Igm Financial Inc. · TSX:IGM
Igm Financial — Q4 2015 Earnings Presentation
28 slides from Igm Financial's earnings presentation, Feb 12, 2016
Slide 1: IGM Financial Q4, 2015 Results
IGM FINANCIAL Q4, 2015 Results February 12th, 2016
Slide 2: Conference Call Participants
IGM FINANCIAL – CONFERENCE CALL PARTICIPANTS Paul W. Hancock Kevin E. Regan Murray J. Taylor Jeffrey R. Carney Vice-President, Executive Vice- President & CEO, President & CEO, Finance and Investor President & CFO, Investors Group Mackenzie Relations IGM Financial Co - President & Co - President & C
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 • Operating Earnings were $198.2MM versus $208.1MM last year and $199.0MM during the prior quarter Financial • Operating Earnings Per Share for the quarter were $0.81 versus Results1 $0.83 last year and $0.81 during the prior quarter • $24.3MM after
Slide 8: Operating Environment
OPERATING ENVIRONMENT • Equity market volatility continued into the fourth quarter of 2015 • While the S&P TSX Composite Index declined 2.2%, most major Financial global equity indices were up during the quarter Markets • Volatility has continued into 2016, with both global and domestic equity indic
Slide 9: Invest in life.
Invest in life.
Slide 10: Investors Group Fourth Quarter Review
INVESTORS GROUP FOURTH QUARTER REVIEW Company Highlights 1) Consultant network at record high 2) Strong momentum in the HNW segment 3) Expanding competitive product offering 4) Solid investment performance in volatile environment 5) Restructuring charge related to exiting certain back office relatio
Slide 11: Consultant Network Growth
CONSULTANT NETWORK GROWTH 5,320 5,221 4,465 • Consultant network rose by < 4 years 99 during the quarter to a 3,223 experience record high of 5,320 • Number of Consultants with CFP or F.Pl. designations stands at 1,531, with an > 4 years experience additional 722 Consultants enrolled in these progra
Slide 12: Trend in Flows
TREND IN FLOWS Quarterly Gross and Net Sales Trends Annual Gross and Net Sales ($ Billions) ($ Billions) 2.5 2.37 7.89 8.0 7.46 1.84 1.89 1.81 1.82 2.0 1.5 6.0 1.0 0.59 Gross Sales Gross Sales 4.0 0.5 0.19 0.14 Net Sales Net Sales 0.03 0.00 2.0 0.65 0.75 - (0.5) - Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 2014
Slide 13: HNW Segment – Key Growth Focus
HNW SEGMENT – KEY GROWTH FOCUS 1 Mutual Fund Gross Sales in HNW Series • Mutual fund gross sales in (Last Twelve Month Trailing - $ Billions) HNW series1 were $1.8B 2.0 during 2015, a 57% increase 1.8 relative to the prior year 1.5 • Announced the launch of the 1.2 new Investors Risk Parity 1.0 Priv
Slide 14: Insurance & Mortgage Business
INSURANCE & MORTGAGE BUSINESS New Annualized Insurance Premiums (Last Twelve Month Trailing - $ Millions) 64.6 70.4 • During 2015, Investors Group Group Insurance Consultants created 380,000 financial plans for clients and 55.2 Individual prospects 49.2 Insurance • New individual insurance Dec. 2014
Slide 15: Investment Performance
INVESTMENT PERFORMANCE Client Account Rate of Return Experience (%) Quarterly 15 Median Client Rate of Return • Client account rate of return 10 for up to five years now 5 90% of clients appears on quarterly had returns 3.0 1.4 within this statements - (0.9) range (3.1) (5) • Median client account r
Slide 16: Investment Performance Based on Gross Returns Relative to Benchmarks
INVESTMENT PERFORMANCE BASED ON GROSS RETURNS RELATIVE TO BENCHMARKS December 31, 2015 1Y 3Y 5Y 10Y • Portfolio management restructuring Canadian Equities completed & improved alpha across US Equities entire IGIM fund platform • Effective January 1, 2016, portfolio Global / International manager com
Slide 17: Average Mutual Fund AUM & Fee Rates
AVERAGE MUTUAL FUND AUM & FEE RATES 212.6 209.2 209.9 208.8 209.0 • Q4/15 average mutual fund AUM declined 0.1% versus 76.8 Q3/15 75.5 75.4 75.3 72.5 • Proportion of mutual fund AUM in HNW series increased to 37.4% during Q4/151 • Management & administration fee rate relatively unchanged quarter ove
Slide 18: Investors Group EBIT
INVESTORS GROUP EBIT ($ Millions, unless otherwise indicated) Change Relative to: • Management and administration Prior Prior Q4/14 Q3/15 Q4/15 Year Quarter fees unchanged from prior quarter Average mutual fund AUM ($ billions) 72.5 75.4 75.3 3.7% (0.1%) • Distribution fees up 12.3% Revenues quarter
Slide 19: On Mackenzie
oN MACKENZIE CONFIDENCE IN A CHANGING WORLD 19
Slide 20: Mackenzie Fourth Quarter Review
MACKENZIE FOURTH QUARTER REVIEW Company Highlights 1) Strong performance in Ivy, Growth and Global Equity & Income teams 2) Formation of new Canadian Growth investment boutique with the internalization of third-party investment manager Bluewater 3) Launched eight unique Private Wealth Pools as well
Slide 21: Mutual Fund Flows
MUTUAL FUND FLOWS 1 Quarterly Mutual Fund Flows ($ Billions) 1.97 2.0 1.71 1.49 1.49 1.59 1.5 1.0 • Adjusted mutual fund gross Gross Sales 0.5 sales of $1.59B were up 6.8% relative to Q4/141 Net Sales - (0.5) (0.11) (0.09) (0.18) (0.19) (1.0) (0.25) • Adjusted mutual fund net Q4/14 Q1/15 Q2/15 Q3/15
Slide 22: Flows – Mutual Fund Gross Sales by Asset Class
FLOWS – MUTUAL FUND GROSS SALES BY ASSET CLASS Total Mutual Fund Gross Sales 1 • Continued strength in (Three months ended December 31 - $ Millions) balanced fund category 2014 2015 $ Change % Change Income-oriented 312 233 (79) (25.4%) • Foreign equity gross sales Balanced 597 631 34 5.7% increased
Slide 23: Flows – Total Investment Product Net Sales
FLOWS – TOTAL INVESTMENT PRODUCT NET SALES 1 Total Investment Product Net Sales (Three months ended December 31 - $ Millions) • Total mutual fund net sales 2014 2015 $ Change increased $61MM excluding Income-oriented (20) (150) (130) 3rd party fund allocation Balanced 90 51 (39) changes Canadian equ
Slide 24: Investment Performance – Mutual Funds
INVESTMENT PERFORMANCE – MUTUAL FUNDS 1 Mackenzie Mutual Funds in First or Second Quartile (Proportion of Assets) 58% 52% 51% September 30, 2015 42% 34% 32% 34% 34% December 31, 2015 1 Year 3 Year 5 Year 10 Year 1 Morningstar Ratings – Proportion of Morningstar-Rated Assets (As at December 31, 2015)
Slide 25: Investment Performance – Mutual Funds
INVESTMENT PERFORMANCE – MUTUAL FUNDS1 Value- Core & Fixed Managed Quality Growth-Oriented Total Oriented Dividend Income Products Global All Cap Waddell JP Systematic Fixed Asset Boutique Cundill Ivy Growth Bluewater Putnam Resource Equity & Putnam Value & Reed Morgan Strategies Income Allocation I
Slide 26: Average Total AUM & Fee Rates
AVERAGE TOTAL AUM & FEE RATES 80.1 78.7 Annualized Net Revenue Rate 73.7 71.0 72.1 (bps)1 • Q4/15 change in average AUM versus Q3/15 73.6 71.7 − Mutual funds down 69.8 1.4% 62.2 61.7 Average Total AUM ($B) (31.4%) (29.5%) (30.8%) (20.9%) (21.4%) Institutional2 − Institutional up 1.2% 48.3 50.5 50.6
Slide 27: Mackenzie EBIT
MACKENZIE EBIT ($ Millions, unless otherwise indicated) Change Relative to: Q4/14 Q3/15 Q4/15 Prior Prior • Net revenue down 2.6% Year Quarter versus Q3/15 due to lower Average AUM ($ billions): Total 69.8 62.2 61.7 (11.7%) (0.9%) AUM and net revenue rate Mutual funds 48.3 49.2 48.5 0.4% (1.4%) • No
Slide 28: Q&A
ISM, Q&A 28