Igm Financial Inc. · TSX:IGM
Igm Financial — Q3 2024 Earnings Presentation
47 slides from Igm Financial's earnings presentation, Nov 8, 2024
Slide 1: IGM Financial Q3, 2024 Results
IGM Financial Q3, 2024 Results November 8th, 2024
Slide 2: Conference call participants
Conference call participants JAMES O‘SULLIVAN DAMON MURCHISON LUKE GOULD KEITH POTTER PRESIDENT & CEO PRESIDENT & CEO PRESIDENT & CEO EXECUTIVE VICE-PRESIDENT IGM FINANCIAL IG WEALTH MANAGEMENT MACKENZIE INVESTMENTS & CFO IGM FINANCIAL 2
Slide 3: Caution concerning forward-looking statements
Caution concerning forward-looking statements Certain statements in this report, other than statements of historical fact, are forward-looking statements based on certain assumptions and reflect IGM Financial Inc.’s (IGM Financial, IGM or the Company) and, where applicable, its subsidiaries’ and str
Slide 4: Non-IFRS financial measures & other financial measures
Non-IFRS financial measures & other financial measures This report contains Non-IFRS financial measures and non-IFRS ratios that do not have standard meanings prescribed by IFRS and may not be directly comparable to similar measures used by other companies. These measures and ratios are used to prov
Slide 5: Non-IFRS financial measures & other financial measures
Non-IFRS financial measures & other financial measures Other items Other items for the nine months ended September 30, 2024 consisted of: • The Company’s proportionate share of items Lifeco excludes from its base earnings (Lifeco other items) of ($6.9) million, including ($4.9) million recorded in t
Slide 6: Documents incorporated by reference
Documents incorporated by reference This summary document and webcast are meant to discuss, not to serve as a substitute for, information included in these documents. The reader is hereby cautioned to refer to the following documents relating to IGM Financial’s results: 1. Documents related to IGM F
Slide 7: Glossary
Glossary AUM&A Assets Under Management & Advisement IFIC The Investment Funds Institute of Canada AUA Assets Under Advisement IMF International Monetary Fund AUM Assets Under Management MA Mass Affluent CAGR Compound Annual Growth Rate NCI Non-controlling Interest EPS Earnings per Share SMA Separate
Slide 8: James O’Sullivan
James O’Sullivan President and CEO IGM Financial 8
Slide 9: IGM Financial Q3, 2024 highlights
IGM Financial Q3, 2024 highlights Financial Highlights Operational Highlights Reported EPS Adjusted EPS1 ➢ Executing on strategy; second best Q3 adjusted EPS on record $1.01 $1.03 +14.8% vs Q3/23 +12.0% vs Q3/23 ➢ Improving momentum at IG Wealth and Mackenzie; record high AUM&A and strong flows impr
Slide 10: Financial market and client investment returns
Financial market and client investment returns IGM Client Return Index1 Investment Performance Q4/24 LTM at 2023 Q1/24 Q2/24 Q3/24 at Oct 31 Sep 30 1.9 2 IGM Client Investment Return 9.9% 5.7% 1.4% 5.2% (0.1%) 20.2% 1.8 Equity Markets: Canada (S&P/TSX Composite) 11.8% 6.6% (0.5%) 10.5% 0.9% 26.7% 1.
Slide 11: Industry operating environment
Industry operating environment Third Quarter Industry Long-term Mutual Fund Net Sales ($B) Total Industry Industry Asset Manager Peers Industry Asset Manager Peers Mutual Fund Net Sales ($B) 23.7 Categories Q3/23 Q3/24 $ Change 7.7 6.1 7.0 6.1 6.1 9.1 Balanced (5.2) (0.8) 4.5 2.6 2.0 2.5 3.4 Foreign
Slide 12: Adjusted net earnings available to common shareholders by segment ($MM)
Adjusted net earnings available to common shareholders1 by segment ($MM) Wealth Management2 Asset Management Corporate & Other3 IGM Consolidated4 +11% 244.1 220.5 +10% Q3/23 124.9 113.7 +16% Q3/24 91.3 78.9 -5% 29.4 27.9 1) A non-IFRS financial measure - see Non-IFRS financial measures and other fin
Slide 13: Third quarter ending AUM&A ($B)
Third quarter ending AUM&A ($B) Consolidated AUM&A incl. SI1 Wealth Management Asset Management 3 2 2 2 2 454.4 461.6 +23% Sub-advised AUM to Wealth Management: Q3/23 Q3/24 $83.6B (Q3/23 339.8 373.8 $74.3) Q3/24 Additional AUM&A not 212.1 included in Consolidated 201.4 AUM&A incl. SI 186.3 151.5 136
Slide 14: Wealth Management
WEALTH MANAGEMENT Damon Murchison President & CEO IG Wealth Management 14
Slide 15: Wealth management Q3, 2024 highlights
Wealth management Q3, 2024 highlights Record Ending AUM&A of $136.4B increased 19% year-over-year • AUM&A grew 5.2% during the quarter, driven by strong client returns of 5.1% • Client asset growth of 6% Record Q3 gross inflows of $3.4B; record Q3 gross sales of $3.3B during the quarter2 and 33% • R
Slide 16: IG Wealth Management net flows
IG Wealth Management net flows IG Wealth Management Gross and Net flows1 ($MM) IG Wealth Management Net Flows2 ($B) Gross Inflows Gross Outflows Net Flows (LTM, as at October 31, 2024) Month of October 1,260 1,029 897 964 Total Net Flows IGM Product Net Flows Cash, GICs, & HISAs 707 728 825 783 875
Slide 17: IG Wealth Management Q3, 2024 operating results
IG Wealth Management Q3, 2024 operating results Gross Inflows Gross Redemption Rate Asset Under Advisement Q3/24 Highlights ($MM) (Quarterly annualized) ($B) Cash, GICs, HISAs 3rd party ▪ Gross inflows of $3.4B, up IGM Solutions (AUM) 10.6% year-over-year 3,432 136.4 3,103 129.7 10.6% 6.2 5.9 ▪ Impr
Slide 18: Strong high-net-worth & mass affluent client acquisition
Strong high-net-worth & mass affluent client acquisition Gross Inflows from Newly Acquired Clients (Q3, $MM) Gross Inflows from New Acquired Clients (LTM, $B) By client assets brought to IG Wealth By client assets brought to IG Wealth <$100K $100-250K $250-1,000K >$1,000K Growth >$250K <$100K 5-year
Slide 19: Mass affluent & high-net worth clients driving growth
Mass affluent & high-net worth clients driving growth 20181 2024 Executing on focus: Since 2018, IG Wealth’s 100% ~$86B +58% AUM&A growth 100% ~$136B AUM&A has grown by 58% of CLIENTS AUM&A of CLIENTS AUM&A HNW client assets have grown by 181% over the $1MM+ 3.5% ~$21B +181% 11.0% ~$58B same per
Slide 20: Strength in insurance and positive progress in mortgage
Strength in insurance and positive progress in mortgage Mortgage funding New annualized insurance premiums ($MM) ($MM) 648 53 595 41 YTD/23 YTD/24 YTD/23 YTD/24 • Mortgage funding up ~9% YTD • New annualized insurance premiums up ~31% YTD • IG Mortgages serviced at $6.7B as of Sept 30/24 • In-force
Slide 21: IG Wealth’s leading advisor value proposition
IG Wealth’s leading advisor value proposition Investment Executive’s 2024 Dealers’ Report Cards1 Strong Position vs. Big 5 Bank FSBs Overall Dealer Report Card Rating2 Net Promoter Score Peer Avg IG Wealth Rating (out of -100 to +100) 8.8 88 8.6 8.5 8.4 8.0 8.0 8.2 8.3 8.0 8.0 76 67 38 22 0 Bank Ban
Slide 22: Rockefeller Q3, 2024 update
Rockefeller Q3, 2024 update Q3, 2024 Highlights LTM Client Asset1 Growth Private Advisor Growth (US$B) 400 3 17.9 148.9 360 1▪ Q3/24 organic growth drove 350 US$2.2B in client assets; 321 2 US$6.8B in growth since Q3/23 12.6 300 1 258 2▪ Inorganic client asset growth of 250 6.8 US$1.5B during Q3/24;
Slide 23: Wealthsimple Q3, 2024 update
Wealthsimple Q3, 2024 update Q3, 2024 Highlights AUA by Quarter Client Count by Quarter1,2 ($B) (‘000s) 52.1 1 2,607 2 2,500 1 ▪ Wealthsimple’s AUA grew to 2,393 2,255 2,228 $52.1B, up 20% sequentially 43.6 2,116 2,169 2,031 and 109% year-over-year 2,002 38.7 ▪ Record AUA growth of $8.5B 31.0 during
Slide 24: Asset Management
ASSET MANAGEMENT Luke Gould President & CEO Mackenzie Investments 24
Slide 25: Asset management Q3, 2024 highlights
Asset management Q3, 2024 highlights Record Ending AUM of $212.1B increased 13.8% year-over-year • AUM increased by 4.9% during the quarter, driven by strong client returns of 5.2% Long-term investment fund Q3 investment fund net redemptions of $296MM; year-over-year improvement • October investment
Slide 26: Mackenzie Investments net sales
Mackenzie Investments net sales Mackenzie Adjusted Investment Fund Flows1 ($MM) Mackenzie Adjusted Investment Fund Net Flows1 ($B) MF Gross Sales MF Redemptions MF Net Sales ETF Net Flows (LTM, as at October 31, 2024) Month of October Total Retail 1,164 8.0 746 874 811 808 411 662 507 512 404 511 17
Slide 27: Mackenzie Q3, 2024 operating results
Mackenzie Q3, 2024 operating results Retail Mutual Fund Gross Sales Morningstar Star Ratings1 Q3/24 Highlights ($MM) (% Proportion of Assets) 15 of top 20 rated mutual funds 4/5 star (series F) Mackenzie – Sep. 2024 ▪ Retail mutual fund gross Mackenzie – Jun. 2024 52% 1,443 Industry – Sep. 2024 49%
Slide 28: Investment boutique retail mutual fund & ETF
Investment boutique retail mutual fund & ETF Fixed Managed 3rd Party Value-Oriented Quality Growth-Oriented Sustainable Core & Dividend Income Solutions & Other North Global Global Fixed Multi-Asset ChinaAMC, Cundill American Ivy Growth Bluewater Resources Greenchip Quantitative Equity & Income Stra
Slide 29: Chinese investment fund industry AUM and net flows; ChinaAMC industry leader
Chinese investment fund industry AUM and net flows; ChinaAMC is an industry leader Chinese Investment Fund Industry Top 10 Long-term Growth Chinese Investment Fund Industry Fund Provider Market Shares (at September 30, 2024) QoQ 1-year Ending AUM1 CAD/RMB = 5.2512 (RMB¥ Trillions) 31.6 3% 16% • Chin
Slide 30: ChinaAMC total AUM and investment fund net flows
total AUM and investment fund net flows continuity Growth ChinaAMC Ending AUM1 (RMB¥ billions) QoQ 1yr Other (primarily institutional) 2,358 9% 29% Money-market funds Long-term investment funds 2,089 2,159 11% 34% 1,740 1,733 1,722 1,772 1,802 1,826 1,824 1,739 1,662 1,461 1,581 1,599 1,507 1,568 1,
Slide 31: Capital Partners Q3, 2024 update
Capital Partners Q3, 2024 update Highlights Northleaf AUM History1 Northleaf LTM AUM Continuity1 ($B) ($B) 4.8 ▪ Strong fundraising of $1.5B for the 29.6 29.6 26.9 -2.0 (2.0) -0.1 (0.1) quarter end September 30, 2024 26.6 ▪ LTM fundraising of $4.8B, AUM 24.1 growth of 10% 19.5 ▪ Northleaf AUM has gr
Slide 32: Keith Potter
Keith Potter Executive Vice-President & CFO IGM Financial 32
Slide 33: IGM Financial Q3, 2024 financial highlights
IGM Financial Q3, 2024 financial highlights Reported EPS $1.01 +14.8% vs Q3/23 • Third quarter adjusted EPS1 of $1.03, up 12.0% year-over-year • Q3/24 adjusted EPS excludes the proportionate share of associates earnings from Lifeco other items Adjusted EPS1 which represented ($4.9MM) during the quar
Slide 34: Total assets under management & advisement
Total assets under management & advisement IGM Assets Under Management & Advisement Change in IGM Assets Under Management & Advisement ($B) ($B) Daily AUM&A Annual Average AUM&A Quarterly Average AUM&A Q3/23 Q4/23 Q1/24 Q2/24 Q3/24 LTM 280 Opening AUM&A excluding sub-advisory to Canada Life 186.8 18
Slide 35: IGM Financial consolidated profitability
IGM Financial consolidated profitability $ Millions (unless otherwise noted): Change QoQ Change YoY IGM Financial Consolidated Q3/23 Q2/24 Q3/24 $ % $ % Days in the period Average AUM & AUA ($ Billions) 92 91 92 1.1% 0.0% 1▪ Higher average AUM&A, up 10.7% year- Wealth Management AUM & AUA 116.9 128.
Slide 36: IG Wealth Management – key profitability drivers
IG Wealth Management – key profitability drivers Daily Average Assets ($B), Advisory and Product Key Revenue & Expenses as bps of & Program Fee Rate (bps)1 Respective Driver (AUA or AUM)1 132.9 128.1 124.0 102.1 102.1 15.2 100.3 98.9 98.4 116.9 117.1 14.6 Other AUA 14.0 12.2 12.9 117.7 113.5 85.7 85
Slide 37: IG Wealth Management profitability
IG Wealth Management profitability $ Millions (unless otherwise noted): Change QoQ Change YoY IG Wealth Management Q3/23 Q2/24 Q3/24 $ % $ % 1▪ Advisory and product and program fee revenue up 10.6% year-over-year and 4.4% sequentially, driven by Days in the period 92.0 91 92 1.1% 0.0% Average assets
Slide 38: Mackenzie – key profitability drivers
Mackenzie – key profitability drivers Average AUM ($B), Net Asset Management Fee Rate1 Net Asset Management Fee Rates1 (bps) (as bps of respective AUM) 207.5 Sub-advisory and 198.9 201.8 AUM to Wealth 191.9 189.3 81.1 Management 80.4 79.4 78.7 78.5 Third Party AUM 81.8 77.9 79.0 Third-party 76.4 75.
Slide 39: Mackenzie profitability
Mackenzie profitability $ Millions (unless otherwise noted): Change QoQ Change YoY Mackenzie Investments Q3/23 Q2/24 Q3/24 $ % $ % Days in the period 92 91 92 1.1% 0.0% 1▪ Net asset management fees up 5.8% year-over- year, driven by asset growth and mix shift Average assets under management ($B) Thi
Slide 40: ChinaAMC – AUM and earnings
ChinaAMC – AUM and earnings ChinaAMC Ending AUM1 IGM Financial Share of ChinaAMC Earnings (RMB¥ billions) (CAD millions) Other (primarily institutional) Q3/24 relatively in- Money-market funds 1-Year 32.9 line with Q2/24 Growth excluding marks Long-term investment funds relating to seed 2,358 29% 28
Slide 41: Adjusted net earnings by segment and company ($MM)
Adjusted net earnings available to common shareholders1 by segment and company ($MM) Wealth Asset Corporate IGM Management Management2 & Other3 Consolidated3,4 +11% 244.1 Q3/23 220.5 Q3/24 +11% 125.5 113.3 FVTOCI +5% 56.5 59.4 +33% 29.6 -5% 22.2 29.4 27.9 1.2 0.1 0.4 2.7 (0.3) (0.5) 1) A non-IFRS fi
Slide 42: Summary: Segment breakdown
Summary: Segment breakdown Adj. Earnings1 by Segment Strategic Investments – Ownership and value Q3/23 Adj. Q3/24 Adj. YoY Ownership Accounting Q3/24 Net Q3/24 Value Assumption $ millions Earnings Earnings Change Q3/23 | Q3/24 Basis Carrying Value Fair Value WEALTH MANAGEMENT2 IG $113.3 $125.5 11% R
Slide 43: Returning capital to shareholders with financial flexibility
Returning capital to shareholders with financial flexibility Return of Capital to Leverage Balanced approach to capital Shareholders (Debt/LTM Adj. EBITDA1) allocation ($MM) Short-term financing related to Dividends Return of capital to shareholders: acquisition of a stake in Share repurchases Rocke
Slide 44: Q&A
¢ Wealth Wealth Management Asset Management Financial Q&A This way to better > y,
Slide 45: Appendix
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Slide 46: Adjusted net earnings available to common shareholders and valuation by company ($MM)
Adjusted net earnings1 available to common shareholders and valuation by company ($MM) Adjusted Net Earnings Available to Common Shareholders1 997 6 926 2023 843 Analyst 507 487 Consensus2 432 2024 204 231 253 2025 11 FVTOCI 94 103 114 89 96 96 14 17 15 8 3 (1) (8) 2024 Analyst 4 UNALLOCATED 4 OTHER
Slide 47: IGM Financial Debt/Adj. EBITDA
IGM Financial Debt/Adj. EBITDA1 Total Debt ($MMs) Q3/23 Q4/23 Q1/24 Q2/24 Q3/24 Long-term Debt 2,400.0 2,400.0 2,400.0 2,400.0 2,400.0 Credit facility 550.0 - - Total debt 2,950.0 2,400.0 2,400.0 2,400.0 2,400.0 Adj. EBITDA before sales commissions 1 (LTM, ending) Q3/23 Q4/23 Q1/24 Q2/24 Q3/24 Adj.