Invesco Ltd · NYSE:IVZ
Invesco — Q3 2012 Earnings Presentation
48 slides from Invesco's earnings presentation, Nov 1, 2012
Slide 1: Invesco third quarter 2012 results
Invesco third quarter 2012 results Martin L. Flanagan President and Chief Executive Officer Loren M. Starr Chief Financial Officer November 1, 2012
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 Financial results Questions Appendix 2
Slide 4: Third quarter overview
Third quarter overview Continued strong investment performance and strong net flows contributed to solid operating results – Maintained strong, long-term investment performance – Continued focus on delivering value to clients contributed to net flows of $11.7 billion – the most robust since Q2 2010
Slide 5: Investing in the future of our business
Investing in the future of our business Taking advantage of opportunities in the marketplace to build our long-term business – Entered into an agreement to acquire 49 percent of Religare Asset Management Company Limited – Further extended the firm’s strong, global suite of multi-asset capabilities –
Slide 6: Summary of third quarter 2012 results
Summary of third quarter 2012 results September 30, 2012, AUM of $683.0 billion versus $646.6 billion Assets under at June 30, 2012 management Average AUM was $667.9 billion versus $651.2 billion for the second quarter Total net flows of $11.7 billion Flows Net long-term flows of $9.4 billio
Slide 7: Discussion topics
Discussion topics Third quarter overview Investment performance Financial results Questions Appendix 6
Slide 8: Investment performance – overview
Investment performance – overview Aggregate performance analysis – asset weighted Percent of actively managed assets in top half of peer group* 1-Year 3-Year 5-Year Assets top half of peer group Assets bottom half of peer group *Excludes passive products, closed-end funds, private equity limited par
Slide 9: Quarterly flows – total flows
Quarterly flows – total flows Strong investment performance, continued focus on client needs and favorable markets contributed to the most robust net flows since Q2 2010 Quarterly long-term flows ($ billions) Total AUM Active AUM Passive AUM 4Q10* 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q10 1Q11 2Q11 3Q
Slide 10: Quarterly flows – total flows
Quarterly flows – total flows Robust net flows across all channels in our global business Quarterly long-term flows ($ billions) Retail(a) Institutional(b) Private Wealth Management(c) 0.9 1.0 1.0 0.9 1.0 0.8 0.8 0.8 0.5 0.6 0.4 0.1 0.1 0.2 0.2 0.2 -0.4 -0.4 -0.5 -0.7 -0.7 -0.7 -0.7 -0.8 4Q10 1Q11 2
Slide 11: Strong net inflows in US Retail of $5.9 billion
Strong net inflows in US Retail of $5.9 billion Gross and net sales Percentage above the bars is change in Net sales gross sales from prior quarter ($ billions) +36% +32% +17% +9% (11%) +29% (27%) (15%) Annualized redemption rate (rolling 3-month average) IVZ Industry Source: Data underlying the ind
Slide 12: Continued strong demand for asset allocation strategies
Continued strong demand for asset allocation strategies, with over $4 billion of net inflows in the third quarter Invesco Balanced-Risk Allocation strategies (global aggregate) Asset allocation extension strategies (global aggregate) Source: Invesco. Asset allocation extension strategies include bal
Slide 13: Discussion topics
Discussion topics Third quarter overview Investment performance Financial results Questions Appendix 12
Slide 14: Total assets under management – 3Q12 vs. 2Q12
Total assets under management – 3Q12 vs. 2Q12 ($ billions) 3Q-12 2Q-12 % Change Beginning Assets $646.6 $672.8 (3.9)% Long-Term Inflows 42.3 37.1 14.0% Long-Term Outflows (32.9) (42.0) (21.7)% Long-Term Net flows 9.4 (4.9) N/A Net flows in Inst. Money Market Funds 2.3 (3.4) N/A Market Gains and Loss
Slide 15: Non-GAAP operating results – 3Q12 vs. 2Q12
Non-GAAP operating results – 3Q12 vs. 2Q12 ($ millions) 3Q-12 2Q-12 % Change Adjusted Revenues Investment Management Fees 840 802 4.7% Service and Distribution Fees 196 187 4.8% Performance Fees 3 16 (78.1)% Other 24 26 (6.9)% Third-Party Distribution, Service and Advisory Expenses (329) (319) 3.3%
Slide 16: Third quarter overview
Third quarter overview Continued strong investment performance and strong net flows contributed to solid operating results – Maintained strong, long-term investment performance – Continued focus on delivering value to clients contributed to net flows of $11.7 billion – the most robust since Q2 2010
Slide 17: Discussion topics
Discussion topics Third quarter overview Investment performance Financial results Questions Appendix 16
Slide 18: Discussion topics
Discussion topics Third quarter overview Investment performance Financial results Questions Appendix 17
Slide 19: Additional Disclosure for Invesco Balanced-Risk Allocation Fund
Additional Disclosure for Invesco Balanced-Risk Allocation Fund Invesco Balanced Risk Allocation Fund is a US registered ’40-Act mutual fund that is distributed by Invesco Distributors, Inc., a wholly- owned indirect subsidiary of Invesco Ltd. 18
Slide 20: Commitment to investment excellence
Commitment to investment excellence Source: Invesco. All data as of September 30, 2012. The listed centers do not all provide products or services that are available in all jurisdictions, nor are their products and services available on all platforms. All entities listed are wholly owned, indirect s
Slide 21: Investment performance (5-year)
Investment performance (5-year) By investment objective (actively managed assets)* Percentages in parentheses represent %AUM of each investment objective as a ratio of all objectives (Total ranked AUM of $378.9 billion) % of assets top half % of assets bottom Equities of peer group half of peer grou
Slide 22: Investment performance (5-year)
Investment performance (5-year) By investment objective (actively managed assets)* Percentages in parentheses represent %AUM of each investment objective as a ratio of all objectives (Total ranked AUM of $378.9 billion) % of assets top half % of assets bottom Equities Global ex-US and Other of peer
Slide 23: Investment performance
Investment performance By investment objective (actively managed assets)* Equities 1st quartile 2nd quartile AUM above benchmark U.S. Core U.S. Growth U.S. Value Sector 100% 100% 100% 100% 99% 94% 42% 66% 60% 59% 15% 90% 40% 55% 49% 9% 17% 6% 41% 29% 28% 44% 38% 22% 28% 2% 15% 30% 15% 2% 20% 15% 24%
Slide 24: Investment performance
Investment performance By investment objective (actively managed assets)* Equities Global ex-U.S. and Other 1st quartile 2nd quartile AUM above benchmark Global Emerging markets Alternatives Balanced 100% 100% 100% 100% 96% 95% 88% 84% 13% 83% 57% 67% 11% 68% 86% 57% 58% 81% 52% 53% 18% 83% 50% 20%
Slide 25: We are diversified as a firm
We are diversified as a firm Delivering a diverse set of solutions to meet client needs By client domicile By channel By asset class 12% 4% 69% 24% 15% 62% 35% 44% 5% 11% 7% 9% 3% 1-Yr 1-Yr 1-Yr ($ billions) Change ($ billions) Change ($ billions) Change U.S. $474.5 15.5% Retail $423.4 19.5% Equity
Slide 26: Non-GAAP operating results – quarterly
Non-GAAP operating results – quarterly ($ millions) 3Q-12 2Q-12 % Change* 1Q-12 4Q-11 3Q-11 2Q-11 1Q-11 4Q-10 Investment Management Fees 840 802 4.7% 812 771 804 844 816 799 Service and Distribution Fees 196 187 4.8% 189 181 189 206 199 202 Performance Fees 3 16 (78.1)% 21 24 3 8 4 19 Other 24 26 (6
Slide 27: US GAAP operating results – quarterly
US GAAP operating results – quarterly ($ millions) 3Q-12 2Q-12 % Change* 1Q-12 4Q-11 3Q-11 2Q-11 1Q-11 4Q-10 Investment Management Fees 818 781 4.8% 791 748 780 819 792 774 Service and Distribution Fees 196 187 4.8% 189 181 189 211 199 202 Performance Fees 3 15 (80.5)% 21 24 3 8 4 19 Other 24 26 (6.
Slide 28: Total assets under management – quarterly
Total assets under management – quarterly ($ billions) 3Q-12 2Q-12 % Change 1Q-12 4Q-11 3Q-11 Beginning Assets $646.6 $672.8 (3.9)% $625.3 $598.4 $653.7 Long-Term Inflows 42.3 37.1 14.0% 42.9 41.1 45.9 Long-Term Outflows (32.9) (42.0) (21.7)% (35.9) (35.5) (42.6) Long-Term Net flows 9.4 (4.9) N/A 7.
Slide 29: Total assets under management – by asset class
Total assets under management – by asset class Fixed Money ($ billions) Total Equity Income Balanced Market Alternative March 31, 2012 $672.8 $305.2 $155.0 $50.5 $74.5 $87.6 Long-Term Inflows 37.1 19.5 8.1 4.6 1.1 3.8 Long-Term Outflows (42.0) (25.6) (8.0) (2.3) (0.9) (5.2) Long-Term Net flows (4.9)
Slide 30: Total assets under management – by asset class
Total assets under management – by asset class Fixed Money ($ billions) Total Equity Income Balanced Market Alternative September 30, 2011 $598.4 $253.2 $146.7 $41.5 $73.6 $83.4 Long-Term Inflows 41.1 22.6 6.4 3.3 0.6 8.2 Long-Term Outflows (35.5) (21.8) (5.4) (1.7) (0.6) (6.0) Long-Term Net flows 5
Slide 31: Total assets under management – by channel
Total assets under management – by channel ($ billions) Total Retail Institutional PWM March 31, 2012 $672.8 $414.8 $238.6 $19.4 Long-Term Inflows 37.1 30.6 5.6 0.9 Long-Term Outflows (42.0) (33.6) (7.7) (0.7) Long-Term Net flows (4.9) (3.0) (2.1) 0.2 Net flows in Inst. Money Market Funds (3.4) - (3
Slide 32: Total assets under management – by channel
Total assets under management – by channel ($ billions) Total Retail Institutional PWM September 30, 2011 $598.4 $354.4 $227.2 $16.8 Long-Term Inflows 41.1 30.2 9.9 1.0 Long-Term Outflows (35.5) (29.0) (6.0) (0.5) Long-Term Net flows 5.6 1.2 3.9 0.5 Net flows in Inst. Money Market Funds 0.4 - 0.4 -
Slide 33: Total assets under management – by client domicile
Total assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Europe Asia March 31, 2012 $672.8 $462.9 $24.8 $98.0 $35.7 $51.4 Long-Term Inflows 37.1 25.8 0.8 3.0 4.7 2.8 Long-Term Outflows (42.0) (28.5) (1.2) (4.4) (4.1) (3.8) Long-Term Net flows (4.9) (2.7) (0.
Slide 34: Total assets under management – by client domicile
Total assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Europe Asia September 30, 2011 $598.4 $411.0 $22.8 $86.7 $31.9 $46.0 Long-Term Inflows 41.1 28.2 0.6 3.0 3.2 6.1 Long-Term Outflows (35.5) (24.8) (1.3) (3.0) (3.4) (3.0) Long-Term Net flows 5.6 3.4 (0.
Slide 35: Passive assets under management – by asset class
Passive assets under management – by asset class Fixed Money ($ billions) Total Equity Income Balanced Market Alternative March 31, 2012 $112.6 $59.0 $32.5 - - $21.1 Long-Term Inflows 12.5 9.8 2.0 - - 0.7 Long-Term Outflows (14.2) (11.6) (0.8) - - (1.8) Long-Term Net flows (1.7) (1.8) 1.2 - - (1.1)
Slide 36: Passive assets under management – by asset class
Passive assets under management – by asset class Fixed Money ($ billions) Total Equity Income Balanced Market Alternative September 30,2011 $87.4 $39.7 $29.5 - - $18.2 Long-Term Inflows 19.5 13.1 1.7 - - 4.7 Long-Term Outflows (13.7) (10.3) (1.2) - - (2.2) Long-Term Net flows 5.8 2.8 0.5 - - 2.5 Net
Slide 37: Passive assets under management – by channel
Passive assets under management – by channel ($ billions) Total Retail Institutional PWM March 31, 2012 $112.6 $92.2 $20.4 $- Long-Term Inflows 12.5 11.7 0.8 - Long-Term Outflows (14.2) (13.8) (0.4) - Long-Term Net flows (1.7) (2.1) 0.4 - Net flows in Inst. Money Market Funds - - - - Market Gains an
Slide 38: Passive assets under management – by channel
Passive assets under management – by channel ($ billions) Total Retail Institutional PWM September 30, 2011 $87.4 $71.0 $16.4 - Long-Term Inflows 19.5 15.6 3.9 - Long-Term Outflows (13.7) (12.8) (0.9) - Long-Term Net flows 5.8 2.8 3.0 - Net flows in Inst. Money Market Funds - - - - Market Gains and
Slide 39: Passive assets under management – by client domicile
Passive assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Europe Asia March 31, 2012 $112.6 $105.7 - - $1.5 $5.4 Long-Term Inflows 12.5 12.3 - - 0.1 0.1 Long-Term Outflows (14.2) (14.1) - - (0.1) - Long-Term Net flows (1.7) (1.8) - - - 0.1 Net flows in Inst
Slide 40: Passive assets under management – by client domicile
Passive assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Europe Asia September 30, 2011 $87.4 $84.1 - - $1.2 $2.1 Long-Term Inflows 19.5 16.1 - - 0.1 3.3 Long-Term Outflows (13.7) (13.6) - - (0.1) - Long-Term Net flows 5.8 2.5 - - - 3.3 Net flows in Inst.
Slide 41: Reconciliation of US GAAP results to non-GAAP results – Q3 2012
Reconciliation of US GAAP results to non-GAAP results – three months ended September 30, 2012 * Other: Please refer to pages 19-21 in the 3Q 2012 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation Consolidated Other
Slide 42: Reconciliation of US GAAP results to non-GAAP results – Q2 2012
Reconciliation of US GAAP results to non-GAAP results – three months ended June 30, 2012 * Other: Please refer to pages 19-21 in the 2Q 2012 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation Consolidated Other* Non
Slide 43: Reconciliation of US GAAP results to non-GAAP results – Q1 2012
Reconciliation of US GAAP results to non-GAAP results – three months ended March 31, 2012 * Other: Please refer to pages 10-12 in the 1Q 2012 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation Consolidated Other* No
Slide 44: Reconciliation of US GAAP results to non-GAAP results – Q4 2011
Reconciliation of US GAAP results to non-GAAP results – three months ended December 31, 2011 * Other: Please refer to pages 13-15 in the 4Q 2011 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 – Q3 2011
Reconciliation of US GAAP results to non-GAAP results – three months ended September 30, 2011 * Other: Please refer to pages 9-10 in the 3Q 2011 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation Consolidated Other*
Slide 46: Reconciliation of US GAAP results to non-GAAP results – Q2 2011
Reconciliation of US GAAP results to non-GAAP results – three months ended June 30, 2011 ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation Consolidated European Non- Consolidation distribution, related / depreciation of Investment Infrastructure GAAP Basis of Joint service
Slide 47: Reconciliation of US GAAP results to non-GAAP results – Q1 2011
Reconciliation of US GAAP results to non-GAAP results – three months ended March 31, 2011 ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation Consolidated Other Non- Consolidation distribution, related / depreciation of Investment Reconciling GAAP Basis of Joint service and d
Slide 48: Reconciliation of US GAAP results to non-GAAP results – Q4 2010
Reconciliation of US GAAP results to non-GAAP results – three months ended December 31, 2010 ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation Consolidated Other Non- Consolidation distribution, related / depreciation of Investment Reconciling GAAP Basis of Joint service an