MARCH 2013 AGF MANAGEMENT LIMITED AGF MANAGEMENT LIMITED EARNINGS CONFERENCE CALL EARNINGS CONFERENCE CALL FIRST QUARTER – 2013 MARCH 27, 2013
CAUTION REGARDING FORWARD-LOOKING STATEMENTS The forward looking information is provided as of March 27, 2013. Certain information presented in these remarks and in this presentation that is not historical factual information may constitute forward-looking information within the meaning of securities laws Actual results could differ materially from a conclusion forecast or projection contained in such of securities laws. Actual results could differ materially from a conclusion, forecast or projection contained in such forward-looking information. Forward-looking information may relate to our future outlook and anticipated events or results and may include statements about AGF Management Limited ("AGF") or the investment funds it manages (the "Funds"), including business operations, strategy and expected financial performance and condition. 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,’ ‘intends,’ ‘plans,’ ‘believes,’ or negative versions thereof and similar expressions or future or conditional verbs such as ‘may,’ ‘will,’ ‘should,’ ‘would,’ or ‘could.’ In addition, any statement that may be made concerning future financial performance (including revenues, earnings or growth rates), ongoing business y g p ( g g g ) g g strategies or prospects, and possible future action on our part, is also a forward-looking statement. t t i t d ibl f t ti t i l f d l ki t t t Forward-looking statements are based on certain material factors and assumptions, including expected growth, results of operations, business prospects, business performance and opportunities. While we consider these factors and assumptions to be reasonable based on information currently available, they may prove to be incorrect. Forward- looking statements are based on current expectations and projections about future events and are inherently subject to, among other things, risks, uncertainties and assumptions about our operations, economic factors and the financial services industry generally. They are not guarantees of future performance, and actual events and results could differ services industry generally They are not guarantees of future performance and actual events and results could differ materially from those expressed or implied by forward-looking statements made by us due to, but not limited to, important risk factors such as level of assets under our management, volume of sales and redemptions of our investment products, performance of our investment funds and of our investment managers and advisors, competitive fee levels for investment management products and administration, and competitive dealer compensation levels and cost efficiency in our investment management operations, as well as interest and foreign exchange rates, taxation, changes in government regulations, unexpected judicial or regulatory proceedings, and our ability to complete strategic transactions and integrate acquisitions. We caution that the foregoing list is not exhaustive. The reader is cautioned to g q g g consider these and other factors carefully and not place undue reliance on forward-looking statements. Other than id th d th f t f ll d t l d li f d l ki t t t Oth th specifically required by applicable laws, we are under no obligation (and expressly disclaim any such obligation) to update or alter the forward-looking statements, whether as a result of new information, future events or otherwise. For a more complete discussion of the risk factors that may impact actual results, please refer to AGF’s most recent financial statements and MD&A and, for the Funds, to each Fund’s most recent prospectus and MRFP, as applicable, all available on www.sedar.com. 2 2
CONFERENCE CALL PARTICIPANTS CONFERENCE CALL PARTICIPANTS • Blake C. Goldring , M.S.M., CFA, Chairman Blake C. Goldring , M.S.M., CFA, Chairman & Chief Executive Officer • Robert J. Bogart , Executive Vice-President & Chief Financial Officer 3
TODAY’S DISCUSSION Highlights of the 1 st Quarter • • Highlights of the 1 Quarter • Business Updates – Investment Management Investment Management – Retail Business – Institutional Business • Financial Results • Capital & Liquidity • Priorities Exiting Q1 2013 4
Q1 2013 HIGHLIGHTS Q1-2013 HIGHLIGHTS Ind str gross flo s Industry gross flows were strong and reflected increased activity in equities ere strong and reflected increased acti it in eq ities • AUM was flat over the quarter at $39B • Gross flows of $1.3B in Q1-13 as compared to $1.4B a year ago • Investment performance weakened slightly over the quarter • Fi Fixed Income category continues to lead in net sales d I t ti t l d i t l • Institutional business experienced outflows • EPS of $0.17; Free cash flow remains strong $ ; g • Board confirmed $0.27 dividend • CRA proposed assessment notice 5
INVESTMENT PERFORMANCE INVESTMENT PERFORMANCE AGF funds gave back some performance in Q1-13 – overall trend is moving in the right direction as this remains our #1 priority 1-yr Performance (% of Funds Above Median) • Year-over-year trajectory on a Y t j t 3 3-yr Performance (% of Funds Above Median) P f (% f F d Ab M di ) 60% 1- and 3-year basis are positive – performance fell off slightly in 50% Q1-13. 39% 40% 40% 38% • Goal: 50% AUM in top two 30% quartiles by end of 2013 for 23% 1-year performance. 20% 17% 10% • Key categories and flagship funds continue to perform. 0% y 12 h 12 il 12 y 12 e 12 y 12 t 12 r 12 r 12 r 12 r 12 y 13 y 13 February March May June July January February Apri Augus Septembe Octobe Novembe December 6
RETAIL BUSINESS REVIEW RETAIL BUSINESS REVIEW We expect the gap between gross sales and redemptions to lessen throughout 2013 We expect the gap between gross sales and redemptions to lessen throughout 2013 – performance of funds will be a critical component Gross Sales • Gross sales - 2.6% of AUM in 2013 vs 2.4% in 2012 • New product offerings are showing strength • Stronger sales push into IIROC and bank channels g • Marketing and brand awareness campaign launched Redemptions Redemptions • Redemptions still remain high – need to close the gap • Emerging Market redemptions in-line with industry and more stable relative to 2012 7
INSTITUTIONAL BUSINESS REVIEW & PIPELINE INSTITUTIONAL BUSINESS REVIEW & PIPELINE Three large redemptions in February offset improving gross flows; we expect f further additional outflows in Q2 – however, we expect to be more “business as h ddi i l fl i Q2 h b “b i usual” as we exit Q2 2013 • $470 million of gross flows in Q1 • Funnel opportunities are robust – RFP activity is up significantly – Consultants are beginning to place EM in active searches Consultants are beginning to place EM in active searches • Global Core and Global Dividend are in demand • Q1 2013 net redemptions of $848 million • Committed institutional pipeline currently negative at $231 million 8
FINANCIAL RESULTS FINANCIAL RESULTS LTM Trending Results Quarter vs Quarter ($ millions, except per share amounts ) Q2’12 Q3’12 Q4’12 Q1’13 Q1’13 Q1’12 Change Revenue Revenue 133 5 133.5 119.8 119 8 125 0 125.0 122 5 122.5 122 5 122.5 132 0 132.0 (7 2%) (7.2%) SG&A 47.0 49.8 41.3 44.1 44.1 43.2 2.1% ing Operations EBITDA 50.3 36.3 50.0 45.3 45.3 52.5 (13.7%) EBITDA Margin 37.7% 30.3% 40.0% 37.0% ons 37.0% 39.8% (7.1%) Continuing Operatio Continu EBITDA (adjusted) 50.3 42.2 49.2 45.3 45.3 52.5 (13.7%) EBITDA Margin (adjusted) 37.7% 35.2% 39.4% 37.0% 37.0% 39.8% (7.1%) Free Cash Flow 33.2 17.6 22.2 28.2 28.2 31.3 (10.2%) C Consolidated Net Income 23.8 (13.3) 15.7 15.6 15.6 17.3 (9.8%) Operations EPS Diluted 0.25 (0.14) 0.17 0.17 0.17 0.18 (5.6%) EPS Diluted (adjusted) 0.25 0.17 0.20 0.17 0.17 0.18 (5.6%) 9
REVENUE & EBITDA 150 150 80.0 80 0 Revenue EBITDA EBITDA (Adjusted) 145 75.0 140 70.0 133.5 133 5 135 135 65 0 65.0 132.0 132 0 venue $ millions) TDA $ millions) 130 60.0 125.0 52.5 125 55.0 122.5 50.3 119.8 50.0 120 120 50 0 50.0 (Rev (EBIT 45.3 49.2 42.2 115 45.0 110 40.0 105 35.0 36 3 36.3 (1) 100 30.0 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 EBITDA Margin 39.8% 37.7% 30.3% 40.0% EBITDA Margin 39 8% 37 7% 30 3% 40 0% 37 0% 37.0% Adj. EBITDA - - 35.2% 39.4% - (1) Q3-12 EBITDA adjusted for $5.9m of one-time items related to restructuring 10 10 (2) Q4-12 EBITDA adjusted for reversal of $0.8m of restructuring cost accrual
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