Invesco Ltd · NYSE:IVZ
Invesco — Q1 2017 Earnings Presentation
53 slides from Invesco's earnings presentation, Apr 27, 2017
Slide 1: Invesco first quarter 2017 results
Invesco first quarter 2017 results Martin L. Flanagan President and Chief Executive Officer Loren M. Starr Chief Financial Officer April 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 first quarter 2017 results
Presentation of first 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 ea
Slide 4: Discussion topics
Discussion topics First quarter overview Investment performance and flows Financial results Enhancing our ability to meet client needs Questions Appendix 3
Slide 5: First quarter overview – highlights
First quarter overview – highlights Maintained strong investment performance and achieved solid long- term organic growth during the quarter Maintained strong, long-term investment performance – 69% and 83% of actively managed assets in top half of peer group on a 3- and 5-year basis Long-term n
Slide 6: First quarter overview – summary of operating results
First quarter overview – summary of operating results Assets under March 31, 2017, AUM of $834.8 billion, versus $812.9 billion at management December 31, 2016 Average AUM was $829.8 billion, versus $809.0 billion for the fourth quarter of 2016 Flows Long-term net inflows of $1.8 billion Tot
Slide 7: Discussion topics
Discussion topics First quarter overview Investment performance and flows Financial results Enhancing our ability to meet client needs Questions Appendix 6
Slide 8: Investment performance – overview
Investment performance – overview Aggregate performance analysis – asset weighted Percent of actively managed assets in top half of peer group* 1-Year 3-Year 5-Year 65% 69% 83% 17% 35% 31% Assets top half of peer group Assets bottom half of peer group * Excludes passive products, closed-end funds, p
Slide 9: Quarterly long-term flows
Quarterly long-term flows Strong passive inflows; active gross sales up from prior quarter Quarterly long-term flows ($ billions) Total Active Passive 52.1 51.7 43.1 39.9 46.2 49.1 36.7 12.3 11.8 11.8 43.5 43.0 42.8 45.8 35.6 37.3 33.2 32.9 33.5 10.6 9.0 9.8 9.9 6.8 12.2 4.5 3.9 8.3 5.9 5.4 3.5 0.5
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) 17.9 40.3 39.6 34.2 34.8 35.6 32.0 32.6 33.1 11.5 11.0 11.4 10.4 10.6 9.7 9.5 6.4 5.0 3.9 3.4 8.8 1.4 1.2 1.8 0.3 0.0 -0.5 0.0 -0.5 -4.2 -2.7 -3.9 -6.5 -6.0 -31.5 -8.3 -
Slide 11: Discussion topics
Discussion topics First quarter overview Investment performance and flows Financial results Enhancing our ability to meet client needs Questions Appendix 10
Slide 12: Total assets under management – 1Q17 vs. 4Q16
Total assets under management – 1Q17 vs. 4Q16 ($ billions) 1Q-17 4Q-16 % Change Beginning Assets $812.9 $820.2 (0.9)% Long-Term Inflows 49.1 46.2 6.3% Long-Term Outflows (47.3) (48.9) (3.3)% Long-Term Net Flows 1.8 (2.7) N/A Net flows in Invesco PowerShares QQQ 1.0 2.7 (63.0)% Net flows in Inst. Mon
Slide 13: US GAAP operating results – 1Q17 vs. 4Q16
US GAAP operating results – 1Q17 vs. 4Q16 ($ millions) 1Q-17 4Q-16 % Change Operating Revenues Investment Management Fees 955.2 946.9 0.9% Service and Distribution Fees 206.4 209.1 (1.3)% Performance Fees 11.3 17.5 (35.4)% Other 19.7 21.2 (7.1)% Total Operating Revenues 1,192.6 1,194.7 (0.2)% Operat
Slide 14: Non-GAAP operating results – 1Q17 vs. 4Q16
Non-GAAP operating results – 1Q17 vs. 4Q16 ($ millions) 1Q-17 4Q-16 % Change Adjusted Revenues Investment Management Fees 973.6 965.1 0.9% Service and Distribution Fees 206.4 209.1 (1.3)% Performance Fees 17.7 17.9 (1.1)% Other 20.8 23.2 (10.3)% Third-Party Distribution, Service and Advisory Expense
Slide 15: Discussion topics
Discussion topics First quarter overview Investment performance and flows Financial results Enhancing our ability to meet client needs Questions Appendix 14
Slide 16: We manage Invesco with a single focus: to help clients achieve their investment objectives
We manage Invesco with a single focus: to help clients achieve their investment objectives Every client has a unique set of investment objectives, which can be achieved in a variety of ways. Invesco’s comprehensive range of active, passive and alternative investment capabilities has been constru
Slide 17: We have a strong and growing business in EMEA
We have a strong and growing business in EMEA Investment reputation and team – Experienced and well-tenured fund management teams, supported by a robust investment culture; delivered strong, long-term investment performance to clients, with 88% of AUM in top half of peer group over 5 years Diver
Slide 18: Our diverse and growing profile in EMEA positions us well
Our diverse and growing profile in EMEA positions us well for changing market forces in the region EMEA AUM by Client Domicile EMEA AUM by Asset Class EMEA AUM by Client Type March 2017 March 2017 March 2017* 17% UK Equity Cross Border 32% 34% 33% Retail 44% Other Equity 56% UK Retail 31% Fixed Inco
Slide 19: Invesco is an innovative leader in factor investing
Invesco is an innovative leader in factor investing with $175 billion in AUM and 40 years’ experience Factor-based investment strategies Invesco Quantitative Invesco Unit Trust PowerShares ETFs Strategies (IQS) $125 billion in AUM $34.5 billion in AUM $16.1 billion in AUM 4th largest ETF pro
Slide 20: The $560B EMEA ETF market is one of the fastest-growing areas
The $560B EMEA ETF market is one of the fastest- growing areas in asset management EMEA ETF market EMEA and US ETF markets AUM $B AUM $B EMEA ETF market has grown at a 23% Follows a similar growth trajectory as the CAGR since 2005 US market with a 7-year lag Expected to reach $900B to $1.1T by
Slide 21: Invesco to acquire Source, an independent, specialist provider of ETFs based in Europe
Invesco to acquire Source, an independent, specialist provider of ETFs based in Europe Source represents a number of key advantages for Invesco: A leading independent, diversified, at-scale ETF provider in Europe, with ~$18 billion in Source-managed AUM, plus ~$7 billion in externally managed AUM
Slide 22: The combination enhances our ability to help clients achieve their investment objectives
The combination enhances our ability to help clients achieve their investment objectives The combination of Invesco and Source significantly benefits clients by further: Expanding the depth and breadth of factor-based strategies and ETFs, adding to the comprehensive range of investment active, pas
Slide 23: First quarter overview – highlights
First quarter overview – highlights Maintained strong investment performance and achieved solid long- term organic growth during the quarter Maintained strong, long-term investment performance – 69% and 83% of actively managed assets in top half of peer group on a 3- and 5-year basis Long-term n
Slide 24: Discussion topics
Discussion topics First quarter overview Investment performance and flows Financial results Enhancing our ability to meet client needs Questions Appendix 23
Slide 25: Discussion topics
Discussion topics First quarter overview Investment performance and flows Financial results Enhancing our ability to meet client needs Questions Appendix 24
Slide 26: We are diversified as a firm
We are diversified as a firm Delivering a diverse set of solutions to meet client needs By client domicile By channel By asset class 15% 3% 12% 66% 66% 46% 34% 24% 9% 10% 9% 6% 1-Yr 1-Yr 1-Yr ($ billions) Change ($ billions) Change ($ billions) Change U.S. $550.0 8.4% Retail $552.1 8.7% Equity $381.
Slide 27: 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% 21% 29% 67% 11% 55% 57% 58% 58% 55% 9% 47% 70% 54% 37% 54% 57% 50% 2% 29% 29% 8% 15% 18% 19% 0% 0% 0% 12% 3% 8%
Slide 28: 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% 2% 100% 100% 98% 4% 95% 91% 73% 72% 29% 68% 67% 62% 55% 96% 24% 58% 83% 89% 81% 89% 3
Slide 29: 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 $456.4 billion) % of assets top % of assets bottom Equities half of peer group half of peer gro
Slide 30: 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 $456.4 billion) % of assets top % of assets bottom Equities Other half of peer grou
Slide 31: US GAAP operating results – quarterly
US GAAP operating results – quarterly ($ millions) 1Q-17 4Q-16 % Change* 3Q-16 2Q-16 1Q-16 4Q-15 3Q-15 2Q-15 Investment Management Fees 955 947 0.9% 966 947 914 987 1,017 1,056 Service and Distribution Fees 206 209 (1.3)% 213 203 198 208 215 220 Performance Fees 11 18 (35.4)% 3 9 15 17 16 7 Other 20
Slide 32: Non-GAAP operating results – quarterly
Non-GAAP operating results– quarterly ($ millions) 1Q-17 4Q-16 % Change* 3Q-16 2Q-16 1Q-16 4Q-15 3Q-15 2Q-15 Investment Management Fees 974 965 0.9% 983 963 930 1,009 1,038 1,083 Service and Distribution Fees 206 209 (1.3)% 213 203 198 208 215 220 Performance Fees 18 18 (1.1)% 4 9 16 19 18 13 Other
Slide 33: Total assets under management – quarterly
Total assets under management – quarterly ($ billions) 1Q-17 4Q-16 % Change 3Q-16 2Q-16 1Q-16 Beginning Assets $812.9 $820.2 (0.9)% $779.6 $771.5 $775.6 Long-Term Inflows 49.1 46.2 6.3% 51.7 45.8 42.8 Long-Term Outflows (47.3) (48.9) (3.3)% (39.5) (41.3) (44.1) Long-Term Net flows 1.8 (2.7) N/A 12.2
Slide 34: Total assets under management – by asset class
Total assets under management – by asset class ($ billions) Total Equity Fixed Balanced Money Alternatives Income Market September 30, 2016 $820.2 $365.3 $207.0 $48.9 $77.2 $121.8 Long-Term Inflows 46.2 20.1 11.6 2.0 0.8 11.7 Long-Term Outflows (48.9) (27.1) (10.9) (2.5) (0.9) (7.5) Long-Term Net fl
Slide 35: Total assets under management – by asset class
Total assets under management – by asset class ($ billions) Total Equity Fixed Balanced Money Alternatives Income Market March 31, 2016 $771.5 $359.5 $187.1 $46.8 $68.6 $109.5 Long-Term Inflows 45.8 20.5 12.0 3.2 1.0 9.1 Long-Term Outflows (41.3) (27.0) (6.4) (3.0) (0.8) (4.1) Long-Term Net flows 4.
Slide 36: Total assets under management – by channel
Total assets under management – by channel ($ billions) Total Retail Institutional September 30, 2016 $820.2 $532.1 $288.1 Long-Term Inflows 46.2 35.6 10.6 Long-Term Outflows (48.9) (39.5) (9.4) Long-Term Net flows (2.7) (3.9) 1.2 Net flows in Invesco PowerShares QQQ 2.7 2.7 - Net flows in Inst. Mon
Slide 37: Total assets under management – by channel
Total assets under management – by channel ($ billions) Total Retail Institutional March 31, 2016 $771.5 $507.7 $263.8 Long-Term Inflows 45.8 34.8 11.0 Long-Term Outflows (41.3) (35.3) (6.0) Long-Term Net flows 4.5 (0.5) 5.0 Net flows in Invesco PowerShares QQQ (3.8) (3.8) - Net flows in Inst. Money
Slide 38: Total assets under management – by client domicile
Total assets under management – by client domicile ($ billions) Total U.S. Canada U.K. Continental Asia Europe September 30, 2016 $820.2 $537.2 $23.9 $100.7 $75.5 $82.9 Long-Term Inflows 46.2 25.8 0.9 4.2 7.2 8.1 Long-Term Outflows (48.9) (31.5) (1.4) (3.8) (7.7) (4.5) Long-Term Net flows (2.7) (5.7
Slide 39: Total assets under management – by client domicile
Total assets under management – by client domicile ($ billions) Total U.S. Canada U.K. Continental Asia Europe March 31, 2016 $771.5 $507.5 $22.9 $99.2 $74.9 $67.0 Long-Term Inflows 45.8 27.7 0.8 3.2 6.1 8.0 Long-Term Outflows (41.3) (25.6) (1.0) (3.8) (7.0) (3.9) Long-Term Net flows 4.5 2.1 (0.2) (
Slide 40: Passive assets under management – by asset class
Passive assets under management – by asset class ($ billions) Total Equity Fixed Balanced Money Alternative Income Market September 30, 2016 $143.3 $91.6 $42.4 - $0.1 $9.2 Long-Term Inflows 10.6 6.6 3.0 - - 1.0 Long-Term Outflows (11.4) (8.0) (2.4) - - (1.0) Long-Term Net flows (0.8) (1.4) 0.6 - - -
Slide 41: Passive assets under management – by asset class
Passive assets under management – by asset class ($ billions) Total Equity Fixed Balanced Money Income Market Alternative March 31, 2016 $131.1 $87.1 $35.6 - $0.1 $8.3 Long-Term Inflows 12.3 7.7 3.5 - - 1.1 Long-Term Outflows (7.8) (6.5) (0.7) - - (0.6) Long-Term Net flows 4.5 1.2 2.8 - - 0.5 Net fl
Slide 42: Passive assets under management – by channel
Passive assets under management – by channel ($ billions) Total Retail Institutional September 30, 2016 $143.3 $126.2 $17.1 Long-Term Inflows 10.6 10.6 - Long-Term Outflows (11.4) (10.1) (1.3) Long-Term Net flows (0.8) 0.5 (1.3) Net flows in Invesco PowerShares QQQ 2.7 2.7 - Net flows in Inst. Money
Slide 43: Passive assets under management – by channel
Passive assets under management – by channel ($ billions) Total Retail Institutional March 31, 2016 $131.1 $115.7 $15.4 Long-Term Inflows 12.3 11.3 1.0 Long-Term Outflows (7.8) (7.7) (0.1) Long-Term Net flows 4.5 3.6 0.9 Net flows in Invesco PowerShares QQQ (3.8) (3.8) - Net flows in Inst. Money Mar
Slide 44: Passive assets under management – by client domicile
Passive assets under management – by client domicile ($ billions) Total U.S. Canada U.K. Continental Asia Europe September 30, 2016 $143.3 $138.6 $0.5 - $1.9 $2.3 Long-Term Inflows 10.6 10.4 - - 0.2 - Long-Term Outflows (11.4) (11.2) - - (0.2) - Long-Term Net flows (0.8) (0.8) - - - - Net flows in I
Slide 45: Passive assets under management – by client domicile
Passive assets under management – by client domicile ($ billions) Total U.S. Canada U.K. Continental Asia Europe March 31, 2016 $131.1 $126.7 $0.4 - $1.8 $2.2 Long-Term Inflows 12.3 12.1 0.1 - 0.1 - Long-Term Outflows (7.8) (7.6) - - (0.2) - Long-Term Net flows 4.5 4.5 0.1 - (0.1) - Net flows in Inv
Slide 46: Reconciliation of US GAAP results to non-GAAP results – three months ended March 31, 2017
Reconciliation of US GAAP results to non-GAAP results – three months ended March 31, 2017 Please refer to pages 7-9 in the 1Q 2017 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party Business Market appreciation / Consolidated Other Non-GAAP Consol
Slide 47: 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 48: 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 49: 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 50: 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 51: 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 52: 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
Slide 53: 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 Business Market appreciation / Consolidated Other Non-GAAP Conso