IGM FINANCIAL REPORTS THIRD QUARTER EARNINGS
Readers are referred to the disclaimer regarding Forward-Looking Statements, Non-IFRS Financial Measures and Other Financial Measures at the end of this Release.
WINNIPEG, MB, Nov. 7, 2024 /CNW/ - IGM Financial Inc. (IGM or the Company) (TSX:IGM) today announced earnings results for the third quarter of 2024.
IGM HIGHLIGHTS
Net earnings of $239.2 million compared to $209.8 million in the third quarter of 2023. Earnings per share of $1.01 compared to $0.88 in the third quarter of 2023.
Adjusted net earnings1 were $244.1 million for the third quarter of 2024 compared to $220.5 million in the third quarter of 2023, an increase of 10.7%. Adjusted earnings per share1 were $1.03 for the third quarter of 2024 compared to $0.92 in the third quarter of 2023.
Record high assets under management and advisement of $264.9 billion, up 16.5% from the third quarter of 20232 and up 4.9% from the prior quarter.
IGM's assets under management and advisement including strategic investments were $461.6 billion compared with $431.7 billion at June 30, 2024 and $373.8 billion at September 30, 2023.2
Net outflows were $272 million compared to net outflows of $709 million in 2023.2
Increase in the value of IGM's investment in Wealthsimple Financial Corp. by $384 million ($1.62 per IGM share) in the quarter to $1.2 billion.
"Record high assets under management and advisement of $264.9 billion increased 16.5% from last year and were a key contributor to our adjusted earnings per share in the quarter of $1.03, one of the highest in the Company's history," said James O'Sullivan, President and Chief Executive Officer of IGM Financial Inc. "IG Wealth Management continues to execute on its strategy, with high net worth client household assets of $1 million or more representing $58.3 billion or 43% of total client assets at IG Wealth Management."
Three months ended
Nine months ended
September 30
September 30
2024
2023
Change
2024
2023
Change
IFRS Financial Measures
Net earnings (millions)
$ 239.2
$ 209.8
14.0 %
$ 678.8
$ 729.3
(6.9) %
Earnings per share
$ 1.01
$ 0.88
14.8 %
$ 2.86
$ 3.06
(6.5) %
Non-IFRS Financial Measures
Adjusted net earnings(1) (millions)
$ 244.1
$ 220.5
10.7 %
$ 689.0
$ 638.2
8.0 %
Adjusted earnings per share(1)
$ 1.03
$ 0.92
12.0 %
$ 2.90
$ 2.67
8.6 %
Assets under management and
advisement (AUM&A) (billions)
AUM&A(2)
$ 264.9
$ 227.4
16.5 %
$ 264.9
$ 227.4
16.5 %
AUM&A including
strategic investments(2)
$ 461.6
$ 373.8
23.5 %
$ 461.6
$ 373.8
23.5 %
WEALTH MANAGEMENT
Reflects the activities of its core business and strategic investments that are principally focused on providing financial planning and related services. This segment includes the activities of IG Wealth Management, the Company's investments in Rockefeller Capital Management (Rockefeller) and Wealthsimple Financial Corp. (Wealthsimple), and, until the fourth quarter of 2023, Investment Planning Counsel (IPC) which was classified as discontinued operations.
Adjusted net earnings available to common shareholders in the third quarter of 2024 were $124.9 million, an increase of 5.7% compared to the third quarter of 2023, and represented 51.2% of IGM's adjusted net earnings available to common shareholders.
Assets under advisement including strategic investments at September 30, 2024 were $191.8 billion, an increase of 5.8% from $181.3 billion at June 30, 2024 and an increase of 26.0% from $152.2 billion at September 30, 2023.
IG Wealth Management
Record high assets under advisement at September 30, 2024 were $136.4 billion, an increase of 5.2% from $129.7 billion at June 30, 2024 and an increase of 19.4% from $114.2 billion at September 30, 2023.
Quarterly net client inflows were $330 million, compared to net client outflows of $17 million in the third quarter of 2023.
Record high quarterly gross client inflows were $3.4 billion, an increase of 10.6% from 2023.
Wealthsimple
The fair value of the Company's investment in Wealthsimple was $1,219 million at September 30, 2024 compared to $835 million at June 30, 2024, due to a fair value increase of 46%. The increase in fair value is consistent with the increase in public market peer valuations, Wealthsimple's business performance and revised revenue expectations, as well as a third party secondary transaction expected to close in the fourth quarter.
ASSET MANAGEMENT
Reflects the activities of its core business and strategic investments primarily focused on providing investment management services. This segment includes the operations of Mackenzie Investments and the Company's investments in China Asset Management Co., Ltd. (ChinaAMC) and Northleaf Capital Group Ltd. (Northleaf).
Adjusted net earnings available to common shareholders in the third quarter of 2024 were $91.3 million, an increase of 15.7% compared to the third quarter of 2023, and represented 37.4% of IGM's adjusted net earnings available to common shareholders.
Assets under management including strategic investments at September 30, 2024 were $354.7 billion, an increase of 7.1% from $331.1 billion at June 30, 2024 and an increase of 20.0% from $295.6 billion at September 30, 2023.
Mackenzie Investments
Record high total assets under management were $212.1 billion, an increase of 4.9% from $202.1 billion at June 30, 2024 and an increase of 13.8% from $186.3 billion at September 30, 2023. Third party assets under management were $128.5 billion at September 30, 2024, an increase of 4.7% from June 30, 2024 and an increase of 14.7% from September 30, 2023.
Investment fund net redemptions were $296 million compared to net redemptions of $699 million in the third quarter of 2023.
Mutual fund gross sales were $1.8 billion, up 20.6% from the third quarter of 2023.
ETF business, ETF assets under management totalled $14.9 billion at September 30, 2024, up from $14.4 billion at June 30, 2024 and $12.5 billion at September 30, 2023. Excluding investment in ETFs by IGM's managed products, ETF assets under management were $6.9 billion at September 30, 2024, compared to $6.3 billion at June 30, 2024 and $5.1 billion at September 30, 2023.
ChinaAMC
The Company's proportionate share of ChinaAMC's third quarter earnings was $32.9 million compared to $24.6 million in the third quarter of 2023.
CORPORATE AND OTHER
Represents the investments in Great-West Lifeco Inc. (Lifeco) and Portage Ventures LPs, as well as unallocated capital.
Lifeco, The Company's proportionate share of Lifeco's third quarter earnings was $20.4 million3 compared to $12.7 million in the third quarter of 2023. The Company's proportionate share of Lifeco's base earnings was $25.3 million compared to $23.4 million in the third quarter of 2023.
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 January 31, 2025 to shareholders of record on December 31, 2024.
1
A non-IFRS measure, see Non-IFRS Financial Measures and Other Financial Measures section of this press release. Adjusted net earnings exclude Other items.
In 2024, Other items consisted of:
•
Lifeco other items of ($4.9) million recorded in the third quarter and ($6.9) million for the nine months ended September 30 reflecting the Company's proportionate share of items Lifeco excludes from its base earnings (Lifeco other items). Base earnings is an alternate measure Lifeco uses to understand the underlying business performance compared to IFRS net earnings.
•
The Company's proportionate share of Rockefeller's one-time debt refinancing costs of $3.3 million, recorded in the second quarter, related to the early repayment of one of Rockefeller's financing facilities.
In 2023, Other items consisted of:
•
Restructuring and other charges of $76.2 million after-tax ($103.3 million pre-tax) recorded in the second quarter resulting from streamlining and simplifying the business to more effectively align with business priorities.
•
A gain on the sale of a portion of the Company's investment in Lifeco of $168.6 million after-tax ($172.9 million pre-tax) consisting of $174.8 million recorded in the first quarter and a decrease of $6.2 million that was recorded on a prospective basis in the second quarter.
•
Lifeco IFRS 17 adjustment of $15.1 million, recorded in the second quarter, representing a change of estimate which has been recorded on a prospective basis.
•
Lifeco other items of ($10.7) million recorded in the third quarter and ($16.4) million for the nine months ended September 30.
2
Assets under management and advisement and net flows exclude discontinued operations (IPC). Including discontinued operations:
•
IGM assets under management and advisement were $253.4 billion at September 30, 2023.
•
IGM assets under management and advisement including strategic investments were $399.7 billion at September 30, 2023.
•
IGM net outflows including discontinued operations were $549 million in the third quarter of 2023.
3
In 2024, the Company has recorded its proportionate share of Lifeco earnings based on actual earnings.
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 Inc.'s (IGM Financial, IGM or the Company) and, where applicable, its subsidiaries' and strategic investments', current expectations. Forward-looking statements are provided to assist the reader in understanding the Company's, and its subsidiaries and strategic investments, 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, and its subsidiaries and strategic investments, 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' and strategic investments' control, affect the operations, performance and results of the Company and its subsidiaries and strategic investments, 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' and strategic investments' 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.sedarplus.ca.
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 ...
