Fiscal 2015 Q4 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
February 11, 2016
CI FinancialFiscal 2015 Q4 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, EBITDA margin, 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 Q4 ResultsFee-Earning Assets
($billions)
160
140
120
100
80
60
40
20
01994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
4.3 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
134.8
145.7
Assets Under Management Assets Under Advisement
Positive net sales in 89% of quarters since 1994
141.4
Jan2016
Page 2 CI FinancialFiscal 2015 Q4 Results2015 Highlights
• 2015 EPS was $1.99, up 8% from $1.85 in 2014• 2015 EPS (adj)1 was $2.02, up 10% from $1.83 in 2014• CI AUM was $111.1 billion, up 8% from 2014• Assante & Stonegate PC assets were $34.6 billion, up 8%
from 2014• 2015 net sales were $3.43 billion• Dividend rate increased 5% in 2015, now $1.32 per annum
12015 EPS adjusted to exclude income of $7.5m related to a fair value adjustment to contingent consideration, a $6.4m provision for legal costs, a $9.8m provision for fund remediation, and a $1.4m acceleration in the amortization of fund contracts. 2014 EPS adjusted to exclude income of $5.0m related to a fair value adjustment to contingent consideration.
Page 3 CI FinancialFiscal 2015 Q4 Results2015 Highlights
(continued)
• Acquisition of First Asset ETF business• Stonegate/Assante growth in HNW• Increased institutional business• Core retail distribution strong• Managed solutions account for over 1/3 of retail AUM• Positive returns for clients versus TSX (-8.3% total return)
Page 4 CI FinancialFiscal 2015 Q4 ResultsForward Fund – Key Facts
• One-time cost of $9.8 million after tax ($0.04/share)• Isolated incident due to unique characteristics of the
forward agreements• $156 million of interest accrued in the bank accounts of the
fund NOT in the accounts of CI• Accounting / administrative error, NOT a compliance error• CI has an exceptional record of NAV accuracy
Page 5 CI FinancialFiscal 2015 Q4 ResultsSales Overview
• 2015 gross sales were $15.4 billion, up 7% from 2014
• Net sales down from 2014 but still strong at $3.43 billion
• Q4 net sales of $299 million
• Managed solutions and PIM account for majority of net sales
• Continued focus on mass affluent and HNW
• Significant investment in service and value-added support
• CI brand awareness
Page 6 CI FinancialFiscal 2015 Q4 Results
• 73% 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 Black Creek’s AUM 1st or 2nd quartile over 10 years
• 87% of Signature’s AUM 1st or 2nd quartile over 10 years
• 77% of Cambridge’s AUM 1st or 2nd quartile over 5 years
Strong Performance
Page 7 CI FinancialFiscal 2015 Q4 Results
• CI Institutional: - Strong 2015 for new institutional clients
- Important addition of Cambridge All Canadian Equity mandate
• First Asset: - ETF AUM up 60% year over year
- Joint product initiatives and operational synergies in progress
- Expect CI investment teams to actively manage a number of First Asset ETFs
Updates on CI Institutional & First Asset
Page 8 CI FinancialFiscal 2015 Q4 Results
• 2015 tougher year for total returns
• Multi-asset, multi-manager strategy continues to pay off: - Global funds, U.S. funds and FX outperformed Canada
- Growth style investment teams outperformed value style
• Strong year for investment strategies/teams in focus
• Significant investments in investment personnel and technology
CI Investment Management
Page 9 CI FinancialFiscal 2015 Q4 Results
• $34.6 billion in assets, up 8% year over year • Strong inflows, up 8% year over year • Continuing investment: - Technology: security initiatives & platform efficiencies - Advisor recruiting: activity 2.4 times that of 2014 - Branding: COMPLETE campaign leveraged into regions - Staffing and expertise: 25% increase in wealth planning • Continuing focus on mass affluent and HNW market
Assante Wealth ManagementStonegate Private Counsel
Page 10 CI FinancialFiscal 2015 Q4 ResultsFinancial Highlights
(annual)
[millions, except per share] 2015 2014 Change
Average AUM $108,384 $98,408 10%
Net income $553.5 $525.0 5%
per share $1.99 $1.85 8%
Adjusted net income1 $563.7 $520.0 8%
per share1 $2.02 $1.83 10%
EBITDA per share $3.37 $3.15 7%
Dividends paid per share $1.295 $1.180 10%
Net debt $433.1 $185.2 134%
12015 net income adjusted to exclude income of $7.5m related to a fair value adjustment to contingent consideration, a $6.4m provision for legal costs, a $9.8m provision for fund remediation, and a $1.4m acceleration in the amortization of fund contracts. 2014 net income adjusted to exclude income of $5.0m related to a fair value adjustment to contingent consideration.
Page 11 CI FinancialFiscal 2015 Q4 ResultsFinancial Highlights
(year over year)
[millions, except per share] Q4-2015 Q4-2014 Change
Average AUM $108,688 $101,120 7%
Net income $127.2 $140.4 -9%
per share $0.46 $0.50 -8%
Adjusted net income1 $137.0 $135.4 1%
per share1 $0.50 $0.48 4%
EBITDA per share $0.83 $0.82 1%
Dividends paid per share $0.330 $0.305 8%
1Q4-2015 net income adjusted to exclude a $9.8m provision for fund remediation. Q4-2014 net income adjusted to exclude income of $5.0m related to a fair value adjustment to contingent consideration.
Page 12 CI FinancialFiscal 2015 Q4 ResultsEBITDA Margin
(% of total revenues)
50%
49%
48%
47%
46%
45%
44%
43%
42%
41%
40%
46.3%
47.6%47.9%47.5%47.7%
Q1-15 Q4-15Q2-15Q4-14 Q3-15
Page 13 CI FinancialFiscal 2015 Q4 Results
0
20
40
60
80
100
120
140
160
180
200
Q4
2010
Q1 Q2 Q3 Q4
2011
Q1 Q2 Q3 Q4
2012
Q1 Q2 Q3 Q4
2013
Q1 Q2 Q3 Q4
2014
Q1 Q2 Q3 Q3 Q4Q4
2009
Q1 Q2 Q3
2015
Q1 Q2
Gross Fee
Net Fee
Net Management Fees(Management fees less trailers less DSC as a percentage of AUM, in bps)
Page 14 CI FinancialFiscal 2015 Q4 ResultsAsset Management Margin
(Management fees less trailers, SG&A and DSC as a percentage of management fees)
45%
44%
43%
42%
41%
40%
39%
38%
37%
36%
35%
42.6% 42.5%42.3% 42.6%42.0%
Mar-15 Jun-15Dec-14 Sep-15
Trailing 12 months
Dec-15
Page 15 CI FinancialFiscal 2015 Q4 ResultsTotal SG&A
(in basis points of average AUM)
40
39
38
37
36
35
34
33
32
31
30
34.633.6
34.0
35.4
Q4-14 Q1-15 Q3-15 Q4-15Q2-15
34.1
Page 16 CI FinancialFiscal 2015 Q4 ResultsSG&A Efficiency Margin
(Management fees less trailers, DSC and SG&A as a percentage of management fees less trailers and DSC)
75%
74%
73%
72%
71%
70%
69%
68%
67%
66%
65%
71.8%71.3%
71.9%71.5% 71.7%
Trailing 12 months
Mar-15 Jun-15Dec-14 Sep-15 Dec-15
Page 17 CI FinancialFiscal 2015 Q4 Results
700
600
500
400
300
200
100
–2014 20152012 2013
Buybacks
Debt Reduction
Dividends
Uses of Free Cash Flow($millions)
Page 18 CI FinancialFiscal 2015 Q4 Results
[in $millions] 2015 Q4-2015
Operating cash flow 688 158
Sales commissions (91) (16 )
Free cash flow 597 142
Share buybacks 244 56
Dividends 362 91
Total 606 147
Return to Shareholders
Page 19 CI FinancialFiscal 2015 Q4 Results
1,000
900
800
700
600
500
400
300
200
100
–Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
20122010 2011
Q1 Q2 Q3 Q4
2013 2015
Q1 Q2 Q3 Q4
2014
Q1 Q2 Q3 Q4
Net Debt
EBITDA Use target leverage for buybacks & acquisitions
1,000
Target leverage
Leverage($millions)
Page 20 CI FinancialFiscal 2015 Q4 ResultsAssets Under Management
(in $millions)
115,000
110,000
105,000
100,000
95,000
90,000
85,000
80,000
Avg. AUM 108,688
Avg. AUM 107,978
Avg. AUM 106,531
Avg. AUM 109,750
Avg. AUM 108,541
Oct. Nov. Dec.Jan. May Jun.Feb. Jul. Aug.Mar. Sept.
2015
Apr.
CIX AUM
TSX Total Return
Jan.
2016
Page 21 CI FinancialFiscal 2015 Q4 Results
• Well positioned in key distribution channels
• Focus on efficiency measures across the company
• Further enhancements to portfolio management
• Continued emphasis on HNW/mass affluent market
• Assante/Stonegate attractive to new advisors
• Share repurchases / dividend growth priorities
Outlook
Thank You
