Slide 1: Fourth Quarter 2023 Results
Fourth Quarter 2023 Results Andrew Schlossberg President and Chief Executive Officer Allison Dukes Chief Financial Officer January 23, 2024
Slide 2: Forward-looking statements and Important Information
Forward-looking statements and Important Information This presentation, and comments made in the associated obligation to update the information in any public disclosure if any conference call today, may include “forward-looking statements.” forward-looking statement later turns out to be inaccurate
Slide 3: Fourth quarter 2023 highlights
Fourth quarter 2023 highlights Key Capability Q4’23 Key Metrics Q4’22 Q3’23 Q4’23 Q4’23 Business Highlights Area Ending AUM ETFs, Factors $634B1 Net LT inflows of $14.0 billion driven by $12.4 billion from ETFs, Net LT Flows (billions) ($3.2) $2.6 $6.7 and Index one of our strongest quarters as we c
Slide 4: Investment performance as of December 31, 2023
Investment performance as of December 31, 2023 % of actively managed assets in top half of peer group or beating benchmark Overall US Equity Global & Int’l Equity Fixed Income Alternatives Balanced 100 80 60 98% 92% 94% 85% 40 78% 73% 74% 76% 71% 67% 64% 71% 69% 63% 63% 66% 57% 53% 51% 47% 20 41% 41
Slide 5: Assets under management & long-term flows
Assets under management & long-term flows 1 Q4'22 Q3'23 Q4'23 % of Total Firm AUM Annualized LT Org. Grow th (in billions) AUM Total Firm AUM by Investment Approach AUM by Channel 69% 65% 62% 31% 35% 38% 62% 63% 66% 38% 37% 34% $1,585 $976 $966 $985 $1,042 $1,487 $942 $1,409 $872 $600 $521 $537 $545
Slide 6: Assets under management & long-term flows (continued)
Assets under management & long-term flows (continued) 1 Q4'22 Q3'23 Q4'23 % of Total Firm AUM Annualized LT Org. Grow th (in billions) AUM by Geography AUM by Asset Class 71% 72% 72% 16% 15% 15% 13% 13% 14% 13% 12% 11% 5% 4% 4% 45% 49% 52% 22% 21% 21% 14% 14% 12% $1,069 $1,134 $824 $999 $727 $637 $3
Slide 7: Market volatility and shifting asset mix lower concentration of active equity
Market volatility and shifting asset mix have resulted in a lower concentration of active equity capabilities; average yield declines should moderate moving forward Average AUM, $B | Net Revenue Yields* Net Revenue Yields $1,584 | 33.4 bps $1,529 | 28.6 bps $1,516 | 27.1 bps 8% 7% • Secular shifts i
Slide 8: Revenues and expenses
Revenues and expenses (in millions) Net Revenues Adjusted Operating Expenses -5.6% 0.2% $2 million increase Q4’22 vs Q4’23 $62 million decrease Includes $22 million of Includes $12 million $1,108 -$31 +$12 $1,046 org. change expenses pertaining to Alpha -$35 -$4 -$4 $769 $771 -$4 -$6 $0 +$11 Q4’22 I
Slide 9: Organizational changes – annualized net savings
Organizational changes – annualized net savings • 88% of net savings target achieved • $44M in annualized net savings realized to date • On track to achieve annualized net savings of $50M for 2024; remaining $6M in annualized net savings expected to be achieved in first quarter (in millions) Operati
Slide 10: Adjusted operating income and profitability
Adjusted operating income and profitability (in millions, except margin and per share information) Adjusted Operating Income and Adjusted Operating Adjusted Net Income and Adjusted Diluted Earnings Margin Excluding $27 million Per Share Excluding $27 million of exec. retirement of exec. retirement e
Slide 11: Capital management
Capital management (in millions, except ratio information) Capital Returned to Shareholders Leverage Ratio** $301 $150 3.19x 3.41x 3.33x 3.50x 3.48x $145 $145 $149 $149 $59 $59 $59 $59 $59 $92 $90 $90 0.78x 0.83x 0.66x 0.69x 0.69x $86 $86 Q4’22 Q1’23 Q2’23 Q3’23 Q4’23 Q4’22 Q1’23 Q2’23 Q3’23 Q4’23 C
Slide 12: Conclusion
Conclusion • Resilient net flows performance with $6.7 billion in LT net inflows led by ETFs • Achieved $44 million of the expected total $50 million of annualized run rate savings • Market volatility and shifting asset mix have resulted in a lower concentration of active equity capabilities; averag
Slide 13: Appendix
Appendix 4 Invesco
Slide 14: We are diversified as a firm
We are diversified as a firm By Client Domicile By Channel By Asset Class 4% 11% 14% 12% 72% 66% 34% 52% 15% 21% 1-Yr 1-Yr 1-Yr (billions) Change (billions) Change (billions) Change Americas $1,133.9 13.5 % Retail $1,042.0 19.5 % Equity $823.7 29.3 % Asia Pac $235.5 5.4 % Institutional $543.3 1.2 %
Slide 15: Investment performance by investment objective
Investment performance By investment objective (actively managed assets)* AUM above benchmark 1st quartile 2nd quartile Equities U.S. Core U.S. Growth U.S. Value Sector 100% 100% 100% 100% 13% 13% 92% 92% 51% 69% 63% 55% 63% 35% 64% 6% 49% 50% 50% 54% 43% 41% 22% 18% 31% 5% 25% 1% 27% 25% 25% 11% 17
Slide 16: Investment performance by investment objective
Investment performance By investment objective (actively managed assets)* AUM above benchmark 1st quartile 2nd quartile Equities Other Global Global ex-U.S. and Em. Mkts. Alternatives Balanced 100% 100% 100% 100% 10% 8% 39% 54% 17% 4% 84% 86% 89% 99% 15% 82% 19% 74% 78% 17% 73% 27% 71% 64% 10% 24% 6
Slide 17: US GAAP and Non-GAAP operating results Q4-23 vs. Q3-23
US GAAP and Non-GAAP operating results Q4-23 vs. Q3-23 US GAAP Basis Non-GAAP Basis (in millions) Q4-23 Q3-23 % Change (1) (in millions) Q4-23 Q3-23 % Change (1) Investment management fees $1,003.3 $1,041.3 (3.6)% Investment management fees $1,126.4 $1,179.8 (4.5)% Service and distribution fees 344.
Slide 18: Reconciliation of US GAAP to Non-GAAP, three months ended December 31, 2023
Reconciliation of US GAAP results to Non-GAAP results Three months ended December 31, 2023 Please refer to pages 9-12 in the 4Q 2023 earnings press release for a description of the adjustments Consolidation 3rd party distribution, Transaction, Amortization Market appreciation / Consolidated of joint
Slide 19: Reconciliation of US GAAP to Non-GAAP, three months ended September 30, 2023
Reconciliation of US GAAP results to Non-GAAP results Three months ended September 30, 2023 Please refer to pages 7-10 in the 3Q 2023 earnings press release for a description of the adjustments Consolidation 3rd party distribution, Transaction, Market appreciation / Consolidated of joint service and
Slide 20: Reconciliation of US GAAP results to Non-GAAP results
Reconciliation of US GAAP results to Non-GAAP results (in millions) Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3’23 Q4’23 Operating revenues $1,763.4 $1,629.4 $1,530.4 $1,445.7 $1,443.4 $1,418.2 $1,442.8 $1,442.0 $1,413.4 Non-GAAP adjustments (389.7) (377.0) (356.5) (335.1) (335.3) (342.3) (352.1) (
Slide 21: Footnote disclosures
Footnote disclosures Footnotes for Slide 3, Fourth quarter 2023 highlights Non-GAAP financial measures - For the reconciliations from US GAAP to non-GAAP measures, see the Appendix to this presentation and the non-GAAP Information and Reconciliations section of the current earnings release. Addition
Slide 22: Footnote disclosures (continued)
Footnote disclosures (continued) Footnotes for Slide 11, Capital management Non-GAAP financial measures – For the reconciliations from US GAAP to non-GAAP measures, see the Appendix to this presentation and the non-GAAP Information and Reconciliations section of the current earnings release. Additio