IGM FINANCIAL Scotiabank GBM Financials Summit · 2020-05-01 · Scotiabank GBM Financials Summit ....
Transcript of IGM FINANCIAL Scotiabank GBM Financials Summit · 2020-05-01 · Scotiabank GBM Financials Summit ....
September 5, 2012
IGM FINANCIAL Scotiabank GBM Financials Summit
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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 for the purposes of assisting the reader in understanding the Company’s financial position and
results of operations as at and for the periods ended on certain dates and to present information about management’s current expectations and plans relating to
the future and readers are cautioned that such statements may not be appropriate for other purposes. These statements may include, without limitation,
statements regarding the operations, business, financial condition, expected financial results, performance, prospects, opportunities, priorities, targets, goals,
ongoing objectives, strategies and outlook of the Company, as well as the outlook for North American and international economies, for the current fiscal year and
subsequent periods. Forward-looking statements include statements that are predictive in nature, depend upon or refer to future events or conditions, or include
words such as “expects”, “anticipates”, “plans”, “believes”, “estimates”, ”seeks”, “intends”, “targets”, “projects”, “forecasts” or negative versions thereof and other
similar expressions, or future or conditional verbs such as “may”, “will”, “should”, “would” and “could”.
This information is based upon certain material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection as reflected in
the forward-looking statements, including the perception of historical trends, current conditions and expected future developments, as well as other factors that are
believed to be appropriate in the circumstances.
By its nature, this information is subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations,
forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct and that objectives, strategic goals and
priorities will not be achieved.
A variety of material factors, many of which are beyond the Company’s, and its subsidiaries’ control, affect the operations, performance and results of the
Company, and its subsidiaries, and their businesses, and could cause actual results to differ materially from current expectations of estimated or anticipated events
or results. These factors include, but are not limited to: the impact of general economic, political and market factors in North America and internationally, interest
and foreign exchange rates, global equity and capital markets, management of market liquidity and funding risks, changes in accounting policies and methods
used to report financial condition (including uncertainties associated with critical accounting assumptions and estimates), the effect of applying future accounting
changes , operational and reputational risks, business competition, technological change, changes in government regulations and legislation, changes in tax laws,
unexpected judicial or regulatory proceedings, catastrophic events, the Company's ability to complete strategic transactions, integrate acquisitions and implement
other growth strategies, and the Company’s success in anticipating and managing the foregoing factors.
The reader is cautioned that the foregoing list is not exhaustive of the factors that may affect any of the Company’s forward-looking statements. The reader is also
cautioned to consider these and other factors, uncertainties and potential events carefully and not place undue reliance on forward-looking statements. Other than
as specifically required by law, the Company undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date
on which such statements are made, or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results, or
otherwise.
Additional information about the risks and uncertainties of the Company’s business is provided in its disclosure materials fi led with the securities regulatory
authorities in Canada, available at www.sedar.com.
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• Net earnings available to common shareholders, which is an additional measure in accordance
with IFRS, may be subdivided into two components consisting of:
– Operating earnings available to common shareholders; and
– Other items, which include the after-tax impact of any item that management considers
to be of a non-recurring nature or that could make the period-over-period comparison of
results from operations less meaningful.
• This report may also contain non-IFRS financial measures. Non-IFRS financial measures are
used to provide management and investors with additional measures of performance. However,
we caution that non-IFRS financial measures do not have standard meanings prescribed by
IFRS and are not directly comparable to similar measures used by other companies. Specific
instances of such measures that may be referred to within this document include “Operating
Earnings”, “Operating Earnings per Share” and “Earnings before Interest and Taxes” (EBIT).
• We refer you to the appropriate reconciliation in the Management’s Discussion and Analysis of
these non-IFRS financial measures to measures prescribed by IFRS.
Non-IFRS Financial Measures
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Please refer to the following documents relating to IGM Financial for a more comprehensive
summary of the corporation’s business and results:
• Interim reports for the quarters ended March 31, 2012 and June 30, 2012
• 2011 Annual Report
• 2011 Annual Information Form
• Press releases subsequent to June 30, 2012
These documents are available on the Company’s website at www.igmfinancial.com and/or at
www.sedar.com.
IGM Financial Public Disclosures
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1. Overview
2. Investors Group
3. Mackenzie Investments
4. Summary
6
IGM Financial manufactures and distributes financial products and services
through its subsidiaries.
• Listed on TSX as ticker “IGM”
• Market Capitalization of $9.9 billion
• Float of $3.8 billion
• Dividend yield of 5.56%
• Second largest mutual fund manager in Canada, with $100 billion in mutual fund
AUM and $117 billion in total AUM.
• Broad and diversified distribution, with an emphasis on financial advisors.
• Part of the Power Financial group of companies, which includes Great West
Life, London Life, Canada Life and Putnam Investments.
Overview
1. At August 28, 2012
2. Ranked according to total mutual fund assets under management per IFIC (as at June 30, 2012)
3. At July 31, 2012
4. Sixth largest global asset manager as measured by market capitalization
1
1
1,4
3
2
Operating Companies
1. At June 30, 2012.
2. At July 31, 2012. IGM Financial total assets under management excludes sub-advisory mandates of Mackenzie to mutual funds
managed by Investors Group and Counsel.
3. Client savings advised upon by financial planners and held at subsidiary mutual fund dealers, investment dealers or trust companies.
IGM Financial operates through three subsidiaries and has total assets under
management of approximately $117 billion.
$58.2 billion $2.9 billion
$59.6 billion
Distribution
Assets Under
Administration
Assets Under
Management
>4,500 exclusive Investors
Group financial planners
>800 financial planners
Core Businesses Financial planning &
investment management
Investment management Financial planning &
investment management
Third party retail (>30,000
planners) and institutional
$60.2 billion N/A $16.0 billion
Products &
Services
The PlanTM, mutual funds,
insurance, securities, mortgages,
SolutionsBankingTM
Mutual funds, asset allocation
programs, institutional pools,
strategic charitable giving,
separately managed accounts
Financial planning, mutual
funds, insurance,
securities, banking
1,3
2
1
2
7
60
70
80
90
100
110
120
130
140
Dec-08 Dec-09 Dec-10 Dec-11 Dec-12
IGM Financial Assets Under Management
During 2012, IGM Financial’s mutual fund assets under management have
increased to $100.1 billion, up 0.4% year to date.
Annual Average
1. Chart reflects actuals to July 31, 2012.
Mutual Funds
Total
$117.0 billion at
July 31, 2012
$100.1 billion at
July 31, 2012
IGM Financial Assets Under Management ($ Billions)
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Value of Advice – CIRANO Research
Robust &
Independent
Survey
Database
• Canada’s largest and most systematic survey of households’ financial lives (10,505
households in the initial survey, 3,610 respondents in follow-up), including:
- Financial/socio-economic situation
- Savings and investment behaviour
- Attitudes towards savings and advice
- Type and tenure of advice
Data Analysis
&
Econometric
Modelling
• Conducted by CIRANO, an internationally recognized research group in applied econometrics
• Research headed by professor Claude Montmarquette, President and CEO of CIRANO
• Controlling for other correlated economic and demographic factors isolates the value of advice
Study
Findings
&
Insights
• The CIRANO work demonstrates that advice has sizeable and positive impact on
financial assets which increases with tenure of advice:
• 4-6 years with advisor – 158% of non-advised assets
• 7-14 years with advisor – 199% of non-advised assets
• 15+ years with advisor – 273% of non-advised assets
1. CIRANO Report “Econometric Models on the Value of Advice of a Financial Adviser” July, 2012.
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1. Overview
2. Investors Group
3. Mackenzie Investments
4. Summary
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Investors Group Consultant Network
Investors Group Consultants have been providing comprehensive financial plans
for clients for over 85 years, through exclusive network of 4,500 Consultants.
The number of Investors Group Region Offices has grown 61% since 2004,
supporting the continued growth of the Investors Group Consultant Network.
67
7479
86
9295
101106 108
2004 2005 2006 2007 2008 2009 2010 2011 2012
Investors Group Region Offices
As at December 31 Investors Group Consultants Across Canada
1. Includes two new Region Office openings, Calgary, Alberta and Ancaster, Ontario, announced to date during 2012.
1 Pro Forma
2010 2011 2012
687734
1,182
Comprehensive Financial Planning
New Annualized Insurance Premiums
Six months ended June 30 ($ Millions)
Mortgages Originations
Six months ended June 30 ($ Millions)
2010 2011 2012
27.3
31.0
34.7
Investors Group continues to experience strong growth in its distribution of
insurance and mortgage products.
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(2.6)
(9.0)
2.3
4.7
(3.6)
(20)
(15)
(10)
(5)
0
5
10
Q2 / 11 Q3 / 11 Q4 / 11 Q1 / 12 Q2 / 12
Investors Group Client Experience
Investors Group Client Rate of Return (%)
Note - Different clients experience different returns based upon portfolio composition and net contributions.
90% of clients had
returns within this
range
Median Client Rate of Return
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The median client return was approximately (3.6%) during the second quarter
of 2012 and positive 0.9% year to date.
2,136
2,625
2,906
3,448
3,999
3,410
2,532
3,196
3,451
3,140
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Investors Group Mutual Fund Sales
Mutual Fund Gross Sales
Six Months Ended June 30 ($ Millions)
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Investors Group had gross sales of $3.1 billion during 2012 year to date.
0%
4%
8%
12%
16%
20%
Dec-02
Dec-03
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-10
Dec-11
Dec-12
Industry excluding Investors Group
Investors Group
Source – IFIC
1. All numbers exclude CI Investments and Invesco from the date that they discontinued reporting to IFIC. CI discontinued
reporting to IFIC during December, 2008 and Invesco discontinued reporting to IFIC during October, 2010.
Investors Group Mutual Fund Redemption Rate
Redemption Rate on Long Term Mutual Funds
(Last Twelve Month Trailing % of Average Assets Under Management)
9.4%
15.9%
1
15
Driven by strong retention of Consultants and clients, Investors Group
continues to experience a long term mutual fund redemption rate that is well
below the industry average.
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1. Continuing to expand the Investor Group Consultant network
• 41% growth in the number of Investors Group Consultants since June, 2004
2. Enhancing our product and service offering
• Recent enhancements to management fees
• Introduction of new investment solutions for high net worth clients
3. Emphasizing the delivery and value of comprehensive financial planning
• Value of advice
• Growth in non-mutual fund products
Investors Group – Areas of Focus
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1. Overview
2. Investors Group
3. Mackenzie Investments
4. Summary
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Mackenzie is focused on providing investment management and service
excellence to a diverse range of distribution channels and end clients.
Mackenzie Investments
– Diversification across
distribution channels,
clientele and product types.
– Common focus of delivering
investment excellence and a
superior client experience.
Dec, 2008 Dec, 2009 Dec, 2010 Dec, 2011 Jul, 2012
35.8 40.6 43.4
39.1 39.1
18.9
23.024.9
22.5 20.5
54.7
63.6
68.3
61.7 59.6
Mackenzie Assets Under Management
Mackenzie Assets Under Management
($ Billions)
1. Includes sub-advisory, separately managed and other institutional accounts.
2. Includes mutual funds, asset allocation programs and funds of funds.
Institutional assets represent slightly more than one-third of Mackenzie
Investments’ total assets under management.
Mutual Funds
Institutional
34% 36% 36% 36% 34% Institutional % of AUM
2
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1
20
Mackenzie Asset Diversification
Mackenzie Investments’ assets under management are diversified by mandate,
asset class, geography, brand and investment style.
Foreign Equity
28.8%
Domestic Balanced
16.7%
Fixed Income
22.5%
Money Market
4.0%
Domestic Equity
25.1%
Foreign Balanced
2.9%
Mackenzie Investments Total Assets Under Management by Asset Class
As at June 30, 2012
2008 2009 2010 2011 2012 YTD
8%
41%
36%
14%
24%
14%
11% 12%
9% 9%
12% 11%
Saxon / Maxxum
Mackenzie Mutual Fund Gross Sales
Mackenzie’s investment style and expertise diversity ensures the company’s
product shelf remains relevant through every stage of the market cycle and
through changes in investor preferences.
Gross Sales Mix of Long-Term Funds by Mackenzie Sub-Brand
Twelve months ended December 31 (unless otherwise indicated)
Cundill
Ivy
Universal
Sentinel
Symmetry & other
1. Excludes Quadrus Funds
2. 2012 YTD reflects year to date gross sales as of June 30, 2012
3. Includes Symmetry, Destination Funds, Founders Funds and other funds
3
1,2
21
1 Year 3 Year 5 Year
48%
56%58%
53% 54%
62%
% of assets under management
% of funds
Mackenzie Investment Performance
58% of Mackenzie’s mutual fund assets reside within funds which have had
first or second quartile performance over the last five years.
Source: Morningstar
Mackenzie Mutual Funds in First or Second Quartile
As at June 30, 2012 • Five Lipper awards received
this year.
– Sentinel Income best ten
year performance
Canadian Fixed Income
Balanced
• Mackenzie Ivy investment
team recognized at the 2011
Morningstar Canadian
Investment Awards.
– Paul Musson awarded
Morningstar Foreign
Equity Fund Manager of
the Year.
– Mackenzie Ivy European
Class named Best
European Equity Fund
(4th consecutive year).
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1. Focusing on investment management
• Divestiture of the MRS group of companies and Winfund to focus exclusively on core investment
management business
• 62% of funds in first or second quartile over the last five years
2. Expanding distribution capabilities
• Exclusive distribution of mutual funds through Laurentian Bank branches effective January, 2013
• Added resources to the distribution team and re-aligned sales teams to focus on retail, platform and
institutional clients
• Continued focus on and expansion of institutional capabilities and re-branded the business unit
Mackenzie Institutional
Mackenzie – Areas of Focus
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1. Overview
2. Investors Group
3. Mackenzie Investments
4. Summary
0.70
0.89
1.12
1.35
1.58
1.852.01
2.31
2.56
2.85
3.23
2.89
2.34
2.89
3.22
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
IGM Financial has a track record of solid financial performance.
IGM Financial Operating Earnings Per Share ($)
1. 2010 and 2011 reflect IFRS, prior periods reflect previous Canadian GAAP.
25
3038
4961
73
86
99
115
134
154
178
200205 205
210215
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012Pro
Forma
26
15 year CAGR of 14%
1. At August 28, 2012
2. 2012 Pro Forma reflects the current 53.75 cent per share quarterly dividend annualized.
2
IGM Financial Dividends
Strong track record of dividend payments over time, current dividend yield
of 5.56%. 1
IGM Financial Dividends Per Share (cents)
150
375
125 150
175 150
200
150
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
IGM Financial manages its capital conservatively.
• Long-term debt and preferred share repayments are staggered across maturities.
• $1.1 billion in long term debt and preferred shares repaid from 2009 to 2011, partially
re-financed with $725 million of new debt issued.
no maturity
IGM Financial Capital Management
Long Term Debt and Preferred Share Maturities at June 30, 2012 ($ Millions)
Issued during 2009 and 2010
27
453513 540 538 536
525
631 610
694 722
72
118 70
157 186
2007 2008 2009 2010 2011
IGM Financial repurchased $186 million of common shares during 2011 under
its Normal Course Issuer Bid.
IGM Financial Capital Management
IGM Financial Common Dividends Paid and Share Repurchases
Twelve months ended December 31 ($ Millions)
Dividends
Share
Repurchases
28
September 5, 2012
IGM FINANCIAL Scotiabank GBM Financials Summit