AGF Management Limited Class B · TSX:AGF.B
AGF Management Limited Class B — CIBC World Markets Frontenac Institutional Investor Conference 2004
28 slides from AGF Management Limited Class B's conference presentation, Sep 30, 2004
Slide 1: AGF Management Limited
AGF MANAGEMENT LIMITED CIBC World Markets Frontenac Institutional Investor Conference Thursday September 30, 2004 Blake C. Goldring, CFA President and Chief Executive Officer Randy Ambrosie Executive Vice-President, Sales and Marketing
Slide 2: AGF: A Global Investment Management Company
AGF: A GLOBAL INVESTMENT MANAGEMENT COMPANY Established in 1957 Market capitalization: $1.6 billion Total assets under management: $31.1 billion Dividend yield: 2.51% August 31, 2004
Slide 3: YTD 2004 Results — Driving Momentum
YTD 2004 RESULTS — DRIVING MOMENTUM Revenue up 11.3% Cash flow from operations up 21.5% EBITDA up 10.8% Net income up 44.9% Includes $10.7 million tax benefit in nine months ended August 31, 2004. Does not include $12.8 million capital gain in Q1 2003.
Slide 4: Corporate Profile — Business Segments
CORPORATE PROFILE — BUSINESS SEGMENTS Investment Management AGF Trust Fund Administration AGF Funds Inc. Unisen Inc. Top supplier to advisors of loans, AGF PIM mortgages and GICs Investmaster AGF Asset Management Asia – Singapore AGF International Advisors Co. Ltd. – Dublin Business segment share of
Slide 5: Competitive Environment: Mutual Fund Industry Life Cycle
COMPETITIVE ENVIRONMENT MUTUAL FUND INDUSTRY LIFE CYCLE • Encourage rival exit— invest to extend market • Maintenance leadership investments • Cut costs to sustain INDUSTRY • Strong cash flow cash flow • Invest for growth— reinvest modest cash flow • Large investment • Cash flow negative INTRODUCTIO
Slide 6: Competitive Environment: Challenging Cyclical Factors
COMPETITIVE ENVIRONMENT CHALLENGING CYCLICAL FACTORS 2004 YTD Industry Net Sales* Mortgage & Real Estate 2% Dividend & Income 34% Balanced 27% Canadian Common Shares (2%) US and Foreign Shares 5% Bond & Income 34% Equity funds have been 3% of total industry sales 2004 YTD. * Calendar year to August,
Slide 7: Competitive Environment: Emerging Cyclical Trends
COMPETITIVE ENVIRONMENT EMERGING CYCLICAL TRENDS Fund Type — August, 2004* 11% 24% 14% Fixed Income 17% Balanced 75% 59% Equities Industry AGF * IFIC
Slide 8: Strategic Priorities
STRATEGIC PRIORITIES • Reinforce investment management excellence • Build a client centric organization focused on multi-channel distribution • Pursue strategic acquisitions to supplement organic growth • Undertake disciplined review of support entities
Slide 9: Strategic Priorities
STRATEGIC PRIORITIES • Reinforce investment management excellence • Build a client centric organization focused on multi-channel distribution • Pursue strategic acquisitions to supplement organic growth • Undertake disciplined review of support entities
Slide 10: Long-Term Performance Tells a Story: Strength in Numbers
LONG-TERM PERFORMANCE TELLS A STORY: STRENGTH IN NUMBERS Fund Performance Comparison — August 31, 2004 % of Total Assets Above Median COMPANY FIVE YEAR TEN YEAR AGF 62% 75% C.I. 49% 38% CIBC 42% 37% Fidelity 70% 65% IG 42% 24% MacKenzie 61% 77% Royal Bank 51% 29% TD Bank 55% 82% AIM/Trimark 87% 53%
Slide 11: Our Category Killer Potential
OUR CATEGORY KILLER POTENTIAL • AGF Canadian Real Value Fund – We have one of the best value managers in the business in Keith Graham • AGF European Equity Fund – #2 European Equity Fund Manager Worldwide — Mercer Investment Consulting* • AGF International Value Fund – Harris Associates named one of
Slide 12: Investment Management — Tactics
INVESTMENT MANAGEMENT — TACTICS 1. Clarify and articulate each fund’s philosophy and style 2. Investigate sub brand strategy 3. Review our investment disciplines – Extract better performance from our processes
Slide 13: Strategic Priorities
STRATEGIC PRIORITIES • Reinforce investment management excellence • Build a client centric organization focused on multi-channel distribution • Pursue strategic acquisitions to supplement organic growth • Undertake disciplined review of support entities
Slide 14: Randy Ambrosie, Executive Vice-President, Sales and Marketing
AGF MANAGEMENT LIMITED Randy Ambrosie Executive Vice-President, Sales and Marketing
Slide 15: U.S. Mutual Fund Companies by Distribution Type
U.S. MUTUAL FUND COMPANIES BY DISTRIBUTION TYPE TOTAL ASSETS CHANGE IN MARKET MAY ’04 ($ billions) SHARE — YTD Industry 4,934 — DISTRIBUTION STRATEGY 1. Vanguard 623.6 0.29% 2. Fidelity 613.0 -0.09% 3. American Funds 534.4 0.62% Direct 4. Franklin Templeton 196.2 -0.06% 5. PIMCO Funds 149.1 0.03% 6.
Slide 16: Percent of a Typical Canadian Advisor's Sales by Fund Family
PERCENT OF A TYPICAL CANADIAN ADVISOR’S SALES BY FUND FAMILY 0 10 20 30 40 50 60 these fund families Rank 1 Core supporter of Rank 2 Rank 3 Rank 4 Second-tier supporter of these fund families Rank 5 2003 Rank 6 2003e 2002 Rank 7 2001 Rank 8 2000 Top 4 fund families = On average, advisors 90% of sale
Slide 17: Bottom Up Approach: Advisor Channel
BOTTOM UP APPROACH ADVISOR CHANNEL • Increase coverage capabilities – 29 core coverage teams • Rationalize sales team compensation – New assets – Asset retention • Additional coverage – Strategic relationships
Slide 18: Client Centric — Sales Tactics
CLIENT CENTRIC — SALES TACTICS Sales & Marketing Customer Advisor National Institutional Product Marketing Relationship Sales Accounts Sales Development Services Management
Slide 19: Strategic Priorities
STRATEGIC PRIORITIES • Reinforce investment management excellence • Build a client centric organization focused on multi-channel distribution • Pursue strategic acquisitions to supplement organic growth • Undertake disciplined review of support entities
Slide 20: Strategic Acquisitions — AGF Private Investment Management
STRATEGIC ACQUISITIONS — AGF PRIVATE INVESTMENT MANAGEMENT Targets: • 50% cash flow margins • 15-20% ROI Montreal •$1.1B in assets •Core Value •Large Cap Vancouver Calgary Toronto Ottawa • $2.1B in assets • Organic growth • Organic • $1B in assets • Oil & Gas • Leverage PM’s growth • Core Value • Sm
Slide 21: Strategic Priorities
STRATEGIC PRIORITIES • Reinforce investment management excellence • Build a client centric organization focused on multi-channel distribution • Pursue strategic acquisitions to supplement organic growth • Undertake disciplined review of support entities
Slide 22: Support Businesses — AGF Trust
SUPPORT BUSINESSES — AGF TRUST AGF Trust — Income Before Taxes AGF Trust — Total Assets ($ 000’s) ($ 000’s) 10,000 800,000 9,000 700,000 8,000 CAGR CAGR 7,000 46% 600,000 43% 6,000 500,000 5,000 4,000 400,000 3,000 300,000 2,000 200,000 1,000 - 100,000 2000 2001 2002 2003 2004 2000 2001 2002 2003 20
Slide 23: Support Businesses
SUPPORT BUSINESSES • Administration and/or technology solutions for over 170 clients • EBITDA for the fund administration segment for YTD 2004 up 19% over prior year August 31, 2004
Slide 24: Strength in Key Measures — Business Growth
STRENGTH IN KEY MEASURES — BUSINESS GROWTH EBITDA and Cash Flow Growth $350,000 CAGR: 28% $300,000 $250,000 CAGR: 32% $200,000 $150,000 $100,000 $50,000 $0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Year annualized EBITDA Cash Flow From Operations
Slide 25: Utilization of Free Cash Flow
UTILIZATION OF FREE CASH FLOW ($ millions) 160 Debt Reduction 140 Dividends Acquisitions 120 Share Repurchases 100 80 60 40 20 0 2002 2003 2004* *2004 Data • Debt reduction is a forecast • Dividends and share repurchases are YTD annualized • Acquisitions are YTD
Slide 26: Dividend Growth — A Priority Use of Free Cash Flow
DIVIDEND GROWTH — A PRIORITY USE OF FREE CASH FLOW Annual Dividends Paid Per Share* $0.50 $0.40 CAGR 24% $0.30 $0.20 $0.10 $0.00 '97 '98 '99 '00 '01 '02 '03 '04 annualized Dividends increased 37.5% in Q2 2004 to an annual rate of $0.44 per share *Fiscal years ending November 30
Slide 27: Recognized Long-Term Outperformance
RECOGNIZED LONG-TERM OUTPERFORMANCE 20-year performance among the 79 companies in the S&P/TSX composite that have been listed on the TSX for 20 years ending Nov 25 2003. Reported by National Post BUSINESS February 2004.
Slide 28: Forward Looking Information
FORWARD LOOKING INFORMATION This presentation contains certain forward-looking statements that are made based on management’s judgment and expectations but are inherently subject to risks and uncertainties beyond the Corporation’s control. These risks and uncertainties include economic conditions, m
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