Impax Asset Management Group Plc · LSE:IPX
Impax Asset Management — FY2017 Earnings Presentation
42 slides from Impax Asset Management's earnings presentation, November 2017
Slide 1: Results for year ended 30 September 2017
Impax Asset Management Group plc Results for year ended 30 September 2017 CLEAR INVESTMENT
Slide 2: Agenda
Agenda • FY17 highlights Ian Simm Charlie Ridge Founder & Chief Executive Chief Financial Officer • Background to the Company • FY17 business update • FY17 financial update • Milestones and prospects CLEAR INVESTMENT 2
Slide 3: 2017 business update
2017 business update All major listed equity strategies AUM increased 61% to new peak Record net inflows of £2.1bn and outperformed MSCI ACWI of £7.3bn1 strong mandate pipeline over 1, 3 and 5 years Successful raising of 3rd PE fund Acquisition of Pax World (ongoing) Management LLC2 1As at 30 Septem
Slide 4: Financial performance
Financial performance 2017 2016 Change Assets under management1 £7.3bn £4.5bn 61% Revenue £32.7m £21.1m 55% Operating earnings2 £7.9m £4.2m 90% Profit/(loss) before tax £5.9m £5.2m 13% Diluted earnings per share 6.24p 3.62p 72% Shareholders’ equity £35.6m £26.7m 33% Interim dividend per share 0.7p 0
Slide 5: Background to the Company
Background to the Company CLEAR INVESTMENT 5
Slide 6: Impax Asset Management: summary
Impax Asset Management: summary ASSETS UNDER MANAGEMENT AND ADVICE1 • Acknowledged global leader investing in the £6.8bn Listed Equities transition to a more sustainable global economy £451m Renewable • Business model designed to build shareholder value £7.3bn Energy Infrastructure AUM £22m Sustaina
Slide 7: The rapidly changing landscape for investment managers
The rapidly changing landscape for investment managers MAINSTREAM TRENDS A FORMULA FOR WINNERS IMPAX WELL POSITIONED • Pressure on generalists “Specialist” approach P • Increasingly complex regulatory environment Differentiated strategies P • Growing fee pressure on generic products Diversified inco
Slide 8: Our investment philosophy
Our investment philosophy Impax believes that… …and offers solutions in Demographic change, resource scarcity, inadequate infrastructure and environmental constraints will shape Thematic Global private sector markets profoundly Equities These trends, which will progressively drive the transition tow
Slide 9: Solid track record of growth
Solid track record of growth AUM at FYE £m 1998 15 1999 20 Phase 1: 2000 39 Establishing the business 2001 38 2002 55 2003 66 2004 69 2005 214 Phase 2: 2006 429 Scale up to critical mass 2007 982 2008 1,099 2009 1,265 2010 1,823 Phase 3: 2011 1,896 Consolidation & investment 2012 1,828 2013 2,197 20
Slide 10: Broad range of strategies with significant capacity - update
Broad range of strategies with significant capacity - update LISTED EQUITIES INCEPTION DATE AUM1 REAL ASSETS INCEPTION DATE AUM1 Impax New Energy Specialists Mar 2002 £1.8bn Investors LP 2005 £37m Leaders Mar 2008 £2.0bn Impax New Energy 2010 £146m Investors II LP Thematic Water Jan 2009 £2.3bn Impa
Slide 11: Our offices and distribution partners
Our offices and distribution partners Capital • In-house sales (UK, US) • Committed third-party distributors • Access to over 20 markets Impax offices • Client base diversified by type and geography Pax office CLEAR INVESTMENT 11
Slide 12: Working in partnership with our clients
Working in partnership with our clients CLEAR INVESTMENT 12
Slide 13: FY17 business update
FY17 business update CLEAR INVESTMENT 13
Slide 14: Listed Equities: strong performance record
Listed Equities: strong performance record Percentage increase to 30 September 2017 141.8 132.8 127.9 95.6 75.7 68.5 63.9 49.8 15.0 15.1 14.9 14.9 Specialists Leaders Water MSCI ACWI 1 year 3 years 5 years Past performance of a strategy is no guarantee as to its performance in the future. The value
Slide 15: AUM growth in Europe and North America
AUM growth in Europe and North America Breakdown by client domicile (£m) Principal funds/partners UK/Ireland 726 Impax Environmental Markets plc 802 Irish UCITS Platform Absalon Capital EMEA 2,774 ASN Bank 4,898 BNP Paribas Asset Management Asia-Pacific 67 BNP Paribas Investment Partners 68 Delaware
Slide 16: Breakdown of AUM increase (Listed Equities)
Breakdown of AUM increase (Listed Equities) LISTED EQUITY FUNDS (£m) WEIGHTED AVERAGE REVENUE MARGIN1 (bps) 30 September 2017 6,787 Market movement 303 FY 2017 54.8 Inflows 1,435 Outflows (264) 31 March 2017 5,313 FY 2016 56.8 Market movement 342 Inflows 910 Outflows (133) 1 October 2016 4,194 1All
Slide 17: Private Equity Infrastructure
Private Equity Infrastructure • NEF ll: successful planned realisation of operating assets € € € • NEF III: final close early 2018 105MW ― Capital commitments of €303m (£267m)1 ― On-going discussions with additional prospective investors € • First investments 78MW € € 48MW € € ― France € € €€ € € €
Slide 18: Pax acquisition: key facts
Pax acquisition1: key facts Impax Pax • Headquartered in London • Headquartered in Portsmouth (NH), USA • Offices in: New York metropolitan region, • AUM of £3.4bn (US$4.5bn)2 Portland (OR) and Hong Kong • Offers actively and passively managed equity • AUM of £7.3bn (US$9.7bn)2 and fixed income stra
Slide 19: Investment capabilities
Investment capabilities Asset class Style Strategy Impax Pax Global thematic ✓ - Global unconstrained ✓ - Active US ✓ ✓ Listed equity Europe ✓ - Asia ✓ - Global thematic - ✓ Passive US - ✓ Private equity ✓ - Fixed income - ✓ CLEAR INVESTMENT 19
Slide 20: Pax acquisition: transaction summary
Pax acquisition: transaction summary • Impax has entered into an agreement to acquire Pax World Management LLC – 83.3 per cent from majority shareholder and others at Closing – 16.7 per cent from Pax Management in 2021 under put/call arrangements • Based in the US, Pax is a pioneer in sustainable in
Slide 21: Impax Asset Management Group plc structure
Impax Asset Management Group plc structure1 Today Post closing of Pax acquisition Impax Asset Impax Asset Management Management Group Plc Group Plc Impax Asset Impax Asset Impax Asset Impax Asset IAM US Holdco, Management Management Management Ltd Management Ltd Inc. (AIFM) Ltd (AIFM) Ltd Pax World
Slide 22: The combined Group
The combined Group Impax stand alone Combined Group1, 2 Run rate revenue £36.1m £59.6m Run rate EBITDA £11.1m £15.6m Cash £22.3m £13.1m Investments £8.6m £8.6m Debt 0 £20.1m Shares in issue 127.7m 132.0m3│137.8m4 Goodwill/intangibles 0 £38.5m (approx) arising on acquisition5 1US$/£ 1.293. 2As of 31
Slide 23: FY17 financial update
FY17 financial update CLEAR INVESTMENT 23
Slide 24: Financial highlights: Operating performance
Financial highlights Operating performance OPERATING COSTS (excluding non- OPERATING EARNINGS (excluding REVENUE (£m) recurring1) (£m) non-recurring1) (£m) 2017 32.7 2017 18.0 5.4 23.4 2017 9.3 Private Equity PPS and 2.0 financing fees Listed Equity flows and 9.6 2016 2016 4.2 12.6 4.3 16.9 performa
Slide 25: Financial highlights (2): Earnings and dividends
Financial highlights (2) Earnings and dividends DILUTED EPS (p) DIVIDEND (p) FY 2017 6.24 2017 0.7 2.21 2.9 Share award dilution (0.51) 2016 0.5 1.6 2.1 2015 0.4 1.2 1.6 0.5 Tax PE adjustments Tax adjustment 2.06 2014 0.3 1.1 1.4 Equity scheme NIC (1.37) 2013 0.9 2012 0.75 Interim Acquisition costs
Slide 26: Financial highlights (3): Cash and investments
Financial highlights (3) Cash and investments INVESTMENTS¹ (£M) CASH RESERVES1 (£M) CASH RESERVE ANALYSIS (£M) 30 September 30 September 2017 7.4 1.1 8.5 20.4 30 September 2017 20.4 2017 Risk buffer (4.1) Dividends and Fair value changes 1.0 net share buy (2.5) backs "Available" cash 16.3 Investment
Slide 27: Financial highlights (4): Balance sheet
Financial highlights (4) Balance sheet Excluding Pax acquisition Including Pax acquisition “AVAILABLE” ASSETS (£m) “AVAILABLE” ASSETS (£m) 30 September 24.8 30 September 16.3 8.5 3.9 8.5 12.4 2017 2017 30 September 21.5 30 September 10.5 11.0 10.5 11.0 21.5 2016 2016 "Available" cash Investments "Av
Slide 28: Long-term trends: Strong cost control
Long-term trends Strong cost control AUM (£bn) AVERAGE NUMBER OF EMPLOYEES FY 2017 7.3 FY 2017 73 FY 2011 1.9 FY 2011 48 TOTAL OPERATING COSTS PER EMPLOYEE (£’000)1 NON STAFF COSTS (£m) FY 2017 320 FY 2017 5.4 FY 2011 306 FY 2011 4.5 1Excludes costs relating to NIC provision on share awards. CLEAR I
Slide 29: Planning for the future
Planning for the future • MiFID II: investment in systems and advice • FCA’s Senior Managers and Certification Regime: planning formal review to ensure compliance • Brexit: well positioned with established EU relationships and extensive experience of local regulatory frameworks CLEAR INVESTMENT 29
Slide 30: Milestones and prospects
Milestones and prospects CLEAR INVESTMENT 30
Slide 31: Milestones/prospects
Milestones/prospects Attractive investment • Unconstrained and thematic high growth global equities skills/strategies • Strong investment performance and long-term track record Potential for further • Stable, expert team scaling • Infrastructure/team in place for significantly larger AUM • Major exp
Slide 32: Appendix
Appendix CLEAR INVESTMENT 32
Slide 33: Income analysis
Total excluding Total Income analysis year ended non-recurring Non-recurring year ended year ended September September September 2017 2017 2017 Income statement £'000 £'000 £'000 Comments on non-recurring items Revenue 32,694 32,694 - Operating costs (24,809) (23,365) (1,444) Mark to market national
Slide 34: Balance sheet
Balance sheet1 30 Sep 2017 30 Sep 2016 £'000 £'000 Goodwill and intangibles 1,698 1,742 Other non-current assets 464 122 Deferred tax asset 1,947 - 4,109 1,864 Cash and cash equivalents2 20,712 15,695 Current asset investments 13,010 12,811 Other current assets 14,452 7,309 Total assets 52,283 37,67
Slide 35: Impax investments
Impax investments Theme Principal funds/investee Investments¹ (£m) % of Fund AUM Comments Impax Environmental Leaders 4.7 51% Leaders Impax Global Equities Global equities 2.8 99% Opportunities Fund Impax New Energy 0.0 4% Commitment: €3.8m, €0.2m outstanding Investors LP Impax New Energy Private eq
Slide 36: IPX shareholder register: Significant staff ownership
IPX shareholder register 30 September 2017 Significant staff ownership BNP Paribas Asset Management, 25% Free Float, 39% 130.1m IPX shares Employee interests, 36%1 1Includes vested shares within sub-funds of the Employee Benefit Trusts (EBTs) from which the individuals and their families may benefit
Slide 37: IPX shareholder register: Significant staff ownership
IPX shareholder register Significant staff ownership FULLY DILUTED IPX SHARES (m) SHARE AWARDS OUTSTANDING IPX issued shares 127.7 Number outstanding End of exercise Vesting date Awards (29th period November Net share buy backs 2017) (15.9) to date 2011 ESOP - Vested 31/12/2017 2012 ESOP 850,000 Ves
Slide 38: Equity
Equity AVAILABLE ASSETS (£m) SHARE MANAGEMENT (m) 20.8p Fully diluted "Available Shares in issue 127.72 26.5 Assets" Net dilution of 11.9 Cash utilisation for net remaining awards (3.21) share buy backs Averaging impact 0.4 25.7p "Diluted Assets" 29.7 Diluted shares 115.4 Dilutive option exercise 4.
Slide 39: Specialists: annual disclosure presentation September 2017 - USD
Specialists: annual disclosure presentation September 2017 - USD MSCI ACWI 3yr FTSE ET 3yr Total Firm Assets Ending Market Annual Gross MSCI ACWI Annual FTSE ET Annual Asset Weighted 3yr Annualized Std Year Number of Portfolios Annual Net Return Annualized Std Annualized Std (Millions) Value (Millio
Slide 40: Leaders: annual disclosure presentation September 2017 - USD
Leaders: annual disclosure presentation September 2017 - USD MSCI ACWI 3yr FTSE EO All-Share Total Firm Assets Ending Market Annual Gross MSCI ACWI Annual FTSE EO All-Share Asset Weighted 3yr Annualized Std Year (millions) Number of Accounts Annual Net Return Annualized Std 3yr Annualized Std Value
Slide 41: Water: annual disclosure presentation September 2017 - USD
Water: annual disclosure presentation September 2017 - USD FTSE EO Water FTSE EO Water MSCI ACWI 3yr Total Firm Assets Ending Market Annual Gross MSCI ACWI Annual Asset Weighted 3yr Annualized Std Technology 3yr Year Number of Portfolios Annual Net Return Technology Annual Annualized Std (Millions)
Slide 42: Important information
Important information This document has been Issued in the UK by Impax Asset Management Group plc, whose shares are quoted on AIM. Impax Asset Management Group plc is registered in England & Wales, number 03262305. Impax Asset Management Group plc is the parent company of Impax Asset Management Limi
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