Invesco Ltd · NYSE:IVZ
Invesco — FY2017 Earnings Presentation
52 slides from Invesco's earnings presentation, Jan 31, 2018
Slide 1: Invesco fourth quarter and full year 2017 results
Invesco fourth quarter and full year 2017 results Martin L. Flanagan President and Chief Executive Officer Loren M. Starr Chief Financial Officer January 31, 2018
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 fourth quarter and full year 2017 results
Presentation of fourth quarter and full year 2017 results This presentation includes the following non-GAAP performance 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 ad
Slide 4: Discussion topics
Discussion topics 2017 overview and fourth quarter overview Investment performance and flows Financial results Questions Appendix 3
Slide 5: 2017 overview – highlights
2017 overview – highlights Continued strong investment performance contributed to net long- term inflows, solid operating results, and record earnings per share Maintained strong, long-term investment performance throughout the year December 31, 2017, AUM of $937.6 billion, versus $812.9 billion
Slide 6: Benefits of diversification
Benefits of diversification Invesco’s global diversification has lead to consistent growth and lower volatility compared to industry average Organic Average Standard Growth Deviation = 2.3% 8.0% A 6.0% IVZ Targeted Organic Growth Rate of 3-5% D 4.0% K L IVZ 2.0% C E Average Organic I GH Growth = 1.1
Slide 7: 2017 overview – building the firm to meet future client needs
2017 overview – building the firm to meet future client needs and strengthen our competitive position Our achievements throughout 2017 enhanced our ability to meet current and future client needs, while strengthening our ability to compete Delivered strong, long-term investment performance to our
Slide 8: 2017 overview – building the firm to meet future client needs
2017 overview – building the firm to meet future client needs and strengthen our competitive position Our achievements throughout 2017 enhanced our ability to meet current and future client needs, while strengthening our ability to compete Continued to expand our Invesco Solutions team, which brin
Slide 9: Our 2017 acquisitions were intended to strengthen our global ETF platform
Our 2017 acquisitions were intended to further strengthen our global ETF platform and enhance our long-term growth The expansion of EMEA ETFs and the planned acquisition of Guggenheim Investment’s ETFs provide highly complementary capabilities that will help accelerate the growth of our global ETF b
Slide 10: We expanded our global ETF business by adding well-performing capabilities
We expanded our global ETF business by adding well- performing capabilities positioned for growth ▪ ETF business with $27.9 billion in AUM, up from $26 billion in AUM at close of acquisition (including $9 billion in externally managed AUM) EMEA ETFs ▪ Expanded our diversified array of ETFs across eq
Slide 11: Fourth quarter overview – highlights
Fourth quarter overview – highlights Maintained strong investment performance and achieved solid long- term organic growth during the quarter Maintained strong, long-term investment performance – 64% and 75% of actively managed assets in top half of peer group on a 3- and 5-year basis December 3
Slide 12: Discussion topics
Discussion topics 2017 overview and fourth quarter overview Investment performance and flows Financial results Questions Appendix 11
Slide 13: Investment performance – overview
Investment performance – overview Aggregate performance analysis – asset weighted Percent of actively managed assets in top half of peer group* 1-Year 3-Year 5-Year 57% 64% 75% 25% 43% 36% Assets top half of peer group Assets bottom half of peer group * Excludes passive products, closed-end funds, p
Slide 14: Quarterly long-term flows
Quarterly long-term flows Strong active and passive demand for the quarter Quarterly long-term flows ($ billions) Total(a) Active(a) Passive 39.9 40.2 16.5 35.6 37.3 33.7 36.2 56.7 32.9 33.5 49.1 45.1 46.4 46.1 9.9 40.8 42.8 41.1 9.3 9.2 9.5 9.1 7.9 7.4 8.3 3.8 3.8 3.9 3.6 2.0 2.1 12.1 0.5 1.3 0.0 0
Slide 15: Quarterly long-term flows
Quarterly long-term flows Strong retail and institutional demand during the quarter Quarterly long-term flows ($ billions) Retail(a)(b)© Institutional(b)(d) 48.3 10.0 10.5 10.6 38.6 38.3 9.7 9.2 36.9 32.8 34.5 33.3 8.1 8.4 31.1 7.8 4.0 2.9 2.7 2.5 9.4 3.6 1.3 2.6 2.3 3.9 0.8 -0.2 -2.4 -2.4 -1.0 -2.0
Slide 16: Discussion topics
Discussion topics 2017 overview and fourth quarter overview Investment performance and flows Financial results Questions Appendix 15
Slide 17: Total assets under management – 4Q17 vs. 3Q17
Total assets under management – 4Q17 vs. 3Q17 ($ billions) 4Q-17 3Q-17 % Change Beginning Assets $917.5 $858.3 6.9% Long-Term Inflows* 56.7 46.1 23.0% Long-Term Outflows (52.3) (40.9) 27.9% Long-Term Net Flows 4.4 5.2 (15.4)% Net flows in non-management fee earning AUM** 1.6 0.9 77.8% Net flows in I
Slide 18: US GAAP operating results – 4Q17 vs. 3Q17
US GAAP operating results – 4Q17 vs. 3Q17 ($ millions) 4Q-17 3Q-17 % Change Operating Revenues Investment Management Fees 1,098.7 1,062.3 3.4% Service and Distribution Fees 217.5 217.6 - Performance Fees 43.0 42.3 1.7% Other 16.4 15.5 5.8% Total Operating Revenues 1,375.6 1,337.7 2.8% Operating Expe
Slide 19: Non-GAAP operating results – 4Q17 vs. 3Q17
Non-GAAP operating results – 4Q17 vs. 3Q17 ($ millions) 4Q-17 3Q-17 % Change Adjusted Revenues Investment Management Fees 1,119.2 1,081.9 3.4% Service and Distribution Fees 217.5 217.6 - Performance Fees 43.3 43.3 - Other 18.4 16.7 10.2% Third-Party Distribution, Service and Advisory Expenses (393.5
Slide 20: Fourth quarter overview – highlights
Fourth quarter overview – highlights Maintained strong investment performance and achieved solid long- term organic growth during the quarter Maintained strong, long-term investment performance – 64% and 75% of actively managed assets in top half of peer group on a 3- and 5-year basis December 3
Slide 21: Discussion topics
Discussion topics 2017 overview and fourth quarter overview Investment performance and flows Financial results Questions Appendix 20
Slide 22: Discussion topics
Discussion topics 2017 overview and fourth quarter overview Investment performance and flows Financial results Questions Appendix 21
Slide 23: 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% 16% 12% 68% 46% 62% 14% 32% 24% 9% 8% 6% 1-Yr 1-Yr 1-Yr ($ billions) Change ($ billions) Change ($ billions) Change U.S. $585.4 8.5% Retail $637.0 21.0% Equity $431
Slide 24: 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% 91% 21% 53% 17% 52% 4% 73% 42% 41% 6% 40% 36% 32% 40% 27% 27% 36% 32% 38% 26% 14% 14% 13% 6% 16% 17% 9% 6% 9% 3
Slide 25: 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% 91% 34% 81% 79% 71% 71% 52% 62% 50% 56% 4% 8% 87% 5% 47% 49% 50% 61% 28% 46
Slide 26: 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 $495.7 billion) % of assets top % of assets bottom Equities half of peer group half of peer gro
Slide 27: 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 $495.7 billion) % of assets top % of assets bottom Equities Other half of peer grou
Slide 28: US GAAP operating results – quarterly
US GAAP operating results – quarterly ($ millions) 4Q-17 3Q-17 % Change* 2Q-17 1Q-17 4Q-16 3Q-16 2Q-16 1Q-16 Investment Management Fees 1,099 1,062 3.4% 1,010 955 947 966 947 914 Service and Distribution Fees 218 218 - 211 206 209 213 203 198 Performance Fees 43 42 1.7% 17 11 18 3 9 15 Other 16 16 5
Slide 29: Non-GAAP operating results – quarterly
Non-GAAP operating results– quarterly ($ millions) 4Q-17 3Q-17 % Change* 2Q-17 1Q-17 4Q-16 3Q-16 2Q-16 1Q-16 Investment Management Fees 1,119 1,082 3.4% 1,028 974 965 983 963 930 Service and Distribution Fees 218 218 - 211 206 209 213 203 198 Performance Fees 43 43 - 18 18 18 4 9 16 Other 18 17 10.2
Slide 30: Total assets under management – quarterly
Total assets under management – quarterly ($ billions) 4Q-17 3Q-17 % Change 2Q-17 1Q-17 4Q-16 3Q-16 2Q-16 1Q-16 Beginning Assets $917.5 $858.3 6.9% $834.8 $812.9 $820.2 $779.6 $771.5 $775.6 Long-Term Inflows* 56.7 46.1 23.0% 41.1 46.4 45.1 49.1 42.8 40.8 Long-Term Outflows (52.3) (40.9) 27.9% (40.8)
Slide 31: Total assets under management – by asset class
Total assets under management – by asset class Fixed Money ($ billions) Total Equity Balanced Alternatives Income Market June 30, 2017 $858.3 $391.2 $208.9 $52.2 $76.1 $129.9 Long-Term Inflows* 46.1 19.9 12.6 3.2 1.3 9.1 Long-Term Outflows (40.9) (22.5) (8.5) (3.0) (1.1) (5.8) Long-Term Net flows 5.
Slide 32: Total assets under management – by asset class
Total assets under management – by asset class Fixed Money ($ billions) Total Equity Balanced Alternatives Income Market December 31, 2016 $812.9 $364.1 $201.7 $46.8 $78.3 $122.0 Long-Term Inflows 46.4 20.3 11.2 2.7 0.8 11.4 Long-Term Outflows (44.8) (24.6) (9.6) (2.2) (0.9) (7.5) Long-Term Net flow
Slide 33: Total assets under management – by channel
Total assets under management – by channel ($ billions) Total Retail Institutional June 30, 2017 $858.3 $572.4 $285.9 Long-Term Inflows* 46.1 36.9 9.2 Long-Term Outflows (40.9) (33.0) (7.9) Long-Term Net flows 5.2 3.9 1.3 Net flows in non-management fee earning AUM** 0.9 (1.0) 1.9 Net flows in Inst.
Slide 34: Total assets under management – by channel
Total assets under management – by channel ($ billions) Total Retail Institutional December 31, 2016 $812.9 $526.5 $286.4 Long-Term Inflows 46.4 38.3 8.1 Long-Term Outflows (44.8) (35.7) (9.1) Long-Term Net flows 1.6 2.6 (1.0) Net flows in non-management fee earning AUM 1.2 0.2 1.0 Net flows in Inst
Slide 35: Total assets under management – by client domicile
Total assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Asia Europe June 30, 2017 $858.3 $559.2 $24.8 $103.8 $86.6 $83.9 Long-Term Inflows* 46.1 21.7 1.0 4.3 13.8 5.3 Long-Term Outflows (40.9) (20.9) (1.1) (3.2) (10.5) (5.2) Long-Term Net flows 5.2 0.8 (0.1
Slide 36: Total assets under management – by client domicile
Total assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Asia Europe December 31, 2016 $812.9 $539.5 $23.1 $98.2 $72.1 $80.0 Long-Term Inflows 46.4 25.1 1.1 4.1 8.3 7.8 Long-Term Outflows (44.8) (24.4) (1.3) (5.9) (6.6) (6.6) Long-Term Net flows 1.6 0.7 (0.2
Slide 37: Passive assets under management – by asset class
Passive assets under management – by asset class Fixed Money ($ billions) Total Equity Balanced Alternative Income Market June 30, 2017 $156.6 $103.5 $46.5 - - $6.6 Long-Term Inflows 9.9 5.9 2.8 - - 1.2 Long-Term Outflows (8.6) (6.3) (1.7) - - (0.6) Long-Term Net flows 1.3 (0.4) 1.1 - - 0.6 Net flow
Slide 38: Passive assets under management – by asset class
Passive assets under management – by asset class Fixed Money ($ billions) Total Equity Balanced Income Market Alternative December 31, 2016 $144.4 $93.5 $41.7 - - $9.2 Long-Term Inflows 9.1 5.6 2.8 - - 0.7 Long-Term Outflows (7.0) (4.8) (0.6) - - (1.6) Long-Term Net flows 2.1 0.8 2.2 - - (0.9) Net f
Slide 39: Passive assets under management – by channel
Passive assets under management – by channel ($ billions) Total Retail Institutional June 30, 2017 $156.6 $141.5 $15.1 Long-Term Inflows 9.9 9.9 - Long-Term Outflows (8.6) (8.6) - Long-Term Net flows 1.3 1.3 - Net flows in non-management fee earning AUM 0.9 (1.0) 1.9 Net flows in Inst. Money Market
Slide 40: Passive assets under management – by channel
Passive assets under management – by channel ($ billions) Total Retail Institutional December 31, 2016 $144.4 $128.8 $15.6 Long-Term Inflows 9.1 9.1 - Long-Term Outflows (7.0) (6.3) (0.7) Long-Term Net flows 2.1 2.8 (0.7) Net flows in non-management fee earning AUM 1.2 0.2 1.0 Net flows in Inst. Mon
Slide 41: Passive assets under management – by client domicile
Passive assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Asia Europe June 30, 2017 $156.6 $152.8 $0.6 - $2.1 $1.1 Long-Term Inflows 9.9 6.1 0.1 - 3.7 - Long-Term Outflows (8.6) (5.1) (0.1) - (3.4) - Long-Term Net flows 1.3 1.0 - - 0.3 - Net flows in non-ma
Slide 42: Passive assets under management – by client domicile
Passive assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Asia Europe December 31, 2016 $144.4 $139.9 $0.5 - $1.9 $2.1 Long-Term Inflows 9.1 9.0 - - 0.1 - Long-Term Outflows (7.0) (6.2) - - (0.1) (0.7) Long-Term Net flows 2.1 2.8 - - - (0.7) Net flows in no
Slide 43: Reconciliation of US GAAP to non-GAAP – year ended December 31, 2017
Reconciliation of US GAAP results to non-GAAP results – year ended December 31, 2017 Please refer to pages 9-12 in the 4Q 2017 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party Business Market appreciation / Consolidated Other Non-GAAP Consolidat
Slide 44: Reconciliation of US GAAP to non-GAAP – year ended December 31, 2016
Reconciliation of US GAAP results to non-GAAP results – year 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 Consolidat
Slide 45: Reconciliation of US GAAP to non-GAAP – three months ended December 31, 2017
Reconciliation of US GAAP results to non-GAAP results – three months ended December 31, 2017 Please refer to pages 9-12 in the 4Q 2017 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party Business Market appreciation / Consolidated Other Non-GAAP Co
Slide 46: Reconciliation of US GAAP to non-GAAP – three months ended September 30, 2017
Reconciliation of US GAAP results to non-GAAP results – three months ended September 30, 2017 Please refer to pages 8-10 in the 3Q 2017 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party Business Market appreciation / Consolidated Other Non-GAAP C
Slide 47: Reconciliation of US GAAP to non-GAAP – three months ended June 30, 2017
Reconciliation of US GAAP results to non-GAAP results – three months ended June 30, 2017 Please refer to pages 8-10 in the 2Q 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 48: Reconciliation of US GAAP to non-GAAP – 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 49: Reconciliation of US GAAP to non-GAAP – 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 50: Reconciliation of US GAAP to non-GAAP – 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 51: Reconciliation of US GAAP to non-GAAP – 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 52: Reconciliation of US GAAP to non-GAAP – 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