Invesco Ltd · NYSE:IVZ
Invesco — Amvescap — Q4 2005 Earnings Presentation
40 slides from Invesco's earnings presentation, Feb 7, 2006
Slide 1: 2005 Fourth Quarter Results
AMVESCAP Helping people worldwide build their financial security 2005 Fourth Quarter Results Martin L. Flanagan, Chief Executive Officer Loren M. Starr, Chief Financial Officer February 7, 2006
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation may include statements that constitute “forward-looking statements” under the United States securities laws. Forward-looking statements include information concerning possible or assumed future results of our operations, earnings, liquidity, cash flow and
Slide 3: Agenda
Agenda Financial Results Our Business Today Our Business Going Forward Questions and Answers Appendix 2
Slide 4: Financial Results
AMVESCAP Financial Results 3
Slide 5: AMVESCAP - Quarterly Flows
AMVESCAP - Quarterly Flows Net outflows and redemption rates have declined for two consecutive quarters but remain a challenge Quarterly long-term flows Gross sales Beginning long-term AUM and quarterly Gross redemptions redemption rates annualized* Beginning assets Net sales ($ in Billions) ($ in
Slide 6: Distribution Channels – Quarterly Flows
Distribution Channels – Quarterly Flows Gross sales Gross redemptions Net sales Retail quarterly flows Institutional quarterly flows HNW quarterly flows ($ in Billions) ($ in Billions) ($ in Billions) 10.4 11.0 9.8 9.8 9.0 6.7 5.9 5.3 4.9 4.0 1.5 0.9 1.1 1.0 0.8 $0.4 $0.3 $0.3 $0.0 $0.0 $0.1 -$1.6 -
Slide 7: Operating Results Before Restructuring Charge – 4Q05 versus 3Q05
Operating Results Before Restructuring Charge – 4Q05 versus 3Q05 $ in Millions 4Q05 3Q05 Q/Q % Change Management Fees 574 556 18 3.2% Service and Distribution 129 126 3 2.4% Other 32 35 (3) -8.6% Total Revenues 735 717 18 2.5% Third-party distribution, service and (183) (180) (3) -1.7% advisory fees
Slide 8: Operating Results Before Restructuring Charge (2005) and U.S. Regulatory Settlement (2004)
Operating Results Before Restructuring Charge (2005) and U.S. Regulatory Settlement (2004) $ in Millions 2005 2004 Y/Y % Change Management Fees 2,214 2,053 161 7.8% Service and Distribution 538 593 (55) -9.3% Other 127 111 16 14.4% Total Revenues 2,879 2,757 122 4.4% Third-party distribution, servic
Slide 9: Restructuring Charge and Expense Guidance
Restructuring Charge and Expense Guidance We took a restructuring charge in 4Q05 as we made progress towards becoming an integrated global investment manager Summary of Restructuring Charges Personnel 285 people $45.1 million Property Atlanta, Houston, UK $20.4 million Fund mergers 18 funds into 8
Slide 10: Our Business Today
AMVESCAP Our Business Today 9
Slide 11: AMVESCAP’s Strengths Create a World of Opportunity
AMVESCAP’s Strengths Create a World of Opportunity Global footprint Great people World of Opportunity Diversification Focus on investment excellence 10
Slide 12: Strength Through Diversification – By Client Base
Strength Through Diversification – By Client Base December 31, 2000 AUM – $402.5 billion December 31, 2005 AUM – $386.3 billion Asia Asia Canada 3% Canada 6% 5% Europe 6% 11% United Europe 8% 8% Kingdom United United States States United 14% 77% 62% Kingdom 2000-05 change CAGR United States $313.5B
Slide 13: Strength Through Diversification – By Channels
Strength Through Diversification – By Channels December 31, 2000 AUM – $402.5 billion December 31, 2005 AUM – $386.3 billion High Net Worth 4% Institutional* Institutional* 42% 47% 58% 49% Retail** Retail** 2000-05 change CAGR Institutional $169.1B Institutional $179.8B 6% 1% Retail $233.4B Retail $
Slide 14: Strength Through Diversification – By Asset Classes
Strength Through Diversification – By Asset Classes December 31, 2000 AUM – $402.5 billion December 31, 2005 AUM – $386.3 billion Alternatives Alternatives Stable Value 6% 3% Stable Value 5% Fixed Income 6% 12% Money Fixed 15% 13% 46% Market Income 59% Equities Equities 12% Money 13% Balanced Market
Slide 15: Strength Through Diversification – By Investment Capability
Strength Through Diversification – By Investment Capability A diversified set of investment capabilities for institutional, retail and high net worth investors Alternatives / Multi Equity Fixed Income Asset Strategies U.S. Small Cap Core Money Markets Private Capital Direct Investments U.S. Small Ca
Slide 16: Strength Through Our Global Footprint
Strength Through Our Global Footprint Europe Asia / Pacific Austria North America Australia Belgium China Canada Czech Republic Japan United States France Singapore Germany Taiwan Ireland United Arab Emirates Italy Netherlands Spain Switzerland United Kingdom Major Majorpresence presenceacross ac
Slide 17: We Also Faced Challenges That Led To Declining Operating Results
We Also Faced Challenges That Led To Declining Operating Results 2000: The high watermark 2000 Avg AUM $390B Net flows $35B Net Revenue $2,448m Challenges Expenses $1,563m 2005 Avg AUM $378B Op. Inc. $885m Net flows $(16B) Business units that were Net Revenue $2,173m independently strong but CAGR
Slide 18: AMVESCAP’s Current Investment Performance
AMVESCAP’s Current Investment Performance Retail % of AUM in Top Half of Peer Group as of 12/31/05 1yr 3yr 5yr US 62% 34% 22% Canada 14% 28% 90% UK 72% 87% 83% Continental Europe and Asia 66% 83% 60% Institutional % of AUM Ahead of Benchmark as of 12/31/05 Equity 53% 53% 97% Fixed Income 94% 93% 92%
Slide 19: Signs of Improvement in AIM’s U.S. Mutual Funds
Signs of Improvement in AIM’s U.S. Mutual Funds AIM US Mutual Funds1 % of AUM in Top Half of Lipper Peer Group on a 1 Year Basis Ending: 12/31/04 09/30/05 12/31/05 Equity 28% 45% 61% Fixed Income 63% 65% 66% Total 30% 46% 62% Performance Highlights Outstanding performance in International/Global p
Slide 20: A Deeper Understanding of the AIM Trimark Investment Discipline
A Deeper Understanding of the AIM Trimark Investment Discipline AIM Trimark Mutual Funds % of AUM in Top Half of Peer Groups Ending: 12/31/99 12/31/02 12/31/05 1 Year 22% 79% 14% 3 Years 19% 83% 28% 5 Years 16% 89% 90% Performance Commentary Trimark investment discipline: Look for strong businesse
Slide 21: Our Business Going Forward
AMVESCAP Our Business Going Forward Realizing Our World of Opportunity 20
Slide 22: Our 2006 Planning Process Followed a Two Step Process
Our 2006 Planning Process Followed a Two Step Process Horizon 1 – “Efficiency & Optimization” Generating momentum through development of a 2006 operating plan August 2005 January 2006 21
Slide 23: Our 2006 Planning Process Followed a Two Step Process
Our 2006 Planning Process Followed a Two Step Process Horizon 2 – “Strategic Repositioning and Growth” Horizon 1 – “Efficiency & Optimization” Defining and delivering on our strategic direction, while continuing to focus on our 2006 operating commitments Generating momentum through development of a
Slide 24: AMVESCAP’s Strategic Direction
AMVESCAP’s Strategic Direction Achieve superior investment performance Build a high-performance Deliver AVZ products anywhere organization in the world to meet client needs Our aspiration: Leverage our world of opportunity to become the premier global investment management firm Unlock the power of o
Slide 25: Key Steps Toward our Strategic Direction
Key Steps Toward our Strategic Direction Achieve Superior Investment Deliver AVZ Products Anywhere In the Performance World to Meet Specific Client Needs Focusing on delivering truly enduring Introducing additional AMVESCAP solutions to investment solutions that are aligned with the U.S. Retail
Slide 26: Key Steps Toward our Strategic Direction
Key Steps Toward our Strategic Direction Unlock the Power of Our Global Build a High Performance Operating Platform Organization Increasing efficiency through focused staff, Delivering operating commitments that discretionary spend, and facilities drive transparency, accountability, management e
Slide 27: Why This is a Winning Strategy?
Why This is a Winning Strategy? Current platform How we will win? Great people By working to exceed our clients’ expectations Focus on investment excellence By realizing our inherent competitive Diversification advantage as a global investment management firm Global footprint By drivin
Slide 28: Questions and Answers
AMVESCAP Questions and Answers Marty Flanagan President and CEO, AMVESCAP Loren Starr CFO, AMVESCAP James Robertson EVP, AMVESCAP John Rogers EVP, AMVESCAP Mark Williamson EVP, AMVESCAP Phil Taylor Head of Canada 27 Bob Yerbury Head of U.K. and Ireland
Slide 29: Appendix
AMVESCAP Appendix 28
Slide 30: Operating Results Before Restructuring – Quarterly
Operating Results Before Restructuring – Quarterly $ in Millions 4Q05 3Q05 2Q05 1Q05 4Q04 Management Fees 574 556 543 542 534 Service and Distribution 129 126 141 142 155 Other 32 35 35 26 42 Total Revenues 735 717 719 710 731 Third-party distribution, service and advisory fees (183) (180) (170) (17
Slide 31: Operating Results Before Restructuring Charge (2005) and U.S. Regulatory Settlement (2004)
Operating Results Before Restructuring Charge (2005) and U.S. Regulatory Settlement (2004) $ in Millions 2005 2004 2003 2002 2001 Management Fees 2,214 2,053 1,757 1,841 2,100 Service and Distribution 538 593 475 439 517 Other 127 111 110 128 149 Total Revenues 2,879 2,757 2,342 2,408 2,766 Third-pa
Slide 32: Assets Under Management 2005 versus 2004
Assets Under Management 2005 versus 2004 (billions) 2005 2004 % Change Beginning Assets $382.1 $370.6 Inflows 66.3 67.0 (1.0)% Outflows (82.5) (86.5) (4.6)% Net flows (16.2) (19.5) (16.9)% Market Gains/Reinvestment 24.4 26.0 (6.2)% Change in money market funds and 0.5 (8.3) N/A other Acquisitions --
Slide 33: Assets Under Management - Quarterly
Assets Under Management - Quarterly (billions) Q405 Q305 % Change Q205 Q105 Q404 Beginning Assets $380.5 $373.2 $375.4 $382.1 $362.7 Inflows 15.8 15.7 0.6% 17.6 17.2 15.8 Outflows (19.5) (20.0) (2.5)% (23.3) (19.7) (23.4) Net flows (3.7) (4.3) (14.0)% (5.7) (2.5) (7.6) Market 8.9 11.1 (19.8)% 5.8 (1
Slide 34: Assets Under Management – 2005 By Channels
Assets Under Management – 2005 By Channels (billions) Total Retail Institutional High Net Worth December 31, 2004 $382.1 $186.0 $180.9 $15.2 Inflows 66.3 41.2 21.3 3.8 Outflows (82.5) (53.3) (25.8) (3.4) Net flows (16.2) (12.1) (4.5) 0.4 Market Gains/Reinvestment 24.4 16.0 7.9 0.5 Change in money ma
Slide 35: Assets Under Management – 4Q05 By Channels
Assets Under Management – 4Q05 By Channels (billions) Total Retail Institutional High Net Worth September 30, 2005 $380.5 $190.0 $174.6 $15.9 Inflows 15.8 11.0 4.0 0.8 Outflows (19.5) (13.7) (5.1) (0.7) Net flows (3.7) (2.7) (1.1) 0.1 Market Gains/Reinvestment 8.9 5.9 2.7 0.3 Change in money market
Slide 36: Assets Under Management – 2005 By Asset Class
Assets Under Management – 2005 By Asset Class (billions) Total Equity Fixed Balanced Money Stable Alter- Income Market Value natives December 31, 2004 $382.1 $178.8 $44.8 $44.1 $50.0 $43.2 $21.5 Inflows 66.3 30.0 14.5 7.8 3.3 4.2 6.5 Outflows (82.5) (45.6) (10.4) (12.5) (3.5) (3.0) (7.5) Net flows (
Slide 37: Assets Under Management – 4Q05 By Asset Class
Assets Under Management – 4Q05 By Asset Class (billions) Total Equity Fixed Balanced Money Stable Alter- Income Market Value natives September 30, 2005 $380.5 $174.6 $47.6 $41.7 $48.7 $46.3 $21.6 Inflows 15.8 7.7 3.3 2.0 0.7 0.4 1.7 Outflows (19.5) (10.4) (1.8) (3.2) (0.9) (0.4) (2.8) Net flows (3.7
Slide 38: Assets Under Management – 2005 By Entity
Assets Under Management – 2005 By Entity (billions) AIM INVESCO Europe/ Total U.S. Canada U.S. U.K. Asia PWM December 31, 2004 $382.1 $137.6 $34.6 $121.0 $49.6 $24.1 $15.2 Inflows 66.3 12.6 5.9 16.7 19.0 8.3 3.8 Outflows (82.5) (28.0) (5.7) (24.0) (11.9) (9.5) (3.4) Net flows (16.2) (15.4) 0.2 (7.3)
Slide 39: Assets Under Management – 4Q05 By Division
Assets Under Management – 4Q05 By Division (billions) AIM INVESCO Europe/ Total U.S. Canada U.S. U.K. Asia PWM September 30, 2005 $380.5 $126.7 $38.4 $117.2 $56.4 $24.1 $15.7 Inflows 15.8 2.6 1.2 3.0 5.9 2.3 0.8 Outflows (19.5) (6.8) (1.5) (4.3) (3.4) (2.8) (0.7) Net flows (3.7) (4.2) (0.3) (1.3) 2.
Slide 40: Additional Income and Expense Information
Additional Income and Expense Information 2005 2004 ($ millions) Full Full Q405 Q305 Year Q304 Q104 Year Operating items: Compensation - Expenses -- (4.7) (4.7) -- -- -- related to German Bank Compensation – Recruitment (11.8) (11.8) Property and Office - -- (11.4) (11.4) (37.0) -- (37.0) Leasehold