Invesco Ltd · NYSE:IVZ
Invesco — Q1 2015 Earnings Presentation
46 slides from Invesco's earnings presentation, Apr 30, 2015
Slide 1: Invesco first quarter 2015 results
Invesco first quarter 2015 results Martin L. Flanagan President and Chief Executive Officer Loren M. Starr Chief Financial Officer April 30, 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 First quarter overview Investment performance and flows Financial results Questions Appendix 2
Slide 4: First quarter overview
First quarter overview Continued strong investment performance and our focus on meeting client needs contributed to solid operating results Maintained strong, long-term investment performance – 81% and 80% of actively managed assets ahead of peers on a 3- and 5-year basis Long-term net inflows o
Slide 5: Summary of first quarter 2015 results
Summary of first quarter 2015 results Assets under March 31, 2015, AUM of $798.3 billion, versus $792.4 billion at management December 31, 2014 Average AUM was $795.4 billion, versus $789.8 billion for the fourth quarter of 2014 Flows Long-term net inflows of $10.3 billion Total net inflows
Slide 6: Discussion topics
Discussion topics First quarter overview Investment performance and flows Financial results Questions Appendix 5
Slide 7: Investment performance – overview
Investment performance – overview Aggregate performance analysis – asset weighted Percent of actively managed assets in top half of peer group* 1-Year 3-Year 5-Year 62% 81% 80% 19% 20% 38% Assets top half of peer group Assets bottom half of peer group * Excludes passive products, closed-end funds, p
Slide 8: Helping clients achieve their investment objectives
Helping clients achieve their investment objectives Actively managed assets outperform benchmarks over most market cycles High Active Share Assets Outperformed Their Benchmarks Over Most Market Cycles Actively managed 100% assets outperformed 90% market-cap- 89% 90% weighted 80% 85% 82% 70% benchm
Slide 9: Quarterly long-term flows
Quarterly long-term flows Strong active and passive flows during the quarter Quarterly long-term flows ($ billions) Total Active Passive 50.2 50.5 41.6 40.6 44.4 45.8 46.0 37.2 11.8 41.8 42.5 44.4 36.1 36.2 36.4 32.6 33.1 9.6 9.9 8.7 8.6 8.6 8.2 6.4 10.3 3.3 3.5 5.0 4.8 6.0 6.8 1.6 6.5 6.0 2.5 3.2 0
Slide 10: Quarterly long-term flows
Quarterly long-term flows Strong retail and institutional flows during the quarter Quarterly long-term flows ($ billions) Retail(a) Institutional(b) 39.6 40.3 37.7 35.8 36.3 35.7 35.5 34.8 10.6 10.3 10.0 9.6 10.2 7.6 6.7 6.3 6.2 6.5 7.5 4.9 4.8 2.8 0.8 1.3 1.2 1.3 1.7 -0.3 -3.5 -8.2 -1.1 -1.5 -4.9 -
Slide 11: We are well-positioned to meet client needs
We are well-positioned to meet client needs, which contributes to long-term growth and success Strong, long-term investment performance Product breadth and alignment to client demand trends Deep knowledge of clients and their evolving needs Global positioning/diversification across geographi
Slide 12: Discussion topics
Discussion topics First quarter overview Investment performance and flows Financial results Questions Appendix 11
Slide 13: Total assets under management – 1Q15 vs. 4Q14
Total assets under management – 1Q15 vs. 4Q14 ($ billions) 1Q-15 4Q-14 % Change Beginning Assets $792.4 $789.6 0.4% Long-Term Inflows 50.5 46.0 9.8% Long-Term Outflows (40.2) (43.5) (7.6)% Long-Term Net flows 10.3 2.5 312.0% Net flows in Invesco PowerShares QQQ (2.6) (3.2) (18.8)% Net flows in Inst.
Slide 14: Non-GAAP operating results – 1Q15 vs. 4Q14
Non-GAAP operating results – 1Q15 vs. 4Q14 ($ millions) 1Q-15 4Q-14 % Change Adjusted Revenues Investment Management Fees 1,024 1,033 (0.9)% Service and Distribution Fees 213 218 (2.0)% Performance Fees 52 19 172.1% Other 31 34 (8.5)% Third-Party Distribution, Service and Advisory Expenses (402) (39
Slide 15: First quarter overview
First quarter overview Continued strong investment performance and our focus on meeting client needs contributed to solid operating results Maintained strong, long-term investment performance – 81% and 80% of actively managed assets ahead of peers on a 3- and 5-year basis Long-term net inflows o
Slide 16: Discussion topics
Discussion topics First quarter overview Investment performance and flows Financial results Questions Appendix 15
Slide 17: Discussion topics
Discussion topics First quarter overview Investment performance and flows Financial results Questions Appendix 16
Slide 18: Key market cycles
Key market cycles Cumulative return of the S&P 500 Index, December 1994–December 2014 700 Market Market Market Cycle 1 Cycle 3 Cycle 5 600 7/98- 4/00-10/07 11/07-12/14 3/00 Cumulative Return (%) 500 400 300 200 100 Market Market Cycle 2 Cycle 4 10/98-9/02 10/02-2/09 0 12/94 12/98 12/02 12/06 12/10 1
Slide 19: 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 13% 3% 68% 23% 67% 13% 32% 49% 9% 9% 8% 6% 1-Yr 1-Yr 1-Yr ($ billions) Change ($ billions) Change ($ billions) Change U.S. $532.6 1.2% Retail $540.7 1.1% Equity $392.8
Slide 20: Investment performance by investment objective
Investment performance By investment objective (actively managed assets)* Equities 1st quartile 2nd quartile AUM above benchmark U.S. Core U.S. Growth U.S. Value Sector 100% 100% 100% 100% 8% 72% 75% 66% 45% 61% 92% 56% 10% 25% 3% 3% 38% 29% 38% 51% 29% 4% 30% 32% 25% 38% 32% 20% 26% 25% 21% 8% 15%
Slide 21: Investment performance by investment objective
Investment performance By investment objective (actively managed assets)* Equities Other 1st quartile 2nd quartile AUM above benchmark Global Global ex-U.S. and Em. Mkts. Alternatives Balanced 100% 100% 100% 100% 99% 2% 90% 86% 85% 86% 71% 42% 71% 68% 57% 67% 86% 22% 20% 79% 54% 84% 51% 38% 46% 46%
Slide 22: 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 $465.6 billion) % of assets top half % of assets bottom Equities of peer group half of peer grou
Slide 23: 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 $465.6 billion) % of assets top half % of assets bottom of peer group half of peer group Equitie
Slide 24: Non-GAAP operating results – quarterly
Non-GAAP operating results – quarterly ($ millions) 1Q-15 4Q-14 % Change* 3Q-14 2Q-14 1Q-14 4Q-13 3Q-13 2Q-13 Investment Management Fees 1,024 1,033 (0.9)% 1,071 1,055 989 983 938 905 Service and Distribution Fees 213 218 (2.0)% 222 215 239 230 221 216 Performance Fees 52 19 172.1% 10 7 34 11 9 9 Ot
Slide 25: US GAAP operating results – quarterly
US GAAP operating results – quarterly ($ millions) 1Q-15 4Q-14 % Change* 3Q-14 2Q-14 1Q-14 4Q-13 3Q-13 2Q-13 Investment Management Fees 1,001 1,010 (0.8)% 1,047 1,032 965 955 914 886 Service and Distribution Fees 213 218 (2.0)% 222 215 239 230 221 216 Performance Fees 47 17 178.6% 8 5 31 9 5 6 Other
Slide 26: Total assets under management – quarterly
Total assets under management – quarterly ($ billions) 1Q-15 4Q-14 % Change 3Q-14 2Q-14 1Q-14 Beginning Assets $792.4 $789.6 0.4% $802.4 $787.3 $778.7 Long-Term Inflows 50.5 46.0 9.8% 44.4 42.5 50.2 Long-Term Outflows (40.2) (43.5) (7.6)% (38.4) (49.4) (43.7) Long-Term Net flows 10.3 2.5 312.0% 6.0
Slide 27: Total assets under management – by asset class
Total assets under management – by asset class ($ billions) Total Equity Fixed Balanced Money Alternative Income Market September 30, 2014 $789.6 $386.3 $179.2 $51.5 $76.6 $96.0 Long-Term Inflows 46.0 22.0 11.5 3.1 1.1 8.3 Long-Term Outflows (43.5) (24.3) (8.6) (3.3) (1.2) (6.1) Long-Term Net flows
Slide 28: Total assets under management – by asset class
Total assets under management – by asset class ($ billions) Total Equity Fixed Balanced Money Alternative Income Market March 31, 2014 $787.3 $388.0 $177.0 $54.6 $76.1 $91.6 Long-Term Inflows 42.5 21.4 8.4 4.3 0.6 7.8 Long-Term Outflows (49.4) (29.3) (6.2) (8.4) (0.7) (4.8) Long-Term Net flows (6.9)
Slide 29: Total assets under management – by channel
Total assets under management – by channel ($ billions) Total Retail Institutional September 30, 2014 $789.6 $532.2 $257.4 Long-Term Inflows 46.0 35.7 10.3 Long-Term Outflows (43.5) (34.9) (8.6) Long-Term Net flows 2.5 0.8 1.7 Net flows in Invesco PowerShares QQQ (3.2) (3.2) - Net flows in Inst. Mon
Slide 30: Total assets under management – by channel
Total assets under management – by channel ($ billions) Total Retail Institutional March 31, 2014 $787.3 $534.6 $252.7 Long-Term Inflows 42.5 36.3 6.2 Long-Term Outflows (49.4) (44.5) (4.9) Long-Term Net flows (6.9) (8.2) 1.3 Net flows in Invesco PowerShares QQQ (3.0) (3.0) - Net flows in Inst. Mone
Slide 31: Total assets under management – by client domicile
Total assets under management – by client domicile ($ billions) Total U.S. Canada U.K. Continental Asia Europe September 30, 2014 $789.6 $532.1 $26.8 $101.5 $70.9 $58.3 Long-Term Inflows 46.0 23.8 0.9 6.8 9.2 5.3 Long-Term Outflows (43.5) (24.7) (1.1) (4.0) (7.4) (6.3) Long-Term Net flows 2.5 (0.9)
Slide 32: Total assets under management – by client domicile
Total assets under management – by client domicile ($ billions) Total U.S. Canada U.K. Continental Asia Europe March 31, 2014 $787.3 $526.1 $27.1 $115.9 $63.4 $54.8 Long-Term Inflows 42.5 19.7 0.9 6.1 10.4 5.4 Long-Term Outflows (49.4) (19.5) (1.1) (19.9) (5.3) (3.6) Long-Term Net flows (6.9) 0.2 (0
Slide 33: Passive assets under management – by asset class
Passive assets under management – by asset class ($ billions) Total Equity Fixed Balanced Money Alternative Income Market September 30, 2014 $142.1 $88.0 $40.8 - - $13.3 Long-Term Inflows 9.6 5.9 2.5 - - 1.2 Long-Term Outflows (8.0) (4.9) (2.1) - - (1.0) Long-Term Net flows 1.6 1.0 0.4 - - 0.2 Net f
Slide 34: Passive assets under management – by asset class
Passive assets under management – by asset class ($ billions) Total Equity Fixed Balanced Money Income Market Alternative March 31, 2014 $142.9 $87.0 $40.9 - - $15.0 Long-Term Inflows 6.4 4.3 1.4 - - 0.7 Long-Term Outflows (5.3) (3.6) (0.6) - - (1.1) Long-Term Net flows 1.1 0.7 0.8 - - (0.4) Net flo
Slide 35: Passive assets under management – by channel
Passive assets under management – by channel ($ billions) Total Retail Institutional September 30, 2014 $142.1 $121.1 $21.0 Long-Term Inflows 9.6 7.7 1.9 Long-Term Outflows (8.0) (7.0) (1.0) Long-Term Net flows 1.6 0.7 0.9 Net flows in Invesco PowerShares QQQ (3.2) (3.2) - Net flows in Inst. Money M
Slide 36: Passive assets under management – by channel
Passive assets under management – by channel ($ billions) Total Retail Institutional March 31, 2014 $142.9 $121.5 $21.4 Long-Term Inflows 6.4 5.6 0.8 Long-Term Outflows (5.3) (5.0) (0.3) Long-Term Net flows 1.1 0.6 0.5 Net flows in Invesco PowerShares QQQ (3.0) (3.0) - Net flows in Inst. Money Marke
Slide 37: Passive assets under management – by client domicile
Passive assets under management – by client domicile ($ billions) Total U.S. Canada U.K. Continental Asia Europe September 30, 2014 $142.1 $138.2 $0.2 - $1.7 $2.0 Long-Term Inflows 9.6 9.3 - - 0.2 0.1 Long-Term Outflows (8.0) (7.8) - - (0.1) (0.1) Long-Term Net flows 1.6 1.5 - - 0.1 - Net flows in I
Slide 38: Passive assets under management – by client domicile
Passive assets under management – by client domicile ($ billions) Total U.S. Canada U.K. Continental Asia Europe March 31, 2014 $142.9 $138.5 $0.1 - $1.8 $2.5 Long-Term Inflows 6.4 6.3 - - 0.1 - Long-Term Outflows (5.3) (4.8) - - (0.2) (0.3) Long-Term Net flows 1.1 1.5 - - (0.1) (0.3) Net flows in I
Slide 39: Reconciliation of US GAAP results to non-GAAP results – three months ended March 31, 2015
Reconciliation of US GAAP results to non-GAAP results – three months ended March 31, 2015 Please refer to pages XX-XX in the 1Q 2015 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation / Consolidated Other Non-GAAP C
Slide 40: Reconciliation of US GAAP results to non-GAAP results – 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 41: Reconciliation of US GAAP results to non-GAAP results – 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 42: Reconciliation of US GAAP results to non-GAAP results – 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 43: Reconciliation of US GAAP results to non-GAAP results – three months ended March 31, 2014
Reconciliation of US GAAP results to non-GAAP results – three months ended March 31, 2014 * Other: 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*
Slide 44: Reconciliation of US GAAP results to non-GAAP results – three months ended December 31, 2013
Reconciliation of US GAAP results to non-GAAP results – three months ended December 31, 2013 * Other: 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 Othe
Slide 45: Reconciliation of US GAAP results to non-GAAP results – three months ended September 30, 2013
Reconciliation of US GAAP results to non-GAAP results – three months ended September 30, 2013 * Other: 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 Oth
Slide 46: Reconciliation of US GAAP results to non-GAAP results – three months ended June 30, 2013
Reconciliation of US GAAP results to non-GAAP results – three months ended June 30, 2013 * Other: Please refer to pages 19-21 in the 2Q 2013 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation / Consolidated Other* N