Impax Asset Management Group plc · LSE:IPX
Impax Asset Management — H1 2017 Earnings Presentation
34 slides from Impax Asset Management's earnings presentation, May 2017
Slide 1: Interim results for the six months to 31 March 2017
Impax Asset Management Group plc Interim results for the six months to 31 March 2017 CLEAR INVESTMENT 1
Slide 2: Agenda
Agenda • Part 1: Business update • Part 2: Financial update Ian Simm Chief Executive • Part 3: Background on Impax Charlie Ridge Chief Financial Officer CLEAR INVESTMENT 2
Slide 3: Part 1: H1 2017 business highlights
Part 1: H1 2017 business highlights CLEAR INVESTMENT 3
Slide 4: H1 milestones
H1 milestones Robust Record total investment AUM1 + 27% net inflows performance in £870m Listed Equities Strong North progress on American real assets AUM reaches fundraising $1 billion 1As at 31 March 2017. Assets under advice represent ~4% of total AUM. CLEAR INVESTMENT 4
Slide 5: Financial performance
Financial performance FINANCIAL PERFORMANCE H1 2017 H2 2016 H1 2016 Assets under management1 £5.7bn £4.5bn £3.6bn Revenue £13.9m £11.7m £9.4m Operating earnings2 £3.2m £2.6m £1.6m Profit before tax £2.4m £3.1m £2.1m Diluted earnings per share3 2.11p 2.27p 1.35p Shareholders’ equity £28.4m £26.7m £24
Slide 6: Solid track record of growth
Solid track record of growth AUM: £m 1998 15 1999 20 Phase 1: 2000 39 Establishing the business 2001 38 2002 55 2003 66 2004 69 2005 214 Phase 2: 2006 429 Scale up to critical mass 2007 982 2008 1099 2009 1265 2010 1823 Phase 3: 2011 1896 Consolidation & investment 2012 1828 2013 2197 2014 2755 Phas
Slide 7: Trump administration: reasons to be cheerful
Trump administration: reasons to be cheerful Source: iStock and Shutterstock. CLEAR INVESTMENT 7
Slide 8: Investment update: Listed Equities (%)
Investment update: Listed Equities (%) 126.7 • Robust investment 106.1 107.7 performance from all 93.9 91.0 strategies • Leaders, Water and 66.5 61.4 Asia top performers 54.7 51.5 53.2 over the Period 46.8 33.2 33.6 33.5 35.8 32.2 • Under-performed 21.9 MSCI ACWI in calendar Q4 2016 due to no holdin
Slide 9: Investment update: Real Assets
Investment update: Real Assets Renewable energy infrastructure NEF ll: good progress with sale of 102MW of generating capacity in Ireland, France and Italy • Expect full exit and delivery of attractive returns to investors in 2018 NEF III: second close achieved • First close on 30 November at €149m
Slide 10: AUM growth in Europe and North America
AUM growth in Europe and North America Breakdown by client domicile (£m) Principal funds/partners 726 Impax Environmental Markets plc UK/Ireland Irish UCITS Platform 756 2,774 BNP Paribas Investment Partners EMEA ASN Bank 3,710 Absalon Capital 67 Asia Pacific 70 BNP Paribas Investment Partners DIAM
Slide 11: Listed Equities: significant growth in most strategies
Listed Equities: significant growth in most strategies £ million 1,427 Specialists 1,619 1,302 Water 1,769 1,270 Leaders 1,507 165 Food & Agriculture 386 28 Asia-Pacific 30 30.09.2016 31.03.2017 CLEAR INVESTMENT 11
Slide 12: Breakdown of AUM increase (listed equities)
Breakdown of AUM increase (listed equities) LISTED EQUITY FUNDS (£m) WEIGHTED AVERAGE REVENUE MARGIN1 (bps) 31 March 2017 5,313 Market movement 342 H1 2017 52.9 Inflows 910 Outflows (133) H2 2016 56.8 30 30 September September 4,194 20162016 H1 2016 58.3 Market movement 716 Inflows 472 Outflows (198
Slide 13: Part 2: H1 2017 financial highlights
Part 2: H1 2017 financial highlights CLEAR INVESTMENT 13
Slide 14: Financial highlights: Operating performance
Financial highlights: Operating performance REVENUE (£m) OPERATING COSTS (£m) OPERATING EARNINGS (£m) H1 2017 13.9 H1 2017 7.9 0.4 2.5 10.8 H1 2017 3.2 Private Private Equity Equity PPSPPS andand 0.2 Financing fees Financing fees Listed Equity flows flowsand and 2.1 H2 2016 7.1 2.0 9.1 H2 2016 2.6 p
Slide 15: Financial highlights (2): Earnings and dividend
Financial highlights (2): Earnings and dividend DILUTED EPS (p) DIVIDEND (p) H1 2017 2.11 2017 0.7 2016 0.5 1.6 2.1 Other (0.13) 2015 0.4 1.2 1.6 0.5 2014 0.3 1.1 1.4 Increase in operating Operating earnings 0.76 earnings 2013 0.9 Fair value Seed 2012 0.75 (0.79) investments 2011 0.7 H2 2016 2.27 20
Slide 16: Financial highlights (3): Cash and investments
Financial highlights (3): Cash and investments INVESTMENTS¹ (£m) CASH RESERVES (£m) CASH RESERVE ANALYSIS (£m) 31 March 2017 31 March 2017 13.0 13.0 31 March 2017 10.0 1.5 11.5 Risk buffer (6.1) Dividends and Dividends and net net (1.8) sharebuy share buybacks backs Fair value "Available" cash 6.9 0
Slide 17: Financial highlights (4): Balance sheet
Financial highlights (4): Balance sheet Balance sheet AVAILABLE ASSETS (£m) BASIC SHARES (m) H1 2017 6.9 11.5 18.4 H1 2017 110.9 H2 2016 10.5 11.0 21.5 H2 2016 111.8 H1 2016 8.1 10.3 18.4 H1 2016 112.6 Available cash Investments • “Available Assets” per share around 16.6p CLEAR INVESTMENT 17
Slide 18: Long term trends: strong cost control
Long term trends: strong cost control AUM (£bn) AVERAGE NUMBER OF EMPLOYEES HY 2017 5.7 HY 2017 71 FY 2016 4.5 FY 2016 65 FY 2011 1.9 FY 2011 48 TOTAL OPERATING COSTS PER EMPLOYEE (£’000) NON STAFF COSTS (£m) HY 2017 1431 HY 2017 2.5 FY 2016 260 FY 2016 4.3 FY 2011 306 FY 2011 4.5 1Excludes costs re
Slide 19: Milestones and prospects
Milestones and prospects Acknowledged Attractive Strong global brand investment distribution leader skills/strategies Potential for Scope to Building further develop/add shareholder scaling new capabilities value CLEAR INVESTMENT 19
Slide 20: Part 3: Background on Impax Asset Management
Part 3: Background on Impax Asset Management CLEAR INVESTMENT 20
Slide 21: Impax is a global leader in Environmental Markets investing
Impax is a global leader in Environmental Markets investing ASSETS UNDER MANAGEMENT AND ADVICE1 £5.3bn Listed Equities • Dedicated to environmental markets since 1998 £375m Renewable £5.7bn Energy Infrastructure • Global institutional client base AUM £22m Sustainable Property • Established thought l
Slide 22: The rapidly changing landscape for investment managers
The rapidly changing landscape for investment managers MAINSTREAM TRENDS A FORMULA FOR WINNERS IMPAX WELL POSITIONED • Pressure on generalists “Specialist” approach P • Increasingly complex regulatory environment Differentiated strategies P • Growing fee pressure on generic products Diversified inco
Slide 23: Our offices and distribution partners
Our offices and distribution partners UK / Ireland Europe North America BNP Paribas IEM plc PaxWorld ASN Bank UCITS Platform Delaware funds platform Absalon Capital NEI London Desjardins Asia Pacific BNP Paribas in Hong Kong Portland New York and Australia Hong Kong Impax offices CLEAR INVESTMENT 23
Slide 24: History of thought leadership
History of thought leadership Impact of £10m invested in the strategy for one year. Based on most recently reported annual environmental data for holdings in the Impax Specialists strategy as at 31 December 2016. Methodology has been assured by Ernst & Young LLP. For further explanation of our impac
Slide 25: Powerful drivers for environmental products and services
Powerful drivers for environmental products and services Clean energy Water Increasing population Rising living standards Infrastructure deficit Waste/Resource Sustainable food, Agriculture & Forestry recovery Finite natural resources Pollution CLEAR INVESTMENT 25
Slide 26: Catalysts for investment
Catalysts for investment UN CLIMATE CHANGE CONFERENCE CHINA 13TH FIVE YEAR PLAN AIR POLLUTION FOOD SCANDAL Source: iStock and Shutterstock. COP21 logo: http://www.cop21.gouv.fr/en/logos/ CLEAR INVESTMENT 26
Slide 27: Important information
Important information This document has been prepared by Impax Asset Management Group plc and approved by Impax Asset Management Limited and Impax Asset Management (AIFM) Limited (“Impax”, authorised and regulated by the Financial Conduct Authority). Both companies are wholly owned subsidiaries of I
Slide 28: Appendix
Appendix CLEAR INVESTMENT 28
Slide 29: IPX shareholder register: significant staff ownership
IPX shareholder register: significant staff ownership FULLY DILUTED IPX SHARES (m) EQUITY AWARDS OUTSTANDING IPX issued shares 127.7 Number End of exercise Awards Vesting date1 outstanding period1 Share Share buybuy backs backs to (18.7) date to date 2011 ESOP 2,110,000 Vested 2017 2012 ESOP 2,200,0
Slide 30: Significant staff ownership
Significant staff ownership BNP Paribas Investment Partners, 25% Free float, 37% 129.8m IPX shares1 Employee ownership, 38%2 1Fully diluted number of shares. 2Staff ownership was 38% as at 30 September 2016. Includes vested shares within sub-funds of the Employee Benefit Trusts (EBTs) from which the
Slide 31: Income statement
Income statement Six months Six months Six months ended ended ended March 2017 September 2016 March 2016 £'000 £'000 £'000 Revenue 13,948 11,633 9,434 Operating costs (10,774) (9,044) (7,871) Operating earnings 3,174 2,589 1,563 Operating margin 23% 22% 17% Credits/(charges) related to legacy long t
Slide 32: Balance sheet
Balance sheet 31 March 30 September 31 March 2017 2016 2016 £'000 £'000 £'000 Goodwill and intangibles 1,681 1,742 1,681 Other non-current assets 159 122 216 1,840 1,864 1,897 Cash and cash equivalents 13,287 15,695 13,244 Current asset investments 15,550 12,811 10,837 Other current assets 7,641 7,3
Slide 33: Impax investments
Impax investments Principal Investments¹ Theme % of Fund AUM Comments funds/investee (£m) Impax Food and Food and agriculture 3.1 95% Agriculture Fund Impax Environmental Leaders 4.3 51% Leaders Impax Global Equities Global equities 2.5 99% Opportunities Fund Impax New Energy Commitment: €3.8m, €0.2
Slide 34: Balance sheet
Balance sheet AVAILABLE ASSETS (£m) SHARE MANAGEMENT (m) Fully Fully diluted diluted "Available 17.1p Shares in issue 127.72 21.8 “Available Assets"Assets” Net Net dilution dilution ofof 14.0 Cash Cash utilisation utilisation for for net remaining awards net share (1.1)1 share buybuy backs backs Ave
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