Impax Asset Management Group plc · LSE:IPX
Impax Asset Management — H1 2011 Earnings Presentation
32 slides from Impax Asset Management's earnings presentation, Jun 2, 2011
Slide 1: Impax Asset Management Group plc Interim Results: 2 June 2011
Impax Asset Management Group plc Interim Results: 2 June 2011 For the Period 1 October 2010 – 31 March 2011 Pegasus House 37‐43 Sackville Street London W1S 3EH UK Tel: +44 (0)20 7434 1122 Fax: +44 (0)20 7437 1245 Impax Asset Management Ltd is authorised and regulated by the Financial Services Author
Slide 2: Agenda
Agenda • Business update Ian Simm (Chief Executive) • Annual results • Q&A Charlie Ridge (CFO) 2
Slide 3: H1 – Financial Highlights
H1 – Financial Highlights • Assets under management and advisory (“AUM”) increased 30% from £1,823 million on 30 September 2010 to £2,362 million on 31 March 2011 and rose further to £2,372 million by 30 April 2011 • Revenue in the first half (H1, 2011) increased 56% to £9.86 million (2010: £6.31 mi
Slide 4: H1 – Commercial Highlights
H1 – Commercial Highlights • Successful expansion of recently established products ‐ Impax Asian Environmental Markets C Share (long‐only): (£131m, October 2010) ‐ Impax New Energy Investors II (private equity): (€297m, June 2011) • Two significant new mandates ‐ LD pension fund: (€68m, January 2011
Slide 5: Environmental Markets: Update/Current Issues
Environmental Markets: Update/Current Issues • Major developments in energy markets ‐ Oil price shock reflecting supply constraints, including Middle East ‐ Comprehensive review of nuclear policy post Fukushima • China’s Five Year Plan ‐ Renewable energy: gy US$750 billion investment byy 2020 ‐ Ener
Slide 6: Strategy Performance (to 31/03/11) in GBP
Strategy Performance (to 31/03/11) in GBP 5Y 3Y 1Y 1 year volatility Forward PE* Environmental Specialists 38.6% 25.0% 10.1% 17.8% 16.5x Environmental Leaders N/A 28.0% 9.9% 15.4% 14.6x Asia‐Pacific N/A N/A 10.1% 15.8% 13.3x Water N/A N/A 12.4% 16.1% 15.7x FTSE World Index 28.1% 27.4% 8.2% 13.3% 13.
Slide 7: Impax AUM Breakdown
Impax AUM Breakdown Investment strategy AUM (£) 31/03/11 AUM (£) 30/09/10 Environmental Specialists 1.1bn 1.0bn p Environmental Markets p ‐ Impax plc 452m 409m ‐ Impax Environmental Markets (Ireland) 230m 215m ‐ Third Party funds/accounts 465m 424m Environmental Leaders 332m 197m ‐ Third Party funds
Slide 8: Increase in AUM by Geographic Region (Client Domicile)
Increase in AUM by Geographic Region (Client Domicile*) Principal funds/partners • Impax Environmental Markets plc UK/Ireland £929m +£194m • Impax Environmental Markets (Ireland) • Impax Asian Environmental Markets plc • Impax Asian Environmental Markets (Ireland) • BNP Paribas Investment Partners O
Slide 9: Net Inflows Across both Impax label and Third Party Funds/Accounts
Net Inflows Across both “Impax label” and Third Party Funds/Accounts H1 2011 Financial year end 2010 “Impax label” funds (£m) AUM 31/03/11 1,320 AUM 30/09/10 1.008 Market Market movements 87 movements 27 /currency /currency Outflows 60 Outflows 32 Inflows 284 Inflows 308 AUM 30/09/10 1,008 AUM 30/09
Slide 10: Private Equity Highlights
Private Equity Highlights • Significant Si ifi t iinvestment t t opportunity t it ‐ Substantial need across the EU to fund construction of renewable power plants ‐ Investment in projects offering stable, long‐term, inflation‐protected cashflow ‐ Considerable C id bl “proprietary” “ i t ”d deall fl f
Slide 11: 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 Littl direct di t competition titi ini N North th A America, i A
Slide 12: Final Results: Financial Highlights (1)
Final Results: Financial Highlights (1) Revenue (£k) Operating costs (£k) Profit before tax (£k) H1 2011 9,858 H1 2011 H1 2011 1,366 2,053 6,962 8,492 H1 2010 6,313 H1 2010 4,787 H1 2010 1,526 1,670 FY 2010 15,339 FY 2010 11,512 FY 2010 3,827 5,177 Exceptional charge Treasury * • Revenue up 56% vs H
Slide 13: Final Results: Financial Highlights (2)
Final Results: Financial Highlights (2) Diluted adjusted EPS (pence) Dividend per share (pence) H1 2011 1.27 Dilutive effect of share awards (0.21) 2010 0.60 Exceptional NIC charge (after (1.01) tax) Increased Treasury gains (after 0.45 tax) 2009 0.40 Increase in operating earnings 0.94 (after tax)
Slide 14: Final Results: Financial Highlights (3)
Final Results: Financial Highlights (3) Investments (£k) Cash held by operating entities (£k) 31 Mar 11 4,809 31 March 2011 14,307 Working capital & Other 2,248 Mark to market 511 Profit from operations 1,951 Net inflow i fl re investments i 280 IEL redemption 332 Corporation tax (197) NEF 2 capital
Slide 15: Employee Incentive Arrangements
Employee Incentive Arrangements • In March 2011 the Company announced that all conditions relating to its Employee Incentive Arrangement had been achieved (ref. Slide 21) • On 1 April 2011 awards under the Arrangement were made to employees in respect of 18.25m 18 25m shares which will vest on 30 Se
Slide 16: Outlook
Outlook • Compelling prospects for environmental markets to sustain “superior growth” ‐ Major overhaul underway in energy policies worldwide ‐ Demographics and weak asset base driving investment in environmental infrastructure • Active investment management ideal for exploiting inefficient prices ‐
Slide 17: Appendix
Appendix 17 IMPAX)
Slide 18: Income Statement
Income Statement Six months Six months Year ended ended ended 31‐Mar‐11 31‐Mar‐10 30‐Sep‐10 £'000 £'000 £'000 Turnover 9,858 6,313 15,339 Exceptional NIC Charge (1,530) (1 530) ‐ ‐ Bonuses (2,380) (1,250) (3,620) Other operating costs (4,582) (3,537) (7,892) Fair value gains 702 168 3 Third party in
Slide 19: Balance Sheet
Balance Sheet Six months Six months Year ended ended ended 31‐Mar‐11 31‐Mar‐10 30‐Sep‐10 £'000 £'000 £'000 Goodwill and intangibles 1,674 1,737 1,705 Other non current assets 270 1,474 313 1,944 , 3,211 , 2,018 , Cash 16,293 6,054 11,729 Current asset investments 4,596 5,043 7,007 Other current asse
Slide 20: AUM – Monthly Development
AUM – Monthly Development* Mar‐11 £2,362m Feb‐11 £2,187m Jan‐11 £2,260m Dec‐10 £2,251m Nov‐10 £2,034m Oct‐10 £1,942m Sep‐10 Sep 10 £1 823m £1,823m *AUM stated as of month end 20
Slide 21: Employee Incentive Arrangement
Employee Incentive Arrangement • Two main schemes ‐ Both subject to share price hurdle and individual performance targets ‐ 2005 scheme (16.8m shares net): 100% allocated and vested ‐ 2008 scheme (18.25m awards): 100% allocated ‐ FY2010 hurdle (58.5p) met in March 2011 ‐ Awards granted 1 April 2011
Slide 22: Employee Incentive Arrangement – Impact on Reported Results
Employee Incentive Arrangement – Impact on Reported Results H1 2011 • No impact on earnings • Performance P f conditions di i on scheme h were met by b 31 March M h hence h diluted dil d adjusted dj d EPS includes i l d allll shares h expected to vest H2 2011 & 2012 H2 2011/£’000 Adjusted basis IFRS
Slide 23: Employee Incentive Arrangement – EBT Awards – Impact on Reported Results
Employee Incentive Arrangement – EBT Awards – Impact on Reported Results H2 2011 & 2012 – Award made to I Simm Adjusted • IFRS 2 ‘share based payment’ and Employer’s NIC H2 2011/£’000 basis IFRS basis charged in same way as for LTIP. Value of share awards/IFRS 2 charge ‐ (923) • The Th awards d do d
Slide 24: Impax Overview: A Compelling Business Proposition
Impax Overview: A Compelling Business Proposition • Attractive sector for specialist investment managers ‐ Environmental policy addressing unsustainable economic development globally ‐ 1400+ quoted companies growing rapidly, US$500 billion+ (annual revenues) ‐ Growing evidence that institutions are
Slide 25: Impax Investment Universe & Product Range
Impax Investment Universe & Product Range Typical # of Geographic Market cap of Strategy stocks/ Benchmark Listed Equities scope universe investments launched ENVIRONMENTAL LEADERS* Listed Equity Universe of c.1400 companies Global c.US$4tn 40‐60 Mar 2008 MSCI World I Investment Universe ENVIRONMENT
Slide 26: Impax Asset Management: Investing Since 1998
Impax Asset Management: Investing Since 1998 AUM (£m) 1998 Impax Asset Management founded 15 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 27: FTSE Environmental Markets Classification: Sub-Sectors
FTSE Environmental Markets Classification: 21 Sub‐Sectors Renewable & Alternative Energy Energy Efficiency Renewable Solar Energy Wind Power Biofuels Other Power Industrials Buildings Transport Energy Generation Generation Renewables Network Energy Energy Energy Developers Equipment Equipment Equipm
Slide 28: FTSE's Partner for Environmental Indices
FTSE’s Partner for Environmental Indices • Growing demand for sector indices • Impax ET50 Index operating since 1999 • Impax‐FTSE partnership established in 2007 • FTSE now marketing 18 indices world‐wide • Impax revenue share and brand/profile /p benefits 28
Slide 29: Extensive Sector Expertise
Extensive Sector Expertise Keith Falconer Ian Simm Charlie Ridge • Chairman since 2004 • Chief Executive • CFO • 30 years investment • 20 years sector • 20 years finance expertise expertise (14 at expertise (2 at Impax) Impax) • Ex Martin Currie • Accountant, ex • Physicist, ex McKinsey Deutsche Ban
Slide 30: Strong Institutional Investor Relationships
Strong Institutional Investor Relationships Consultants Investors in pooled vehicles + > 100 other institutions White label funds Investors in segregated accounts European Institution 30
Slide 31: Well-Placed Distribution Partners
Well‐Placed Distribution Partners UK: United States: ‐ Collins Stewart ‐ Pax World ‐ plus direct sales ‐ Titanium Asset Management Continental Europe: ‐ BNP Paribas Investment Asia/Australia: Partners ‐ BNP Paribas Investment ‐ ASN Bank Partners ‐ DIAM (Japan) 31
Slide 32: Disclaimer
Disclaimer This document has been p prepared p byy Impax p Asset Management g Groupppplc and approved pp byy Impax p Asset Management g Limited ((Impax, p , authorized and regulated by the Financial Services Authority). The information and any opinions contained in this document have been compiled i
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