Invesco Ltd · NYSE:IVZ
Invesco — Q4 2020 Earnings Presentation
24 slides from Invesco's earnings presentation, Jan 26, 2021
Slide 1: Fourth Quarter 2020 Results
Fourth Quarter 2020 Results Marty Flanagan President and Chief Executive Officer Allison Dukes Chief Financial Officer January 26, 2021
Slide 2: Forward-looking statements and Important Information
Forward-looking statements and Important Information This presentation, and comments made in the associated Invesco Ltd., and adjusted diluted earnings per share (EPS). We conference call today, may include “forward-looking statements.” believe the adjusted measures provide valuable insight into our
Slide 3: Introduction
Introduction Executing our long-term strategy for the benefit of clients and our business • Organization aligned to best serve our clients • Focused on enhancing the client experience and delivery of targeted outcomes Key capabilities in areas of high client demand driving strong inflows • Continued
Slide 4: Fourth quarter 2020 highlights
Fourth quarter 2020 highlights Investment • 55%, 58%, 61% and 70% of actively managed assets in top half of peer group on a 1-, 3-, 5-, and 10-year basis Performance • Strong performance in capabilities where we saw strong demand from clients globally: Fixed Income and Global Equities, including Eme
Slide 5: We have scale, investment readiness and competitive strength in key capability areas
We have scale, investment readiness and competitive strength in key capability areas with high client demand Invesco competitive and market positioning by strategic priority area Invesco Competitive and Market Positioning Metrics Invesco AUM as of Dec 2020 | Invesco performance as of Dec 2020 | Mark
Slide 6: Our global focus areas are aligned with client demand
Our global focus areas are aligned with client demand and our high-quality investment offerings Global Focus Areas for 2021 ▪ Expand our market-leading position in ETFs in the US and EMEA and build our passive presence in Asia Pacific Focus Areas ▪ Further build on our market-leading position in Chi
Slide 7: Investment performance
Investment performance % of Actively Managed Assets in Top Half of Peer Group Global & Overall US Equity Fixed Income Alternatives Balanced Int’l Equity 100% 90% 15% 80% 38% 70% 24% 13% 18% 60% 25% 3% 50% 42% 28% 19% 11% 22% 26% 40% 28% 35% 77% 42% 15% 30% 29% 60% 57% 55% 51% 54% 45% 33% 33% 26% 35%
Slide 8: Assets under management
Assets under management Q4'19 Q3'20 Q4'20 % of Total Firm AUM Total AUM by Investment Approach in billions in billions $1,350 76% 74% 73% 24% 26% 27% $1,226 $1,218 $929 $979 $900 $318 $371 $297 Total Firm Active Passive by Channel by Geography in billions in billions 72% 69% 70% 28% 31% 30% 72% 72%
Slide 9: Long-term flows and annualized organic growth
Long-term flows and annualized organic growth 1 Q4'19 Q3'20 Q4'20 Annualized LT Org. Growth Long-Term Flows Net Flows by Investment Approach in billions in billions -5.7% 3.3% 3.9% -7.9% 0.9% 0.2% 5.3% 14.2% 20.1% $91.6 $71.9 $9.4 $60.7 $6.0 $1.8 $2.2 $7.8 $9.8 $0.4 ($14.0) ($74.7) ($81.8) ($16.2) (
Slide 10: Institutional clients remain engaged and constructive
Institutional clients remain engaged and constructive Won Not Funded Pipeline by Type of Global Institutional LT Flows Mandate (% AUM) in billions 100% = $30.5 billion 2% 7% 7% $26.9 $27.4 $19.7 36% $15.4 $15.3 $10.6 $11.2 $0.7 $0.5 $8.1 22% ($11.6) ($14.8) ($15.7) ($14.8) ($16.8) Q4’19 Q1’20 Q2’20
Slide 11: Revenues and expenses
Revenues and expenses Net Revenues Adjusted Operating Expenses Non-GAAP results in millions Non-GAAP results in millions $135 million increase $57 million increase +8.3% +12.4% $743 +$8 -$34 $1,228 +$12 +$71 +$6 -$1 +$15 +$40 $1,093 +$75 $686 Q3 2020 Investment Service & Performance Other Third Q4 2
Slide 12: Strategic evaluation - annualized net savings
Strategic evaluation - annualized net savings • Our strategic evaluation is focused on investing for growth in key areas of our business, including ETFs, Fixed Income, China, Solutions, Alternatives and Global Equities • We will achieve further efficiency and effectiveness, helping to drive sustaine
Slide 13: Adjusted operating income and profitability
Adjusted operating income and profitability Adjusted Operating Income and Adjusted Net Income and Adjusted Operating Margin Adjusted Diluted Earnings Per Share Non-GAAP results; operating income in millions Non-GAAP results; net income in millions 40.9% $0.65 $0.70 $0.72 39.9% $0.64 39.5% 36.0% 37.2
Slide 14: Capital management and balance sheet
Capital management and balance sheet Ample liquidity with enhanced capacity to optimize the balance sheet Capital Management Balance Sheet Highlights Capital returned to shareholders in millions in millions $232 Assets Liabilities Equity $211 $11 $32 Q3'20 Q4'20 Q3'20 Q4'20 Q3'20 Q4'20 $59 $59 $136
Slide 15: Conclusion
Conclusion Executing our long-term strategy for the benefit of clients and our business Key capabilities in areas of high client demand driving strong inflows Driving greater scale and flexibility in our operating model | 15
Slide 16: Appendix
Appendix Invesco
Slide 17: We are diversified as a firm
We are diversified as a firm By Client domicile By Channel By Asset class 6% 8% 5% 30% 11% 13% 71% 51% 13% 70% 22% 1-Yr 1-Yr 1-Yr (billions) Change (billions) Change (billions) Change Americas $959.9 9.1% Retail $947.1 7.8% Equity $689.6 15.2% U.K. $66.9 (10.1)% Balanced $78.9 17.2% Institutional $4
Slide 18: Investment performance
Investment performance By investment objective (actively managed assets)* Equities AUM above benchmark 1st quartile 2nd quartile U.S. Core U.S. Growth U.S. Value Sector 100% 100% 100% 100% 99% 97% 96% 87% 87% 24% 20% 76% 24% 22% 77% 53% 77% 53% 24% 63% 59% 59% 16% 16% 27% 38% 38% 16% 29% 16% 12% 12%
Slide 19: Investment performance
Investment performance By investment objective (actively managed assets)* Equities Other AUM above benchmark 1st quartile 2nd quartile Global Global ex-U.S. and Em. Mkts. Alternatives Balanced 100% 100% 100% 100% 98% 89% 89% 89% 87% 79% 38% 73% 75% 71% 71% 72% 51% 63% 76% 3% 60% 19% 11% 53% 60% 28%
Slide 20: US GAAP and Non-GAAP operating results
US GAAP and Non-GAAP operating results Q4-20 vs. Q3-20 (in millions) Q4-20 Q3-20 % Change1 (in millions) Q4-20 Q3-20 % Change1 US GAAP Basis Non-GAAP Basis Investment Management Fees $1,148.8 $1,096.8 4.7% Investment Management Fees $1,266.8 $1,191.6 6.3% Service and Distribution Fees 367.8 352.7 4.
Slide 21: Reconciliation of US GAAP results to Non-GAAP results
Reconciliation of US GAAP results to Non-GAAP results Three months ended December 31, 2020 Please refer to pages 8-11 in the 4Q 2020 earnings press release for a description of the adjustments (in millions) Transaction, 3rd party distribution, Market appreciation / Consolidated Other US GAAP Consoli
Slide 22: Reconciliation of US GAAP results to Non-GAAP results
Reconciliation of US GAAP results to Non-GAAP results Three months ended September 30, 2020 Please refer to pages 7-10 in the 3Q 2020 earnings press release for a description of the adjustments (in millions) Transaction, 3rd party distribution, Market appreciation / Consolidated Other US GAAP Consol
Slide 23: Reconciliation of US GAAP results to Non-GAAP results
Reconciliation of US GAAP results to Non-GAAP results (in millions) 1Q 2019 2Q 2019 3Q 2019 4Q 2019 1Q 2020 2Q 2020 3Q 2020 4Q 2020 Operating Revenues $1,214.6 $1,439.4 $1,720.6 $1,742.8 $1,598.9 $1,419.0 $1,497.6 $1,630.1 Non-GAAP Adjustments (327.5) (407.9) (491.9) (475.0) (453.1) (384.7) (405.1)
Slide 24: Invesco competitive and market positioning metrics - additional information
Invesco competitive and market positioning metrics - additional information (1) Addressable Market refers to client assets managed by non-affiliated, third-party professional money managers. Market sizing and organic CAGR sourced from Broadridge, McKinsey, Oliver Wyman and internal estimates; “ETFs,