Invesco Ltd · NYSE:IVZ
Invesco — Q2 2013 Earnings Presentation
47 slides from Invesco's earnings presentation, Jul 31, 2013
Slide 1: Invesco second quarter 2013 results
Invesco second quarter 2013 results Martin L. Flanagan President and Chief Executive Officer Loren M. Starr Chief Financial Officer July 31, 2013
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 Second quarter overview Investment performance and flows Financial results Questions Appendix 2
Slide 4: Second quarter overview
Second quarter overview Continued strong investment performance and record net flows contributed to strong operating results – Maintained strong, long-term investment performance – 81% and 82% of actively managed assets ahead of peers on a 3- and 5-year basis – Continued focus on delivering value to
Slide 5: Summary of second quarter 2013 results
Summary of second quarter 2013 results June 30, 2013 AUM of $705.6 billion versus $707.7 billion at Assets under March 31, 2013 management Average AUM was $719.8 billion versus $691.6 billion for the first quarter Total flows of $1.4 billion Flows Net long-term inflows of $1.4 billion Adju
Slide 6: Discussion topics
Discussion topics Second quarter overview Investment performance and flows Financial results Questions Appendix 5
Slide 7: Investment performance – overview
Investment performance – overview Aggregate performance analysis – asset weighted Percent of actively managed assets in top half of peer group* 1-Year 3-Year 5-Year 74% 81% 82% 19% 18% 26% Assets top half of peer group Assets bottom half of peer group *Excludes passive products, closed-end funds, pr
Slide 8: Quarterly long-term flows
Quarterly long-term flows Continued strong gross sales across our global business Quarterly long-term flows ($ billions) Total AUM Active AUM Passive AUM 34.1 13.5 32.6 47.6 11.8 44.4 26.9 27.7 25.5 8.6 34.9 23.8 25.2 9.3 8.8 34.1 34.0 34.4 20.5 8.0 29.8 29.4 6.7 6.4 5.6 5.2 7.9 3.7 14.3 2.9 2.2 1.5
Slide 9: Quarterly long-term flows
Quarterly long-term flows Continued strong gross sales in the retail channel Quarterly long-term flows ($ billions) Retail(a) Institutional(b) 37.7 36.2 25.5 26.9 26.9 11.4 26.0 23.3 9.4 9.6 20.2 8.0 7.5 7.2 6.7 10.3 5.1 3.8 4.0 5.7 4.9 2.8 2.9 1.9 0.5 2.1 0.6 -1.6 -0.3 -0.7 -2.7 -3.5 -5.2 -5.8 -6.9
Slide 10: US Retail gross sales remained strong at $21.8 billion for the quarter
US Retail gross sales remained strong at $21.8 billion for the quarter – up 49% year over year Gross and net sales Percentage above the bars is change in gross sales from prior quarter Net sales ($ billions) +37% (1%) +32% +17% (11%) (+6%) 22.0 21.8 (15%) 16.4 17.1 16.1 14.7 14.6 12.5 5.9 6.8 3.5 0.
Slide 11: Continued demand for asset allocation strategies
Continued demand for asset allocation strategies, with over $2 billion of net inflows in the second quarter Invesco Global Asset Allocation AUM ($ billions) 35.0 30.0 25.0 20.0 15.0 10.0 5.0 - 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 Invesco Balanced-Risk Allocation stra
Slide 12: Invesco well-positioned to retain assets in a rising interest rate environment
Invesco well-positioned to retain assets in a rising interest rate environment US Retail Long-Term AUM* US Equity Int'l/Global Equity Sector Allocation Taxable Fixed Tax-free Fixed Alternatives 0% 10% 20% 30% 40% 50% Top 20 Firms by AUM % Invesco AUM % Source: Strategic Insight, Invesco estimates. *
Slide 13: Discussion topics
Discussion topics Second quarter overview Investment performance and flows Financial results Questions Appendix 12
Slide 14: Total assets under management – 2Q13 vs. 1Q13
Total assets under management – 2Q13 vs. 1Q13 ($ billions) 2Q-13 1Q-13 % Change Beginning Assets $707.7 $667.4 6.0% Long-Term Inflows 44.4 47.6 (6.7)% Long-Term Outflows (43.0) (33.3) 29.1% Long-Term Net flows 1.4 14.3 (90.2)% Net flows in Invesco PowerShares QQQ 0.7 (0.4) N/A Net flows in Inst. Mon
Slide 15: Non-GAAP operating results – 2Q13 vs. 1Q13
Non-GAAP operating results – 2Q13 vs. 1Q13 ($ millions) 2Q-13 1Q-13 % Change Adjusted Revenues Investment Management Fees 905 863 4.9% Service and Distribution Fees 216 206 4.6% Performance Fees 9 39 (76.7)% Other 29 26 12.0% Third-Party Distribution, Service and Advisory Expenses (369) (346) 6.7% A
Slide 16: Second quarter overview
Second quarter overview Continued strong investment performance and record net flows contributed to strong operating results – Maintained strong, long-term investment performance – 81% and 82% of actively managed assets ahead of peers on a 3- and 5-year basis – Continued focus on delivering value to
Slide 17: Discussion topics
Discussion topics Second quarter overview Investment performance and flows Financial results Questions Appendix 16
Slide 18: Discussion topics
Discussion topics Second quarter overview Investment performance and flows Financial results Questions Appendix 17
Slide 19: Additional Information for Invesco Balanced-Risk Allocation Fund
Additional Information for Invesco Balanced-Risk Allocation Fund As of June 30, 2013 Invesco Balanced Risk Allocation Fund is a US registered ’40-Act mutual fund that is distributed by Invesco Distributors, Inc., a wholly- owned indirect subsidiary of Invesco Ltd. 18
Slide 20: Investment performance (5-year)
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 $397.3 billion) % of assets top half % of assets bottom Equities of peer group half of peer grou
Slide 21: Investment performance (5-year)
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 $397.3 billion) % of assets top half % of assets bottom Equities Global ex-US and Other of peer
Slide 22: Investment performance
Investment performance By investment objective (actively managed assets)* Equities 1st quartile 2nd quartile AUM above benchmark U.S. Core U.S. Growth U.S. Value Sector 100% 100% 100% 100% 98% 81% 81% 77% 74% 3% 47% 63% 61% 11% 46% 92% 37% 55% 50% 9% 60% 37% 45% 38% 45% 29% 24% 24% 27% 33% 6% 24% 24
Slide 23: Investment performance
Investment performance By investment objective (actively managed assets)* Equities Global ex-U.S. and Other 1st quartile 2nd quartile AUM above benchmark Global Emerging markets Alternatives Balanced 100% 100% 100% 100% 99% 99% 99% 96% 90% 22% 73% 75% 64% 51% 35% 92% 56% 59% 93% 45% 17% 41% 74% 47%
Slide 24: We are diversified as a firm
We are diversified as a firm Delivering a diverse set of solutions to meet client needs By client domicile By channel By asset class 3% 12% 68% 15% 65% 24% 35% 46% 7% 11% 7% 7% 1-Yr 1-Yr 1-Yr ($ billions) Change ($ billions) Change ($ billions) Change U.S. $481.5 12.4% Retail $457.7 15.3% Equity $32
Slide 25: Non-GAAP operating results – quarterly
Non-GAAP operating results – quarterly ($ millions) 2Q-13 1Q-13 % Change* 4Q-12 3Q-12 2Q-12 1Q-12 4Q-11 3Q-11 Investment Management Fees 905 863 4.9% 836 813 775 787 747 779 Service and Distribution Fees 216 206 4.6% 200 196 187 189 181 189 Performance Fees 9 39 (76.7)% 4 3 16 21 12 3 Other 29 26 12
Slide 26: US GAAP operating results – quarterly
US GAAP operating results – quarterly ($ millions) 2Q-13 1Q-13 % Change* 4Q-12 3Q-12 2Q-12 1Q-12 4Q-11 3Q-11 Investment Management Fees 886 845 4.8% 818 791 753 766 724 754 Service and Distribution Fees 216 206 4.6% 200 196 187 189 181 189 Performance Fees 6 36 (83.4)% 2 3 16 20 12 3 Other 28 25 12.
Slide 27: Total assets under management – quarterly
Total assets under management – quarterly ($ billions) 2Q-13 1Q-13 % Change 4Q-12 3Q-12 2Q-12 Beginning Assets $707.7 $667.4 6.0% $663.0 $627.6 $653.3 Long-Term Inflows 44.4 47.6 (6.7)% 34.4 34.0 29.4 Long-Term Outflows (43.0) (33.3) 29.1% (31.7) (25.5) (32.4) Long-Term Net flows 1.4 14.3 (90.2)% 2.
Slide 28: Total assets under management – by asset class
Total assets under management – by asset class Fixed Money ($ billions) Total Equity Income Balanced Market Alternative December 31, 2012 $667.4 $295.6 $171.9 $43.6 $73.3 $83.0 Long-Term Inflows 47.6 18.5 14.1 7.0 0.7 7.3 Long-Term Outflows (33.3) (16.2) (9.1) (2.0) (0.8) (5.2) Long-Term Net flows 1
Slide 29: Total assets under management – by asset class
Total assets under management – by asset class Fixed Money ($ billions) Total Equity Income Balanced Market Alternative June 30, 2012 $627.6 $282.8 $155.6 $33.5 $71.0 $84.7 Long-Term Inflows 34.0 12.0 11.7 5.3 0.7 4.3 Long-Term Outflows (25.5) (14.1) (4.5) (1.2) (0.9) (4.8) Long-Term Net flows 8.5 (
Slide 30: Total assets under management – by channel
Total assets under management – by channel ($ billions) Total Retail Institutional December 31, 2012 $667.4 $425.8 $241.6 Long-Term Inflows 47.6 36.2 11.4 Long-Term Outflows (33.3) (25.9) (7.4) Long-Term Net flows 14.3 10.3 4.0 Net flows in Invesco PowerShares QQQ (0.4) (0.4) - Net flows in Inst. Mo
Slide 31: Total assets under management – by channel
Total assets under management – by channel ($ billions) Total Retail Institutional June 30, 2012 $627.6 $396.8 $230.8 Long-Term Inflows 34.0 26.0 8.0 Long-Term Outflows (25.5) (20.3) (5.2) Long-Term Net flows 8.5 5.7 2.8 Net flows in Invesco PowerShares QQQ 0.6 0.6 - Net flows in Inst. Money Market
Slide 32: Total assets under management – by client domicile
Total assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Europe Asia December 31, 2012 $667.4 $452.5 $25.2 $101.9 $38.8 $49.0 Long-Term Inflows 47.6 30.1 1.2 3.7 8.9 3.7 Long-Term Outflows (33.3) (20.1) (1.3) (4.3) (3.9) (3.7) Long-Term Net flows 14.3 10.0 (
Slide 33: Total assets under management – by client domicile
Total assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Europe Asia June 30, 2012 $627.6 $428.3 $23.5 $92.8 $34.4 $48.6 Long-Term Inflows 34.0 22.6 0.8 3.4 4.6 2.6 Long-Term Outflows (25.5) (13.5) (1.1) (3.7) (3.0) (4.2) Long-Term Net flows 8.5 9.1 (0.3) (0
Slide 34: Passive assets under management – by asset class
Passive assets under management – by asset class Fixed Money ($ billions) Total Equity Income Balanced Market Alternative December 31, 2012 $114.0 $55.5 $39.0 - - $19.5 Long-Term Inflows 13.5 6.3 5.7 - - 1.5 Long-Term Outflows (7.1) (3.2) (2.4) - - (1.5) Long-Term Net flows 6.4 3.1 3.3 - - - Net flo
Slide 35: Passive assets under management – by asset class
Passive assets under management – by asset class Fixed Money ($ billions) Total Equity Income Balanced Market Alternative June 30, 2012 $107.6 $54.6 $33.9 - - $19.1 Long-Term Inflows 8.8 3.4 3.9 - - 1.5 Long-Term Outflows (3.6) (2.4) (0.5) - - (0.7) Long-Term Net flows 5.2 1.0 3.4 - - 0.8 Net flows
Slide 36: Passive assets under management – by channel
Passive assets under management – by channel ($ billions) Total Retail Institutional December 31, 2012 $114.0 $91.2 $22.8 Long-Term Inflows 13.5 10.3 3.2 Long-Term Outflows (7.1) (5.7) (1.4) Long-Term Net flows 6.4 4.6 1.8 Net flows in Invesco PowerShares QQQ (0.4) (0.4) - Net flows in Inst. Money M
Slide 37: Passive assets under management – by channel
Passive assets under management – by channel ($ billions) Total Retail Institutional June 30, 2012 $107.6 $86.9 $20.7 Long-Term Inflows 8.8 6.3 2.5 Long-Term Outflows (3.6) (3.5) (0.1) Long-Term Net flows 5.2 2.8 2.4 Net flows in Invesco PowerShares QQQ 0.6 0.6 Net flows in Inst. Money Market Funds
Slide 38: Passive assets under management – by client domicile
Passive assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Europe Asia December 31, 2012 $114.0 $107.8 0.1 - $1.1 $5.0 Long-Term Inflows 13.5 13.3 - - 0.2 - Long-Term Outflows (7.1) (6.9) - - (0.1) (0.1) Long-Term Net flows 6.4 6.4 - - 0.1 (0.1) Net flows in
Slide 39: Passive assets under management – by client domicile
Passive assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Europe Asia June 30, 2012 $107.6 $100.7 - - $1.4 $5.5 Long-Term Inflows 8.8 8.5 - - - 0.3 Long-Term Outflows (3.6) (3.3) - - (0.2) (0.1) Long-Term Net flows 5.2 5.2 - - (0.2) 0.2 Net flows in Invesco
Slide 40: Reconciliation of US GAAP results to non-GAAP results – three months ended June 30, 2013
Reconciliation of US GAAP results to non-GAAP results – three months ended June 30, 2013 * Other: Please refer to pages 19-21 in the 2Q 2013 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation Consolidated Other* Non
Slide 41: Reconciliation of US GAAP results to non-GAAP results – three months ended March 31, 2013
Reconciliation of US GAAP results to non-GAAP results – three months ended March 31, 2013 * Other: Please refer to pages 18-20 in the 1Q 2013 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation / Consolidated Other*
Slide 42: Reconciliation of US GAAP results to non-GAAP results – three months ended December 31, 2012
Reconciliation of US GAAP results to non-GAAP results – three months ended December 31, 2012 * Other: Please refer to pages 23-26 in the 4Q 2012 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation Consolidated Other*
Slide 43: Reconciliation of US GAAP results to non-GAAP results – three months ended September 30, 2012
Reconciliation of US GAAP results to non-GAAP results – three months ended September 30, 2012 * Other: Please refer to pages 19-21 in the 3Q 2012 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 June 30, 2012
Reconciliation of US GAAP results to non-GAAP results – three months ended June 30, 2012 * Other: Please refer to pages 19-21 in the 2Q 2012 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation Consolidated Other* Non
Slide 45: Reconciliation of US GAAP results to non-GAAP results – three months ended March 31, 2012
Reconciliation of US GAAP results to non-GAAP results – three months ended March 31, 2012 * Other: Please refer to pages 10-12 in the 1Q 2012 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation Consolidated Other* No
Slide 46: Reconciliation of US GAAP results to non-GAAP results – three months ended December 31, 2011
Reconciliation of US GAAP results to non-GAAP results – three months ended December 31, 2011 * Other: Please refer to pages 13-15 in the 4Q 2011 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation Consolidated Other*
Slide 47: Reconciliation of US GAAP results to non-GAAP results – three months ended September 30, 2011
Reconciliation of US GAAP results to non-GAAP results – three months ended September 30, 2011 * Other: Please refer to pages 9-10 in the 3Q 2011 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation Consolidated Other*