Mr. James O'Sullivan reports

IGM FINANCIAL REPORTS SECOND QUARTER EARNINGS

IGM Financial Inc. has released its earnings results for the second quarter of 2023.

IGM highlights:

• Net earnings of $138.2-million or 58 cents per share compared with $207.1-million or 87 cents per share in 2022. Adjusted net earnings, excluding other items (1), were $205.5-million or 86 cents per share for the second quarter of 2023, compared with $207.1-million or 87 cents per share in 2022;
• Assets under management and advisement of $261.1-billion, up slightly from the prior quarter and up 7.9 per cent from the second quarter of 2022;
• IGM Financial's assets under management and advisement, including strategic investments, were $402.8-billion as at June 30, 2023, compared with $376.5-billion at March 31, 2023, and $305.0-billion at June 30, 2022. This is a new measure and reflects the importance of these high-growth investments and their contribution to IGM's value;
• Net outflows were $821-million, compared with net outflows of $527-million in 2022.

"We are pleased with the strong earnings contributions from IG Wealth and Mackenzie this quarter. We implemented actions in the quarter, enabling us to invest in our businesses while sustainably reducing expenses resulting in an after-tax restructuring charge of $76.2-million," said James O'Sullivan, president and chief executive officer of IGM Financial. "With the closing of the Rockefeller Capital Management and China Asset Management Co. Ltd. transactions, we are introducing a new measure of our assets under management and advisement that includes our proportionate share of our investments in China Asset Management Co. Ltd., Rockefeller Capital Management, Northleaf Capital Group Ltd. and Wealthsimple Financial Corp. Assets under management and advisement, including strategic investments, were $402.8-billion at June 30, 2023."

IGM Financial is also announcing it is holding an investor day on Dec. 5, 2023, in Toronto. Further details will be announced in the fall.

Net earnings available to common shareholders for the second quarter of 2023 were $138.2-million or 58 cents per share, compared with $207.1-million or 87 cents per share in 2022. Adjusted net earnings available to common shareholders, excluding other items (1), for the second quarter of 2023 were $205.5-million or 86 cents per share, compared with $207.1-million or 87 cents per share in 2022.

Net earnings available to common shareholders for the six months ended June 30, 2023, were $519.5-million or $2.18 per share, compared with $426.4-million or $1.78 per share in 2022. Adjusted net earnings available to common shareholders, excluding other items (1), for the six-month period of 2023 were $412.0-million or $1.73 per share, compared with $426.4-million or $1.78 per share in 2022.

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 (IPC), which have been reclassified as discontinued operations.

Net earnings in the second quarter of 2023 were $116.8-million and represented 56.8 per cent of IGM's adjusted net earnings available to common shareholders. This was an increase of 7.4 per cent compared with the second quarter of 2022.

Assets under advisement at June 30, 2023, were $147.8-billion, an increase of 0.7 per cent from $146.8-billion at March 31, 2023, and an increase of 10.2 per cent from $134.2-billion at June 30, 2022.

IG Wealth Management

Assets under advisement at June 30, 2023, were $116.8-billion, an increase of 0.8 per cent from $115.9-billion at March 31, 2023, and an increase of 10.8 per cent from $105.5-billion at June 30, 2022.

Quarterly net client outflows were $424-million, compared with net client inflows of $389-million in the second quarter of 2022.

Quarterly gross client inflows were $2.8-billion, down 8.9 per cent from gross client inflows of $3.1-billion in 2022.

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 2023 were $50.1-million and represented 24.4 per cent of IGM's adjusted net earnings available to common shareholders. This was a decrease of 2.3 per cent compared with the second quarter of 2022.

Total assets under management were $193.3-billion, a decrease of 0.2 per cent from $193.8-billion at March 31, 2023, and an increase of 4.7 per cent from $184.7-billion at June 30, 2022. Third party assets under management were $116.6-billion at June 30, 2023, a decrease of 0.3 per cent from March 31, 2023, and an increase of 4.2 per cent from June 30, 2022.

Investment fund net redemptions were $616-million, compared with net redemptions of $819-million in the second quarter of 2022.

Mutual fund gross sales of $1.7-billion were comparable with the second quarter of 2022.

ETF (exchange-traded fund) business

ETF assets under management totalled $12.9-billion at June 30, 2023, up slightly from March 31, 2023, and up from $11.6-billion at June 30, 2022. Excluding investment in ETFs by IGM's managed products, ETF assets under management were $5.2-billion at June 30, 2023, compared with $5.1-billion at March 31, 2023, and $5.4-billion at June 30, 2022.

Strategic investments and other represent the key strategic investments made by the company, including China Asset Management Co. Ltd. (ChinaAMC), Great-West Lifeco Inc. (Lifeco), Rockefeller Capital Management, Northleaf Capital Group Ltd., Wealthsimple Financial Corp. and Portage Ventures LPs, as well as unallocated capital.

On Jan. 12, 2023, the company closed the previously announced transaction to acquire Power Corp. of Canada's 13.9-per-cent interest in ChinaAMC, increasing the company's overall investment in ChinaAMC to 27.8 per cent, and to sell a portion of the company's investment in Lifeco, reducing it from 4.0 per cent to 2.4 per cent.

Great-West Lifeco

The company's proportionate share of Lifeco's second quarter estimated earnings was $14.5-million (2), compared with $29.0-million in the second quarter of 2022. This included a reduction of $5.7-million to adjust first quarter earnings to the actual earnings disclosed by Lifeco.

China Asset Management

The company's proportionate share of ChinaAMC's second quarter earnings was $27.7-million, compared with $14.8-million in the second quarter of 2022.

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 Oct. 31, 2023, to shareholders of record on Sept. 29, 2023.

(1) Other items in 2023 consisted of:

• Restructuring and other charges of $76.2-million after tax ($103.3-million pretax) recorded in the second quarter, resulting from streamlining and simplifying the business to more effectively align with business priorities. The charge includes the company's changes to the organizational structure to advance the growing needs of the business, digital transformation by retiring duplicate systems and modernizing information technology, and an effort to consolidate its real estate footprint to better reflect client and adviser needs;
• A gain on the sale of a portion of the company's investment in Lifeco of $168.6-million after tax ($172.9-million pretax) 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 (international financial reporting standards) adjustment of $15.1-million, recorded in the second quarter, representing a change of estimate which has been recorded on a prospective basis.

(2) The company recorded its proportionate share of second quarter Lifeco earnings using consensus analysts' earnings estimates as Lifeco is now reporting quarterly earnings after the company.

Second quarter webcast and conference call

IGM Financial's second quarter 2023 results conference call and webcast will be held on Thursday, Aug. 3, 2023, at 8 a.m. ET. The webcast and conference call can be accessed respectively through the company's website 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's website.

About IGM Financial Inc.

IGM Financial is one of Canada's leading diversified wealth and asset management companies with approximately $261-billion in total assets under management and advisement at June 30, 2023. 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 Corp. group of companies.

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