IGM Financial Inc. · TSX:IGM
IGM Financial — Q3 2022 Earnings Presentation
44 slides from IGM Financial's earnings presentation, Nov 4, 2022
Slide 1: IGM Financial Q3, 2022 Results
IGM Financial Q3, 2022 Results November 4, 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 und
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 Q3, 2022 RESULTS
Slide 7: IGM Financial Q3, 2022 Highlights
IGM Financial Q3, 2022 Highlights 1 Third quarter earnings per share of 91 cents 2 Ending AUM&A of $238.1B, down 1.6% during the quarter • Driven by client investment returns of negative 0.9% 3 Third quarter total net redemptions of $342MM (excludes Northleaf & ChinaAMC) • Solid IG Wealth Management
Slide 8: Financial Market and Client Investment Returns
Financial Market and Client Investment Returns IGM Client Return Index1 2.6 2.4 Investment Performance Q4/22 at 2022 YTD 2.2 2021 Q1/22 Q2/22 Q3/22 Oct 31/22 (at Oct 31) 2 IGM Client Investment Returns 11.9% (4.6%) (9.7%) (0.9%) 3.1% (11.9%) Equity Markets: 2.0 Canada (S&P / TSX Composite) 25.1% 3.8
Slide 9: Industry Operating Environment
Industry Operating Environment Third Quarter Industry Long-term Net Sales ($B) Total Industry Industry Asset Manager Peers 23.7 11.6 7.7 6.1 6.1 6.3 9.1 Categories Q3 2021 Q3 2022 $ Change 4.1 Balanced 2.9 (3.4) (6.3) 2.2 2.6 0.5 2.0 2.5 1.1 0.7 Foreign Equity 2.8 (1.6) (4.4) Canadian Equity (0.1) (
Slide 10: IGM Financial Q3, 2022 Results
IGM Financial Q3, 2022 Results Net Earnings ($MM) Net Earnings Per Share ($) Total AUM&A ($B) Daily AUM&A Annual Average AUM&A 1.13 Quarterly Average AUM&A 271 290 280 0.91 270 216 260 250 240 Net acquisitions 230 of $30.3B (GLC/Greenchip/ 220 QGOF) 210 200 190 180 170 160 150 140 130 Q3/21 Q3/22 Q3
Slide 11: Adjusted Net Earnings Available to Common Shareholders by Segment and Company
Adjusted Net Earnings Available to Common Shareholders1 by Segment and Company ($MM) Wealth Management Asset Management Strategic Investments & Other2 IGM Consolidated 270.8 -20% 216.1 140.9 -22% 109.5 -18% 71.0 58.5 -22% 35.3 -14% -84%3 27.6 +28% 15.3 13.2 5.9 0.9 2.9 3.7 Q3/21 Q3/22 Q3/21 Q3/22 Q3
Slide 12: Third Quarter Ending AUM&A (CAD $B)
Third Quarter Ending AUM&A (CAD $B) Wealth Management Asset Management1 IGM Consolidated Strategic Investments 2 3 +8% 337 311 265 -10% 238 -8% -12% 124 114 105 109 -10% +24% 32 28 23 19 Q3/21 Q3/22 Q3/21 Q3/22 Q3/21 Q3/22 Q3/21 Q3/22 Q3/21 Q3/22 Q3/21 Q3/22 1) Excludes sub-advisory to Wealth Manage
Slide 13: Third Quarter Net Flows ($MM)
Third Quarter Net Flows ($MM) Wealth Management Asset Management IGM Consolidated Strategic Investments 2 Institutional SMA1 2,248 1,092 1,110 1,014 2,275 406 1,119 258 291 39 (27) (27) (203) (680) (139) (342) (139) (819) Q3/21 Q3/22 Q3/21 Q3/22 Q3/21 Q3/22 Q3/21 Q3/22 Q3/21 Q3/22 1) Excludes sub-ad
Slide 14: IG Wealth Management
IG WEALTH MANAGEMENT DAMON MURCHISON PRESIDENT & CEO IG WEALTH MANAGEMENT IGM FINANCIAL Q3, 2022 RESULTS
Slide 15: IG Wealth Management Q3, 2022 Highlights
IG Wealth Management Q3, 2022 Highlights 1 Ending AUM&A of $105.0B declined 0.4% during Q3 • Due to client investment returns of negative 0.7% 2 Q3 gross inflows of $2.8B were the 2nd best third quarter on record 3 Solid net flows of $406MM in Q3 2022 marked our 8th consecutive quarter of positive n
Slide 16: Solid Net Flows at IG Wealth Management
Solid Net Flows at IG Wealth Management IG Wealth Management Gross and Net Flows1 ($MM) IG Wealth Management Flows Gross Inflows Gross Outflows Net Flows (Last Twelve Month Trailing, $B) Month of October 1,029 897 Total Net Flows IGM Product Net Flows 825 783 875 615 707 728 541 588 Cash, GICs, & HI
Slide 17: IG Wealth Management Assets Under Advisement & Net Flows
IG Wealth Management Assets Under Advisement & Net Flows IG Wealth Management AUA Continuity by Investment Category ($MM) 105,474 406 – (851) 105,029 ▪1 ~$600MM increase in AUA Total 1 short-term assets (cash, GICs & HISAs) is expected to Cash, GICs support future sales of & HISAs (3.6% long-term in
Slide 18: IG Wealth Management Q3, 2022 Operating Results
IG Wealth Management Q3, 2022 Operating Results Gross Outflows Rate Assets Under Gross Inflows ($MM) (quarterly annualized) Net Flows ($MM) Advisement ($B) 1,014 3rd party IG mutual funds 3,141 2,773 114.0 406 7.4 105.5 105.0 8.7% 8.9 9.5 7.4% Q3/21 Q3/22 Net Flows Q3/21 Q3/22 106.6 96.6 95.5 IG fun
Slide 19: IG Wealth's Clients Remaining Committed to Financial Plans
IG Wealth’s Clients Remaining Committed to Financial Plans, IG Focused on Comprehensive Financial Planning Redemption Rates1 (Last Twelve Month Trailing % of Average Assets) 20% 18% 16% 15.5% Industry 14% (as at Sep. 30, 2022; IG Investment Return Index based on long-term fund redemptions & 12% AUM;
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 (Q3, $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 <$100K $100-
Slide 21: Strong Advisor Productivity
Strong Advisor Productivity Gross Inflows per Advisor Gross Inflows per Advisor Recruit with <4 years experience Practice with >4 years experience ($MM) ($MM) Key Initiatives Driving Productivity • Tightened recruiting standards 0.55 1.53 • National Service Centre to help provide 0.51 consistent ser
Slide 22: Mackenzie Investments
MACKENZIE INVESTMENTS LUKE GOULD PRESIDENT & CEO MACKENZIE INVESTMENTS IGM FINANCIAL Q3, 2022 RESULTS
Slide 23: Mackenzie Investments & Strategic Investments Q3, 2022 Highlights
Mackenzie Investments & Strategic Investments Q3, 2022 Highlights 1 Ending AUM of $180.5B, down 2.3% from June 30, 2022 2 Investment fund net redemptions of $680MM, in-line with industry outflows 3 Strong results in the Environics 2022 advisor perception study1 • Overall perception rank improves to
Slide 24: Mackenzie Investments Net Flows
Mackenzie Investments Net Flows Mackenzie Adjusted Investment Fund Flows1 ($MM) Mackenzie Adjusted Investment Fund Net Flows1 Gross Sales Redemptions MF Net Sales ETF Net Flows (Last Twelve Month Trailing, $MM) 1,164 Month of October 874 746 811 808 Total Retail 542 519 507 512 8,000 411 404 279 171
Slide 25: Mackenzie Q3, 2022 Operating Results
Mackenzie Q3, 2022 Operating Results Retail Mutual Fund Gross Sales ($MM) Net Sales ($MM)1,2 ▪ Retail mutual fund net redemptions Q3/20 Q3/21 Q3/22 were $477MM 2,093 Retail mutual Funds 440 704 (477) 1,689 ▪ Institutional investment fund net Retail ETFs 399 215 (115) redemptions were $88MM 1,061 Ret
Slide 26: 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 27: 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 QoQ Chinese Mutual Fund Industry Ending AUM1 26.4 26.3 (0.7%) (RMB Trillions) 25.124.6 Chinese Mutual Fund Industry Long-term Mutual CAD/RMB = 5.2463 22.9 23.8 F
Slide 28: A Leading Chinese Asset Manager – Total AUM Continuity
– A Leading Chinese Asset Manager – Total AUM Continuity ChinaAMC Ending AUM1 (RMB billions) Growth 2-year CAGR 1-year 1,740 1,733 16% 10% 1,662 1,607 1,581 1,599 1,536 1,461 1,294 604 591 (1%) (3%) 1,248 623 594 1,186 630 610 642 1,032 657 561 608 359 382 30% 18% 509 297 350 322 316 493 329 265 249
Slide 29: Capital Partners
Capital Partners • Strong year-to-date fundraisings of $2.5B and AUM growth of 18.5% as at September 30, 2022 • IGM Financial and Great-West Lifeco have committed capital across each of Northleaf’s three global mid-market private market platforms (private equity, private credit and infrastructure) N
Slide 30: Financial Highlights
IGM FINANCIAL Financial Highlights KEITH POTTER EXECUTIVE VICE-PRESIDENT & CFO IGM FINANCIAL IGM FINANCIAL Q3, 2022 RESULTS
Slide 31: Total Assets Under Management & Advisement
Total Assets Under Management & Advisement IGM Assets Under Management & Advisement ($B) Change in IGM AUM&A ($B) Daily AUM&A Annual Average AUM&A Q3/21 Q4/21 Q1/22 Q2/22 Q3/22 LTM AUM&A excluding sub-advisory to Canada Life Quarterly Average AUM&A Opening AUM&A 210.9 214.1 224.3 216.8 195.5 214.1 I
Slide 32: IGM Financial Adjusted EBIT & Margins
IGM Financial Adjusted EBIT & Margins IGM Adjusted EBIT1 ($MM) IGM Adjusted EBIT Margin1,2 (% of AUM&A) Direct advisor/dealer 890.9 902.1 compensation3 & sub- 857.2 824.7 827.3 advisory expenses 243.5 253.5 Share of associates’ 1.24% 1.24% 1.22% 1.22% 1.23% 253.7 241.6 earnings and net 240.8 investm
Slide 33: IGM Financial Consolidated Profitability
IGM Financial Consolidated Profitability $ Millions (unless otherwise noted): Change QoQ Change YoY IGM Financial Consolidated Q3/21 Q2/22 Q3/22 $ % $ % Days in the period 92 91 92 1.1% 0.0% Average AUM & AUA ($ Billions) Wealth Management AUM & AUA 146.5 141.0 137.8 (3.2) (2.3%) (8.7) (6.0%) 1▪ Net
Slide 34: IG Wealth Management Key Profitability Drivers
IG Wealth Management ▪1 Reminder: Asset-based compensation is paid based on the simple average of opening & ending monthly AUA and based on the # of months in a period (whereas advisory and product & program fee revenue is Key Profitability Drivers earned on daily average AUA based on the # of days
Slide 35: IG Wealth Management Profitability
IG Wealth Management Profitability $ Millions (unless otherwise noted): Change QoQ Change YoY IG Wealth Management Q3/21 Q2/22 Q3/22 $ % $ % Days in the period 92 91 92 1.1% 0.0% Average assets under advisement ($B) 114.8 110.7 108.5 (2.2) (1.9%) (6.3) (5.5%) Average assets under management ($B) 107
Slide 36: Asset Management Key Profitability Drivers
Asset Management ▪1 The 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 AUM) 204.9
Slide 37: Asset Management Segment Profitability
Asset Management Segment Profitability $ Millions (unless otherwise noted): Change QoQ Change YoY Asset Management Q3/21 Q2/22 Q3/22 $ % $ % Days in the period 92 91 92 1.1% 0.0% ▪1 Operations & support and Average assets under management ($B) Excluding sub-advisory to Wealth Management 125.2 118.5
Slide 38: A Leading Chinese Asset Manager – AUM up 10% year-over-year
– A Leading Chinese Asset Manager – AUM up 10% year-over-year ChinaAMC Ending AUM1 IGM Share of ChinaAMC Earnings2 (RMB billions) (CAD millions) CSI 300 TR index down 14.3% in Q3; seed capital losses of ~C$2MM after-tax 17.0 17.0 during the quarter 1,740 1,733 1,662 1,581 1,599 14.8 14.7 13.5 604 59
Slide 39: Adjusted Net Earnings by Segment and Company ($MM)
Adjusted Net Earnings Available to Common Shareholders by Segment and Company ($MM) Wealth Management Asset Management Strategic Investments & Other IGM Consolidated Adjusted Net Earnings 270.8 Available to Common -20% Shareholders8 Q3/21 216.1 Q3/22 140.9 -22% 109.5 -18% 71.0 58.5 -22% 35.3 -14% -8
Slide 40: Adjusted Net Earnings and Valuation by Segment and Company ($MM)
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 -12% 6% Shareholders8 971 851 901 -15% 2% 2021 523 446 454 -19% 7% Not applic
Slide 41: Q&A
Q&A IGM FINANCIAL Q3, 2022 RESULTS
Slide 42: Appendix
Appendix IGM FINANCIAL Q3, 2022 RESULTS
Slide 43: Continued Focus on Prudent Expense Management
Continued Focus on Prudent Expense Management Reiterating full-year expense guidance: no more than 3% growth year-over-year Original Guidance and Outlook: Combined Operations & Support and Business Development Expenses IGM Consolidated1 By Company (year-over-year change) (year-over-year change) Post
Slide 44: Wealthsimple AUA and Clients
• Wealthsimple’s AUA increased 7% year-over-year and increased sequentially by 3% • The number of clients served by Wealthsimple increased 32% in the last year to 2.0 million (excluding users who only use Wealthsimple Tax)1 Wealthsimple AUA of CAD $17.5B1 Wealthsimple Clients of 2.0 million1,2 (AUA,