Igm Financial Inc. · TSX:IGM
Igm Financial — Q4 2021 Earnings Presentation
46 slides from Igm Financial's earnings presentation, Feb 11, 2022
Slide 1: IGM Financial Q4, 2021 Results
IGM Financial Q4, 2021 Results February 11, 2022
Slide 2: Conference Call Participants
Conference Call Participants JAMES O‘SULLIVAN DAMON MURCHISON BARRY MCINERNEY LUKE GOULD PRESIDENT & CEO PRESIDENT & CEO PRESIDENT & CEO EXECUTIVE VICE-PRESIDENT IGM FINANCIAL IG WEALTH MANAGEMENT MACKENZIE INVESTMENTS & CFO IGM FINANCIAL 2
Slide 3: Caution Concerning Forward-looking Statements
Caution Concerning Forward-looking Statements Certain statements in this report other than statements of historical fact, are forward-looking statements based on certain assumptions and reflect IGM Financial’s current expectations. Forward-looking statements are provided to assist the reader in unde
Slide 4: Non-IFRS Financial Measures & Additional IFRS Measures
Non-IFRS Financial Measures & Additional IFRS Measures Net earnings available to common shareholders, which is an additional measure in accordance with IFRS, may be subdivided into two components consisting of: • Adjusted net earnings available to common shareholders; and • Other items, which includ
Slide 5: Documents Incorporated By Reference
Documents Incorporated By Reference This summary document and webcast are meant to discuss, not to serve as a substitute for, information included in these documents. The reader is hereby cautioned to refer to the following documents relating to IGM Financial’s results: 1. Documents related to IGM F
Slide 6: IGM Financial
IGM FINANCIAL JAMES O‘SULLIVAN PRESIDENT & CEO IGM FINANCIAL IGM FINANCIAL Q4, 2021 RESULTS
Slide 7: IGM Financial 2021 Highlights
IGM Financial 2021 Highlights All-time record high EPS of $4.08 up 27% from 1 reported EPS of $3.21 last year Adjusted EPS - Available to Common Shareholders ($)1 • Adjusted EPS of $4.05 up 27% year-over-year relative to Up 27% adjusted EPS of $3.20 cents in 20201 +19% • Driven by strong increases i
Slide 8: 2022 Forward View: Outlook and Capital Allocation Priorities
2022 Forward View Outlook for 2022 Capital Allocation Priorities 1) Attractive operating environment 1) Position our businesses for long-term success through: 2) Strong momentum across our businesses, with robust net inflows • investing for organic growth; and continuing into January • pursuing busi
Slide 9: IGM Financial Q4, 2021 Highlights
IGM Financial Q4, 2021 Highlights 1 Record fourth quarter adjusted EPS of $1.08; up 26% from adjusted EPS of 86 cents last year1 • Reported EPS of $1.11 up 16% year-over-year relative to reported EPS of 96 cents in Q4/20 2 Record high AUM&A of $277.1B, up 4.5% during the quarter • Driven by client i
Slide 10: Financial Market and Client Investment Returns
Financial Market and Client Investment Returns IGM Client Return Index1 2.6 2.4 Investment Performance Q1/22 at 2020 Q4/21 2021 Jan 31 2.2 IGM Client Investment Returns 2 6.5% 4.3% 11.9% (3.0%) Equity Markets: 2.0 Canada (S&P / TSX Composite) 5.6% 6.5% 25.1% (0.4%) U.S. (S&P 500) 18.4% 11.0% 28.7% (
Slide 11: Industry Operating Environment
Industry Operating Environment Fourth Quarter Industry Long-term Net Sales ($B) Total Industry Industry Asset Manager Peers 15.5 12.1 8.4 8.2 7.6 5.0 4.5 3.3 6.8 5.9 3.2 1.8 2.1 3.4 1.4 1.0 (0.4) (0.7) (8.2) (15.6) 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Long-term Mutual Fund Net Sales Rat
Slide 12: IGM Financial Q4, 2021 Results
IGM Financial Q4, 2021 Results Up 16% from last year Net Earnings ($MM) Net Earnings Per Share ($) Daily Total AUM & AUA ($B) Daily AUM&A 269 1.11 229 0.96 Annual Average AUM&A Quarterly Average AUM&A 290 280 270 260 250 Q4/20 Q4/21 Q4/20 Q4/21 240 Net acquisitions 230 of $30.3B Adjusted Net Adjuste
Slide 13: Adjusted Net Earnings by Segment and Company
Adjusted Net Earnings Available to Common Shareholders by Segment and Company ($MM)1 Wealth Management Asset Management Strategic Investments & Other2 IGM Consolidated +28% Quarter 260.8 +20% 204.3 141.1 117.4 +60% +11% +39% 65.3 +44% 40.7 27.3 30.4 4.4 6.1 10.6 15.3 0.8 2.6 Q4/20 Q4/21 Q4/20 Q4/21
Slide 14: Fourth Quarter and Full Year Net Flows
Fourth Quarter and Full Year Net Flows ($MM) Wealth Management Asset Management IGM Consolidated Institutional SMA1 Quarter 2,221 1,673 985 2,296 1,234 485 1,748 1,810 249 123 757 181 (75) (576) 2 (75) (576) 2 Q4/20 Q4/21 Q4/20 Q4/21 Q4/20 Q4/21 Q4/20 Q4/21 Institutional SMA1 8,701 7,099 6,250 2,062
Slide 15: IG Wealth Management
IG WEALTH MANAGEMENT DAMON MURCHISON PRESIDENT & CEO IG WEALTH MANAGEMENT IGM FINANCIAL Q4, 2021 RESULTS
Slide 16: IG Wealth Management Q4, 2021 Highlights
IG Wealth Management Q4, 2021 Highlights 1 Record high quarter end AUM&A of $119.6B, up 4.9% during Q4 and 15.8% for full year 2021 • Client returns of 4.1% and strong Q4 net flows of $1.0B 2 Record high Q4 and full year 2021 net flows of $1.0B and $3.7B, respectively • Strong net sales to IGM manag
Slide 17: Continued Net Flow Momentum at IG Wealth Management
Continued Net Flow Momentum at IG Wealth Management IG Wealth Management Gross and Net Flows1 ($MM) IG Wealth Management Flows Gross Inflows Gross Outflows Net Flows (Last Twelve Month Trailing, $B) Month of January: Record high January Gross & Net Flows Total Net Flows IGM Product Net Flows 1,166 5
Slide 18: IG Wealth Management Q4, 2021 Operating Results
IG Wealth Management Q4, 2021 Operating Results Gross Outflows Rate Assets Under Gross Inflows ($MM) (quarterly annualized) Net Flows ($MM) Advisement ($B) +17% 985 3rd party IG mutual funds 3,437 9.8% 485 2,938 114.0 119.6 8.3% 103.3 7.4 9.1 5.6 Q4/20 Q4/21 Net Flows Q4/20 Q4/21 106.6 110.5 97.7 IG
Slide 19: Sales Growth Driven by Accelerating High-Net-Worth Client Acquisition
Sales Growth Driven by Accelerating High-Net-Worth Client Acquisition Gross Flows from Newly Acquired Clients Gross Flows from Newly Acquired Clients (Annual, $MM) (Last Twelve Month Trailing, $MM) By Client Assets Brought to IG Wealth By Client Assets Brought to IG Wealth Growth >$500K $100-500K <$
Slide 20: Accelerating Consultant Productivity
Accelerating Consultant Productivity Gross Inflows per Consultant Gross Inflows per Consultant Recruit with <4 years experience Practice with >4 years experience Key Initiatives ($MM) ($MM) Driving Productivity 1.69 • Elimination of DSC (2017), removing competitive impediment 0.60 1.38 • Tightened r
Slide 21: New digital advisor application for tailored client investment proposals
New digital advisor application to deliver tailored client investment proposals with integrated compliance management INTEGRATED Product shelf details hosted on CapIntel PROUCT SHELF Concentration limits for specific MANAGER securities inside portfolios and households Integrated approved product she
Slide 22: Mackenzie Investments
MACKENZIE INVESTMENTS BARRY MCINERNEY PRESIDENT & CEO MACKENZIE INVESTMENTS IGM FINANCIAL Q4, 2021 RESULTS
Slide 23: Mackenzie Investments Q4, 2021 Highlights
Mackenzie Investments Q4, 2021 Highlights 1 Record high quarter end AUM of $210.3B, up 3.4% from September 30, 2021 • Organic growth through investment returns of 4.5% and net flows of $181 million Q4 investment fund net flows of $757MM were the second best on record; full year 2021 2 investment fun
Slide 24: Continued Strong Net Flows at Mackenzie
Continued Strong Net Flows at Mackenzie Mackenzie Adjusted Investment Fund Flows1 ($MM) Investment Fund Net Sales 2 Gross Sales Redemptions MF Net Sales ETF Net Flows QGOF Gross Sales January January Launched private label 2021 2022 Wealthsimple North America Month of January: Second Best Net Flows
Slide 25: Mackenzie Q4, 2021 Operating Results
Mackenzie Q4, 2021 Operating Results Retail Mutual Fund ▪ $653MM retail investment fund net sales, Gross Sales ($MM) Net Sales ($MM)1,2 second highest on record Q4/19 Q4/20 Q4/21 ▪ Gaining share; 9.0% long-term investment 2,587 2,229 Retail mutual Funds 222 1,010 478 fund net sales rate over the twe
Slide 26: Investment Boutique Retail Mutual Fund Performance & Net Sales
Investment Boutique Retail Mutual Fund Performance & Net Sales Fixed Managed 3rd Party Value-Oriented Quality Growth-Oriented Sustainable Core & Dividend Income Solutions & Other North Global Global ChinaAMC, Fixed Multi-Asset Putnam, Cundill American Ivy Growth Bluewater Resources Greenchip Quantit
Slide 27: Five Areas of Product Emphasis for Mackenzie – 2021 Highlights
Five Areas of Product Emphasis for Mackenzie – 2021 Highlights Areas of Emphasis Macro Thesis Select 2021 Highlights $44T1 market with diversified • Mackenzie Greenchip Global All Cap Fund achieves 5-star Morningstar 1. Sustainable Investing retail and institutional interest rating + $1.2B net sales
Slide 28: Strong Growth in Chinese Mutual Fund Industry AUM
Strong Growth in Chinese Mutual Fund Industry AUM; ChinaAMC is an Industry Leader, and Consistently Among the Top Five in the League Tables Chinese Mutual Fund Industry Ending AUM (RMB Trillions)1 25.3 Chinese Mutual Fund Industry Long-term Mutual CAD/RMB = 5.0753 22.9 23.8 Fund Market Share (% at D
Slide 29: Capital Partners
Capital Partners • Strong Q4 fundraisings of $1.2B and full year 2021 of $5.5B, annual AUM increase of 34% • Together, IGM and GWO have committed capital across each of Northleaf’s mid-market private market platforms (private equity, private credit and infrastructure) Northleaf Capital Raised Since
Slide 30: Financial Highlights
IGM FINANCIAL Financial Highlights LUKE GOULD EXECUTIVE VICE-PRESIDENT & CFO IGM FINANCIAL IGM FINANCIAL Q4, 2021 RESULTS
Slide 31: Total Assets Under Management & Advisement
Total Assets Under Management & Advisement IGM Assets Under Management & Advisement ($B) Change in IGM AUM&A ($B) Daily AUM&A Annual Average AUM&A 1 Q4/20 Q1/21 Q2/21 Q3/21 Q4/21 LTM AUM&A excluding sub-advisory to Canada Life Quarterly Average AUM&A Opening AUM&A 196.4 192.81 199.7 210.9 214.1 192.
Slide 32: IGM Financial Adjusted EBIT & Margins
IGM Financial Adjusted EBIT & Margins IGM Adjusted EBIT1 ($MM) IGM Adjusted EBIT Margin1,2 (% of AUM&A) Direct advisor/dealer 890.9 902.1 compensation3 & sub- 843.9 1.44% 779.5 800.5 advisory expenses 243.5 253.5 Share of associates’ 0.42% 1.26% 1.25% 1.24% 1.24% 232.0 earnings and net 213.4 224.8 0
Slide 33: IGM Financial Consolidated Profitability
IGM Financial Consolidated Profitability1 $ Millions (unless otherwise noted): Change QoQ Change YoY IGM Financial Consolidated Q4/20 Q3/21 Q4/21 $ % $ % ▪1 Combination of operations & Days in the period 92 92 92 0.0% 0.0% Average AUM & AUA ($ Billions) support and business Wealth Management AUM & A
Slide 34: IG Wealth Management Key Profitability Drivers
IG Wealth Management Key Profitability Drivers Average Assets ($B), Advisory and Key Revenue & Expenses as bps of Respective Product & Program Fee Rate (bps)1 Driver (AUA or AUM or Gross Inflows)1 117.4 105.0 114.8 104.3 104.2 102.6 101.8 109.7 7.9 105.5 7.2 6.6 Other AUA Advisory 100.3 109.5 85.8 8
Slide 35: IG Wealth Management Profitability
IG Wealth Management Profitability $ Millions (unless otherwise noted): 1 Change QoQ Change YoY IG Wealth Management Q4/20 Q3/21 Q4/21 $ % $ % Days in the period 92 92 92 0.0% 0.0% Average assets under advisement ($B) 100.3 114.8 117.4 2.6 2.2% 17.1 17.0% Average assets under management ($B) 95.2 10
Slide 36: Mackenzie AUM & Sales Disclosure Enhancements
Mackenzie AUM & Sales Disclosure Enhancements We have enhanced disclosures to detail the sub-advisory relationship to Canada Life and related revenues Mackenzie Ending AUM ($B) Mackenzie Sub-advisory to Canada Life 210.3 210.3 Key Metric 203.3 1-Yr % Q4/20 Q1/21 Q2/21 Q3/21 Q4/21 change Canada Life
Slide 37: Asset Management Key Profitability Drivers
Asset Management Key Profitability Drivers Net Asset Management Fee Rates1 Average AUM ($B), Net Asset Management Fees (bps)1 (as bps of respective AUM) 204.9 207.1 Sub-advisory AUM 196.6 81.8 81.8 82.1 Third-party to Wealth 80.6 187.2 Excluding Management Canada Life Third Party AUM 70.8 Overall Th
Slide 38: Asset Management Segment Profitability
Asset Management Segment Profitability $ Millions (unless otherwise noted):1 Change QoQ Change YoY Asset Management Q4/20 Q3/21 Q4/21 $ % $ % Days in the period 92 92 92 0.0% 0.0% Average assets under management ($B) Excluding sub-advisory to Wealth Management 77.2 125.2 126.8 1.6 1.3% 49.6 64.2% Su
Slide 39: ChinaAMC – A Leading Chinese Asset Manager
ChinaAMC – A Leading Chinese Asset Manager – Delivering Accelerated Growth with Q4/21 Net Earnings Increasing ~43% Year-over-year ChinaAMC Ending AUM1 IGM Share of ChinaAMC Earnings (RMB billions) (CAD millions) 21.0 4.0 One-time unfavourable tax adjustments of 17.0 17.0 1,662 ~$4MM in Q4/21 1,607 1
Slide 40: Adjusted Net Earnings by Segment and Company
Adjusted Net Earnings Available to Common Shareholders by Segment and Company ($MM) Wealth Management Asset Management Strategic Investments & Other IGM Consolidated Adjusted Net Earnings Available to Common +28% Shareholders Q4/20 260.8 Q4/21 204.3 +20% 141.1 117.4 +60% 65.3 +11% Not applicable +39
Slide 41: Adjusted Net Earnings and Valuation by Segment and Company
Adjusted Net Earnings Available to Common Shareholders and Valuation by Segment and Company ($MM) Wealth Management Asset Management Strategic Investments & Other1 IGM Consolidated Adjusted Net Earnings +9% Available to Common 1,059 Shareholders +6% 971 2021 523 554 +10% Not applicable 2022 241 266
Slide 42: 2022 Expense Guidance – Continued Focus on Prudent Expense Management
2022 Expense Guidance – Continued Focus on Prudent Expense Management Guidance and Outlook: Combined Operations & Support and Business Development Expenses IGM Consolidated1 By Company (year-over-year change) (year-over-year change) 1 2021 actual came in slightly below guidance 1) 5-year technology
Slide 43: Q&A
Q&A IGM FINANCIAL Q4, 2021 RESULTS
Slide 44: Appendix
Appendix IGM FINANCIAL Q4, 2021 RESULTS
Slide 45: 2022 Guidance - Mackenzie Business Development Expense Sensitivity
2022 Guidance - Mackenzie Business Development Expense Sensitivity Mackenzie Business Development Expense Sensitivity to Retail Mutual Fund Sales Levels ($MM, unless otherwise noted) Retail mutual fund gross sales ↑30% Retail mutual fund net sales ↑17.5% 13,200 ↑6% 12,000 ↓4% 10,800 10,206 9,800 ↓20
Slide 46: Wealthsimple AUA and Clients
• Wealthsimple’s AUA nearly doubled during 2021 to $18.8 billion • The number of clients served by Wealthsimple increased 168% during 2021 and currently stands at over 1.5 million (excluding Wealthsimple Tax users)1 Wealthsimple AUA of CAD $18.8B1 Wealthsimple Clients Surpass 1.5 million1 (AUA, $B)