Invesco Ltd · NYSE:IVZ
Invesco — Q2 2014 Earnings Presentation
45 slides from Invesco's earnings presentation, Jul 31, 2014
Slide 1: Invesco second quarter 2014 results
Invesco second quarter 2014 results Martin L. Flanagan President and Chief Executive Officer Loren M. Starr Chief Financial Officer July 31, 2014
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: Discussion topics
Discussion topics Second quarter overview Investment performance and flows Financial results Questions Appendix 2
Slide 4: Second quarter overview
Second quarter overview Strong investment performance contributed to solid operating results Maintained strong, long-term investment performance – 80% of actively managed assets ahead of peers on a 3- and 5-year basis Net long-term outflows of $6.9 billion, reflecting a previously disclosed sing
Slide 5: Summary of second quarter 2014 results
Summary of second quarter 2014 results June 30,2014 AUM of $802.4 billion versus $787.3 billion at March Assets under 31, 2014 management Average AUM was $790.1 billion versus $779.6 billion for the first quarter Total net outflows of $8.8 billion Long-term net outflows of $6.9 billion Flows
Slide 6: Discussion topics
Discussion topics Second quarter overview Investment performance and flows Financial results Questions Appendix 5
Slide 7: Investment performance – overview
Investment performance – overview Aggregate performance analysis – asset weighted Percent of actively managed assets in top half of peer group* 1-Year 3-Year 5-Year 72% 80% 80% 20% 20% 28% Assets top half of peer group Assets bottom half of peer group *Excludes passive products, closed-end funds, pr
Slide 8: Quarterly long-term flows
Quarterly long-term flows Strong global flows offset by a single client withdrawal Quarterly long-term flows ($ billions) Total Active Passive 13.5 50.2 41.6 11.8 47.6 45.8 44.4 37.2 36.1 41.8 42.5 34.1 32.6 33.1 34.0 34.4 8.8 8.7 8.6 8.6 27.7 25.2 6.7 6.4 6.4 5.2 14.3 3.3 8.5 7.9 1.5 1.3 6.5 3.3 4.
Slide 9: Quarterly long-term flows
Quarterly long-term flows Strong global flows offset by a single client withdrawal Quarterly long-term flows ($ billions) Retail(a) Institutional(b) 39.6 37.7 36.3 36.2 35.5 35.8 26.0 26.9 11.4 10.0 10.6 8.0 7.5 10.3 6.7 6.2 7.6 6.3 5.7 6.5 4.9 2.1 4.0 2.8 1.3 0.6 1.3 -0.3 -8.2 -1.5 -1.1 -3.5 -20.3
Slide 10: Second quarter highlights
Second quarter highlights Strong momentum across our global business Americas Flows in US driven by international growth equities, US value equities, high-yield municipal and UITs. Redemption rates for US retail remain favorable to industry. Increase in US retail gross sales of 29% in trailing t
Slide 11: EMEA AUM remain stable in 2Q
EMEA AUM remain stable in 2Q Thoughtfully managed transition mitigates impact to the business Ending AUM 2Q 2014 1Q 2014 ($ billions) Invesco Ltd. 802.4 787.3 Invesco EMEA 139.3 176.1 133.8 178.3 36.8 44.5 UK Equity Income AUM EMEA Ex-UK Equity Income AUM 2Q14 LT Net Flows 1Q14 LT Net Flows Change i
Slide 12: Discussion topics
Discussion topics Second quarter overview Investment performance and flows Financial results Questions Appendix 11
Slide 13: Total assets under management – 2Q14 vs. 1Q14
Total assets under management – 2Q14 vs. 1Q14 ($ billions) 2Q-14 1Q-14 % Change Beginning Assets $787.3 $778.7 1.1% Long-Term Inflows 42.5 50.2 (15.3)% Long-Term Outflows (49.4) (43.7) 13.0% Long-Term Net flows (6.9) 6.5 N/A Net flows in Invesco PowerShares QQQ (3.0) (1.3) 130.8% Net flows in Inst.
Slide 14: Non-GAAP operating results – 2Q14 vs. 1Q14
Non-GAAP operating results – 2Q14 vs. 1Q14 ($ millions) 2Q-14 1Q-14 % Change Adjusted Revenues Investment Management Fees 1,055 989 6.6% Service and Distribution Fees 215 239 (10.0)% Performance Fees 7 34 (78.3)% Other 39 36 9.0% Third-Party Distribution, Service and Advisory Expenses (414) (409) 1.
Slide 15: Second quarter overview
Second quarter overview Strong investment performance contributed to solid operating results Maintained strong, long-term investment performance – 80% of actively managed assets ahead of peers on a 3- and 5-year basis Net long-term outflows of $6.9 billion, reflecting a previously disclosed sing
Slide 16: Appendix
Discussion topics Second quarter overview Investment performance and flows Financial results Questions Appendix Appendix 15
Slide 17: Discussion topics
Discussion topics Second quarter overview Investment performance and flows Financial results Questions Appendix 16
Slide 18: Investment performance (5-year)
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 $480.7 billion) % of assets top half % of assets bottom Equities of peer group half of peer grou
Slide 19: Investment performance (5-year)
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 $480.7 billion) % of assets top half % of assets bottom Equities Global ex-US and Other of peer
Slide 20: Investment performance by investment objective
Investment performance By investment objective (actively managed assets)* Equities 1st quartile 2nd quartile AUM above benchmark U.S. Core U.S. Growth U.S. Value Sector 100% 100% 100% 100% 95% 81% 64% 49% 57% 54% 95% 54% 54% 55% 7% 7% 40% 23% 7% 34% 54% 9% 15% 38% 43% 24% 32% 24% 24% 24% 24% 25% 26%
Slide 21: Investment performance by investment objective
Investment performance By investment objective (actively managed assets)* Equities Global ex-U.S. and Other 1st quartile 2nd quartile AUM above benchmark Global Emerging markets Alternatives Balanced 100% 100% 100% 100% 99% 99% 21% 87% 16% 82% 80% 12% 73% 70% 67% 63% 64% 67% 82% 96% 97% 76% 20% 44%
Slide 22: We are diversified as a firm
We are diversified as a firm Delivering a diverse set of solutions to meet client needs By client domicile By channel By asset class 4% 12% 67% 13% 68% 23% 32% 49% 9% 10% 7% 6% 1-Yr 1-Yr 1-Yr ($ billions) Change ($ billions) Change ($ billions) Change U.S. $537.5 11.6% Retail $544.8 19.0% Equity $39
Slide 23: Non-GAAP operating results – quarterly
Non-GAAP operating results – quarterly ($ millions) 2Q-14 1Q-14 % Change* 4Q-13 3Q-13 2Q-13 1Q-13 4Q-12 3Q-12 Investment Management Fees 1,055 989 6.6% 983 938 905 863 836 813 Service and Distribution Fees 215 239 (10.0)% 230 221 216 206 200 196 Performance Fees 7 34 (78.3)% 11 9 9 39 4 3 Other 39 3
Slide 24: US GAAP operating results – quarterly
US GAAP operating results – quarterly ($ millions) 2Q-14 1Q-14 % Change* 4Q-13 3Q-13 2Q-13 1Q-13 4Q-12 3Q-12 Investment Management Fees 1,032 965 6.9% 955 914 886 845 818 791 Service and Distribution Fees 215 239 (10.0)% 230 221 216 206 200 196 Performance Fees 5 31 (83.9)% 9 5 6 36 2 3 Other 38 34
Slide 25: Total assets under management – quarterly
Total assets under management – quarterly ($ billions) 2Q-14 1Q-14 % Change 4Q-13 3Q-13 2Q-13 Beginning Assets $787.3 $778.7 1.1% $745.5 $705.6 $707.7 Long-Term Inflows 42.5 50.2 (15.3)% 45.8 41.8 44.4 Long-Term Outflows (49.4) (43.7) 13.0% (44.8) (36.8) (43.0) Long-Term Net flows (6.9) 6.5 N/A 1.0
Slide 26: Total assets under management – by asset class
Total assets under management – by asset class Fixed Money ($ billions) Total Equity Income Balanced Market Alternative December 31, 2013 $778.7 $383.1 $171.7 $53.3 $82.7 $87.9 Long-Term Inflows 50.2 27.4 9.6 5.0 0.8 7.4 Long-Term Outflows (43.7) (26.2) (6.7) (4.4) (1.0) (5.4) Long-Term Net flows 6.
Slide 27: Total assets under management – by asset class
Total assets under management – by asset class Fixed Money ($ billions) Total Equity Income Balanced Market Alternative June 30, 2013 $705.6 $321.4 $173.1 $49.7 $77.8 $83.6 Long-Term Inflows 41.8 22.8 8.4 3.7 1.0 5.9 Long-Term Outflows (36.8) (18.2) (9.5) (3.5) (1.1) (4.5) Long-Term Net flows 5.0 4.
Slide 28: Total assets under management – by channel
Total assets under management – by channel ($ billions) Total Retail Institutional December 31, 2013 $778.7 $519.6 $259.1 Long-Term Inflows 50.2 39.6 10.6 Long-Term Outflows (43.7) (32.0) (11.7) Long-Term Net flows 6.5 7.6 (1.1) Net flows in Invesco PowerShares QQQ (1.3) (1.3) - Net flows in Inst. M
Slide 29: Total assets under management – by channel
Total assets under management – by channel ($ billions) Total Retail Institutional June 30, 2013 $705.6 $457.7 $247.9 Long-Term Inflows 41.8 35.5 6.3 Long-Term Outflows (36.8) (29.0) (7.8) Long-Term Net flows 5.0 6.5 (1.5) Net flows in Invesco PowerShares QQQ 0.8 0.8 - Net flows in Inst. Money Marke
Slide 30: Total assets under management – by client domicile
Total assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Europe Asia December 31, 2013 $778.7 $521.3 $27.1 $114.8 $60.9 $54.6 Long-Term Inflows 50.2 24.7 1.1 5.1 11.3 8.0 Long-Term Outflows (43.7) (21.1) (1.2) (6.9) (6.5) (8.0) Long-Term Net flows 6.5 3.6 (0
Slide 31: Total assets under management – by client domicile
Total assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Europe Asia June 30, 2013 $705.6 $481.5 $24.8 $104.3 $46.4 $48.6 Long-Term Inflows 41.8 25.7 0.8 4.0 6.4 4.9 Long-Term Outflows (36.8) (23.7) (1.0) (4.3) (4.2) (3.6) Long-Term Net flows 5.0 2.0 (0.2) (
Slide 32: Passive assets under management – by asset class
Passive assets under management – by asset class Fixed Money ($ billions) Total Equity Income Balanced Market Alternative December 31, 2013 $139.7 $85.6 $39.5 - - $14.6 Long-Term Inflows 8.6 5.4 2.2 - - 1.0 Long-Term Outflows (5.3) (3.2) (1.2) - - (0.9) Long-Term Net flows 3.3 2.2 1.0 - - 0.1 Net fl
Slide 33: Passive assets under management – by asset class
Passive assets under management – by asset class Fixed Money ($ billions) Total Equity Income Balanced Market Alternative June 30, 2013 $123.7 $65.7 $42.5 - - $15.5 Long-Term Inflows 8.7 6.0 1.6 - - 1.1 Long-Term Outflows (8.5) (3.6) (3.9) - - (1.0) Long-Term Net flows 0.2 2.4 (2.3) - - 0.1 Net flow
Slide 34: Passive assets under management – by channel
Passive assets under management – by channel ($ billions) Total Retail Institutional December 31, 2013 $139.7 $118.2 $21.5 Long-Term Inflows 8.6 7.9 0.7 Long-Term Outflows (5.3) (4.5) (0.8) Long-Term Net flows 3.3 3.4 (0.1) Net flows in Invesco PowerShares QQQ (1.3) (1.3) - Net flows in Inst. Money
Slide 35: Passive assets under management – by channel
Passive assets under management – by channel ($ billions) Total Retail Institutional June 30, 2013 $123.7 $100.0 $23.7 Long-Term Inflows 8.7 8.7 - Long-Term Outflows (8.5) (6.0) (2.5) Long-Term Net flows 0.2 2.7 (2.5) Net flows in Invesco PowerShares QQQ 0.8 0.8 - Net flows in Inst. Money Market Fun
Slide 36: Passive assets under management – by client domicile
Passive assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Europe Asia December 31, 2013 $139.7 $135.2 $0.1 - $1.8 $2.6 Long-Term Inflows 8.6 8.5 - - 0.1 - Long-Term Outflows (5.3) (5.1) - - (0.1) (0.1) Long-Term Net flows 3.3 3.4 - - - (0.1) Net flows in In
Slide 37: Passive assets under management – by client domicile
Passive assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Europe Asia June 30, 2013 $123.7 $119.7 $0.1 - $1.3 $2.6 Long-Term Inflows 8.7 8.6 - - 0.1 - Long-Term Outflows (8.5) (8.4) - - (0.1) - Long-Term Net flows 0.2 0.2 - - - - Net flows in Invesco PowerS
Slide 38: Reconciliation of US GAAP to non-GAAP – three months ended June 30, 2014
Reconciliation of US GAAP results to non-GAAP results – three months ended June 30, 2014 Please refer to pages 19-22 in the 2Q 2014 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party distribution, Acquisition Market appreciation / Consolidated Non
Slide 39: Reconciliation of US GAAP to non-GAAP – three months ended March 31, 2014
Reconciliation of US GAAP results to non-GAAP results – three months ended March 31, 2014 * Other: Please refer to pages 18-22 in the 1Q 2014 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party distribution, Acquisition Market appreciation / Consol
Slide 40: Reconciliation of US GAAP to non-GAAP – three months ended December 31, 2013
Reconciliation of US GAAP results to non-GAAP results – three months ended December 31, 2013 * Other: Please refer to pages 19-21 in the 4Q 2013 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party distribution, Acquisition Market appreciation / Con
Slide 41: Reconciliation of US GAAP to non-GAAP – three months ended September 30, 2013
Reconciliation of US GAAP results to non-GAAP results – three months ended September 30, 2013 * Other: Please refer to pages 19-21 in the 3Q 2013 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party distribution, Acquisition Market appreciation / Co
Slide 42: Reconciliation of US GAAP to non-GAAP – three months ended June 30, 2013
Reconciliation of US GAAP results to non-GAAP results – three months ended June 30, 2013 * Other: Please refer to pages 19-21 in the 2Q 2013 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party distribution, Acquisition Market appreciation / Consoli
Slide 43: Reconciliation of US GAAP to non-GAAP – three months ended March 31, 2013
Reconciliation of US GAAP results to non-GAAP results – three months ended March 31, 2013 * Other: Please refer to pages 18-20 in the 1Q 2013 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation / Consolidated Other*
Slide 44: Reconciliation of US GAAP to non-GAAP – three months ended December 31, 2012
Reconciliation of US GAAP results to non-GAAP results – three months ended December 31, 2012 * Other: Please refer to pages 23-26 in the 4Q 2012 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party distribution, Acquisition Market appreciation / Con
Slide 45: Reconciliation of US GAAP to non-GAAP – three months ended September 30, 2012
Reconciliation of US GAAP results to non-GAAP results – three months ended September 30, 2012 * Other: Please refer to pages 19-21 in the 3Q 2012 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation Consolidated Other