term Inflows 15.8 15.7 - - 0.1 - Long-Term Outflows (30.4) (11.7) - - (0.1) (18.6) Long-Term Net flows (14.6) 4.0 - -
Slide 41: AUM – ETF, UIT and passive – by client domicile
Assets under management – ETF, UIT and passive – by client domicile Continental ($ billions) Total U.S. Canada U.K. Europe Asia March 31, 2010 $55.7 $52.9 $0.0 $0.0 $1.1 $1.7 Long-Term Inflows 26.6 10.7 - - 0.1 15.8 Long-Term Outflows (11.9) (11.8) - - (0.1) - Long-Term Net flows 14.7 (1.1) - - - 15
Slide 42: Reconciliation of US GAAP to non-GAAP – three months ended March 31, 2011
Reconciliation of US GAAP results to non-GAAP results – three months ended March 31, 2011 ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation Consolidated Other Non- Consolidation distribution, related / depreciation of Investment Reconciling GAAP Basis of Joint service and d
Slide 43: Reconciliation of US GAAP to non-GAAP – three months ended December 31, 2010
Reconciliation of US GAAP results to non-GAAP results – three months ended December 31, 2010 ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation Consolidated Other Non- Consolidation distribution, related / depreciation of Investment Reconciling GAAP Basis of Joint service an
Slide 44: Reconciliation of US GAAP to non-GAAP – three months ended September 30, 2010
Reconciliation of US GAAP results to non-GAAP results – three months ended September 30, 2010 ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation Consolidated Other Non- Consolidation distribution, related / depreciation of Investment Reconciling GAAP Basis of Joint service a
Slide 45: Reconciliation of US GAAP to non-GAAP – three months ended June 30, 2010
Reconciliation of US GAAP results to non-GAAP results – three months ended June 30, 2010 ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation Consolidated Other Non- Consolidation distribution, related / depreciation of Investment Reconciling GAAP Basis of Joint service and de
Slide 46: Reconciliation of US GAAP to non-GAAP – three months ended March 31, 2010
Reconciliation of US GAAP results to non-GAAP results – three months ended March 31, 2010 ($ millions) US GAAP Proportional 3rd party Acquisiti Market appreciation / Consolidated Non- share of JV distribution, on depreciation of Investment GAAP Basis service and related deferred compensation Product
Slide 47: Reconciliation of US GAAP to non-GAAP – three months ended December 31, 2009
Reconciliation of US GAAP results to non-GAAP results – three months ended December 31, 2009 ($ millions) US GAAP Proportional 3rd party distribution, Acquisition Consolidated Non-GAAP Consolidation service and advisory related Investment Products basis Basis of Joint expenses Operating Revenues Ven
Slide 48: Reconciliation of US GAAP to non-GAAP – three months ended September 30, 2009
Reconciliation of US GAAP results to non-GAAP results – three months ended September 30, 2009 ($ millions) US GAAP Proportional 3rd party distribution, Acquisition Consolidated Non-GAAP Consolidation of service and advisory related Investment Products basis Basis Joint Ventures expenses Operating Re
Slide 49: Reconciliation of US GAAP to non-GAAP – three months ended June 30, 2009
Reconciliation of US GAAP results to non-GAAP results – three months ended June 30, 2009 ($ millions) US GAAP Proportional 3rd party distribution, Acquisition Consolidated Non-GAAP Consolidation of service and advisory related Investment Products basis Basis Joint Ventures expenses Operating Revenue