Invesco Ltd · NYSE:IVZ
Invesco — Q3 2013 Earnings Presentation
54 slides from Invesco's earnings presentation, Oct 31, 2013
Slide 1: Invesco third quarter 2013 results
Invesco third quarter 2013 results Martin L. Flanagan President and Chief Executive Officer Loren M. Starr Chief Financial Officer October 31, 2013
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 Update on EMEA Financial Results Questions Appendix 2
Slide 4: Third quarter overview
Third quarter overview Continued strong investment performance and favorable market conditions contributed to solid operating results – Maintained strong, long-term investment performance – 82% of actively managed assets ahead of peers on a 3- and 5-year basis – Strong investment performance, broad
Slide 5: Summary of third quarter 2013 results
Summary of third quarter 2013 results September 30, 2013 AUM of $745.5 billion versus $705.6 billion Assets under at June 30, 2013 management Average AUM was $729.4 billion versus $719.8 billion for the second quarter Total net inflows of $9.1 billion Flows Net long-term inflows of $5.0 bill
Slide 6: Discussion topics
Discussion topics Third quarter overview Investment performance and flows Update on EMEA Financial results Questions Appendix 5
Slide 7: Investment performance – overview
This image cannot currently be display ed. Investment performance – overview Aggregate performance analysis – asset weighted Percent of actively managed assets in top half of peer group* 1-Year 3-Year 5-Year 72% 82% 82% 18% 18% 28% Assets top half of peer group Assets bottom half of peer group *Excl
Slide 8: Quarterly long-term flows
Quarterly long-term flows Continued strong gross sales across our global business Quarterly long-term flows ($ billions) Total AUM Active AUM Passive AUM 13.5 34.1 32.6 33.1 47.6 11.8 44.4 41.8 25.5 27.7 8.7 23.8 25.2 9.3 8.8 34.1 34.0 34.4 20.5 8.6 29.8 29.4 6.4 6.7 5.6 5.2 7.9 3.7 14.3 4.8 2.9 8.5
Slide 9: Quarterly long-term flows
Quarterly long-term flows Continued strong gross sales in the retail channel Quarterly long-term flows ($ billions) Retail(a) Institutional(b) 36.2 37.7 35.5 26.9 11.4 26.0 26.9 24.3 9.6 20.2 8.0 7.5 7.2 6.7 6.3 5.1 4.0 10.3 6.5 3.8 5.7 4.9 2.8 2.9 2.1 0.6 -0.3 -1.6 -0.7 -1.5 -2.7 -3.5 -5.8 -5.2 -20
Slide 10: Asset allocation strategies remain important but the third quarter saw a shift to risk-based assets
Asset allocation strategies remain important but the third quarter saw a shift to risk-based assets Invesco Global Asset Allocation AUM ($ billions) 35.0 30.0 25.0 20.0 15.0 10.0 5.0 - 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 Invesco Balanced-Risk Allocation strateg
Slide 11: US Retail gross sales remained strong at $21.6 billion for the quarter
US Retail gross sales remained strong at $21.6 billion for the quarter – up 26% year over year Gross and net sales Percentage above the bars is change in gross sales from prior quarter Net sales ($ billions) +37% (1%) (1%) +32% +17% (6%) 22.0 21.8 21.6 (11%) (15%) 16.4 17.1 16.1 14.6 12.5 6.8 5.9 3.
Slide 12: Discussion topics
Discussion topics Third quarter overview Investment performance and flows Update on EMEA Financial results Questions Appendix 11
Slide 13: Well-positioned in EMEA
Well-positioned in EMEA A strong and growing business Well-positioned for long-term success across the UK and Continental Europe – Has delivered strong, long-term investment performance – An experienced, capable and well-tenured fund management team supported by a robust investment culture – Tremend
Slide 14: Well-positioned in EMEA
Well-positioned in EMEA A strong and growing business AUM ($, billions) Invesco Ltd. 745.5 Invesco EMEA 48.5 116.2 164.7 UK Equity Income AUM EMEA Ex-UK Equity Income AUM YTD 2013 LT Net Flows (billions) Annualized LT Organic Growth Invesco Ltd. +$20.7 +4% Invesco EMEA (ex‐UK Equity Income) +$8.8 +1
Slide 15: Invesco Perpetual
Invesco Perpetual A deep and well-tenured team with strong investment performance Asset-weighted investment performance Equal-weighted investment performance %, end of September 2013 %, end of September 2013 3 year 5 year 3 year 5 year 3% 2% 13% 14% 97% 98% 86% 87% Top half of peer group Bottom half
Slide 16: Invesco Perpetual
Invesco Perpetual A comprehensive range of capabilities overseen by a deep and well- tenured team UK Equity European Equity Global Equity1 10 fund managers/analysts 6 fund managers/analysts 10 fund managers/analysts 19 years’ average experience 17 years’ average experience 19 years’ average experien
Slide 17: Continental Europe
Continental Europe A comprehensive range of capabilities overseen by a deep and well- tenured team Invesco Real Estate – One of the world’s largest real estate management firms with a significant EMEA profile – In market since 1996 – $6.3 billion under management, 102 employees, 6 offices across Con
Slide 18: Cross border fund range
Cross border fund range Invesco well-positioned for success in the $1.6T cross-border market Asset-weighted investment performance %, end of September 2013 3 year 5 year 13% 16% 87% 84% Top half of peer group Bottom half of peer group Driven by a broad product range well-suited to European investo
Slide 19: Well-positioned in EMEA
Well-positioned in EMEA A strong and growing business Well-positioned for long-term success across the UK and Continental Europe – Has delivered strong, long-term investment performance – An experienced, capable and well-tenured fund management team supported by a robust investment culture – Tremend
Slide 20: Discussion topics
Discussion topics Third quarter overview Investment performance and flows Update on EMEA Financial results Questions Appendix 19
Slide 21: Total assets under management – 3Q13 vs. 2Q13
Total assets under management – 3Q13 vs. 2Q13 ($ billions) 3Q-13 2Q-13 % Change Beginning Assets $705.6 $707.7 (0.3)% Long-Term Inflows 41.8 44.4 (5.9)% Long-Term Outflows (36.8) (43.0) (14.4)% Long-Term Net flows 5.0 1.4 N/A Net flows in Invesco PowerShares QQQ 0.8 0.7 14.3% Net flows in Inst. Mone
Slide 22: Non-GAAP operating results – 3Q13 vs. 2Q13
Non-GAAP operating results – 3Q13 vs. 2Q13 ($ millions) 3Q-13 2Q-13 % Change Adjusted Revenues Investment Management Fees 938 905 3.6% Service and Distribution Fees 221 216 2.3% Performance Fees 9 9 (5.6)% Other 33 29 14.5% Third-Party Distribution, Service and Advisory Expenses (384) (369) 4.2% Adj
Slide 23: Third quarter overview
Third quarter overview Continued strong investment performance and favorable market conditions contributed to solid operating results – Maintained strong, long-term investment performance – 82% of actively managed assets ahead of peers on a 3- and 5-year basis – Strong investment performance, broad
Slide 24: Discussion topics
Discussion topics Third quarter overview Investment performance and flows Update on EMEA Financial results Questions Appendix 23
Slide 25: Discussion topics
Discussion topics Third quarter overview Investment performance and flows Update on EMEA Financial results Questions Appendix 24
Slide 26: Additional Information for Invesco Balanced-Risk Allocation Fund
Additional Information for Invesco Balanced-Risk Allocation Fund As of September 30, 2013 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. 25
Slide 27: Investment performance (5-year)
This image cannot currently be display ed. 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 $424.5 billion) % of assets top half % of assets bott
Slide 28: 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 $424.5 billion) % of assets top half % of assets bottom Equities Global ex-US and Other of peer
Slide 29: Investment performance
Investment performance By investment objective (actively managed assets)* Equities 1st quartile 2nd quartile AUM above benchmark U.S. Core U.S. Growth U.S. Value Sector 100% 100% 100% 100% 94% 94% 79% 79% 80% 76% 73% 46% 71% 10% 45% 45% 52% 9% 50% 16% 87% 6% 12% 41% 55% 29% 41% 28% 42% 40% 32% 35% 9
Slide 30: Investment performance
Investment performance By investment objective (actively managed assets)* Equities Global ex-U.S. and Other 1st quartile 2nd quartile AUM above benchmark Global Emerging markets Alternatives Balanced 100% 100% 100% 100% 97% 97% 98% 91% 81% 73% 75% 65% 30% 8% 58% 83% 93% 16% 76% 94% 41% 50% 46% 42% 5
Slide 31: We are diversified as a firm
We are diversified as a firm Delivering a diverse set of solutions to meet client needs By client domicile By channel By asset class 4% 12% 68% 23% 15% 66% 34% 47% 7% 11% 7% 7% 1-Yr 1-Yr 1-Yr ($ billions) Change ($ billions) Change ($ billions) Change U.S. $502.5 10.6% Retail $492.0 16.2% Equity $35
Slide 32: Non-GAAP operating results – quarterly
Non-GAAP operating results – quarterly ($ millions) 3Q-13 2Q-13 % Change* 1Q-13 4Q-12 3Q-12 2Q-12 1Q-12 4Q-11 Investment Management Fees 938 905 3.6% 863 836 813 775 787 747 Service and Distribution Fees 221 216 2.3% 206 200 196 187 189 181 Performance Fees 9 9 (5.6)% 39 4 3 16 21 12 Other 33 29 14.
Slide 33: US GAAP operating results – quarterly
US GAAP operating results – quarterly ($ millions) 3Q-13 2Q-13 % Change* 1Q-13 4Q-12 3Q-12 2Q-12 1Q-12 4Q-11 Investment Management Fees 914 886 3.3% 845 818 791 753 766 724 Service and Distribution Fees 221 216 2.3% 206 200 196 187 189 181 Performance Fees 5 6 (15.0)% 36 2 3 16 20 12 Other 32 28 11.
Slide 34: Total assets under management – quarterly
Total assets under management – quarterly ($ billions) 3Q-13 2Q-13 % Change 1Q-13 4Q-12 3Q-12 Beginning Assets $705.6 $707.7 (0.3)% $667.4 $663.0 $627.6 Long-Term Inflows 41.8 44.4 (5.9)% 47.6 34.4 34.0 Long-Term Outflows (36.8) (43.0) (14.4)% (33.3) (31.7) (25.5) Long-Term Net flows 5.0 1.4 N/A 14.
Slide 35: Total assets under management – by asset class
Total assets under management – by asset class Fixed Money ($ billions) Total Equity Income Balanced Market Alternative March 31, 2013 $707.7 $319.1 $175.9 $49.3 $77.8 $85.6 Long-Term Inflows 44.4 21.0 9.6 5.6 1.2 7.0 Long-Term Outflows (43.0) (22.4) (9.5) (3.5) (0.7) (6.9) Long-Term Net flows 1.4 (
Slide 36: Total assets under management – by asset class
Total assets under management – by asset class Fixed Money ($ billions) Total Equity Income Balanced Market Alternative September 30, 2012 $663.0 $298.9 $167.0 $39.6 $73.2 $84.3 Long-Term Inflows 34.4 13.2 9.5 5.1 0.6 6.0 Long-Term Outflows (31.7) (16.5) (6.1) (1.8) (0.7) (6.6) Long-Term Net flows 2
Slide 37: Total assets under management – by channel
Total assets under management – by channel ($ billions) Total Retail Institutional March 31, 2013 $707.7 $454.9 $252.8 Long-Term Inflows 44.4 37.7 6.7 Long-Term Outflows (43.0) (32.8) (10.2) Long-Term Net flows 1.4 4.9 (3.5) Net flows in Invesco PowerShares QQQ 0.7 0.7 - Net flows in Inst. Money Mar
Slide 38: Total assets under management – by channel
Total assets under management – by channel ($ billions) Total Retail Institutional September 30, 2012 $663.0 $423.4 $239.6 Long-Term Inflows 34.4 26.9 7.5 Long-Term Outflows (31.7) (24.8) (6.9) Long-Term Net flows 2.7 2.1 0.6 Net flows in Invesco PowerShares QQQ (2.5) (2.5) - Net flows in Inst. Mone
Slide 39: Total assets under management – by client domicile
Total assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Europe Asia March 31, 2013 $707.7 $482.4 $26.0 $104.6 $44.3 $50.4 Long-Term Inflows 44.4 25.6 0.9 4.4 7.5 6.0 Long-Term Outflows (43.0) (25.9) (1.3) (5.0) (5.0) (5.8) Long-Term Net flows 1.4 (0.3) (0.4
Slide 40: Total assets under management – by client domicile
Total assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Europe Asia September 30, 2012 $663.0 $454.5 $25.0 $99.6 $35.6 $48.3 Long-Term Inflows 34.4 20.6 1.3 3.3 5.8 3.4 Long-Term Outflows (31.7) (20.3) (1.3) (3.4) (3.9) (2.8) Long-Term Net flows 2.7 0.3 - (
Slide 41: Passive assets under management – by asset class
Passive assets under management – by asset class Fixed Money ($ billions) Total Equity Income Balanced Market Alternative March 31, 2013 $123.1 $62.0 $41.9 - - $19.2 Long-Term Inflows 11.8 6.8 4.0 - - 1.0 Long-Term Outflows (10.5) (4.8) (2.2) - - (3.5) Long-Term Net flows 1.3 2.0 1.8 - - (2.5) Net f
Slide 42: Passive assets under management – by asset class
Passive assets under management – by asset class Fixed Money ($ billions) Total Equity Income Balanced Market Alternative September 30, 2012 $117.9 $59.2 $37.6 - - $21.1 Long-Term Inflows 6.7 3.6 2.5 - - 0.6 Long-Term Outflows (5.2) (2.7) (1.0) - - (1.5) Long-Term Net flows 1.5 0.9 1.5 - - (0.9) Net
Slide 43: Passive assets under management – by channel
Passive assets under management – by channel ($ billions) Total Retail Institutional March 31, 2013 $123.1 $98.5 $24.6 Long-Term Inflows 11.8 10.1 1.7 Long-Term Outflows (10.5) (8.2) (2.3) Long-Term Net flows 1.3 1.9 (0.6) Net flows in Invesco PowerShares QQQ 0.7 0.7 - Net flows in Inst. Money Marke
Slide 44: Passive assets under management – by channel
Passive assets under management – by channel ($ billions) Total Retail Institutional September 30, 2012 $117.9 $94.7 $23.2 Long-Term Inflows 6.7 6.3 0.4 Long-Term Outflows (5.2) (4.7) (0.5) Long-Term Net flows 1.5 1.6 (0.1) Net flows in Invesco PowerShares QQQ (2.4) (2.4) - Net flows in Inst. Money
Slide 45: Passive assets under management – by client domicile
Passive assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Europe Asia March 31, 2013 $123.1 $116.9 $0.1 - $1.2 $4.9 Long-Term Inflows 11.8 11.5 - - 0.2 0.1 Long-Term Outflows (10.5) (8.3) - - (0.1) (2.1) Long-Term Net flows 1.3 3.2 - - 0.1 (2.0) Net flows i
Slide 46: Passive assets under management – by client domicile
Passive assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Europe Asia September 30, 2012 $117.9 $110.8 - - $1.3 $5.8 Long-Term Inflows 6.7 6.6 0.1 - - - Long-Term Outflows (5.2) (4.6) - - (0.2) (0.4) Long-Term Net flows 1.5 2.0 0.1 - (0.2) (0.4) Net flows i
Slide 47: Reconciliation of US GAAP results to non-GAAP results – three months ended September 30, 2013
Reconciliation of US GAAP results to non-GAAP results – three months ended September 30, 2013 * Other: Please refer to pages 19-21 in the 3Q 2013 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation Consolidated Other
Slide 48: 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 Acquisition Market appreciation Consolidated Other* Non
Slide 49: 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 50: 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 Acquisition Market appreciation Consolidated Other*
Slide 51: Reconciliation of US GAAP results to non-GAAP results – three months ended September 30, 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 52: Reconciliation of US GAAP results to non-GAAP results – three months ended June 30, 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 53: Reconciliation of US GAAP results to non-GAAP results – three months ended March 31, 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 54: Reconciliation of US GAAP results to non-GAAP results – three months ended December 31, 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*