Invesco Ltd · NYSE:IVZ
Invesco — Q1 2013 Earnings Presentation
54 slides from Invesco's earnings presentation, Apr 30, 2013
Slide 1: Invesco first quarter 2013 results
Invesco first quarter 2013 results Martin L. Flanagan President and Chief Executive Officer Loren M. Starr Chief Financial Officer April 30, 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 First quarter overview Investment performance Financial results Questions Appendix 2
Slide 4: First quarter overview
First quarter overview Continued strong investment performance and record net flows contributed to strong operating results – Maintained strong, long-term investment performance – 75% and 82% of actively managed assets ahead of peers on a 3- and 5-year basis – Continued focus on delivering value to
Slide 5: Summary of first quarter 2013 results
Summary of first quarter 2013 results March 31, 2013 AUM of $729.3 billion versus $687.7 billion at Assets under December 31, 2012 management Average AUM was $712.7 billion versus $680.2 billion for the fourth quarter Total net flows of $19.2 billion Flows Net long-term flows of $14.8 billio
Slide 6: Discussion topics
Discussion topics First quarter overview Investment performance Financial results Questions Appendix 5
Slide 7: Investment performance – overview
This image cannot currently be display ed. Investment performance – overview Aggregate performance analysis – asset weighted Percent of actively managed assets in top half of peer group* 1-Year 3-Year 5-Year 75% 75% 82% 18% 25% 25% Assets top half of peer group Assets bottom half of peer group *Excl
Slide 8: Quarterly long-term flows
Quarterly long-term flows Strong active and passive flows across our global business Quarterly long-term flows(a) ($ billions) Total AUM Active AUM Passive AUM 35.1 13.5 48.6 28.0 27.8 29.1 26.6 26.3 24.6 35.5 35.8 21.6 35.2 35.1 35.8 9.3 30.9 8.6 8.8 30.2 8.0 7.5 6.7 6.4 8.4 5.6 5.2 14.8 2.9 3.6 1.
Slide 9: Quarterly long-term flows by channel
Quarterly long-term flows Strong flows across all channels Quarterly long-term flows ($ billions) Retail(a) Institutional(b) Private Wealth Management(c) 36.2 1.4 27.4 26.0 25.5 26.0 26.9 23.7 11.4 1.0 1.0 1.0 1.0 20.0 0.9 0.9 9.5 9.9 0.8 0.7 8.6 8.1 0.6 7.5 0.5 10.3 6.8 0.4 0.5 5.6 3.9 4.0 0.2 0.2
Slide 10: US Retail gross sales remained strong at $22.1 billion
US Retail gross sales remained strong at $22.1 billion for the quarter – up 34% year over year Gross and net sales Percentage above the bars is change in gross sales from prior quarter Net sales ($ billions) +37% +36% +32% +17% (6%) 22.1 (27%) +9% (11%) 18.5 (15%) 16.5 17.1 16.1 13.6 13.5 14.7 14.7
Slide 11: Continued strong demand for asset allocation strategies
Continued strong demand for asset allocation strategies, with over $4 billion of net inflows in the first quarter Invesco Global Asset Allocation AUM ($ billions) 35.0 30.0 25.0 20.0 15.0 10.0 5.0 - 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 Invesco Balanced-Risk Allocation str
Slide 12: A long-term commitment to executing our strategy
A long-term commitment to executing our strategy and delivering consistent results for shareholders Asset Weighted Investment Performance1 % of AUM rated 4 or 5 stars by Morningstar2 (% of actively managed AUM in the top-half) (Open-end US domiciled mutual funds only) 90.0% 90.0% 80.0% 80.0% 70.0% 7
Slide 13: A long-term commitment to executing our strategy
A long-term commitment to executing our strategy and delivering consistent results for shareholders Long-Term Organic Growth1 Adjusted Operating Expense per Average AUM2 10.0% 45.0 8.0% 40.0 6.0% 35.0 -33% 4.0% 30.0 25.0 2.0% 20.0 0.0% 15.0 ‐2.0% 10.0 ‐4.0% 5.0 ‐6.0% ‐ 2005 2006 2007 2008 2009 2010
Slide 14: A long-term commitment to executing our strategy
A long-term commitment to executing our strategy and delivering consistent results for shareholders (millions) Cumulative Return of Capital Total Return1 $4,000 160% CAGR: 11.8% $3,500 140% $3,000 120% 100% $2,500 80% $2,000 60% $1,500 40% 20% CAGR: 5.4% $1,000 0% $500 ‐20% $0 ‐40% 2005 2006 2007 20
Slide 15: Key priorities for 2013
Key priorities for 2013 Continued focus on the fundamentals to build our long-term business – Further enhance an investment culture that supports strong, long-term investment performance – Further expand capabilities that can be scaled globally to meet client needs – Continued focus and execution on
Slide 16: Discussion topics
Discussion topics First quarter overview Investment performance Financial results Questions Appendix 15
Slide 17: Total assets under management – 1Q13 vs. 4Q12
Total assets under management – 1Q13 vs. 4Q12 ($ billions) 1Q-13 4Q-12 % Change Beginning Assets $687.7 $683.0 0.7% Long-Term Inflows 48.6 35.8 35.8% Long-Term Outflows (33.8) (32.5) 4.0% Long-Term Net flows 14.8 3.3 N/A Net flows in Invesco PowerShares QQQ (0.4) (2.4) (83.3)% Net flows in Inst. Mon
Slide 18: Non-GAAP operating results – 1Q13 vs. 4Q12
Non-GAAP operating results – 1Q13 vs. 4Q12 ($ millions) 1Q-13 4Q-12 % Change Adjusted Revenues Investment Management Fees 892 865 3.2% Service and Distribution Fees 206 199 3.5% Performance Fees 39 21 82.9% Other 26 27 (5.8)% Third-Party Distribution, Service and Advisory Expenses (347) (337) 2.8% A
Slide 19: First quarter overview
First quarter overview Continued strong investment performance and record net flows contributed to strong operating results – Maintained strong, long-term investment performance – 75% and 82% of actively managed assets ahead of peers on a 3- and 5-year basis – Continued focus on delivering value to
Slide 20: Discussion topics
Discussion topics First quarter overview Investment performance Financial results Questions Appendix 19
Slide 21: Discussion topics
Discussion topics First quarter overview Investment performance Financial results Questions Appendix 20
Slide 22: Additional Information for Invesco Balanced-Risk Allocation Fund
Additional Information 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. 21
Slide 23: Additional Disclosure for Aggregate Investment Performance
Additional Disclosure for Aggregate Investment Performance Excludes passive products, closed-end funds, private equity limited partnerships, non-discretionary funds, unit investment trusts, fund of funds with component funds managed by Invesco, stable value building block funds and CDOs. Certain fun
Slide 24: Additional Disclosure for Long-Term Organic Growth Rate
Additional Disclosure for Long-Term Organic Growth Rate For all periods, long-term organic growth rates for Invesco and Peer Group are annualized and calculated using long- term net flows divided by beginning period AUM for all firms. For the periods 2005 – 2012, the peer group includes Affiliated M
Slide 25: Additional Disclosure on the Revenue and Expense of Atlantic Trust
Additional Disclosure on the Revenue and Expense of Atlantic Trust Net Revenue: $115 million Operating Expense: $85 million (100% investment management fees) 6% 16% 1% 78% Compensation Marketing Property, Office & Technology G&A 24
Slide 26: 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 $404.4 billion) % of assets top half % of assets bott
Slide 27: 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 $404.4 billion) % of assets top half % of assets bottom Equities Global ex-US and Other of peer
Slide 28: Investment performance
Investment performance By investment objective (actively managed assets)* Equities 1st quartile 2nd quartile AUM above benchmark U.S. Core U.S. Growth U.S. Value Sector 100% 100% 100% 100% 1-Yr 3-Yr 5-Yr 1-Yr 3-Yr 5-Yr 1-Yr 3-Yr 5-Yr 1-Yr 3-Yr 5-Yr U.K. Canadian Asian European 100% 100% 100% 100% 99
Slide 29: Investment performance
Investment performance By investment objective (actively managed assets)* Equities Global ex-U.S. and Other 1st quartile 2nd quartile AUM above benchmark Global Emerging markets Alternatives Balanced 100% 100% 100% 100% 1-Yr 3-Yr 5-Yr 1-Yr 3-Yr 5-Yr 1-Yr 3-Yr 5-Yr 1-Yr 3-Yr 5-Yr Fixed income Money m
Slide 30: We are diversified as a firm
We are diversified as a firm Delivering a diverse set of solutions to meet client needs By client domicile By channel By asset class 12% 4% 69% 24% 14% 62% 35% 44% 6% 11% 7% 9% 3% 1-Yr 1-Yr 1-Yr ($ billions) Change ($ billions) Change ($ billions) Change U.S. $504.0 8.9% Retail $454.8 9.6% Equity $3
Slide 31: Non-GAAP operating results – quarterly
Non-GAAP operating results – quarterly ($ millions) 1Q-13 4Q-12 % Change* 3Q-12 2Q-12 1Q-12 4Q-11 3Q-11 2Q-11 Investment Management Fees 892 865 3.2% 840 802 812 771 804 844 Service and Distribution Fees 206 199 3.5% 196 187 189 181 189 206 Performance Fees 39 21 82.9% 3 16 21 24 3 8 Other 26 27 (5.
Slide 32: US GAAP operating results – quarterly
US GAAP operating results – quarterly ($ millions) 1Q-13 4Q-12 % Change* 3Q-12 2Q-12 1Q-12 4Q-11 3Q-11 2Q-11 Investment Management Fees 874 847 3.2% 818 781 791 748 780 819 Service and Distribution Fees 206 199 3.5% 196 187 189 181 189 211 Performance Fees 36 20 81.4% 3 15 21 24 3 8 Other 25 27 (5.6
Slide 33: Total assets under management – quarterly
Total assets under management – quarterly ($ billions) 1Q-13 4Q-12 % Change 3Q-12 2Q-12 1Q-12 Beginning Assets $687.7 $683.0 0.7% $646.6 $672.8 $625.3 Long-Term Inflows 48.6 35.8 35.8% 35.1 30.2 35.2 Long-Term Outflows (33.8) (32.5) 4.0% (26.3) (33.1) (32.4) Long-Term Net flows 14.8 3.3 N/A 8.8 (2.9
Slide 34: Total assets under management – by asset class
Total assets under management – by asset class Fixed Money ($ billions) Total Equity Income Balanced Market Alternative September 30, 2012 $683.0 $300.6 $167.0 $57.9 $73.2 $84.3 Long-Term Inflows 35.8 13.4 9.5 6.3 0.6 6.0 Long-Term Outflows (32.5) (16.7) (6.1) (2.4) (0.7) (6.6) Long-Term Net flows 3
Slide 35: Total assets under management – by asset class
Total assets under management – by asset class Fixed Money ($ billions) Total Equity Income Balanced Market Alternative March 31, 2012 $672.8 $305.2 $155.0 $50.5 $74.5 $87.6 Long-Term Inflows 30.2 12.6 8.1 4.6 1.1 3.8 Long-Term Outflows (33.1) (16.7) (8.0) (2.3) (0.9) (5.2) Long-Term Net flows (2.9)
Slide 36: Total assets under management – by channel
Total assets under management – by channel ($ billions) Total Retail Institutional PWM September 30, 2012 $683.0 $423.4 $240.0 $19.6 Long-Term Inflows 35.8 26.9 7.5 1.4 Long-Term Outflows (32.5) (24.9) (6.9) (0.7) Long-Term Net flows 3.3 2.0 0.6 0.7 Net flows in Invesco PowerShares QQQ (2.4) (2.4) -
Slide 37: Total assets under management – by channel
Total assets under management – by channel ($ billions) Total Retail Institutional PWM March 31, 2012 $672.8 $414.8 $238.6 $19.4 Long-Term Inflows 30.2 23.7 5.6 0.9 Long-Term Outflows (33.1) (24.7) (7.7) (0.7) Long-Term Net flows (2.9) (1.0) (2.1) 0.2 Net flows in Invesco PowerShares QQQ (2.0) (2.0)
Slide 38: Total assets under management – by client domicile
Total assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Europe Asia September 30, 2012 $683.0 $474.5 $25.0 $99.6 $35.6 $48.3 Long-Term Inflows 35.8 22.0 1.3 3.3 5.8 3.4 Long-Term Outflows (32.5) (21.1) (1.3) (3.4) (3.9) (2.8) Long-Term Net flows 3.3 0.9 - (
Slide 39: Total assets under management – by client domicile
Total assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Europe Asia March 31, 2012 $672.8 $462.9 $24.8 $98.0 $35.7 $51.4 Long-Term Inflows 30.2 18.9 0.8 3.0 4.7 2.8 Long-Term Outflows (33.1) (19.6) (1.2) (4.4) (4.1) (3.8) Long-Term Net flows (2.9) (0.7) (0.
Slide 40: Passive assets under management – by asset class
Passive assets under management – by asset class Fixed Money ($ billions) Total Equity Income Balanced Market Alternative September 30, 2012 $117.9 $59.2 $37.6 - - $21.1 Long-Term Inflows 6.7 3.6 2.5 - - 0.6 Long-Term Outflows (5.2) (2.7) (1.0) - - (1.5) Long-Term Net flows 1.5 0.9 1.5 - - (0.9) Net
Slide 41: Passive assets under management – by asset class
Passive assets under management – by asset class Fixed Money ($ billions) Total Equity Income Balanced Market Alternative March 31, 2012 $112.6 $59.0 $32.5 - - $21.1 Long-Term Inflows 5.6 2.9 2.0 - - 0.7 Long-Term Outflows (5.3) (2.7) (0.8) - - (1.8) Long-Term Net flows 0.3 0.2 1.2 - - (1.1) Net flo
Slide 42: Passive assets under management – by channel
Passive assets under management – by channel ($ billions) Total Retail Institutional PWM September 30, 2012 $117.9 $94.7 $23.2 $- Long-Term Inflows 6.7 6.3 0.4 - Long-Term Outflows (5.2) (4.7) (0.5) - Long-Term Net flows 1.5 1.6 (0.1) - Net flows in Invesco PowerShares QQQ (2.4) (2.4) - - Net flows
Slide 43: Passive assets under management – by channel
Passive assets under management – by channel ($ billions) Total Retail Institutional PWM March 31, 2012 $112.6 $92.2 $20.4 $- Long-Term Inflows 5.6 4.8 0.8 - Long-Term Outflows (5.3) (4.9) (0.4) - Long-Term Net flows 0.3 (0.1) 0.4 - Net flows in Invesco PowerShares QQQ (2.0) (2.0) - - Net flows in I
Slide 44: Passive assets under management – by client domicile
Passive assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Europe Asia September 30, 2012 $117.9 $110.8 - - $1.3 $5.8 Long-Term Inflows 6.7 6.6 0.1 - - - Long-Term Outflows (5.2) (4.6) - - (0.2) (0.4) Long-Term Net flows 1.5 2.0 0.1 - (0.2) (0.4) Net flows i
Slide 45: Passive assets under management – by client domicile
Passive assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Europe Asia March 31, 2012 $112.6 $105.7 - - $1.5 $5.4 Long-Term Inflows 5.6 5.4 - - 0.1 0.1 Long-Term Outflows (5.3) (5.2) - - (0.1) - Long-Term Net flows 0.3 0.2 - - - 0.1 Net flows in Invesco Powe
Slide 46: Reconciliation of US GAAP to non-GAAP – three months ended March 31, 2013
Reconciliation of US GAAP results to non-GAAP results – three months ended March 31, 2013 * Other: Please refer to pages 18-20 in the 1Q 2013 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation Consolidated Other* No
Slide 47: Reconciliation of US GAAP to non-GAAP – 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 48: Reconciliation of US GAAP to non-GAAP – 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 49: Reconciliation of US GAAP to non-GAAP – 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 50: Reconciliation of US GAAP to non-GAAP – 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 51: Reconciliation of US GAAP to non-GAAP – 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 52: Reconciliation of US GAAP to non-GAAP – 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 53: Reconciliation of US GAAP to non-GAAP – 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 54: Reconciliation of US GAAP Operating Expense to Adjusted Operating Expense
Reconciliation of US GAAP Operating Expense to Adjusted Operating Expense Operating Expense Reconciled to Adjusted Operating Expense 2005 2006 2007 2008 2009 2010 2011 2012 1Q‐13 US GAAP Operating Expense 2,464.7 2,487.5 2,884.6 2,559.8 2,143.0 2,897.8 3,194.1 3,305.5 868.4 Third party distribution,