IGM Financial Inc. · TSX:IGM
IGM Financial — Q1 2023 Earnings Presentation
48 slides from IGM Financial's earnings presentation, May 4, 2023
Slide 1: IGM Financial Q1, 2023 Results
IGM Financial Q1, 2023 Results May 4, 2023
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’s current expectations. Forward-looking statements are provided to assist the reader in und
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: 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 6: IGM Financial
IGM FINANCIAL JAMES O‘SULLIVAN PRESIDENT & CEO IGM FINANCIAL IGM FINANCIAL Q1, 2023 RESULTS
Slide 7: IGM Financial Q1, 2023 Highlights
IGM Financial Q1, 2023 Highlights 1 Reported EPS of $1.60; adjusted EPS of 87 cents1, 2nd best first quarter adjusted EPS on record • Reported EPS includes impact of gain on sale of Lifeco shares 2 Ending AUM&A of $260.4B, up 4.4% during the quarter 3 First quarter total net flows of $990MM (exclude
Slide 8: Financial Market and Client Investment Returns
Financial Market and Client Investment Returns IGM Client Return Index1 2.6 Investment Performance Q2/23 at 2023 YTD at 2.4 Q4/22 2022 Q1/23 Apr 30/23 Apr 30/23 IGM Client Investment Returns 2 5.4% (9.9%) 4.4% 1.4% 5.9% 2.2 Equity Markets: Canada (S&P / TSX Composite) 6.0% (5.8%) 4.6% 2.9% 7.6% 2.0
Slide 9: Industry Operating Environment
Industry Operating Environment First Quarter Industry Long-term Net Sales ($B) Total Industry Industry Asset Manager Peers 41.2 Categories Q1 2022 Q1 2023 $ Change 23.8 Balanced 2.7 (3.5) (6.2) 21.1 18.9 Foreign Equity 2.9 (1.6) (4.5) 16.9 16.3 10.0 13.0 Canadian Equity 0.3 (0.5) (0.8) 5.3 4.7 6.9 I
Slide 10: IGM Financial Q1, 2023 Results
IGM Financial Q1, 2023 Results Total AUM&A ($B) Net Earnings ($MM) Net Earnings Per Share ($) Daily AUM&A Daily AUM&A Ex Disc Ops Annual Average AUM&A Quarterly Average AUM&A 381 1.60 290 219 0.91 280 270 260 250 240 Q1/22 Q1/23 Q1/22 Q1/23 230 220 Adjusted Net Adjusted Net Earnings 210 Earnings1 ($
Slide 11: Adjusted Net Earnings by Segment and Company
Adjusted Net Earnings Available to Common Shareholders1 by Segment and Company ($MM) Wealth Wealth Management - Management Asset Management Strategic Investments & Other2 Discontinued Operations3 IGM Consolidated -6% 219.3 IPC 206.5 -11% 117.6 104.6 -7% 52.1 48.4 -33% +109% 30.7 4 25.3 +21% -26% 20.
Slide 12: First Quarter Ending AUM&A (CAD $B)
First Quarter Ending AUM&A (CAD $B) Wealth Wealth Management - Management Asset Management1 Discontinued Operations IGM Consolidated Strategic Investments 2 3 +11% 349 315 -3% 268 260 IPC IPC 0% -6% 116 125 117 116 +22% 32 31 25 20 Q1/22 Q1/23 Q1/22 Q1/23 Q1/22 Q1/23 Q1/22Q1/23 Q1/22 Q1/23 Q1/22 Q1/
Slide 13: First Quarter Net Flows ($MM)
First Quarter Net Flows ($MM) Wealth Wealth Management - Management Asset Management Discontinued Operations IGM Consolidated Strategic Investments 2 1 Institutional SMA IPC 2,466 1,466 2,733 990 1,062 873 794 IPC 504 1,300 98 313 170 160 579 98 72 (427) (427) Q1/22 Q1/23 Q1/22 Q1/23 Q1/22 Q1/23 Q1/
Slide 14: IGM is Focused on Bettering Lives for Tomorrow
IGM is Focused on Bettering Lives for Tomorrow IGM’s sustainability strategy Our sustainability strategy keeps us focused on what matters most to our business and our stakeholders, and seeks to accelerate positive change in areas where we – as wealth and asset managers – can make the greatest impact
Slide 15: IG Wealth Management
IG WEALTH MANAGEMENT DAMON MURCHISON PRESIDENT & CEO IG WEALTH MANAGEMENT IGM FINANCIAL Q1, 2023 RESULTS
Slide 16: IG Wealth Management Q1, 2023 Highlights
IG Wealth Management Q1, 2023 Highlights 1 Ending AUM&A of $115.9B increased 4.6% during Q1 • Driven by client investment returns of 4.3% 2 Q1 gross inflows of $3.7B were the 2nd best first quarter on record 3 Solid net flows of $504MM in Q1 2023 marked our 10th consecutive quarter of positive net f
Slide 17: Solid Net Flows at IG Wealth Management
Solid Net Flows at IG Wealth Management IG Wealth Management Gross and Net Flows1 ($MM) IG Wealth Management Flows (in $B) Gross Inflows Gross Outflows Net Flows (Last Twelve Month Trailing, as at April 30, 2023) 4,000 Total Net Flows IGM Product Net Flows First Quarter 3,636 3,663 2,932 2,895 3,006
Slide 18: IG Wealth Management Q1, 2023 Operating Results
IG Wealth Management Q1, 2023 Operating Results Gross Outflows Rate Assets Under Gross Inflows ($MM) (quarterly annualized) Net Flows ($MM) Advisement ($B) Cash, GICs, HISAs 1,466 3rd party 11.2% IGM Solutions (AUM) 4,000 3,663 116.3 115.9 8.8% 504 2.9 110.8 5.8 5.2 5.3 6.0 5.4 Q1/22 Q1/23 108.1 100
Slide 19: IG Wealth's Clients Remaining Committed to Financial Plans
IG Wealth’s Clients Remaining Committed to Financial Plans, IG Focused on Comprehensive Financial Planning Redemption Rates1 (Last Twelve Month Trailing % of Average Assets) 20% 18% 16.7% 16% Industry 14% (as at Mar. 31, 2023; IG Investment Return Index based on long-term fund redemptions & 12% AUM;
Slide 20: Sales Growth Driven by High-Net-Worth & Mass Affluent Client Acquisition
Sales Growth Driven by Strong High-Net-Worth & Mass Affluent Client Acquisition Gross Flows from Newly Acquired Clients Gross Flows from Newly Acquired Clients (Q1, $MM) (Last Twelve Month Trailing, $MM) By Client Assets Brought to IG Wealth By Client Assets Brought to IG Wealth Growth <$100K $100-5
Slide 21: Strong Advisor Productivity
Strong Advisor Productivity Gross Inflows per Advisor Recruit Gross Inflows per Advisor Practice with <4 years experience with >4 years experience ($MM) ($MM) Key Initiatives Driving Productivity • Tightened recruiting standards • National Service Centre to help provide 0.71 1.98 consistent service
Slide 22: Leading Investment Solutions at IG Wealth
Leading Investment Solutions at IG Wealth Managed by Top Global Public and Private Markets Asset Managers with Strong Investment Performance iProfile managed 58% solutions provide of assets rated 4 or 5 stars clients with access by Morningstar1 to: 88% Well-constructed managed solutions by world-cla
Slide 23: Mackenzie Investments
MACKENZIE INVESTMENTS LUKE GOULD PRESIDENT & CEO MACKENZIE INVESTMENTS IGM FINANCIAL Q1, 2023 RESULTS
Slide 24: Mackenzie Investments & Strategic Investments Q1, 2023 Highlights
Mackenzie Investments & Strategic Investments Q1, 2023 Highlights 1 Ending AUM of $193.8B, up 3.8% from December 31, 2022 • Driven by client investment returns of 4.7%1 2 Investment fund net flows of $72MM • Quarterly annualized net sales rate 0.3% versus industry peers of (1.1%) 3 ChinaAMC long-ter
Slide 25: Mackenzie Investments Net Flows
Mackenzie Investments Net Flows Mackenzie Adjusted Investment Fund Flows1 ($MM) Mackenzie Adjusted Investment Fund Net Flows1 (in $MM) Gross Sales Redemptions MF Net Sales ETF Net Flows (Last Twelve Month Trailing, as at April 30, 2023) First Quarter 4,031 Total Retail 3,283 2,921 8,000 2,374 2,548
Slide 26: Mackenzie Q1, 2023 Operating Results
Mackenzie Q1, 2023 Operating Results Retail Mutual Fund Gross Sales ($MM) Net Sales ($MM)1,2 ▪ Total net sales were $170MM Q1/22 Q1/23 2,490 ▪ (3.8%) long-term investment fund Retail mutual Funds 592 83 1,954 net sales rate over the twelve Retail ETFs (172) (75) months ending March 31, 2023 is in- R
Slide 27: Investment Boutique Retail Mutual Fund Performance & Net Sales
Investment Boutique Retail Mutual Fund Performance & Net Sales 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 Eq
Slide 28: Mackenzie Sustainability in Focus
Mackenzie Sustainability in Focus Q2 focused on transparency and simplicity with launch of 2022 Sustainable investing report and the Mackenzie Corporate Knights Global 100 index ETF and fund Launch of CKG100 Mutual fund & ETF Investment Growth Since Inception1 (CKG100 v. MSCI ACWI) launched April 20
Slide 29: Chinese Mutual Fund Industry AUM and Net Flows
Chinese Mutual Fund Industry AUM and Net Flows; ChinaAMC is an Industry Leader, and Consistently Among the Top Five in the League Tables Growth Chinese Mutual Fund Industry Long-term Mutual Chinese Mutual Fund Industry QoQ 1yr Fund Market Share2 (% at March 31, 2023) Ending AUM1 25.1 26.4 26.3 25.7
Slide 30: A Leading Chinese Asset Manager – Total AUM Continuity
– A Leading Chinese Asset Manager – Total AUM Continuity ChinaAMC Ending AUM1 (RMB billions) Growth QoQ 1yr 1,740 1,733 1,722 1,772 3% 11% 1,662 1,607 1,581 1,599 1,536 1,461 579 604 591 584 1,294 623 1,248 630 594 1,186 610 1,193 5% 19% 642 1,137 1,142 1,137 1,032 657 1,038 1,004 976 971 561 608 89
Slide 31: Capital Partners
Capital Partners • Strong fundraisings of $0.8B and AUM growth of 2.5% for the quarter ended March 31, 2023 • IGM Financial and Great-West Lifeco have committed capital across each of Northleaf’s three global mid-market private market platforms (private equity, private credit and infrastructure) Nor
Slide 32: Financial Highlights
IGM FINANCIAL Financial Highlights KEITH POTTER EXECUTIVE VICE-PRESIDENT & CFO IGM FINANCIAL IGM FINANCIAL Q1, 2023 RESULTS
Slide 33: Total Assets Under Management & Advisement
Total Assets Under Management & Advisement IGM Assets Under Management & Advisement ($B) Change in IGM AUM&A ($B) Daily AUM&A Daily AUM&A ex Disc Ops Q1/22 Q2/22 Q3/22 Q4/22 Q1/23 LTM AUM&A excluding sub-advisory to Canada Life Opening AUM&A 224.3 216.8 195.5 193.1 202.4 216.8 Annual Average AUM&A Q
Slide 34: IGM Financial Adjusted EBIT & Margins
IGM Financial Adjusted EBIT & Margins Excludes discontinued operations IGM Adjusted EBIT1 ($MM) IGM Adjusted EBIT Margin1,2 (% of AUM&A) Direct advisor/dealer compensation3 & sub- advisory expenses 772.1 744.7 748.1 767.6 754.9 Share of associates’ 1.24% 1.24% 1.26% 1.25% 1.23% earnings and net 195.
Slide 35: IGM Financial Consolidated Profitability
IGM Financial Consolidated Profitability $ Millions (unless otherwise noted): Change QoQ Change YoY IGM Financial Consolidated Q1/22 Q4/22 Q1/23 $ % $ % Days in the period 90 92 90 (2.2%) 0.0% 1▪ Net investment income & other up Average AUM & AUA ($ Billions) $13.5MM year-over-year, primarily Wealth
Slide 36: IG Wealth Management Key Profitability Drivers
Reminder: Asset-based compensation is paid based on the simple IG Wealth Management ▪1 average of opening & ending monthly AUA and based on the # of months in a period (whereas advisory and product & program fee revenue is Key Profitability Drivers earned on daily average AUA based on the # of days
Slide 37: IG Wealth Management Profitability
IG Wealth Management Profitability $ Millions (unless otherwise noted): Change QoQ Change YoY IG Wealth Management Q1/22 Q4/22 Q1/23 $ % $ % Days in the period 90 92 90 (2.2%) 0.0% Average assets under advisement ($B) 116.3 109.6 114.7 5.0 4.6% (1.6) (1.4%) Average assets under management ($B) 107.4
Slide 38: Asset Management Key Profitability Drivers
Asset Management Key Profitability Drivers Net Asset Management Fee Rates1 Average AUM ($B), Net Asset Management Fees (bps)1 (as bps of respective AUM) 205.5 Sub-advisory and AUM to Wealth 82.0 82.3 Third-party 195.5 192.0 79.0 80.5 80.8 Excluding 187.3 186.3 Management Canada Life Third Party AUM
Slide 39: Asset Management Segment Profitability
Asset Management Segment Profitability $ Millions (unless otherwise noted): Change QoQ Change YoY Asset Management Q1/22 Q4/22 Q1/23 $ % $ % Days in the period 90 92 90 (2.2%) 0.0% ▪1 Year-over-year increase in net Average assets under management ($B) Third Party AUM 125.7 112.7 115.7 3.1 2.7% (10.0
Slide 40: A Leading Chinese Asset Manager – AUM and Earnings
– A Leading Chinese Asset Manager – AUM and Earnings ChinaAMC Ending AUM1 IGM Share of ChinaAMC Earnings2 (RMB billions) (CAD millions) 28.1 Original 13.9% ownership 1-Year Growth Additional share due to increased ownership 1,740 1,733 1,772 1,722 11% 1,599 On January 12, 2023, IGM closed on the acq
Slide 41: Adjusted Net Earnings by Segment and Company
Adjusted Net Earnings Available to Common Shareholders by Segment and Company ($MM) 219.3 Adjusted Net Earnings Available to Common Shareholders1 IPC 206.5 Wealth Asset Wealth Management IPC Q1/22 Management Management Strategic Investments & Other - Discontinued Ops12 -11% Q1/23 117.6 104.6 -7% 8%
Slide 42: Adjusted Net Earnings and Valuation by Segment and Company
Adjusted Net Earnings Available to Common Shareholders and Valuation by Segment and Company ($MM) Adjusted Net Earnings Available to Common Shareholders1 867 880 Wealth IPC IPC Asset Wealth Management Management Management Strategic Investments & Other - Discontinued Ops 2022 437 447 Analyst Other a
Slide 43: Q&A
Q&A IGM FINANCIAL Q1, 2023 RESULTS
Slide 44: Appendix
Appendix IGM FINANCIAL Q1, 2023 RESULTS
Slide 45: 2023 Expense Guidance – Continued Focus on Prudent Expense Management
2023 Expense Guidance – Continued Focus on Prudent Expense Management Guidance and Outlook: Combined Operations & Support and Business Development Expenses IGM Consolidated1 (year-over-year change) 5-year technology & operations 9% 9% transformation announced 7% 6% 5% 3% ~3% 2.2% 2 2.3% 1% 3 2014 20
Slide 46: Wealthsimple AUA and Clients
• Wealthsimple’s AUA was up 10% year-over-year and increased sequentially by 16% • The number of clients served by Wealthsimple increased 11% in the last year to 2.1 million1 Wealthsimple AUA of CAD $21.3B1 Wealthsimple Clients of 2.1 million1,2 (AUA, $B) +10% (000s of clients, excluding Wealthsimpl
Slide 47: ESG highlights and release of 2022 IGM Sustainability Report
ESG highlights and release of 2022 IGM Sustainability Report Building Advancing Accelerating diversity, financial well-being sustainable investing equity & inclusion • 20,000+ attended IG webinars on a wide • $4.8B AUM in sustainable solutions, • Recognized as one of Canada’s Best range of financial
Slide 48: Reconciliation of adjusted to IFRS earnings and EPS
Reconciliation of adjusted to IFRS earnings and EPS ($ millions except EPS) Q1/22 Q4/22 Q1/23 Adjusted net earnings available to common shareholders1 $219.3 $224.7 $206.5 Gain on sale of Lifeco, net of tax - - 174.8 Net earnings available to common shareholders $219.3 $224.7 $381.3 Adjusted net earn