Igm Financial Inc. · TSX:IGM
Igm Financial — Q2 2022 Earnings Presentation
47 slides from Igm Financial's earnings presentation, Aug 5, 2022
Slide 1: IGM Financial Q2, 2022 Results
IGM Financial Q2, 2022 Results August 5, 2022
Slide 2: Conference Call Participants
Conference Call Participants JAMES O‘SULLIVAN DAMON MURCHISON LUKE GOULD KEITH POTTER 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 & Other Financial Measures
Non-IFRS Financial Measures & Other Financial Measures This report contains Non-IFRS financial measures and non-IFRS ratios that do not have standard meanings prescribed by IFRS and may not be directly comparable to similar measures used by other companies. These measures and ratios are used to prov
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
IGM FINANCIAL JAMES O‘SULLIVAN PRESIDENT & CEO IGM FINANCIAL IGM FINANCIAL Q2, 2022 RESULTS
Slide 7: IGM Financial Q2, 2022 Highlights
IGM Financial Q2, 2022 Highlights 1 Second quarter EPS of 87 cents, 2nd best Q2 adjusted EPS on record, down 12% from last year 2 Ending AUM&A of $242.1B, down 9.8% during the quarter • Driven by client investment returns of negative 9.7% 3 Second quarter total net redemptions of $527MM (excludes No
Slide 8: Financial Market and Client Investment Returns
Financial Market and Client Investment Returns IGM Client Return Index1 2.6 2.4 Investment Performance Q3/22 at 2022 2021 Q1/22 Q2/22 Jul 31/22 YTD 2.2 IGM Client Investment Returns 2 11.9% (4.6%) (9.7%) 4.7% (9.7%) Equity Markets: 2.0 Canada (S&P / TSX Composite) 25.1% 3.8% (13.2%) 4.7% (5.7%) U.S.
Slide 9: Industry Operating Environment
Industry Operating Environment Second Quarter Industry Long-term Net Sales ($B) Total Industry Industry Asset Manager Peers 28.8 13.5 14.0 11.4 14.2 Categories Q2 2021 Q2 2022 $ Change 9.4 5.5 7.2 3.7 3.6 Balanced 6.6 (2.7) (9.3) 1.8 3.4 1.3 2.6 (0.9) Foreign Equity 4.2 (2.1) (6.3) Canadian Equity 0
Slide 10: IGM Financial Q2, 2022 Results
IGM Financial Q2, 2022 Results Net Earnings ($MM) Net Earnings Per Share ($) Total AUM&A ($B) Daily AUM&A Annual Average AUM&A 237 Quarterly Average AUM&A 290 0.99 207 280 270 0.87 260 250 240 Net acquisitions 230 of $30.3B (GLC/Greenchip/ 220 QGOF) 210 200 190 180 170 160 150 140 130 Q2/21 Q2/22 Q2
Slide 11: Adjusted Net Earnings Available to Common Shareholders by Segment and Company
Adjusted Net Earnings Available to Common Shareholders1 by Segment and Company ($MM) Wealth Management Asset Management Strategic Investments & Other2 IGM Consolidated3 237.4 -13% 207.1 130.4 -19% 105.7 -9% 56.5 51.3 -7% 31.3 29.0 -1% -21% +$3.5MM 13.5 13.4 3.9 3.1 1.4 4.9 Q2/21 Q2/22 Q2/21 Q2/22 Q2
Slide 12: Second Quarter Ending AUM&A (CAD $B)
Second Quarter Ending AUM&A (CAD $B) Wealth Management Asset Management1 IGM Consolidated Strategic Investments 2 3 +8% 335 309 262 -8% 242 -6% -9% 123 112 105 112 -8% +26% 31 29 22 17 Q2/21 Q2/22 Q2/21 Q2/22 Q2/21 Q2/22 Q2/21 Q2/22 Q2/21 Q2/22 Q2/21 Q2/22 1) Excludes sub-advisory to Wealth Manageme
Slide 13: Second Quarter Net Flows ($MM)
Second Quarter Net Flows ($MM) Wealth Management Asset Management IGM Consolidated Strategic Investments 2 Institutional 2,917 SMA1 2,286 617 617 1,700 1,100 2,300 670 1,669 389 116 11 (394) (819) (133) (527) (133) (952) Q2/21 Q2/22 Q2/21 Q2/22 Q2/21 Q2/22 Q2/21 Q2/22 Q2/21 Q2/22 1) Excludes sub-adv
Slide 14: IG Wealth Management
IG WEALTH MANAGEMENT DAMON MURCHISON PRESIDENT & CEO IG WEALTH MANAGEMENT IGM FINANCIAL Q2, 2022 RESULTS
Slide 15: IG Wealth Management Q2, 2022 Highlights
IG Wealth Management Q2, 2022 Highlights 1 Ending AUM&A of $105.5B declined 9.3% during Q2 • Due to client investment returns of negative 9.7% 2 Strong net flows of $389MM during the second quarter • Q2 gross inflows of $3.1B are the 2nd best in history, down 4.7% from $3.2B in 2021 • June 30, 2022
Slide 16: Continued Net Flow Momentum at IG Wealth Management
Continued Net Flow Momentum at IG Wealth Management IG Wealth Management Gross and Net Flows1 ($MM) IG Wealth Management Flows Gross Inflows Gross Outflows Net Flows (Last Twelve Month Trailing, $B) 1,073 Total Net Flows IGM Product Net Flows Month of July 949 706 719 806 516 605 658 559 663 5.0 348
Slide 17: IG Wealth Management Assets Under Advisement & Net Flows
IG Wealth Management Assets Under Advisement & Net Flows IG Wealth Management AUA Continuity by Investment Category ($MM) 116,281 389 – (11,196) 105,474 1▪ Cash balances can be held AUA Total in client accounts (nominee 3 1 dealer platform) Deposits Includes term 2▪ Third party funds and & HISA depo
Slide 18: IG Wealth Management Q2, 2022 Operating Results
IG Wealth Management Q2, 2022 Operating Results Gross Outflows Rate Assets Under Gross Inflows ($MM) (quarterly annualized) Net Flows ($MM) Advisement ($B) 670 3rd party IG mutual funds 3,220 3,068 389 9.7% 9.3% 112.2 116.3 105.5 9.1 7.0 8.9 Q2/21 Q2/22 Net Flows Q2/21 Q2/22 107.2 105.2 96.6 IG fund
Slide 19: IG Wealth's Clients Remaining Committed to Financial Plans
IG Wealth’s Clients Remaining Committed to Financial Plans, IG Focused on Client Engagement & Gamma Redemption Rates1 (Last Twelve Month Trailing % of Average Assets) 20% 18% 16% 14.6% Industry 14% (as at Jun 30, 2022; IG Investment Return Index based on long-term fund redemptions & 12% AUM; excludi
Slide 20: Strong Sales Driven by Continued High-Net-Worth Client Acquisition
Strong Sales Driven by Continued 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 5-year 1-year >$500K $100-
Slide 21: Strong Advisor Productivity
Strong Advisor Productivity Gross Inflows per Advisor Gross Inflows per Advisor Recruit with <4 years experience Practice with >4 years experience ($MM) ($MM) Key Initiatives Driving Productivity • Elimination of DSC (2017), removing competitive impediment 1.56 0.54 1.50 0.51 • Tightened recruiting
Slide 22: Continued Momentum Advancing Advisor Value Proposition
Continued Momentum Advancing Advisor Value Proposition Investment Executive Report Cards1 Top Ranking in Dealer Report Card Strong Position vs. Big 5 Bank FSBs Strong performance reflects 2 2 Net Promoter Score recent initiatives of integrating 5th 3rd 3rd 1st (out of -100 to +100) 8.8 87 86 our sys
Slide 23: Mackenzie Investments
MACKENZIE INVESTMENTS LUKE GOULD PRESIDENT & CEO MACKENZIE INVESTMENTS IGM FINANCIAL Q2, 2022 RESULTS
Slide 24: Mackenzie Investments & Strategic Investments Q2, 2022 Highlights
Mackenzie Investments & Strategic Investments Q2, 2022 Highlights 1 Ending AUM of $184.7B, down 10.1% from March 31, 2022 2 Investment fund net redemptions of $819MM, in-line with industry outflows On June 30th Mackenzie launched a suite of 25 funds designed to address the specific needs of 3 Primer
Slide 25: Mackenzie Investments Net Flows
Mackenzie Investments Net Flows Mackenzie Adjusted Investment Fund Flows1 ($MM) Mackenzie Adjusted Investment Fund Net Flows1 Gross Sales Redemptions MF Net Sales ETF Net Flows (Last Twelve Month Trailing, $MM) Month of July 830 868 660 784 802 Total Retail 449 511 536 475 411 288 315 410 8,000 168
Slide 26: Mackenzie Q2, 2022 Operating Results
Mackenzie Q2, 2022 Operating Results Retail Mutual Fund Gross Sales ($MM) Net Sales ($MM)1,2 ▪ Retail mutual fund net redemptions Q2/20 Q2/21 Q2/22 were $553MM 2,480 Retail mutual Funds 218 1,006 (553) ▪ Institutional investment fund net Retail ETFs 191 402 (126) redemptions were $140MM 1,596 1,518
Slide 27: 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 ChinaAMC, Fixed Multi-Asset Cundill American Ivy Growth Bluewater Resources Greenchip Quantitative Eq
Slide 28: New Multi-Year Product And Services Distribution Agreement With PFSL (Primerica)
New Multi-Year Product And Services Distribution Agreement With PFSL Investment Canada Ltd. (Primerica) Product Launch Highlights • June 30th launch of the exclusive Mackenzie FuturePath product suite for Primerica advisors and their clients • Suite consists of 25 unique solutions covering all major
Slide 29: Five Areas of Product Emphasis for Mackenzie – Q2 2022 Highlights
Five Areas of Product Emphasis for Mackenzie – Q2 2022 Highlights Areas of Emphasis Macro Thesis Q2 2022 Highlights Launched Mackenzie Northleaf Global Private Equity Fund which allows $44T1 market with diversified 1. Sustainable Investing retail and institutional interest retail investors to expand
Slide 30: Strong Net Sales in Chinese Mutual Fund Industry; ChinaAMC an Industry Leader
Strong Net Sales in Chinese Mutual Fund Industry; ChinaAMC is an Industry Leader, and Consistently Among the Top Five in the League Tables Chinese Mutual Fund Industry Ending AUM1 26.2↑ 6.3% (RMB Trillions) 25.124.6 Chinese Mutual Fund Industry Long-term Mutual CAD/RMB = 5.1832 22.9 23.8 Fund Market
Slide 31: A Leading Chinese Asset Manager – Total AUM up 9%
– A Leading Chinese Asset Manager – Total AUM up 9% and Long-term AUM up 13% During Q2/22 ChinaAMC Ending AUM1 (RMB billions) Growth 2-year CAGR 1-year 1,740 18% 8% 1,662 1,607 1,581 1,599 1,536 1,461 1,294 604 4% (4%) 1,248 623 594 1,186 630 610 642 1,032 657 561 608 359 22% 3% 509 297 350 322 316
Slide 32: Capital Partners
Capital Partners • Strong year-to-date fundraisings of $2.2B, increasing AUM by 13% YTD June 30, 2022 • IGM Financial and Great-West Lifeco have committed capital across each of Northleaf’s three global mid-market private market platforms (private equity, private credit and infrastructure) Northleaf
Slide 33: Financial Highlights
IGM FINANCIAL Financial Highlights KEITH POTTER EXECUTIVE VICE-PRESIDENT & CFO IGM FINANCIAL IGM FINANCIAL Q2, 2022 RESULTS
Slide 34: Total Assets Under Management & Advisement
Total Assets Under Management & Advisement IGM Assets Under Management & Advisement ($B) Change in IGM AUM&A ($B) Daily AUM&A Annual Average AUM&A Q2/21 Q3/21 Q4/21 Q1/22 Q2/22 LTM AUM&A excluding sub-advisory to Canada Life Quarterly Average AUM&A Opening AUM&A 199.7 210.9 214.1 224.3 216.8 210.9 I
Slide 35: IGM Financial Adjusted EBIT & Margins
IGM Financial Adjusted EBIT & Margins IGM Adjusted EBIT1 ($MM) IGM Adjusted EBIT Margin1,2 (% of AUM&A) Direct advisor/dealer 890.9 902.1 compensation3 & sub- 843.9 857.2 824.7 advisory expenses 243.5 253.5 Share of associates’ 1.25% 1.24% 1.24% 1.22% 1.22% 232.0 253.7 earnings and net 240.8 0.36% 0
Slide 36: IGM Financial Consolidated Profitability
IGM Financial Consolidated Profitability $ Millions (unless otherwise noted): Change QoQ Change YoY IGM Financial Consolidated Q2/21 Q1/22 Q2/22 $ % $ % Days in the period 91 90 91 1.1% 0.0% Average AUM & AUA ($ Billions) Wealth Management AUM & AUA 140.2 148.3 141.0 (7.3) (4.9%) 0.8 0.6% 1▪ Seed ca
Slide 37: IG Wealth Management Key Profitability Drivers
1▪ Advisory fee rates increased in Q2/22 primarily due to the impact of financial market declines IG Wealth Management 2▪ on the composition of AUM&A across client wealth bands and pricing tiers. Reminder: Asset-based compensation is paid based on the simple average of opening & ending Key Profitabi
Slide 38: IG Wealth Management Profitability
IG Wealth Management Profitability $ Millions (unless otherwise noted): Change QoQ Change YoY IG Wealth Management Q2/21 Q1/22 Q2/22 $ % $ % Days in the period 91 90 91 1.1% 0.0% Average assets under advisement ($B) 109.7 116.3 110.7 (5.6) (4.8%) 1.0 0.9% Average assets under management ($B) 103.1 1
Slide 39: Asset Management Key Profitability Drivers
Asset Management ▪1 The sequential increase in net asset management fee rate was driven by lower deferred selling commission Key Profitability Drivers expenses, which are netted within this line. Net Asset Management Fee Rates1 Average AUM ($B), Net Asset Management Fees (bps)1 (as bps of respective
Slide 40: Asset Management Segment Profitability
Asset Management Segment Profitability $ Millions (unless otherwise noted): Change QoQ Change YoY Asset Management Q2/21 Q1/22 Q2/22 $ % $ % Days in the period 91 90 91 1.1% 0.0% ▪1 Operations & support and Average assets under management ($B) Excluding sub-advisory to Wealth Management 119.3 125.7
Slide 41: A Leading Chinese Asset Manager – AUM up 8% year-over-year
– A Leading Chinese Asset Manager – AUM up 8% year-over-year ChinaAMC Ending AUM1 IGM Share of ChinaAMC Earnings4 (RMB billions) (CAD millions) Q2 average AUM was in- line with Q1, but strong markets & results in June drove ending AUM higher 17.0 17.0 1,740 1,662 1,607 1,581 1,599 15.0 14.8 13.5 604
Slide 42: Wealthsimple AUA and Clients
• Wealthsimple’s AUA increased 14% year-over-year and declined sequentially by 13% • The number of clients served by Wealthsimple increased 39% in the last year to ~1.7 million (excluding Wealthsimple Tax users)1 Wealthsimple AUA of CAD $16.9B1 Wealthsimple Clients Surpass 1.7 million1 (AUA, $B) (00
Slide 43: Adjusted Net Earnings Available to Common Shareholders by Segment and Company
Adjusted Net Earnings Available to Common Shareholders by Segment and Company ($MM) Wealth Management Asset Management Strategic Investments & Other IGM Consolidated9 Adjusted Net Earnings 1 Change in Fair Value: Wealthsimple valuation adjustment further Available to Common reduces fair value of cor
Slide 44: 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 Net Earnings Available to Common -11% Shareholders8 971 864 -12% 2021 523 460 -19% Not applicable 2022 241 194
Slide 45: Q&A
Q&A IGM FINANCIAL Q2, 2022 RESULTS
Slide 46: Appendix
Appendix IGM FINANCIAL Q2, 2022 RESULTS
Slide 47: Continued Focus on Prudent Expense Management
Continued Focus on Prudent Expense Management Revising full-year expense guidance to no more than 3% growth year-over-year (from ~5%) Original Guidance and Outlook: Combined Operations & Support and Business Development Expenses IGM Consolidated1 By Company (year-over-year change) (year-over-year ch