IGM Financial Inc. · TSX:IGM

IGM Financial — Q4 2020 Earnings Presentation

44 slides from IGM Financial's earnings presentation, Feb 12, 2021

  1. Slide 1: IGM Financial Q4, 2020 Results

    IGM Financial Q4, 2020 Results February 12, 2021

  2. Slide 2: Conference Call Participants

    Conference Call Participants JAMES O‘SULLIVAN DAMON MURCHISON BARRY S. MCINERNEY LUKE GOULD PRESIDENT & CEO PRESIDENT & CEO PRESIDENT & CEO EXECUTIVE VICE-PRESIDENT IGM FINANCIAL IG WEALTH MANAGEMENT MACKENZIE INVESTMENTS & CFO IGM FINANCIAL 2

  3. 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 unde

  4. Slide 4: Non-IFRS Financial Measures & Additional IFRS Measures

    Non-IFRS Financial Measures & Additional IFRS Measures Net earnings available to common shareholders, which is an additional measure in accordance with IFRS, may be subdivided into two components consisting of: • Adjusted net earnings available to common shareholders; and • Other items, which includ

  5. 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

  6. Slide 6: IGM Financial

    IGM FINANCIAL JAMES O‘SULLIVAN PRESIDENT & CEO IGM FINANCIAL IGM FINANCIAL Q4, 2020 RESULTS

  7. Slide 7: IGM Financial 2020 Highlights

    Up 26.3%, or IGM Financial 2020 Highlights IGM AUM&A Growth During 2020 ($B) 10.3% excluding acquisitions 6.5% investment 1) Record high AUM&A of $240B, up ~26% 3.7% net sales rate return rate 2) Record high net flows of $7.1B, a rate of 3.7% 3) Strong Adjusted EPS of $3.201 in context of volatile y

  8. Slide 8: IGM Financial Q4, 2020 Highlights

    IGM Financial Q4, 2020 Highlights 1 Record high AUM&A of $240B; up 6.7% in the quarter excluding acquisitions • Organic growth from client investment returns of 5.5% and net flows of $2.2B • $30.3B in net assets acquired through acquisitions 2 Record high total net flows of $2.2B and investment fund

  9. Slide 9: Financial Market and Client Investment Returns

    Financial Market and Client Investment Returns IGM Client Return Index1 Investment Performance Q1/21 at 2.4 2019 Q4/20 2020 Feb 9/21 IGM Client Investment Returns 2 13.0% 5.5% 6.5% 2.4% Equity Markets: 2.2 Canada (S&P / TSX Composite) 19.1% 8.1% 2.2% 5.6% U.S. (S&P 500) 28.9% 11.7% 16.3% 4.1% 2.0 Eu

  10. Slide 10: Industry Operating Environment

    Industry Operating Environment Fourth Quarter Industry Long-term Net Sales ($B) Total Industry Advice Channel 16.4 8.6 8.8 8.0 5.5 5.7 7.2 3.2 3.8 3.7 3.4 1.6 1.4 2.2 0.3 2.5 0.1 (0.7) (8.2) (15.6) 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Long-term Mutual Fund Net Sales Rate (Last Twelve Mo

  11. Slide 11: IGM Financial Q4, 2020 Results

    IGM Financial Q4, 2020 Results Up 20% from last year Daily Total AUM & AUA ($B) Net Earnings ($MM) Net Earnings Per Share (₵) 96 229 Total AUM&A Annual Average AUM&A 192 191 80 80 Quarterly Average AUM&A Investment Fund Assets 260 250 240 230 Net acquisitions of $30.3B Q4/19 Q3/20 Q4/20 Q4/19 Q3/20

  12. Slide 12: Adjusted Earnings before Interest & Tax by Segment

    Adjusted Earnings before Interest & Tax by Segment Wealth Asset $ millions Management Management Strategic Investments & Other Unallocated Capital & Adjusted Quarter Other EBIT EPS (₵) Q4 2020 182.4 6.3 60.1 27.3 11.8 1.0 - 0.2 289.1 86 Quarter-over- 0.4% 18.9% (14.8%) (17.3%) 12.4% (3.8%) (4.4%) qu

  13. Slide 13: Fourth Quarter and Full Year Net Flows

    Fourth Quarter and Full Year Net Flows Wealth Management Asset Management IGM Consolidated Up $594MM Up $272MM Up $1,526MM Up $2,228MM Quarter 2,221 ($MM) 1,673 485 249 147 (109) (23) (7) Q4/19 Q4/20 Q4/19 Q4/20 Q4/19 Q4/20 Q4/19 Q4/20 Up $1,575MM Up $962MM Up $6,523MM Up $8,763MM 7,099 6,250 Year (

  14. Slide 14: IG Wealth Management

    IG WEALTH MANAGEMENT DAMON MURCHISON PRESIDENT & CEO IG WEALTH MANAGEMENT IGM FINANCIAL Q4, 2020 RESULTS

  15. Slide 15: IG Wealth Management Q4, 2020 Highlights

    IG Wealth Management Q4, 2020 Highlights 1 Record high AUM&A of $103.3B as at December 31, 2020, up 5.9% during Q4 • Fourth quarter client returns were positive ~5.2% 2 Record high Q4 and full year gross inflows • Q4/20 gross inflows up 19.1%, driven by HNW client acquisition and contributions from

  16. Slide 16: Continued Net Flow Momentum at IG Wealth Management

    Continued Net Flow Momentum at IG Wealth Management IG Wealth Management Gross and Net Flows1 ($MM) IG Wealth Management Flows Gross Inflows Gross Outflows Net Flows (Last Twelve Month Trailing, $MM) Month of January: Net Flows Gross Inflows (RHS) 999 834 879 739 864 3,000 11,500 618 656 670 638 Str

  17. Slide 17: IG Wealth Management Q4, 2020 Operating Results

    IG Wealth Management Q4, 2020 Operating Results Gross Outflows Rate Assets Under Gross Inflows ($MM) (quarterly annualized) Net Flows ($MM) Advisement ($B) Up 19.1% Up $594MM 3rd party IG mutual funds 2,938 10.7% 485 2,467 9.8% 97.1 97.5 103.3 5.6 3.9 4.6 (109) 93.2 92.9 97.7 Q4/19 Q4/20 (96.0%) (95

  18. Slide 18: IG Wealth Management Assets Under Advisement & Net Flows

    IG Wealth Management Assets Under Advisement & Net Flows ($MM) IG Wealth Management Assets Under Advisement & Net Flows ($MM) Assets Under Advisement Q4, 2020 Net Flows Contributions to Buy and Sell Decisions + Accounts = Net flows Dec 31, Dec 31, Cash and in-kind 2019 2020 Change Buys - Sells = Net

  19. Slide 19: Continued Improvements in Consultant Productivity

    Continued Improvements in Consultant Productivity Gross Sales per Consultant Recruits Gross Sales per Consultant Practice with <4 years experience with >4 years experience ($MM) ($MM) ▪ Continued focus on high quality recruits and prioritizing 1.25 strength and 0.38 competitiveness of the 0.35 1.04

  20. Slide 20: Experience our next generation IG Living Plan

    Experience our next generation IG Living Plan™ Key features and benefits: • Complete snapshot of your whole financial picture • “What if” scenario analysis • Plan with even more confidence • Easily monitor your progress to your goals • Collaborative planning experience with clients remotely Roll-out

  21. Slide 21: Mackenzie Investments

    MACKENZIE INVESTMENTS BARRY S. MCINERNEY PRESIDENT & CEO MACKENZIE INVESTMENTS IGM FINANCIAL Q4, 2020 RESULTS

  22. Slide 22: Mackenzie Investments Q4, 2020 Highlights

    Mackenzie Investments Q4, 2020 Highlights Record high AUM of $186.8B at December 31, 2020, up 6.2% from Q3 2020 excluding 1 acquisitions (up 26.8% including acquisitions) • Organic growth through client returns of 5.8% and net sales of $1.7B • $30.3B acquired through GLC and Greenchip acquisitions,

  23. Slide 23: Continued Strong Momentum at Mackenzie with a Record-breaking Q4

    Continued Strong Momentum at Mackenzie with a Record-breaking Q4 Mackenzie Investment Fund Flows1 ($MM) Mackenzie Investment Funds Net Flows1 Gross Sales Redemptions Mutual Fund Net Sales ETF Net Flows (Last Twelve Month Trailing, $MM) Month of January: 1,285 994 804 384 605 652 501 509 698 716 779

  24. Slide 24: Mackenzie Q4, 2020 Operating Results

    Mackenzie Q4, 2020 Operating Results Mutual Fund Gross Sales ($MM)2 Net Sales ($MM)1,2 ▪ $1,314MM retail net sales, up Retail Institutional $929MM Q4/19 Q4/20 4,501 Up 74% Retail mutual Funds 222 1,010 ▪ 5.5% long-term investment fund net Up 113% Retail ETFs 163 304 1,914 sales rate over the twelve

  25. Slide 25: Investment Boutique Retail Mutual Fund Performance & Net Sales

    Investment Boutique Retail Mutual Fund Performance & Net Sales Fixed Managed Value-Oriented Quality Growth-Oriented Sustainable Core & Dividend 3rd Party Income Solutions North Global Global CAMC, Fixed Multi-Asset Putnam, Cundill American Ivy Growth Bluewater Resources Greenchip Quantitative Equity

  26. Slide 26: Northleaf and Greenchip Acquisitions Further Expand Mackenzie's Capabilities

    Northleaf and Greenchip Acquisitions Further Expand Mackenzie’s Capabilities • Transaction closed December 22, 2020 • Transaction closed October 28, 2020 • Northleaf is an independent mid-market global private • Greenchip’s long-term investment performance is top equity, private credit and infrastru

  27. Slide 27: China AMC – A Leading Chinese Asset Manager

    China AMC – A Leading Chinese Asset Manager – Delivering Accelerated Growth with Q4 AUM and Net Earnings Increasing Over 40% Year-over-year China AMC Ending AUM1 China AMC Net Earnings IGM Share of China AMC Earnings (RMB billions) (RMB millions) (CAD millions) 1,461 440 11.8 398 407 1,248 10.3 10.5

  28. Slide 28: Financial Highlights

    IGM FINANCIAL Financial Highlights LUKE GOULD EXECUTIVE VICE-PRESIDENT & CFO IGM FINANCIAL IGM FINANCIAL Q4, 2020 RESULTS

  29. Slide 29: Assets Under Management & Advisement

    Assets Under Management & Advisement IGM Assets Under Management & Advisement ($B) Change in IGM AUM & AUA ($B) Total AUM&A Annual Average AUM&A Q4/19 Q1/20 Q2/20 Q3/20 Q4/20 LTM Opening AUM & AUA 185.1 190.0 168.4 188.3 196.4 190.0 Quarterly Average AUM&A Investment Fund Assets 260 IG Wealth Manage

  30. Slide 30: IGM Financial Adjusted EBIT & Margins

    IGM Financial Adjusted EBIT & Margins IGM Adjusted EBIT1 ($MM) IGM Adjusted EBIT Margin1,2 (% of AUM&A) 779.5 Direct advisor/dealer 760.0 753.4 compensation3 & sub- 707.9 706.6 1.53% 1.49% advisory expenses 1.45% 1.44% 1.44% 213.4 0.44% 0.43% 207.9 202.7 Share of associates’ 0.42% 0.41% 0.42% 198.0

  31. Slide 31: IGM Financial Consolidated Profitability

    IGM Financial Consolidated Profitability1 $ Millions (unless otherwise noted): Change YoY Change QoQ ▪1 Business development includes IGM Financial Consolidated Q4/19 Q3/20 Q4/20 $ % $ % Days in the period 92 92 92 0.0% 0.0% $10MM in increased Mackenzie Average AUM & AUA ($ Billions) wholesaling com

  32. Slide 32: Mackenzie Retail Mutual Fund Sales & Business Development Expenses

    Mackenzie Retail Mutual Fund Sales & Business Development Expenses Retail Mutual Fund Sales Retail Mutual Fund Sales Retail Mutual Fund Sales Last twelve month trailing ($MM) Quarters ($MM) Full Years ($MM) Gross Sales Net Sales Mutual Fund Gross Sales 12,000 6,000 Net +50% Mutual Fund Net Sales +53

  33. Slide 33: IGM Financial Operations & Support and Business Development Expenses

    IGM Financial Operations & Support and Business Development Expenses1 2019 2020 % Change 2021 Guidance (expressed as change relative to 2020) Business development expenses IG Wea l th 207.3 199.1 (4.0%) <3% IPC 27.3 28.8 5.8% 5 – 10% Ma ckenzi e 79.9 80.2 0.4% 5% (~20% variable with sales & ~20% dis

  34. Slide 34: IG Wealth Management Key Profitability Drivers

    IG Wealth Management Key Profitability Drivers Average Assets ($B), Advisory and Key Revenue & Expenses as bps of Respective Product & Program Fee Rate (bps)1 Driver (AUA or AUM or Gross Inflows)1 109.5 106.7 106.8 105.9 105.0 100.3 95.8 94.9 97.0 5.1 Other AUA Advisory 3.9 91.2 4.5 87.1 87.0 86.3 8

  35. Slide 35: IG Wealth Management Profitability

    IG Wealth Management Profitability $ Millions (unless otherwise noted): 1 Change YoY Change QoQ IG Wealth Management Q4/19 Q3/20 Q4/20 $ % $ % Days in the period 92 92 92 0.0% 0.0% ▪1 Other financial planning Average Assets under advisement ($B) 95.8 97.0 100.3 4.5 4.7% 3.3 3.3% revenues up $8.1MM q

  36. Slide 36: Mackenzie Investments Q4/2020 AUM Growth

    Mackenzie Investments Q4/2020 AUM Growth Q4 2020 Change in AUM ($B) Up 26.8% QoQ 5.7% 8.7% annualized investment Up 6.2% QoQ net sales rate1 return rate1 75.8 Sub-advisory to WM 75.8 110.9 72.7 Institutional 74.6 80.6 51.7 7.7 8.2 SMA Investment 66.9 72.5 59.3 Funds Reduction to Increase Inv. Fund A

  37. Slide 37: Mackenzie Investments Key Profitability Drivers

    Mackenzie Investments 1▪ Run-rate December 31, 2020 3rd party net asset management fee rate estimated to be ~54.5bps pro forma GLC and Greenchip transactions Key Profitability Drivers Based on Dec 31, 2020 AUM, the transactions’ contributions to annualized net revenues and expenses are estimated to

  38. Slide 38: Asset Management Segment Profitability

    Asset Management Segment Profitability $ Millions (unless otherwise noted): 1 Change YoY Change QoQ ▪1 Business development Asset Management Q4/19 Q3/20 Q4/20 $ % $ % includes $10MM in Days in the period 92 92 92 0.0% 0.0% increased Mackenzie Assets under Management ($B) Excluding sub-advisory to We

  39. Slide 39: Strategic Investments & Other Segment as at December 31, 2020

    Strategic Investments & Other Segment as at December 31, 2020 • The Strategic Investments & Other segment has a fair value of ~$2.9B at December 31, 2020 Great-West Lifeco: China: Northleaf:6 Fintech: Unallocated Total Capital & Other $ millions unless otherwise noted (TSX:GWO) WS: 36% fully IGM own

  40. Slide 40: Q&A

    Q&A IGM FINANCIAL Q4, 2020 RESULTS

  41. Slide 41: Appendix

    Appendix IGM FINANCIAL Q4, 2020 RESULTS

  42. Slide 42: New Presentation of Statement of Earnings Compared to Prior Disclosure – Q4/20

    New Presentation of Statement of Earnings Compared to Prior Disclosure Presentation – Q4/201 Three months ended December 31, 2020 Management Administration Distribution Net Investment Proportionate Commission Non-commission Adjusted $ millions Prior Fees Fees Fees Income & Other Share of Associates

  43. Slide 43: New Presentation of Statement of Earnings Compared to Prior Disclosure – 2020

    New Presentation of Statement of Earnings Compared to Prior Disclosure Presentation – 20201 Twelve months ended December 31, 2020 Management Administration Distribution Net Investment Proportionate Commission Non-commission Adjusted $ millions Prior Fees Fees Fees Income & Other Share of Associates

  44. Slide 44: Wealthsimple Momentum Continues; AUA up ~94% Year-over-Year

    Wealthsimple Momentum Continues; AUA up ~94% Year-over-Year • IGM is the largest shareholder with an aggregate 36% fully diluted proforma interest and, collectively, the Power group holds 62% AUA1 (CAD$ Billions) Wealthsimple AUA of CAD $9.7B 9.7 increased 93.6% year-over-year1 7.1 5.0 3.8 2.6 2.1 J

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