Impax Asset Management Group plc · LSE:IPX
Impax Asset Management — FY2011 Earnings Presentation
32 slides from Impax Asset Management's earnings presentation, November 2011
Slide 1: Impax Asset Management Group plc Final Results: Financial Year Ending 30 Sept 2011
Impax Asset Management Group plc Final Results: Financial Year Ending 30 Sept 2011 Norfolk House 31 St James’s Square London SW1Y 4JR UK Tel: +44 (0)20 7434 1122 Fax: +44 (0)20 7437 1245 Impax Asset Management Ltd is authorised and regulated by the Financial Services Authority Impax is a registered
Slide 2: Agenda
Agenda • Business update Ian Simm (Chief Executive) • Annual results • Q&A Charlie Ridge (CFO) 2
Slide 3: Financial Highlights
Financial Highlights • Revenue up 36% to £20.9m (2010: £15.3m) • Operating earnings* increased 63% to £6.2m (2010: £3.8m) • Profit before tax (“PBT”) of £1.7m, inclusive of a £5.4m charge arising from share incentive schemes (2010: £5.2m, which included a £1.0m gain from repayment of a loan note) •
Slide 4: Commercial Highlights
Commercial Highlights • Successful expansion of recently established products ‐ Impax Asian Environmental Markets C Share (long‐only): (£131m, October 2010) ‐ Impax New Energy Investors II (private equity): (final close at €330m, September 2011) • Two significant new listed equity mandates ‐ LD pens
Slide 5: Environmental Markets Update
Environmental Markets Update • Major developments in energy markets ‐ Review of nuclear policy post Fukushima accident ‐ Historically high oil prices ‐ Renewed interest in carbon taxes/markets • China’s Five Year Plan ‐ c.$1trn investment in environmental sectors (renewables, water and waste) by 201
Slide 6: Listed Equity Strategy Performance (to 30/10/11) in GBP
Listed Equity Strategy Performance (to 30/10/11) in GBP 5Y 3Y 1Y 1 year volatility Forward PE* Environmental Specialists 23.4% 40.8% ‐6.2% 18.8% 13.5x Environmental Leaders N/A 48.9% ‐2.1% 18.1% 12.6x Asia‐Pacific N/A N/A ‐24.8% 21.3% 10.2x Water N/A 63.3%** 0.4% 15.4% 13.2x FTSE World Index 19.1% 4
Slide 7: AUM Breakdown
AUM Breakdown AUM (£) AUM (£) AUM (£) Investment Strategy 30/09/11 31/03/11 30/09/10 Environmental Specialists 0.8bn 1.1bn 1.0bn ‐ Impax Environmental Markets plc 343m 452m 409m ‐ Impax Environmental Markets (Ireland) 162m 230m 215m ‐ Third Party funds/accounts 333m 465m 423m Environmental Leaders 2
Slide 8: Increase in AUM by Geographic Region (Client Domicile)
Increase in AUM by Geographic Region (Client Domicile*) £ million Principal funds/partners • Impax Environmental Markets plc UK/Ireland • Impax Environmental Markets (Ireland) • Impax Asian Environmental Markets plc • Impax Asian Environmental Markets (Ireland) • BNP Paribas Investment Partners Othe
Slide 9: Flows for Impax label and Third party funds/accounts
Flows for “Impax label” and Third party funds/accounts “Impax label” funds (£m) Third party funds/accounts (£m) 30 September 2011 712 30 September 2011 792 Market movement (236) Market movement (214) Outflows (40) Outflows (116) Inflows 26 Inflows 79 31 March 2011 962 31 March 2011 1,044 Market move
Slide 10: Private Equity Highlights
Private Equity Highlights • Significant investment opportunity ‐ Substantial need across the EU to fund construction of renewable power plants ‐ Investment in projects offering stable, long‐term, inflation‐protected cashflow ‐ Considerable “proprietary” deal flow from Impax network • NEF I ‐ Fund I
Slide 11: Channels for Growth
Channels for Growth • US distribution ‐ Pax Global Green Fund (ca.$40m, Morningstar “4 star”) ‐ Impax Green Markets Fund LP ‐ Consultants ‐ Focus on endowments, foundations, family offices, charities • BNP Paribas Investment Partners • New strategies • Additional distribution resources 11
Slide 12: Final Results: Financial Highlights (1)
Final Results: Financial Highlights (1) Revenue (£m) Operating costs (£m) Operating earnings (£m) 2011 20.9 2011 14.7 20.1 2011 6.2 2010 15.3 2010 11.5 2010 3.8 Long‐term incentive schemes * • Revenue up 36% vs 2010 primarily • “Other operating costs” up 28% • Operating earnings up 63% due to new as
Slide 13: Final Results: Financial Highlights (2)
Final Results: Financial Highlights (2) Diluted adjusted EPS (p) Ordinary Shares (m) Dividend per share (p) (per diluted adjusted EPS) 2011 3.74 Dilutive effect of April 2011 2011 Ordinary Shares share awards (0.64) 127.4 Exceptional NIC charge (after (0.74) 2011 0.70 tax) Additional shares re EMI s
Slide 14: Final Results: Financial Highlights (3)
Final Results: Financial Highlights (3) Investments (£m) Cash reserves (operating entities) (£m) Cash reserve commitments (£m) 30 September 2011 20.0 30 September 2011 Working capital Cash as at 30 September 4.8 2.7 20.0 and other 2011 Operating cash 6.8 Short term requirements (4.2) Mark to market
Slide 15: New Remuneration Policy (2011 onwards)
New Remuneration Policy (2011 onwards) • Implemented by the Board after the successful conclusion of the Company’s previous long term incentive scheme on 1 April 2011 (slides 21&22) • Salaries to continue at market median • Variable remuneration pool determined by % of “earnings before variable remu
Slide 16: Outlook
Outlook • Attractive prospects for environmental markets to sustain “superior growth” ‐ Major overhaul underway in energy policies worldwide ‐ Demographics and weak asset base driving investment in environmental infrastructure • Active investment management ideal for exploiting inefficient prices ‐
Slide 17: Appendix
Appendix 17 IMPAX)
Slide 18: Income Statement
Income Statement Year Year ended ended 2011 2010 £'000 £'000 Revenue 20,931 15,339 Bonuses (5,267) (3,620) Other operating costs (9,429) (7,892) Operating earnings 6,235 3,827 Share based payment charge (3,647) ‐ Exceptional long‐term incentive scheme NIC charge (1,090) ‐ Other long‐term incentive s
Slide 19: Balance Sheet
Balance Sheet Year Year ended ended 2011 2010 £'000 £'000 Goodwill and intangibles 1,668 1,705 Other non current assets 509 313 2,177 2,018 Cash 21,416 11,729 Current asset investments 3,930 7,007 Other current assets 3,433 6,378 Total assets 30,956 27,132 Current liabilities 7,868 9,424 Non current
Slide 20: AUM – Monthly Development
AUM – Monthly Development* Sep‐11 £1,896m Aug‐11 £2,096m Jul‐11 £2,222m Jun‐11 £2,366m May‐11 £2,326m Apr‐11 £2,372m Mar‐11 £2,362m Feb‐11 £2,187m Jan‐11 £2,260m Dec‐10 £2,251m Nov‐10 £2,034m Oct‐10 £1,942m Sep‐10 £1,823m *AUM stated as of month end 20
Slide 21: Remuneration (1) - Employee Incentive Arrangement (FY 2005-10)
Remuneration (1) ‐ Employee Incentive Arrangement (FY 2005‐10) • Two schemes; both subject to share price hurdle and individual performance targets ‐ 2005 scheme (18.25m shares): 100% allocated and vested ‐ 2008 scheme (18.25m shares): 100% allocated ‐ FY2010 hurdle (58.5p) met in March 2011 with aw
Slide 22: Remuneration (2) - New Remuneration Policy (FY 2011+)
Remuneration (2) ‐ New Remuneration Policy (FY 2011+) • Employee Share Option Plan (“ESOP”) ‐ Designed to incentivise management and key senior staff to deliver strong personal performance that contributes to increasing shareholder value ‐ Strike price for “10% out‐of‐the‐money” options to be based
Slide 23: Impax Overview: A Compelling Business Proposition
Impax Overview: A Compelling Business Proposition • Attractive sector for specialist investment managers ‐ Environmental policy addressing unsustainable economic development globally ‐ 1400+ quoted companies growing rapidly, US$500 billion+ (annual revenues) ‐ Growing evidence that institutions are
Slide 24: Investment Strategies
Investment Strategies Market cap of Typical # of Strategy Geographic scope Benchmark universe stocks launched Listed ENVIRONMENTAL LEADERS MSCI World Equity Global c.US$4tn 45‐55 Mar 2008 Universe of c.1400 companies* FTSE EOAS Investment Universe ENVIRONMENTAL SPECIALISTS MSCI World Small Global c.
Slide 25: Impax Asset Management: Investing Since 1998
Impax Asset Management: Investing Since 1998 1998 Impax Asset Management founded AUM (£m) 15 1999 First listed equity mandate and Impax ET50 launched 22 2000 36 2001 Listing on AIM 39 2002 Impax Environmental Markets plc 55 2003 68 2004 Impax Environmental Markets (Ireland) Fund 93 2005 First Privat
Slide 26: FTSE Environmental Markets Classification: Sub-Sectors
FTSE Environmental Markets Classification: 21 Sub‐Sectors Renewable & Alternative Energy Energy Efficiency Renewable Solar Energy Wind Power Biofuels Other Power Industrials Buildings Transport Energy Generation Generation Renewables Network Energy Energy Energy Developers Equipment Equipment Equipm
Slide 27: FTSE's Partner for Environmental Indices
FTSE’s Partner for Environmental Indices • Growing demand for sector indices • Impax ET50 Index operating since 1999 • Impax‐FTSE partnership established in 2007 • FTSE now marketing 18 indices world‐wide • Impax revenue share and brand/profile benefits 27
Slide 28: Competitors
Competitors Listed Equities • Products from large, branded asset managers not typically “consultant quality” • Limited number of boutiques • Sub‐sector products, e.g. alternative energy, tend to underperform broader strategies • Little direct competition in North America, Asia Private Equity • Estab
Slide 29: Extensive Sector Expertise
Extensive Sector Expertise Keith Falconer Ian Simm Charlie Ridge • Chairman since 2004 • Chief Executive • CFO • 30 years investment • 21 years sector • 20 years finance expertise expertise (15 at expertise (3 at Impax) Impax) • Ex Martin Currie • Accountant, ex • Physicist, ex McKinsey Deutsche Ban
Slide 30: Strong Institutional Investor Relationships
Strong Institutional Investor Relationships Consultants Investors in Impax pooled vehicles + > 100 other institutions White label funds Investors in segregated accounts European Institution 30
Slide 31: Well-Placed Distribution Partners
Well‐Placed Distribution Partners UK: United States: ‐ Collins Stewart ‐ Pax World ‐ plus direct sales ‐ Titanium Asset Management Continental Europe: ‐ BNP Paribas Investment Asia/Australia: Partners ‐ BNP Paribas Investment ‐ ASN Bank Partners ‐ DIAM (Japan) 31
Slide 32: Disclaimer
Disclaimer This document has been prepared by Impax Asset Management Group plc and approved by Impax Asset Management Limited (Impax, authorized and regulated by the Financial Services Authority). The information and any opinions contained in this document have been compiled in good faith, but no re
Impax Asset Management Group — FY2011 Earnings Presentation on 6ix