Igm Financial Inc. · TSX:IGM
Igm Financial — Scotia Capital Financials Summit 2005
36 slides from Igm Financial's conference presentation, Sep 13, 2005
Slide 1: IGM Financial Inc. Scotia Capital Financials Summit
Financiere IGM FINANCIAL INC. SCOTIA CAPITAL FINANCIALS SUMMIT e e September 13, 2005 Financial °”
Slide 2: Caution Regarding Forward-Looking Statements
Caution Regarding Forward- Looking Statements This presentation may contain forward looking statements about the Company, including its business operations, strategy and expected financial performance and condition. forward looking statements include statements that are predictive in nature, depend
Slide 3: Non-GAAP Financial Measures
Non-GAAP Financial Measures This presentation may also contain non-GAAP financial measures. Terms by which non-GAAP financial measures may be identified include but are not limited to “Net income, diluted earnings per share and return on common equity excluding unitholder compensation” and “Net inco
Slide 4: Agenda
1. Overview 2. Industry and Operating Environment 3. Investors Group 4. Mackenzie 5. Summary 4
Slide 5: Overview
Overview ! IGM Financial manufactures and distributes financial products and services through its subsidiaries. • Market Capitalization of $11.6 billion • Float of $4.8 billion • Listed on TSX as ticker “IGM” • Dividend yield of 3.2% • Largest mutual fund manager in Canada. • Broad and diversified d
Slide 6: Leading Scale in Asset Management
Leading Scale in Asset Management ! IGM Financial is the largest mutual fund manager in Canada, with nearly double the assets of its nearest competitor. 84.8 Long Term Mutual Fund Assets Under Management at June 30, 2005 ($ billions) 45.5 42.3 43.2 35.6 30.9 30.0 23.7 20.1 21.0 FT AGF BMO TD Fidelit
Slide 7: Operating Companies
Operating Companies ! IGM Financial operates through three subsidiaries. At June 30, 2005 Financial 3,500 Investors > 30,000 third party > 500 Financial Planners Group Consultants planners and brokers Planners Assets Under $46.9 billion $45.9 billion $1.7 billion Management Client Assets Under $49.1
Slide 8: Advice Channel Strategy
Advice Channel Strategy ! IGM Financial is part of the Power Financial group of companies. ! The group enjoys broad and diversified distribution capabilities with an emphasis on financial advisors. At June 30, 2005 3,500 > 30,000 > 500 1,200 3,000 > 11,000 Investors third party financial financial f
Slide 9: Highlights
Highlights ! IGM Financial’s operating and financial performance continues to strengthen. ($ millions, unless otherwise indicated) 2003 2004 Change Earnings Per Share ($) 2.01 2.31 14.9% Net Income 534 616 15.4% EBITDA 1,139 1,253 10.1% Operating Cash Flow (before DSC commissions) 673 790 17.4% Long
Slide 10: Agenda
1. Overview 2. Industry and Operating Environment 3. Investors Group 4. Mackenzie 5. Summary 10
Slide 11: Attractive Industry
Attractive Industry ! IGM Financial subsidiaries operate in a profitable and growing industry. High growth rate • Demographics support continued savings • Built in growth through investment returns on assets under management Investors desire advice • 62% of Canadian discretionary financial assets an
Slide 12: Operating Environment
Operating Environment ! Improving industry net fund flows, with concentration in income-oriented and balanced mandates ! Solid Canadian equity market performance ! Regulatory and compliance developments ! Evolving product structures ! Continued emphasis on financial advice 12
Slide 13: Agenda
1. Overview 2. Industry and Operating Environment 3. Investors Group 4. Mackenzie 5. Summary 13
Slide 14: Investors Group
Investors Group ! Investors Group provides comprehensive financial planning through its network of over 3,500 Consultants. Product Offering Support Platform • Investment management • 112 financial planning centres • 144 mutual funds • MasterseriesTM • Industry-leading brand training Consultant - Cli
Slide 15: Investors Group Emphasis
Investors Group Emphasis Enduring client relationships – Long term Consultant / client relationship – Financial planning heritage Strong culture – Entrepreneurial – Mentorship – Community involvement Solid growth – Strong client & Consultant loyalty – Region office and recruiting expansion 15
Slide 16: Investors Group Recent Initiatives
Investors Group Recent Initiatives ! The last three years has been a period of repositioning for growth. Investors Group Consultant Network Growth • Consultant retention strengthened through enhanced compensation and support offering • Introduction of six new region offices Improvements to Financial
Slide 17: Investors Group Consultant Network
Investors Group Consultant Network ! Improvements to the Consultant Network offering implemented throughout 2003 have improved Consultant retention and provided a strong platform for recruitment. Number of Investors Group Consultants Up Up10.3% 10.3%during duringlast lastyear year 3,600 3,503 3,537
Slide 18: Investors Group Asset Retention
Investors Group Asset Retention ! Driven by strong retention of Consultants, Investors Group’s redemption rate has improved considerably during the last two years. Redemption Rate on Long Term Mutual Funds (Last Twelve Month Trailing % of Average Assets Under Management) 18% 16% Industry (IFIC) excl
Slide 19: Investors Group Mutual Fund Sales
Investors Group Mutual Fund Sales ! Investors Group’s sales momentum has continued to improve during 2005. Mutual Fund Gross Sales ($ millions) Mutual Fund Net Sales ($ millions) Six Months Ended June 30 Six Months Ended June 30 48.4% 48.4%growth growth 2,906 468 2,625 315 2004 2005 2004 2005 19
Slide 20: Investors Group Investment Performance
Investors Group Investment Performance ! Strong long term risk-adjusted investment performance by the Investors Group investment management team is demonstrated by 39% of our Masterseries funds being rated 4 or 5 star by Morningstar. Morningstar Ratings at June 30, 2005 (Proportion of Morningstar-ra
Slide 21: Investors Group Management Focus
Investors Group Management Focus ! Building upon the strengths of Investors Group’s culture and heritage ! Growing the Investors Group Consultant Network ! Enhancing Investors Group’s product and service offering to clients ! Pursuing opportunities for further automation and systems integration ! Co
Slide 22: Agenda
1. Overview 2. Industry and Operating Environment 3. Investors Group 4. Mackenzie 5. Summary 22
Slide 23: Mackenzie
Mackenzie ! Mackenzie is one of Canada’s premier investment managers. Investment Management Service Platform • Retail mutual funds • Experienced wholesaling team • 135 mutual funds • Client-focused culture • Sub-branding approach Advisor • Systems & technology Relationships • In-house and external •
Slide 24: Mackenzie Asset Management
Mackenzie Asset Management ! Mackenzie has experienced solid growth in assets under management during the last year. Mackenzie Assets Under Management ($ billions at June 30) 45.9 39.9 2004 2005 Change Mutual Funds 35.85 38.95 8.7% Private & Institutional Clients 3.98 6.76 69.9% Structured Products
Slide 25: Mackenzie Emphasis
Mackenzie Emphasis Investment Management – Superior long-term investment performance – Diversification – Capabilities, processes & talent Distribution – Wholesaling capabilities and relationships – Branding – Product breadth Customer Service – Advisor & dealer support – Product innovation – Training
Slide 26: Mackenzie Investment Performance
Mackenzie Investment Performance ! Mackenzie’s disciplined approach to investment management has produced strong results, 66% of assets under management residing in funds with a 4 or 5 star Morningstar rating. Morningstar Ratings at June 30, 2005 66% (Proportion of Morningstar-rated assets) 49% Mack
Slide 27: Mackenzie Mutual Fund Sales
Mackenzie Mutual Fund Sales ! Mackenzie long term fund net sales have remained strong during 2005. Long Term Mutual Fund Gross Sales ($ millions) Long Term Mutual Fund Net Sales ($ millions) Six Months Ended June 30 Six Months Ended June 30 3,545 597 599 2,983 2004 2005 2004 2005 27
Slide 28: Mackenzie Distribution Strength
Mackenzie Distribution Strength ! Mackenzie consistently ranks as one of the top selling fund managers among financial planners and full service brokers. Intermediated Fund Manager Sales – Year Ended December 31, 2004 ($ billions) Fund Manager Gross Sales Net Sales Assets 1 Mackenzie 6.8 0.8 37.1 2
Slide 29: Mackenzie Branding
Mackenzie Branding ! Mackenzie’s product line-up is organized within sub-brands according to product type, mandate and investment management approach. 29
Slide 30: Mackenzie Branding
Mackenzie Branding ! Five sub-brands are represented within Mackenzie’s ten largest funds. Mackenzie Ten Largest Long Term Funds at June 30, 2005 ($ millions) Assets Sub-brand 1 Mackenzie Ivy Canadian Fund 5,294 Ivy 2 Mackenzie Ivy Growth & Income Fund 4,162 Ivy 3 Mackenzie Cundill Value Fund 2,519
Slide 31: Mackenzie Financial Advisor Support
Mackenzie Financial Advisor Support ! Mackenzie offers education and training through Mackenzie University. 31
Slide 32: Mackenzie Management Focus
Mackenzie Management Focus ! Delivering superior long-term investment performance ! Providing advisors, dealers and clients with industry-leading levels of service and support ! Building upon track record of product and service innovation ! Continuing to pursue opportunities in evolving distribution
Slide 33: Agenda
1. Overview 2. Industry and Operating Environment 3. Investors Group 4. Mackenzie 5. Summary 33
Slide 34: Summary
Summary ! IGM Financial provides a stable and attractive vehicle for participation in a high growth industry. ! Advantages of scale from being the largest player in the industry ! Diversified distribution ! Broad product offering, quality brands and significant investment management capabilities ! A
Slide 35: Earnings Per Share ($)
Earnings Per Share ($) ! Consistent increases in Earnings Per Share. 2.31 10 10year yearCAGR CAGRof of19.1% 19.1% 2.01 1.85 1.58 1.35 1.12 0.89 0.70 0.56 0.46 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2004 Earnings Per Share has been adjusted to exclude unitholder compensation provision. 200
Slide 36: Dividends
Dividends ! Consistent increases in dividends. ! IGM Financial’s current annualized declared dividend is $1.38 per share (3.2% yield). 115 IGM Financial Dividends Per Share (cents) 99 86 10 10year yearCAGR CAGRof of22.2% 22.2% 73 61 49 38 30 25 19 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 36
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