Igm Financial Inc. · TSX:IGM
Igm Financial — Q1 2024 Earnings Presentation
48 slides from Igm Financial's earnings presentation, May 3, 2024
Slide 1: IGM Financial Q1, 2024 Results
IGM Financial Q1, 2024 Results May 3rd, 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 three months ended March 31, 2024 consisted of: • ($1.1) million reflecting the Company’s proportionate share of items Lifeco excludes from its base earnings (Lifeco other items). • Effective in the first quarter
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: James O’Sullivan
James O’Sullivan President and CEO IGM Financial 7
Slide 8: IGM Financial Q1, 2024 highlights
IGM Financial Q1, 2024 highlights First quarter operational highlights Additional highlights Reported EPS • $146MM returned to $0.94 • Record high first quarter adj. EPS1 of $0.94, +8.0% vs. Q1/23 • Q1/23 Reported EPS included a $174.8MM after-tax gain on shareholders during the first quarter, inclu
Slide 9: Financial market and client investment returns
Financial market and client investment returns IGM Client Return Index1 Investment Performance Q2/24 2024 YTD 2.8 Q4/23 2023 Q1/24 at April 30 at April 30 IGM Client Investment Returns 2,3 6.7% 9.9% 5.7% 2.6 Equity Markets: Canada (S&P / TSX Composite) 8.1% 11.8% 6.6% (1.8%) 4.7% 2.4 U.S. (S&P 500)
Slide 10: Industry operating environment
Industry operating environment First Quarter Industry Long-term Net Sales ($B) Total Industry Industry Asset Manager Peers Industry Asset Manager Peers Net Sales 40.9 Categories Q1/23 Q1/24 $ Change 23.8 16.9 19.1 16.2 Balanced (3.5) (3.6) (0.1) 10.0 13.0 4.7 Foreign Equity (1.7) 0.4 2.1 5.4 4.4 3.5
Slide 11: IGM Financial Q1, 2024 results
IGM Financial Q1, 2024 results Net Earnings Adj. Net Earnings2 ($MM) ($MM) Total AUM&A1 ($B) 224 Daily AUM&A Annual Average AUM&A Quarterly Average AUM&A 206 381 260 223 250 240 230 220 Net Earnings Adj. Net Earnings 210 Per Share ($) Per Share2 ($) 200 0.94 1.60 0.87 190 180 0.94 170 160 2022 2023
Slide 12: Adjusted net earnings available to common shareholders by segment ($MM)
Adjusted net earnings available to common shareholders1 by segment ($MM) Wealth Management2 Asset Management Corporate & Other3 IGM Consolidated4 +9% 224.5 Year-over-year change includes Year-over-year change includes impact of the partial sale of 206.3 the impact of the additional IGM’s equity inte
Slide 13: First quarter ending AUM&A (CAD $B)
First quarter ending AUM&A (CAD $B) Consolidated AUM&A incl. SI1,4 Wealth Management Asset Management 3 2 2 2 2 391.4 422.3 +21% 349.0 Sub-advised AUM to Wealth Management: 349.7 Q1/23 Q1/24 $79.5B (Q1/23 $76.8B) Q1/24 Additional AUM&A not 3 203.7 included in Consolidated 193.8 180.7 AUM&A incl. SI
Slide 14: Wealth Management
WEALTH MANAGEMENT Damon Murchison President & CEO IG Wealth Management 14
Slide 15: Wealth management Q1, 2024 highlights
Wealth management Q1, 2024 highlights IG Wealth ending AUM&A of $128.0B increased 10% year-over- year • AUM&A grew 5.6% during the quarter, driven by strong client returns of 5.9% • Client asset growth of 9% during the quarter5 and 27% year-over- year IG Wealth Q1 gross inflows of $3.7B represent an
Slide 16: IG Wealth Management net flows
1 Excludes January 2024 IG defined benefit pension plan IG Wealth Management net flows redemption of $177MM. These pension plan assets were re- allocated into an SMA account managed by Mackenzie. IG Wealth Management First Quarter Gross and IG Wealth Management Net Flows2 Net Flows1 ($MM) (Last twel
Slide 17: IG Wealth Management Q1, 2024 operating results
IG Wealth Management Q1, 2024 operating results Gross Inflows Gross Outflows Rate Asset Under Advisement Q1/24 Highlights ($MM) (Quarterly annualized1) ($B) Cash, GICs, HISAs ▪ Gross inflows of $3.7B 3rd party 3,663 3,699 IGM Solutions (AUM) ▪ Total net flows of $223MM, 121.2 128.0 11.2% 11.2% 115.9
Slide 18: Strong high-net-worth & mass affluent client acquisition
Strong high-net-worth & mass affluent client acquisition Gross Flows from Newly Acquired Clients (Q1, $MM) Gross Flows from New Acquired Clients (LTM, $MM) By client assets brought to IG Wealth By client assets brought to IG Wealth <$100K $100-250K $250-1,000K >$1,000K Growth >$250K <$100K 5-year 1-
Slide 19: Strong advisor productivity
Strong advisor productivity Gross Inflows per Advisor Recruit Gross Inflows per Advisor Practice with <4 years experience ($MM) with >4 years experience1 ($MM) Productivity in-focus 0.76 0.70 0.71 • Scaling our segmented advice model to 1.98 1.97 help provide consistent services to all 0.59 1.84 cli
Slide 20: Insurance business delivering strong growth
Insurance business delivering strong growth Investing in advisor and client experience, driving productivity and expanding revenue opportunities Q1 First Year Commissions (FYC) Investment focus ($MM) (Investor Day 2023) 5.7 Enhance carrier partnerships and During April, IG Wealth announced a 4.2 o
Slide 21: 2023 earned media – #1 wealth brand in Canada
2023 earned media – #1 wealth brand in Canada1 Increasing our presence, communicating our difference Share of voice among Canadian banks and Most visible industry spokespeople independent wealth brands (Top 10) IG Wealth spokespeople #4 #5 #2 #2 #1 Rank Others Ranked IG Wealth 2 spokespeople represe
Slide 22: Rockefeller Q1, 2024 update
Rockefeller Q1, 2024 update Q1 2024 highlights LTM Client Asset1 Growth Team and Private Advisor Growth (US$ B) Advisor Teams Advisors 400 1 ▪ Q1/24 organic growth drove 3 160 US$1.3B in client assets; $3.3B 2 350 140 in growth since Q1/23 300 120 2 Strong inorganic growth of 250 Advisor Teams ▪ 1 1
Slide 23: Wealthsimple Q1, 2024 update
Wealthsimple Q1, 2024 update Q1 2024 Highlights AUA by Quarter ($B) Client Count by Quarter1 (000s) 38.7 1 2,360 2 1▪ Wealthsimple’s AUA grew to 2,169 2,255 2,228 2,116 $38.7B, up 25% sequentially 1,965 2,002 2,031 1,910 and 82% year-over-year 31.0 ▪ Record AUA growth of $7.7B 23.4 24.9 during the q
Slide 24: Asset Management
ASSET MANAGEMENT Luke Gould President & CEO Mackenzie Investments 24
Slide 25: Asset management Q1, 2024 highlights
Asset management Q1, 2024 highlights Mackenzie ending AUM of $203.7B increased 5% year- over-year • AUM grew 4.1% during the quarter, driven by strong client returns of 5.5% • ChinaAMC investment fund AUM growth of 14% during the quarter and 26% year-over-year, exceeding Investment fund net redempti
Slide 26: Mackenzie Investments net flows
Mackenzie Investments net flows Mackenzie First Quarter Adjusted Investment Mackenzie Adjusted Investment Fund Net Flows1 ($MM) Fund Flows1 ($MM) (Last twelve month trailing, as at March 31, 2024) MF Gross Sales MF Redemptions MF Net Sales ETF Net Flows Total Retail 8,000 4,031 3,283 6,000 2,921 2,5
Slide 27: Mackenzie Q1, 2024 operating results
Mackenzie Q1, 2024 operating results Retail Mutual Fund Gross Sales Morningstar Star Ratings1 17 of top 20 rated mutual Q1/24 Highlights ($MM) (% Proportion of Assets) funds 4/5 star (series F) Mackenzie – Mar. 2024 ▪ Total net redemptions were Mackenzie – Dec. 2023 1,954 1,885 51% 51% $174MM Indust
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 ChinaAMC, Fixed Multi-Asset Cundill American Ivy Growth Bluewater Resources Greenchip Quantitative Equity & Putnam, Inc
Slide 29: Mackenzie sustainability in focus
Mackenzie sustainability in focus During Q1 Mackenzie was awarded lead sponsorship of the 2024 UN PRI in Person and released their 3 rd annual Sustainable Investing Report Announced in January 2024, preparations for the world’s pre-eminent responsible investing conference are underway, with 2,000 de
Slide 30: Chinese investment fund industry AUM and net flows
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 March 31, 2024) QoQ 1-year Ending AUM1 CAD/RMB = 5.3102 (RMB Trillions) 28.9 6% 9% 26.4 27.4
Slide 31: A leading Chinese asset manager – total AUM continuity
A leading Chinese asset manager – total AUM continuity Growth ChinaAMC Ending AUM (RMB billions) QoQ 1yr Other (primarily institutional) Money-market funds Long-term investment funds 2,089 15% 18% 1,772 1,802 1,826 1,824 1,740 1,733 1,722 1,607 1,662 1,599 14% 26% 1,536 1,581 1,507 1,461 1,253 1,301
Slide 32: Capital Partners
Capital Partners Highlights Northleaf AUM History1 Northleaf LTM AUM Continuity1 $Billions $Billions ▪ Strong fundraisings of $0.7B for the quarter ended March 31, 2024 26.6 27.3 (0.9) ▪ LTM fundraising of $3.4B and AUM 24.1 growth of 10% 19.5 ▪ Northleaf AUM has grown at a 21% compound annual growt
Slide 33: Keith Potter
Keith Potter Executive Vice-President & CFO IGM Financial 33
Slide 34: IGM Financial Q1, 2024 financial highlights
IGM Financial Q1, 2024 financial highlights Reported EPS $0.94 • Record high first quarter adjusted EPS1 of $0.94, up 8.0% year-over-year -41.3% vs Q1/23 • Q1/23 Reported EPS included a $174.8MM after-tax gain on sale of Lifeco shares Adjusted EPS1 • Adjusted EPS1 now includes IGM Financial’s share
Slide 35: Total assets under management & advisement
Total assets under management & advisement IGM Assets Under Management & Advisement1 Change in IGM AUM&A1 ($B) ($B) Q1/23 Q2/23 Q3/23 Q4/23 Q1/24 LTM Daily AUM&A Annual Average AUM&A Quarterly Average AUM&A Opening AUM&A excluding sub-advisory to Canada Life 177.2 185.5 186.8 181.5 190.5 185.5 260 I
Slide 36: IGM Financial consolidated profitability
IGM Financial consolidated profitability $ Millions (unless otherwise noted): Change QoQ Change YoY IGM Financial Consolidated Q1/23 Q4/23 Q1/24 $ % $ % Days in the period 90 92 91 (1.1%) 1.1% Average AUM & AUA ($ Billions) 1▪ Higher AUM&A, up 5.5% sequentially and 5.8% Wealth Management AUM & AUA 1
Slide 37: 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)1 124.0 114.7 116.1 116.9 117.1 102.8 102.2 102.1 102.1 14.0 100.3 Other AUA 11.3 11.8 12.2 12.9 Advisory fees 2 1
Slide 38: IG Wealth Management profitability
IG Wealth Management profitability 1▪ Advisory and product & program fee revenue up $ Millions (unless otherwise noted): Change QoQ Change YoY IG Wealth Management Q1/23 Q4/23 Q1/24 $ % $ % Days in the period Average assets under advisement ($B) 90 114.7 117.1 92 91 124.0 6.9 (1.1%) 5.9% 9.3 1.1% 8.
Slide 39: Mackenzie – key profitability drivers
Mackenzie – key profitability drivers Average AUM ($B), Net Asset Management Fee Rate Net Asset Management Fee Rates1 (bps)1 (as bps of respective AUM) Sub-advisory and 198.9 AUM to Wealth 192.0 193.1 191.9 189.3 81.1 Third-party Management 80.8 80.9 80.4 79.4 Excluding Canada Life Third Party AUM 7
Slide 40: Mackenzie profitability
Mackenzie profitability $ Millions (unless otherwise noted): Change QoQ Change YoY 1▪ Net asset management fees up 2.8% sequentially Mackenzie Investments Q1/23 Q4/23 Q1/24 $ % $ % Days in the period 90 92 91 (1.1%) 1.1% and 3.0% year-over-year, driven by strong asset Average assets under management
Slide 41: ChinaAMC – AUM and earnings
ChinaAMC – AUM and earnings ChinaAMC Ending AUM1 IGM Share of ChinaAMC Earnings (RMB billions) (CAD millions) Other (primarily institutional) Additional share due to increased ownership Money-market funds Original 13.9% ownership 1-Year Long-term investment funds Growth 2,089 28.1 27.7 26.9 18% 24.6
Slide 42: Adjusted net earnings available to common shareholders by segment and company ($MM)
Adjusted net earnings available to common shareholders1 by segment and company ($MM) Wealth Asset Corporate IGM Management2 Management3 & Other2, 4 Consolidated5 Year-over-year change Year-over-year change includes impact of the includes the impact of partial sale of IGM’s +9% the additional equity
Slide 43: Summary: Segment breakdown
Summary: Segment breakdown Adj. Earnings by Segment Strategic Investments – Ownership and value Q1/23 Adj. Q1/24 Adj. YoY Ownership Accounting Q1/24 Net Q1/24 Value Assumption $ in millions Earnings1 Earnings1 Change Q1/23 | Q1/24 Basis Carrying Value Fair Value WEALTH MANAGEMENT2 IG $104.6 $117.2 1
Slide 44: Returning capital to shareholders with financial flexibility
Returning capital to shareholders with financial flexibility Return of Capital to Leverage Balanced approach to capital Shareholders (Debt/LTM EBITDA1) allocation: ($MM) Dividends Short-term financing Return of capital to shareholders: Share repurchases related to acquisition of a stake in Rockefell
Slide 45: Q&A
- Wealth Wealth Management Asset Management Financial Q&A This way to better > y,
Slide 46: Appendix
Wealth Management Asset Management This way to better > y,
Slide 47: Adjusted net earnings available to common shareholders by company ($MM)
Adjusted net earnings available to common shareholders by company ($MM) Adjusted Net Earnings Available to Common Shareholders1 843 5 886 2023 Analyst 466 Consensus2 432 2024 216 204 7 FVTOCI 94 94 89 90 3 14 14 8 (1) Figures in table may not add due to rounding 2024 Analyst UNALLOCATED Estimates2 O
Slide 48: IGM Financial Debt/EBITDA
IGM Financial Debt/EBITDA1 Total Debt ($MMs) Q1/23 Q2/23 Q3/23 Q4/23 Q1/24 Long-term Debt 2,100.0 2,400.0 2,400.0 2,400.0 2,400.0 Credit facility - 550.0 550.0 - - Total debt 2,100.0 2,950.0 2,950.0 2,400.0 2,400.0 EBITDA before sales commissions1 (LTM, ending) Q1/23 Q2/23 Q3/23 Q4/23 Q1/24 EBIT2 ($