Igm Financial Inc. · TSX:IGM
Igm Financial — Q3 2023 Earnings Presentation
48 slides from Igm Financial's earnings presentation, Nov 2, 2023
Slide 1: IGM Financial Q3, 2023 Results
IGM Financial Q3, 2023 Results November 2, 2023
Slide 2: Conference Call Participants
Conference Call Participants JAMES O‘SULLIVAN DAMON MURCHISON LUKE GOULD KEITH POTTER 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 und
Slide 4: Non-IFRS Financial Measures & Other Financial Measures
Non-IFRS Financial Measures & Other Financial Measures This report contains Non-IFRS financial measures and non-IFRS ratios that do not have standard meanings prescribed by IFRS and may not be directly comparable to similar measures used by other companies. These measures and ratios are used to prov
Slide 5: Non-IFRS Financial Measures & Other Financial Measures
Non-IFRS Financial Measures & Other Financial Measures Other items Other items for the nine month period ending September 30, 2023 consisted of: • Restructuring and other charges of $76.2 million after-tax ($103.3 million pre-tax), recorded in the second quarter, related to further streamlining and
Slide 6: 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 7: IGM Financial Q3, 2023 Results
IGM FINANCIAL JAMES O‘SULLIVAN PRESIDENT & CEO IGM FINANCIAL IGM FINANCIAL Q3, 2023 RESULTS
Slide 8: IGM Financial Q3, 2023 Highlights
IGM Financial Q3, 2023 Highlights 1 Third quarter earnings per share of 88 cents • Earnings driven by strong results at IG Wealth and Mackenzie 2 Ending AUM&A of $253.4B, down 3.0% during the quarter • Ending AUM&A of $400B1 including strategic investments, relatively flat versus June 30 and up 32.4
Slide 9: Financial Market and Client Investment Returns
Financial Market and Client Investment Returns IGM Client Return Index1 2.6 Investment Performance 2.4 2022 Q1/23 Q2/23 Q3/23 IGM Client Investment Returns 2 (9.9%) 4.4% 1.2% (2.4%) 2.2 Equity Markets: Canada (S&P / TSX Composite) (5.8%) 4.6% 1.1% (2.2%) U.S. (S&P 500) (18.1%) 7.5% 8.7% (3.3%) 2.0 E
Slide 10: Industry Operating Environment
Industry Operating Environment Third Quarter Industry Long-term Net Sales ($B) Total Industry Industry Asset Manager Peers 23.7 11.6 Categories Q3 2022 Q3 2023 $ Change 7.7 6.1 6.1 6.3 9.1 Balanced (3.4) (5.3) (1.9) 2.6 2.0 2.5 Foreign Equity (1.6) (2.0) (0.4) 2.2 0.5 1.1 Canadian Equity (1.2) (1.1)
Slide 11: IGM Financial Q3, 2023 Results
IGM Financial Q3, 2023 Results Total AUM&A ($B) Net Earnings ($MM) Net Earnings Per Share ($) Daily AUM&A Daily AUM&A Ex Disc Ops Annual Average AUM&A Quarterly Average AUM&A 0.91 0.88 216 290 210 280 270 260 250 240 230 220 210 200 190 180 170 160 150 140 130 2021 2022 2023 Q3/22 Q3/23 11
Slide 12: Adjusted Net Earnings Available to Common Shareholders by Segment and Company
Adjusted Net Earnings Available to Common Shareholders1 by Segment and Company ($MM) Wealth Asset Wealth Management - Management Management Strategic Investments & Other2 Discontinued Operations3 IGM Consolidated Recorded based on analyst estimates for Q3/23 earnings with an adjustment -3% to true-u
Slide 13: Third Quarter Ending AUM&A
Third Quarter Ending AUM&A (CAD $B) Consolidated AUM&A inc. Wealth Asset Wealth Management - IGM strategic Management Management1 Discontinued Operations Consolidated Strategic Investments investments IGM Proportionate Share2 +32.4%3 Q3/22 Q3/23 400 Q3/23 1% Q3/22 337 340 302 +6% 253 238 IPC IPC 253
Slide 14: Third Quarter Net Flows
Third Quarter Net Flows ($MM) Wealth Wealth Management - Management Asset Management1 Discontinued Operations IGM Consolidated Strategic Investments 2 Q3/23 1,293 Q3/22 406 291 116 39 (17) (342) (549) (692) (819) Q3/22 Q3/23 1) Excludes sub-advisory to Wealth Management segment and Canada Life. 2) R
Slide 15: IGM Financial Investor Day – December 5th, 2023
IGM Financial Investor Day – December 5th, 2023 (Toronto) IGM Financial is positioned for sustainable profitable growth with leading wealth and asset management businesses Join us at our Investor Day on December 5th to learn more1 1) Investor Day 2023 (igmfinancial.com) 15
Slide 16: Wealth Management
WEALTH MANAGEMENT DAMON MURCHISON PRESIDENT & CEO IG WEALTH MANAGEMENT IGM FINANCIAL Q3, 2023 RESULTS
Slide 17: Wealth Management Q3, 2023 Highlights
Wealth Management Q3, 2023 Highlights 1 IG Wealth ending AUM&A of $114.2B decreased 2.2% during the quarter • Due to client investment returns of negative 2.2% 2 IG Wealth Q3 gross inflows of $3.1B represent another solid quarter • Net outflows of $17MM in Q3/23 • September 30, 2023 LTM AUA redempti
Slide 18: Net Flows at IG Wealth Management
Net Flows at IG Wealth Management IG Wealth Management Gross and Net Flows1 ($MM) IG Wealth Management Flows (in $B) Gross Inflows Gross Outflows Net Flows (Last Twelve Month Trailing, as at September 30, 2023) Month of September 1,033 Total Net Flows IGM Product Net Flows 858 886 592 659 683 817 56
Slide 19: IG Wealth Management Q3, 2023 Operating Results
IG Wealth Management Q3, 2023 Operating Results Gross Outflows Rate Assets Under Gross Inflows ($MM) (quarterly annualized) Net Flows ($MM) Advisement ($B) 406 Cash, GICs, HISAs 3rd party 3,103 IGM Solutions (AUM) 3 2,773 10.6% 8.7% 116.8 114.2 105.0 5.7 5.7 3.8 6.4 6.6 4.9 (17) Q3/22 Q3/23 96.3 104
Slide 20: Sales Growth Driven by Strong High-Net-Worth & Mass Affluent Client Acquisition
Sales Growth Driven by Strong High-Net-Worth & Mass Affluent Client Acquisition Gross Flows from Newly Acquired Clients Gross Flows from Newly Acquired Clients (Q3, $MM) (Last Twelve Month Trailing, $MM) By Client Assets Brought to IG Wealth By Client Assets Brought to IG Wealth Growth <$100K $100-5
Slide 21: Strong Advisor Productivity
Strong Advisor Productivity Gross Inflows per Advisor Recruit Gross Inflows per Advisor Practice Key Initiatives Driving Productivity with <4 years experience with >4 years experience 1 ($MM) ($MM) • Tightened recruiting standards 1.58 • Corporate advice channel that provides 1.53 consistent service
Slide 22: IG Wealth’s Leading Advisor Value Proposition
IG Wealth’s Leading Advisor Value Proposition 2023 Investment Executive Dealers’ Report Cards1 Overall Dealer Report Card Rating2 Strong Position vs. Big 5 Bank FSBs Net Promoter Score Peer Avg IG Wealth Rating 8.8 (out of -100 to +100) 8.6 8.4 8.2 8.3 84 84 8.0 8.0 8.0 76 7.8 7.6 66 54 12 2019 2020
Slide 23: Launch of Private Company Advisory
Launch of Private Company Advisory Providing strategic and transaction advisory services for small and medium sized businesses in Canada 76% of Canada’s business owners will exit their business in the next decade— representing over $2T in business assets Only ~1 in 10 have a formal business Finding
Slide 24: Rockefeller Q3 and YTD 2023 Highlights
Q3 and YTD 2023 Highlights YTD 2023 Client Asset1 Growth ($US B) Advisor Team Growth 1▪ Year-to-date organic growth 132 3 2 drove US$3.1B in client assets 116 2▪ Strong year-to-date inorganic growth 1 91 ▪ US$9.1B client assets, including US$2.1B during Q3 60 3▪ 4 new advisor teams added in Q3, brin
Slide 25: Wealthsimple Highlights
Highlights AUA by Quarter ($B) Client Count by Quarter1 (000s) 1▪ Wealthsimple’s AUA grew to 2,255 2 1 2,169 $24.9B, up 7% sequentially and 24.9 2,116 23.4 2,031 42% year-over-year 1,965 2,002 1,910 21.3 1,753 19.4 2▪ Wealthsimple serves ~2.3 18.4 18.3 17.5 1,518 million clients, up 13% during 16.3
Slide 26: Asset Management
ASSET MANAGEMENT LUKE GOULD PRESIDENT & CEO MACKENZIE INVESTMENTS IGM FINANCIAL Q3, 2023 RESULTS
Slide 27: Asset Management Q3, 2023 Highlights
Asset Management Q3, 2023 Highlights 1 Mackenzie ending AUM of $186.3B, down 3.6% versus June 30, 2023 2 Mackenzie investment fund net redemptions of $699MM, in-line with industry outflows 3 Mackenzie continues to post strong results in the Environics 2023 Advisor Perception Study1 • #3 in overall a
Slide 28: Mackenzie Investments Net Flows
Mackenzie Investments Net Flows Mackenzie Adjusted Investment Fund Flows1 ($MM) Mackenzie Adjusted Investment Fund Net Flows1 (in $MM) MF Gross Sales MF Redemptions MF Net Sales ETF Net Flows (Last Twelve Month Trailing, as at September 30, 2023) Month of September 1,228 734 748 818 Total Retail 641
Slide 29: Mackenzie Q3, 2023 Operating Results
Mackenzie Q3, 2023 Operating Results Retail Mutual Fund Gross Sales ($MM) Net Sales ($MM)1,2 ▪ Total net redemptions were $692MM Q3/22 Q3/23 1,223 ▪ (3.4%) long-term investment fund 1,061 Retail mutual Funds (477) (624) net sales rate over the twelve Retail ETFs (115) (82) months ending September 30
Slide 30: 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 ChinaAMC, Fixed Multi-Asset Cundill American Ivy Growth Bluewater Resources Greenchip Quantitative Eq
Slide 31: Chinese Mutual Fund Industry AUM and Net Flows; ChinaAMC Industry Leader
Chinese Mutual Fund Industry AUM and Net Flows; ChinaAMC is an Industry Leader, and Consistently Among the Top Five in the League Tables Growth Chinese Mutual Fund Industry Long-term Mutual Chinese Mutual Fund Industry QoQ 1yr Fund Market Share (% at September 30, 2023) Ending AUM1 27.4 27.2 (1%) 3%
Slide 32: A Leading Chinese Asset Manager – Total AUM Continuity
– A Leading Chinese Asset Manager – Total AUM Continuity ChinaAMC Ending AUM1 (RMB billions) 1 Q3/23 long-term mutual Growth fund net sales of 78B RMB QoQ 1yr 1,802 1,826 1% 5% 1,740 1,733 1,722 1,772 1,662 1,607 1,581 1,599 1,536 1,461 1,294 1,301 4% 14% 1,253 1,193 1,137 1,142 1,137 1,032 1,038 1,
Slide 33: Capital Partners
Capital Partners • Strong fundraisings of $1.3B and AUM growth of 6.8% for the quarter ended September 30, 2023 • Northleaf AUM has grown at a 25% compound annual growth rate (CAGR) since the partnership with Mackenzie was formed in late 2020, driven by strong fundraising activity across each of the
Slide 34: Financial Highlights
IGM FINANCIAL Financial Highlights KEITH POTTER EXECUTIVE VICE-PRESIDENT & CFO IGM FINANCIAL IGM FINANCIAL Q3, 2023 RESULTS
Slide 35: Total Assets Under Management & Advisement
Total Assets Under Management & Advisement IGM Assets Under Management & Advisement ($B) Change in IGM AUM&A ($B) Daily AUM&A Daily AUM&A ex Disc Ops Q3/22 Q4/22 Q1/23 Q2/23 Q3/23 LTM AUM&A excluding sub-advisory to Canada Life Opening AUM&A 195.5 193.1 202.4 211.9 213.2 193.1 Annual Average AUM&A Q
Slide 36: IGM Financial Adjusted EBIT & Margins
IGM Financial Adjusted EBIT & Margins Excludes discontinued operations IGM Adjusted EBIT1 ($MM) IGM Adjusted EBIT Margin1,2 (% of AUM&A) Direct advisor/dealer compensation3 & sub- advisory expenses 748.1 767.6 754.9 762.7 770.8 Share of associates’ 1.26% 1.25% 1.23% 1.25% 1.26% earnings and net 193.
Slide 37: IGM Financial Consolidated Profitability
IGM Financial Consolidated Profitability $ Millions (unless otherwise noted): Change QoQ Change YoY 1▪ Proportionate share of associate IGM Financial Consolidated Q3/22 Q2/23 Q3/23 $ % $ % Average AUM & AUA ($ Billions) earnings includes a negative $8.0MM Wealth Management AUM & AUA 108.5 116.1 116.
Slide 38: IG Wealth Management Key Profitability Drivers
IG Wealth Management Key Profitability Drivers Daily Average Assets ($B), Advisory Key Revenue & Expenses as bps of Respective and Product & Program Fee Rate (bps)1 Driver (AUA or AUM)1 114.7 116.1 116.9 108.5 109.6 102.5 102.4 102.8 102.2 102.1 11.3 11.8 12.2 9.4 10.4 Other AUA 2 103.3 104.2 104.7
Slide 39: IG Wealth Management Profitability
IG Wealth Management Profitability $ Millions (unless otherwise noted): Change QoQ Change YoY IG Wealth Management Q3/22 Q2/23 Q3/23 $ % $ % Average assets under advisement ($B) 108.5 116.1 116.9 0.9 0.7% 8.4 7.7% Average assets under management ($B) 99.1 104.2 104.7 0.5 0.5% 5.6 5.6% Gross inflows
Slide 40: Asset Management Key Profitability Drivers
Asset Management Key Profitability Drivers Net Asset Management Fee Rates1 Average AUM ($B), Net Asset Management Fees (bps)1 (as bps of respective AUM) Sub-advisory and AUM to Wealth 82.0 82.3 Third-party 193.1 80.8 80.9 81.1 192.0 191.9 Management Excluding 187.3 186.3 Canada Life Third Party AUM
Slide 41: Asset Management Segment Profitability
Asset Management Segment Profitability $ Millions (unless otherwise noted): Change QoQ Change YoY Asset Management Q3/22 Q2/23 Q3/23 $ % $ % Average assets under management ($B) ▪1 Q3/23 operations & support Third Party AUM 113.4 116.3 115.5 (0.8) (0.7%) 2.1 1.8% and business development Sub-advisor
Slide 42: ChinaAMC AUM and Earnings
AUM and Earnings ChinaAMC Ending AUM1 IGM Share of ChinaAMC Earnings2 (RMB billions) (CAD millions) Original 13.9% ownership 1-Year Additional share due to Growth increased ownership 1,802 1,826 28.1 1,733 1,772 5% 27.7 1,722 On January 12, 2023, IGM closed 24.6 549 526 (11%) on the acquisition of a
Slide 43: Adjusted Net Earnings Available to Common Shareholders by Segment and Company
Adjusted Net Earnings Available to Common Shareholders by Segment and Company ($MM) 216.1 Adjusted Net Earnings Available to Common Shareholders1, 12 209.8 Wealth Asset Wealth Management Q3/22 Management Management Strategic Investments & Other - Discontinued Ops 3% Q3/23 109.5 113.3 -3% 58.5 56.5 -
Slide 44: Adjusted Net Earnings and Valuation by Segment and Company
Adjusted Net Earnings Available to Common Shareholders and Valuation by Segment and Company ($MM) Adjusted Net Earnings Available to Common Shareholders1 867 812 839 Wealth Asset Wealth Management Management Management Strategic Investments & Other - Discontinued Ops 2022 437 430 429 Analyst Other a
Slide 45: Q&A
Q&A IGM FINANCIAL Q3, 2023 RESULTS
Slide 46: Appendix
Appendix IGM FINANCIAL Q3, 2023 RESULTS
Slide 47: 2023 Expense Guidance – Continued Focus on Prudent Expense Management
2023 Expense Guidance – Continued Focus on Prudent Expense Management Guidance and Outlook: Combined Operations & Support and Business Development Expenses IGM Consolidated1 (year-over-year change) 5-year technology & operations Full-year expense growth 9% 9% transformation announced guidance of 2%
Slide 48: Reconciliation of adjusted to IFRS earnings and EPS
Reconciliation of adjusted to IFRS earnings and EPS ($ millions except EPS) Q3/22 Q2/23 Q3/23 Adjusted net earnings available to common shareholders1 $216.1 $205.5 $209.8 Restructuring and other, net of tax (76.2) Gain on sale of Lifeco, net of tax (6.2) Lifeco IFRS 17 adjustment 15.1 Net earnings a