IGM Financial Inc. · TSX:IGM
IGM Financial — Q2 2017 Earnings Presentation
34 slides from IGM Financial's earnings presentation, Aug 3, 2017
Slide 1: IGM Financial Q2, 2017 Results
IGM FINANCIAL Q2, 2017 Results August 3, 2017
Slide 2: Conference Call Participants
IGM Financial Q2 Analyst Call Conference Call Participants Paul W. Hancock Kevin E. Regan Jeffrey R. Carney Barry S. McInerney Vice-President, Executive Vice- President & CEO, President & CEO, Finance and Investor President & CFO, IGM Financial and Mackenzie Relations, IGM Financial President & CEO,
Slide 3: Caution Concerning Forward Looking Statements
IGM Financial Q2 Analyst Call 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 provide
Slide 4: Non-IFRS Financial Measures and Additional IFRS Measures
IGM Financial Q2 Analyst Non-IFRS Financial Measures and Additional Call 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;
Slide 5: Documents Incorporated by Reference
IGM Financial Q2 Analyst Call 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:
Slide 6: Agenda
IGM Financial Q2 Analyst Call Agenda 1 IGM Financial Highlights 2 Investors Group 3 Mackenzie Investments 6
Slide 7: Q2 2017 Financial Performance
IGM Financial Q2 Analyst Call Q2 2017 Financial Performance • Adjusted net earnings were Net Earnings and Adjusted Net Earnings ($MM) $185.9MM or $0.77 per share in the quarter compared to $172.9MM or $200.8 $185.9 $0.72 per share in Q2 2016 $172.9 $172.9 • Other items consisted of; • $36.8MM1 as a
Slide 8: Q2 2017 Financial Performance
IGM Financial Q2 Analyst Call Q2 2017 Financial Performance Average Investment Fund AUM ($B) $127.9 $143.9 • Average investment fund AUM of $143.9B, compared to $127.9B last 2Q/16 2Q/17 year Mutual Fund Gross Sales ($MM) $4,730 $3,485 • Mutual fund gross sales of $4.7B, up 35.7% compared to Q2 2016
Slide 9: Industry Operating Environment
IGM Financial Q2 Analyst Call Industry Operating Environment Industry and Asset Flows Long Term Mutual Total Mutual Fund Fund Assets Net Sales1 Q2/17 vs Q1/17 Q2/17 vs Q2/16 1.4% $5.7B Industry Flows by Channel Advice Channel2 Deposit Takers Q2/17 vs Q2/16 Q2/17 vs Q2/16 Gross Sales 18.9% Gross Sale
Slide 10: IGM Highlights
IGM Financial Q2 Analyst Call IGM Highlights Expansion of IGM Financial senior leadership team • Chuck McDevitt, Executive Vice-President, Strategy Execution Office Recognition of Corporate Social Responsibility • IGM Financial ranked 8th in the 2017 Corporate Knight’s 50 Best Corporate Citizens in
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Slide 12: Investors Group Q2 Highlights
IGM Financial Q2 Analyst Call Investors Group Q2 Highlights Mutual fund AUM of $84.3B, up 11% compared to Q2 2016 Significant mutual fund sales momentum • Mutual Fund gross sales of $2.4B, up 33% compared to Q2 2016 • Mutual Fund net sales of $435MM, best Q2 since 1998 • Strong asset retention, with
Slide 13: Strategic Vision
IGM Financial Q2 Analyst Call Strategic Vision 13
Slide 14: Our Value Proposition
IGM Financial Q2 Analyst Call Our Value Proposition 14
Slide 15: Mutual Fund Flows
IGM Financial Q2 Analyst Call Mutual Fund Flows Mutual Fund Gross Sales Mutual Fund Net Sales $ Billions $ Millions 3.0 500 435 • Gross sales in the quarter of 2.36 $2.4B, up 33% compared to 300 2.0 1.78 last year 100 1.0 -100 • Net sales of $435MM in the - -300 -168 quarter, up $603MM Q2/16 Q2/17 Q
Slide 16: Consultant Network
IGM Financial Q2 Analyst Call Consultant Network Consultant Network Composition (Number of Consultants) 1 Associates & RD's Recruits (<4 years) Consultant Practices (>4 years) 5,366 5,380 931 957 4,947 4,754 4,435 4,423 968 4,530 1,010 3,979 1,003 3,744 3,527 2,074 2,065 1,679 1,482 1,298 • 95% of C
Slide 17: High Net Worth Solutions
IGM Financial Q2 Analyst Call High Net Worth Solutions HNW Mutual Fund Series Assets1 • $36.4B in high net worth series assets accounting for $36.4B 43.2% of mutual fund AUM, up +25% $4.2B Unbundled from 38.3% at Q2 2016 $29.1B fee structures $1.7B $10.8B growth of +160% • $15.0B of AUM in unbundled
Slide 18: High Net Worth Solutions
IGM Financial Q2 Analyst Call High Net Worth Solutions Gross Sales of High Net Worth Solutions ($ millions) 1,200 Series J (HNW Bundled) 1,095 • $1.0B in quarterly gross sales, Series U (HNW Unbundled) +113% 977 1,000 iProfile (HNW Unbundled) up 113% relative to Q2 2016 746 800 549 • Unbundled fee s
Slide 19: Managed Solutions Products
IGM Financial Q2 Analyst Call Managed Solutions Products1 Managed Solutions Share of Long Term Fund Gross Sales and Assets • Broad selection of products 80% with a variety of asset 69% allocation strategies 70% Share of Long Term 60% Gross Sales • 27% increase in managed 50% solutions AUM compared t
Slide 20: Investment Performance
IGM Financial Q2 Analyst Call Investment Performance Client Account Rate of Return Experience (%) Quarterly 8 • Median client account rate of 6 4 return was negative 0.2% 3.5 2 2.2 2.1 during the second quarter and 90% of client - (0.2) accounts had 8.0% over the last 12 months (2) returns within (4
Slide 21: Insurance and Mortgage Operations
IGM Financial Q2 Analyst Call Insurance and Mortgage Operations New Annualized Insurance Premiums (Six months ended June 30 - $ Millions) 41.7 • New individual insurance 37.9 Group Insurance product sales increased 8.9% YTD 2017 compared Individual to the same period in 2016 29.0 31.6 Insurance • Mo
Slide 22: Average Mutual Fund AUM & Fee Rates
IGM Financial Q2 Analyst Call Average Mutual Fund AUM & Fee Rates 208.9 208.6 208.1 • Q2 2017 average mutual 206.3 205.7 fund AUM increased 2.7% compared to Q1 2017 85.0 82.8 • Fee rate declined due to 79.7 78.1 ongoing mix shift into high 75.8 net worth products and reduction in no-load pricing whi
Slide 23: Investors Group EBIT
IGM Financial Q2 Analyst Call Investors Group EBIT ($ Millions, unless otherwise indicated) Change Relative to: • Total revenue up 8.5% in the Q2/16 Q1/17 Q2/17 Prior Year Prior Quarter quarter compared to Q2 2016 Average mutual fund AUM ($ Billions) 75.8 82.8 85.0 12.2% 2.7% • Non-commission expens
Slide 24: Mackenzie Investments
rN MACKENZIE CONFIDENCE IN A CHANGING WORLD 24
Slide 25: Mackenzie Q2 Highlights
IGM Financial Q2 Analyst Call Mackenzie Q2 Highlights Significant sales momentum with mutual fund AUM reaching record high of $53.6B • Mutual fund gross sales of $2.2B1, up 47% from Q2 2016 • Investment fund net sales of $625MM1 and mutual fund net sales of $447MM1, best 2Q result since 1999 Strong
Slide 26: Investment Fund Flows
IGM Financial Q2 Analyst Call Investment Fund Flows Quarterly Investment Fund Flows1 Mutual Fund Gross Sales Investment Fund Net Sales • Mutual fund gross sales up $ Billions $ Millions 47.1% compared to Q2 2016 3.0 900 625 2.0 2.20 • Investment fund net sales of 1.49 400 $625MM, up $1.0B compared 1
Slide 27: Mutual Fund Gross Sales by Asset Class
IGM Financial Q2 Analyst Call Mutual Fund Gross Sales by Asset Class Total TotalMutual MutualFund FundGross GrossSales Sales • 47.1% growth in gross sales (Three months ended June 30 - $ Millions) compared to 15.6% growth 2016 2017 $ Change % Change in advice channel excluding IGM Financial Money ma
Slide 28: Total Net Sales
IGM Financial Q2 Analyst Call Total Net Sales 1,2,3 Total TotalNet Sales1,2,3 NetSales (Three months ended June 30 - $ Millions) 2016 2017 $ Change • Mutual fund net sales driven by strong flows into balanced Money market 5 19 14 funds Income-oriented (90) 30 120 Balanced • Total net sales of $2.0B
Slide 29: Expanding our Suite of ETFs
IGM Financial Q2 Analyst Call Expanding our Suite of ETFs Mackenzie ETF AUM $622MM • $622MM of ETF AUM in 20171 Exclusive retail $282MM • Launch of the Mackenzie partnership in Canada with TOBAM, an award-winning Global High Yield Fixed global asset manager based in France Income ETF expands Mackenz
Slide 30: Investment Performance – Mutual Funds
IGM Financial Q2 Analyst Call Investment Performance – Mutual Funds Mackenzie Mutual Funds in First or Second Quartile1 (Proportion of Assets) 72% 73% 60% 55% March 31, 2017 47% 40% 44% June 30, 2017 34% 1 Year 3 Year 5 Year 10 Year Morningstar Ratings – Proportion of Morningstar-Rated Assets1 (As a
Slide 31: Investment Boutiques – Performance & Flows
IGM Financial Q2 Analyst Call Investment Boutiques – Performance & Flows 10,000 MutualFund Mutual Fund Assets Assets by by Morningstar Morningstar Rating Rating ($ millions) ($ millions) 7,500 4 or 5 Stars 3 Stars 1 or 2 Stars Not Rated 5,000 2,500 0 % 4 or 5 0% 17% 90% 85% 71% 35% 0% 45% 33% 52% 4%
Slide 32: Average Total AUM & Fee Rates
IGM Financial Q2 Analyst Call Average Total AUM & Fee Rates Annualized Net 76.8 76.9 77.3 77.1 76.0 Revenue Rate (bps)1 • Q2 2017 change in average AUM versus Q1 2017: • Investment funds up 65.2 67.8 Average Total AUM ($B) 3.5% 63.5 63.8 60.8 Institutional2 • Institutional2 up 6.2% 52.3 54.2 Investm
Slide 33: Mackenzie EBIT
IGM Financial Q2 Analyst Call Mackenzie EBIT ($ Millions, unless otherwise indicated) • Total net revenue up 10.2% Change Relative to: Prior Prior Q2/16 Q1/17 Q2/17 Year Quarter in the quarter compared to Average AUM ($ Billions): Q2 2016 Total 60.8 65.2 67.8 11.4% 4.0% Investment funds 47.9 52.3 54
Slide 34: Q&A
Q&A 34