Igm Financial Inc. · TSX:IGM
Igm Financial — Q1 2021 Earnings Presentation
44 slides from Igm Financial's earnings presentation, May 7, 2021
Slide 1: IGM Financial Q1, 2021 Results
IGM Financial Q1, 2021 Results May 7, 2021
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 – James O'Sullivan
IGM FINANCIAL JAMES O‘SULLIVAN PRESIDENT & CEO IGM FINANCIAL IGM FINANCIAL Q1, 2021 RESULTS
Slide 7: IGM Financial Q1, 2021 Highlights
IGM Financial Q1, 2021 Highlights 1 Record high AUM&A of $248.5B; up 3.6% in the quarter • Organic growth from client investment returns of 2.7% and net flows of $2.2B 2 All-time record high Q1 total net flows of $2.2B • IG Wealth Management net flows of $1.0B, best first quarter in over two decades
Slide 8: Financial Market and Client Investment Returns
Financial Market and Client Investment Returns IGM Client Return Index1 2.4 2.2 Investment Performance Q2/21 at Apr 30 2020 Q1/21 Apr 30 2021 YTD IGM Client Investment Returns 2 6.5% 2.7% 1.7% 4.4% 2.0 Equity Markets: Canada (S&P / TSX Composite) 2.2% 7.3% 2.2% 9.6% 1.8 U.S. (S&P 500) 16.3% 5.8% 5.2
Slide 9: Industry Operating Environment
Industry Operating Environment First Quarter Industry Long-term Net Sales ($B) Total Industry Industry Asset Manager Peers 38.8 22.6 24.6 19.4 18.9 13.1 15.7 11.7 9.1 4.8 6.7 5.9 4.7 3.0 3.6 2.2 3.5 0.3 (1.1) (3.6) 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Long-term Mutual Fund Net Sales Rat
Slide 10: IGM Financial Q1, 2021 Results
IGM Financial Q1, 2021 Results Net Earnings Available to Daily Total AUM & AUA ($B) Common Shareholders ($MM) Earnings Per Share (₵) Total AUM&A Annual Average AUM&A Up 25% from last year Quarterly Average AUM&A Investment Fund Assets 202 85 270 260 250 68 161 240 230 Net acquisitions of $30.3B (GLC
Slide 11: Net Earnings Available to Common Shareholders by Segment and Company
Net Earnings Available to Common Shareholders by Segment and Company ($MM) Wealth Management Asset Management Strategic Investments & Other1 IGM Consolidated 2 3 +26% 202.2 160.9 +8% 110.5 101.9 +49% 48.0 +97% 32.3 28.1 +41% +16% 14.3 11.3 3.7 4.3 8.0 - 0.8 Q1/20 Q1/21 Q1/20 Q1/21 Q1/20 Q1/21 Q1/20
Slide 12: First Quarter Net Flows
First Quarter Net Flows ($MM) Wealth Management Asset Management IGM Consolidated +1,358 2,179 +1,101 1,452 +634 1,015 821 381 351 116 -125 (9) Q1/20 Q1/21 Q1/20 Q1/21 Q1/20 Q1/21 Q1/20 Q1/21 12
Slide 13: IGM Financial 2020 Sustainability Report
IGM Financial 2020 Sustainability Report Our Sustainability Strategy – Focused on what matters most to our business and stakeholders, and seeks to accelerate positive change where we can make the greatest impact UN WOMEN’S EMPOWERMENT PRINCIPLES 13
Slide 14: Equity Offerings Accelerate Momentum and Enhance Value for IGM Shareholders
Equity Offerings Accelerate Momentum and Enhance Value for IGM Financial Shareholders Value of IGM’s Investment in Wealthsimple Increases by ~$900 million to $1.45 billion • Fundraising of $250 million primary offering as well as $500 million secondary offering by the Power Corporation group of comp
Slide 15: IG Wealth Management
IG WEALTH MANAGEMENT DAMON MURCHISON PRESIDENT & CEO IG WEALTH MANAGEMENT IGM FINANCIAL Q1, 2021 RESULTS
Slide 16: IG Wealth Management Q1, 2021 Highlights
IG Wealth Management Q1, 2021 Highlights 1 Record high AUM&A of $107.0B as at March 31, 2021, up 3.6% during Q1 • Strong first quarter client returns of 2.6% and net flows of $1.0B 2 Best net flows in over twenty years of $1.0B • Record high Q1/21 gross inflows driven by a ~30% year-over-year increa
Slide 17: Continued Net Flow Momentum at IG Wealth Management
Continued Net Flow Momentum at IG Wealth Management IG Wealth Management Gross and Net Flows1 ($MM) IG Wealth Management Flows Gross Inflows Gross Outflows Net Flows (Last Twelve Month Trailing, $B) First Quarter: 3,636 Net Flows Gross Inflows (RHS) 2,932 2,895 3,006 3.0 11.5 2,467 Strong momentum c
Slide 18: IG Wealth Management Q1, 2021 Operating Results
IG Wealth Management Q1, 2021 Operating Results Gross Outflows Rate Assets Under Gross Inflows ($MM) (quarterly annualized) Net Flows ($MM) Advisement ($B) Up 21% 1,015 3,636 3rd party IG mutual funds 11.2% 3,006 10.2% 381 103.3 107.0 5.6 6.3 85.8 3.9 Q1/20 Q1/21 Net Flows Q1/20 Q1/21 97.7 100.7 IG
Slide 19: IG Wealth Management Assets Under Advisement & Net Flows
IG Wealth Management Assets Under Advisement & Net Flows IG Wealth Management AUA Continuity by Investment Category ($MM) 1▪ Cash balances can now be held AUA Total 103,273 1,015 – 2,707 106,995 in client accounts (nominee 1 dealer platform) Deposits 2▪ Third party funds and securities & HISA (1.8%
Slide 20: Expanding Consultant Productivity Driven by Mass Affluent and High Net Worth
Expanding Consultant Productivity Driven by Success in Mass Affluent and High Net Worth Segments Gross Inflows per Consultant Gross Inflows per Consultant Recruit with <4 years experience Practice with >4 years experience Gross Inflows by Household Size ($MM) ($MM) ($B) Over $500k Under $500k 1.72 3
Slide 21: Strong Performance in our iProfile Solutions and Further Enhancements
Strong Performance in our iProfile Solutions and Further Enhancements Announced Including New Allocations to Private Market Investments NEW ENHANCEMENTS TO iPROFILE SOLUTIONS $22 Billion client assets invested in 2• Introduced new discretionary 3• Expanded use of liquid alternatives and iProfile man
Slide 22: IG Living Plan Portal, the Next Generation in Planning
IG Living Plan Portal, the Next Generation in Planning Helping Canadians achieve true financial well-being Our holistic approach to financial planning is comprehensive and goes beyond traditional investment advice to consider all aspects of your financial life. We are committed to providing the righ
Slide 23: Mackenzie Investments
MACKENZIE INVESTMENTS BARRY MCINERNEY PRESIDENT & CEO MACKENZIE INVESTMENTS IGM FINANCIAL Q1, 2021 RESULTS
Slide 24: Mackenzie Investments Q1, 2021 Highlights
Mackenzie Investments Q1, 2021 Highlights 1 Record high AUM of $191.6B at March 31, 2021, up 3.5% from December 31, 2020 • Organic growth through client returns of 2.8% and net sales of $1.5B 2 Record first quarter total net sales of $1.5B; gaining significant market share • Continued success in ret
Slide 25: Continued Strong Momentum at Mackenzie with a Record-breaking Q1
Continued Strong Momentum at Mackenzie with a Record-breaking Q1 Mackenzie Adjusted Investment Fund Flows1 ($MM) Mackenzie Adjusted Investment Fund Net Flows1 Gross Sales Redemptions Mutual Fund Net Sales ETF Net Flows (Last Twelve Month Trailing, $MM) First Quarter: 4,145 3,283 10,000 2,374 1,973 2
Slide 26: Mackenzie Q1, 2021 Operating Results
Mackenzie Q1, 2021 Operating Results Mutual Fund Gross Sales ($MM)2 Net Sales ($MM)1,2 ▪ $1,913MM retail investment fund net Retail Institutional sales, up $1,719MM Q1/20 Q1/21 4,512 Up 23% Retail mutual Funds 180 1,613 3,656 ▪ Gaining share; 8.1% long-term 1,108 Retail ETFs 14 300 investment fund n
Slide 27: Significant Business Momentum for Mackenzie Retail
Significant Business Momentum for Mackenzie Retail Mackenzie Retail Investment Fund Flows ($B) Last twelve month trailing Quarterly Monthly Mutual Fund Net Sales Mutual Fund Gross Sales Investment Fund Net Sales ETF Net Sales #1 Rated Sales 6.0 Mutual Fund Net Sales +59% Organization in 10.8% 3.4 Ca
Slide 28: 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 CAMC, Fixed Multi-Asset Putnam, Cundill American Ivy Growth Bluewater Resources Greenchip Quantitativ
Slide 29: Five Areas of Product Emphasis for Mackenzie
Five Areas of Product Emphasis for Mackenzie – Q1/21 Highlights on Sustainable Investing and Private Investments Themes • $1.4B AUM managed by Mackenzie Greenchip boutique as at March 31, Areas of Macro 2021, with continued strong investment performance & net sales Emphasis Thesis • During April, Ma
Slide 30: Financial Highlights
IGM FINANCIAL Financial Highlights LUKE GOULD EXECUTIVE VICE-PRESIDENT & CFO IGM FINANCIAL IGM FINANCIAL Q1, 2021 RESULTS
Slide 31: Assets Under Management & Advisement
Assets Under Management & Advisement IGM Assets Under Management & Advisement ($B) Change in IGM AUM & AUA ($B) Total AUM&A Annual Average AUM&A Q1/20 Q2/20 Q3/20 Q4/20 Q1/21 LTM Quarterly Average AUM&A Investment Fund Assets Opening AUM & AUA 190.0 168.4 188.3 196.4 240.0 168.4 270 IG Wealth Manage
Slide 32: IGM Financial Adjusted EBIT & Margins
IGM Financial Adjusted EBIT & Margins IGM Adjusted EBIT1 ($MM) IGM Adjusted EBIT Margin1,2 (% of AUM&A) 779.5 800.5 Direct advisor/dealer EBIT margin of 753.4 compensation3 & sub- 0.46% excluding 707.9 706.6 1.49% 1.45% 1.44% 1.44% GLC and Greenchip advisory expenses 213.4 224.8 1.26% 202.7 Share of
Slide 33: IGM Financial Consolidated Profitability
IGM Financial Consolidated Profitability1 $ Millions (unless otherwise noted): Change YoY Change QoQ IGM Financial Consolidated Q1/20 Q4/20 Q1/21 $ % $ % Days in the period 91 92 90 (1.1%) (2.2%) Average AUM & AUA ($ Billions) Wealth Management AUM & AUA 121.9 128.3 134.9 13.0 10.6% 6.6 5.1% Asset M
Slide 34: Net Earnings Available to Common Shareholders by Segment and Company
Net Earnings Available to Common Shareholders by Segment and Company ($MM) Further disclosure enhancements to bring reportable Significant value creation in strategic investments & 1 segments to net earnings line (introduced on March 10) 2 other segment • Better reflect the business performance of u
Slide 35: Adjusted Net Earnings and Valuation by Segment and Company
Adjusted Net Earnings Available to Common Shareholders and Valuation by Segment and Company ($MM) Wealth Management Asset Management Strategic Investments & Other1 IGM Consolidated Adjusted +19% 907 Net Earnings 763 +14% 2020 434 493 +40% Not applicable 2021 221 +6% +27% (fair value +7% 158 through
Slide 36: IG Wealth Management Key Profitability Drivers
▪1 Asset-based compensation expenses is paid and IG Wealth Management Key recognized based on the number of months in the Profitability Drivers period (i.e. 3/12 per quarter). Estimating using 90/365 for Q1 would understate expenses by $2.7MM. Average Assets ($B), Advisory and Key Revenue & Expenses
Slide 37: IG Wealth Management Profitability
IG Wealth Management Profitability $ Millions (unless otherwise noted): 1 Change YoY Change QoQ IG Wealth Management Q1/20 Q4/20 Q1/21 $ % $ % Days in the period 91 92 90 (1.1%) (2.2%) Average Assets under advisement ($B) 94.9 100.3 105.5 10.6 11.1% 5.2 5.2% ▪ 1 Other financial planning revenues Ave
Slide 38: Asset Management Key Profitability Drivers
Asset Management Key Profitability Drivers Key Revenue as bps of Respective Driver1 Average AUM ($B), Net Asset Management Fees (bps)1 (Third-party AUM or Sub-advisory AUM to Wealth Mgmt.) 187.2 Sub-advisory AUM to Wealth 74.5 Management 73.7 72.0 71.0 70.8 Third Party AUM 68.7 149.5 Ex-acquisitions
Slide 39: Asset Management Segment Profitability
Asset Management Segment Profitability $ Millions (unless otherwise noted): 1 Change YoY Change QoQ Asset Management Q1/20 Q4/20 Q1/21 $ % $ % Days in the period 91 92 90 (1.1%) (2.2%) ▪1 Q1 2021 is the first quarter Assets under Management ($B) that fully reflects the impact Excluding sub-advisory
Slide 40: Q&A
Q&A IGM FINANCIAL Q1, 2021 RESULTS
Slide 41: Appendix
Appendix IGM FINANCIAL Q1, 2021 RESULTS
Slide 42: Mackenzie Retail Mutual Fund Sales & Business Development Expenses
Mackenzie Retail Mutual Fund Sales & Business Development Expenses Retail Mutual Fund Sales Retail Mutual Fund Sales Retail Mutual Fund Sales Last twelve month trailing ($MM) Quarters ($B) Full Years ($MM) Gross Sales Net Sales 12,000 6,000 Mutual Fund Gross Sales Net +50% sales rates Mutual Fund Ne
Slide 43: Operations & Support and Business Development Expenses
IGM Financial Operations & Support and Business Development Expenses1 2019 2020 % Change 2021 Guidance (expressed as change relative to 2020) Business development expenses IG Wea l th 207.3 199.1 (4.0%) <3% IPC 27.3 28.8 5.8% 5 – 10% Ma ckenzi e 79.9 80.2 0.4% 5% (~20% variable with sales & ~20% dis
Slide 44: China AMC – A Leading Chinese Asset Manager
China AMC – A Leading Chinese Asset Manager – Delivering Accelerated Growth with Q4/20 AUM and Q1/21 Net Earnings Increasing Over 40% Year-over-year China AMC Ending AUM1 China AMC Net Earnings IGM Share of China AMC Earnings (RMB billions) (RMB millions) (CAD millions) 471 1,461 443 12.5 11.8 398 4