Impax Asset Management Group Plc · LSE:IPX
Impax Asset Management — FY2016 Earnings Presentation
37 slides from Impax Asset Management's earnings presentation, December 2016
Slide 1: Results for year ended 30 September 2016
Impax Asset Management Group plc Results for year ended 30 September 2016 CLEAR INVESTMENT
Slide 2: Agenda
Agenda • Part 1: Introduction to the company • Part 2: Business update Ian Simm Chief Executive • Part 3: Financial update Charlie Ridge Chief Financial Officer CLEAR INVESTMENT 2
Slide 3: Part 1: Introduction to Impax Asset Management
Part 1: Introduction to Impax Asset Management CLEAR INVESTMENT 3
Slide 4: Impax Asset Management: summary
Impax Asset Management: summary Acknowledged global leader investing in high growth markets Business model designed to build shareholder value Excellent investment and corporate track record 2016 UNPRI assessment: Strong catalysts for 2017 and the longer term A rating: Policies, Processes, Practices
Slide 5: Solid track record of growth
Solid track record of growth AUM at FYE (£m) 1998 15 1999 20 Phase 1: 2000 39 Establishing the business 2001 38 2002 55 2003 66 2004 69 2005 214 Phase 2: 2006 429 Scale up to critical mass 2007 982 2008 1099 2009 1265 2010 1823 Phase 3: 2011 1896 Consolidation & investment 2012 1828 2013 2197 2014 2
Slide 6: The rapidly changing landscape for investment managers
The rapidly changing landscape for investment managers MAINSTREAM TRENDS A FORMULA FOR WINNERS IMPAX WELL POSITIONED • Pressure on generalists “Specialist” approach P • Increasingly complex regulatory environment Differentiated strategies P • Growing fee pressure on generic products Diversified inco
Slide 7: Environmental Markets: highly attractive for an active manager
Environmental Markets: highly attractive for an active manager POWERFUL DRIVERS ENVIRONMENTAL MARKETS RAPIDLY EXPANDING Energy Energy Water Increasing population • Energy • Water Efficiency infrastructure/ • Alternative Technologies Rising living standards Energy • Pollution Control Infrastructure d
Slide 8: Rapidly expanding universe of under-researched stocks
Rapidly expanding universe of under-researched stocks RAPIDLY EXPANDING UNIVERSE PREVALENCE FOR MIS- LACK OF RESEARCH OF STOCKS1 PRICING # Analysts per stock 1,100 Technology innovation 21 Policy & regulation 10 Corporate activity 250 1999 2016 Environmental IEM MSCI ACWI MSCI ACWI Markets . 1”Speci
Slide 9: Assets under management and advice
Assets under management and advice1 2015 £2.8bn Renewable Energy Sustainable Property £22m Infrastructure £285m 2016 £4.5bn Listed Equity £4.2bn 1As at 30 September 2016. Assets under advice represent ~3% of total AUM. CLEAR INVESTMENT 9
Slide 10: Broad range of strategies with significant capacity
Broad range of strategies with significant capacity LISTED EQUITIES INCEPTION DATE AUM1 REAL ASSETS INCEPTION DATE AUM1 Impax New Energy Specialists Mar 2002 £1.4bn Investors LP 2005 £83m Established Leaders Mar 2008 £893m Impax New Energy 2010 £201m Investors II LP Water Jan 2009 £1.7bn Impax Clima
Slide 11: Part 2: Business highlights
Part 2: Business highlights CLEAR INVESTMENT 11
Slide 12: 2016 business update
2016 business update AUM1 increased 59% to new Record net inflows of £496m All listed equity strategies peak of £4.5bn Encouraging mandate pipeline outperformed MSCI ACWI First close of our third private Strong growth of North American Expansion of product offering for equity infrastructure fund at
Slide 13: Financial performance for the Period
Financial performance for the Period FINANCIAL PERFORMANCE 2016 2015 AUM at period end1 £4.5bn £2.8bn Revenue £21.1m £19.7m Operating earnings2 £4.2m £3.1m Profit/(loss) before tax £5.2m £5.1m Diluted earnings per share 3.62p 3.13p Shareholders’ equity £26.7m £25.9m Interim dividend per share 0.5p 0
Slide 14: Powerful catalysts for investment
Powerful catalysts for investment MOSCOW HEATWAVE 2010 QUEENSLAND FLOODS JAN 2011 UN CLIMATE CHANGE CONFERENCE POLLUTION VOLKSWAGEN EMISSIONS SCANDAL CHINA 13TH FIVE YEAR PLAN CLEAR INVESTMENT 14
Slide 15: Environmental Markets: Brexit, Trump and COP-22
Environmental Markets: Brexit, Trump and COP-22 Impax listed equity and private US has ratified the Paris Climate Defiant and optimistic mood at equity funds have limited UK Agreement COP-22: strong commitments exposure from China, India, Saudi Arabia Infrastructure spend likely to rise Domestic env
Slide 16: Our global distribution capabilities
Our global distribution capabilities • In house sales • Committed third-party distributors • Access to over 20 markets • Client base diversified by type and geography Impax offices CLEAR INVESTMENT 16
Slide 17: AUM growth in Europe and North America
AUM growth in Europe and North America Breakdown by client domicile (£m) Principal funds/partners 614 Impax Environmental Markets plc UK/Ireland Irish UCITS Platform 726 EMEA 1,647 BNP Paribas Investment Partners 2,774 ASN Bank Asia Pacific 53 BNP Paribas Investment Partners 67 DIAM Delaware private
Slide 18: AUM growth in North America
AUM growth in North America £ million 30 Sep 16 260 323 45 628 30 Sep 15 174 30 Sep 14 248 30 Sep 13 77 30 Sep 12 36 30 Sep 11 19 £- £100,000,000.00 £200,000,000.00 £300,000,000.00 £400,000,000.00 £500,000,000.00 £600,000,000.00 £700,000,000.00 Pax World Other US Clients Canadian Clients CLEAR INVES
Slide 19: Listed Equities
Listed Equities • Leaders: now available to UK investors • Specialists: strong global demand • Food & Agriculture: BNPP SMaRT Food reached AUM of £162m1 • Water: BNPP launched GBP share class of Aqua in response to UK investor demand • Global Opportunities: seeded, building track record and signific
Slide 20: Listed Equities: strong performance record
Listed Equities: strong performance record Percentage increase to 30 September 2016 152.9 131.1 117.6 98.7 67.1 55.3 50.5 45.1 44.6 45 41.2 30.6 Specialists Leaders Water MSCI ACWI 1 year 3 years 5 years Source: Factset. Gross cumulative performance in Sterling. CLEAR INVESTMENT 20
Slide 21: Breakdown of AUM increase
Breakdown of AUM increase LISTED EQUITY FUNDS (£m) WEIGHTED AVERAGE REVENUE MARGIN1 (bps) 30 September 30 September 2016 4,194 2016 2016 56.8 Market movement 716 Inflows 472 Outflows (198) 2015 61.7 31 31 March 2016 3,204 Market movement Market movement 414 Inflows 589 Outflows (288) 11October Octob
Slide 22: Real Assets
Real Assets Private Equity Infrastructure NEF ll: successful planned realisation of operating assets • Distributions to investors represent 116% of amounts paid in1 • 371 MW of operating assets sold and 60% of capital invested realised2 NEF III: first close • First close on 30 November at €149m • On
Slide 23: Part 3: Financial highlights
Part 3: Financial highlights CLEAR INVESTMENT 23
Slide 24: Financial highlights (1): Operating performance
Financial highlights (1) Operating performance REVENUE (£m) OPERATING COSTS (£m) OPERATING EARNINGS (£m) 2016 21.1 2016 12.6 4.3 16.9 2016 4.2 Private Private Equity Equity and (1.6) and Financing related Fees fees 23% Listed Listed Equity Equity 2.4 flowsand Flows and 3.0 performance Performance 20
Slide 25: Financial highlights (2): Long term trends
Financial highlights (2) Long term trends AUM (£bn) AVERAGE NUMBER OF EMPLOYEES 2016 4.5 69 2016 137% 44% 2011 1.9 2011 48 TOTAL OPERATING COSTS PER EMPLOYEE (£’000) NON STAFF COSTS (£m) 2016 245 2016 4.3 -20% -4% 2011 306 2011 4.5 CLEAR INVESTMENT 25
Slide 26: Financial highlights (3): Earnings
Financial highlights (3) Earnings DILUTED EPS (p) DIVIDEND (p) 2016 2016 0.5 1.6 2.11 3.62 2015 0.4 1.2 1.6 0.5 Effect of share buy 0.02 backand back anddilution dilution 2014 0.3 1.1 1.4 Fair Fairvalue valueof 2013 0.9 investments 0.2 Interim investments 2012 0.75 Final IncreaseIncreased operating
Slide 27: Financial highlights (4): Cash and investments
Financial highlights (4) Cash and investments INVESTMENTS1 (£m) CASH RESERVES (£m) CASH RESERVES ANALYSIS (£m) 302016 Sept 302016 30 Sept Sept 30 Sept 30 Sept 1.6 11.0 30 Sept 15.4 15.4 9.4 2016 2016 2016 2016 Risk buffer buffer (4.9) Dividends and share Dividends and Fairvalue Fair value (3.8) 2.9
Slide 28: Financial highlights (5): Balance sheet
Financial highlights (5) Balance sheet CURRENT ASSETS (£m) BASIC SHARES (m) 2016 10.5 11.0 21.5 2016 111.8 2015 2015 115.1 14.4 7.4 21.8 Available cash Investments • “Available Assets” per share around 19.2p • 3.6m shares bought back during the Period • 12.9m ESOP awards and 4.9m RSS granted and une
Slide 29: Our ownership structure
Our ownership structure BNP Paribas Investment Partners 25% Free float 37% Significant employee ownership 38%1 • Total IPX ordinary shares 127.7m • Employee and Trust holdings 48.5m (38%) • 17.8m ESOP and RSS awards granted and unexercised (equivalent to 14% IPX shares) of which 6.1m have vested and
Slide 30: Our remuneration policy aligns incentives
Our remuneration policy aligns incentives • Policy of median salary and profit-related bonus variable performance-related reward Profit related pay (PRP) pool typically capped at 45% of EBIT before bonus • Restricted Share Scheme launched 2014 aligns interest of staff and shareholders full
Slide 31: Milestones/Prospects
Milestones/Prospects • High growth global equities Attractive investment skills/strategies • An acknowledged leader internationally • Strong investment performance Potential for further • Stable, expert team scaling • 4 scalable strategies at critical mass; 3 more to be scaled • Infrastructure/team
Slide 32: Important information
Important information This document has been prepared by Impax Asset Management Group plc and approved by Impax Asset Management Limited and Impax Asset Management (AIFM) Limited (“Impax”, authorised and regulated by the Financial Conduct Authority). Both companies are wholly owned subsidiaries of I
Slide 33: Appendix
Appendix CLEAR INVESTMENT 33
Slide 34: Appendix: Balance sheet
Appendix Balance sheet AVALIABLE ASSETS & SHARE ANALYSIS (£m) SHARE ANALYSIS (m) Fully 21.4p Full diluted diluted "Available “Available 27.3 Shares in issue 127.7 Assets" assets” Net Netdilution of of dilution 13.9 Net premium Net premium on fullon full option remaining options remaining options 3.3
Slide 35: Income statement
Income statement Year Year ended ended 2016 2015 £'000 £'000 Revenue 21,067 19,726 Operating costs (16,915) (16,616) Operating earnings 4,152 3,110 Operating margin 20% 16% Credits/(charges) related to legacy long term incentive schemes 27 1,285 Fair value (losses)/gains 989 615 Change in third part
Slide 36: Balance sheet
Balance sheet 30 Sep 2016 30 Sep 2015 £'000 £'000 Goodwill and intangibles 1,742 1,754 Other non-current assets 122 201 1,864 1,955 Cash and cash equivalents 15,695 19,517 Current asset investments 12,811 7,419 Other current assets 7,309 4,980 Total assets 37,679 33,871 Current liabilities 9,998 5,5
Slide 37: Impax investments
Impax investments Principal Investments¹ Theme % of Fund AUM Comments funds/investee (£m) Impax Food and Food and Agriculture 3.0 95% Agriculture Fund Impax Environmental Leaders 4.0 67% Leaders (Ireland) fund Impax Global Equity Global equities 2.4 99% Opportunities Fund Impax New Energy Commitment
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