Invesco Ltd · NYSE:IVZ
Invesco — Q4 2012 Earnings Presentation
47 slides from Invesco's earnings presentation, Jan 31, 2013
Slide 1: Invesco fourth quarter 2012 results
Invesco fourth quarter 2012 results Martin L. Flanagan President and Chief Executive Officer Loren M. Starr Chief Financial Officer January 31, 2013
Slide 2: Forward-looking statements
Forward-looking statements This presentation, and comments made in the associated conference call today, may include “forward-looking statements.” Forward-looking statements include information concerning future results of our operations, expenses, earnings, liquidity, cash flow and capital expendit
Slide 3: Discussion topics
Discussion topics Fourth quarter overview Investment performance Financial results Questions Appendix 2
Slide 4: Fourth quarter overview
Fourth quarter overview Continued strong investment performance and strong net flows contributed to solid operating results – Maintained strong, long-term investment performance – Adjusted operating income increased 10.4% to $276.5 million – Adjusted operating margin grew to 35.6% from 34.1% in the
Slide 5: Summary of fourth quarter 2012 results
Summary of fourth quarter 2012 results December 31, 2012, AUM of $687.7 billion versus $683.0 billion Assets under at September 30, 2012 management Average AUM was $680.2 billion versus $667.9 billion for the third quarter Total net flows of $1.0 billion Flows Net long-term flows of $0.9 bil
Slide 6: Achievements in 2012 further position the firm for long-term success
Achievements in 2012 further position the firm for long-term success Strategic objective 2012 achievement Client benefit Continued to deliver strong, long- 78% of assets ahead of peers at yearend 2012 on term investment performance for a 5-year basis versus 63% in 20051 Achieve strong our client
Slide 7: Discussion topics
Discussion topics Fourth quarter overview Investment performance Financial results Questions Appendix 6
Slide 8: Investment performance – overview
This image cannot currently be display ed. Investment performance – overview Aggregate performance analysis – asset weighted Percent of actively managed assets in top half of peer group* 1-Year 3-Year 5-Year 66% 73% 78% 27% 22% 34% Assets top half of peer group Assets bottom half of peer group *Excl
Slide 9: Quarterly long-term flows
Quarterly long-term flows Quarterly long-term flows ($ billions) Total AUM Active AUM Passive AUM 48.0 19.5 45.9 29.0 28.0 27.8 29.1 19.0 42.7 41.1 42.9 42.3 41.7 26.6 24.6 26.3 18.1 37.1 16.3 16.0 21.6 14.7 12.5 12.6 8.1 7.9 5.8 5.8 9.4 2.9 3.6 6.6 7.0 0.6 1.8 5.6 2.7 3.8 3.3 0.9 0.9 -1.5 -0.2 -0.9
Slide 10: Quarterly long-term flows
Quarterly long-term flows Quarterly long-term flows ($ billions) Retail(a) Institutional(b) Private Wealth Management(c) 36.5 1.4 35.6 35.1 33.2 33.2 32.8 30.2 30.6 10.7 1.0 1.0 1.0 0.9 0.9 9.5 9.9 0.8 0.8 0.7 8.6 8.1 0.6 7.5 0.5 6.8 0.4 5.6 0.2 0.2 0.2 7.5 3.9 0.1 6.3 2.9 4.1 2.4 1.9 2.9 1.0 1.2 0.
Slide 11: US Retail gross sales remained strong at $16.1 billion for the quarter
US Retail gross sales remained strong at $16.1 billion for the quarter – up 9% year over year Gross and net sales Percentage above the bars is change in Net sales gross sales from prior quarter ($ billions) +36% +32% +17% (6%) 18.5 +9% (11%) +29% (27%) (15%) 16.5 17.1 16.1 14.7 14.7 13.6 13.5 12.5 1
Slide 12: Continued strong demand for asset allocation strategies
Continued strong demand for asset allocation strategies, with over $3 billion of net inflows in the fourth quarter Invesco Global Asset Allocation AUM ($ billions) 30.0 25.0 20.0 15.0 10.0 5.0 - 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 Invesco Balanced-Risk Allocation strateg
Slide 13: Discussion topics
Discussion topics Fourth quarter overview Investment performance Financial results Questions Appendix 12
Slide 14: Total assets under management – 4Q12 vs. 3Q12
Total assets under management – 4Q12 vs. 3Q12 ($ billions) 4Q-12 3Q-12 % Change Beginning Assets $683.0 $646.6 5.6% Long-Term Inflows 41.7 42.3 (1.4)% Long-Term Outflows (40.8) (32.9) 24.0% Long-Term Net flows 0.9 9.4 (90.4)% Net flows in Inst. Money Market Funds 0.1 2.3 (95.7)% Market Gains and Los
Slide 15: Non-GAAP operating results – 4Q12 vs. 3Q12
Non-GAAP operating results – 4Q12 vs. 3Q12 ($ millions) 4Q-12 3Q-12 % Change Adjusted Revenues Investment Management Fees 865 840 3.0% Service and Distribution Fees 199 196 1.7% Performance Fees 21 3 N/A Other 27 24 12.3% Third-Party Distribution, Service and Advisory Expenses (337) (329) 2.4% Adjus
Slide 16: Fourth quarter overview
Fourth quarter overview Continued strong investment performance and strong net flows contributed to solid operating results – Maintained strong, long-term investment performance – Adjusted operating income increased 10.4% to $276.5 million – Adjusted operating margin grew to 35.6% from 34.1% in the
Slide 17: Discussion topics
Discussion topics Fourth quarter overview Investment performance Financial results Questions Appendix 16
Slide 18: Discussion topics
Discussion topics Fourth quarter overview Investment performance Financial results Questions Appendix 17
Slide 19: Additional Disclosure for Invesco Balanced-Risk Allocation Fund
Additional Disclosure for Invesco Balanced-Risk Allocation Fund Invesco Balanced Risk Allocation Fund is a US registered ’40-Act mutual fund that is distributed by Invesco Distributors, Inc., a wholly- owned indirect subsidiary of Invesco Ltd. 18
Slide 20: Investment performance (5-year)
This image cannot currently be display ed. Investment performance (5-year) By investment objective (actively managed assets)* Percentages in parentheses represent %AUM of each investment objective as a ratio of all objectives (Total ranked AUM of $382.2 billion) % of assets top half % of assets bott
Slide 21: Investment performance (5-year)
Investment performance (5-year) By investment objective (actively managed assets)* Percentages in parentheses represent %AUM of each investment objective as a ratio of all objectives (Total ranked AUM of $382.2 billion) % of assets top half % of assets bottom Equities Global ex-US and Other of peer
Slide 22: Investment performance
Investment performance By investment objective (actively managed assets)* Equities 1st quartile 2nd quartile AUM above benchmark U.S. Core U.S. Growth U.S. Value Sector 100% 100% 100% 100% 99% 82% 63% 65% 58% 39% 53% 52% 55% 54% 90% 3% 49% 20% 20% 35% 2% 15% 29% 29% 29% 15% 22%34% 24% 23% 23% 22% 19
Slide 23: Investment performance
Investment performance By investment objective (actively managed assets)* Equities Global ex-U.S. and Other 1st quartile 2nd quartile AUM above benchmark Global Emerging markets Alternatives Balanced 100% 100% 100% 100% 99% 88% 88% 80% 19% 5% 53% 77% 68% 78% 59% 60% 31% 23% 87% 57% 87% 51% 47% 45% 6
Slide 24: We are diversified as a firm
We are diversified as a firm Delivering a diverse set of solutions to meet client needs By client domicile By channel By asset class 12% 4% 69% 25% 15% 62% 35% 43% 5% 11% 7% 9% 3% 1-Yr 1-Yr 1-Yr ($ billions) Change ($ billions) Change ($ billions) Change U.S. $472.8 10.0% Retail $425.8 13.9% Equity
Slide 25: Non-GAAP operating results – quarterly
Non-GAAP operating results – quarterly ($ millions) 4Q-12 3Q-12 % Change* 2Q-12 1Q-12 4Q-11 3Q-11 2Q-11 1Q-11 Investment Management Fees 865 840 3.0% 802 812 771 804 844 816 Service and Distribution Fees 199 196 1.7% 187 189 181 189 206 199 Performance Fees 21 3 N/A 16 21 24 3 8 4 Other 27 24 12.3%
Slide 26: US GAAP operating results – quarterly
US GAAP operating results – quarterly ($ millions) 4Q-12 3Q-12 % Change* 2Q-12 1Q-12 4Q-11 3Q-11 2Q-11 1Q-11 Investment Management Fees 847 818 3.5% 781 791 748 780 819 792 Service and Distribution Fees 199 196 1.7% 187 189 181 189 211 199 Performance Fees 20 3 N/A 15 21 24 3 8 4 Other 27 24 9.9% 26
Slide 27: Total assets under management – quarterly
Total assets under management – quarterly ($ billions) 4Q-12 3Q-12 % Change 2Q-12 1Q-12 4Q-11 Beginning Assets $683.0 $646.6 5.6% $672.8 $625.3 $598.4 Long-Term Inflows 41.7 42.3 (1.4)% 37.1 42.9 41.1 Long-Term Outflows (40.8) (32.9) 24.0% (42.0) (35.9) (35.5) Long-Term Net flows 0.9 9.4 (90.4)% (4.
Slide 28: Total assets under management – by asset class
Total assets under management – by asset class Fixed Money ($ billions) Total Equity Income Balanced Market Alternative June 30, 2012 $646.6 $283.8 $155.6 $51.5 $71.0 $84.7 Long-Term Inflows 42.3 19.9 11.7 5.7 0.7 4.3 Long-Term Outflows (32.9) (20.7) (4.5) (2.0) (0.9) (4.8) Long-Term Net flows 9.4 (
Slide 29: Total assets under management – by asset class
Total assets under management – by asset class Fixed Money ($ billions) Total Equity Income Balanced Market Alternative December 31, 2011 $625.3 $271.0 $149.0 $44.6 $74.0 $86.7 Long-Term Inflows 42.9 22.7 9.6 4.9 0.3 5.4 Long-Term Outflows (35.9) (19.4) (7.2) (1.8) (0.9) (6.6) Long-Term Net flows 7.
Slide 30: Total assets under management – by channel
Total assets under management – by channel ($ billions) Total Retail Institutional PWM June 30, 2012 $646.6 $396.7 $231.0 $18.9 Long-Term Inflows 42.3 33.2 8.1 1.0 Long-Term Outflows (32.9) (26.9) (5.2) (0.8) Long-Term Net flows 9.4 6.3 2.9 0.2 Net flows in Inst. Money Market Funds 2.3 - 2.3 - Marke
Slide 31: Total assets under management – by channel
Total assets under management – by channel ($ billions) Total Retail Institutional PWM December 31, 2011 $625.3 $373.9 $233.5 $17.9 Long-Term Inflows 42.9 35.1 6.8 1.0 Long-Term Outflows (35.9) (27.6) (7.9) (0.4) Long-Term Net flows 7.0 7.5 (1.1) 0.6 Net flows in Inst. Money Market Funds 1.1 - 1.1 -
Slide 32: Total assets under management – by client domicile
Total assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Europe Asia June 30, 2012 $646.6 $447.3 $23.5 $92.8 $34.4 $48.6 Long-Term Inflows 42.3 30.9 0.8 3.4 4.6 2.6 Long-Term Outflows (32.9) (20.9) (1.1) (3.7) (3.0) (4.2) Long-Term Net flows 9.4 10.0 (0.3) (
Slide 33: Total assets under management – by client domicile
Total assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Europe Asia December 31, 2011 $625.3 $430.0 $23.4 $89.8 $32.0 $50.1 Long-Term Inflows 42.9 29.1 0.9 3.7 5.5 3.7 Long-Term Outflows (35.9) (22.7) (1.4) (3.7) (3.9) (4.2) Long-Term Net flows 7.0 6.4 (0.5
Slide 34: Passive assets under management – by asset class
Passive assets under management – by asset class Fixed Money ($ billions) Total Equity Income Balanced Market Alternative June 30, 2012 $107.6 $54.6 $33.9 - - $19.1 Long-Term Inflows 16.0 10.6 3.9 - - 1.5 Long-Term Outflows (10.2) (9.0) (0.5) - - (0.7) Long-Term Net flows 5.8 1.6 3.4 - - 0.8 Net flo
Slide 35: Passive assets under management – by asset class
Passive assets under management – by asset class Fixed Money ($ billions) Total Equity Income Balanced Market Alternative December 31, 2011 $96.3 $45.6 $30.0 - - $20.7 Long-Term Inflows 16.3 11.8 2.8 - - 1.7 Long-Term Outflows (8.4) (6.1) (0.4) - - (1.9) Long-Term Net flows 7.9 5.7 2.4 - - (0.2) Net
Slide 36: Passive assets under management – by channel
Passive assets under management – by channel ($ billions) Total Retail Institutional PWM June 30, 2012 $107.6 $86.9 $20.7 $- Long-Term Inflows 16.0 13.5 2.5 - Long-Term Outflows (10.2) (10.1) (0.1) - Long-Term Net flows 5.8 3.4 2.4 - Net flows in Inst. Money Market Funds - - - - Market Gains and Los
Slide 37: Passive assets under management – by channel
Passive assets under management – by channel ($ billions) Total Retail Institutional PWM December 31, 2011 $96.3 $76.9 $19.4 $- Long-Term Inflows 16.3 15.0 1.3 - Long-Term Outflows (8.4) (8.0) (0.4) - Long-Term Net flows 7.9 7.0 0.9 - Net flows in Inst. Money Market Funds - - - - Market Gains and Lo
Slide 38: Passive assets under management – by client domicile
Passive assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Europe Asia June 30, 2012 $107.6 $100.7 - - $1.4 $5.5 Long-Term Inflows 16.0 15.7 - - - 0.3 Long-Term Outflows (10.2) (9.9) - - (0.2) (0.1) Long-Term Net flows 5.8 5.8 - - (0.2) 0.2 Net flows in Inst
Slide 39: Passive assets under management – by client domicile
Passive assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Europe Asia December 31, 2011 $96.3 $89.6 - - $1.3 $5.4 Long-Term Inflows 16.3 16.2 - - 0.1 - Long-Term Outflows (8.4) (8.3) - - (0.1) - Long-Term Net flows 7.9 7.9 - - - - Net flows in Inst. Money M
Slide 40: Reconciliation of US GAAP results to non-GAAP results – three months ended December 31, 2012
Reconciliation of US GAAP results to non-GAAP results – three months ended December 31, 2012 * Other: Please refer to pages 23-26 in the 4Q 2012 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation Consolidated Other*
Slide 41: Reconciliation of US GAAP results to non-GAAP results – three months ended September 30, 2012
Reconciliation of US GAAP results to non-GAAP results – three months ended September 30, 2012 * Other: Please refer to pages 19-21 in the 3Q 2012 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation Consolidated Other
Slide 42: Reconciliation of US GAAP results to non-GAAP results – three months ended June 30, 2012
Reconciliation of US GAAP results to non-GAAP results – three months ended June 30, 2012 * Other: Please refer to pages 19-21 in the 2Q 2012 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation Consolidated Other* Non
Slide 43: Reconciliation of US GAAP results to non-GAAP results – three months ended March 31, 2012
Reconciliation of US GAAP results to non-GAAP results – three months ended March 31, 2012 * Other: Please refer to pages 10-12 in the 1Q 2012 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation Consolidated Other* No
Slide 44: Reconciliation of US GAAP results to non-GAAP results – three months ended December 31, 2011
Reconciliation of US GAAP results to non-GAAP results – three months ended December 31, 2011 * Other: Please refer to pages 13-15 in the 4Q 2011 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation Consolidated Other*
Slide 45: Reconciliation of US GAAP results to non-GAAP results – three months ended September 30, 2011
Reconciliation of US GAAP results to non-GAAP results – three months ended September 30, 2011 * Other: Please refer to pages 9-10 in the 3Q 2011 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation Consolidated Other*
Slide 46: Reconciliation of US GAAP results to non-GAAP results – three months ended June 30, 2011
Reconciliation of US GAAP results to non-GAAP results – three months ended June 30, 2011 ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation Consolidated European Non- Consolidation distribution, related / depreciation of Investment Infrastructure GAAP Basis of Joint service
Slide 47: Reconciliation of US GAAP results to non-GAAP results – three months ended March 31, 2011
Reconciliation of US GAAP results to non-GAAP results – three months ended March 31, 2011 ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation Consolidated Other Non- Consolidation distribution, related / depreciation of Investment Reconciling GAAP Basis of Joint service and d