Impax Asset Management Group plc · LSE:IPX
Impax Asset Management — FY2012 Earnings Presentation
31 slides from Impax Asset Management's earnings presentation, December 2012
Slide 1: Impax Asset Management Group plc Final Results FY2012
Impax Asset Management Group plc Final Results: Financial Year Ending 30 September 2012
Slide 2: Agenda
Agenda • Business update Ian Simm (Chief Executive) • Annual results • Q&A Charlie Ridge (CFO) 2
Slide 3: Impax Overview: Key Facts
Impax Overview: Key Facts • Attractive investment themes ‒ Rapidly growing markets Impax clients ‒ Large population of dynamic companies (by AUM) ‒ Market complexity leads to mis-pricing • Scalable, experienced team White Label ‒ 56 staff, including 28 investment professionals Fund Clients ‒ Stable
Slide 4: Highlights (1 October 2011 – 30 September 2012)
Highlights (1 October 2011 – 30 September 2012) • Financial performance ‒ Revenue £18.6 m (2011: £20.9 m) ‒ Operating earnings £4.6 m (2011: £6.2 m) ‒ Loss before tax of £4.7 m (2011: profit of £1.7 m) including £8.7 million charges associated with the Company’s historical share-based incentive sche
Slide 5: Markets Update (I): Strengthening Drivers
Markets Update (I): Strengthening Drivers Illustrative New Development(s) Catalysts for Impax Themes • Worst US drought since 1950s1 • Fracking water treatment investments Water Scarcity • Extreme flooding US, UK, Philippines, China • Disaster relief/flood defence funding • China:$450bn in water/was
Slide 6: Markets Update (II): Expanding Beyond Environmental Markets
Markets Update (II): Expanding Beyond Environmental Markets Wider scope for research Global Food & Agriculture Fund: universe “overlap” with Environmental Markets* 70% Env. Markets Universe 60% Solutions to Resource 50% Food & Agri Universe Scarcity 40% 30% 20% 10% 0% Environmental Markets • Alterna
Slide 7: Food & Agriculture Initiative
Food & Agriculture Initiative • Compelling fundamentals ‒ Strong growth driven by rising demand ‒ Widespread inefficient pricing ‒ Large population of stocks • Scope for new product ‒ Value chain analysis resonates with Impax process ‒ Attractive investment theme, especially wholesale ‒ Peers genera
Slide 8: Listed Equities: Strategy Performance in GBP
Listed Equities: Strategy Performance in GBP 2008 2009 2010 2011 2012* Specialists -20.3% 29.1% 11.9% -17.8% 3.6% FTSE ET50 Index -37.1% 15.2% -2.2% -27.4% -3.7% Leaders N/A 21.7% 15.1% -12.0% 8.1% FTSE EO All Share Index -20.7% 23.1% 21.9% -12.9% 3.7% Water N/A 24.9% 20.3% -9.0% 13.0% FTSE EO Water
Slide 9: Environmental Markets have De-rated but are Looking Relatively Cheap
Environmental Markets have De-rated but are Looking Relatively Cheap P/E de-rating - env. markets sub-sectors1 Price earnings2 vs earnings growth3 P/E de-rating - geographical1 2 Forward earnings (1 year forecast). 3 EPS growth (1 year forecast over prior year). 1 FTSE EO All Share Index - forward e
Slide 10: Impax AUM Breakdown
Impax AUM Breakdown AUM (£) AUM (£) Investment strategy 30 Sep’12 30 Sep’11 Specialists 759m 838m - Impax Environmental Markets plc 327m 343m - Impax Environmental Markets (Ireland) 102m 162m - Third Party funds/accounts 330m 333m Leaders 276m 252m - Third Party funds/accounts 276m 252m Water 226m 2
Slide 11: AUM Analysed by Geographic Region (Client Domicile)
AUM Analysed by Geographic Region (Client Domicile*) Principal funds/partners • Impax Environmental Markets plc 746 • Impax Environmental Markets (Ireland) Fund UK/Ireland 822 • Impax Asian Environmental Markets plc • Impax Asian Environmental Markets (Ireland) Fund 626 • BNP Paribas Investment Part
Slide 12: Flows for Impax label and Third Party Funds/Accounts
Flows for “Impax label” and Third Party Funds/Accounts “Impax label” funds (£m) Third party funds/accounts (£m) Note: the data above refers to Listed Equity funds and accounts only 12
Slide 13: Private Equity Highlights
Private Equity Highlights • Significant investment opportunity - Substantial need across the EU to fund construction of renewable power plants - Investment in projects offering stable, long-term, inflation-protected cashflow - Considerable “proprietary” deal flow from Impax network • NEF I - Fund I
Slide 14: Final Results: Financial Highlights (1)
Final Results: Financial Highlights (1) Revenue (£m) Operating costs (£m) Operating earnings (£m) • Revenue down 11% vs 2011 • Investment in staff and other • Operating margin of 24.5% primarily due to lower cost growth, offset by down from 29.8% in 2011 average AUM (2012: £1.9bn; reductions in perf
Slide 15: Final Results: Financial Highlights (2)
Final Results: Financial Highlights (2) Diluted adjusted* EPS (p) EPS shares reconciliation (m) • Plan to issue 12.2m shares Dec’12 • 109m shares ranking for dividend * Adjusted to exclude IFRS2 charges for shares schemes intended to be * 18m shares awarded to staff in April 2011 under Employee Ince
Slide 16: Final Results: Financial Highlights (3)
Final Results: Financial Highlights (3) Investments1 (£m) Cash reserves (£m) Cash reserve analysis (£m) • Seed investment relates to Food & • INEI II – private equity fund drawdown Agriculture Fund, launch Nov’12 • Continued strong cash generation • IARF – hedge fund redemption • Cash generation > £
Slide 17: Distribution Strategy - Update
Distribution Strategy - Update Global platform • Head of Distribution recruited Oct’11 • Further investment in standardisation e.g. CRM, consultant relations • PR function brought in-house Aug’12 UK BNP Paribas US • New relationships • Roll-out of water fund • Head of Sales joined Aug’12 – Instituti
Slide 18: Outlook
Outlook • Attractive prospects for target markets to sustain “superior growth” - Major overhaul underway in energy policies worldwide - Demographics, weak asset base and weather risk driving investment in infrastructure - Secular expansion of food/agriculture value chain • Active investment manageme
Slide 19: Appendix
19 Appendix IMPAX)
Slide 20: Income Statement
Income Statement Year Year ended ended 30 Sep 2012 30 Sep 2011 £'000 £'000 Revenue 18,621 20,931 Bonus (3,835) (5,268) Other operating costs (10,233) (9,428) Operating earnings 4,553 6,235 Share-based payment charge for EIA extension scheme* (7,757) (3,647) Exceptional long-term incentive scheme NIC
Slide 21: Balance Sheet
Balance Sheet 30 Sep 2012 30 Sep 2011 £'000 £'000 Goodwill and intangibles 1,629 1,668 Other non-current assets 866 509 Total non-current assets 2,495 2,177 Cash and cash equivalents 19,671 21,416 Current asset investments 8,710 3,930 Other current assets 2,998 3,433 Total assets 33,874 30,956 Curre
Slide 22: Remuneration Update
Remuneration Update • Historical incentive schemes - Schemes now vested - 12.2m shares to be issued December 2012 • Employee Share Option Plan (“ESOP”) - 5m options awarded in respect of FY 2011, strike price 49.6p - 3m options awarded in respect of FY 2012, strike price determined December 12 to Ja
Slide 23: Diverse Investment Opportunities
Diverse Investment Opportunities Energy Water Energy Efficiency Alternative Energy Water Infrastructure & Pollution Control - Power Network Efficiency - Developers and IPPs Technologies - Pollution Control - Industrials Energy Efficiency - Solar Equipment - Water Infrastructure Solutions - Buildings
Slide 24: Impax's Investment Strategies
Impax’s Investment Strategies Regions Cap bias No. of Stocks Listed LEADERS Equity Universe of c.1400 companies* Global All Cap 40-60 Investment Universe SPECIALISTS Universe of c.900 companies Global Small-Mid cap 70-80 c. 2,400 companies ASIA-PACIFIC Asia Pacific All Cap 40-60 Universe of c.450 co
Slide 25: Impax Asset Management: Investing Since 1998
Impax Asset Management: Investing Since 1998 1998 Impax Asset Management founded 15 AUM (£m) 1999 First listed equity mandate and Impax ET50 launched 22 2000 36 2001 Listing on AIM 39 2002 Impax Environmental Markets plc 55 2003 68 2004 Impax Environmental Markets (Ireland) Fund 93 2005 First Privat
Slide 26: Development of Environmental Indices
Development of Environmental Indices • Impax is FTSE’s global partner for the environmental sector • 18 environmental sector indices • Launched in 2007 • Adopted by major pension funds as a benchmark 26
Slide 27: Competitors
Competitors Listed Equities • Products from large, branded asset managers not typically “consultant quality” • Limited number of boutiques • Sub-sector products, e.g. alternative energy, tend to underperform broader strategies • Little direct competition in North America, Asia Private Equity • Estab
Slide 28: Extensive Expertise
Extensive Expertise Keith Falconer Ian Simm Charlie Ridge • Chairman since • Chief Executive • CFO 2004 • 22 years’ • 25 years’ • 33 years’ experience experience experience Bruce Peter Ominder Ken David Kaye Jenkyn-Jones Rossbach Dhillon Locklin Richardson Forrest • MD, Listed • MD, Private • Head o
Slide 29: Strong Investor Relationships
Strong Investor Relationships 29
Slide 30: Sources (Slide 5)
Sources (Slide 5) 1 CBC News article, http://www.cbc.ca/news/world/story/2012/07/25/f-drought-usa-faq.html, 26 July 2012, referencing report by National Climatic Data Centre. 2 http://www.businesswire.com/news/home/20111025005865/en/China-Waste-Energy-Outlook-2011-Held-December http://www1.bnppariba
Slide 31: Disclaimer
Disclaimer This document has been prepared by Impax Asset Management Group plc and approved by Impax Asset Management Limited (Impax, authorized and regulated by the Financial Services Authority). The information and any opinions contained in this document have been compiled in good faith, but no re
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