Igm Financial Inc. · TSX:IGM
Igm Financial — Q4 2016 Earnings Presentation
31 slides from Igm Financial's earnings presentation, Feb 10, 2017
Slide 1: IGM Financial Q4, 2016 Results
IGM FINANCIAL Q4, 2016 Results February 10th, 2017
Slide 2: Conference Call Participants
IGM Financial – Conference Call Participants Paul W. Hancock Kevin E. Regan Jeffrey R. Carney Barry S. McInerney Vice-President, Executive Vice- President & CEO, President & CEO, Finance and Investor President & CFO, IGM Financial and Mackenzie Relations, IGM Financial President & CEO, IGM Financial
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. Investors Group 3. Mackenzie Investments 6
Slide 7: IGM Financial Highlights of Fourth Quarter Results
IGM Financial Highlights of Fourth Quarter Results • Net earnings were $233MM which included a $34MM benefit reflecting a reduction in income tax estimates related to certain tax filings • Operating earnings were $199.0MM versus $198.2MM last year and Financial $197.6MM during the prior quarter Resu
Slide 8: Operating Environment
Operating Environment • The S&P TSX Composite Index rose 3.8% in the quarter and was up 21.1% on a total return basis for the year making it one of the best Financial performers among developed equity markets in 2016 Markets • U.S. and European equity indices also experienced strong returns • Canadi
Slide 9: Strategic Investment in Leading Chinese Asset Manager
Strategic Investment in Leading Chinese Asset Manager IGM Financial to acquire 13.9% strategic interest in China AMC1 • CAD$647MM investment • IGM and Power Corp to collectively own 27.8% of China AMC • AUM of RMB¥1,100B (CAD$215B) at 6/30/2016, 41% CAGR since 2011 • Net earnings of RMB¥1,414MM (CAD
Slide 10: Recent Regulatory Developments
Recent Regulatory Developments CSA Consultation Paper • Seeking comments on the potential impacts that a ban on embedded 81-408 commissions could have on Canadian investors and market participants Consultation on the • An important consideration for any regulatory change in Canada is to Option of Di
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Slide 12: Investors Group Fourth Quarter Review
Investors Group Fourth Quarter Review Company Highlights 1) Strong sales momentum - Q4 Mutual fund gross sales up 15% versus approximately 3% for industry - Best Q4 net sales since 2007, up $261 million - Solid asset retention, with redemption rate of 8.3% down from 8.8% last year 2) New Consultant
Slide 13: Trend in Flows
Trend in Flows Quarterly Gross and Net Sales Trends ($ Billions) 2.5 2.27 2.09 2.0 1.82 1.78 1.63 1.5 Gross Sales • Gross sales during the 1.0 0.47 0.5 0.00 0.26 Net Sales quarter of $2.1B, up 15% (0.17) - compared to last year (0.5) (0.19) Q4/15 Q1/15 Q2/16 Q3/16 Q4/16 Quarterly Annualized • Net sa
Slide 14: HNW Segment – Key Growth Focus
HNW Segment – Key Growth Focus HNW Mutual Fund Series Assets1 • $32.3B in HNW series assets accounting for 39.8% of total AUM $35B $32.3B $2.3B Unbundled • $2.2B in gross sales in 2016, a $30B $28.0B fee structures $1.6B $5.4B growth of 20% increase relative to the +49.7% $25B $3.6B vs Q4 2015 prior
Slide 15: Investment Performance
Investment Performance Client Account Rate of Return Experience (%) Quarterly 8 • Median client account rate of 6 4 90% of client return was 2.2% during the 3.5 2 1.3 2.2 accounts had fourth quarter and 6.8% over returns within - 0.0 this range the last 12 months (2) (4) (6) (8) Q1/16 Q2/16 Q3/16 Q4
Slide 16: Insurance & Mortgage Business
Insurance & Mortgage Business New Annualized Insurance Premiums (Twelve months ended December 31 - $ Millions) 93.5 • New individual insurance 70.4 Group Insurance product sales increased 36.1% in 2016 Individual 75.1 Insurance • New mortgage business in 55.2 2016 was $2.9B, up 7.9% 2015 2016 compar
Slide 17: Consultant Network Enhancements Focusing on Quality
Consultant Network Enhancements Focusing on Quality • Consultant Practices, which are teams led by Consultants with greater than 4 years experience, is a key measurement of our business • Tightening recruitment standards to focus on individuals with a greater likelihood of success to drive productiv
Slide 18: Consultant Network Enhancements Focusing on Quality
Consultant Network Enhancements Focusing on Quality • Investors Group has more Certified Financial Planners than any other company in Canada1 Rank of Top Ten Firms by Number of Holders of CFP Designation2 Leading Professional Accreditation • 1,553 Consultants with CFP/F.Pl. and 1. Investors Group 1,
Slide 19: Average Mutual Fund AUM & Fee Rates
Average Mutual Fund AUM & Fee Rates 209.0 208.8 208.9 208.6 208.2 • Q4 2016 average mutual fund AUM increased 2.1% compared to Q3 2016 79.7 78.1 75.3 75.8 • Proportion of mutual fund 73.5 AUM in HNW series increased to 39.8% in Q4 20161 • Management & administration fee rate relatively stable compar
Slide 20: Investors Group EBIT
INVESTORS GROUP EBIT ($ Millions, unless otherwise indicated) Change Relative to: • Management and Q4/15 Q3/16 Q4/16 Prior Year Prior Quarter administration fees increased Average mutual fund AUM ($ Billions) 75.3 78.1 79.7 6.0% 2.1% 1.8% compared to Q3 2016 reflecting higher average Revenues Manage
Slide 21: Mackenzie Investments
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Slide 22: Mackenzie Fourth Quarter Review
Mackenzie Fourth Quarter Review Company Highlights 1. Strong sales momentum1 - Best Q4 mutual fund gross and net sales since 2006 - Significant sales capture, with mutual fund gross sales up 22.5% versus industry advice channel peers up 1.0% - Record high mutual fund AUM 2. Accelerated momentum in b
Slide 23: Mutual Fund Flows
Mutual Fund Flows 1 Quarterly Mutual Fund Flows ($ Billions) 1.84 1.95 2.0 1.65 1.59 1.49 1.5 1.0 Gross Sales • Mutual fund gross sales up 0.5 Net Sales 22.5% relative to Q4 2015 - versus industry peers up 1% (0.07) (0.02) (0.5) (0.19) (0.20) (0.38) (1.0) • $164MM improvement in Q4/15 Q1/15 Q2/16 Q3
Slide 24: Flows – Mutual Fund Gross Sales by Asset Class
Flows – Mutual Fund Gross Sales by Asset Class • 54.8% improvement in core Total Mutual Fund Gross Sales balanced fund gross sales (Three months ended December 31 - $ Millions) 2015 2016 $ Change % Change led by strong flows into the Global Monthly Income Fund Money market 95 122 27 28.4% Income-ori
Slide 25: Flows – Total Investment Product Net Sales
Flows – Total Investment Product Net Sales Total Investment Product Net Sales (Three months ended December 31 - $ Millions) 2015 2016 $ Change • Improvement in mutual fund net sales primarily from Money market 28 54 26 $128MM increase in core Income-oriented (153) (70) 83 balance funds Balanced Symm
Slide 26: Strong Momentum in Mackenzie's ETF Business
Strong Momentum in Mackenzie’s ETF Business Mackenzie ETF AUM 1 $177MM • Ten Mackenzie ETFs launched in last 12 months complementing Mackenzie’s Exclusive retail partnership in Canada with $113MM broad and innovative fund TOBAM, an award-winning global asset manager based in lineup France • Suite in
Slide 27: Investment Performance – Mutual Funds
Investment Performance – Mutual Funds 1 Mackenzie Mutual Funds in First or Second Quartile (Proportion of Assets) 72% 65% 57% September 30, 2016 42% December 31, 2016 37% 33% 36% 32% 1 Year 3 Year 5 Year 10 Year 1 Morningstar Ratings – Proportion of Morningstar-Rated Assets (As at December 31, 2016)
Slide 28: Investment Boutiques – Performance & Flows
Investment Boutiques – Performance & Flows Mutual Fund Assets by Morningstar Rating ($ millions) 10,000 4 or 5 Stars 3 Stars 1 or 2 Stars Not Rated Cundill Percentiles 7,500 3m 6m 12m 5,000 96.0 93.9 72.5 2,500 0 % 4 or 5 0% 27% 88% 82% 67% 34% 4% 39% 73% 40% 3% Fixed Managed Value-Oriented Quality
Slide 29: Average Total AUM & Fee Rates
Average Total AUM & Fee Rates 78.7 Annualized Net 76.5 76.8 76.9 77.3 Revenue Rate (bps)1 • Q4 2016 change in average AUM versus Q3 2016: − Mutual funds up 1.8% 63.5 63.8 61.7 59.8 60.8 Average Total AUM ($B) − Institutional down 3.6% Institutional2 − Proportion of average 48.5 46.7 47.8 49.6 50.5 M
Slide 30: Mackenzie EBIT
MACKENZIE EBIT ($ Millions, unless otherwise indicated) • Net revenue up 1.1% Change Relative to: Prior Prior Q4/15 Q3/16 Q4/16 Year Quarter compared to Q3 2016 due to Average AUM ($ Billions): slightly higher average AUM Total 61.7 63.5 63.8 3.5% 0.6% Mutual funds 48.5 49.6 50.5 4.2% 1.8% levels •
Slide 31: Q&A
ISM, Q&A 31