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IGM FINANCIAL REPORTS SECOND QUARTER EARNINGS

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Readers are referred to the disclaimer regarding Forward-Looking Statements, Non-IFRS Financial Measures and Other Financial Measures at the end of this Release

IGM Financial Inc. Logo (CNW Group/IGM Financial Inc.)
IGM Financial Inc. Logo (CNW Group/IGM Financial Inc.)

WINNIPEG, MB, Aug. 4, 2022 IGM Financial Inc. (IGM or the Company) (TSX: IGM) today announced earnings results for the second quarter of 2022.

IGM HIGHLIGHTS

  • Net earnings of $207.1 million or 87 cents per share compared to $237.4 million or 99 cents per share in 2021.

  • Assets under management and advisement of $242.1 billion, down 7.6% from the second quarter of 2021 and down 9.8% from the prior quarter. 

  • Net outflows were $527 million compared to net inflows of $2.9 billion in 2021. Year to date net inflows of $1.9 billion remained strong.

  • Returned capital to shareholders by repurchasing 2.32 million shares at a total cost of $90 million, in addition to common share dividends paid of $135 million.

"Our client flows remained solid with a strong contribution from IG Wealth Management in the context of a challenging industry environment," said James O'Sullivan, President and Chief Executive Officer of IGM Financial Inc. "Net earnings of 87 cents per share were the second highest second quarter result in the company's history, on an adjusted EPS basis."

Net earnings available to common shareholders for the second quarter of 2022 were $207.1 million or 87 cents per share compared to $237.4 million or 99 cents per share in 2021. Net earnings available to common shareholders for the six months ended June 30, 2022 were $426.4 million or $1.78 per share compared to $439.6 million or $1.84 per share in 2021.

WEALTH MANAGEMENT

Reflects the activities of operating companies that are principally focused on providing financial planning and related services to Canadian households, and includes the activities of IG Wealth Management and Investment Planning Counsel.

Net earnings in the second quarter of 2022 were $108.8 million and represented 52.5% of IGM's net earnings available to common shareholders. This was a decrease of 19.0% compared to the second quarter of 2021.

Assets under advisement at June 30, 2022 were $134.2 billion, a decrease of 6.4% from $143.3 billion at June 30, 2021 and a decrease of 9.4% from $148.0 billion at March 31, 2022.

IG Wealth Management

Assets under advisement at June 30, 2022 were $105.5 billion, a decrease of 6.0% from $112.2 billion at June 30, 2021 and a decrease of 9.3% from $116.3 billion at March 31, 2022.

Year to date net client inflows of $1.9 billion were the highest result in over 20 years, an increase of $170 million from net client inflows of $1.7 billion in 2021. Quarterly net client inflows were $389 million, compared to net client inflows of $670 million in 2021.

Record high gross client inflows for the six months ended June 30, 2022 were $7.1 billion, up 3.1% from gross inflows of $6.9 billion in 2021. Quarterly gross client inflows were $3.1 billion, down 4.7% from gross inflows of $3.2 billion in 2021.

ASSET MANAGEMENT

Reflects the activities of operating companies primarily focused on providing investment management services, and represents the operations of Mackenzie Investments.

Net earnings in the second quarter of 2022 were $51.3 million and represented 24.8% of IGM's net earnings available to common shareholders. This was a decrease of 9.2% compared to the second quarter of 2021.

Total assets under management were $184.7 billion, a decrease of 8.4% from $201.7 billion at June 30, 2021 and a decrease of 10.1% from $205.5 billion at March 31, 2022. Assets under management excluding sub-advisory to the Wealth Management segment were $111.9 billion at June 30, 2022, a decrease of 9.0% from June 30, 2021 and a decrease of 10.3% from March 31, 2022.

Investment fund net redemptions of $819 million were down from net sales of $1.7 billion1 in the second quarter of 2021.

Mutual fund gross sales of $1.7 billion were down from $2.9 billion in the second quarter of 2021.

Retail mutual fund gross sales were $1.5 billion, a decrease from $2.5 billion in the second quarter of 2021.

ETF business - ETF assets under management totalled $11.6 billion at June 30, 2022, up from $10.6 billion at June 30, 2021. Excluding investment in ETFs by IGM mutual funds, ETF assets under management were $5.4 billion at June 30, 2022, compared to $4.9 billion at June 30, 2021.

STRATEGIC INVESTMENTS AND OTHER

Represents the key strategic investments made by the Company, including China Asset Management Co., Ltd., Great-West Lifeco Inc., Northleaf Capital Group Ltd., Wealthsimple Financial Corporation, and Portage Ventures LPs, as well as unallocated capital.

Great-West Lifeco Inc. (Lifeco) – The Company's proportionate share of Lifeco's second quarter earnings was $29.0 million, a decrease of 7.3% from $31.3 million in the second quarter of 2021.

China Asset Management Co., Ltd. (ChinaAMC) – The Company's proportionate share of ChinaAMC's second quarter earnings was $14.8 million, a decrease of 2.0% from $15.1 million in the second quarter of 2021.

Wealthsimple Financial Corp. (Wealthsimple) – The fair value of the Company's investment in Wealthsimple was $492 million at June 30, 2022 compared to $925 million at March 31, 2022. This change in fair value is consistent with the continued decline in stock markets and public market peer valuations, and Wealthsimple focusing on its core business lines and revising revenue expectations.

Dividends

The Board of Directors has declared a dividend of 56.25 cents per share on the Company's common shares which is payable on October 31, 2022 to shareholders of record on September 30, 2022.


____________________________


1 During 2021, institutional clients, which include Mackenzie mutual funds within their investment offerings, made fund allocation changes which resulted in net redemptions of $361 million.

Forward-Looking Statements

Certain statements in this Release, 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 to assist 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. 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. While the Company considers these assumptions to be reasonable based on information currently available to management, they may prove to be incorrect.

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 or unanticipated 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, outbreaks of disease or pandemics (such as COVID-19), the Company's ability to complete strategic transactions, integrate acquisitions and implement other growth strategies, and the Company's and its subsidiaries' 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 applicable Canadian 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 and material factors or assumptions on which information contained in forward-looking statements is based is provided in its disclosure materials filed with the securities regulatory authorities in Canada, available at www.sedar.com.

NON-IFRS FINANCIAL MEASURES AND OTHER FINANCIAL MEASURES

This report contains Non-IFRS financial measures and non-IFRS ratios that do not have standard meanings prescribed by IFRS and may not be directly comparable to similar measures used by other companies. These measures and ratios are used to provide management, investors and investment analysts with additional measures to assess earnings performance.

Non-IFRS financial measures include, but are not limited to, "Adjusted net earnings available to common shareholders", "adjusted net earnings", "adjusted earnings before income taxes", "adjusted earnings before interest and taxes" (Adjusted EBIT), "earnings before interest, taxes, depreciation and amortization before sales commissions" (EBITDA before sales commissions), and "earnings before interest, taxes, depreciation and amortization after sales commissions" (EBITDA after sales commissions). These measures exclude other items which are items of a non-recurring nature, or that could make the period-over-period comparison of results from operations less meaningful. EBITDA before sales commissions excludes all sales commissions. EBITDA after sales commissions includes all sales commissions and highlights aggregate cash flows.

Non-IFRS ratios include the following: 

Ratio

Numerator

Denominator

Adjusted earnings per share
(Adjusted EPS)

Adjusted net earnings available to
common shareholders

Average number of outstanding
common shares on a diluted basis

Return (Adjusted return) on equity
(ROE, Adjusted ROE)

Net earnings (Adjusted net earnings)
available to common shareholders

Average shareholders' equity
excluding non-controlling interest

ROE (Adjusted ROE) excluding the
impact of fair value through other
comprehensive income investments

Net earnings (Adjusted net earnings)
available to common shareholders

Average shareholders' equity
excluding non-controlling interest
and the impact of fair value
through other comprehensive
income investments net of tax

Refer to the appropriate reconciliations of non-IFRS financial measures, including as components of non-IFRS ratios, to reported results in accordance with IFRS included in IGM Financial Inc.'s most recent Management, Discussion and Analysis.

This report also contains other financial measures which include:

  • Assets under Management and Advisement (AUM&A) represents the consolidated AUM and AUA of IGM Financial. In the Wealth Management segment, AUM is a component part of AUA. All instances where the asset management segment is providing investment management services or distributing its products through the Wealth Management segment are eliminated in our reporting such that there is no double-counting of the same client savings held at IGM Financial's operating companies.

  • Assets under Advisement (AUA) are the key driver of the Wealth Management segment. AUA are savings and investment products held within client accounts of our Wealth Management segment operating companies.

  • Assets under Management (AUM) are the key driver of the Asset Management segment. AUM are a secondary driver of revenues and expenses within the Wealth Management segment in relation to its investment management activities. AUM are client assets where we provide investment management services, and include investment funds where we are the fund manager, investment advisory mandates to institutions, and other client accounts where we have discretionary portfolio management responsibilities.

SECOND QUARTER WEBCAST AND CONFERENCE CALL

IGM Financial Inc.'s Second Quarter 2022 results conference call and webcast will be held on Friday, August 5, 2022 at 8:00 a.m. ET. The webcast and conference call can be accessed respectively through igmfinancial.com/en or by phone at 1-800-319-4610 or 1-416-915-3239.

The most recent Consolidated Financial Statements and Management's Discussion and Analysis (MD&A) of operating results are available on IGM Financial Inc.'s website at igmfinancial.com/en.

ABOUT IGM FINANCIAL INC.

IGM Financial Inc. is one of Canada's leading diversified wealth and asset management companies with approximately $253 billion in total assets under management and advisement at July 31, 2022. The company provides a broad range of financial planning and investment management services to help more than two million Canadians meet their financial goals. Its activities are carried out principally through IG Wealth Management, Mackenzie Investments and Investment Planning Counsel. IGM Financial is a member of the Power Corporation group of companies.

IGM FINANCIAL INC.

Consolidated Statements of Earnings
















(unaudited)



Three months ended




Six months ended

(in thousands of Canadian dollars,



June 30




June 30

 except per share amounts)

2022


2021


2022


2021









Revenues








Wealth management

$     611,066


$     627,638


$  1,252,271


$  1,231,089

Asset management

241,585


248,312


497,415


481,302

Dealer compensation expense

(77,421)


(82,701)


(163,612)


(163,410)

Net asset management

164,164


165,611


333,803


317,892

Net investment income and other

(540)


2,475


(2,558)


5,609

Proportionate share of associates' earnings

50,033


48,153


98,433


89,742


824,723


843,877


1,681,949


1,644,332









Expenses








Advisory and business development

303,828


291,124


612,936


575,150

Operations and support

206,426


196,685


421,854


403,224

Sub-advisory

18,311


20,472


38,949


40,201

Interest

28,386


28,496


56,519


56,616


556,951


536,777


1,130,258


1,075,191

Earnings before income taxes

267,772


307,100


551,691


569,141

Income taxes

59,441


69,354


123,195


129,025

Net earnings

208,331


237,746


428,496


440,116

Non-controlling interest

(1,230)


(357)


(2,079)


(547)

Net earnings available to common shareholders

$     207,101


$     237,389


$     426,417


$     439,569









Earnings per share (in dollars)








- Basic

$          0.87


$          0.99


$          1.78


$          1.84

- Diluted

$          0.87


$          0.99


$          1.78


$          1.84

 

 

Financial Highlights



















For the three months
ended June 30


As at and for the six months
ended June 30


(unaudited)


2022


2021


Change


2022


2021


Change



















Net earnings available to














common shareholders ($ millions)

$

207.1


$         237.4


(12.8)

%

$         426.4


$        439.6


(3.0)

%


















Diluted earnings per share


0.87


0.99


(12.1)


1.78


1.84


(3.3)



















Return on equity








13.6 %


15.5 %





















Dividends per share 


0.5625


0.5625


-


1.125


1.125


-





















































Total assets under management and advisement (1) ($millions)




$     242,083


$    262,006


(7.6)

%

Total assets under management (1) 






213,101


233,616


(8.8)



Wealth Management
















Assets under advisement(1)





134,159


143,345


(6.4)




IG Wealth Management















Assets under management (2)





96,603


105,218







Other assets under advisement




8,871


6,967







Assets under advisement






105,474


112,185


(6.0)




Investment Planning Counsel















Assets under management (2)





4,635


5,485







Other assets under advisement




24,057


25,686







Assets under advisement






28,692


31,171


(8.0)



Asset Management (Mackenzie Investments)













Mutual funds 








53,576


58,765







ETFs (3)








5,368


4,889







Investment funds







58,944


63,654







Institutional SMA







6,344


8,167







Subadvisory to Canada Life






46,575


51,092







Total excluding subadvisory to Wealth Management




111,863


122,913







Sub-advisory to Wealth Management




72,855


78,788







Total assets under management




184,718


201,701


(8.4)















 . 





















Net Flows














($ millions)





     Wealth Management


Asset 
Management(4)













 IG Wealth
Management 


 Investment Planning
Counsel 


 Mackenzie
Investments 


 Intersegment
Eliminations 


Total (1)



For the three months ended June 30, 2022












Mutual fund net sales (2)


$            (99)


$            (72)


$           (758)


$                -

$

(929)




ETF net creations



-


-


(61)


-


(61)




Investment fund net sales


(99)


(72)


(819)


-


(990)




Institutional SMA net sales


-


-


(133)


-


(133)




Managed asset net sales


(99)


(72)


(952)


-


(1,123)




Other dealer net flows


488


83


-


25


596




Total net flows




389


11


(952)


25


(527)





































For the six months ended June 30, 2022












Mutual fund net sales (2)


$         1,165


$           (134)


$           (176)


$                -

$

855




ETF net creations



-


-


657


-


657




Investment fund net sales


1,165


(134)


481


-


1,512




Institutional SMA net sales


-


-


(560)


-


(560)




Managed asset net sales


1,165


(134)


(79)


-


952




Other dealer net flows


690


305


-


(8)


987




Total net flows




1,855


171


(79)


(8)


1,939




































 

(1)

Consolidated results eliminate double counting where business is reflected within multiple segments.

(2)

Includes separately managed accounts.

(3)

Total ETFs in the Asset Management section including ETFs held within IGM investment funds were $11.6 billion at June 30, 2022 compared to $10.6 billion at June 30, 2021.

(4)

Asset Management flows activity excludes sub-advisory to Wealth Management.

 



SOURCE IGM Financial Inc.

Cision
Cision

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