Invesco Ltd · NYSE:IVZ
Invesco — Q4 2013 Earnings Presentation
51 slides from Invesco's earnings presentation, Jan 30, 2014
Slide 1: Invesco fourth quarter 2013 results
Invesco fourth quarter 2013 results Martin L. Flanagan President and Chief Executive Officer Loren M. Starr Chief Financial Officer January 30, 2014
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 Fourth quarter and 2013 overview Investment performance and flows Update on EMEA Financial Results Questions Appendix 2
Slide 4: Fourth quarter overview
Fourth quarter overview Continued strong investment performance and favorable market conditions contributed to solid operating results – Maintained strong, long-term investment performance – 83% of actively managed assets ahead of peers on a 3-year basis – Net inflows of $5.2 billion driven by stron
Slide 5: Summary of fourth quarter 2013 results
Summary of fourth quarter 2013 results December 31,2013 AUM of $778.7 billion versus $745.5 billion at Assets under September 30, 2013 management Average AUM was $761.7 billion versus $729.4 billion for the third quarter Total net inflows of $5.2 billion Flows Net long-term inflows of $1.0 b
Slide 6: 2013 overview
2013 overview Achievements throughout 2013 enhanced our ability to meet client needs and further positioned the firm for long-term success – Maintained strong, long-term investment performance – 83% of actively managed assets ahead of peers on a 3-year basis – Strong investment performance drove mea
Slide 7: Discussion topics
Discussion topics Fourth quarter and 2013 overview Investment performance and flows Update on EMEA Financial results Questions Appendix 6
Slide 8: Investment performance – overview
Investment performance – overview Aggregate performance analysis – asset weighted Percent of actively managed assets in top half of peer group* 1-Year 3-Year 5-Year 62% 72% 83% 17% 28% 38% Assets top half of peer group Assets bottom half of peer group *Excludes passive products, closed-end funds, pr
Slide 9: Quarterly long-term flows
Quarterly long-term flows Continued strong gross sales across our global business Quarterly long-term flows ($ billions) Total AUM Active AUM Passive AUM 13.5 47.6 37.2 44.4 41.8 45.8 34.1 11.8 32.6 33.1 34.1 34.0 34.4 25.5 25.2 27.7 8.6 8.8 8.7 29.4 8.6 23.8 6.7 6.4 5.6 5.2 14.3 3.7 8.5 7.9 1.3 5.0
Slide 10: Quarterly long-term flows
Quarterly long-term flows Continued strong gross sales in both the retail and institutional channels Quarterly long-term flows ($ billions) Retail(a) Institutional(b) 37.7 35.5 35.8 36.2 26.9 11.4 26.0 26.9 24.3 10.0 7.2 8.0 7.5 6.7 6.3 10.3 5.1 4.0 6.5 5.7 2.8 2.1 4.9 2.9 1.3 0.6 -0.3 -0.3 -0.7 -1.
Slide 11: Asset allocation strategies shift to risk-based assets
Asset allocation strategies remain important but the fourth quarter saw a further 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 4Q13 Invesco Balanced-Risk Allo
Slide 12: US Retail gross sales remained strong
US Retail gross sales remained strong at $18.4 billion for the quarter – up 14% year over year Gross and net sales Percentage above the bars is change in gross sales from prior quarter Net sales ($ billions) +37% (1%) (1%) (15%) +32% +17% (6%) 22.0 21.8 21.6 (11%) 18.4 16.4 17.1 16.1 14.6 12.5 6.8 5
Slide 13: Reinvesting in the business to drive future growth
Reinvesting in the business to drive future growth Several new capabilities launched in the fourth quarter, positioning the firm ahead of client demand globally Product launches focused on bringing existing institutional-quality alternative investment capabilities to our retail clients Global Targ
Slide 14: Discussion topics
Discussion topics Fourth quarter and 2013 overview Investment performance and flows Update on EMEA Financial results Questions Appendix 13
Slide 15: 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 – Continued to deliver strong, long-term investment performance – Ongoing success in our Cross Border retail business, with $10 billion in net flows for 2013 – Further div
Slide 16: Well-positioned in EMEA
Well-positioned in EMEA A strong and growing business Ending AUM 3Q 2013 4Q 2013 ($ billions) Invesco Ltd. 745.5 778.7 Invesco EMEA 116.2 164.7 125.3 171.9 48.5 46.6 UK Equity Income AUM EMEA Ex-UK Equity Income AUM 3Q13 LT Net Flows 4Q13 LT Net Flows Change in Ending AUM (billions) (billions) (3Q v
Slide 17: Discussion topics
Discussion topics Fourth quarter and 2013 overview Investment performance and flows Update on EMEA Financial results Questions Appendix 16
Slide 18: Total assets under management – 4Q13 vs. 3Q13
Total assets under management – 4Q13 vs. 3Q13 ($ billions) 4Q-13 3Q-13 % Change Beginning Assets $745.5 $705.6 5.7% Long-Term Inflows 45.8 41.8 9.6% Long-Term Outflows (44.8) (36.8) 21.7% Long-Term Net flows 1.0 5.0 (80.0)% Net flows in Invesco PowerShares QQQ 2.6 0.8 N/A Net flows in Inst. Money Ma
Slide 19: Non-GAAP operating results – 4Q13 vs. 3Q13
Non-GAAP operating results – 4Q13 vs. 3Q13 ($ millions) 4Q-13 3Q-13 % Change Adjusted Revenues Investment Management Fees 983 938 4.8% Service and Distribution Fees 230 221 4.3% Performance Fees 11 9 30.6% Other 33 33 0.6% Third-Party Distribution, Service and Advisory Expenses (400) (384) 4.2% Adju
Slide 20: Fourth quarter overview
Fourth quarter overview Continued strong investment performance and favorable market conditions contributed to solid operating results – Maintained strong, long-term investment performance – 83% of actively managed assets ahead of peers on a 3-year basis – Net inflows of $5.2 billion driven by stron
Slide 21: Discussion topics
Discussion topics Fourth quarter and 2013 overview Investment performance and flows Update on EMEA Financial results Questions Appendix 20
Slide 22: Discussion topics
Discussion topics Fourth quarter and 2013 overview Investment performance and flows Update on EMEA Financial results Questions Appendix 21
Slide 23: Additional Information for Invesco Balanced-Risk Allocation Fund
Additional Information for Invesco Balanced-Risk Allocation Fund As of December 31, 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. 22
Slide 24: 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 $443.8 billion) % of assets top half % of assets bottom Equities of peer group half of peer grou
Slide 25: 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 $443.8 billion) % of assets top half % of assets bottom Equities Global ex-US and Other of peer
Slide 26: Investment performance
Investment performance By investment objective (actively managed assets)* Equities 1st quartile 2nd quartile AUM above benchmark U.S. Core U.S. Growth U.S. Value Sector 100% 100% 100% 100% 97% 81% 80% 77% 71% 72% 53% 44% 57% 5% 49% 49% 12% 38% 14% 56% 32% 30% 48% 36% 26% 27% 11% 10% 24% 24% 28% 11%
Slide 27: Investment performance
Investment performance By investment objective (actively managed assets)* Equities Global ex-U.S. and Other 1st quartile 2nd quartile AUM above benchmark Global Emerging markets Alternatives Balanced 100% 100% 100% 100% 97% 97% 91% 21% 83% 42% 72% 44% 73% 67% 8% 61% 36% 60% 73% 96% 20% 49% 47% 73% 4
Slide 28: We are diversified as a firm
We are diversified as a firm Delivering a diverse set of solutions to meet client needs By client domicile By channel By asset class 3% 11% 68% 22% 15% 67% 33% 49% 8% 11% 7% 7% 1-Yr 1-Yr 1-Yr ($ billions) Change ($ billions) Change ($ billions) Change U.S. $521.3 15.2% Retail $519.6 22.0% Equity $38
Slide 29: Non-GAAP operating results – quarterly
Non-GAAP operating results – quarterly ($ millions) 4Q-13 3Q-13 % Change* 2Q-13 1Q-13 4Q-12 3Q-12 2Q-12 1Q-12 Investment Management Fees 983 938 4.8% 905 863 836 813 775 787 Service and Distribution Fees 230 221 4.3% 216 206 200 196 187 189 Performance Fees 11 9 30.6% 9 39 4 3 16 21 Other 33 33 0.6%
Slide 30: US GAAP operating results – quarterly
US GAAP operating results – quarterly ($ millions) 4Q-13 3Q-13 % Change* 2Q-13 1Q-13 4Q-12 3Q-12 2Q-12 1Q-12 Investment Management Fees 955 914 4.5% 886 845 818 791 753 766 Service and Distribution Fees 230 221 4.3% 216 206 200 196 187 189 Performance Fees 9 5 70.6% 6 36 2 3 16 20 Other 31 32 (1.3)%
Slide 31: Total assets under management – quarterly
Total assets under management – quarterly ($ billions) 4Q-13 3Q-13 % Change 2Q-13 1Q-13 4Q-12 Beginning Assets $745.5 $705.6 5.7% $707.7 $667.4 $663.0 Long-Term Inflows 45.8 41.8 9.6% 44.4 47.6 34.4 Long-Term Outflows (44.8) (36.8) 21.7% (43.0) (33.3) (31.7) Long-Term Net flows 1.0 5.0 (80.0)% 1.4 1
Slide 32: Total assets under management – by asset class
Total assets under management – by asset class Fixed Money ($ billions) Total Equity Income Balanced Market Alternative June 30, 2013 $705.6 $321.4 $173.1 $49.7 $77.8 $83.6 Long-Term Inflows 41.8 22.8 8.4 3.7 1.0 5.9 Long-Term Outflows (36.8) (18.2) (9.5) (3.5) (1.1) (4.5) Long-Term Net flows 5.0 4.
Slide 33: Total assets under management – by asset class
Total assets under management – by asset class Fixed Money ($ billions) Total Equity Income Balanced Market Alternative December 31, 2012 $667.4 $295.6 $171.9 $43.6 $73.3 $83.0 Long-Term Inflows 47.6 18.5 14.1 7.0 0.7 7.3 Long-Term Outflows (33.3) (16.2) (9.1) (2.0) (0.8) (5.2) Long-Term Net flows 1
Slide 34: Total assets under management – by channel
Total assets under management – by channel ($ billions) Total Retail Institutional June 30, 2013 $705.6 $457.7 $247.9 Long-Term Inflows 41.8 35.5 6.3 Long-Term Outflows (36.8) (29.0) (7.8) Long-Term Net flows 5.0 6.5 (1.5) Net flows in Invesco PowerShares QQQ 0.8 0.8 - Net flows in Inst. Money Marke
Slide 35: Total assets under management – by channel
Total assets under management – by channel ($ billions) Total Retail Institutional December 31, 2012 $667.4 $425.8 $241.6 Long-Term Inflows 47.6 36.2 11.4 Long-Term Outflows (33.3) (25.9) (7.4) Long-Term Net flows 14.3 10.3 4.0 Net flows in Invesco PowerShares QQQ (0.4) (0.4) - Net flows in Inst. Mo
Slide 36: Total assets under management – by client domicile
Total assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Europe Asia June 30, 2013 $705.6 $481.5 $24.8 $104.3 $46.4 $48.6 Long-Term Inflows 41.8 25.7 0.8 4.0 6.4 4.9 Long-Term Outflows (36.8) (23.7) (1.0) (4.3) (4.2) (3.6) Long-Term Net flows 5.0 2.0 (0.2) (
Slide 37: Total assets under management – by client domicile
Total assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Europe Asia December 31, 2012 $667.4 $452.5 $25.2 $101.9 $38.8 $49.0 Long-Term Inflows 47.6 30.1 1.2 3.7 8.9 3.7 Long-Term Outflows (33.3) (20.1) (1.3) (4.3) (3.9) (3.7) Long-Term Net flows 14.3 10.0 (
Slide 38: Passive assets under management – by asset class
Passive assets under management – by asset class Fixed Money ($ billions) Total Equity Income Balanced Market Alternative June 30, 2013 $123.7 $65.7 $42.5 - - $15.5 Long-Term Inflows 8.7 6.0 1.6 - - 1.1 Long-Term Outflows (8.5) (3.6) (3.9) - - (1.0) Long-Term Net flows 0.2 2.4 (2.3) - - 0.1 Net flow
Slide 39: Passive assets under management – by asset class
Passive assets under management – by asset class Fixed Money ($ billions) Total Equity Income Balanced Market Alternative December 31, 2012 $114.0 $55.5 $39.0 - - $19.5 Long-Term Inflows 13.5 6.3 5.7 - - 1.5 Long-Term Outflows (7.1) (3.2) (2.4) - - (1.5) Long-Term Net flows 6.4 3.1 3.3 - - - Net flo
Slide 40: Passive assets under management – by channel
Passive assets under management – by channel ($ billions) Total Retail Institutional June 30, 2013 $123.7 $100.0 $23.7 Long-Term Inflows 8.7 8.7 - Long-Term Outflows (8.5) (6.0) (2.5) Long-Term Net flows 0.2 2.7 (2.5) Net flows in Invesco PowerShares QQQ 0.8 0.8 - Net flows in Inst. Money Market Fun
Slide 41: Passive assets under management – by channel
Passive assets under management – by channel ($ billions) Total Retail Institutional December 31, 2012 $114.0 $91.2 $22.8 Long-Term Inflows 13.5 10.3 3.2 Long-Term Outflows (7.1) (5.7) (1.4) Long-Term Net flows 6.4 4.6 1.8 Net flows in Invesco PowerShares QQQ (0.4) (0.4) - Net flows in Inst. Money M
Slide 42: Passive assets under management – by client domicile
Passive assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Europe Asia June 30, 2013 $123.7 $119.7 $0.1 - $1.3 $2.6 Long-Term Inflows 8.7 8.6 - - 0.1 - Long-Term Outflows (8.5) (8.4) - - (0.1) - Long-Term Net flows 0.2 0.2 - - - - Net flows in Invesco PowerS
Slide 43: Passive assets under management – by client domicile
Passive assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Europe Asia December 31, 2012 $114.0 $107.8 0.1 - $1.1 $5.0 Long-Term Inflows 13.5 13.3 - - 0.2 - Long-Term Outflows (7.1) (6.9) - - (0.1) (0.1) Long-Term Net flows 6.4 6.4 - - 0.1 (0.1) Net flows in
Slide 44: Reconciliation of US GAAP to non-GAAP – three months ended December 31, 2013
Reconciliation of US GAAP results to non-GAAP results – three months ended December 31, 2013 * Other: Please refer to pages xx-xx in the 4Q 2013 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party distribution, Acquisition / Market appreciation / C
Slide 45: Reconciliation of US GAAP to non-GAAP – 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 distribution, Acquisition / Market appreciation /
Slide 46: Reconciliation of US GAAP to non-GAAP – 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 distribution, Acquisition / Market appreciation / Conso
Slide 47: Reconciliation of US GAAP to non-GAAP – 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 48: Reconciliation of US GAAP to non-GAAP – 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 distribution, Acquisition / Market appreciation / C
Slide 49: Reconciliation of US GAAP to non-GAAP – 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 distribution, Acquisition/di Market appreciation /
Slide 50: Reconciliation of US GAAP to non-GAAP – 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 distribution, Acquisition / Market appreciation / Conso
Slide 51: Reconciliation of US GAAP to non-GAAP – 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 distribution, Acquisition / Market appreciation / Cons