fiscal 2016 q2 results - ci investments · fiscal 2016 q2 results ... august 4, 2016. ci financial...
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Fiscal 2016 Q2 Results
Peter Anderson, CEODoug Jamieson, CFO
August 4, 2016
CI FinancialFiscal 2016 Q2 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 adjusted net income, adjusted EBITDA, free cash flow, operating cash flow, asset management margin, and SG&A efficiency margin 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 are described and/or reconciled to the nearest IFRS measure in CI’s Management’s Discussion and Analysis available at www.cifinancial.com.
Figures exclude non-controlling interest, where applicable.
Page 1 CI FinancialFiscal 2016 Q2 ResultsQ2 Overview
• Equity markets volatile but generally up
– Gold/oil rally, Brexit vote
• Asset managers’ stock prices generally down
• Industry fund sales down significantly YoY
• CI redemptions partly due to institutional
• Large institutional purchase slated for Q3
Page 2 CI FinancialFiscal 2016 Q2 ResultsFinancial Highlights
(consecutive quarters)
[millions, except per share] Q2-2016 Q1-2016 Change
Average AUM $108,994 $107,321 2%
Net income $128.6 $116.6 10%
per share $0.47 $0.42 12%
Adjusted net income1 $128.6 $126.1 2%
per share1 $0.47 $0.46 2%
Adjusted EBITDA per share1 $0.79 $0.77 3%
Free cash flow $147.5 $143.6 3%
Dividends paid per share $0.335 $0.330 2%
1Q1-2016 adjusted to exclude a $13.0 million ($9.6 million after tax) provision for severance and transition costs.
Page 3 CI FinancialFiscal 2016 Q2 ResultsFinancial Highlights
(year-over-year quarters)
[millions, except per share] Q2-2016 Q2-2015 Change
Average AUM $108,994 $109,750 -1%
Net income $128.6 $138.9 -7%
per share $0.47 $0.50 -6%
Adjusted net income1 $128.6 $142.4 -10%
per share1 $0.47 $0.51 -8%
Adjusted EBITDA per share1 $0.79 $0.86 -8%
Free cash flow $147.5 $151.1 -2%
Dividends paid per share $0.335 $0.320 5%
1Q2-2015 adjusted to exclude a $4.8 million ($3.5 million after tax) provision for a legal settlement.
Page 4 CI FinancialFiscal 2016 Q2 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 Q3 Q4Q4
2009
Q1 Q2 Q3
2015 2016
Q1 Q1Q2 Q2
Gross Fee
Net Fee
Net Management Fees(Management fees less trailers less DSC as a % of AUM, in bps)
Page 5 CI FinancialFiscal 2016 Q2 Results
50%
45%
40%
35%
30%
41.8%
39.8%
41.5%42.6%
38.8%
40.3%
42.0%42.6%
39.2%
40.9%42.3% 42.5% 42.2%
Q2-13 Q3-14Q1-14 Q2-15 Q1-16Q3-13 Q4-14 Q3-15 Q2-16Q2-14Q4-13 Q1-15 Q4-15
Asset Management Margin(Management fees less trailers, SG&A and DSC as a % of management fees)
Trailing 12 months
Page 6 CI FinancialFiscal 2016 Q2 ResultsTotal SG&A
(as a % of average AUM, in basis points)
46
44
42
40
38
36
34
32
30
28
26
36.236.9
33.8 33.6
38.0
36.3
34.1 34.0
37.0
34.8 34.6 35.436.1
Q2-13 Q3-14Q1-14 Q2-15 Q1-16Q3-13 Q4-14 Q3-15 Q2-16Q2-14Q4-13 Q1-15 Q4-15
Page 7 CI FinancialFiscal 2016 Q2 ResultsSG&A Efficiency Margin
(Management fees less trailers, DSC and SG&A as a percentage of management fees less trailers and DSC)
75%
70%
65%
60%
67.7%
69.0%
71.0%71.9%
71.7%
68.1%
69.6%
71.5%
68.5%
70.3%
71.8%71.3%
70.6%
69.8%
Q2-13 Q3-14Q1-14 Q2-15 Q1-16 Q2-16Q3-13 Q4-14 Q3-15Q1-13 Q2-14Q4-13 Q1-15 Q4-15
Trailing 12 months
Page 8 CI FinancialFiscal 2016 Q2 Results
180
160
140
120
100
80
60
40
20
–
99
124
148151
161
114
123
148
119
138143
151144 147
Q2-13 Q3-14Q1-14 Q2-15 Q1-16 Q2-16Q3-13 Q4-14 Q3-15Q1-13 Q2-14Q4-13 Q1-15 Q4-15
Quarterly Free Cash Flow (in $millions)
Page 9 CI FinancialFiscal 2016 Q2 Results
[in $millions] LTM Q2-2016 Q1-2016
Operating cash flow 647 158 152
Adjustments 19 - 10
Sales commissions (63 ) (10 ) (18 )
Free cash flow 603 147 144
Share buybacks 263 74 64
Dividends 366 92 91
Total 629 165 155
Return to Shareholders
Page 10 CI FinancialFiscal 2016 Q2 ResultsOutlook
• CI Institutional Asset Management
– Pipeline is very strong
– Approx. $1B in institutional commitments to fund over the next several quarters
• Assante Wealth Management
– Growing ahead of peers
– Continue to reinvest
Page 11 CI FinancialFiscal 2016 Q2 ResultsOutlook (cont’d)
• First Asset
– Adding ETFs using CI managers
– New CIBC relationship
– Using products within CI/AWM
• Filling gaps – adding wholesalers
• Approx. 900 advisors to attend fall conference
Thank You