Invesco Ltd · NYSE:IVZ
Invesco — Q3 2014 Earnings Presentation
45 slides from Invesco's earnings presentation, Oct 30, 2014
Slide 1: Invesco third quarter 2014 results
Invesco third quarter 2014 results Martin L. Flanagan President and Chief Executive Officer Loren M. Starr Chief Financial Officer October 30, 2014
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 Third quarter overview Investment performance and flows Financial results Questions Appendix 2
Slide 4: Third quarter overview
Third quarter overview Strong investment performance contributed to solid operating results In spite of market volatility, maintained strong, long-term investment performance – 81% of actively managed assets ahead of peers on a 3- and 5-year basis. Strong investment performance and the comprehen
Slide 5: Summary of third quarter 2014 results
Summary of third quarter 2014 results September 30,2014 AUM of $789.6 billion versus $802.4 billion at Assets under June 30, 2014 management Average AUM was $801.7 billion versus $790.1 billion for the second quarter Total net inflows of $2.0 billion Flows Long-term net inflows of $6.0 billi
Slide 6: Discussion topics
Discussion topics Third quarter overview Investment performance and flows Financial results Questions Appendix 5
Slide 7: Investment performance – overview
Investment performance – overview Strong, long-term investment performance in spite of market volatility Percent of actively managed assets in top half of peer group* 1-Year 3-Year 5-Year 76% 81% 81% 19% 19% 24% Assets top half of peer group Assets bottom half of peer group Percent of actively manag
Slide 8: Investment performance – highlights
Investment performance – highlights Among the firm’s strongest investment performance historically U.S. Retail U.K. Retail Cross Border Retail 4% 19% 22% 18% 30% 43% 58% 69% 90% 96% 81% 78% 82% 70% 57% 42% 31% 10% 2014 2009 2004 2014 2009 2004 2014 2009 2004 Percent of AUM ranked 4 or 5 stars by Mor
Slide 9: Quarterly long-term flows
Quarterly long-term flows Strong global flows driven by active capabilities Quarterly long-term flows ($ billions) Total Active Passive 13.5 50.2 41.6 47.6 11.8 45.8 36.1 36.2 44.4 41.8 42.5 44.4 34.1 37.2 32.6 33.1 34.4 8.7 8.6 8.6 8.2 27.7 6.4 6.7 6.4 14.3 3.3 7.9 6.5 6.0 6.0 1.5 5.0 4.8 1.3 0.7 1
Slide 10: Quarterly long-term flows
Quarterly long-term flows Strong global flows across all channels Quarterly long-term flows ($ billions) Retail(a) Institutional(b) 39.6 36.2 37.7 35.8 36.3 35.5 34.8 26.9 11.4 10.0 10.6 9.6 7.5 10.3 6.7 6.3 6.2 6.5 7.6 4.9 4.8 4.0 2.1 1.2 0.6 1.3 1.3 -0.3 -8.2 -1.5 -1.1 -3.5 -4.9 -24.8 -25.9 -29.0
Slide 11: Third quarter highlights
Third quarter highlights Strong momentum across our global business Americas US Retail gross flows up 9% from prior quarter to $17.7 billion. Flows in US driven by international growth equities, US value equities, high-yield municipal, diversified dividend and UITs. Redemption rates for US retail
Slide 12: Third quarter highlights
Third quarter highlights Strong momentum across our global business Asia-Pacific Average AUM for the region increased by 6% during the quarter, from $55 billion to $58.4 billion, driven mainly by strong overall long-term flows. Continued strong net inflows in the Shinko US REIT Fund ($840 millio
Slide 13: EMEA AUM lower in 3Q due to markets and FX
EMEA AUM lower in 3Q due to markets and FX Thoughtfully managed transition mitigates impact to the business Ending AUM 3Q 2014 2Q 2014 ($ billions) Invesco Ltd. 789.6 802.4 Invesco EMEA 137.4 170.8 139.3 176.1 33.4 36.8 UK Equity Income AUM EMEA Ex-UK Equity Income AUM 3Q14 LT Net Flows 2Q14 LT Net
Slide 14: Discussion topics
Discussion topics Third quarter overview Investment performance and flows Financial results Questions Appendix 13
Slide 15: Total assets under management – 3Q14 vs. 2Q14
Total assets under management – 3Q14 vs. 2Q14 ($ billions) 3Q-14 2Q-14 % Change Beginning Assets $802.4 $787.3 1.9% Long-Term Inflows 44.4 42.5 4.5% Long-Term Outflows (38.4) (49.4) (22.3)% Long-Term Net flows 6.0 (6.9) N/A Net flows in Invesco PowerShares QQQ (3.2) (3.0) 6.7% Net flows in Inst. Mon
Slide 16: Non-GAAP operating results – 3Q14 vs. 2Q14
Non-GAAP operating results – 3Q14 vs. 2Q14 ($ millions) 3Q-14 2Q-14 % Change Adjusted Revenues Investment Management Fees 1,071 1,055 1.6% Service and Distribution Fees 222 215 3.4% Performance Fees 10 7 41.1% Other 35 39 (11.3)% Third-Party Distribution, Service and Advisory Expenses (424) (414) 2.
Slide 17: Third quarter overview
Third quarter overview Strong investment performance contributed to solid operating results In spite of market volatility, maintained strong, long-term investment performance – 81% of actively managed assets ahead of peers on a 3- and 5-year basis. Strong investment performance and the comprehen
Slide 18: Appendix
Discussion topics Third quarter overview Investment performance and flows Financial results Questions Appendix Appendix 17
Slide 19: Discussion topics
Discussion topics Third quarter overview Investment performance and flows Financial results Questions Appendix 18
Slide 20: 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% 98% 82% 7% 80% 24% 68% 3% 82% 55% 57% 54% 54% 48% 49% 45% 72% 10% 45% 14% 51% 32% 50% 26% 24% 28% 30% 25% 23% 1
Slide 21: 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% 96% 99% 91% 6% 83% 50% 72% 64% 65% 15% 72% 21% 22% 97% 92% 95% 39% 54% 49% 47
Slide 22: 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 4% 12% 67% 13% 67% 23% 33% 49% 9% 10% 7% 6% 1-Yr 1-Yr 1-Yr ($ billions) Change ($ billions) Change ($ billions) Change U.S. $532.1 5.9% Retail $532.2 8.2% Equity $386.
Slide 23: Non-GAAP operating results – quarterly
Non-GAAP operating results – quarterly ($ millions) 3Q-14 2Q-14 % Change* 1Q-14 4Q-13 3Q-13 2Q-13 1Q-13 4Q-12 Investment Management Fees 1,071 1,055 1.6% 989 983 938 905 863 836 Service and Distribution Fees 222 215 3.4% 239 230 221 216 206 200 Performance Fees 10 7 41.1% 34 11 9 9 39 4 Other 35 39
Slide 24: US GAAP operating results – quarterly
US GAAP operating results – quarterly ($ millions) 3Q-14 2Q-14 % Change* 1Q-14 4Q-13 3Q-13 2Q-13 1Q-13 4Q-12 Investment Management Fees 1,047 1,032 1.5% 965 955 914 886 845 818 Service and Distribution Fees 222 215 3.4% 239 230 221 216 206 200 Performance Fees 8 5 64.0% 31 9 5 6 36 2 Other 33 38 (12
Slide 25: Total assets under management – quarterly
Total assets under management – quarterly ($ billions) 3Q-14 2Q-14 % Change 1Q-14 4Q-13 3Q-13 Beginning Assets $802.4 $787.3 1.9% $778.7 $745.5 $705.6 Long-Term Inflows 44.4 42.5 4.5% 50.2 45.8 41.8 Long-Term Outflows (38.4) (49.4) (22.3)% (43.7) (44.8) (36.8) Long-Term Net flows 6.0 (6.9) N/A 6.5 1
Slide 26: Total assets under management – by asset class
Total assets under management – by asset class Fixed Money ($ billions) Total Equity Income Balanced Market Alternative March 31, 2014 $787.3 $388.0 $177.0 $54.6 $76.1 $91.6 Long-Term Inflows 42.5 21.4 8.4 4.3 0.6 7.8 Long-Term Outflows (49.4) (29.3) (6.2) (8.4) (0.7) (4.8) Long-Term Net flows (6.9)
Slide 27: Total assets under management – by asset class
Total assets under management – by asset class Fixed Money ($ billions) Total Equity Income Balanced Market Alternative September 30, 2013 $745.5 $353.2 $172.4 $53.5 $81.1 $85.3 Long-Term Inflows 45.8 26.2 7.2 3.4 0.8 8.2 Long-Term Outflows (44.8) (24.7) (8.9) (4.6) (0.9) (5.7) Long-Term Net flows 1
Slide 28: Total assets under management – by channel
Total assets under management – by channel ($ billions) Total Retail Institutional March 31, 2014 $787.3 $534.6 $252.7 Long-Term Inflows 42.5 36.3 6.2 Long-Term Outflows (49.4) (44.5) (4.9) Long-Term Net flows (6.9) (8.2) 1.3 Net flows in Invesco PowerShares QQQ (3.0) (3.0) - Net flows in Inst. Mone
Slide 29: Total assets under management – by channel
Total assets under management – by channel ($ billions) Total Retail Institutional September 30, 2013 $745.5 $492.0 $253.5 Long-Term Inflows 45.8 35.8 10.0 Long-Term Outflows (44.8) (36.1) (8.7) Long-Term Net flows 1.0 (0.3) 1.3 Net flows in Invesco PowerShares QQQ 2.6 2.6 - Net flows in Inst. Money
Slide 30: Total assets under management – by client domicile
Total assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Europe Asia March 31, 2014 $787.3 $526.1 $27.1 $115.9 $63.4 $54.8 Long-Term Inflows 42.5 19.7 0.9 6.1 10.4 5.4 Long-Term Outflows (49.4) (19.5) (1.1) (19.9) (5.3) (3.6) Long-Term Net flows (6.9) 0.2 (0
Slide 31: Total assets under management – by client domicile
Total assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Europe Asia September 30, 2013 $745.5 $502.5 $26.4 $113.1 $51.6 $51.9 Long-Term Inflows 45.8 23.3 0.9 4.2 9.3 8.1 Long-Term Outflows (44.8) (24.5) (1.1) (8.4) (5.9) (4.9) Long-Term Net flows 1.0 (1.2)
Slide 32: Passive assets under management – by asset class
Passive assets under management – by asset class Fixed Money ($ billions) Total Equity Income Balanced Market Alternative March 31, 2014 $142.9 $87.0 $40.9 - - $15.0 Long-Term Inflows 6.4 4.3 1.4 - - 0.7 Long-Term Outflows (5.3) (3.6) (0.6) - - (1.1) Long-Term Net flows 1.1 0.7 0.8 - - (0.4) Net flo
Slide 33: Passive assets under management – by asset class
Passive assets under management – by asset class Fixed Money ($ billions) Total Equity Income Balanced Market Alternative September 30, 2013 $129.6 $74.1 $39.6 - - $15.9 Long-Term Inflows 8.6 6.3 1.7 - - 0.6 Long-Term Outflows (7.9) (4.5) (1.6) - - (1.8) Long-Term Net flows 0.7 1.8 0.1 - - (1.2) Net
Slide 34: Passive assets under management – by channel
Passive assets under management – by channel ($ billions) Total Retail Institutional March 31, 2014 $142.9 $121.5 $21.4 Long-Term Inflows 6.4 5.6 0.8 Long-Term Outflows (5.3) (5.0) (0.3) Long-Term Net flows 1.1 0.6 0.5 Net flows in Invesco PowerShares QQQ (3.0) (3.0) - Net flows in Inst. Money Marke
Slide 35: Passive assets under management – by channel
Passive assets under management – by channel ($ billions) Total Retail Institutional September 30, 2013 $129.6 $108.3 $21.3 Long-Term Inflows 8.6 7.6 1.0 Long-Term Outflows (7.9) (7.1) (0.8) Long-Term Net flows 0.7 0.5 0.2 Net flows in Invesco PowerShares QQQ 2.6 2.6 - Net flows in Inst. Money Marke
Slide 36: Passive assets under management – by client domicile
Passive assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Europe Asia March 31, 2014 $142.9 $138.5 $0.1 - $1.8 $2.5 Long-Term Inflows 6.4 6.3 - - 0.1 - Long-Term Outflows (5.3) (4.8) - - (0.2) (0.3) Long-Term Net flows 1.1 1.5 - - (0.1) (0.3) Net flows in I
Slide 37: Passive assets under management – by client domicile
Passive assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Europe Asia September 30, 2013 $129.6 $125.4 $0.1 - $1.4 $2.7 Long-Term Inflows 8.6 8.4 - - 0.2 - Long-Term Outflows (7.9) (7.9) - - - - Long-Term Net flows 0.7 0.5 - - 0.2 - Net flows in Invesco Pow
Slide 38: Reconciliation of US GAAP results to non-GAAP results – three months ended September 30, 2014
Reconciliation of US GAAP results to non-GAAP results – three months ended September 30, 2014 Please refer to pages 19-22 in the 3Q 2014 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party distribution, Acquisition Market appreciation / Consolidate
Slide 39: Reconciliation of US GAAP results to non-GAAP results – three months ended June 30, 2014
Reconciliation of US GAAP results to non-GAAP results – three months ended June 30, 2014 Please refer to pages 19-22 in the 2Q 2014 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party distribution, Acquisition Market appreciation / Consolidated Non
Slide 40: Reconciliation of US GAAP results to non-GAAP results – three months ended March 31, 2014
Reconciliation of US GAAP results to non-GAAP results – three months ended March 31, 2014 * Other: Please refer to pages 18-22 in the 1Q 2014 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party distribution, Acquisition Market appreciation / Consol
Slide 41: Reconciliation of US GAAP results to non-GAAP results – three months ended December 31, 2013
Reconciliation of US GAAP results to non-GAAP results – three months ended December 31, 2013 * Other: Please refer to pages 19-21 in the 4Q 2013 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party distribution, Acquisition Market appreciation / Con
Slide 42: Reconciliation of US GAAP results to non-GAAP results – three months ended September 30, 2013
Reconciliation of US GAAP results to non-GAAP results – three months ended September 30, 2013 * Other: Please refer to pages 19-21 in the 3Q 2013 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party distribution, Acquisition Market appreciation / Co
Slide 43: Reconciliation of US GAAP results to non-GAAP results – three months ended June 30, 2013
Reconciliation of US GAAP results to non-GAAP results – three months ended June 30, 2013 * Other: Please refer to pages 19-21 in the 2Q 2013 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party distribution, Acquisition Market appreciation / Consoli
Slide 44: Reconciliation of US GAAP results to non-GAAP results – 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*
Slide 45: Reconciliation of US GAAP results to non-GAAP results – 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 distribution, Acquisition Market appreciation / Con