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Fiscal 2017 Q2 Results
Peter Anderson, CEODoug Jamieson, CFO
August 10, 2017
CI FinancialFiscal 2017 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, including its 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 andAnalysis available at www.cifinancial.com.
This presentation contains several non-IFRS financial measures including adjusted net income, EBITDA, free cash flow, operating cash flow, 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.
Fiscal 2017 Q2 Results
Page 1 CI FinancialFiscal 2017 Q2 Results
• 100% of shares for $780 million in cash and stock • Expected to close Sept. 30th subject to approvals • Increases scale and access to distribution • Combined AUM of approx. $140 billion • Accretive to CI shareholders
Sentry Investments Acquisition
Doug Jamieson Chief Financial Officer
Page 3 CI FinancialFiscal 2017 Q2 Results
140
120
100
80
60
40
20
0
ETFTotal BalancedFixedIncome
Equity
Combined AUM(in $billions)
CI Sentry
Page 4 CI FinancialFiscal 2017 Q2 Results
225
200
175
150
125
100
75
50
0
RBCCIB
C
CI + Sentry
Investo
rs Group
DesjardinsTD
BMO
National B
ankCI
Mackenzie
Frankli
n Templeton
Fidelity
Manulife AGFScotia MD
Sentry
Source: IFIC, CI Reports
Industry Position(As at June 30, 2017, in $billions)
Page 5 CI FinancialFiscal 2017 Q2 Results
• Consolidate similar vendor relationships
• Increased negotiating power with vendors
• IT and back-office functions highly scalable
• Expect to achieve full synergies by 2019
• Deal highly accretive
Scale & Synergies
Page 6 CI FinancialFiscal 2017 Q2 Results
• Revenue $2.3B +
• EBITDA $1.0B +
• Net Income $650M
• Free Cash Flow $750M
Pro Forma 2018
Page 7 CI FinancialFiscal 2017 Q2 Results
• Paying $230 million in cash, plus approximately 20 million common shares
• Pro forma debt will be approximately $1 billion at close
• Debt to EBITDA ratio at 1:1
CI Financial Position
Page 8 CI FinancialFiscal 2017 Q2 ResultsFinancial Highlights
(consecutive quarters)
[millions, except per share] Q2-2017 Q1-2017 Change
Average AUM $122,691 $119,423 3%
Net income $96.3 $134.2 -28%
per share $0.37 $0.51 -27%
Adjusted net income* $141.3 $134.2 5%
per share* $0.54 $0.51 6%
EBITDA $222.0 $219.4 1%
per share $0.85 $0.83 2%
Free cash flow $154.8 $153.8 1%
Dividends paid per share $0.3475 $0.3450 1%
*The quarter ended June 30, 2017 excludes a $45.0 million provision for the settlement of outstanding notices of reassessment received for the years 2006 to 2008.
Page 9 CI FinancialFiscal 2017 Q2 ResultsFinancial Highlights
(year-over-year quarters)
[millions, except per share] Q2-2017 Q2-2016 Change
Average AUM $122,691 $108,994 13%
Net income $96.3 $128.6 -25%
per share $0.37 $0.47 -21%
Adjusted net income* $141.3 $128.6 10%
per share* $0.54 $0.47 15%
EBITDA $222.0 $214.1 4%
per share $0.85 $0.78 9%
Free cash flow $154.8 $147.5 5%
Dividends paid per share $0.3475 $0.3350 4%
*The quarter ended June 30, 2017 excludes a $45.0 million provision for the settlement of outstanding notices of reassessment received for the years 2006 to 2008.
Page 10 CI FinancialFiscal 2017 Q2 ResultsTotal SG&A
(as a % of average AUM, in basis points)
46
44
42
40
38
36
34
32
30
28
26
36.236.7
33.8 33.6
35.4
36.5
34.1 34.0
35.534.8 34.6 35.436.1
Q3-16Q3-14 Q2-17Q2-15 Q1-16 Q4-16 Q1-17Q4-14 Q3-15 Q2-16Q2-14 Q1-15 Q4-15
Page 11 CI FinancialFiscal 2017 Q2 Results
180
160
140
120
100
80
60
40
20
–
160
148151
161154 155
148154
138143
151144 147
Q3-14 Q2-17Q2-15 Q1-16 Q2-16Q4-14 Q3-15 Q3-16 Q4-16 Q1-17Q2-14 Q1-15 Q4-15
Quarterly Free Cash Flow (in $millions)
Page 12 CI FinancialFiscal 2017 Q2 Results
[in $millions] LTM Q2-2017 Q1-2017
Operating cash flow 591 117 164
Adjustments 65 45 -
Sales commissions (34 ) (7 ) (10 )
Free cash flow 622 155 154
Share buybacks 316 90 73
Dividends 368 91 92
Total 684 181 164
Return to Shareholders
Note: totals may not sum due to rounding.
Peter Anderson Chief Executive Officer
Page 14 CI FinancialFiscal 2017 Q2 Results
CI Retail • Positive momentum continues • Strong sales across all regions and channels
CI Institutional Asset Management • More wins in Q2; large purchase in July • $1.25 billion in short-listed mandates Portfolio Management • Big turnaround in short-term performance • Long-term performance remains strong
Q2 Review
Page 15 CI FinancialFiscal 2017 Q2 Results
GSFM • Retail business growing extremely well • Launching CI products later this year First Asset • ETF assets have doubled since acquisition • On track for best sales year
Assante & Stonegate • Net sales 20% higher compared with Q2-2016 • Advisor pipeline remains strong
Q2 Review (cont’d)
Page 16 CI FinancialFiscal 2017 Q2 Results
• First half of 2017 much stronger than last year • Sentry acquisition is very strategic to CI: - Provides scale in a market where scale is critical - Broadens distribution in Canada - Adds new talent such as PMs, sales staff etc. - Accretive to CI
Summary
Thank You