Invesco Ltd · NYSE:IVZ
Invesco — Q1 2014 Earnings Presentation
52 slides from Invesco's earnings presentation, May 1, 2014
Slide 1: Invesco first quarter 2014 results
Invesco first quarter 2014 results Martin L. Flanagan President and Chief Executive Officer Loren M. Starr Chief Financial Officer May 1, 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 First quarter overview Investment performance and flows Update on EMEA Financial Results Questions Appendix 2
Slide 4: First quarter overview
First quarter overview Strong investment performance contributed to solid operating results Maintained strong, long-term investment performance – 81% of actively managed assets ahead of peers on a 3-year basis Net long-term inflows of $6.5 billion driven by strong investment performance and broa
Slide 5: Summary of first quarter 2014 results
Summary of first quarter 2014 results March 31,2014 AUM of $787.3 billion versus $778.7 billion at Assets under December 31, 2013 management Average AUM was $779.6 billion versus $761.7 billion for the fourth quarter Total net outflows of $0.9 billion Flows Long-term net inflows of $6.5 bill
Slide 6: Discussion topics
Discussion topics First quarter overview Investment performance and flows Update on EMEA Financial results Questions Appendix 5
Slide 7: Investment performance – overview
Investment performance – overview Aggregate performance analysis – asset weighted Percent of actively managed assets in top half of peer group* 1-Year 3-Year 5-Year 73% 68% 81% 19% 27% 32% Assets top half of peer group Assets bottom half of peer group *Excludes passive products, closed-end funds, pr
Slide 8: Quarterly long-term flows
Quarterly long-term flows Continued strong gross sales across our global business Quarterly long-term flows ($ billions) Total Active Passive 50.2 13.5 47.6 41.6 44.4 45.8 37.2 11.8 41.8 34.1 32.6 33.1 34.0 34.4 23.8 25.2 27.7 8.8 8.7 8.6 8.6 29.4 6.7 6.4 5.6 5.2 14.3 8.5 7.9 3.3 5.0 6.5 4.8 1.3 2.7
Slide 9: Quarterly long-term flows
Quarterly long-term flows Continued strong gross sales in the retail channel Quarterly long-term flows ($ billions) Retail(a) Institutional(b) 39.6 36.2 37.7 35.5 35.8 11.4 24.3 26.0 26.9 10.6 10.0 8.0 7.5 6.7 6.3 10.3 5.1 5.7 7.6 4.0 4.9 6.5 2.8 2.1 1.3 0.6 -0.3 -0.3 -1.5 -1.1 -2.7 -3.5 -5.2 -6.9 -
Slide 10: US Retail gross sales remained strong
US Retail gross sales remained strong $19.2 billion for the quarter – up 4% versus the prior quarter Gross and net sales Percentage above the bars is change in gross sales from prior quarter Net sales ($ billions) +37% (1%) (1%) 4% (15%) +17% (6%) 22.0 21.8 21.6 (11%) 19.2 18.4 16.4 17.1 16.1 14.6 5
Slide 11: Discussion topics
Discussion topics First quarter overview Investment performance and flows Update on EMEA Financial results Questions Appendix 10
Slide 12: Well-positioned in EMEA
Well-positioned in EMEA A strong and growing business We are well-positioned for long-term success in EMEA. Our strong and growing business is supported by: – A record of delivering strong, long-term investment performance – An experienced, capable and well-tenured fund management team supported by
Slide 13: Invesco Perpetual
Invesco Perpetual A deep and well-tenured team with strong investment performance Percent of assets in top half of peer group – asset weighted First quarter, 2014 3 year 5 year Top half of peer group Bottom half of peer group 97% of AUM in the top half of peers over three years Past performance is
Slide 14: Cross Border fund range
Cross Border fund range Well positioned for success in the $1.6T cross-border market Percent of assets in top half of peer group – asset weighted First quarter, 2014 3 year 5 year Top half of peer group Bottom half of peer group 91% of AUM in the top half of peers over three years Past performance
Slide 15: Well-positioned in EMEA: UK retail fund range diversified
Well-positioned in EMEA Our UK retail fund range is increasingly diversified Share of gross sales by investment team Share of gross sales by investment team ($ millions) % 100 3,500 90 3,000 80 Multi-Asset Multi-Asset 2,500 70 US Equity US Equity GEMs EM Equity 60 EM Equity GEMs 2,000 Europe Equity
Slide 16: Strong growth in European Cross Border
Well-positioned in EMEA Strong growth in European Cross Border Cross Border AUM ($s millions) Cross Border market share 45,000 40,000 4.0% 35,000 3.5% 30,000 3.0% 25,000 2.5% 20,000 2.0% 15,000 1.5% 10,000 1.0% 5,000 0.5% 0 0.0% Dec Dec Dec Dec Dec Dec 2008 2009 2010 2011 2012 2013 Source: IMA and S
Slide 17: Well-positioned in EMEA: strong and growing business
Well-positioned in EMEA A strong and growing business Ending AUM 1Q 2014 4Q 2013 ($ billions) Invesco Ltd. 787.3 778.7 Invesco EMEA 133.8 178.3 125.3 171.9 44.5 46.6 UK Equity Income AUM EMEA Ex-UK Equity Income AUM 1Q14 LT Net Flows 4Q13 LT Net Flows Change in Ending AUM (billions) (billions) (1Q14
Slide 18: Well-positioned in EMEA
Well-positioned in EMEA A strong and growing business We are well-positioned for long-term success in EMEA. Our strong and growing business is supported by: – A record of delivering strong, long-term investment performance – An experienced, capable and well-tenured fund management team supported by
Slide 19: Discussion topics
Discussion topics First quarter overview Investment performance and flows Update on EMEA Financial results Questions Appendix 18
Slide 20: Total assets under management – 1Q14 vs. 4Q13
Total assets under management – 1Q14 vs. 4Q13 ($ billions) 1Q-14 4Q-13 % Change Beginning Assets $778.7 $745.5 4.5% Long-Term Inflows 50.2 45.8 9.6% Long-Term Outflows (43.7) (44.8) (2.5)% Long-Term Net flows 6.5 1.0 550.0% Net flows in Invesco PowerShares QQQ (1.3) 2.6 N/A Net flows in Inst. Money
Slide 21: Non-GAAP operating results – 1Q14 vs. 4Q13
Non-GAAP operating results – 1Q14 vs. 4Q13 ($ millions) 1Q-14 4Q-13 % Change Adjusted Revenues Investment Management Fees 989 983 0.6% Service and Distribution Fees 239 230 3.7% Performance Fees 34 11 202.7% Other 36 33 7.2% Third-Party Distribution, Service and Advisory Expenses (409) (400) 2.3% Ad
Slide 22: First quarter overview
First quarter overview Strong investment performance contributed to solid operating results Maintained strong, long-term investment performance – 81% of actively managed assets ahead of peers on a 3-year basis Net long-term inflows of $6.5 billion driven by strong investment performance and broa
Slide 23: Discussion topics
Discussion topics First quarter overview Investment performance and flows Update on EMEA Financial results Questions Appendix 22
Slide 24: Discussion topics
Discussion topics First quarter overview Investment performance and flows Update on EMEA Financial results Questions Appendix 23
Slide 25: 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 $445.1 billion) % of assets top half % of assets bottom Equities of peer group half of peer grou
Slide 26: 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 $445.1 billion) % of assets top half % of assets bottom Equities Global ex-US and Other of peer
Slide 27: Investment performance by investment objective
Investment performance By investment objective (actively managed assets)* Equities 1st quartile 2nd quartile AUM above benchmark U.S. Core U.S. Growth U.S. Value Sector 100% 100% 100% 100% 95% 91% 7% 80% 54% 77% 62% 62% 57% 57% 53% 73% 42% 16% 38% 6% 33% 19% 35% 30% 44% 33% 29% 21% 16% 2% 25% 25% 26
Slide 28: Investment performance by investment objective
Investment performance By investment objective (actively managed assets)* Equities Global ex-U.S. and Other 1st quartile 2nd quartile AUM above benchmark Global Emerging markets Alternatives Balanced 100% 100% 100% 100% 99% 99% 94% 1% 22% 20% 85% 84% 44% 27% 78% 71% 72% 69% 71% 74% 61% 76% 22% 50% 6
Slide 29: We are diversified as a firm
We are diversified as a firm Delivering a diverse set of solutions to meet client needs By client domicile By channel By asset class 3% 12% 67% 15% 68% 22% 32% 49% 8% 10% 7% 7% 1-Yr 1-Yr 1-Yr ($ billions) Change ($ billions) Change ($ billions) Change U.S. $526.1 9.1% Retail $534.6 17.5% Equity $388
Slide 30: Non-GAAP operating results – quarterly
Non-GAAP operating results – quarterly ($ millions) 1Q-14 4Q-13 % Change* 3Q-13 2Q-13 1Q-13 4Q-12 3Q-12 2Q-12 Investment Management Fees 989 983 0.6% 938 905 863 836 813 775 Service and Distribution Fees 239 230 3.7% 221 216 206 200 196 187 Performance Fees 34 11 202.7% 9 9 39 4 3 16 Other 36 33 7.2
Slide 31: US GAAP operating results – quarterly
US GAAP operating results – quarterly ($ millions) 1Q-14 4Q-13 % Change* 3Q-13 2Q-13 1Q-13 4Q-12 3Q-12 2Q-12 Investment Management Fees 965 955 1.1% 914 886 845 818 791 753 Service and Distribution Fees 239 230 3.7% 221 216 206 200 196 187 Performance Fees 31 9 257.5% 5 6 36 2 3 16 Other 34 31 10.3%
Slide 32: Total assets under management – quarterly
Total assets under management – quarterly ($ billions) 1Q-14 4Q-13 % Change 3Q-13 2Q-13 1Q-13 Beginning Assets $778.7 $745.5 4.5% $705.6 $707.7 $667.4 Long-Term Inflows 50.2 45.8 9.6% 41.8 44.4 47.6 Long-Term Outflows (43.7) (44.8) (2.5)% (36.8) (43.0) (33.3) Long-Term Net flows 6.5 1.0 550.0% 5.0 1
Slide 33: Total assets under management – by asset class
Total assets under management – by asset class Fixed Money ($ billions) Total Equity Income Balanced Market Alternative September 30, 2013 $745.5 $353.2 $172.4 $53.5 $81.1 $85.3 Long-Term Inflows 45.8 26.2 7.2 3.4 0.8 8.2 Long-Term Outflows (44.8) (24.7) (8.9) (4.6) (0.9) (5.7) Long-Term Net flows 1
Slide 34: Total assets under management – by asset class
Total assets under management – by asset class Fixed Money ($ billions) Total Equity Income Balanced Market Alternative March 31, 2013 $707.7 $319.1 $175.9 $49.3 $77.8 $85.6 Long-Term Inflows 44.4 21.0 9.6 5.6 1.2 7.0 Long-Term Outflows (43.0) (22.4) (9.5) (3.5) (0.7) (6.9) Long-Term Net flows 1.4 (
Slide 35: Total assets under management – by channel
Total assets under management – by channel ($ billions) Total Retail Institutional September 30, 2013 $745.5 $492.0 $253.5 Long-Term Inflows 45.8 35.8 10.0 Long-Term Outflows (44.8) (36.1) (8.7) Long-Term Net flows 1.0 (0.3) 1.3 Net flows in Invesco PowerShares QQQ 2.6 2.6 - Net flows in Inst. Money
Slide 36: Total assets under management – by channel
Total assets under management – by channel ($ billions) Total Retail Institutional March 31, 2013 $707.7 $454.9 $252.8 Long-Term Inflows 44.4 37.7 6.7 Long-Term Outflows (43.0) (32.8) (10.2) Long-Term Net flows 1.4 4.9 (3.5) Net flows in Invesco PowerShares QQQ 0.7 0.7 - Net flows in Inst. Money Mar
Slide 37: Total assets under management – by client domicile
Total assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Europe Asia September 30, 2013 $745.5 $502.5 $26.4 $113.1 $51.6 $51.9 Long-Term Inflows 45.8 23.3 0.9 4.2 9.3 8.1 Long-Term Outflows (44.8) (24.5) (1.1) (8.4) (5.9) (4.9) Long-Term Net flows 1.0 (1.2)
Slide 38: Total assets under management – by client domicile
Total assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Europe Asia March 31, 2013 $707.7 $482.4 $26.0 $104.6 $44.3 $50.4 Long-Term Inflows 44.4 25.6 0.9 4.4 7.5 6.0 Long-Term Outflows (43.0) (25.9) (1.3) (5.0) (5.0) (5.8) Long-Term Net flows 1.4 (0.3) (0.4
Slide 39: Passive assets under management – by asset class
Passive assets under management – by asset class Fixed Money ($ billions) Total Equity Income Balanced Market Alternative September 30, 2013 $129.6 $74.1 $39.6 - - $15.9 Long-Term Inflows 8.6 6.3 1.7 - - 0.6 Long-Term Outflows (7.9) (4.5) (1.6) - - (1.8) Long-Term Net flows 0.7 1.8 0.1 - - (1.2) Net
Slide 40: Passive assets under management – by asset class
Passive assets under management – by asset class Fixed Money ($ billions) Total Equity Income Balanced Market Alternative March 31, 2013 $123.1 $62.0 $41.9 - - $19.2 Long-Term Inflows 11.8 6.8 4.0 - - 1.0 Long-Term Outflows (10.5) (4.8) (2.2) - - (3.5) Long-Term Net flows 1.3 2.0 1.8 - - (2.5) Net f
Slide 41: Passive assets under management – by channel
Passive assets under management – by channel ($ billions) Total Retail Institutional September 30, 2013 $129.6 $108.3 $21.3 Long-Term Inflows 8.6 7.6 1.0 Long-Term Outflows (7.9) (7.1) (0.8) Long-Term Net flows 0.7 0.5 0.2 Net flows in Invesco PowerShares QQQ 2.6 2.6 - Net flows in Inst. Money Marke
Slide 42: Passive assets under management – by channel
Passive assets under management – by channel ($ billions) Total Retail Institutional March 31, 2013 $123.1 $98.5 $24.6 Long-Term Inflows 11.8 10.1 1.7 Long-Term Outflows (10.5) (8.2) (2.3) Long-Term Net flows 1.3 1.9 (0.6) Net flows in Invesco PowerShares QQQ 0.7 0.7 - Net flows in Inst. Money Marke
Slide 43: Passive assets under management – by client domicile
Passive assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Europe Asia September 30, 2013 $129.6 $125.4 $0.1 - $1.4 $2.7 Long-Term Inflows 8.6 8.4 - - 0.2 - Long-Term Outflows (7.9) (7.9) - - - - Long-Term Net flows 0.7 0.5 - - 0.2 - Net flows in Invesco Pow
Slide 44: Passive assets under management – by client domicile
Passive assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Europe Asia March 31, 2013 $123.1 $116.9 $0.1 - $1.2 $4.9 Long-Term Inflows 11.8 11.5 - - 0.2 0.1 Long-Term Outflows (10.5) (8.3) - - (0.1) (2.1) Long-Term Net flows 1.3 3.2 - - 0.1 (2.0) Net flows i
Slide 45: Reconciliation of US GAAP to non-GAAP – three months ended March 31, 2014
Reconciliation of US GAAP results to non-GAAP results – three months ended March 31, 2014 * Other: Please refer to pages 18-22 in the 1Q 2014 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party distribution, Acquisition Market appreciation / Consol
Slide 46: 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 47: 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 48: 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 49: 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 50: 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 51: 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
Slide 52: Reconciliation of US GAAP to non-GAAP – three months ended June 30, 2012
Reconciliation of US GAAP results to non-GAAP results – three months ended June 30, 2012 * Other: Please refer to pages 19-21 in the 2Q 2012 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation Consolidated Other* Non