Invesco Ltd · NYSE:IVZ
Invesco — Q4 2015 Earnings Presentation
49 slides from Invesco's earnings presentation, Jan 28, 2016
Slide 1: Invesco fourth quarter 2015 results
Invesco fourth quarter 2015 results Martin L. Flanagan President and Chief Executive Officer Loren M. Starr Chief Financial Officer January 28, 2016
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 2015 overview and fourth quarter overview Investment performance and flows Financial results Questions Appendix 2
Slide 4: 2015 overview – highlights
2015 overview – highlights Continued strong investment performance and our focus on meeting client needs contributed to net long-term inflows and solid operating results despite volatile markets Maintained strong, long-term investment performance – 79% and 85% of actively managed assets ahead of p
Slide 5: 2015 overview – summary of operating results
2015 overview – summary of operating results Assets under December 31, 2015, AUM of $775.6 billion, versus $792.4 billion at management December 31, 2014 Average AUM was $794.7 billion, versus $790.3 billion for 2014 Flows Long-term net inflows of $16.2 billion Total net inflows of $2.5 bill
Slide 6: 2015 overview – a sharp focus on meeting current and future client needs
2015 overview – a sharp focus on meeting current and future client needs Achievements throughout 2015 enhanced our ability to meet client needs and further positioned the firm for long-term success – Delivered strong, long-term investment performance – 79% and 85% of actively managed assets ahead of
Slide 7: 2015 overview – a sharp focus on meeting current and future client needs
2015 overview – a sharp focus on meeting current and future client needs Achievements throughout 2015 enhanced our ability to meet client needs and further positioned the firm for long-term success – Invesco Global Targeted Return (GTR) continued to achieve solid flows based on strong performance re
Slide 8: Helping advisors meet evolving client needs with the acquisition of Jemstep
Helping advisors meet evolving client needs with the acquisition of Jemstep Invesco Jemstep combines Invesco’s broad investment management expertise and Jemstep’s digital technology leadership The Invesco Jemstep transaction (in the first quarter) is one outcome of our exploration of opportunities
Slide 9: Fourth quarter overview
Fourth quarter overview Continued strong investment performance and our focus on meeting client needs contributed to net long-term inflows and solid operating results despite volatile markets Maintained strong, long-term investment performance – 79% and 85% of actively managed assets ahead of peer
Slide 10: Summary of fourth quarter 2015 results
Summary of fourth quarter 2015 results Assets under December 31, 2015, AUM of $775.6 billion, versus $755.8 billion at management September 30, 2015 Average AUM was $783.7 billion, versus $788.9 billion for the third quarter of 2015 Flows Long-term net inflows of $3.9 billion Total net inflo
Slide 11: Discussion topics
Discussion topics 2015 overview and fourth quarter overview Investment performance and flows Financial results Questions Appendix 10
Slide 12: Investment performance – overview
Investment performance – overview Aggregate performance analysis – asset weighted Percent of actively managed assets in top half of peer group* 1-Year 3-Year 5-Year 60% 79% 85% 15% 21% 40% Assets top half of peer group Assets bottom half of peer group * Excludes passive products, closed-end funds, p
Slide 13: Quarterly long-term flows
Quarterly long-term flows Positive active and passive flows during a volatile quarter Quarterly long-term flows ($ billions) Total Active Passive 52.1 41.6 43.1 50.2 50.5 40.6 46.0 36.1 36.2 36.4 36.7 42.5 44.4 43.5 43.0 33.2 9.9 9.8 9.6 9.0 8.6 8.2 6.4 6.8 3.3 3.5 6.5 6.0 10.3 6.8 5.4 5.9 3.2 6.0 3
Slide 14: Quarterly long-term flows
Quarterly long-term flows Retail flows flat during a volatile quarter; institutional flows strong Quarterly long-term flows ($ billions) Retail(a) Institutional(b) 17.9 39.6 40.3 36.3 35.7 34.2 34.8 32.0 32.6 11.5 10.6 10.3 10.2 10.4 9.6 7.6 6.2 6.4 7.5 3.9 0.8 -0.5 2.8 1.2 1.7 4.8 0.3 0.0 -1.1 -4.2
Slide 15: Discussion topics
Discussion topics 2015 overview and fourth quarter overview Investment performance and flows Financial results Questions Appendix 14
Slide 16: Total assets under management – 4Q15 vs. 3Q15
Total assets under management – 4Q15 vs. 3Q15 ($ billions) 4Q-15 3Q-15 % Change Beginning Assets $755.8 $803.6 (5.9)% Long-Term Inflows 43.0 43.5 (1.1)% Long-Term Outflows (39.1) (47.4) (17.5)% Long-Term Net flows 3.9 (3.9) N/A Net flows in Invesco PowerShares QQQ 2.0 (0.9) N/A Net flows in Inst. Mo
Slide 17: Non-GAAP operating results – 4Q15 vs. 3Q15
Non-GAAP operating results – 4Q15 vs. 3Q15 ($ millions) 4Q-15 3Q-15 % Change Adjusted Revenues Investment Management Fees 1,009 1,038 (2.8)% Service and Distribution Fees 208 215 (3.4)% Performance Fees 19 18 6.8% Other 29 28 5.1% Third-Party Distribution, Service and Advisory Expenses (378) (395) (
Slide 18: Impact of Foreign Exchange on Non-GAAP operating results
Impact of Foreign Exchange on Non-GAAP operating results Amounts represent impact of change in average exchange rate from prior period used to translate non-USD earnings. ($ millions) 4Q-15 vs 3Q-15 FY 2015 vs FY 2014 Investment Management Fees (10.1) (209.7) Service and Distribution Fees (0.1) (4.5
Slide 19: Fourth quarter overview
Fourth quarter overview Continued strong investment performance and our focus on meeting client needs contributed to net long-term inflows and solid operating results despite volatile markets Maintained strong, long-term investment performance – 79% and 85% of actively managed assets ahead of peer
Slide 20: Discussion topics
Discussion topics 2015 overview and fourth quarter overview Investment performance and flows Financial results Questions Appendix 19
Slide 21: Discussion topics
Discussion topics 2015 overview and fourth quarter overview Investment performance and flows Financial results Questions Appendix 20
Slide 22: 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% 13% 13% 66% 66% 24% 34% 10% 48% 9% 8% 6% 1-Yr 1-Yr 1-Yr ($ billions) Change ($ billions) Change ($ billions) Change U.S. $510.7 (4.0)% Retail $514.8 (3.3)% Equity $
Slide 23: 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% 100% 8% 95% 31% 76% 60% 8% 87% 52% 46% 31% 4% 25% 67% 32% 43% 30% 26% 31% 29% 24% 25% 21% 21% 10% 12% 4% 9% 4%
Slide 24: 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% 7% 98% 87% 90% 85% 33% 31% 57% 76% 70% 71% 8% 62% 90% 65% 90% 61% 83% 23% 4
Slide 25: 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 $439.1 billion) % of assets top % of assets bottom Equities half of peer group half of peer gro
Slide 26: 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 $439.1 billion) % of assets top % of assets bottom Equities Other half of peer grou
Slide 27: Non-GAAP operating results – quarterly
Non-GAAP operating results – quarterly ($ millions) 4Q-15 3Q-15 % Change* 2Q-15 1Q-15 4Q-14 3Q-14 2Q-14 1Q-14 Investment Management Fees 1,009 1,038 (2.8)% 1,083 1,024 1,033 1,071 1,055 989 Service and Distribution Fees 208 215 (3.4)% 220 213 218 222 215 239 Performance Fees 19 18 6.8% 13 52 19 10 7
Slide 28: US GAAP operating results – quarterly
US GAAP operating results – quarterly ($ millions) 4Q-15 3Q-15 % Change* 2Q-15 1Q-15 4Q-14 3Q-14 2Q-14 1Q-14 Investment Management Fees 987 1,017 (2.9)% 1,056 1,001 1,010 1,047 1,032 965 Service and Distribution Fees 208 215 (3.4)% 220 213 218 222 215 239 Performance Fees 17 16 7.7% 7 47 17 8 5 31 O
Slide 29: Total assets under management – quarterly
Total assets under management – quarterly ($ billions) 4Q-15 3Q-15 % Change 2Q-15 1Q-15 4Q-14 Beginning Assets $755.8 $803.6 (5.9)% $798.3 $792.4 $789.6 Long-Term Inflows 43.0 43.5 (1.1)% 52.1 50.5 46.0 Long-Term Outflows (39.1) (47.4) (17.5)% (46.2) (40.2) (43.5) Long-Term Net flows 3.9 (3.9) N/A 5
Slide 30: Total assets under management – by asset class
Total assets under management – by asset class ($ billions) Total Equity Fixed Balanced Money Alternatives Income Market June 30, 2015 $803.6 $394.7 $187.5 $53.6 $67.9 $99.9 Long-Term Inflows 43.5 19.6 10.5 3.2 1.3 8.9 Long-Term Outflows (47.4) (25.6) (11.3) (4.3) (1.0) (5.2) Long-Term Net flows (3.
Slide 31: Total assets under management – by asset class
Total assets under management – by asset class ($ billions) Total Equity Fixed Balanced Money Alternatives Income Market December 31, 2014 $792.4 $384.4 $181.6 $50.6 $76.5 $99.3 Long-Term Inflows 50.5 24.5 10.8 4.1 0.7 10.4 Long-Term Outflows (40.2) (21.5) (7.2) (3.2) (0.9) (7.4) Long-Term Net flows
Slide 32: Total assets under management – by channel
Total assets under management – by channel ($ billions) Total Retail Institutional June 30, 2015 $803.6 $541.3 $262.3 Long-Term Inflows 43.5 32.0 11.5 Long-Term Outflows (47.4) (36.2) (11.2) Long-Term Net flows (3.9) (4.2) 0.3 Net flows in Invesco PowerShares QQQ (0.9) (0.9) - Net flows in Inst. Mon
Slide 33: Total assets under management – by channel
Total assets under management – by channel ($ billions) Total Retail Institutional December 31, 2014 $792.4 $532.5 $259.9 Long-Term Inflows 50.5 40.3 10.2 Long-Term Outflows (40.2) (32.8) (7.4) Long-Term Net flows 10.3 7.5 2.8 Net flows in Invesco PowerShares QQQ (2.6) (2.6) - Net flows in Inst. Mon
Slide 34: Total assets under management – by client domicile
Total assets under management – by client domicile ($ billions) Total U.S. Canada U.K. Continental Asia Europe June 30, 2015 $803.6 $530.8 $24.9 $110.7 $77.0 $60.2 Long-Term Inflows 43.5 20.6 0.9 5.7 8.3 8.0 Long-Term Outflows (47.4) (25.6) (0.9) (5.9) (7.3) (7.7) Long-Term Net flows (3.9) (5.0) - (
Slide 35: Total assets under management – by client domicile
Total assets under management – by client domicile ($ billions) Total U.S. Canada U.K. Continental Asia Europe December 31, 2014 $792.4 $532.1 $25.8 $105.1 $71.1 $58.3 Long-Term Inflows 50.5 26.1 1.0 4.9 12.2 6.3 Long-Term Outflows (40.2) (22.0) (1.0) (4.3) (7.2) (5.7) Long-Term Net flows 10.3 4.1 -
Slide 36: Passive assets under management – by asset class
Passive assets under management – by asset class ($ billions) Total Equity Fixed Balanced Money Alternative Income Market June 30, 2015 $141.6 $89.4 $41.2 - - $11.0 Long-Term Inflows 6.8 5.3 0.9 - - 0.6 Long-Term Outflows (9.1) (6.2) (1.8) - - (1.1) Long-Term Net flows (2.3) (0.9) (0.9) - - (0.5) Ne
Slide 37: Passive assets under management – by asset class
Passive assets under management – by asset class ($ billions) Total Equity Fixed Balanced Money Income Market Alternative December 31, 2014 $141.4 $88.2 $41.1 - - $12.1 Long-Term Inflows 9.9 6.5 2.0 - - 1.4 Long-Term Outflows (6.4) (3.5) (1.2) - - (1.7) Long-Term Net flows 3.5 3.0 0.8 - - (0.3) Net
Slide 38: Passive assets under management – by channel
Passive assets under management – by channel ($ billions) Total Retail Institutional June 30, 2015 $141.6 $119.7 $21.9 Long-Term Inflows 6.8 6.0 0.8 Long-Term Outflows (9.1) (7.8) (1.3) Long-Term Net flows (2.3) (1.8) (0.5) Net flows in Invesco PowerShares QQQ (0.9) (0.9) - Net flows in Inst. Money
Slide 39: Passive assets under management – by channel
Passive assets under management – by channel ($ billions) Total Retail Institutional December 31, 2014 $141.4 $119.7 $21.7 Long-Term Inflows 9.9 8.9 1.0 Long-Term Outflows (6.4) (5.8) (0.6) Long-Term Net flows 3.5 3.1 0.4 Net flows in Invesco PowerShares QQQ (2.6) (2.6) - Net flows in Inst. Money Ma
Slide 40: Passive assets under management – by client domicile
Passive assets under management – by client domicile ($ billions) Total U.S. Canada U.K. Continental Asia Europe June 30, 2015 $141.6 $137.4 $0.4 - $1.8 $2.0 Long-Term Inflows 6.8 5.9 - - 0.2 0.7 Long-Term Outflows (9.1) (8.3) - - (0.1) (0.7) Long-Term Net flows (2.3) (2.4) - - 0.1 - Net flows in In
Slide 41: Passive assets under management – by client domicile
Passive assets under management – by client domicile ($ billions) Total U.S. Canada U.K. Continental Asia Europe December 31, 2014 $141.4 $137.6 $0.2 - $1.8 $1.8 Long-Term Inflows 9.9 9.6 - - 0.2 0.1 Long-Term Outflows (6.4) (6.1) - - (0.2) (0.1) Long-Term Net flows 3.5 3.5 - - - - Net flows in Inve
Slide 42: Reconciliation of US GAAP results to non-GAAP results – three months ended December 31, 2015
Reconciliation of US GAAP results to non-GAAP results – three months ended December 31, 2015 Please refer to pages 22-26 in the 4Q 2015 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation / Consolidated Other Non-GAA
Slide 43: 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 Acquisition Market appreciation / Consolidated Other Non-GA
Slide 44: Reconciliation of US GAAP results to non-GAAP results – three months ended June 30, 2015
Reconciliation of US GAAP results to non-GAAP results – three months ended June 30, 2015 Please refer to pages 19-22 in the 2Q 2015 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation / Consolidated Other Non-GAAP Co
Slide 45: Reconciliation of US GAAP results to non-GAAP results – three months ended March 31, 2015
Reconciliation of US GAAP results to non-GAAP results – three months ended March 31, 2015 Please refer to pages 18-21 in the 1Q 2015 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation / Consolidated Other Non-GAAP C
Slide 46: Reconciliation of US GAAP results to non-GAAP results – three months ended December 31, 2014
Reconciliation of US GAAP results to non-GAAP results – three months ended December 31, 2014 Please refer to pages 22-26 in the 4Q 2014 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation / Consolidated Other Non-GAA
Slide 47: Reconciliation of US GAAP results to non-GAAP results – three months ended September 30, 2014
Reconciliation of US GAAP results to non-GAAP results – three months ended September 30, 2014 Please refer to pages 19-22 in the 3Q 2014 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation / Consolidated Other Non-GA
Slide 48: Reconciliation of US GAAP results to non-GAAP results – three months ended June 30, 2014
Reconciliation of US GAAP results to non-GAAP results – three months ended June 30, 2014 Please refer to pages 19-22 in the 2Q 2014 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party distribution, Acquisition Market appreciation / Consolidated Non
Slide 49: Reconciliation of US GAAP results to non-GAAP results – three months ended March 31, 2014
Reconciliation of US GAAP results to non-GAAP results – three months ended March 31, 2014 *Please refer to pages 18-22 in the 1Q 2014 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation / Consolidated Other Non-GAAP