Impax Asset Management Group Plc · LSE:IPX
Impax Asset Management — FY2013 Earnings Presentation
33 slides from Impax Asset Management's earnings presentation, September 2013
Slide 1: Final Results: Year ended 30 September 2013
Impax Asset Management Group plc Final Results: Year ended 30 September 2013
Slide 2: Agenda
Agenda • Business update Ian Simm Chief Executive • Annual results • Q&A Charlie Ridge Chief Financial Officer 2
Slide 3: Goals and Strategy for Growth
Goals and Strategy for Growth We are in business to… Our Strategy is based on… • Be the leading specialist boutique investing • Recruiting and retaining specialist in the rapidly expanding resource efficiency investment expertise and environmental markets • Managing a small number of scalable • Offe
Slide 4: Impax History: Building the Business Since 1998
Impax History: Building the Business Since 1998 AUM (£m) Phase 1: Establishing the Business 1998 15 • First listed equity strategy (small cap) 1999 22 • AIM quotation 2000 36 • Distribution principally in UK 2001 39 2002 55 2003 68 Phase 2: Scale up to Critical Mass 2004 93 • First private equity fu
Slide 5: Performance Summary for Financial Year Ending 30 September 2013
Performance Summary for Financial Year Ending 30 September 2013 Business Performance Key Figures 2013 2012 Assets under management £2.2bn £1.8bn • Principal listed equity strategies all outperformed global markets Revenue £18.5m £18.6m • Encouraging business development in the Operating earnings1 £4
Slide 6: Powerful Drivers Behind Resource Efficiency and Environmental Markets
Powerful Drivers Behind Resource Efficiency and Environmental Markets Economic growth is unsustainable... …while market dislocations provide investment opportunities Technology Consumers • New solutions • Population pressure Weak infrastructure • Corporate R&D • Higher living standards • Power grids
Slide 7: Update on Resource Efficiency and Environmental Markets
Update on Resource Efficiency and Environmental Markets Compelling drivers Deepening concern re climate change Global economic recovery1 Near term catalysts 112 US GDP (rebased 31.09.2005) 110 108 106 104 102 Energy Efficiency: Pollution: Chinese 100 multiple initiatives Government response 7 Source
Slide 8: Markets Update: Poised for Further Growth
Markets Update: Poised for Further Growth Illustrative New Development(s) Catalysts for Impax Themes • Fracking water treatment investments Water Scarcity • Worst US drought since 1950s1 • Disaster relief/flood defence funding • China: $450bn investment in water/waste • China 12th 5‐year plan Urbani
Slide 9: Changing Investor Sentiment
Changing Investor Sentiment • Search for growth • Analysis of investment beliefs • Review of fiduciary duty • Concerns re climate risk and stranded assets 9
Slide 10: Impax's Listed Equity Investment Strategies
Impax’s Listed Equity Investment Strategies Global All cap AUM Inception date Specialists Universe: 900 companies Small‐Mid £819m Mar 2002 Universe Size: $0.6 T market cap Leaders Universe: 1500 companies £409m Mar 2008 Universe Size: $3 T market cap Water Universe: 300 companies £562m Jan
Slide 11: Strong Investment Performance
Strong Investment Performance Annualised Performance to YTD 1 Year 3 Years 5 Years 10 Years EPS Growth PE Ratio 30.09.2013 in GBP (%) Specialists 24.6 31.0 7.5 7.9 10.9 24.8 17.5x FTSE ET50 33.1 40.3 0.8 ‐1.6 6.9 15.3 21.3x Leaders 22.3 31.5 12.4 11.7 ‐‐ 15.1 16.3x FTSE EOAS 22.0 31.5 9.9 11.9 12.4
Slide 12: Water Strategy – Strong Inflows and Performance
Water Strategy – Strong Inflows and Performance BNP Paribas Aqua Fund AUM (£m) Nov 2008 8 Sept 2012 68 • Five year anniversary in December 2013 Mar 2013 206 • Continuing strong signals for long‐term Sept 2013 364 investment Investment performance (%) 200 • Wider European distribution Water Strategy
Slide 13: Food and Agriculture Strategy – Excellent Performance vs. Peer Group
Food and Agriculture Strategy – Excellent Performance vs. Peer Group Investment performance (%) • First anniversary on 1 December 2013 125 Food and Agriculture Fund Custom peer group 120 MSCI AC World • Key Differentiators: 115 – Investing across entire value chain 110 105 – Concentrated portfolio (
Slide 14: AUM Breakdown (1): by Strategy
AUM Breakdown (1): by Strategy AUM (£) AUM (£) Investment strategy 30 Sep’13 30 Sep’12 Specialists 819m 759m ‐ Impax Environmental Markets plc 363m 327m ‐ Impax Environmental Markets (Ireland) 104m 102m ‐ Third Party funds/accounts 352m 330m Leaders 409m 276m ‐ Third Party funds/accounts 409m 276m W
Slide 15: AUM Breakdown (2): by Client Domicile
AUM Breakdown (2): by Client Domicile* (£m) Principal funds/partners • Impax Environmental Markets plc 634 • Impax Environmental Markets (Ireland) Fund UK/Ireland 746 • Impax Asian Environmental Markets (Ireland) Fund • BNP Paribas Investment Partners 1,040 • ASN Bank Other Europe 626 • LD • BNP Par
Slide 16: 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) September 2013 503 September 2013 1,314 Market movement 15 Market movement 65 Inflows 6 Inflows 232 IAEM plc closure (190) Outflows (38) Outflows (122) March 2013 710 March 2013 1,139 Mark
Slide 17: Private Equity Update
Private Equity Update • NEF I – Strong portfolio performance – Impact of Spanish regulation on solar projects • NEF II – Investments and commitments now 60% – On‐shore wind acquisitions in France, Poland and first investment in Finland – Sale of first asset at attractive profit – Strong investment p
Slide 18: Distribution Strategy – Institutional Quality Global Platform
Distribution Strategy – Institutional Quality Global Platform UK • IEM plc ‐ strong performance, continuation vote passed US • Developing new relationships • Groundwork since 2007 – Institutions • PaxWorld Global – Family offices Environmental Markets • Old Mutual Ethical Fund: grown from US$49m to
Slide 19: Raising Profile and Assets in North America
Raising Profile and Assets in North America AUM (£m) 80 Significant growth in US AUM over 3 years 70 60 50 40 30 20 10 0 19 All data as at 30 September 2013 in GBP
Slide 20: Final Results: Financial Highlights (1)
Final Results: Financial Highlights (1) Revenues Operating costs Operating earnings (£m) (£m) (£m) 2013 18.5 Listed Equity 2013 4.3 1.3 2013 52.9% 23.5% 14.1 Performance Staff costs (% of Effect of Listed 0.0 revenue) Equity Flows Other costs (% of Private Equity FX 2012 4.6 (0.7) 2012 51.2% 24.3% 1
Slide 21: Final Results: Financial Highlights (2)
Final Results: Financial Highlights (2) Investments¹ (£m) Cash reserves (£m) Cash reserves analysis (£m) Cash as at 30 Sept 2013 16.5 16.5 30 Sept 2013 30 Sept 2013 6.2 2.7 8.9 Investment hedges (1.0) Short‐term and treasury income (2.8) net liabilities Working capital (0.7) Mark to Risk buffer (3.9
Slide 22: Final Results: Financial Highlights (3)
Final Results: Financial Highlights (3) Diluted adjusted* EPS (p) Dividend (p) 2013 2.77 2013 0.90* Effect of share buy 2012 0.75 0.16 backs 2011 0.70 Tax and other EIA effects 0.37 2010 0.60 Decrease in PBT excl (0.40) EIA charges 2009 0.40 2012 2.64 2008 0.35 * Excluding share based payment charge
Slide 23: Valuation Indicators
Valuation Indicators Liquid Assets (£m) Shares reconciliation* (m) Diluted shares 117.5 2013 9.8 6.2 16.0 ESOP Dilution (currently out 0.0 of money) Basic shares 117.5 2012 10.9 3.1 14.0 Share buy 10.3 backs Shares in issue 127.7 Available cash Liquid Seed investments • Liquid Assets represent 13‐14
Slide 24: Outlook
Outlook Attractive prospects for target markets to Active investment management ideal for sustain “superior growth” exploiting inefficient prices • Major overhaul underway in energy policies • Rapidly changing market drivers worldwide • Expert team can interpret technology and • Demographics, weak a
Slide 25: Appendix
25 Appendix IMPAX)
Slide 26: Income Statement
Income Statement Year Year ended ended 2013 2012 £'000 £'000 Revenue 18,463 18,621 Bonus Pool (3,558) (3,611) Other operating costs (10,566) (10,457) Operating costs (14,124) (14,068) Operating earnings 4,339 4,553 Share‐based payment charge for EIA extension scheme* (280) (7,757) Other charges rela
Slide 27: Balance Sheet
Balance Sheet 30 Sep 2013 30 Sep 2012 £'000 £'000 Goodwill and intangibles 1,724 1,775 Other non‐current assets 473 720 2,197 2,495 Cash and cash equivalents 16,553 19,671 Current asset investments 9,336 8,710 Other current assets 3,509 2,998 Total assets 31,595 33,874 Current liabilities 6,999 10,0
Slide 28: Impax Equity Interests
Impax Equity Interests IPX ordinary shares Employee Incentive Schemes (Total 127.7m) (%) BNP Paribas Impax Share Strike price Exercise Period Options Investment Partners Option Scheme outstanding 25.8% 25.2% Directors & staff* FY11 ESOP 49.6p 1 Jan 2015 ‐ 31 Dec 2017 4,780,000 FY12 ESOP 37.6p 1 Jan
Slide 29: Impax Seed Investments
Impax Seed Investments Investments by theme: Theme Principal funds / Investments* % of Initial Comments Investee (£m) Fund Investment AUM Date Specialists Impax Global Resource 3.9 35% Nov‐11 Withdrawal commenced Oct 2013: $1m Optimization Fund Food & Agriculture Impax Food and 2.2 80% Dec‐12 1 year
Slide 30: Competitors
Competitors Listed equity • 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 and Asia Private equity • Esta
Slide 31: Extensive Expertise
Extensive Expertise Keith Falconer Ian Simm Charlie Ridge • Chairman since • Chief Executive • CFO 2004 • 24 years’ • 26 years’ • 34 years’ experience experience experience Bruce Peter Ominder David Ken Kaye Jenkyn‐Jones Rossbach Dhillon Richardson Locklin Forrest • MD, Listed • MD, Private • Head o
Slide 32: Sources (Slide 9)
Sources (Slide 9) 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 33: 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 Conduct Authority). This document is solely for the use of professionals, defined as Eligible Counterparties or Professional
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