Invesco Ltd · NYSE:IVZ
Invesco — Amvescap — Q3 2000 Earnings Presentation
24 slides from Invesco's earnings presentation, Oct 19, 2000
Slide 1: Analyst Presentation
ANALYST PRESENTATION 19 October 2000
Slide 2: Agenda
AGENDA • Acquisition of Perpetual PLC, one of the UK’s largest and most respected retail fund managers • Record earnings for third quarter and nine months to 30 September 2000 2
Slide 3: Strategic Rationale
STRATEGIC RATIONALE • Combines INVESCO’s rapidly growing UK business with one of UK’s largest and most respected retail fund managers • Accretive to AMVESCAP earnings in 2001 • Market leadership position - second largest retail fund manager in UK • Product ranges are complementary – Perpetual recogn
Slide 4: Strategic Rationale (continued)
STRATEGIC RATIONALE (continued) • Increased scale and resource to sustain industry leading investment management, brand and customer service capabilities • Perpetual brings strong reputation in customer service and retail administration • Increased operations capacity will be provided by Perpetual’s
Slide 5: About Perpetual
ABOUT PERPETUAL • FUM £11.8bn ($17.6bn) at 30 September 2000 • 800 employees • Six months to 31 March 2000 (in millions) – Revenues £60,306 – Operating profit £30,561 – Profit before tax £35,015 – Net profit £24,598 5
Slide 6: The Combined Entity
THE COMBINED ENTITY • Combined unit trust business – FUM of £16.5bn ($24.5bn) – Approaching 2 million unitholder accounts – Approximately 1 million clients • Combined offshore funds of £9.4bn ($14.0bn) A Leader in UK Retail Fund Management Industry 6
Slide 7: Terms of the Transaction
TERMS OF THE TRANSACTION • AMVESCAP offers 2 shares per Perpetual share plus £10 in cash with a loan note alternative • Transaction valued at £1.05 billion ($1.5 billion) based on AMVESCAP share price on 18 October 2000 • Unanimously recommended by Perpetual Board • Agreement to acquire 12.3 million
Slide 8: Timetable
TIMETABLE • Announcement on 19 October 2000 • Offer document expected to be posted to Perpetual shareholders on 1 November 2000 • First possible closing date on 22 November 2000 • Last closing date on 31 December 2000 8
Slide 9: Third Quarter Financial Results
THIRD QUARTER FINANCIAL RESULTS
Slide 10: Financial Highlights: Nine Months Ended September 2000
FINANCIAL HIGHLIGHTS NINE MONTHS ENDED 30 SEPTEMBER 2000 • Revenues of £1,200.2m, up £423.5m from 1999 • Pre-tax profits (before exceptional item and goodwill amortisation) of £415.0m, up £183.2m (79%) • EPS (before exceptional item and goodwill amortisation) *Basic -- 42.8p, up 75% *Diluted -- 40.7
Slide 11: Financial Highlights: Three Months Ended September 2000
FINANCIAL HIGHLIGHTS THREE MONTHS ENDED 30 SEPTEMBER 2000 • Revenues of £446.0m, up £169.4m from 1999 • Pre-tax profits (before exceptional item and goodwill amortisation) of £159.4m, up £73.5m from 1999 (86%) • EPS (before exceptional item and goodwill amortisation) *Basic -- 16.0p, up 76% *Diluted
Slide 12: Group Profit & Loss Account (Three Months)
GROUP PROFIT & LOSS ACCOUNT Three Months Ended 30 Sept 2000 Ordinary Exceptional activities item Total 1999 Revenues £445,958 £ - £445,958 £276,571 Operating expenses (276,244) (26,830) (303,074) (182,200) 169,714 (26,830) 142,884 94,371 Goodwill amortisation (17,021) -- (17,021) (9,332) Operating p
Slide 13: Group Profit & Loss Account (Nine Months)
GROUP PROFIT & LOSS ACCOUNT Nine Months Ended 30 Sept 2000 Ordinary Exceptional activities item Total 1999 Revenues £ 1,200,211 £ - £ 1,200,211 £ 776,651 Operating expenses (762,206) (26,830) (789,036) (518,303) 438,005 (26,830) 411,175 258,348 Goodwill amortisation (35,391) -- (35,391) (27,483) Ope
Slide 14: Quarterly Financial Comparisons
QUARTERLY FINANCIAL COMPARISONS in thousands 2000 2000 Q3 Q2 % change Revenues £ 445,958 £ 384,737 16% Operating profit (before exceptional item & goodwill amortisation) 169,714 136,416 24% Profit (before exceptional item & goodwill amortisation) 108,406 89,021 22% EPS (before exceptional item & goo
Slide 15: Segmental Analysis
SEGMENTAL ANALYSIS in thousands Nine Months Ended 30 Sept 2000 Revenues Expenses Oper. Profit Managed Products £ 772,518 £ (390,458) £ 382,060 US Institutional 146,023 (110,183) 35,840 INVESCO Global 246,243 (174,296) 71,947 Retirement and Benefit Services 35,090 (32,219) 2,871 New Business 337 (15,
Slide 16: Operating Profit - 1999 v. 2000
OPERATING PROFIT - 1999 v. 2000 (Decrease)/ in thousands 2000 1999 Increase Managed Products £ 382,060 £ 212,682 £ 169,378 US Institutional 35,840 46,082 (10,242) INVESCO Global 71,947 36,655 35,292 Retirement and Benefit Services 2,871 (2,005) 4,876 New Business (15,571) (7,528) (8,043) Corporate (
Slide 17: Funds Under Management - Q3 2000
FUNDS UNDER MANAGEMENT - Q3 2000 in billions Managed Products US INVESCO RBS & Total AIM INVESCO Instit. Global New Bus. 30 June 2000 $ 389.0 $ 183.4 $ 45.9 $ 89.5 $ 62.7 $ 7.5 Market gains 1.6 - 2.5 0.9 (2.0) 0.2 Trimark Acquisition 16.7 16.7 - - - - Net new (lost) business 6.2 4.8 2.4 (1.9) 1.4 (0
Slide 18: Funds Under Management - YTD 2000
FUNDS UNDER MANAGEMENT - YTD 2000 in billions Managed Products US INVESCO RBS & Total AIM INVESCO Instit. Global New Bus. 31 Dec 1999 $ 357.4 $ 165.3 $ 34.4 $ 92.5 $ 57.2 $ 8.0 Market gains 7.2 3.8 4.5 1.6 (2.7) - Trimark acquisition 16.7 16.7 - - - - Net new (lost) business 30.3 16.9 10.8 (5.5) 9.1
Slide 19: Balance Sheet
BALANCE SHEET in thousands 30 Sept 2000 31 Dec 1999 Fixed assets Goodwill £ 1,596,237 £ 664,135 Investments 202,773 128,921 Tangible assets 133,598 108,021 1,932,608 901,077 Current assets Debtors 966,820 675,856 Investments 78,899 60,135 Cash at bank and in hand 442,822 189,732 1,488,541 925,723 Cr
Slide 20: Group Cash Flow
GROUP CASH FLOW in thousands Nine Months Ended 30 Sept 2000 30 Sept 99 Operating profit £375,784 £230,865 Amortisation and depreciation 72,654 74,856 Change in debtors, creditors and other 228,239 (39,537) Net cash inflow from operating activities 676,677 266,184 Interest paid, net of investment inc
Slide 21: Analysis of Net Debt
ANALYSIS OF NET DEBT in thousands 30 September 2000 31 December 1999 (Decrease)/Increase £ $ £ $ £ $ Current Debt 2,149 3,181 - - 2,149 3,181 Long-term Debt: Senior notes 457,038 676,416 405,035 656,157 52,003 20,259 Equity subordinated debentures 232,076 343,472 - - 232,076 343,472 Credit facility
Slide 22: US GAAP Reconciliation (Profit)
US GAAP RECONCILIATION (PROFIT) in thousands Nine Months Ended 30 Sept 2000 1999 Net profit under UK GAAP £ 231,774 £ 128,959 US GAAP adjustments: Acquisition accounting (48,475) (57,847) Taxation (12,170) (18,765) Other 508 (3,609) Net income under US GAAP £ 171,637 £ 48,738 22
Slide 23: US GAAP Reconciliation (Equity)
US GAAP RECONCILIATION (EQUITY) in thousands 30 Sept 2000 31 Dec 1999 Shareholders' funds under UK GAAP £ 1,235,406 £ 436,661 US GAAP adjustments: Acquisition accounting 1,065,876 993,765 Treasury stock (173,718) (132,615) Dividends - 35,544 Other 6,634 3,957 Shareholders' equity under US GAAP £ 2,1
Slide 24: Global Investment Services
AW AMVESCAP Global Investment Services