Invesco Ltd · NYSE:IVZ
Invesco — Q2 2012 Earnings Presentation
47 slides from Invesco's earnings presentation, Jul 26, 2012
Slide 1: Invesco second-quarter 2012 results
Invesco second-quarter 2012 results Martin L. Flanagan President and Chief Executive Officer Loren M. Starr Chief Financial Officer July 26, 2012
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 Financial results Questions Appendix 2
Slide 4: Second-quarter overview
Second-quarter overview Strong investment performance and solid operating results in a volatile, yet trendless, market environment – Maintained strong, long-term investment performance across all time periods – Achieved solid operating results in a challenging quarter and volatile market environment
Slide 5: Summary of second-quarter 2012 results
Summary of second-quarter 2012 results June 30, 2012, AUM of $646.6 billion versus $672.8 billion at Assets under March 31, 2012 management Average AUM was $651.2 billion versus $658.2 billion for the first quarter Total net outflows of $8.3 billion Flows Net long-term outflows of $4.9 billi
Slide 6: Discussion topics
Discussion topics Second‐quarter overview Investment performance Financial results Questions Appendix 5
Slide 7: Investment performance – overview
Investment performance – overview Aggregate performance analysis – asset weighted Percent of actively managed assets in top half of peer group* 1-Year 3-Year 5-Year Assets top half of peer group Assets bottom half of peer group *Excludes passive products, closed-end funds, private equity limited par
Slide 8: Quarterly flows – total flows
Quarterly flows – total flows Quarterly long-term flows ($ billions) Total AUM Active AUM Passive AUM 3Q10 4Q10* 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q10 4Q10* 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 Gross sales Gross redemptions Net long-term sales * 4Q10 exclude the impact
Slide 9: Quarterly flows – total flows
Quarterly flows – total flows Quarterly long-term flows ($ billions) Retail(a) Institutional(b) Private Wealth Management(c) 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q10 4Q10* 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 Gross sales Gross redemptions Net long-term sales * 4Q
Slide 10: US Retail net inflows of $700 million; redemptions remain lower than industry average
US Retail net inflows of $700 million; redemptions remain lower than industry average Gross and net sales Percentage above the bars is change in Net sales gross sales from prior quarter ($ billions) +36% +32% +9% (11%) +29% (27%) (15%) Annualized redemption rate (rolling 3-month average) IVZ Industr
Slide 11: Continued strong demand for asset allocation strategies
Continued strong demand for asset allocation strategies, with $3 billion of net inflows in the second quarter Invesco Balanced-Risk Allocation strategies (global aggregate) Asset allocation extension strategies (global aggregate) Source: Invesco. Asset allocation extension strategies include balance
Slide 12: Discussion topics
Discussion topics Second‐quarter overview Investment performance Financial results Questions Appendix 11
Slide 13: Total assets under management – 2Q12 vs. 1Q12
Total assets under management – 2Q12 vs. 1Q12 ($ billions) 2Q-12 1Q-12 % Change Beginning Assets $672.8 $625.3 7.6% Long-Term Inflows 37.1 42.9 (13.5)% Long-Term Outflows (42.0) (35.9) 17.0% Long-Term Net flows (4.9) 7.0 N/A Net flows in Inst. Money Market Funds (3.4) 1.1 N/A Market Gains and Losses
Slide 14: Non-GAAP operating results – 2Q12 vs. 1Q12
Non-GAAP operating results – 2Q12 vs. 1Q12 ($ millions) 2Q-12 1Q-12 % Change Adjusted Revenues Investment Management Fees 802 812 (1.2)% Service and Distribution Fees 187 189 (1.0)% Performance Fees 16 21 (26.9)% Other 26 33 (21.5)% Third-Party Distribution, Service and Advisory Expenses (319) (319)
Slide 15: Second-quarter overview
Second-quarter overview Strong investment performance and solid operating results in a volatile, yet trendless, market environment – Maintained strong, long-term investment performance across all time periods – Achieved solid operating results in a challenging quarter and volatile market environment
Slide 16: Discussion topics
Discussion topics Second‐quarter overview Investment performance Financial results Questions Appendix 15
Slide 17: Discussion topics
Discussion topics Second‐quarter overview Investment performance Financial results Questions Appendix 16
Slide 18: Additional Disclosure for Invesco Balanced-Risk Allocation Fund
Additional Disclosure for Invesco Balanced-Risk Allocation Fund *Source: ©2012 Morningstar Inc. All rights reserved. The information contained herein is proprietary to Morningstar and/or its content providers. It may not be copied or distributed and is not warranted to be accurate, complete or timel
Slide 19: Commitment to investment excellence
Commitment to investment excellence Source: Invesco. All data as of June 30, 2012. The listed centers do not all provide products or services that are available in all jurisdictions, nor are their products and services available on all platforms. All entities listed are wholly owned, indirect subsid
Slide 20: Investment performance (5-year)
This image cannot currently be display ed. 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 $365.6 billion) % of assets top half % of assets bott
Slide 21: 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 $365.6 billion) % of assets top half % of assets bottom Equities Global ex-US and Other of peer
Slide 22: Investment performance
Investment performance By investment objective (actively managed assets)* Equities 1st quartile 2nd quartile AUM above benchmark U.S. Core U.S. Growth U.S. Value Sector 100% 100% 100% 100% 96% 96% 23% 2% 63% 66% 58% 59% 95% 58% 76% 6% 68% 1% 3% 31% 39% 25% 39% 25% 7% 20% 16% 22% 31% 28% 33% 15% 20%
Slide 23: Investment performance
Investment performance By investment objective (actively managed assets)* Equities Global ex-U.S. and Other 1st quartile 2nd quartile AUM above benchmark Global Emerging markets Alternatives Balanced 100% 100% 100% 100% 94% 82% 16% 34% 80% 80% 11% 71% 16% 65% 45% 64% 64% 59% 79% 81% 39% 47% 59% 69%
Slide 24: We are diversified as a firm
We are diversified as a firm Delivering a diverse set of solutions to meet client needs By client domicile By channel By asset class 13% 4% 69% 24% 14% 44% 5% 11% 8% 8% 1-Yr 1-Yr 1-Yr ($ billions) Change ($ billions) Change ($ billions) Change U.S. $447.3 1.7% Retail $396.7 (1.2)% Equity $283.8 (6.0
Slide 25: Non-GAAP operating results – quarterly
Non-GAAP operating results – quarterly ($ millions) 2Q-12 1Q-12 % Change* 4Q-11 3Q-11 2Q-11 1Q-11 4Q-10 3Q-10 Investment Management Fees 802 812 (1.2)% 771 804 844 816 799 749 Service and Distribution Fees 187 189 (1.0)% 181 189 206 199 202 192 Performance Fees 16 21 (26.9)% 24 3 8 4 19 3 Other 26 3
Slide 26: US GAAP operating results – quarterly
US GAAP operating results – quarterly ($ millions) 2Q-12 1Q-12 % Change* 4Q-11 3Q-11 2Q-11 1Q-11 4Q-10 3Q-10 Investment Management Fees 781 791 (1.4)% 748 780 819 792 774 726 Service and Distribution Fees 187 189 (1.0)% 181 189 211 199 202 192 Performance Fees 15 21 (24.9)% 24 3 8 4 19 3 Other 26 33
Slide 27: Total assets under management – quarterly
Total assets under management – quarterly ($ billions) 2Q-12 1Q-12 % Change 4Q-11 3Q-11 2Q-11 Beginning Assets $672.8 $625.3 7.6% $598.4 $653.7 $641.9 Long-Term Inflows 37.1 42.9 (13.5)% 41.1 45.9 42.7 Long-Term Outflows (42.0) (35.9) 17.0% (35.5) (42.6) (38.9) Long-Term Net flows (4.9) 7.0 N/A 5.6
Slide 28: Total assets under management – by asset class
Total assets under management – by asset class Fixed Money ($ billions) Total Equity Income Balanced Market Alternative December 31, 2011 $625.3 $271.0 $149.0 $44.6 $74.0 $86.7 Long-Term Inflows 42.9 22.7 9.6 4.9 0.3 5.4 Long-Term Outflows (35.9) (19.4) (7.2) (1.8) (0.9) (6.6) Long-Term Net flows 7.
Slide 29: Total assets under management – by asset class
Total assets under management – by asset class Fixed Money ($ billions) Total Equity Income Balanced Market Alternative June 30, 2011 $653.7 $301.9 $145.8 $44.5 $74.4 $87.1 Long-Term Inflows 45.9 23.8 10.3 2.8 0.9 8.1 Long-Term Outflows (42.6) (27.0) (7.7) (1.6) (0.5) (5.8) Long-Term Net flows 3.3 (
Slide 30: Total assets under management – by channel
Total assets under management – by channel ($ billions) Total Retail Institutional PWM December 31, 2011 $625.3 $373.9 $233.5 $17.9 Long-Term Inflows 42.9 35.1 6.8 1.0 Long-Term Outflows (35.9) (27.6) (7.9) (0.4) Long-Term Net flows 7.0 7.5 (1.1) 0.6 Net flows in Inst. Money Market Funds 1.1 - 1.1 -
Slide 31: Total assets under management – by channel
Total assets under management – by channel ($ billions) Total Retail Institutional PWM June 30, 2011 $653.7 $401.7 $234.5 $17.5 Long-Term Inflows 45.9 35.6 9.5 0.8 Long-Term Outflows (42.6) (34.6) (7.6) (0.4) Long-Term Net flows 3.3 1.0 1.9 0.4 Net flows in Inst. Money Market Funds (1.1) - (1.1) - M
Slide 32: Total assets under management – by client domicile
Total assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Europe Asia December 31, 2011 $625.3 $430.0 $23.4 $89.8 $32.0 $50.1 Long-Term Inflows 42.9 29.1 0.9 3.7 5.5 3.7 Long-Term Outflows (35.9) (22.7) (1.4) (3.7) (3.9) (4.2) Long-Term Net flows 7.0 6.4 (0.5
Slide 33: Total assets under management – by client domicile
Total assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Europe Asia June 30, 2011 $653.7 $439.9 $27.5 $97.1 $37.9 $51.3 Long-Term Inflows 45.9 31.9 0.6 3.5 4.3 5.6 Long-Term Outflows (42.6) (28.5) (1.2) (3.3) (5.5) (4.1) Long-Term Net flows 3.3 3.4 (0.6) 0.
Slide 34: Passive assets under management – by asset class
Passive assets under management – by asset class Fixed Money ($ billions) Total Equity Income Balanced Market Alternative December 31, 2011 $96.3 $45.6 $30.0 - - $20.7 Long-Term Inflows 16.3 11.8 2.8 - - 1.7 Long-Term Outflows (8.4) (6.1) (0.4) - - (1.9) Long-Term Net flows 7.9 5.7 2.4 - - (0.2) Net
Slide 35: Passive assets under management – by asset class
Passive assets under management – by asset class Fixed Money ($ billions) Total Equity Income Balanced Market Alternative June 30, 2011 $91.8 $45.7 $26.7 - - $19.4 Long-Term Inflows 18.1 12.6 2.9 - - 2.6 Long-Term Outflows (15.4) (12.6) (0.6) - - (2.2) Long-Term Net flows 2.7 - 2.3 - - 0.4 Net flows
Slide 36: Passive assets under management – by channel
Passive assets under management – by channel ($ billions) Total Retail Institutional PWM December 31, 2011 $96.3 $76.9 $19.4 $- Long-Term Inflows 16.3 15.0 1.3 - Long-Term Outflows (8.4) (8.0) (0.4) - Long-Term Net flows 7.9 7.0 0.9 - Net flows in Inst. Money Market Funds - - - - Market Gains and Lo
Slide 37: Passive assets under management – by channel
Passive assets under management – by channel ($ billions) Total Retail Institutional PWM June 30, 2011 $91.8 $76.7 $15.1 - Long-Term Inflows 18.1 16.2 1.9 - Long-Term Outflows (15.4) (15.2) (0.2) - Long-Term Net flows 2.7 1.0 1.7 - Net flows in Inst. Money Market Funds - - - - Market Gains and Losse
Slide 38: Passive assets under management – by client domicile
Passive assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Europe Asia December 31, 2011 $96.3 $89.6 - - $1.3 $5.4 Long-Term Inflows 16.3 16.2 - - 0.1 - Long-Term Outflows (8.4) (8.3) - - (0.1) - Long-Term Net flows 7.9 7.9 - - - - Net flows in Inst. Money M
Slide 39: Passive assets under management – by client domicile
Passive assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Europe Asia June 30, 2011 $91.8 $88.0 - - $1.4 $2.4 Long-Term Inflows 18.1 18.0 - - 0.1 - Long-Term Outflows (15.4) (15.3) - - (0.1) - Long-Term Net flows 2.7 2.7 - - - - Net flows in Inst. Money Mar
Slide 40: Reconciliation of US GAAP results to non-GAAP results – three months ended June 30, 2012
Reconciliation of US GAAP results to non-GAAP results – three months ended June 30, 2012 * Other: Please refer to pages 19-21 in the 2Q 2012 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation Consolidated Other* Non
Slide 41: Reconciliation of US GAAP results to non-GAAP results – three months ended March 31, 2012
Reconciliation of US GAAP results to non-GAAP results – three months ended March 31, 2012 * Other: Please refer to pages 10-12 in the 1Q 2012 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation Consolidated Other* No
Slide 42: Reconciliation of US GAAP results to non-GAAP results – three months ended December 31, 2011
Reconciliation of US GAAP results to non-GAAP results – three months ended December 31, 2011 * Other: Please refer to pages 13-15 in the 4Q 2011 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation Consolidated Other*
Slide 43: Reconciliation of US GAAP results to non-GAAP results – three months ended September 30, 2011
Reconciliation of US GAAP results to non-GAAP results – three months ended September 30, 2011 * Other: Please refer to pages 9-10 in the 3Q 2011 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 results to non-GAAP results – three months ended June 30, 2011
Reconciliation of US GAAP results to non-GAAP results – three months ended June 30, 2011 ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation Consolidated European Non- Consolidation distribution, related / depreciation of Investment Infrastructure GAAP Basis of Joint service
Slide 45: Reconciliation of US GAAP results to non-GAAP results – three months ended March 31, 2011
Reconciliation of US GAAP results to non-GAAP results – three months ended March 31, 2011 ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation Consolidated Other Non- Consolidation distribution, related / depreciation of Investment Reconciling GAAP Basis of Joint service and d
Slide 46: Reconciliation of US GAAP results to non-GAAP results – three months ended December 31, 2010
Reconciliation of US GAAP results to non-GAAP results – three months ended December 31, 2010 ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation Consolidated Other Non- Consolidation distribution, related / depreciation of Investment Reconciling GAAP Basis of Joint service an
Slide 47: Reconciliation of US GAAP results to non-GAAP results – three months ended September 30, 2010
Reconciliation of US GAAP results to non-GAAP results – three months ended September 30, 2010 ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation Consolidated Other Non- Consolidation distribution, related / depreciation of Investment Reconciling GAAP Basis of Joint service a