Invesco Ltd · NYSE:IVZ
Invesco — Q2 2017 Earnings Presentation
45 slides from Invesco's earnings presentation, Jul 27, 2017
Slide 1: Invesco second quarter 2017 results
Invesco second quarter 2017 results Martin L. Flanagan President and Chief Executive Officer Loren M. Starr Chief Financial Officer July 27, 2017
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: Presentation of second quarter 2017 results
Presentation of second quarter 2017 results This presentation includes the following non-GAAP financial measures: net revenue (and by calculation, net revenue yield on AUM), adjusted operating income, adjusted operating margin, adjusted net income attributable to Invesco Ltd., and adjusted diluted e
Slide 4: Discussion topics
Discussion topics Second quarter overview Investment performance and flows Financial results Questions Appendix 3
Slide 5: Second quarter overview – highlights
Second quarter overview – highlights Maintained strong investment performance and achieved a solid operating margin during the quarter Maintained strong, long-term investment performance – 71% and 78% of actively managed assets in top half of peer group on a 3- and 5-year basis Solid retail dema
Slide 6: Second quarter overview – summary of operating results
Second quarter overview – summary of operating results Assets under June 30, 2017, AUM of $858.3 billion, versus $834.8 billion at management March 31, 2017 Average AUM was $849.2 billion, versus $829.8 billion for the first quarter of 2017 Flows Long-term net outflows of $0.6 billion Total
Slide 7: Discussion topics
Discussion topics Second quarter overview Investment performance and flows Financial results Questions Appendix 6
Slide 8: Investment performance – overview
Investment performance – overview Aggregate performance analysis – asset weighted Percent of actively managed assets in top half of peer group* 1-Year 3-Year 5-Year 64% 71% 78% 22% 29% 36% Assets top half of peer group Assets bottom half of peer group * Excludes passive products, closed-end funds, p
Slide 9: Quarterly long-term flows
Quarterly long-term flows Improving active long-term net flows for the quarter Quarterly long-term flows ($ billions) Total Active Passive 51.7 46.2 49.1 39.9 36.7 12.3 11.8 43.5 43.0 42.8 45.8 42.3 35.6 37.3 33.7 11.8 33.2 32.9 33.5 10.6 9.8 9.9 8.6 6.8 4.5 12.2 8.3 3.9 4.5 2.3 3.9 3.5 1.8 0.5 0.4
Slide 10: Quarterly long-term flows
Quarterly long-term flows Solid retail demand during the quarter Quarterly long-term flows ($ billions) Retail(a) Institutional(b) 40.3 39.6 11.5 11.0 11.4 35.6 34.4 32.0 33.1 34.8 10.4 10.6 32.6 9.7 9.5 7.9 5.0 3.9 3.4 8.8 1.4 1.2 1.8 1.4 0.3 0.0 0.0 -0.5 -4.2 -2.7 -3.9 -2.0 -6.0 -6.5 -8.0 -8.3 -9.
Slide 11: Discussion topics
Discussion topics Second quarter overview Investment performance and flows Financial results Questions Appendix 10
Slide 12: Total assets under management – 2Q17 vs. 1Q17
Total assets under management – 2Q17 vs. 1Q17 ($ billions) 2Q-17 1Q-17 % Change Beginning Assets $834.8 $812.9 2.7% Long-Term Inflows 42.3 49.1 (13.8)% Long-Term Outflows (42.9) (47.3) (9.3)% Long-Term Net Flows (0.6) 1.8 N/A Net flows in Invesco PowerShares QQQ 0.2 1.0 (80.0)% Net flows in Inst. Mo
Slide 13: US GAAP operating results – 2Q17 vs. 1Q17
US GAAP operating results – 2Q17 vs. 1Q17 ($ millions) 2Q-17 1Q-17 % Change Operating Revenues Investment Management Fees 1,010.4 955.2 5.8% Service and Distribution Fees 211.3 206.4 2.4% Performance Fees 16.7 11.3 47.8% Other 16.0 19.7 (18.8)% Total Operating Revenues 1,254.4 1,192.6 5.2% Operating
Slide 14: Non-GAAP operating results – 2Q17 vs. 1Q17
Non-GAAP operating results – 2Q17 vs. 1Q17 ($ millions) 2Q-17 1Q-17 % Change Adjusted Revenues Investment Management Fees 1,027.9 973.6 5.6% Service and Distribution Fees 211.3 206.4 2.4% Performance Fees 18.0 17.7 1.7% Other 17.3 20.8 (16.8)% Third-Party Distribution, Service and Advisory Expenses
Slide 15: Second quarter overview – highlights
Second quarter overview – highlights Maintained strong investment performance and achieved a solid operating margin during the quarter Maintained strong, long-term investment performance – 71% and 78% of actively managed assets in top half of peer group on a 3- and 5-year basis Solid retail dema
Slide 16: Discussion topics
Discussion topics Second quarter overview Investment performance and flows Financial results Questions Appendix 15
Slide 17: Discussion topics
Discussion topics Second quarter overview Investment performance and flows Financial results Questions Appendix 16
Slide 18: 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 15% 3% 12% 67% 65% 46% 24% 10% 33% 10% 9% 6% 1-Yr 1-Yr 1-Yr ($ billions) Change ($ billions) Change ($ billions) Change U.S. $559.2 9.1% Retail $572.4 13.5% Equity $39
Slide 19: Investment performance by investment objective
Investment performance By investment objective (actively managed assets)* Equities AUM above benchmark 1st quartile 2nd quartile U.S. Core U.S. Growth U.S. Value Sector 100% 100% 100% 100% 87% 87% 37% 80% 19% 72% 58% 58% 58% 20% 54% 41% 9% 62% 7% 50% 51% 29% 37% 25% 28% 29% 17% 0% 0% 13% 9% 13% 5% 5
Slide 20: Investment performance by investment objective (continued)
Investment performance By investment objective (actively managed assets)* (CONTINUED) Equities Other AUM above benchmark 1st quartile 2nd quartile Global Global ex-U.S. and Em. Mkts. Alternatives Balanced 100% 100% 100% 100% 91% 4% 83% 81% 6% 73% 34% 76% 62% 63% 34% 64% 51% 53% 82% 45% 48% 35% 68% 6
Slide 21: Investment performance (5-year) by investment objective
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 $477.7 billion) % of assets top % of assets bottom Equities half of peer group half of peer gro
Slide 22: Investment performance (5-year) by investment objective (continued)
Investment performance (5-year) By investment objective (actively managed assets)* (CONTINUED) Percentages in parentheses represent % AUM of each investment objective as a ratio of all objectives (Total ranked AUM of $477.7 billion) % of assets top % of assets bottom Equities Other half of peer grou
Slide 23: US GAAP operating results – quarterly
US GAAP operating results – quarterly ($ millions) 2Q-17 1Q-17 % Change* 4Q-16 3Q-16 2Q-16 1Q-16 4Q-15 3Q-15 Investment Management Fees 1,010 955 5.8% 947 966 947 914 987 1,017 Service and Distribution Fees 211 206 2.4% 209 213 203 198 208 215 Performance Fees 17 11 47.8% 18 3 9 15 17 16 Other 16 20
Slide 24: Non-GAAP operating results – quarterly
Non-GAAP operating results– quarterly ($ millions) 2Q-17 1Q-17 % Change* 4Q-16 3Q-16 2Q-16 1Q-16 4Q-15 3Q-15 Investment Management Fees 1,028 974 5.6% 965 983 963 930 1,009 1,038 Service and Distribution Fees 211 206 2.4% 209 213 203 198 208 215 Performance Fees 18 18 1.7% 18 4 9 16 19 18 Other 17 2
Slide 25: Total assets under management – quarterly
Total assets under management – quarterly ($ billions) 2Q-17 1Q-17 % Change 4Q-16 3Q-16 2Q-16 1Q-16 4Q-15 3Q-15 Beginning Assets $834.8 $812.9 2.7% $820.2 $779.6 $771.5 $775.6 $755.8 $803.6 Long-Term Inflows 42.3 49.1 (13.8)% 46.2 51.7 45.8 42.8 43.0 43.5 Long-Term Outflows (42.9) (47.3) (9.3)% (48.
Slide 26: Total assets under management – by asset class
Total assets under management – by asset class Fixed Money ($ billions) Total Equity Balanced Alternatives Income Market December 31, 2016 $812.9 $364.1 $201.7 $46.8 $78.3 $122.0 Long-Term Inflows 49.1 21.5 12.7 2.7 0.8 11.4 Long-Term Outflows (47.3) (26.5) (10.2) (2.2) (0.9) (7.5) Long-Term Net flo
Slide 27: Total assets under management – by asset class
Total assets under management – by asset class Fixed Money ($ billions) Total Equity Balanced Alternatives Income Market June 30, 2016 $779.6 $348.8 $196.3 $47.4 $71.1 $116.0 Long-Term Inflows 51.7 19.9 17.1 2.6 1.2 10.9 Long-Term Outflows (39.5) (23.1) (7.9) (2.4) (1.1) (5.0) Long-Term Net flows 12
Slide 28: Total assets under management – by channel
Total assets under management – by channel ($ billions) Total Retail Institutional December 31, 2016 $812.9 $526.5 $286.4 Long-Term Inflows 49.1 39.6 9.5 Long-Term Outflows (47.3) (37.8) (9.5) Long-Term Net flows 1.8 1.8 - Net flows in Invesco PowerShares QQQ 1.0 1.0 - Net flows in Inst. Money Marke
Slide 29: Total assets under management – by channel
Total assets under management – by channel ($ billions) Total Retail Institutional June 30, 2016 $779.6 $504.3 $275.3 Long-Term Inflows 51.7 40.3 11.4 Long-Term Outflows (39.5) (31.5) (8.0) Long-Term Net flows 12.2 8.8 3.4 Net flows in Invesco PowerShares QQQ 1.1 1.1 - Net flows in Inst. Money Marke
Slide 30: Total assets under management – by client domicile
Total assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Asia Europe December 31, 2016 $812.9 $539.5 $23.1 $98.2 $72.1 $80.0 Long-Term Inflows 49.1 27.8 1.1 4.1 8.3 7.8 Long-Term Outflows (47.3) (26.9) (1.3) (5.9) (6.6) (6.6) Long-Term Net flows 1.8 0.9 (0.2
Slide 31: Total assets under management – by client domicile
Total assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Asia Europe June 30, 2016 $779.6 $512.5 $23.1 $93.8 $72.8 $77.4 Long-Term Inflows 51.7 32.5 0.8 4.1 6.0 8.3 Long-Term Outflows (39.5) (24.5) (1.0) (3.6) (6.3) (4.1) Long-Term Net flows 12.2 8.0 (0.2) 0
Slide 32: Passive assets under management – by asset class
Passive assets under management – by asset class Fixed Money ($ billions) Total Equity Balanced Alternative Income Market December 31, 2016 $144.4 $93.5 $41.7 - - $9.2 Long-Term Inflows 11.8 6.8 4.3 - - 0.7 Long-Term Outflows (9.5) (6.7) (1.2) - - (1.6) Long-Term Net flows 2.3 0.1 3.1 - - (0.9) Net
Slide 33: Passive assets under management – by asset class
Passive assets under management – by asset class Fixed Money ($ billions) Total Equity Balanced Income Market Alternative June 30, 2016 $133.5 $84.9 $38.9 - $0.2 $9.5 Long-Term Inflows 11.8 6.9 4.1 - - 0.8 Long-Term Outflows (7.9) (6.2) (0.7) - - (1.0) Long-Term Net flows 3.9 0.7 3.4 - - (0.2) Net f
Slide 34: Passive assets under management – by channel
Passive assets under management – by channel ($ billions) Total Retail Institutional December 31, 2016 $144.4 $128.8 $15.6 Long-Term Inflows 11.8 10.4 1.4 Long-Term Outflows (9.5) (8.4) (1.1) Long-Term Net flows 2.3 2.0 0.3 Net flows in Invesco PowerShares QQQ 1.0 1.0 - Net flows in Inst. Money Mark
Slide 35: Passive assets under management – by channel
Passive assets under management – by channel ($ billions) Total Retail Institutional June 30, 2016 $133.5 $117.0 $16.5 Long-Term Inflows 11.8 10.9 0.9 Long-Term Outflows (7.9) (7.7) (0.2) Long-Term Net flows 3.9 3.2 0.7 Net flows in Invesco PowerShares QQQ 1.1 1.1 - Net flows in Inst. Money Market F
Slide 36: Passive assets under management – by client domicile
Passive assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Asia Europe December 31, 2016 $144.4 $139.9 $0.5 - $1.9 $2.1 Long-Term Inflows 11.8 11.7 - - 0.1 - Long-Term Outflows (9.5) (8.7) - - (0.1) (0.7) Long-Term Net flows 2.3 3.0 - - - (0.7) Net flows in
Slide 37: Passive assets under management – by client domicile
Passive assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Asia Europe June 30, 2016 $133.5 $128.9 $0.5 - $1.7 $2.4 Long-Term Inflows 11.8 11.6 0.1 - 0.1 - Long-Term Outflows (7.9) (7.7) (0.1) - (0.1) - Long-Term Net flows 3.9 3.9 - - - - Net flows in Invesc
Slide 38: Reconciliation of US GAAP results to non-GAAP results – three months ended June 30, 2017
Reconciliation of US GAAP results to non-GAAP results – three months ended June 30, 2017 Please refer to pages 8-10 in the 2Q 2017 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party Business Market appreciation / Consolidated Other Non-GAAP Consol
Slide 39: Reconciliation of US GAAP results to non-GAAP results – three months ended March 31, 2017
Reconciliation of US GAAP results to non-GAAP results – three months ended March 31, 2017 Please refer to pages 7-9 in the 1Q 2017 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party Business Market appreciation / Consolidated Other Non-GAAP Consol
Slide 40: Reconciliation of US GAAP results to non-GAAP results – three months ended December 31, 2016
Reconciliation of US GAAP results to non-GAAP results – three months ended December 31, 2016 Please refer to pages 9-11 in the 4Q 2016 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party Business Market appreciation / Consolidated Other Non-GAAP Co
Slide 41: Reconciliation of US GAAP results to non-GAAP results – three months ended September 30, 2016
Reconciliation of US GAAP results to non-GAAP results – three months ended September 30, 2016 Please refer to pages 8-10 in the 3Q 2016 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party Business Market appreciation / Consolidated Other Non-GAAP C
Slide 42: Reconciliation of US GAAP results to non-GAAP results – three months ended June 30, 2016
Reconciliation of US GAAP results to non-GAAP results – three months ended June 30, 2016 Please refer to pages 8-10 in the 2Q 2016 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party Business Market appreciation / Consolidated Other Non-GAAP Consol
Slide 43: Reconciliation of US GAAP results to non-GAAP results – three months ended March 31, 2016
Reconciliation of US GAAP results to non-GAAP results – three months ended March 31, 2016 Please refer to pages 22-26 in the 1Q 2016 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party Business Market appreciation / Consolidated Other Non-GAAP Cons
Slide 44: Reconciliation of US GAAP results to non-GAAP results – three months ended December 31, 2015
Reconciliation of US GAAP results to non-GAAP results – three months ended December 31, 2015 Please refer to pages 22-26 in the 4Q 2015 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party Business Market appreciation / Consolidated Other Non-GAAP C
Slide 45: Reconciliation of US GAAP results to non-GAAP results – three months ended September 30, 2015
Reconciliation of US GAAP results to non-GAAP results – three months ended September 30, 2015 Please refer to pages 19-22 in the 3Q 2015 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party Business Market appreciation / Consolidated Other Non-GAAP