Fiscal 2015 Q3 Results - CI Investments · 2015. 11. 5. · Important Information Fiscal 2015 Q3...
Transcript of Fiscal 2015 Q3 Results - CI Investments · 2015. 11. 5. · Important Information Fiscal 2015 Q3...
Fiscal 2015 Q3 Results
Stephen MacPhail, President & CEODoug Jamieson, Executive Vice-President & CFO
Derek Green, President, CI InvestmentsSteven Donald, President, Assante Wealth Management
Neal Kerr, President, CI Institutional & Investment Management
November 5, 2015
CI FinancialFiscal 2015 Q3 ResultsImportant Information
This presentation contains forward-looking statements concerning anticipated future events, results, circumstances, performance or expectations with respect to CI and its products and services, includingits business operations, strategy and financial performance and condition. Although management believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, such statements involve risks and uncertainties. For further information regarding factors that could cause actual results to differ from expectations, please refer to Management’s Discussion and Analysis available at www.cifinancial.com.
This presentation contains several non-IFRS financial measures including EBITDA, pre-tax operating earnings, free cash flow, operating cash flow, net debt, asset management margin, SG&A efficiency margin, and adjusted net income that do not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies. However, management uses these financial measures and also believes that most shareholders, creditors, other stakeholders and investment analysts prefer to include the use of these financial measures in analyzing CI’s results. These non-IFRS measures and reconciliations to IFRS, where necessary, are included in Management’s Discussion and Analysis available at www.cifinancial.com.
Page 1 CI FinancialFiscal 2015 Q3 ResultsFee-Earning Assets
($billions)
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Oct2015
160
140
120
100
80
60
40
20
04.3 4.7 5.9 7.0 8.2
18.623.8 21.2
29.1
60.570.9
80.1
90.9 93.7
72.0
86.696.5 92.3
100.3
119.9
134.8142.3
Assets Under Management Assets Under Advisement
Positive net sales in 89% of quarters since 1994
Page 2 CI FinancialFiscal 2015 Q3 ResultsQ3-2015 Highlights
• EPS of $0.51, up 6% from $0.48 in Q3-2014• EBITDA per share of $0.85, up 5% from Q3-2014• Pre-tax operating earnings per share up 5% compared
to Q3-2014• Q3-2015 average AUM up 7% year over year• Assante and Stonegate Private Counsel assets of
$33 billion, up 6% from Q3-2014• YTD net sales of $3.1 billion compared to $3.4 billion
in 2014
Page 3 CI FinancialFiscal 2015 Q3 ResultsSales Overview
• Q3-2015 gross sales of $3.1 billion
• Q3-2015 net sales of $431 million
• YTD net sales of $3.1 billion, down slightly from prior year
• Sales well diversified by channel
• Continue to build brand and deliver premium advisor educational events
Page 4 CI FinancialFiscal 2015 Q3 Results
• Highly concentrated assets
• Canadian households with >$100k in investable assets hold 89% of wealth
• $32b in CI mass affluent and HNW programs with growth rates outpacing industry averages
• Managed solutions and PIM continue to be the platform of choice, accounting for 94% of net sales YTD
Focus on Mass Affluent and HNW
Page 5 CI FinancialFiscal 2015 Q3 Results
• 72% of CI’s long-term AUM 1st or 2nd quartile over 10 years
• 90% of CI’s managed solutions AUM 1st or 2nd quartile over 10 years
• 100% of Blackcreek’s AUM 1st or 2nd quartile over 10 years
• 87% of Signature’s AUM 1st or 2nd quartile over 10 years
• 72% of Cambridge’s AUM 1st or 2nd quartile over 5 years
Strong Performance
Page 6 CI FinancialFiscal 2015 Q3 Results
• $33 billion in assets, up 6% year over year • Strong inflows, up 24% year over year • Continuing focus on mass affluent and HNW market • Leveraging a strong dealer platform • Continuing investment: - Staffing and expertise - Advisor recruiting - Technology - Branding • CSA report: A Dissection of Mutual Fund Fees, Flows
and Performance
Assante Wealth ManagementStonegate Private Counsel
Page 7 CI FinancialFiscal 2015 Q3 Results
<$500kMass Affluent $500K-$1M$7.2B – 22%
Mid-Market $100K-$500K$10.5B – 32%
Mass Market <$100K$2.3B – 7%
HNW $1M+$13.0B – 39%
>$500k
$12.8 b (39%)
$20.2 b (61%)
$7.2 b (22%)
>$1 million (39%)
Assante Wealth Management & Stonegate Private Counsel
By Household Financial Wealth – $33 Billion
Page 8 CI FinancialFiscal 2015 Q3 ResultsFirst Asset Acquisition
• $3 billion AUM, including $1.8B in active and factor-based ETFs
• Provides additional product manufacturing capabilities and additional distribution platform
• Maintain existing brand, management and sales teams
• Seeking mutual growth opportunities for calendar 2016
Page 9 CI FinancialFiscal 2015 Q3 ResultsFinancial Highlights
(year over year)
[millions, except per share] Q3-2015 Q3-2014 Change
Average AUM $108,541 $101,016 7%
Net income $142.8 $135.1 6%
per share $0.51 $0.48 6%
EBITDA per share $0.85 $0.81 5%
Dividends paid $91.9 $85.3 8%
Long-term debt $435.6 $499.3 -13%
Net debt $321.7 $220.2 46%
Page 10 CI FinancialFiscal 2015 Q3 ResultsFinancial Highlights
(consecutive)
[millions, except per share] Q3-2015 Q2-2015 Change
Average AUM $108,541 $109,750 -1%
Net income $142.8 $138.9 3%
per share $0.51 $0.50 2%
Adjusted net income $142.8 $142.4 0%
per share $0.51 $0.51 0%
EBITDA $237.0 $239.8 -1%
per share $0.85 $0.86 -1%
Dividends paid $91.9 $90.0 2%
Page 11 CI FinancialFiscal 2015 Q3 ResultsEBITDA Margin
(% of total revenues)
50%
49%
48%
47%
46%
45%
47.5%47.7%
48.0%47.6%
47.9%
Q4-14 Q3-15Q1-15Q3-14 Q2-15
Page 12 CI FinancialFiscal 2015 Q3 Results
0
20
40
60
80
100
120
140
160
180
200
Q4
2010
Q1 Q2 Q3 Q4
2011
Q1 Q2 Q3 Q4
2012
Q1 Q2 Q3 Q4
2013
Q1 Q2 Q3 Q4
2014
Q1 Q2 Q3 Q3Q4
2009
Q1 Q2 Q3
2015
Q1 Q2
Gross Fee
Net Fee
Net Management Fees(Management fees less trailers less DSC as a percentage of AUM, in bps)
Page 13 CI FinancialFiscal 2015 Q3 ResultsAsset Management Margin
(Management fees less trailers, SG&A and DSC as a percentage of management fees)
45%
44%
43%
42%
41%
40%
39%
38%
37%
36%
35%
42.6% 42.6%42.0% 42.3%
41.5%
Q4-14 Q3-15Q1-15Q3-14 Q2-15
Trailing 12 months
Page 14 CI FinancialFiscal 2015 Q3 ResultsTotal SG&A
(in basis points of average AUM)
40
39
38
37
36
35
34
33
32
31
30
34.633.6
34.033.8
Q4-14 Q1-15 Q3-15Q3-14 Q2-15
34.1
Page 15 CI FinancialFiscal 2015 Q3 ResultsSG&A Efficiency Margin
(Management fees less trailers, DSC and SG&A as a percentage of management fees less trailers and DSC)
75%
74%
73%
72%
71%
70%
69%
68%
67%
66%
65%
71.8%71.0%
71.9%71.5% 71.7%
Q4-14 Q3-15Q1-15Q3-14 Q2-15
Trailing 12 months
Page 16 CI FinancialFiscal 2015 Q3 ResultsQuarterly Free Cash Flow
(in $millions)
165
160
155
150
145
140
135
130
125
148 148151
161
143
Q3-14 Q4-14 Q2-15 Q3-15Q1-15
Page 17 CI FinancialFiscal 2015 Q3 Results
[in $millions] Q3-2015 Q2-2015
Operating cash flow 180 175
Sales commissions (19) (24 )
Free cash flow 161 151
Share buybacks 69 71
Dividends 92 90
Total 161 161
Return to Shareholders
Page 18 CI FinancialFiscal 2015 Q3 Results
700
600
500
400
300
200
100
–2014 2015 (est)2012 2013
Buybacks
Debt Reduction
Dividends
Uses of Free Cash Flow($millions)
Page 19 CI FinancialFiscal 2015 Q3 Results
1,000
900
800
700
600
500
400
300
200
100
–Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
20122010 2011
Q1 Q2 Q3 Q4
2013
Q1
2015
Q1 Q2 Q3 Q4
2014
Q2 Q3
Net Debt
EBITDA Use target leverage for buybacks & acquisitions
1,000
}Target leverage
Leverage($millions)
Page 20 CI FinancialFiscal 2015 Q3 ResultsAssets Under Management
(in $millions)
115,000
110,000
105,000
100,000
95,000
90,000
85,000
80,000
Avg. AUM 97,895
Avg. AUM 101,016
Avg. AUM 101,120
Avg. AUM 106,531
Avg. AUM 109,750
Avg. AUM 108,541
Oct. Oct.Nov. Nov.Dec. Dec.Jan.May MayJun. Jun.Feb.Jul. Jul.Aug. Aug.Mar.Sept. Sept.
20152014
Apr. Apr.
Increase to $1.20 dividend
Increase to $1.26 dividend
Increase to $1.32 dividend
Page 21 CI FinancialFiscal 2015 Q3 Results
• Core business performing well
• Assante & Stonegate Private Counsel outperforming
• Continued investment in service, products and money management
• Maintaining focus on competitive advantages
• Emphasis on high net worth strategy
• First Asset offers product & distribution diversification
Outlook
Thank You