Invesco Ltd · NYSE:IVZ
Invesco — Q3 2023 Earnings Presentation
23 slides from Invesco's earnings presentation, Oct 24, 2023
Slide 1: Third Quarter 2023 Results
Third Quarter 2023 Results Andrew Schlossberg President and Chief Executive Officer Allison Dukes Chief Financial Officer October 24, 2023
Slide 2: Forward-looking statements and Important Information
Forward-looking statements and Important Information This presentation, and comments made in the associated obligation to update the information in any public disclosure if any conference call today, may include “forward-looking statements.” forward-looking statement later turns out to be inaccurate
Slide 3: Third quarter 2023 highlights
Third quarter 2023 highlights Key Capability Q3’23 Key Metrics Q3’22 Q2’23 Q3’23 Q3’23 Business Highlights Area Ending AUM ETFs, Factors $552B1 Net LT inflows of $11.8 billion from ETFs, one of our strongest Net LT Flows (billions) ($7.7) ($2.0) $2.6 and Index quarters as we continue to gain market
Slide 4: Fixed Income Capabilities Span Duration and Credit Risk Appetites
We have performance, competitive strength, and scale with greater than $500 billion in AUM across a spectrum of Fixed Income asset classes, vehicles and geographies • Organic growth across geographies, client types and capabilities—diversification will drive future growth opportunities • Positioned
Slide 5: Strategic Relationship with MassMutual
Strategic Relationship with MassMutual $4B 18.1% Preferred Stake in shares common (notional shares value) $3.5B Meaningful, Including active Mutually investment Beneficial mandates and lending facilities Strategic $9B Relationship MM Broker- Dealer, Variable Annuities, Sub-advisory • MassMutual is a
Slide 6: Investment performance as of September 30, 2023
Investment performance as of September 30, 2023 % of actively managed assets in top half of peer group or beating benchmark Overall US Equity Global & Int’l Equity Fixed Income Alternatives Balanced 100 80 60 98% 94% 90% 40 76% 79% 83% 74% 75% 74% 71% 73% 76% 70% 67% 67% 65% 55% 49% 20 44% 35% 26% 2
Slide 7: Assets under management & long-term flows
Assets under management & long-term flows (in billions) AUM Total Firm AUM by Investment Approach AUM by Channel 69% 66% 65% 31% 34% 35% 63% 63% 63% 37% 37% 37% $1,538 $1,487 $1,017 $969 $942 $966 $1,323 $914 $834 $570 $545 $522 $521 $489 $409 Total Firm Active Passive Retail2 Institutional3 Long-Te
Slide 8: Assets under management & long-term flows (continued)
Assets under management & long-term flows (continued) (in billions) AUM by Geography AUM by Asset Class 71% 72% 72% 16% 14% 15% 13% 13% 13% 14% 12% 12% 5% 4% 4% 45% 49% 49% 23% 21% 21% 13% 15% 14% $1,113 $1,069 $747 $727 $941 $598 $304 $319 $313 $226 $210 $186 $182 $177 $172 $210 $222 $221 $172 $204
Slide 9: Market volatility and shifting asset mix; net revenue yields
Market volatility and shifting asset mix have resulted in a lower concentration of active equity capabilities; average yield declines should moderate moving forward AUM, $B | Net Revenue Yields* Net Revenue Yields Bars based on AUM $, labels indicate % of total AUM • Secular shifts in the asset mana
Slide 10: Revenues and expenses
Revenues and expenses (in millions) Net Revenues Adjusted Operating Expenses -1.1% 6.4% Q3’22 vs Q3’23 $48 million increase $12 million decrease Includes $39 million Includes $8 million of org. change pertaining to Alpha $1,111 $1,098 expenses -$37 +$13 +$1 -$1 +$12 $789 $741 +$47 -$3 +$2 +$2 Q3’22
Slide 11: Adjusted operating income and profitability
Adjusted operating income and profitability (in millions, except margin and per share information) Adjusted Operating Income and Adjusted Operating Adjusted Net Income and Adjusted Diluted Earnings Margin Per Share Excluding $39 million of org. change Excluding $39 million 42.1% 42.0% expenses would
Slide 12: Capital management
Capital management (in millions, except ratio information) Capital Returned to Shareholders Leverage Ratio** $301 $150 3.19x 3.41x 3.33x 3.50x $145 $145 $145 $149 2.76x $59 $59 $59 $59 $59 $92 $90 0.67x 0.78x 0.83x 0.66x 0.69x $86 $86 $86 Q3’22 Q4’22 Q1’23 Q2’23 Q3’23 Q3’22 Q4’22 Q1’23 Q2’23 Q3’23 C
Slide 13: Conclusion
Conclusion • Resilient net flows performance with $2.6 billion in LT net inflows led by ETFs • Simplifying and streamlining the organization to achieve greater scale, consistent investment quality, and improved profitability • Market volatility and shifting asset mix have resulted in a lower concent
Slide 14: Appendix
Appendix 4 Invesco
Slide 15: We are diversified as a firm
We are diversified as a firm By Client Domicile By Channel By Asset Class 4% 12% 13% 14% 72% 63% 37% 49% 15% 21% 1-Yr 1-Yr 1-Yr (billions) Change (billions) Change (billions) Change Americas $1,069.2 13.6 % Retail $942.4 13.0 % Equity $726.7 21.6 % Asia Pac $220.5 4.9 % Institutional $544.9 11.4 % F
Slide 16: Investment performance by investment objective
Investment performance By investment objective (actively managed assets)* AUM above benchmark 1st quartile 2nd quartile Equities U.S. Core U.S. Growth U.S. Value Sector 100% 100% 100% 100% 13% 1% 100% 70% 62% 62% 62% 35% 22% 21% 49% 49% 45% 53% 42% 37% 37% 42% 31% 17% 25% 1% 23% 22% 22% 24% 21% 16%
Slide 17: Investment performance by investment objective
Investment performance By investment objective (actively managed assets)* AUM above benchmark 1st quartile 2nd quartile Equities Other Global Global ex-U.S. and Em. Mkts. Alternatives Balanced 100% 100% 100% 100% 4% 8% 41% 55% 50% 8% 87% 81% 99% 3% 78% 85% 76% 7% 76% 25% 77% 70% 75% 40% 62% 69% 66%
Slide 18: US GAAP and Non-GAAP operating results Q3-23 vs. Q2-23
US GAAP and Non-GAAP operating results Q3-23 vs. Q2-23 US GAAP Basis Non-GAAP Basis (in millions) Q3-23 Q2-23 % Change (1) (in millions) Q3-23 Q2-23 % Change (1) Investment management fees $1,041.3 $1,033.5 0.8% Investment management fees $1,179.8 $1,183.8 (0.3)% Service and distribution fees 353.5
Slide 19: Reconciliation of US GAAP to Non-GAAP, three months ended September 30, 2023
Reconciliation of US GAAP results to Non-GAAP results Three months ended September 30, 2023 Please refer to pages 7-10 in the 3Q 2023 earnings press release for a description of the adjustments Consolidation 3rd party distribution, Transaction, Market appreciation / Consolidated of joint service and
Slide 20: Reconciliation of US GAAP to Non-GAAP, three months ended June 30, 2023
Reconciliation of US GAAP results to Non-GAAP results Three months ended June 30, 2023 Please refer to pages 7-10 in the 2Q 2023 earnings press release for a description of the adjustments Consolidation 3rd party distribution, Transaction, Market appreciation / Consolidated of joint service and advi
Slide 21: Reconciliation of US GAAP results to Non-GAAP results
Reconciliation of US GAAP results to Non-GAAP results (in millions) Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3’23 Operating revenues $1,750.0 $1,763.4 $1,629.4 $1,530.4 $1,445.7 $1,443.4 $1,418.2 $1,442.8 $1,442.0 Non-GAAP adjustments (416.5) (389.7) (377.0) (356.5) (335.1) (335.3) (342.3) (
Slide 22: Footnote disclosures
Footnote disclosures Footnotes for Slide 3, Third quarter 2023 highlights Non-GAAP financial measures - For the reconciliations from US GAAP to non-GAAP measures, see the Appendix to this presentation and the non-GAAP Information and Reconciliations section of the current earnings release. Additiona
Slide 23: Footnote disclosures (continued)
Footnote disclosures (continued) Footnotes for Slide 12, Capital management Non-GAAP financial measures – For the reconciliations from US GAAP to non-GAAP measures, see the Appendix to this presentation and the non-GAAP Information and Reconciliations section of the current earnings release. Additio