Invesco Ltd · NYSE:IVZ
Invesco — Q3 2015 Earnings Presentation
44 slides from Invesco's earnings presentation, Oct 29, 2015
Slide 1: Invesco third quarter 2015 results
Invesco third quarter 2015 results Martin L. Flanagan President and Chief Executive Officer Loren M. Starr Chief Financial Officer October 29, 2015
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 Third quarter overview Investment performance and flows Financial results Questions Appendix 2
Slide 4: Third quarter overview
Third quarter overview Continued strong investment performance and our focus on meeting client needs contributed to solid operating results despite volatile markets Maintained strong, long-term investment performance – 73% and 83% of actively managed assets ahead of peers on a 3- and 5-year basis
Slide 5: Summary of third quarter 2015 results
Summary of third quarter 2015 results Assets under September 30, 2015, AUM of $755.8 billion, versus $803.6 billion management at June 30, 2015 Average AUM was $788.9 billion, versus $810.9 billion for the second quarter of 2015 Flows Long-term net outflows of $3.9 billion Total net outflows
Slide 6: Discussion topics
Discussion topics Third quarter overview Investment performance and flows Financial results Questions Appendix 5
Slide 7: Investment performance – overview
Investment performance – overview Aggregate performance analysis – asset weighted Percent of actively managed assets in top half of peer group* 1-Year 3-Year 5-Year 53% 73% 83% 17% 27% 47% Assets top half of peer group Assets bottom half of peer group * Excludes passive products, closed-end funds, p
Slide 8: Quarterly long-term flows
Quarterly long-term flows Lower active sales reflecting a volatile environment while passive flows were impacted by a narrowing of client demand Quarterly long-term flows ($ billions) Total Active Passive 50.2 50.5 52.1 41.6 40.6 43.1 45.8 44.4 46.0 43.5 37.2 36.1 36.2 36.4 36.7 42.5 9.6 9.9 8.6 9.0
Slide 9: Quarterly long-term flows
Quarterly long-term flows Positive institutional flows (in spite of a large single client outflow) were offset by retail volatility Quarterly long-term flows ($ billions) Retail(a) Institutional(b) 17.9 39.6 40.3 35.8 36.3 34.8 34.2 35.7 32.0 11.5 10.0 10.6 10.3 10.2 9.6 6.4 7.5 6.2 7.6 4.8 2.8 -0.3
Slide 10: Discussion topics
Discussion topics Third quarter overview Investment performance and flows Financial results Questions Appendix 9
Slide 11: Total assets under management – 3Q15 vs. 2Q15
Total assets under management – 3Q15 vs. 2Q15 ($ billions) 3Q-15 2Q-15 % Change Beginning Assets $803.6 $798.3 0.7% Long-Term Inflows 43.5 52.1 (16.5)% Long-Term Outflows (47.4) (46.2) 2.6% Long-Term Net flows (3.9) 5.9 N/A Net flows in Invesco PowerShares QQQ (0.9) (0.3) 200.0% Net flows in Inst. M
Slide 12: Non-GAAP operating results – 3Q15 vs. 2Q15
Non-GAAP operating results – 3Q15 vs. 2Q15 ($ millions) 3Q-15 2Q-15 % Change Adjusted Revenues Investment Management Fees 1,038 1,083 (4.2)% Service and Distribution Fees 215 220 (2.2)% Performance Fees 18 13 34.4% Other 28 38 (27.2)% Third-Party Distribution, Service and Advisory Expenses (395) (41
Slide 13: Third quarter overview
Third quarter overview Continued strong investment performance and our focus on meeting client needs contributed to solid operating results despite volatile markets Maintained strong, long-term investment performance – 73% and 83% of actively managed assets ahead of peers on a 3- and 5-year basis
Slide 14: Discussion topics
Discussion topics Third quarter overview Investment performance and flows Financial results Questions Appendix 13
Slide 15: Discussion topics
Discussion topics Third quarter overview Investment performance and flows Financial results Questions Appendix 14
Slide 16: 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 3% 13% 66% 14% 66% 24% 34% 47% 10% 9% 7% 7% 1-Yr 1-Yr 1-Yr ($ billions) Change ($ billions) Change ($ billions) Change U.S. $499.7 (6.1)% Retail $499.4 (6.2)% Equity $
Slide 17: Investment performance by investment objective
Investment performance By investment objective (actively managed assets)* Equities AUM above benchmark 1st quartile 2nd quartile U.S. Core U.S. Growth U.S. Value Sector 100% 100% 100% 100% 95% 88% 30% 77% 76% 59% 26% 30% 68% 37% 4% 4% 26% 24% 20% 26% 18% 14% 22% 26% 24% 21% 20% 15% 8% 4% 4% 4% 8% 2%
Slide 18: Investment performance by investment objective (continued)
Investment performance By investment objective (actively managed assets)* (CONTINUED) Equities Other AUM above benchmark 1st quartile 2nd quartile Global Global ex-U.S. and Em. Mkts. Alternatives Balanced 100% 100% 100% 100% 98% 87% 88% 88% 85% 70% 39% 74% 72% 71% 59% 13% 58% 95% 88% 30% 37% 50% 39%
Slide 19: Investment performance (5-year) by investment objective
Investment performance (5-year) By investment objective (actively managed assets)* Percentages in parentheses represent % AUM of each investment objective as a ratio of all objectives (Total ranked AUM of $467.2 billion) % of assets top % of assets bottom Equities half of peer group half of peer gro
Slide 20: Investment performance (5-year) by investment objective (continued)
Investment performance (5-year) By investment objective (actively managed assets)* (CONTINUED) Percentages in parentheses represent % AUM of each investment objective as a ratio of all objectives (Total ranked AUM of $467.2 billion) % of assets top % of assets bottom Equities Other half of peer grou
Slide 21: Non-GAAP operating results – quarterly
Non-GAAP operating results – quarterly ($ millions) 3Q-15 2Q-15 % Change* 1Q-15 4Q-14 3Q-14 2Q-14 1Q-14 4Q-13 Investment Management Fees 1,038 1,083 (4.2)% 1,024 1,033 1,071 1,055 989 983 Service and Distribution Fees 215 220 (2.2)% 213 218 222 215 239 230 Performance Fees 18 13 34.4% 52 19 10 7 34
Slide 22: US GAAP operating results – quarterly
US GAAP operating results – quarterly ($ millions) 3Q-15 2Q-15 % Change* 1Q-15 4Q-14 3Q-14 2Q-14 1Q-14 4Q-13 Investment Management Fees 1,017 1,056 (3.7)% 1,001 1,010 1,047 1,032 965 955 Service and Distribution Fees 215 220 (2.2)% 213 218 222 215 239 230 Performance Fees 16 7 132.8% 47 17 8 5 31 9
Slide 23: Total assets under management – quarterly
Total assets under management – quarterly ($ billions) 3Q-15 2Q-15 % Change 1Q-15 4Q-14 3Q-14 Beginning Assets $803.6 $798.3 0.7% $792.4 $789.6 $802.4 Long-Term Inflows 43.5 52.1 (16.5)% 50.5 46.0 44.4 Long-Term Outflows (47.4) (46.2) 2.6% (40.2) (43.5) (38.4) Long-Term Net flows (3.9) 5.9 N/A 10.3
Slide 24: Total assets under management – by asset class
Total assets under management – by asset class ($ billions) Total Equity Fixed Balanced Money Alternatives Income Market March 31, 2015 $798.3 $392.8 $184.4 $50.6 $70.2 $100.3 Long-Term Inflows 52.1 23.8 13.2 6.0 1.0 8.1 Long-Term Outflows (46.2) (26.4) (8.7) (3.1) (1.0) (7.0) Long-Term Net flows 5.
Slide 25: Total assets under management – by asset class
Total assets under management – by asset class ($ billions) Total Equity Fixed Balanced Money Alternatives Income Market September 30, 2014 $789.6 $386.3 $179.2 $51.5 $76.6 $96.0 Long-Term Inflows 46.0 22.0 11.5 3.1 1.1 8.3 Long-Term Outflows (43.5) (24.3) (8.6) (3.3) (1.2) (6.1) Long-Term Net flows
Slide 26: Total assets under management – by channel
Total assets under management – by channel ($ billions) Total Retail Institutional March 31, 2015 $798.3 $540.7 $257.6 Long-Term Inflows 52.1 34.2 17.9 Long-Term Outflows (46.2) (34.7) (11.5) Long-Term Net flows 5.9 (0.5) 6.4 Net flows in Invesco PowerShares QQQ (0.3) (0.3) - Net flows in Inst. Mone
Slide 27: Total assets under management – by channel
Total assets under management – by channel ($ billions) Total Retail Institutional September 30, 2014 $789.6 $532.2 $257.4 Long-Term Inflows 46.0 35.7 10.3 Long-Term Outflows (43.5) (34.9) (8.6) Long-Term Net flows 2.5 0.8 1.7 Net flows in Invesco PowerShares QQQ (3.2) (3.2) - Net flows in Inst. Mon
Slide 28: Total assets under management – by client domicile
Total assets under management – by client domicile ($ billions) Total U.S. Canada U.K. Continental Asia Europe March 31, 2015 $798.3 $532.6 $24.9 $106.3 $74.2 $60.3 Long-Term Inflows 52.1 27.4 1.0 4.5 9.7 9.5 Long-Term Outflows (46.2) (24.5) (1.1) (4.3) (8.1) (8.2) Long-Term Net flows 5.9 2.9 (0.1)
Slide 29: Total assets under management – by client domicile
Total assets under management – by client domicile ($ billions) Total U.S. Canada U.K. Continental Asia Europe September 30, 2014 $789.6 $532.1 $26.8 $101.5 $70.9 $58.3 Long-Term Inflows 46.0 23.8 0.9 6.8 9.2 5.3 Long-Term Outflows (43.5) (24.7) (1.1) (4.0) (7.4) (6.3) Long-Term Net flows 2.5 (0.9)
Slide 30: Passive assets under management – by asset class
Passive assets under management – by asset class ($ billions) Total Equity Fixed Balanced Money Alternative Income Market March 31,2015 $143.0 $90.0 $42.0 - - $11.0 Long-Term Inflows 9.0 6.3 1.6 - - 1.1 Long-Term Outflows (8.5) (6.2) (1.0) - - (1.3) Long-Term Net flows 0.5 0.1 0.6 - - (0.2) Net flow
Slide 31: Passive assets under management – by asset class
Passive assets under management – by asset class ($ billions) Total Equity Fixed Balanced Money Income Market Alternative September 30, 2014 $142.1 $88.0 $40.8 - - $13.3 Long-Term Inflows 9.6 5.9 2.5 - - 1.2 Long-Term Outflows (8.0) (4.9) (2.1) - - (1.0) Long-Term Net flows 1.6 1.0 0.4 - - 0.2 Net f
Slide 32: Passive assets under management – by channel
Passive assets under management – by channel ($ billions) Total Retail Institutional March 31, 2015 $143.0 $120.8 $22.2 Long-Term Inflows 9.0 7.6 1.4 Long-Term Outflows (8.5) (7.6) (0.9) Long-Term Net flows 0.5 - 0.5 Net flows in Invesco PowerShares QQQ (0.3) (0.3) - Net flows in Inst. Money Market
Slide 33: Passive assets under management – by channel
Passive assets under management – by channel ($ billions) Total Retail Institutional September 30, 2014 $142.1 $121.1 $21.0 Long-Term Inflows 9.6 7.7 1.9 Long-Term Outflows (8.0) (7.0) (1.0) Long-Term Net flows 1.6 0.7 0.9 Net flows in Invesco PowerShares QQQ (3.2) (3.2) - Net flows in Inst. Money M
Slide 34: Passive assets under management – by client domicile
Passive assets under management – by client domicile ($ billions) Total U.S. Canada U.K. Continental Asia Europe March 31, 2015 $143.0 $139.0 $0.3 - $1.8 $1.9 Long-Term Inflows 9.0 8.1 0.1 - 0.1 0.7 Long-Term Outflows (8.5) (7.7) - - (0.1) (0.7) Long-Term Net flows 0.5 0.4 0.1 - - - Net flows in Inv
Slide 35: Passive assets under management – by client domicile
Passive assets under management – by client domicile ($ billions) Total U.S. Canada U.K. Continental Asia Europe September 30, 2014 $142.1 $138.2 $0.2 - $1.7 $2.0 Long-Term Inflows 9.6 9.3 - - 0.2 0.1 Long-Term Outflows (8.0) (7.8) - - (0.1) (0.1) Long-Term Net flows 1.6 1.5 - - 0.1 - Net flows in I
Slide 36: Reconciliation of US GAAP to non-GAAP – three months ended September 30, 2015
Reconciliation of US GAAP results to non-GAAP results – three months ended September 30, 2015 Please refer to pages 19-22 in the 3Q 2015 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation / Consolidated Other Non-GA
Slide 37: Reconciliation of US GAAP to non-GAAP – three months ended June 30, 2015
Reconciliation of US GAAP results to non-GAAP results – three months ended June 30, 2015 Please refer to pages 19-22 in the 2Q 2015 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation / Consolidated Other Non-GAAP Co
Slide 38: Reconciliation of US GAAP to non-GAAP – three months ended March 31, 2015
Reconciliation of US GAAP results to non-GAAP results – three months ended March 31, 2015 Please refer to pages 18-21 in the 1Q 2015 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation / Consolidated Other Non-GAAP C
Slide 39: Reconciliation of US GAAP to non-GAAP – three months ended December 31, 2014
Reconciliation of US GAAP results to non-GAAP results – three months ended December 31, 2014 Please refer to pages 22-26 in the 4Q 2014 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation / Consolidated Other Non-GAA
Slide 40: Reconciliation of US GAAP to non-GAAP – three months ended September 30, 2014
Reconciliation of US GAAP results to non-GAAP results – three months ended September 30, 2014 Please refer to pages 19-22 in the 3Q 2014 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation / Consolidated Other Non-GA
Slide 41: Reconciliation of US GAAP to non-GAAP – three months ended June 30, 2014
Reconciliation of US GAAP results to non-GAAP results – three months ended June 30, 2014 Please refer to pages 19-22 in the 2Q 2014 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party distribution, Acquisition Market appreciation / Consolidated Non
Slide 42: Reconciliation of US GAAP to non-GAAP – three months ended March 31, 2014
Reconciliation of US GAAP results to non-GAAP results – three months ended March 31, 2014 *Please refer to pages 18-22 in the 1Q 2014 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation / Consolidated Other Non-GAAP
Slide 43: Reconciliation of US GAAP to non-GAAP – three months ended December 31, 2013
Reconciliation of US GAAP results to non-GAAP results – three months ended December 31, 2013 *Please refer to pages 19-21 in the 4Q 2013 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation / Consolidated Other Non-GA
Slide 44: Reconciliation of US GAAP to non-GAAP – three months ended September 30, 2013
Reconciliation of US GAAP results to non-GAAP results – three months ended September 30, 2013 * Please refer to pages 19-21 in the 3Q 2013 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation / Consolidated Other Non-