Fiscal 2015 Q3 Results - CI Investments · 2015. 11. 5. · Important Information Fiscal 2015 Q3 Results This presentation contains forward-looking statements concerning anticipated

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


• 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


• $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


<$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


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


[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


700

600

500

400

300

200

100

–2014 2015 (est)2012 2013

Buybacks

Debt Reduction

Dividends

Uses of Free Cash Flow($millions)


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




• 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

Documents

Fiscal 2015 Q3 Results - CI Investments · 2015. 11. 5. · Important Information Fiscal 2015 Q3 Results This presentation contains forward-looking statements concerning anticipated