Invesco Ltd · NYSE:IVZ
Invesco — Q1 2008 Earnings Presentation
32 slides from Invesco's earnings presentation, Apr 24, 2008
Slide 1: 2008 First Quarter Results
Invesco 2008 First Quarter Results April 24, 2008 Martin L. Flanagan, Chief Executive Officer Loren M. Starr, Chief Financial Officer
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation may include statements that constitute "forward-looking statements" under the United States securities laws. Forward-looking statements include information concerning possible or assumed future results of our operations, earnings, liquidity, cash flow and
Slide 3: Discussion Topics
Discussion Topics 1. Business Overview 2. Financial Results 3. Questions and Answers 4. Appendix 3
Slide 4: Our Strategic Priorities
Our Strategic Priorities The Markets Are Global and So is Our Company 1 Achieve strong investment performance 4 Build a high- 2 Deliver our investment performance Our Aspiration: capabilities anywhere in organization Take advantage of the world to meet client our world of opportunity needs to become
Slide 5: Specialized Investment Capabilities Globally
Specialized Investment Capabilities Globally Investment management team network Each of Invesco’s investment centers adheres to clearly defined investment strategies and philosophies intended to align with client expectations. Harnessing the distinct expertise at each center, Invesco’s teams draw on
Slide 6: Invesco Delivers Investment Strategies That Meet Our Clients Diverse Needs
Invesco Delivers Investment Strategies That Meet Our Clients Diverse Needs Diversified Investment Strategies Equity Alternatives • Market cap • Commodities and • Investment style natural resources • Geography – Energy; traditional • Sector and alternative Delivered the Way Our Clients Want • Structu
Slide 7: Invesco's Diversification is a Key Strength
Invesco’s Diversification is a Key Strength 12/31/05 03/31/08 Total AUM: $386.3bn Total AUM: $470.3bn Canada Canada By Client Domicile 11.0% 9.0% U.K. U.K. 17.4% U.S. 13.7% U.S. 61.1% 59.9% Europe Europe 8.4% 7.0% Asia Asia 5.8% 6.7% Balanced Balanced 10.5% Money 7.9% Money Market Market 13.5% 18.6%
Slide 8: Summary of First Quarter 2008 Results
Summary of First Quarter 2008 Results March 31, 2008 AUM of $470.3bn versus $500.1bn as of December 31, AUM 2007 and $471.2bn as of March 31, 2007 1Q08 average AUM was $476.6bn, down $33.3bn since 4Q07 Total net inflows were $1.2bn including $9.6bn in money market and Quarterly Flows ($8.4)bn
Slide 9: Quarterly Flows
Quarterly Flows Long-term gross sales declined largely due to market deterioration resulting in lower market demand for equity products Institutional money market increased $9.6bn to $80.7bn Total net flows were positive $1.2bn during 1Q08 Quarterly Long-Term Flows ($ billions) Growth in Insti
Slide 10: Distribution Channels – Quarterly LT Flows
Distribution Channels – Quarterly LT Flows Retail long-term flows were down: in-line with global markets Institutional redemptions improved as stable value outflows have stabilized Private Wealth net flows were slightly positive for the quarter Retail quarterly flows Institutional quarterly fl
Slide 11: Investment Performance – Overview
Investment Performance – Overview Asset Weighted 3-Year Performance March 31, 2008 December 31, 2007 Includes rated AUM of $358.8bn Includes rated AUM of $380.0bn Above Above Benchmark Benchmark 1Qtl and 2Qtl 1Qtl and 2Qtl 72% 70% Below Below Benchmark Benchmark 3Qtl or 4Qtl 3Qtl or 4Qtl 28% 30% Rat
Slide 12: Investment Performance – Overview
Investment Performance – Overview Ensuring well-defined, repeatable and disciplined investment processes that meet client expectations Retail Results % of AUM in Top Half of Peer Group 1yr 3yr 5yr Mar-08 Dec-07 Mar-07 Mar-08 Dec-07 Mar-07 Mar-08 Dec-07 Mar-07 US (Lipper)* 39% 45% 61% 60% 64% 66% 67%
Slide 13: Investment Performance – U.S. Retail
Investment Performance – U.S. Retail Strength across a diverse product line Improving competitive positioning Focused sales effort is beginning to generate results % of AUM in the Top Half of Lipper Classifications – 3/08 U.S. Core Equity Intl/Glbl/Regional Equity Sector Equity 97% 100% 100% 1
Slide 14: Investment Performance – Canadian Retail
Investment Performance – Canadian Retail Improved very short-term performance Headwinds may be becoming tailwinds Currency (most Trimark Funds do not hedge currency) Emerging Markets (Trimark Funds have no direct exposure to China and low exposure to India) % AUM in Top Half Decline in CAD M
Slide 15: Leveraging the Collective Strengths of Invesco Worldwide Fixed Income
Leveraging the Collective Strengths of Invesco Worldwide Fixed Income As of March 31, 2008 Our Investment Capabilities… Strengthening Our Competitive Position… Our Fixed Income teams consist of 120 investment Top quartile performance in each of our money professionals, with a combined global tea
Slide 16: Invesco Quantitative Strategies
Invesco Quantitative Strategies Bringing discipline to undisciplined financial markets As of March 31,2008 Who We Are… Strengthening Our Competitive Position… We manage $29bn in quantitatively-oriented Industry leader in alternative strategies, including products globally with 56 team members ma
Slide 17: Strategic priorities
Strategic priorities Invesco Ltd objectives … … embedded within North American Retail Helping people worldwide build their financial security NA Retail’s strategic priorities: 1. Achieve strong Investment reputation investment Building greater marketplace recognition performance and confidence in
Slide 18: Invesco Aim – Positioned for growth
Invesco Aim – Positioned for growth Investment Reputation Investment performance has improved New Invesco Aim and Invesco PowerShares brand identities better reflect global scale and scope of our business Restructured senior investment leadership Restructured Domestic Growth investment team
Slide 19: Worldwide ETF assets are approaching $800bn USD
Worldwide ETF assets are approaching $800bn USD with the number of funds having surpassed 1100 globally. One study predicts that Global ETF assets will surpass $2tn by 2011. Source: Morgan Stanley 19
Slide 20: Actively Managed ETFs = Opportunity
Actively Managed ETFs = Opportunity Benefits Opportunity • Benefits of traditional ETFs: • Deliver Invesco’s world-class institutional capabilities – Tax efficiency – Invesco Quantitative Strategies - – Transparency PowerShares Active Mega Cap Portfolio – Near instant liquidity – Invesco Worldwide F
Slide 21: Discussion Topics
Discussion Topics 1. Our Business Today 2. Financial Results 3. Questions and Answers 4. Appendix 21
Slide 22: Assets Under Management – 1Q08 vs. 4Q07
Assets Under Management – 1Q08 vs. 4Q07 ($ billions) 1Q08 4Q07 % Change Beginning Assets $500.1 $507.2 (1.4)% Inflows 20.8 30.9 (32.7)% Outflows (29.2) (35.9) (18.7)% Long-Term Net flows (8.4) (5.0) 68.0% Net flows in Money Market Funds and Other 9.6 3.5 174.3% Market Gains/Reinvestment (33.5) (5.0)
Slide 23: Operating Results – 1Q08 vs. 4Q07
Operating Results – 1Q08 vs. 4Q07 ($ millions) 1Q08 4Q07 % Change* Investment Management Fees 738 816 (9.7)% Performance Fees 11 13 (16.0)% Service and Distribution Fees 138 151 (8.2)% Other 23 43 (45.3)% Total Operating Revenues 910 1,023 (11.0)% Employee Compensation 273 286 (4.7)% Third-Party Dis
Slide 24: Questions & Answers
Questions & Answers 2008 First Quarter Results April 24, 2008
Slide 25: Discussion Topics
Discussion Topics 1. Our Business Today 2. Financial Results 3. Questions and Answers 4. Appendix 25
Slide 26: We Are Diversified As A Firm
We Are Diversified As A Firm Delivering a diverse set of solutions to meet a broad set of global investment needs By Client Domicile By Channel By Asset Class High Net Balanced Worth 7.9% Canada Money 3.6% 9.0% Market 18.6% U.K. Fixed U.S. Retail 17.4% Income 59.9% 48.6% Equity Institutional 45.8% 8
Slide 27: Operating Results – Quarterly
Operating Results – Quarterly ($ millions) 1Q08 4Q07 % Change* 3Q07 2Q07 1Q07 4Q06 3Q06 2Q06 Investment Management Fees 738 816 (9.7)% 792 766 706 688 626 612 Performance Fees 11 13 (16.0)% 4 34 19 26 10 13 Service and Distribution Fees 138 151 (8.2)% 151 148 143 135 131 133 Other 23 43 (45.3)% 30 3
Slide 28: Assets Under Management - Quarterly
Assets Under Management - Quarterly ($ billions) 1Q08 4Q07 % Change 3Q07 2Q07 1Q07 Beginning Assets $500.1 $507.2 (1.4)% $491.6 $471.2 $462.6 Inflows 20.8 30.9 (32.7)% 31.1 27.5 30.4 Outflows (29.2) (35.9) (18.7)% (30.9) (26.8) (29.7) Long-Term Net flows (8.4) (5.0) 68.0% 0.2 0.7 0.7 Net flows in Mo
Slide 29: Assets Under Management – by Channel
Assets Under Management – by Channel ($ billions) Total Retail Institutional PWM September 30, 2007 $507.2 $262.3 $227.3 $17.6 Inflows 30.9 22.9 6.7 1.3 Outflows (35.9) (21.7) (13.1) (1.1) Long-Term Net flows (5.0) 1.2 (6.4) 0.2 Net flows in Money Market Funds 3.5 - 3.5 - and Other Market Gains/Rein
Slide 30: Assets Under Management – by Asset Class
Assets Under Management – by Asset Class Fixed Money Stable ($ billions) Total Equity Income Balanced Market Value Alternative September 30, 2007* $507.2 $254.2 $39.6 $41.9 $73.6 $41.0 $56.9 Inflows 30.9 19.1 2.4 2.2 0.4 0.5 6.3 Outflows (35.9) (18.4) (3.1) (2.4) (0.5) (9.4) (2.1) Long-Term Net flow
Slide 31: Assets Under Management – by Client Domicile
Assets Under Management – by Client Domicile ($ billions) Total U.S. Canada U.K. Europe Asia September 30, 2007* $507.2 $296.2 $49.2 $87.8 $37.5 $36.5 Inflows 30.9 12.7 1.2 6.3 5.5 5.2 Outflows (35.9) (20.3) (2.2) (3.2) (5.5) (4.7) Long-Term Net flows (5.0) (7.6) (1.0) 3.1 - 0.5 Net flows in Money M
Slide 32: Schedule of Non-GAAP Information
Schedule of Non-GAAP Information For the three months ended March 31, 2008 December 31, 2007 March 31, 2007 Operating revenues, GAAP basis $910.4 $1,023.1 $900.2 Third-party distribution, service and advisory expenses (247.1) (284.9) (232.4) Proportional share of revenues, net of third-party distrib