Invesco Ltd · NYSE:IVZ
Invesco — Q4 2014 Earnings Presentation
45 slides from Invesco's earnings presentation, Jan 29, 2015
Slide 1: Invesco fourth quarter 2014 results
Invesco fourth quarter 2014 results Martin L. Flanagan President and Chief Executive Officer Loren M. Starr Chief Financial Officer January 29, 2015
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 Fourth quarter and 2014 overview Investment performance and flows Financial results Questions Appendix 2
Slide 4: Fourth quarter overview
Fourth quarter overview Continued strong investment performance in volatile late-year markets contributed to solid operating results – Maintained strong, long-term investment performance – 81% of actively managed assets ahead of peers on a 5-year basis – Net long-term inflows of $2.5 billion, driven
Slide 5: Summary of fourth quarter 2014 results
Summary of fourth quarter 2014 results December 31, 2014, AUM of $792.4 billion, versus $789.6 billion Assets under at September 30, 2014 management Average AUM was $789.8 billion, versus $801.7 billion for the third quarter Flows Total net outflows of $0.7 billion Net long-term inflows of $
Slide 6: 2014 overview – a sharp focus on meeting current and future client needs
2014 overview – a sharp focus on meeting current and future client needs Achievements throughout 2014 enhanced our ability to meet client needs and further positioned the firm for long-term success – Delivered strong, long-term investment performance – 77% and 81% of actively managed assets ahead of
Slide 7: 2014 overview – a sharp focus on meeting current and future client needs
2014 overview – a sharp focus on meeting current and future client needs Achievements throughout 2014 enhanced our ability to meet client needs and further positioned the firm for long-term success – Continued to expand client access to our Invesco PowerShares offerings, with new ETFs launched in Ca
Slide 8: Discussion topics
Discussion topics Fourth quarter and 2014 overview Investment performance and flows Financial results Questions Appendix 7
Slide 9: 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 67% 77% 81% 23% 19% 33% Assets top half of peer group Assets bottom half of peer group *Excludes passive products, closed-end funds, pr
Slide 10: Quarterly long-term flows
Quarterly long-term flows Passive flows outpaced active during a volatile quarter Quarterly long-term flows ($ billions) Total Active Passive 13.5 50.2 41.6 47.6 45.8 11.8 44.4 37.2 36.1 36.2 36.4 41.8 42.5 44.4 46.0 34.1 32.6 33.1 9.6 8.7 8.6 8.6 8.2 6.4 6.4 14.3 3.3 7.9 6.0 6.5 6.0 1.3 5.0 2.5 4.8
Slide 11: Quarterly long-term flows
Quarterly long-term flows Strengthening institutional flows during the quarter Quarterly long-term flows ($ billions) Retail(a) Institutional(b) 39.6 36.2 37.7 35.5 35.8 36.3 34.8 35.7 11.4 10.0 10.6 9.6 10.3 10.3 6.7 6.3 6.2 4.9 6.5 7.6 4.8 4.0 0.8 1.3 1.7 1.3 1.2 -0.3 -8.2 -1.5 -1.1 -3.5 -25.9 -4.
Slide 12: Discussion topics
Discussion topics Fourth quarter and 2014 overview Investment performance and flows Financial results Questions Appendix 11
Slide 13: Total assets under management – 4Q14 vs. 3Q14
Total assets under management – 4Q14 vs. 3Q14 ($ billions) 4Q-14 3Q-14 % Change Beginning Assets $789.6 $802.4 (1.6)% Long-Term Inflows 46.0 44.4 3.6% Long-Term Outflows (43.5) (38.4) 13.3% Long-Term Net flows 2.5 6.0 (58.3)% Net flows in Invesco PowerShares QQQ (3.2) (3.2) - Net flows in Inst. Mone
Slide 14: Non-GAAP operating results – 4Q14 vs. 3Q14
Non-GAAP operating results – 4Q14 vs. 3Q14 ($ millions) 4Q-14 3Q-14 % Change Adjusted Revenues Investment Management Fees 1,033 1,071 (3.6)% Service and Distribution Fees 218 222 (2.0)% Performance Fees 19 10 84.5% Other 34 35 (1.2)% Third-Party Distribution, Service and Advisory Expenses (398) (424
Slide 15: Fourth quarter overview
Fourth quarter overview Continued strong investment performance in volatile late-year markets contributed to solid operating results – Maintained strong, long-term investment performance – 81% of actively managed assets ahead of peers on a 5-year basis – Net long-term inflows of $2.5 billion, driven
Slide 16: Discussion topics
Discussion topics Fourth quarter and 2014 overview Investment performance and flows Financial results Questions Appendix 15
Slide 17: Discussion topics
Discussion topics Fourth quarter and 2014 overview Investment performance and flows Financial results Questions Appendix 16
Slide 18: We are diversified as a firm
We are diversified as a firm Delivering a diverse set of solutions to meet client needs By client domicile By channel By asset class 3% 13% 67% 13% 23% 67% 33% 48% 9% 10% 8% 6% 1-Yr 1-Yr 1-Yr ($ billions) Change ($ billions) Change ($ billions) Change U.S. $532.1 2.1% Retail $532.5 2.5% Equity $384.
Slide 19: 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% 82% 73% 67% 6% 4% 55% 54% 53% 74% 25% 7% 30% 25% 49% 54% 45% 26% 24% 25% 25% 25% 30% 22% 18% 5% 9% 8% 9% 13% 9%
Slide 20: 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% 98% 97% 99% 2% 85% 2% 37% 71% 66% 20% 21% 67% 56% 59% 93% 98% 54% 84% 52% 69% 82
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 $471.5 billion) % of assets top half % of assets bottom Equities of peer group half of peer grou
Slide 22: 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 $471.5 billion) % of assets top half % of assets bottom Equities Global ex-US and Other of peer
Slide 23: Non-GAAP operating results – quarterly
Non-GAAP operating results – quarterly ($ millions) 4Q-14 3Q-14 % Change* 2Q-14 1Q-14 4Q-13 3Q-13 2Q-13 1Q-13 Investment Management Fees 1,033 1,071 (3.6)% 1,055 989 983 938 905 863 Service and Distribution Fees 218 222 (2.0)% 215 239 230 221 216 206 Performance Fees 19 10 84.5% 7 34 11 9 9 39 Other
Slide 24: US GAAP operating results – quarterly
US GAAP operating results – quarterly ($ millions) 4Q-14 3Q-14 % Change* 2Q-14 1Q-14 4Q-13 3Q-13 2Q-13 1Q-13 Investment Management Fees 1,010 1,047 (3.6)% 1,032 965 955 914 886 845 Service and Distribution Fees 218 222 (2.0)% 215 239 230 221 216 206 Performance Fees 17 8 104.9% 5 31 9 5 6 36 Other 3
Slide 25: Total assets under management – quarterly
Total assets under management – quarterly ($ billions) 4Q-14 3Q-14 % Change 2Q-14 1Q-14 4Q-13 Beginning Assets $789.6 $802.4 (1.6)% $787.3 $778.7 $745.5 Long-Term Inflows 46.0 44.4 3.6% 42.5 50.2 45.8 Long-Term Outflows (43.5) (38.4) 13.3% (49.4) (43.7) (44.8) Long-Term Net flows 2.5 6.0 (58.3)% (6.
Slide 26: Total assets under management – by asset class
Total assets under management – by asset class Fixed Money ($ billions) Total Equity Income Balanced Market Alternative June 30, 2014 $802.4 $394.2 $181.9 $52.6 $77.1 $96.6 Long-Term Inflows 44.4 22.1 8.3 4.6 1.1 8.3 Long-Term Outflows (38.4) (19.8) (9.0) (3.0) (0.9) (5.7) Long-Term Net flows 6.0 2.
Slide 27: Total assets under management – by asset class
Total assets under management – by asset class Fixed Money ($ billions) Total Equity Income Balanced Market Alternative December 31, 2013 $778.7 $383.1 $171.7 $53.3 $82.7 $87.9 Long-Term Inflows 50.2 27.4 9.6 5.0 0.8 7.4 Long-Term Outflows (43.7) (26.2) (6.7) (4.4) (1.0) (5.4) Long-Term Net flows 6.
Slide 28: Total assets under management – by channel
Total assets under management – by channel ($ billions) Total Retail Institutional June 30, 2014 $802.4 $544.8 $257.6 Long-Term Inflows 44.4 34.8 9.6 Long-Term Outflows (38.4) (30.0) (8.4) Long-Term Net flows 6.0 4.8 1.2 Net flows in Invesco PowerShares QQQ (3.2) (3.2) - Net flows in Inst. Money Mar
Slide 29: Total assets under management – by channel
Total assets under management – by channel ($ billions) Total Retail Institutional December 31, 2013 $778.7 $519.6 $259.1 Long-Term Inflows 50.2 39.6 10.6 Long-Term Outflows (43.7) (32.0) (11.7) Long-Term Net flows 6.5 7.6 (1.1) Net flows in Invesco PowerShares QQQ (1.3) (1.3) - Net flows in Inst. M
Slide 30: Total assets under management – by client domicile
Total assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Europe Asia June 30, 2014 $802.4 $537.5 $28.7 $107.6 $70.4 $58.2 Long-Term Inflows 44.4 23.1 1.0 4.0 9.9 6.4 Long-Term Outflows (38.4) (22.5) (1.1) (5.1) (5.6) (4.1) Long-Term Net flows 6.0 0.6 (0.1) (
Slide 31: Total assets under management – by client domicile
Total assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Europe Asia December 31, 2013 $778.7 $521.3 $27.1 $114.8 $60.9 $54.6 Long-Term Inflows 50.2 24.7 1.1 5.1 11.3 8.0 Long-Term Outflows (43.7) (21.1) (1.2) (6.9) (6.5) (8.0) Long-Term Net flows 6.5 3.6 (0
Slide 32: Passive assets under management – by asset class
Passive assets under management – by asset class Fixed Money ($ billions) Total Equity Income Balanced Market Alternative June 30, 2014 $145.8 $89.0 $42.0 - - $14.8 Long-Term Inflows 8.2 4.9 2.4 - - 0.9 Long-Term Outflows (8.2) (3.5) (3.5) - - (1.2) Long-Term Net flows - 1.4 (1.1) - - (0.3) Net flow
Slide 33: Passive assets under management – by asset class
Passive assets under management – by asset class Fixed Money ($ billions) Total Equity Income Balanced Market Alternative December 31, 2013 $139.7 $85.6 $39.5 - - $14.6 Long-Term Inflows 8.6 5.4 2.2 - - 1.0 Long-Term Outflows (5.3) (3.2) (1.2) - - (0.9) Long-Term Net flows 3.3 2.2 1.0 - - 0.1 Net fl
Slide 34: Passive assets under management – by channel
Passive assets under management – by channel ($ billions) Total Retail Institutional June 30, 2014 $145.8 $123.9 $21.9 Long-Term Inflows 8.2 6.5 1.7 Long-Term Outflows (8.2) (5.7) (2.5) Long-Term Net flows - 0.8 (0.8) Net flows in Invesco PowerShares QQQ (3.2) (3.2) - Net flows in Inst. Money Market
Slide 35: Passive assets under management – by channel
Passive assets under management – by channel ($ billions) Total Retail Institutional December 31, 2013 $139.7 $118.2 $21.5 Long-Term Inflows 8.6 7.9 0.7 Long-Term Outflows (5.3) (4.5) (0.8) Long-Term Net flows 3.3 3.4 (0.1) Net flows in Invesco PowerShares QQQ (1.3) (1.3) - Net flows in Inst. Money
Slide 36: Passive assets under management – by client domicile
Passive assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Europe Asia June 30, 2014 $145.8 $141.7 $0.1 - $1.8 $2.2 Long-Term Inflows 8.2 8.0 0.1 - - 0.1 Long-Term Outflows (8.2) (8.0) - - (0.1) (0.1) Long-Term Net flows - - 0.1 - (0.1) - Net flows in Invesc
Slide 37: Passive assets under management – by client domicile
Passive assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Europe Asia December 31, 2013 $139.7 $135.2 $0.1 - $1.8 $2.6 Long-Term Inflows 8.6 8.5 - - 0.1 - Long-Term Outflows (5.3) (5.1) - - (0.1) (0.1) Long-Term Net flows 3.3 3.4 - - - (0.1) Net flows in In
Slide 38: Reconciliation of US GAAP results to non-GAAP results – three months ended December 31, 2014
Reconciliation of US GAAP results to non-GAAP results – three months ended December 31, 2014 Please refer to pages 22-26 in the 4Q 2014 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party distribution, Acquisition Market appreciation / Consolidated
Slide 39: Reconciliation of US GAAP results to non-GAAP results – three months ended September 30, 2014
Reconciliation of US GAAP results to non-GAAP results – three months ended September 30, 2014 Please refer to pages 19-22 in the 3Q 2014 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party distribution, Acquisition Market appreciation / Consolidate
Slide 40: Reconciliation of US GAAP results to non-GAAP results – three months ended June 30, 2014
Reconciliation of US GAAP results to non-GAAP results – three months ended June 30, 2014 Please refer to pages 19-22 in the 2Q 2014 earnings press release for a description of the adjustments ($ millions) US GAAP Proportional 3rd party distribution, Acquisition Market appreciation / Consolidated Non
Slide 41: Reconciliation of US GAAP results to non-GAAP results – 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 42: Reconciliation of US GAAP results to non-GAAP results – 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 43: Reconciliation of US GAAP results to non-GAAP results – 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 44: Reconciliation of US GAAP results to non-GAAP results – 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 45: Reconciliation of US GAAP results to non-GAAP results – 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*