Impax Asset Management Group Plc · LSE:IPX
Impax Asset Management — H1 2019 Earnings Presentation
34 slides from Impax Asset Management's earnings presentation, June 2019
Slide 1: Interim results for six months to 31 March 2019
Interim results for six months to 31 March 2019 The specialist asset manager focused on a more sustainable economy
Slide 2: Agenda
Agenda • Highlights Ian Simm Charlie Ridge Founder & Chief Executive Chief Financial Officer • Business update • Financial update • Appendix 2
Slide 3: H1 2019 highlights
H1 2019 highlights Despite volatile Positive net Strong organic Robust investment markets AUM inflows for 14 growth with performance increased 6% to consecutive positive net particularly ‘Global £13.3bn1 quarters inflows £887m1 Opportunities’ & encouraging strategy pipeline 30 April 2019 AUM - £13.7
Slide 4: Financial performance
Financial performance1 H1 2019 H2 2018 H1 2018 Assets under management2 £13.3bn £12.5bn £11.0bn Revenue £33.8m £40.0m £25.7m Adjusted operating profit £7.7m £12.3m £7.7m Profit before tax £9.3m £9.1m £5.5m Adjusted diluted earnings per share 4.4p 7.6p 4.8p Shareholders’ equity £54.6m £52.6m £46.9m I
Slide 5: Business update
Business update Be gs
Slide 6: Impax Asset Management - overview
Impax Asset Management - overview Thematic Equities £9.7bn Unconstrained & US Equities £1.3bn £13.3bn Smart Beta £975m AUM1 Fixed Income £830m Real Assets £436m 30 April 2019 AUM - £13.7 billion London managed // US managed2 1As at 31 March 2019. Assets under advice represent ~3%. Total of asset cla
Slide 7: Impax LN managed: AUM by client domicile
AUM growth in Europe and North America – breakdown by client domicile (£m) PRINCIPAL FUNDS/PARTNERS Impax Environmental Markets plc 1,321 Irish UCITS Platform UK/Ireland 930 St James’s Place Absalon Capital 7,145 EMEA ASN Bank 6,581 Impax LN managed BNP Paribas Asset Management 96 Asia-Pacific BNP P
Slide 8: AUM growth by investment strategy
AUM growth – breakdown by investment strategy (£m) Specialists 2,357 2,193 Leaders 2,962 2,694 Impax LN managed Asia-Pacific 225 99 Water 3,403 3,305 Sustainable Food Food & Agriculture 739 709 Unconstrained Global Equities 375 24 Real Assets 436 450 Impax NH managed US Equities 952 1,209 Smart Beta
Slide 9: Integration and development of Impax NH business
Integration and development of Impax NH business • Investment teams • New product launches ― No integration ― Pax Global Opportunities Fund (June 2018) ― Channels established to exchange ― Actively managed ‘Global Women’s’ ideas/best practice portfolio (May 2019) • Client service and business develo
Slide 10: Breakdown of AUM increase
Breakdown of AUM increase IMPAX LN: LISTED EQUITY FUNDS (£m)1 IMPAX NH: PAX WORLD FUNDS (£m)1 31 March 2019 10,060 31 March 2019 3,354 Market movement (67) Market movement (75) Inflows 2,080 Inflows 418 Outflows (977) Outflows (634) 30 September 2018 9,024 30 September 2018 3,645 Market movement 676
Slide 11: Private Equity Infrastructure
Private Equity Infrastructure NEF II INVESTMENTS NEF ll € € • Over 95% of total value of portfolio now € realised 105MW • Excellent performance track record • Outstanding proceeds to investors over next 18 months € € NEF III € € € € € 48MW € • Capital commitments of €357m €€ € Key as at 30 September
Slide 12: Financial update
Financial update Be gs
Slide 13: Financial highlights - revenue
Financial highlights - revenue IMPAX LN (£m) IMPAX NH1 (£m) H1 2019 23.3 H1 2019 10.5 Listed equity Listed Equity flows flows and 0.9 and performance Flows and performance (1.0) performance One Prior offPrivate year prior year private Equity items not (6.1) equity items not repeated repeated H2 2018
Slide 14: Financial highlights - operating expenses
Financial highlights - operating expenses IMPAX LN (adjusted1) (£m) IMPAX NH (adjusted1) (£m) H1 2019 4.7 6.0 5.7 16.4 H1 2019 5.2 3.3 1.2 9.7 H2 2018 4.3 5.6 7.6 17.5 H2 2018 5.4 3.3 1.7 10.4 2 H1 2018 3.4 5.4 5.7 14.5 H1 2018 1.6 1.3 0.5 3.4 Non-staff costs Fixed staff costs Variable staff costs •
Slide 15: Financial highlights - trends
Financial highlights - trends LN AVERAGE NUMBER OF EMPLOYEES NH AVERAGE NUMBER OF EMPLOYEES 31 March 2019 89 31 March 2019 55 30 September 2018 87 30 September 2018 54 LN ADJUSTED OPERATING COSTS PER EMPLOYEE (£’000) NH ADJUSTED OPERATING COSTS PER EMPLOYEE (£’000) 31 March 2019 184 31 March 2019 17
Slide 16: Financial highlights - earnings and dividends
Financial highlights - earnings and dividends ADJUSTED DILUTED EPS (p) DIVIDEND (p) 4.43 2019 1.5 2018 H1 2019 2018 1.1 3.0 4.1 2.6 Share dilution (0.26) 2017 0.7 2.2 2.9 2016 0.5 1.6 2.1 NH operating earnings (0.20) 2015 0.4 1.2 1.6 0.5 LN operating earnings 0.14 2014 0.3 1.1 1.4 2013 0.9 PriorPriv
Slide 17: Financial highlights - balance sheet
Financial highlights - balance sheet CASH MOVEMENTS1 (£m) CASH RESERVE ANALYSIS1 (£m) 31 March 2019 14.9 31 March 2019 14.9 Repayment of bank borrowing borrowing (3.6) Risk buffer (7.5) Investment in NEF III (1.0) Acquisition Acquasitionofofown own "Available" cash 7.4 (2.5) sharesshares Other cash
Slide 18: IPX shareholder register
IPX shareholder register IPX SHARES MARCH 2019 (m) POTENTIAL DILUTION (IN 2021) • Management equity: 1.3m1 shares would be issued to acquire the IPX issued shares 130.4 16.7% of Impax NH owned by management through put/call options. Net Netshare buy share backs buy to backs date to date (7.3) CURREN
Slide 19: Impax's strong position
Impax’s strong position Attractive Established Acknowledged investment distribution leading global skills/strategies network brand Scope to Building Potential for develop/add new shareholder further scaling capabilities value 19
Slide 20: Appendix
Appendix
Slide 21: Adjusted "IFRS" performance measures
Adjusted “IFRS” performance measures As a result of the acquisition, certain financial performance measures have been prepared on an adjusted basis. “Adjusted” financial metrics are shown after removing the effects of primarily: • acquisition costs incurred as part of the transaction; • revaluation
Slide 22: Acquisition transaction summary
Acquisition transaction summary On 18 January 2018 Impax completed the purchase of Pax World Management LLC (renamed Impax Asset Management LLC, here referred to as “Impax NH”) ― 83.3 per cent from majority shareholder and others ― 16.7 per cent from Pax Management in 2021 under put/call arrangement
Slide 23: Income analysis
Income analysis IFRS Adjustments for Adjusted for Period ended Period ended Period ended March March March 2019 2019 2019 Income statement £'000 £'000 £'000 Comments on adjustments Revenue 33,794 - 33,794 Operating costs (23,871) (2,210) (26,081) Credit from contingent consideration revaluation and
Slide 24: Additional information
Additional information SHARE AWARDS OUTSTANDING INVESTMENTS END OF NUMBER VESTING DATE 1 EXERCISE % OF AWARDS PRINCIPAL INVESTED OUTSTANDING PERIOD THEME FUND COMMENTS FUNDS/INVESTEE (£M) AUM 2013 ESOP 250,000 Vested 31/12/2019 Global Pax World Global US$2m seed in June 2014 ESOP 600,000 Vested 31/1
Slide 25: Listed equities (Impax LN): investment performance to 31 March 2019
Listed equities (Impax LN) : investment performance to 31 March 2019 (USD) STRATEGIES 1 YEAR 3 YEARS 5 YEARS Specialists Active 0.9 11.3 6.2 FTSE ET100 INDEX BENCHMARK -1.6 8.6 3.4 Leaders Active 2.8 11.7 6.6 FTSE EOAS INDEX BENCHMARK 0.6 12.3 7.1 Asia-Pacific Active 1.1 12.1 7.6 FTSE EOAP COMPOSITE
Slide 26: Global Opportunities strategy
Global Opportunities strategy • Investing across the transition to a more 160 Global Opportunities strategy (gross) sustainable global economy 140 MSCI ACWI • Broader approach than Thematic Equity 120 strategies (ca.25% overlap with Leaders) 100 • Targeting MSCI ACWI + 250 bp annualised, 80 gross of
Slide 27: Our offices and distribution partners
Our offices and distribution partners North America UK/Ireland Pax World Funds IEM plc Delaware funds platform UCITS platform NEI Investments NEF Funds1 Desjardins Global Asset Management St James’s Place Mackenzie Investments London Portland Asia - Pacific Portsmouth BNP Paribas in Hong Kong and Au
Slide 28: Global Opportunities: annual disclosure presentation
Global Opportunities: annual disclosure presentation – March 2019 USD Benchmark 3yr Total Firm Assets Ending Market Number of Annual Gross Annual Benchmark Asset Weighted 3yr Annualized Std Annualized Std Year (Millions) Value (Millions) Portfolios Return Annual Net Return Return StdDev* Dev** Dev**
Slide 29: Leaders: annual disclosure presentation
Leaders: annual disclosure presentation – March 2019 USD Annual Annual Benchmark 1 3yr Benchmark 2 3yr Total Firm Assets Ending Market Number of Annual Gross Annual Net Benchmark 1 Benchmark 2 Asset Weighted 3yr Annualized Annualized Std Annualized Std Year (Millions) Value (Millions) Portfolios Ret
Slide 30: Specialists: annual disclosure presentation
Specialists: annual disclosure presentation – March 2019 USD MSCI AC World FTSE ET 3yr Total Firm Ending Market Number of Annual Gross Annual Net MSCI AC World Asset Weighted 3yr Annualized 3yr Annualized Annualized Std Year Assets (Millions) Value (Millions) Portfolios¹ Return Return Return FTSE ET
Slide 31: Asia-Pacific: annual disclosure presentation
Asia-Pacific: annual disclosure presentation – March 2019 USD MSCI AC AP 3yr FTSE EO AP 3yr Total Firm Ending Market Number of Annual Gross Annual Net MSCI AC AP FTSE EO AP Asset Weighted 3yr Annualized Annualized Std Annualized Std Year Assets (Millions) Value (Millions) Portfolios Return Return Re
Slide 32: Water: annual disclosure presentation
Water: annual disclosure presentation – March 2019 USD FTSE EO Water FTSE EO Water MSCI AC World Technology 3yr Total Firm Ending Market Number of Annual Gross Annual Net MSCI AC World Technology Asset Weighted 3yr Annualized 3yr Annualized Annualized Std Year Assets (Millions) Value (Millions) Port
Slide 33: Sustainable Food: annual disclosure presentation
Sustainable Food : annual disclosure presentation – March 2019 USD Benchmark 1 3yr Total Firm Assets Ending Market Number of Annual Gross Annual Benchmark Asset Weighted 3yr Annualized Std Annualized Std Year (Millions) Value (Millions) Portfolios Return Annual Net Return 1 Return StdDev* Dev** Dev*
Slide 34: Important information
Important information Disclaimer This document has been approved by Impax Asset Management Limited and Impax Asset Management (AIFM) Limited ('Impax', authorised and regulated by the Financial Conduct Authority). Both companies are wholly owned subsidiaries of Impax Asset Management Group plc and ar
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