Invesco fourth quarter and full year 2017 results

Transcription

1 Invesco fourth quarter and full year 2017 results Martin L. Flanagan President and Chief Executive Officer Loren M. Starr Chief Financial Officer January 31, 2018

2 Forward-looking statements This presentation, and comments made in the associated conference call today, may include forward-looking statements. Forward-looking statements include information concerning future results of our operations, expenses, earnings, liquidity, cash flow and capital expenditures, industry or market conditions, AUM, geopolitical events and their potential impact on the company, acquisitions and divestitures, debt and our ability to obtain additional financing or make payments, regulatory developments, demand for and pricing of our products and other aspects of our business or general economic conditions. In addition, words such as believes, expects, anticipates, intends, plans, estimates, projects, forecasts, and future or conditional verbs such as will, may, could, should, and would as well as any other statement that necessarily depends on future events, are intended to identify forward-looking statements. Forward-looking statements are not guarantees, and they involve risks, uncertainties and assumptions. There can be no assurance that actual results will not differ materially from our expectations. We caution investors not to rely unduly on any forward-looking statements and urge you to carefully consider the risks described in our most recent Form 10-K and subsequent Forms 10-Q, filed with the Securities and Exchange Commission. You may obtain these reports from the SEC s website at We expressly disclaim any obligation to update the information in any public disclosure if any forward-looking statement later turns out to be inaccurate. 1

3 Presentation of fourth quarter and full year 2017 results This presentation includes the following non-gaap performance measures: net revenue (and by calculation, net revenue yield on AUM), adjusted operating income, adjusted operating margin, adjusted net income attributable to Invesco Ltd., and adjusted diluted earnings per share (EPS). We believe the adjusted measures provide valuable insight into our ongoing operational performance and assist in comparisons to our competitors. These measures also assist management with the establishment of operational budgets and forecasts and assist the Board of Directors and management in determining incentive compensation decisions. The most directly comparable U.S. GAAP measures are operating revenues (and by calculation, gross revenue yield on AUM), operating income, operating margin, net income attributable to Invesco Ltd., and diluted EPS. The information in this presentation is meant to supplement the information contained in the earnings release and includes a more detailed reconciliation format of the income statement from U.S. GAAP to a non-gaap presentation. We believe that this presentation is useful, as it aggregates the various non-gaap adjustments to illustrate adjusted revenue and expense categories and allows more transparency into the calculation of the non-gaap financial measures. 2

4 Discussion topics 2017 overview and fourth quarter overview Investment performance and flows Financial results Questions Appendix 3

5 2017 overview highlights Continued strong investment performance contributed to net longterm inflows, solid operating results, and record earnings per share Maintained strong, long-term investment performance throughout the year December 31, 2017, AUM of $937.6 billion, versus $812.9 billion at December 31, 2016 Average AUM was $875.0 billion, versus $788.8 billion for 2016 Long-term net inflows of $11.5 billion across a broad range of investment capabilities, resulting in an organic growth rate of 1.7% Achieved nine consecutive years of positive, long-term net flows Adjusted operating income was $1,480 million versus $1,313 million in the prior year Adjusted operating margin was 39.4% versus 38.7% in the prior year Adjusted diluted EPS for the year was $2.70 versus $2.23 in the prior year Returned $472 million to shareholders during 2017 through dividends with no repurchase of common shares due to completed and pending acquisitions 4 Past performance is not a guarantee of future results. Please see page 12 of this presentation for more information on investment performance Non-GAAP financial measures - See Appendix to this presentation for a reconciliation of adjusted operating income (and by calculation adjusted operating margin), to the most directly comparable U.S. GAAP financial measure.

6 Benefits of diversification Invesco s global diversification has lead to consistent growth and lower volatility compared to industry average Organic Growth Average Standard Deviation = 2.3% 8.0% A 6.0% D IVZ Targeted Organic Growth Rate of 3-5% 4.0% K 2.0% IVZ C L I B G H 0.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% E Average Organic Growth = 1.1% Standard Deviation -2.0% F -4.0% J -6.0% 5 Note: Organic growth is based on average annual net long term flows divided by beginning period AUM from (2017 amounts based on annualized YTD results through September 30, 2017 except IVZ). Averages exclude IVZ. Companies represented include: Affiliated Managers, Group, AllianceBernstein, Ameriprise Financial, Bank of New York Mellon, BlackRock,, Eaton Vance, Federated Investors, Franklin Resources, Lazard, Legg Mason, Principal Financial, and T. Rowe Price. Source: Invesco Ltd.

7 2017 overview building the firm to meet future client needs and strengthen our competitive position Our achievements throughout 2017 enhanced our ability to meet current and future client needs, while strengthening our ability to compete Delivered strong, long-term investment performance to our clients across the globe: 64% and 75% of actively managed assets in the top half of peer groups on a threeand five-year basis, respectively (as of Dec. 31, 2017). Achieved nine consecutive years of positive, long-term net flows and record adjusted diluted EPS* of $2.70 for the year Continued to build our comprehensive range of active, passive and alternative capabilities while strengthening our scale and relevance in key capabilities: Completed the acquisition of Source, a leading independent specialist provider of exchange-traded funds (ETFs) based in Europe; Announced our intention to acquire Guggenheim Investments ETF business, which includes 76 ETFs that would strengthen the depth, breadth and diversity of Invesco s traditional and smart beta ETFs; and Launched a variety of new funds and ETFs which will strengthen our ability to help clients achieve their investment objectives. Past performance is not a guarantee of future results. Please see page 12 of this presentation for more information on investment performance. *Non-GAAP financial measures - See Appendix to this presentation for a reconciliation of adjusted operating income (and by calculation adjusted operating margin), to the most directly comparable U.S. GAAP financial measure. 6

8 2017 overview building the firm to meet future client needs and strengthen our competitive position Our achievements throughout 2017 enhanced our ability to meet current and future client needs, while strengthening our ability to compete Continued to expand our Invesco Solutions team, which brings together the full capabilities of the firm to provide outcomes that help clients meet their investment objectives. Announced partnerships with a number of large enterprises for our digital advice capability, Jemstep, and are well down the implementation path with several of them. The sales and onboarding pipeline is robust, particularly among banks. Further strengthened our investment and distribution teams through new hires and our efforts to attract, develop, motivate and retain the best talent in the industry. Continued to drive savings through our business optimization program, which delivered more than $43 million in annualized run-rate expense savings as of the end of The savings will be used to offset investment in initiatives that enhance our ability to meet client needs and key growth initiatives for future years (e.g., factor-based investing, institutional and our expansion in China). 7

9 Our 2017 acquisitions were intended to further strengthen our global ETF platform and enhance our long-term growth The expansion of EMEA ETFs and the planned acquisition of Guggenheim Investment s ETFs provide highly complementary capabilities that will help accelerate the growth of our global ETF business by: Further expanding the depth, breadth and diversity of Invesco s ETFs Strengthening the competitiveness of our global business, and particularly our EMEA and US Wealth Management Intermediaries businesses Providing additional scale and relevance in the growing ETF market globally Expanding our ability to build better, more diversified portfolios for clients Driving greater operating efficiency by delivering scale benefits to our existing global ETF platform across investments, distribution and operations 8

10 We expanded our global ETF business by adding wellperforming capabilities positioned for growth EMEA ETFs (Source) ETF business with $27.9 billion in AUM, up from $26 billion in AUM at close of acquisition (including $9 billion in externally managed AUM) Expanded our diversified array of ETFs across equity, fixed income and commodities, including smart beta and active ETFs Added largest and most liquid suite of sector ETFs in Europe and leading precious metals capability Expanded depth and breadth of factor-based ETFs, adding to the comprehensive range of active, passive and alternative capabilities Invesco offers in EMEA Strengthened Invesco s ability to innovate in product development Added 10 new products since completion of the acquisition, #1 EMEA position by number of funds launched in Q Guggenheim Investments ETF business ETF business with nearly $40 billion in AUM as of Jan 15, 2018 (up from $37 billion on Sept. 30, 2017) Long-term flows of $0.7 billion from announcement in September, $3.5 billion from beginning of 2017 Approximately 60% of AUM in smart beta product suites 76 ETFs; top five funds account for 54% of ETF assets Diversified product offering in equity, fixed income and alternatives Enhances our ability to create client-directed, proprietary indexes through our selfindexing capability Further strengthens Invesco s #2 smart beta leadership position in the US Source: Guggenheim Investments and Invesco PowerShares. All data as of Dec. 31, 2017, unless otherwise stated. 9

11 Fourth quarter overview highlights Maintained strong investment performance and achieved solid longterm organic growth during the quarter Maintained strong, long-term investment performance 64% and 75% of actively managed assets in top half of peer group on a 3- and 5-year basis December 31, 2017, AUM of $937.6 billion, versus $917.5 billion at September 30, 2017 Average AUM was $930.3 billion, versus $890.8 billion for the third quarter of 2017 Solid retail and institutional demand led to long-term net inflows of $4.4 billion and a long-term organic growth rate of 2.3% Adjusted operating income was $399 million versus $397 million in the prior quarter Adjusted operating margin was 39.7% in the quarter versus 40.7% in the prior quarter Adjusted diluted EPS for the quarter was $0.73 versus $0.71 in the prior quarter Returned $119 million to shareholders during the fourth quarter through dividends. Quarterly dividend of $0.29 per share, up 3.6% over the prior year 10 Past performance is not a guarantee of future results. Please see page 12 of this presentation for more information on investment performance. Non-GAAP financial measures - See Appendix to this presentation for a reconciliation to the most directly comparable U.S. GAAP financial measure.

12 Discussion topics 2017 overview and fourth quarter overview Investment performance and flows Financial results Questions Appendix 11

13 Investment performance overview Aggregate performance analysis asset weighted Percent of actively managed assets in top half of peer group* 1-Year 3-Year 5-Year 57% 64% 75% 43% 36% 25% Assets top half of peer group Assets bottom half of peer group * Excludes passive products, closed-end funds, private equity limited partnerships, non-discretionary funds, unit investment trusts, fund of funds with component funds managed by Invesco, stable value building block funds and CDOs. Certain funds and products were excluded from the analysis because of limited benchmark or peer group data. Had these been available, results may have been different. These results are preliminary and subject to revision. Data as of 12/31/2017. Includes AUM of $528.5 billion (56% of total IVZ) for 1 year, $526.0 billion (56% of total IVZ) for three year, and $495.7 billion (53% of total IVZ) for 5 year. Peer group rankings are sourced from a widely-used third party ranking agency in each fund s market (Lipper, Morningstar, IA, Russell, Mercer, evestment Alliance, SITCA, Value Research) and asset-weighted in USD. Rankings are as of prior quarter-end for most institutional products and prior month-end for Australian retail funds due to their late release by third parties. Rankings for the most representative fund in each GIPS composite are applied to all products within each GIPS composite. Performance assumes the reinvestment of dividends. Past performance is not indicative of future results and may not reflect an investor s experience. 12

14 Quarterly long-term flows Strong active and passive demand for the quarter Quarterly long-term flows ($ billions) Total (a) Active (a) Passive Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 Long-term inflows Long-term outflows Net long-term flows Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 (a) For the three months ended December 31, 2017 and September 30, 2017, reinvested dividends and capital gains of $5.9 billion and $1.1 billion, respectively are included in long-term inflows. For previous periods, reinvested dividends and capital gains are included in market gains and losses. (b) As of December 31, 2017, the company changed the presentation of long-term inflows, outflows, and AUM to exclude Unit Investment Trusts (UIT) and product leverage. All periods have been reclassified to conform to the new presentation. Non-management fee earning AUM include Invesco PowerShares QQQ, UIT and product leverage. 13

15 Quarterly long-term flows Strong retail and institutional demand during the quarter Quarterly long-term flows ($ billions) Retail (a)(b) Institutional (b)(d) Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 Long-term inflows Long-term outflows Net long-term flows 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 (a) For the three months ended December 31, 2017 and September 30, 2017, reinvested dividends and capital gains of $5.9 billion and $1.1 billion, respectively are included in long-term inflows. For previous periods, reinvested dividends and capital gains are included in market gains and losses (b) As of December 31, 2017, the company changed the presentation of long-term inflows, outflows, and AUM to exclude Unit Investment Trusts (UITs) and product leverage. All periods have been reclassified to conform to the new presentation. Non-management fee earning AUM include Invesco PowerShares QQQ, UITs, and product leverage. (c) Retail AUM and flows are distributed by the company s retail sales team and generally includes retail products in the U.S., Canada, U.K., Continental Europe, Asia and our offshore product line. Retail AUM flows exclude Invesco PowerShares QQQ and UITs flows. (d) Institutional AUM and flows are distributed by the company s institutional sales team and generally includes our institutional investment capabilities in the U.S., Canada, U.K., Continental Europe and Asia. Institutional excludes money market and product leverage 14

16 Discussion topics 2017 overview and fourth quarter overview Investment performance and flows Financial results Questions Appendix 15

17 Total assets under management 4Q17 vs. 3Q17 ($ billions) 4Q-17 3Q-17 % Change Beginning Assets $917.5 $ % Long-Term Inflows* % Long-Term Outflows (52.3) (40.9) 27.9% Long-Term Net Flows (15.4)% Net flows in non-management fee earning AUM** % Net flows in Inst. Money Market Funds (3.3) 5.4 N/A Total Net Flows (76.5)% Market Gains and Losses (0.7)% Acquisitions/Dispositions, net N/A Foreign Currency Translation (62.7)% Ending Assets $937.6 $ % Average Long-Term AUM $765.9 $ % Ending Long-Term AUM $775.8 $ % Average AUM $930.3 $ % Net Revenue Yield (annualized)*** 43.2bps 43.9bps Net Revenue Yield Before Performance Fees (annualized)*** 41.3bps 41.9bps Annualized long-term organic growth rate**** 2.3% 3.0% * For the three months ended December 31, 2017 and September 30, 2017, reinvested dividends and capital gains of $5.9 billion and $1.1 billion, respectively are included in long-term inflows. ** As of December 31, 2017, the company changed the presentation of long-term inflows, outflows, and AUM to exclude Unit Investment Trusts (UITs) and product leverage. All periods have been reclassified to conform to the new presentation. Non-management fee earning AUM include Invesco PowerShares QQQ, UITs, and product leverage. *** Non-GAAP financial measure - See the Appendix to this presentation for a reconciliation to the most directly comparable U.S. GAAP financial measure. *** Annualized long-term organic growth rate is calculated using long-term net flows (annualized) divided by opening long-term AUM for the period. Long-term AUM excludes institutional money market, Invesco PowerShares QQQ, UIT, and non-fee earning leverage 16

18 US GAAP operating results 4Q17 vs. 3Q17 ($ millions) 4Q-17 3Q-17 % Change Operating Revenues Investment Management Fees 1, , % Service and Distribution Fees Performance Fees % Other % Total Operating Revenues 1, , % Operating Expenses Third-Party Distribution, Service and Advisory Expenses % Employee Compensation (2.8)% Marketing % Property, Office and Technology % General and Administrative % Total Operating Expenses 1, % Operating Income (3.1)% Other Income/(Expense) Equity in Earnings of Unconsolidated Affiliates (72.1)% Interest and Dividend Income % Interest Expense (23.6) (23.6) - Other Gains and Losses, net % Other income/(expense) of CIP, net % Income before income taxes % Income Tax Provision 23.2 (123.1) N/A Effective Tax Rate (5.8)% 31.0% Net Income % Net (Income)/Loss attributable to Noncontrolling Interests (14.4) (7.1) 102.8% in Consolidated Entities Net Income attributable to Invesco Ltd % Diluted EPS $0.99 $ % Operating Margin 25.0% 26.6% Average AUM ($ billions) % Headcount 7,030 6, % 17

19 Non-GAAP operating results 4Q17 vs. 3Q17 ($ millions) 4Q-17 3Q-17 % Change Adjusted Revenues Investment Management Fees 1, , % Service and Distribution Fees Performance Fees Other % Third-Party Distribution, Service and Advisory Expenses (393.5) (382.9) 2.8% Net Revenues 1, % Adjusted Operating Expenses Employee Compensation (2.0)% Marketing % Property, Office and Technology % General and Administrative % Total Adjusted Operating Expenses % Adjusted Operating Income % Adjusted Other Income/(Expense) Equity in Earnings of Unconsolidated Affiliates (32.6)% Interest and Dividend Income % Interest Expense (23.6) (23.6) - Other Gains and Losses, net % Adjusted Income before income taxes % Income Tax Provision (109.2) (111.5) (2.1)% Effective Tax Rate 26.8% 27.6% Adjusted Net Income attributable to Invesco Ltd % Adjusted Diluted EPS $0.73 $ % Adjusted Operating Margin 39.7% 40.7% Average AUM ($ billions) % Headcount 7,030 6, % Non-GAAP financial measures - See the Appendix to this presentation for a reconciliation to the most directly comparable U.S. GAAP financial measure. 18

20 Fourth quarter overview highlights Maintained strong investment performance and achieved solid longterm organic growth during the quarter Maintained strong, long-term investment performance 64% and 75% of actively managed assets in top half of peer group on a 3- and 5-year basis December 31, 2017, AUM of $937.6 billion, versus $917.5 billion at September 30, 2017 Average AUM was $930.3 billion, versus $890.8 billion for the third quarter of 2017 Solid retail and institutional demand led to long-term net inflows of $4.4 billion and a long-term organic growth rate of 2.3% Adjusted operating income was $399 million versus $397 million in the prior quarter Adjusted operating margin was 39.7% in the quarter versus 40.7% in the prior quarter Adjusted diluted EPS for the quarter was $0.73 versus $0.71 in the prior quarter Returned $119 million to shareholders during the fourth quarter through dividends. Quarterly dividend of $0.29 per share, up 3.6% over the prior year 19 Past performance is not a guarantee of future results. Please see page 12 of this presentation for more information on investment performance. Non-GAAP financial measures - See Appendix to this presentation for a reconciliation to the most directly comparable U.S. GAAP financial measure.

21 Discussion topics 2017 overview and fourth quarter overview Investment performance and flows Financial results Questions Appendix 20

22 Discussion topics 2017 overview and fourth quarter overview Investment performance and flows Financial results Questions Appendix 21

23 We are diversified as a firm Delivering a diverse set of solutions to meet client needs By client domicile By channel By asset class 3% 16% 12% 62% 14% 68% 32% 24% 46% 9% 8% 6% ($ billions) 1-Yr Change ($ billions) 1-Yr Change ($ billions) 1-Yr Change U.S. Canada U.K. Europe Asia $585.4 $26.8 $110.9 $127.1 $ % 16.0% 12.9% 76.3% 9.3% Retail Institutional $637.0 $ % 5.0% Equity Balanced Money Market Fixed Income Alternatives $431.2 $57.7 $78.7 $225.8 $ % 23.3% 0.5% 11.9% 18.2% Total $ % Total $ % Total $ % As of December 31,

24 Investment performance By investment objective (actively managed assets)* Equities AUM above benchmark 1 st quartile 2 nd quartile U.S. Core U.S. Growth U.S. Value Sector 100% 100% 100% 100% 91% 21% 6% 32% 26% 9% 6% 13% 6% 1-Yr 3-Yr 5-Yr 40% 40% 27% 36% 36% 27% 9% 1-Yr 3-Yr 5-Yr 53% 17% 52% 4% 73% 32% 38% 1-Yr 3-Yr 5-Yr 42% 41% 16% 14% 14% 17% 3% 6% 1-Yr 3-Yr 5-Yr U.K. Canadian Asian European 100% 100% 100% 100% 100% 91% 92% 98% 99% 1% 76% 51% 63% 68% 49% 91% 70% 47% 46% 39% 47% 37% 19% 27% 20% 19% 26% 7% 2% 6% 11% 11% 11% 8% 7% 1-Yr 3-Yr 5-Yr 1-Yr 3-Yr 5-Yr 1-Yr 3-Yr 5-Yr 1-Yr 3-Yr 5-Yr * Excludes passive products, closed-end funds, private equity limited partnerships, non-discretionary funds, unit investment trusts, fund of funds with component funds managed by Invesco, stable value building block funds and CDOs. Certain funds and products were excluded from the analysis because of limited benchmark or peer group data. Had these been available, results may have been different. These results are preliminary and subject to revision. AUM measured in the one, three, and five year quartile rankings represents 56%, 56%, and 53% of total Invesco AUM, respectively, and AUM measured versus benchmark on a one, three, and five year basis represents 70%, 67%, and 62% of total Invesco AUM as of 12/31/17. Peer group rankings are sourced from a widely-used third party ranking agency in each fund s market (Lipper, Morningstar, IA, Russell, Mercer, evestment Alliance, SITCA, Value Research) and asset-weighted in USD. Rankings are as of prior quarter-end for most institutional products and prior month-end for Australian retail funds due to their late release by third parties. Rankings for the most representative fund in each GIPS composite are applied to all products within each GIPS composite. Performance assumes the reinvestment of dividends. Past performance is not indicative of future results and may not reflect an investor s experience. 23

25 Investment performance By investment objective (actively managed assets)* (CONTINUED) Equities Other AUM above benchmark 1 st quartile 2 nd quartile Global Global ex-u.s. and Em. Mkts. Alternatives Balanced 100% 100% 100% 100% 91% 34% 81% 79% 71% 71% 52% 62% 50% 56% 4% 8% 87% 5% 47% 49% 50% 61% 28% 46% 37% 41% 35% 31% 32% 25% 3% 12% 13% 4% 4% 7% 6% 2% 1-Yr 3-Yr 5-Yr 1-Yr 3-Yr 5-Yr 1-Yr 3-Yr 5-Yr 1-Yr 3-Yr 5-Yr Fixed income Money market U.S. fixed income Global fixed income Stable value 100% 100% 100% 100% 99% 100% 99% 87% 87% 84% 11% 10% 13% 1-Yr 3-Yr 5-Yr 88% 88% 86% 56% 75% 72% 29% 12% 13% 1-Yr 3-Yr 5-Yr 79% 59% 66% 68% 33% 35% 27% 14% 8% 1-Yr 3-Yr 5-Yr 100% 22% 100% 100% 18% 100% 78% 82% 1-Yr 3-Yr 5-Yr * Excludes passive products, closed-end funds, private equity limited partnerships, non-discretionary funds, unit investment trusts, fund of funds with component funds managed by Invesco, stable value building block funds and CDOs. Certain funds and products were excluded from the analysis because of limited benchmark or peer group data. Had these been available, results may have been different. These results are preliminary and subject to revision. AUM measured in the one, three, and five year quartile rankings represents 56%, 56%, and 53% of total Invesco AUM, respectively, and AUM measured versus benchmark on a one, three, and five year basis represents 70%, 67%, and 62% of total Invesco AUM as of 12/31/17. Peer group rankings are sourced from a widely-used third party ranking agency in each fund s market (Lipper, Morningstar, IA, Russell, Mercer, evestment Alliance, SITCA, Value Research) and asset-weighted in USD. Rankings are as of prior quarter-end for most institutional products and prior month-end for Australian retail funds due to their late release by third parties. Rankings for the most representative fund in each GIPS composite are applied to all products within each GIPS composite. Performance assumes the reinvestment of dividends. Past performance is not indicative of future results and may not reflect an investor s experience. 24

26 Investment performance (5-year) By investment objective (actively managed assets)* Percentages in parentheses represent % AUM of each investment objective as a ratio of all objectives (Total ranked AUM of $495.7 billion) Equities U.S. Core (3%) % of assets top half of peer group U.S. Growth (5%) U.S. Value (13%) Sector (1%) % of assets bottom half of peer group U.K. (5%) Canadian (1%) Asian (4%) European (5%) * Excludes passive products, closed-end funds, private equity limited partnerships, non-discretionary funds, unit investment trusts, fund of funds with component funds managed by Invesco, stable value building block funds and CDOs. Certain funds and products were excluded from the analysis because of limited benchmark or peer group data. Had these been available, results may have been different. These results are preliminary and subject to revision. Includes AUM of $495.7 billion (53% of total IVZ) for five year as of 12/31/17. Peer group rankings are sourced from a widely-used third party ranking agency in each fund s market (Lipper, Morningstar, IA, Russell, Mercer, evestment Alliance, SITCA, Value Research) and asset-weighted in USD. Rankings are as of prior quarter-end for most institutional products and prior month-end for Australian retail funds due to their late release by third parties. Rankings for the most representative fund in each GIPS composite are applied to all products within each GIPS composite. Performance assumes the reinvestment of dividends. Past performance is not indicative of future results and may not reflect an investor s experience. 25

27 Investment performance (5-year) By investment objective (actively managed assets)* (CONTINUED) Percentages in parentheses represent % AUM of each investment objective as a ratio of all objectives (Total ranked AUM of $495.7 billion) Equities Global (4%) Global ex-us and Em. Mkts (5%) Other % of assets top half of peer group Alternatives (7%) Balanced (12%) % of assets bottom half of peer group Fixed income Money market (16%) U.S. fixed income (8%) Global fixed income (7%) Stable value (6%) * Excludes passive products, closed-end funds, private equity limited partnerships, non-discretionary funds, unit investment trusts, fund of funds with component funds managed by Invesco, stable value building block funds and CDOs. Certain funds and products were excluded from the analysis because of limited benchmark or peer group data. Had these been available, results may have been different. These results are preliminary and subject to revision. Includes AUM of $495.7 billion (53% of total IVZ) for five year as of 12/31/17. Peer group rankings are sourced from a widely-used third party ranking agency in each fund s market (Lipper, Morningstar, IA, Russell, Mercer, evestment Alliance, SITCA, Value Research) and asset-weighted in USD. Rankings are as of prior quarter-end for most institutional products and prior month-end for Australian retail funds due to their late release by third parties. Rankings for the most representative fund in each GIPS composite are applied to all products within each GIPS composite. Performance assumes the reinvestment of dividends. Past performance is not indicative of future results and may not reflect an investor s experience. 26

28 US GAAP operating results quarterly ($ millions) 4Q-17 3Q-17 % Change* 2Q-17 1Q-17 4Q-16 3Q-16 2Q-16 1Q-16 Investment Management Fees 1,099 1, % 1, Service and Distribution Fees Performance Fees % Other % Total Operating Revenues 1,376 1, % 1,254 1,193 1,195 1,202 1,189 1,149 Third-Party Distribution, Service and Advisory % Employee Compensation (2.8)% Marketing % Property, Office and Technology % General and Administrative % Total Operating Expenses 1, % Operating Income (3.1)% Equity in Earnings of Unconsolidated Affiliates 4 13 (72.1)% (12) Interest and Dividend Income % Interest Expense (24) (24) - (24) (24) (24) (24) (22) (24) Other Gains and Losses, net % (4) (5) Other income/(expense) of CIP, net % (8) Income before income taxes % Effective Tax Rate** (5.8)% 31.0% 27.1% 26.1% 29.9% 26.0% 26.1% 31.3% Net Income % Net (Income)/Loss Attributable to Noncontrolling Interests in Consolidated Entities (14) (7) 102.8% (10) (2) 8 (15) (11) 3 Net Income Attributable to Invesco Ltd % Diluted EPS $0.99 $ % $0.58 $0.52 $0.55 $0.58 $0.54 $0.38 * % change based on unrounded figures ** Effective tax rate = Tax expense / Income before income taxes and minority interest 27

29 Non-GAAP operating results quarterly ($ millions) 4Q-17 3Q-17 % Change* 2Q-17 1Q-17 4Q-16 3Q-16 2Q-16 1Q-16 Investment Management Fees 1,119 1, % 1, Service and Distribution Fees Performance Fees Other % Third-party distribution, service and advisory expense (393) (383) 2.8% (368) (351) (352) (365) (351) (349) Net Revenues 1, % Employee Compensation (2.0)% Marketing % Property, Office and Technology % General and Administrative % Adjusted Operating Expenses % Adjusted Operating Income % Equity in Earnings of Unconsolidated Affiliates (32.6)% (1) Interest and Dividend Income % Interest Expense (24) (24) - (24) (24) (24) (24) (22) (24) Other Gains and Losses, net % (0) (8) Other income/(expense) of CSIP, net Adjusted Income before income taxes % Effective Tax Rate** 26.8% 27.6% 26.7% 26.6% 27.7% 26.5% 26.5% 26.5% Adjusted Net Income Attributable to Invesco Ltd % Adjusted Diluted EPS $0.73 $ % $0.64 $0.61 $0.59 $0.60 $0.56 $0.49 * % change based on unrounded figures ** Effective tax rate = Adjusted tax expense / Adjusted income before taxes. See Reconciliation of US GAAP results to non-gaap results in this appendix. 28

30 Total assets under management quarterly ($ billions) 4Q-17 3Q-17 % Change 2Q-17 1Q-17 4Q-16 3Q-16 2Q-16 1Q-16 Beginning Assets $917.5 $ % $834.8 $812.9 $820.2 $779.6 $771.5 $775.6 Long-Term Inflows* % Long-Term Outflows (52.3) (40.9) 27.9% (40.8) (44.8) (45.0) (37.0) (39.0) (40.3) Long-Term Net flows (15.4)% Net flows in non-management fee earning AUM** % (0.7) 1.2 (0.1) 1.2 (3.1) (4.4) Net flows in Inst. Money Market Funds (3.3) 5.4 N/A 2.8 (8.1) Total Net Flows (76.5)% 2.4 (5.3) (0.1) Market Gains and Losses (0.7)% (3.0) Acquisitions/Dispositions, net N/A (3.6) Foreign Currency Translation (62.7)% (14.8) (2.2) (7.7) 2.6 Ending Assets $937.6 $ % $858.3 $834.8 $812.9 $820.2 $779.6 $771.5 Average Long-Term AUM $765.9 $ % $701.6 $686.0 $668.2 $673.1 $649.6 $617.4 Ending Long-Term AUM $775.8 $ % $707.9 $692.0 $670.7 $679.8 $649.3 $638.0 Average AUM $930.3 $ % $849.2 $829.8 $809.0 $814.1 $784.5 $747.5 Gross Revenue Yield (annualized)*** 59.7bps 60.7bps 59.7bps 58.1bps 59.8bps 59.8bps 61.3bps 62.1bps Gross Revenue Yield Less Performance Fees (annualized)*** 57.9bps 58.7bps 58.9bps 57.5bps 58.9bps 59.6bps 60.9bps 61.3bps Net Revenue Yield (annualized)**** 43.2bps 43.9bps 42.7bps 41.8bps 42.7bps 42.0bps 43.7bps 43.8bps Net Revenue Yield Less Performance Fees (annualized)**** 41.3bps 41.9bps 41.8bps 40.9bps 41.8bps 41.8bps 43.2bps 42.9bps * For the three months ended December 31, 2017 and September 30, 2017, reinvested dividends and capital gains of $5.9 billion and $1.1 billion, respectively are included in long-term inflows. ** As of December 31, 2017, the company changed the presentation of long-term inflows, outflows, and AUM to exclude Unit Investment Trusts (UITs) and product leverage. All periods have been reclassified to conform to the new presentation. Non-management fee earning AUM include Invesco PowerShares QQQ, UITs, and product leverage. *** Gross revenue yield on AUM is equal to total operating revenues divided by average AUM, excluding JV AUM. Average AUM for 4Q17, for our joint ventures in China were $9.1bn (3Q17:$8.6bn; 2Q17:$8.1bn; 1Q17:$8.4bn; 4Q16:$10.1bn; 3Q16:$10.4bn) **** Net Revenue Yield on AUM is equal to net revenues divided by average AUM including JV AUM. Average AUM for 4Q17, for our joint ventures in China were $9.1bn (3Q17:$8.6bn; 2Q17:$8.1bn; 1Q17:$8.4bn; 4Q16:$10.1bn; 3Q16:$10.4bn) 29

31 Total assets under management by asset class ($ billions) Total Equity * For the three months ended December 31, 2017 and September 30, 2017, reinvested dividends and capital gains of $5.9 billion and $1.1 billion, respectively are included in long-term inflows. ** As of December 31, 2017, the company changed the presentation of long-term inflows, outflows, and AUM to exclude Unit Investment Trusts (UITs) and product leverage. All periods have been reclassified to conform to the new presentation. Non-management fee earning AUM include Invesco PowerShares QQQ, UITs, and product leverage. 30 Fixed Income Balanced Money Market Alternatives June 30, 2017 $858.3 $391.2 $208.9 $52.2 $76.1 $129.9 Long-Term Inflows* Long-Term Outflows (40.9) (22.5) (8.5) (3.0) (1.1) (5.8) Long-Term Net flows 5.2 (2.6) Net flows in non-management fee earning AUM** 0.9 (1.0) Net flows in Inst. Money Market Fund Market Gains and Losses Acquisitions/Dispositions, net Transfer/Reclassifications Foreign Currency Translation September 30, 2017 $917.5 $416.2 $224.5 $54.2 $81.9 $140.7 Long-Term Inflows* Long-Term Outflows (52.3) (29.2) (12.4) (2.5) (1.0) (7.2) Long-Term Net flows Net flows in non-management fee earning AUM** (0.1) Net flows in Inst. Money Market Fund (3.3) (3.3) - Market Gains and Losses Acquisitions/Dispositions, net Transfer/Reclassifications Foreign Currency Translation December 31, 2017 $937.6 $431.2 $225.8 $57.7 $78.7 $144.2

32 Total assets under management by asset class ($ billions) Total Equity Fixed Income Balanced Money Market Alternatives December 31, 2016 $812.9 $364.1 $201.7 $46.8 $78.3 $122.0 Long-Term Inflows Long-Term Outflows (44.8) (24.6) (9.6) (2.2) (0.9) (7.5) Long-Term Net flows 1.6 (4.3) (0.1) 3.9 Net flows in non-management fee earning AUM Net flows in Inst. Money Market Fund (8.1) (8.1) - Market Gains and Losses (0.1) Acquisitions/Dispositions, net Transfers/Reclassifications - - (3.0) Foreign Currency Translation March 31, 2017 $834.8 $381.8 $203.8 $48.9 $73.1 $127.2 Long-Term Inflows Long-Term Outflows (40.8) (22.9) (8.4) (2.1) (0.9) (6.5) Long-Term Net flows 0.3 (4.9) Net flows in non-management fee earning AUM (0.7) (0.5) (0.2) Net flows in Inst. Money Market Fund Market Gains and Losses (0.1) Acquisitions/Dispositions, net Transfer/Reclassifications Foreign Currency Translation June 30, 2017 $858.3 $391.2 $208.9 $52.2 $76.1 $ As of December 31, 2017, the company changed the presentation of long-term inflows, outflows, and AUM to exclude Unit Investment Trusts (UITs) and product leverage. All periods have been reclassified to conform to the new presentation. Non-management fee earning AUM include Invesco PowerShares QQQ, UITs, and product leverage.

33 Total assets under management by channel ($ billions) Total Retail Institutional June 30, 2017 $858.3 $572.4 $285.9 Long-Term Inflows* Long-Term Outflows (40.9) (33.0) (7.9) Long-Term Net flows Net flows in non-management fee earning AUM** 0.9 (1.0) 1.9 Net flows in Inst. Money Market Funds Market Gains and Losses Acquisitions/Dispositions, net Transfer/Reclassifications Foreign Currency Translation September 30, 2017 $917.5 $621.5 $296.0 Long-Term Inflows* Long-Term Outflows (52.3) (44.7) (7.6) Long-Term Net flows Net flows in non-management fee earning AUM** Net flows in Inst. Money Market Funds (3.3) (3.2) (0.1) Market Gains and Losses Acquisitions/Dispositions, net Transfer/Reclassifications Foreign Currency Translation December 31, 2017 $937.6 $637.0 $300.6 * For the three months ended December 31, 2017 and September 30, 2017, reinvested dividends and capital gains of $5.9 billion and $1.1 billion, respectively are included in long-term inflows. ** As of December 31, 2017, the company changed the presentation of long-term inflows, outflows, and AUM to exclude Unit Investment Trusts (UITs) and product leverage. All periods have been reclassified to conform to the new presentation. Non-management fee earning AUM include Invesco 32 PowerShares QQQ, UITs, and product leverage.

34 Total assets under management by channel ($ billions) Total Retail Institutional December 31, 2016 $812.9 $526.5 $286.4 Long-Term Inflows Long-Term Outflows (44.8) (35.7) (9.1) Long-Term Net flows (1.0) Net flows in non-management fee earning AUM Net flows in Inst. Money Market Funds (8.1) - (8.1) Market Gains and Losses Acquisitions/Dispositions, net Transfer/Reclassifications Foreign Currency Translation March 31, 2017 $834.8 $552.1 $282.7 Long-Term Inflows Long-Term Outflows (40.8) (31.0) (9.8) Long-Term Net flows (2.0) Net flows in non-management fee earning AUM (0.7) (0.7) - Net flows in Inst. Money Market Funds Market Gains and Losses Acquisitions/Dispositions, net Transfer/Reclassifications Foreign Currency Translation June 30, 2017 $858.3 $572.4 $ As of December 31, 2017, the company changed the presentation of long-term inflows, outflows, and AUM to exclude Unit Investment Trusts (UITs) and product leverage. All periods have been reclassified to conform to the new presentation. Non-management fee earning AUM include Invesco PowerShares QQQ, UITs, and product leverage.

35 Total assets under management by client domicile ($ billions) Total U.S. Canada U.K. Continental Europe Asia June 30, 2017 $858.3 $559.2 $24.8 $103.8 $86.6 $83.9 Long-Term Inflows* Long-Term Outflows (40.9) (20.9) (1.1) (3.2) (10.5) (5.2) Long-Term Net flows (0.1) Net flows in non-management fee earning AUM** Net flows in Inst. Money Market Funds Market Gains and Losses (0.2) Acquisitions/Dispositions, net Transfer/Reclassifications Foreign Currency Translation September 30, 2017 $917.5 $578.0 $25.8 $108.0 $120.7 $85.0 Long-Term Inflows* Long-Term Outflows (52.3) (27.9) (1.2) (3.4) (15.4) (4.4) Long-Term Net flows 4.4 (0.6) (0.1) Net flows in non-management fee earning AUM** Net flows in Inst. Money Market Funds (3.3) (2.2) - (0.2) (0.4) (0.5) Market Gains and Losses Acquisitions/Dispositions, net (0.2) (0.3) 0.5 Transfer/Reclassifications Foreign Currency Translation December 31, 2017 $937.6 $585.4 $26.8 $110.9 $127.1 $87.4 * For the three months ended December 31, 2017 and September 30, 2017, reinvested dividends and capital gains of $5.9 billion and $1.1 billion, respectively are included in long-term inflows. ** As of December 31, 2017, the company changed the presentation of long-term inflows, outflows, and AUM to exclude Unit Investment Trusts (UITs) and product leverage. All periods have been reclassified to conform to the new presentation. Non-management fee earning AUM include Invesco 34 PowerShares QQQ, UITs, and product leverage.

36 Total assets under management by client domicile ($ billions) Total U.S. Canada U.K. Continental Europe Asia December 31, 2016 $812.9 $539.5 $23.1 $98.2 $72.1 $80.0 Long-Term Inflows Long-Term Outflows (44.8) (24.4) (1.3) (5.9) (6.6) (6.6) Long-Term Net flows (0.2) (1.8) Net flows in non-management fee earning AUM Net flows in Inst. Money Market Funds (8.1) (7.2) (1.8) Market Gains and Losses Acquisitions/Dispositions, net Transfer/Reclassifications Foreign Currency Translation March 31, 2017 $834.8 $550.0 $23.9 $101.0 $77.6 $82.3 Long-Term Inflows Long-Term Outflows (40.8) (23.2) (1.0) (5.1) (5.8) (5.7) Long-Term Net flows 0.3 (1.9) 0.1 (1.1) 4.0 (0.8) Net flows in non-management fee earning AUM (0.7) (0.7) Net flows in Inst. Money Market Funds (1.8) (0.1) 1.1 Market Gains and Losses Acquisitions/Dispositions, net Transfer/Reclassifications Foreign Currency Translation June 30, 2017 $858.3 $559.2 $24.8 $103.8 $86.6 $ As of December 31, 2017, the company changed the presentation of long-term inflows, outflows, and AUM to exclude Unit Investment Trusts (UITs) and product leverage. All periods have been reclassified to conform to the new presentation. Non-management fee earning AUM include Invesco PowerShares QQQ, UITs, and product leverage.

37 Passive assets under management by asset class ($ billions) Total Equity Fixed Income Balanced Money Market Alternative June 30, 2017 $156.6 $103.5 $ $6.6 Long-Term Inflows Long-Term Outflows (8.6) (6.3) (1.7) - - (0.6) Long-Term Net flows 1.3 (0.4) Net flows in non-management fee earning AUM 0.9 (1.0) Net flows in Inst. Money Market Funds Market Gains and Losses Acquisitions/Dispositions, net Transfer/Reclassifications Foreign Currency Translation September 30, 2017 $190.5 $119.8 $ $13.3 Long-Term Inflows Long-Term Outflows (15.7) (9.5) (4.3) - - (1.9) Long-Term Net flows (0.2) Net flows in non-management fee earning AUM (0.1) Net flows in Inst. Money Market Funds Market Gains and Losses (0.5) Acquisitions/Dispositions, net Transfer/Reclassifications Foreign Currency Translation December 31, 2017 $199.0 $128.4 $ $ As of December 31, 2017, the company changed the presentation of long-term inflows, outflows, and AUM to exclude Unit Investment Trusts (UITs) and product leverage. All periods have been reclassified to conform to the new presentation. Non-management fee earning AUM include Invesco PowerShares QQQ, UITs, and product leverage.

38 Passive assets under management by asset class ($ billions) Total Equity Fixed Income Balanced Money Market Alternative December 31, 2016 $144.4 $93.5 $ $9.2 Long-Term Inflows Long-Term Outflows (7.0) (4.8) (0.6) - - (1.6) Long-Term Net flows (0.9) Net flows in non-management fee earning AUM Net flows in Inst. Money Market Funds Market Gains and Losses (0.4) Acquisitions/Dispositions, net Transfer/Reclassifications Foreign Currency Translation March 31, 2017 $154.3 $101.2 $ $8.0 Long-Term Inflows Long-Term Outflows (6.9) (4.7) (0.7) - - (1.5) Long-Term Net flows (1.1) Net flows in non-management fee earning AUM (0.7) (0.5) (0.2) Net flows in Inst. Money Market Funds Market Gains and Losses (0.3) Acquisitions/Dispositions, net Transfer/Reclassifications Foreign Currency Translation June 30, 2017 $156.6 $103.5 $ $ As of December 31, 2017, the company changed the presentation of long-term inflows, outflows, and AUM to exclude Unit Investment Trusts (UITs) and product leverage. All periods have been reclassified to conform to the new presentation. Non-management fee earning AUM include Invesco PowerShares QQQ, UITs, and product leverage.

39 Passive assets under management by channel ($ billions) Total Retail Institutional June 30, 2017 $156.6 $141.5 $15.1 Long-Term Inflows Long-Term Outflows (8.6) (8.6) - Long-Term Net flows Net flows in non-management fee earning AUM 0.9 (1.0) 1.9 Net flows in Inst. Money Market Funds Market Gains and Losses Acquisitions/Dispositions, net Transfer/Reclassifications Foreign Currency Translation September 30, 2017 $190.5 $173.4 $17.1 Long-Term Inflows Long-Term Outflows (15.7) (15.7) - Long-Term Net flows Net flows in non-management fee earning AUM Net flows in Inst. Money Market Funds Market Gains and Losses (0.1) Acquisitions/Dispositions, net Transfer/Reclassifications Foreign Currency Translation December 31, 2017 $199.0 $182.0 $ As of December 31, 2017, the company changed the presentation of long-term inflows, outflows, and AUM to exclude Unit Investment Trusts (UITs) and product leverage. All periods have been reclassified to conform to the new presentation. Non-management fee earning AUM include Invesco PowerShares QQQ, UITs, and product leverage.

40 Passive assets under management by channel ($ billions) Total Retail Institutional December 31, 2016 $144.4 $128.8 $15.6 Long-Term Inflows Long-Term Outflows (7.0) (6.3) (0.7) Long-Term Net flows (0.7) Net flows in non-management fee earning AUM Net flows in Inst. Money Market Funds Market Gains and Losses (0.2) Acquisitions/Dispositions, net Transfer/Reclassifications Foreign Currency Translation March 31, 2017 $154.3 $138.5 $15.8 Long-Term Inflows Long-Term Outflows (6.9) (6.4) (0.5) Long-Term Net flows (0.5) Net flows in non-management fee earning AUM (0.7) (0.7) - Net flows in Inst. Money Market Funds Market Gains and Losses (0.2) Acquisitions/Dispositions, net Transfer/Reclassifications Foreign Currency Translation June 30, 2017 $156.6 $141.5 $ As of December 31, 2017, the company changed the presentation of long-term inflows, outflows, and AUM to exclude Unit Investment Trusts (UITs) and product leverage. All periods have been reclassified to conform to the new presentation. Non-management fee earning AUM include Invesco PowerShares QQQ, UITs, and product leverage.