Igm Financial Inc. · TSX:IGM
Igm Financial — Q2 2016 Earnings Presentation
29 slides from Igm Financial's earnings presentation, Aug 4, 2016
Slide 1: IGM Financial Q2, 2016 Results
IGM FINANCIAL Q2, 2016 Results August 4th, 2016
Slide 2: Conference Call Participants
IGM FINANCIAL – CONFERENCE CALL PARTICIPANTS Paul W. Hancock Kevin E. Regan Jeffrey R. Carney Barry S. McInerney Vice-President, Executive Vice- President & CEO, President & CEO, Finance and Investor President & CFO, IGM Financial Mackenzie Relations, IGM Financial IGM Financial President & CEO, Inv
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 and Additional IFRS Measures
NON-IFRS FINANCIAL MEASURES AND 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: – Operating earnings available to common shareholders; and – Other items, which inclu
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: Agenda for Today's Call
AGENDA FOR TODAY’S CALL 1. IGM Highlights 2. Investors Group 3. Mackenzie Investments 6
Slide 7: IGM Financial Highlights of Second Quarter Results
IGM FINANCIAL HIGHLIGHTS OF SECOND QUARTER RESULTS • Operating earnings were $172.9MM versus $198.5MM last year and $167.0MM during the prior quarter Financial • Operating earnings per share for the quarter were $0.72 versus $0.80 last year and $0.69 during the prior quarter Results • Quarterly divi
Slide 8: Operating Environment
OPERATING ENVIRONMENT • The S&P TSX Composite Index rose 4.2% in the quarter driven by a significant rebound in cyclical stocks such as gold and silver Financial producers Markets • Other global equity indices experienced muted returns in the quarter • Canadian dollar strength negatively impacted fo
Slide 9: Regulatory Developments in the Quarter
REGULATORY DEVELOPMENTS IN THE QUARTER • Focused on ‘enhancing’ the client-advisor relationship, CSA Consultation Paper 33-404 including introduction of a best interest standard • Targeted reforms extensive and cover all aspects of the client- PROPOSALS TO ENHANCE THE OBLIGATIONS OF advisor relation
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Slide 11: Investors Group Second Quarter Review
INVESTORS GROUP SECOND QUARTER REVIEW Company Highlights 1) Consultant network at record high 2) Continued momentum in HNW segment 3) Strong utilization of our competitive product offerings 4) CEO Listening Tour and Consultant engagement 11
Slide 12: Consultant Network Growth
CONSULTANT NETWORK GROWTH 5,366 +19% • Consultant network at 5,366, up 19% from the end < 4 years experience of 2012 • Number of Consultants with CFP or F.Pl. designations stands at 1,543, with an additional 874 Consultants > 4 years experience enrolled in these programs which combined is up 27% fro
Slide 13: Trend in Flows
TREND IN FLOWS Quarterly Gross and Net Sales Trends ($ Billions) 2.5 2.27 1.89 1.81 1.82 1.78 2.0 1.5 Gross Sales • Gross sales during the 1.0 0.47 0.5 0.03 0.14 0.00 Net Sales quarter of $1.78B were down - 6.1% compared to Q2 2015 (0.5) Q2/15 Q3/15 Q4/15 Q1/16 (0.17) Q2/16 but represent the second
Slide 14: HNW Segment – Key Growth Focus
HNW SEGMENT – KEY GROWTH FOCUS 1 Mutual Fund Gross Sales in HNW Series • Mutual fund gross sales in (Last Twelve Month Trailing - $ Billions) HNW series1 were $1.0B YTD 2.5 2016, a 12% increase relative to the prior year (25% of gross 2.0 1.9 sales compared to 21% in the 1.8 prior period) 1.5 1.2 •
Slide 15: Insurance & Mortgage Business
INSURANCE & MORTGAGE BUSINESS New Annualized Insurance Premiums (Six months ended June 30 - $ Millions) 37.9 35.5 • New individual insurance Group Insurance product sales have increased 8.2% YTD 2016 26.8 29.0 Individual Insurance • New mortgage business 2015 2016 YTD 2016 was $1.47B, up 26.5% compa
Slide 16: Investment Performance
INVESTMENT PERFORMANCE Client Account Rate of Return Experience (%) Quarterly 15 Median Client Account Rate of • Client account rate of return 10 Return for up to five years now 5 appears on quarterly 90% of client 1.4 1.3 accounts had statements - 0.0 returns within (3.1) this range (5) • Median cl
Slide 17: Investment Performance Based on Gross Returns Relative to Benchmarks
INVESTMENT PERFORMANCE BASED ON GROSS RETURNS RELATIVE TO BENCHMARKS June 30, 2016 1Y 3Y 5Y 10Y -3.8 -1.2 -1.7 -2.5 -0.9 -1.5 -3.1 -2.3 1.6 1.7 -0.8 -0.4 -5.0 -2.2 Gross Returns Above Benchmarks Canadian Equities -1.3 -5.3 -2.2 -2.3 -1.1 0.4 1.9 0.4 -7.0 12.1 -2.3 5.4 -7.2 5.9 3.6 Fixed Income Equit
Slide 18: Average Mutual Fund AUM & Fee Rates
AVERAGE MUTUAL FUND AUM & FEE RATES 209.9 • Q2 2016 average mutual 208.8 209.0 208.8 208.9 fund AUM increased 3.1% compared to Q1 2016 76.8 75.8 75.4 75.3 73.5 • Proportion of mutual fund AUM in HNW series increased to 38.3% in Q2 20161 • Management & administration fee rate relatively unchanged com
Slide 19: Investors Group EBIT
INVESTORS GROUP EBIT ($ Millions, unless otherwise indicated) Change Relative to: • Management and Prior Prior Q2/15 Q1/16 Q2/16 Year Quarter administration fees increased Average mutual fund AUM ($ billions) 76.8 73.5 75.8 (1.3%) 3.1% compared to Q1 2016 Revenues reflecting higher average Managemen
Slide 20: Mackenzie – Confidence in a Changing World
rN MACKENZIE CONFIDENCE IN A CHANGING WORLD 20
Slide 21: Mackenzie Second Quarter Review
MACKENZIE SECOND QUARTER REVIEW Company Highlights 1) Continued improvement in investment performance 2) Launched six actively managed ETFs listed on TSX and four mutual funds • 4 fixed income ETFs • 2 TOBAM equity ETFs and corresponding mutual funds • Mackenzie Ivy International Equity Fund • Macke
Slide 22: Mutual Fund Flows
MUTUAL FUND FLOWS 1 Quarterly Mutual Fund Flows ($ Billions) 2.0 1.84 1.71 1.59 1.49 1.49 1.5 1.0 • Mutual fund gross sales of Gross Sales 0.5 $1.49B were down 12.8% Net Sales - relative to Q2 2015 (0.5) (0.09) (0.18) (0.19) (0.20) (1.0) (0.38) • Mutual fund net redemptions Q2/15 Q3/15 Q4/15 Q1/16 Q
Slide 23: Flows – Mutual Fund Gross Sales by Asset Class
FLOWS – MUTUAL FUND GROSS SALES BY ASSET CLASS Total Mutual Fund Gross Sales • Core balanced fund gross (Three months ended June 30 - $ Millions) sales increase 10.5% 2015 1 2016 $ Change % Change relative to prior year due to strong investment Money market 110 91 (19) (17.3%) performance Income-ori
Slide 24: Flows – Total Investment Product Net Sales
FLOWS – TOTAL INVESTMENT PRODUCT NET SALES Total Investment Product Net Sales 20151 2016 $ Change • $51MM improvement in Money market 36 4 (32) balance fund category Income-oriented (65) (130) (65) excluding Symmetry Balanced Symmetry 238 83 (155) • Institutional net sales were Other (54) (3) 51 Tot
Slide 25: Investment Boutiques – Performance & Flows
INVESTMENT BOUTIQUES – PERFORMANCE & FLOWS Mutual Fund Assets by Morningstar Rating at Jun 30, 2016 ($MM) 1 10000 7500 1 or 2 Stars 3 Stars 4 or 5 Stars Not Rated 5000 2500 0 % 4 or 5 0% 6% 92% 51% 99% 62% 85% 0% 0% 0% 64% 30% 1% Fixed Managed Value-Oriented Quality Growth-Oriented Core & Dividend I
Slide 26: Investment Performance – Mutual Funds
INVESTMENT PERFORMANCE – MUTUAL FUNDS 1 Mackenzie Mutual Funds in First or Second Quartile (Proportion of Assets) 62% 57% 45% March 31, 2016 39% 40% 42% 42% 37% June 30, 2016 1 Year 3 Year 5 Year 10 Year 1 Morningstar Ratings – Proportion of Morningstar-Rated Assets (As at June 30, 2016) 39% 37% 37%
Slide 27: Average Total AUM & Fee Rates
AVERAGE TOTAL AUM & FEE RATES 80.1 78.7 Annualized Net 76.5 76.8 Revenue Rate 72.1 (bps)1 • Q2 2016 change in average AUM versus Q1 2016: 71.7 − Mutual funds up 2.3% 62.2 61.7 59.8 60.8 Average Total AUM ($B) − Institutional down 0.2% 50.6 49.2 48.5 Institutional2 46.7 47.8 Mutual − Proportion of av
Slide 28: Mackenzie EBIT
MACKENZIE EBIT ($ Millions, unless otherwise indicated) Change Relative to: Q2/15 Q1/16 Q2/16 Prior Prior • Net revenue up 2.6% Year Quarter compared to Q1 2016 due to Average AUM ($ Billions): Total 71.7 59.8 60.8 (15.1%) 1.8% higher AUM level Mutual funds 50.6 46.7 47.8 (5.4%) 2.3% • Non-commissio
Slide 29: Q&A
ISM, Q&A 29