Igm Financial Inc. · TSX:IGM
Igm Financial — Q2 2021 Earnings Presentation
44 slides from Igm Financial's earnings presentation, Aug 5, 2021
Slide 1: IGM Financial Q2, 2021 Results
IGM Financial Q2, 2021 Results August 5, 2021
Slide 2: Conference Call Participants
Conference Call Participants JAMES O‘SULLIVAN DAMON MURCHISON BARRY MCINERNEY LUKE GOULD PRESIDENT & CEO PRESIDENT & CEO PRESIDENT & CEO EXECUTIVE VICE-PRESIDENT IGM FINANCIAL IG WEALTH MANAGEMENT MACKENZIE INVESTMENTS & CFO IGM FINANCIAL 2
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 & Additional IFRS Measures
Non-IFRS Financial Measures & 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: • Adjusted net earnings available to common shareholders; and • Other items, which includ
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: IGM Financial – James O'Sullivan
IGM FINANCIAL JAMES O‘SULLIVAN PRESIDENT & CEO IGM FINANCIAL IGM FINANCIAL Q2, 2021 RESULTS
Slide 7: IGM Financial Q2, 2021 Highlights
IGM Financial Q2, 2021 Highlights 1 Record high AUM&A of $262.0B; up 5.4% in the quarter • Organic growth from client investment returns of 4.5% and net flows of $2.5B 2 Strong Q2 total net flows of $2.5B; record high investment fund net flows of $1.9B • Record high IG Wealth Management net flows of
Slide 8: Financial Market and Client Investment Returns
Financial Market and Client Investment Returns IGM Client Return Index1 2.6 2.4 Investment Performance June 30 2020 Q1/21 Q2/21 2021 YTD 2.2 IGM Client Investment Returns 2 6.5% 2.7% 4.5% 7.2% Equity Markets: Canada (S&P / TSX Composite) 2.2% 7.3% 7.8% 15.7% 2.0 U.S. (S&P 500) 16.3% 5.8% 8.2% 14.4%
Slide 9: Industry Operating Environment
Industry Operating Environment Second Quarter Industry Long-term Net Sales ($B) Total Industry Industry Asset Manager Peers 27.9 13.7 13.7 13.4 9.9 10.4 6.7 4.4 5.0 2.0 3.5 3.6 3.2 2.5 0.0 1.1 (2.4) (1.1) (1.8) (2.5) 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Long-term Mutual Fund Net Sales R
Slide 10: IGM Financial Q2, 2021 Results
IGM Financial Q2, 2021 Results Net Earnings Available to Daily Total AUM & AUA ($B) Common Shareholders ($MM) Earnings Per Share (₵) Total AUM&A Record high 237 EPS; up 29% Annual Average AUM&A Quarterly Average AUM&A 99 270 260 184 250 77 240 230 Net acquisitions of $30.3B (GLC/Greenchip/QGOF) 220
Slide 11: Net Earnings Available to Common Shareholders by Segment and Company
Net Earnings Available to Common Shareholders by Segment and Company ($MM) Wealth Management Asset Management Strategic Investments & Other1 IGM Consolidated 2 3 +29% 237.4 183.5 +34% 130.4 97.2 +54% 56.5 -9% 36.6 34.5 31.3 +46% +20% 9.3 13.6 3.3 3.9 - 1.4 Q2/20 Q2/21 Q2/20 Q2/21 Q2/20 Q2/21 Q2/20 Q
Slide 12: Second Quarter Net Flows ($MM)
Second Quarter Net Flows ($MM) Wealth Management Asset Management IGM Consolidated Institutional SMA 1 3,599 3,649 Record high investment fund net flows of $1.7B 2,538 2,542 2 2,5422 242 1,907 +1,189 Record high net flows 242 +608 +732 2,296 670 1,665 -38 1,057 1,107 154 116 (62) Q2/20 Q2/21 Q2/20 Q
Slide 13: IG Wealth Management
IG WEALTH MANAGEMENT DAMON MURCHISON PRESIDENT & CEO IG WEALTH MANAGEMENT IGM FINANCIAL Q2, 2021 RESULTS
Slide 14: IG Wealth Management Q2, 2021 Highlights
IG Wealth Management Q2, 2021 Highlights 1 Record high AUM&A of $112.2B as at June 30, 2021, up 4.9% during Q2 • Strong second quarter client returns of 4.2% and record high Q2 net flows of $670MM 2 Record high Q2 net flows of $670MM and gross inflows of $3.2B • Strong net sales to IGM managed produ
Slide 15: Continued Net Flow Momentum at IG Wealth Management
Continued Net Flow Momentum at IG Wealth Management IG Wealth Management Gross and Net Flows1 ($MM) IG Wealth Management Flows Gross Inflows Gross Outflows IGM Product Other Net Flows (Last Twelve Month Trailing, $B) Month of July: Total Net Flows IGM Product Net Flows 1,073 806 3.0 658 706 719 663
Slide 16: IG Wealth Management Q2, 2021 Operating Results
IG Wealth Management Q2, 2021 Operating Results Gross Outflows Rate Assets Under Gross Inflows ($MM) (quarterly annualized) Net Flows ($MM) Advisement ($B) Up 69% 670 3,220 3rd party IG mutual funds 112.2 107.0 9.3% 7.0 8.7% (62) 93.8 6.3 4.3 1,901 Q2/20 Q2/21 Net Flows Q2/20 Q2/21 89.5 100.7 105.2
Slide 17: IG Wealth Management Assets Under Advisement & Net Flows
IG Wealth Management Assets Under Advisement & Net Flows IG Wealth Management AUA Continuity by Investment Category ($MM) 1▪ Cash balances can now be held AUA Total 106,995 670 – 4,520 112,185 in client accounts (nominee 1 dealer platform) Deposits 2▪ Third party funds and securities & HISA (1.7% co
Slide 18: Accelerating Consultant Productivity
Accelerating Consultant Productivity Gross Inflows per Consultant Gross Inflows per Consultant Recruit with <4 years experience Practice with >4 years experience Key Initiatives ($MM) ($MM) Driving Productivity • Elimination of DSC (2017), removing 1.56 0.54 competitive impediment • Tightened recrui
Slide 19: Sales Growth Driven by Accelerating High-Net-Worth Client Acquisition
Sales Growth Driven by Accelerating High-Net-Worth Client Acquisition Gross Flows from Newly Acquired Clients Gross Flows from Newly Acquired Clients (Q2, $MM) (Last Twelve Month Trailing, $MM) By Client Assets Brought to IG Wealth By Client Assets Brought to IG Wealth Growth >$500K $100-500K <$100K
Slide 20: IG Wealth Top Performer in 2021 Investment Executive Dealer Report Card
IG Wealth Top Performer in 2021 Investment Executive Dealer Report Card IG Wealth Industry Average (ex-IG Wealth) Continued leading 9.2 8.9 9.1 9.2 position in our highly 8.2 8.7 8.4 8.2 differentiated 7.7 7.8 financial planning & Support for Support for wills and Support for tax Support for insuran
Slide 21: Mackenzie Investments
MACKENZIE INVESTMENTS BARRY MCINERNEY PRESIDENT & CEO MACKENZIE INVESTMENTS IGM FINANCIAL Q2, 2021 RESULTS
Slide 22: Mackenzie Investments & Strategic Investments Q2, 2021 Highlights
Mackenzie Investments & Strategic Investments Q2, 2021 Highlights 1 Record high AUM of $201.7B at June 30, 2021, up 5.3% from March 31, 2021 • Organic growth through investment returns of 4.7% and net sales of $1.9B Strong total net sales of $1.9B and record investment fund net sales of $1.7B; gaini
Slide 23: Continued Strong Momentum at Mackenzie
Continued Strong Momentum at Mackenzie Mackenzie Adjusted Investment Fund Flows1 ($MM) Mackenzie Adjusted Investment Fund Net Flows1 Gross Sales Redemptions Mutual Fund Net Sales ETF Net Flows (Last Twelve Month Trailing, $MM) Month of July: 900 784 830 802 Total Retail 660 511 536 475 385 449 288 4
Slide 24: Mackenzie Q2, 2021 Operating Results
Mackenzie Q2, 2021 Operating Results Mutual Fund Gross Sales ($MM)2 Net Sales ($MM)1,2 ▪ $1,408MM retail investment fund net Retail Institutional sales, up $999MM Q2/20 Q2/21 2,996 +20% Retail mutual Funds 218 1,006 2,505 ▪ Gaining share; 10% long-term 516 Retail ETFs 191 402 investment fund net sal
Slide 25: Investment Boutique Retail Mutual Fund Performance & Net Sales
Investment Boutique Retail Mutual Fund Performance & Net Sales Fixed Managed 3rd Party Value-Oriented Quality Growth-Oriented Sustainable Core & Dividend Income Solutions & Other North Global Global CAMC, Fixed Multi-Asset Putnam, Cundill American Ivy Growth Bluewater Resources Greenchip Quantitativ
Slide 26: Five Areas of Product Emphasis for Mackenzie
Five Areas of Product Emphasis for Mackenzie – Q2/21 Highlights on Private Investments, Exchange Traded Funds, and China Themes • Another strong quarter in Areas of Macro Q2 2021, with fundraising Emphasis Thesis Northleaf AUM3 ($B) of $1.7B, driving Northleaf’s AUM up 9% 1. Sustainable $44T1 market
Slide 27: Strong Growth in Chinese Mutual Fund Industry AUM
Strong Growth in Chinese Mutual Fund Industry AUM; ChinaAMC is an Industry Leader, and Consistently Among the Top Five in the League Tables Chinese Mutual Fund Industry Ending AUM 22.8 Chinese Mutual Fund Industry Long-term Mutual 21.6 (RMB Trillions)1 Fund Market Share (% at March 31, 2021)2 20.0 C
Slide 28: ChinaAMC – A Leading Chinese Asset Manager Delivering Accelerated Growth
ChinaAMC – A Leading Chinese Asset Manager Delivering Accelerated Growth; Mackenzie Capitalizing on Chinese Market Opportunity in Canada ChinaAMC Ending AUM1 (RMB billions) Q2/21 Mackenzie-ChinaAMC strategic partnership highlights • C$680MM sub-advisory mandate awarded to Mackenzie during Q2/21 • Ma
Slide 29: Financial Highlights
IGM FINANCIAL Financial Highlights LUKE GOULD EXECUTIVE VICE-PRESIDENT & CFO IGM FINANCIAL IGM FINANCIAL Q2, 2021 RESULTS
Slide 30: Assets Under Management & Advisement
Assets Under Management & Advisement IGM Assets Under Management & Advisement ($B) Change in IGM AUM & AUA ($B) Total AUM&A Annual Average AUM&A Quarterly Average AUM&A Q2/20 Q3/20 Q4/20 Q1/21 Q2/21 LTM Opening AUM & AUA 168.4 188.3 196.4 240.0 248.5 188.3 270 IG Wealth Management Net Flows (0.1) (0
Slide 31: IGM Financial Adjusted EBIT & Margins
IGM Financial Adjusted EBIT & Margins IGM Adjusted EBIT1 ($MM) IGM Adjusted EBIT Margin1,2 (% of AUM&A) 843.9 Direct advisor/dealer 779.5 800.5 compensation3 & sub- 753.4 1.45% 1.44% 1.44% 706.6 advisory expenses 232.0 1.26% 1.25% 224.8 Share of associates’ 0.42% 0.41% 0.42% 202.7 213.4 189.4 earnin
Slide 32: IGM Financial Consolidated Profitability
IGM Financial Consolidated Profitability $ Millions (unless otherwise noted): Change YoY Change QoQ IGM Financial Consolidated Q2/20 Q1/21 Q2/21 $ % $ % Days in the period 91 90 91 0.0% 1.1% Average AUM & AUA ($ Billions) Wealth Management AUM & AUA 117.1 134.9 140.2 23.1 19.7% 5.3 3.9% Asset Manage
Slide 33: IG Wealth Management Key Profitability Drivers
IG Wealth Management Key Profitability Drivers Average Assets ($B), Advisory and Key Revenue & Expenses as bps of Respective Product & Program Fee Rate (bps)1 Driver (AUA or AUM or Gross Inflows)1 109.7 106.8 105.9 105.5 105.0 104.3 104.2 100.3 6.6 97.0 5.9 5.1 103.1 Other AUA Advisory 91.2 4.5 99.6
Slide 34: IG Wealth Management Profitability
IG Wealth Management Profitability $ Millions (unless otherwise noted): 1 Change YoY Change QoQ IG Wealth Management Q2/20 Q1/21 Q2/21 $ % $ % Days in the period 91 90 91 0.0% 1.1% Average assets under advisement ($B) 91.2 105.5 109.7 18.5 20.3% 4.2 4.0% ▪ 1 Year-to-date 2021 operations and Average
Slide 35: Asset Management Key Profitability Drivers
Asset Management Key Profitability Drivers Key Revenue as bps of Respective Driver1 Average AUM ($B), Net Asset Management Fees (bps)1 (Third-party AUM or Sub-advisory AUM to Wealth Mgmt.) Sub-advisory AUM 196.6 to Wealth 187.2 Management 72.0 71.0 70.8 Third Party AUM 149.5 77.3 144.5 74.5 134.5 Ne
Slide 36: Mackenzie Retail Mutual Fund Sales & Business Development Expenses
Mackenzie Retail Mutual Fund Sales & Business Development Expenses Retail Mutual Fund Sales Retail Mutual Fund Sales Retail Mutual Fund Sales Last twelve month trailing ($MM) Quarters ($B) Full Years ($MM) Gross Sales Net Sales 12,000 6,000 Mutual Fund Gross Sales Net +50% sales rates Mutual Fund Ne
Slide 37: Asset Management Segment Profitability
Asset Management Segment Profitability $ Millions (unless otherwise noted):1 Change YoY Change QoQ Asset Management Q2/20 Q1/21 Q2/21 $ % $ % Days in the period 91 90 91 0.0% 1.1% ▪1 Year-to-date business Average assets under management ($B) Excluding sub-advisory to Wealth Management 67.3 112.7 119
Slide 38: ChinaAMC – Q2/21 Net Earnings Increasing 45% Year-over-year
ChinaAMC – A Leading Chinese Asset Manager – Delivering Accelerated Growth with Q2/21 Net Earnings Increasing 45% Year-over-year ChinaAMC Ending AUM1 ChinaAMC Net Earnings IGM Share of ChinaAMC Earnings (RMB billions) (RMB millions) (CAD millions) 15.1 578 1,607 1,461 12.5 471 11.8 1,248 443 630 10.
Slide 39: Net Earnings Available to Common Shareholders by Segment and Company
Net Earnings Available to Common Shareholders by Segment and Company ($MM) On May 3, 2021, Wealthsimple announced a $750MM equity fundraising, valuing IGM’s investment in 1 Wealthsimple at $1.45B • As part of the transaction, IGM disposed of a portion of its investment for proceeds of $294 million (
Slide 40: Adjusted Net Earnings and Valuation by Segment and Company
Adjusted Net Earnings Available to Common Shareholders and Valuation by Segment and Company ($MM) Wealth Management Asset Management Strategic Investments & Other1 IGM Consolidated Adjusted +20% 919 Net Earnings +18% 763 2020 512 434 +42% Not applicable +9% 2021 +39% 224 +27% (fair value 158 109 118
Slide 41: Q&A
Q&A IGM FINANCIAL Q2, 2021 RESULTS
Slide 42: Appendix
Appendix IGM FINANCIAL Q2, 2021 RESULTS
Slide 43: IGM Financial Operations & Support and Business Development Expenses
IGM Financial Operations & Support and Business Development Expenses1 2019 2020 % Change 2021 Guidance (expressed as change relative to 2020) Business development expenses IG Wea l th 207.3 199.1 (4.0%) <3% IPC 27.3 28.8 5.8% 5 – 10% Ma ckenzi e 79.9 80.2 0.4% 20% (~20% variable with sales & ~20% di
Slide 44: Equity Offerings Accelerate Momentum and Enhance Value for IGM Financial Shareholders
Equity Offerings Accelerate Momentum and Enhance Value for IGM Financial Shareholders On May 3, 2021, Wealthsimple announced a $750 million equity fundraising, valuing IGM’s investment in Wealthsimple at $1,448 million. • As part of the transaction, IGM Financial disposed of a portion of its investm