Impax Asset Management Group plc

Right. Let's go. We're very pleased to welcome everybody to the webinar today from Impacts, and the presenters are going to cover their interim results for the six months to the 31st of March. Just a few points of admin from me first. The presentation is being recorded, so if you do miss anything, you will get a chance to watch it again. We are keen to try and address as many questions that will come in after the presentation, so you will see the Zoom Submit Question button on your screen. Put any questions you have in there, and after the formal presentation, Ian and Karen will try and go through that. And also, the presentation deck that they are talking to is in slightly different form, but is also on the impacts.am website. with quite a lot of other very useful material, so we'd commend that to you. We're delighted to be joined again by CFO Karen Coburn and the CEO and founder, Ian Simp, and I shall now pass over to Ian to start proceedings.

Okay. Hello, everybody. Welcome to the interim results for Impact Asset Management Group, BLC, for the six months to March, 31st of March, 2026. So if you've been to or attended one of these events before, you'll remember the agenda, which is basically an overview, highlights and business update. I think Talon will give the financial update before I round off. There won't be any presentation appendices. So I think just in summary, fair to say that the world of asset management is changing and changing quite rapidly. There is definitely a move to very large firms with a trillion dollars or more under management at one end, but also like a splitting or bifurcation of the market in which boutiques are of increasing interest to the major asset owners of the world if those boutiques bring something that's different, that's specialist and that can offer products and services that are not easy to find elsewhere. And so in that context, Impact finds itself in a very strong position with a medium to long-term outlook because we are really the global leader in this area of what we would call the transition to a more sustainable economy. We do use the word sustainability as a shorthand, but essentially this is the idea that the world is moving inexorably towards the need for more resource efficiency, for less pollution, for smart materials and those factors and similar factors are producing opportunities to make money because frankly they're quite complicated they require detailed understanding of technology change and regulatory change and it's those areas that provide us as a specialist investment group with an opportunity to uncover hidden gems if you like both in equities and in fixed income. In addition what we can do with our client relationships is expand beyond just the pursuit of great risk-adjusted returns and offer them information around where policy is heading, where difficult and complex scientific debates like extreme weather projections are going, and also compare and contrast for them what's going on in different parts of the world in these topics. So this is where, in fact, asset management sits in the global market. asset management universe, which I hope you've now understood already, is a very strong residence or has a very strong residence with where the whole of the asset management sector is going. The additional points on this slide is that we've very deliberately set up our business to be scalable. So we focused on areas of the market that have a very high degree of liquidity. We positioned our products to be able to generate outperformance relative to global benchmarks over the medium to long term in those areas. And we've set up our business model to be scalable, should underpin the delivery of growth over that timeframe. So moving to the period that we're just reporting, clearly as a public issue, company, then we have various obligations to report data and give outlooks. So, of course, there is a bit of a constraint around the rest of this presentation. But essentially just summarizing what our key messages are as set out on this page. We do think that the fundamentals around this transition to a more sustainable economy are strengthening. That's illustrated quite nicely with the concerns around energy security, particularly heightened by the Iran situation, which in May 2026 is a major topic. There's also real interest and concern around where where the patterns are going, the opportunity to cope with new types of threats and business growth in the food sector, water supply, et cetera, et cetera. Very pleased to be able to report that our investment performance has turned a corner. So at the end of April this year, for a calendar year to date perspective, 70% of our asset management had beaten their benchmarks. which is quite significant improvement on what's happened in the last two or three years when frankly the AI dominated revolutions really skewed markets and I'm sure you all appreciate active managers like ourselves have struggled to keep up with those generic benchmarks. Notwithstanding the improved investment performance then the flows in and out of our funds and products have yet to turn positive. This is not unusual in the context of a period in which investment performance is moving from relatively poor compared to generic benchmarks to relatively good or stronger. So we can't yet forecast when the flows are going to turn around, but the lag effect, if you like, is quite common. In that context, we are focusing very much on positioning the business for the recovery. So diversifying and launching new products, building out our client partnerships, working very assiduously on cost reduction and efficiency. And of course, making sure that our clients and everyone else realize that our balance sheet remains very strong and that the largest investor group is actually management owning 18% of the business. On the next slide, Karen's going to take you through the numbers, so I think it's probably a good idea for me to move on from this, but if you want to refer to those later, please do so. Karen will cover them in a bit more detail. Next slide. This is a set of slides that have followed us for a while. You'll have seen before, so we're trying to provide continuity. So the green bar in the middle is the asset center management that we reported at the start of our the natural year, which is the 1st of October 2025. Everything to the right of that green bar to the blue bar is what's happened during the reporting period. And to the left of the green bar is the previous six months. So as you can see from comparing the heights of the bars, yellow, green, and blue, we were able to grow very slightly as to the management in the previous six months, but they've dropped in this six months. Flows on a net basis negative in both areas. both periods and then market movement in the period we're reporting was substantially lower than it was pre-September or October the 1st, 2025. Next slide. A couple of slides coming out, which look quite busy, but essentially the first of those two slides here is listed equities. How's our performance been? The next one's going to be fixed income. So this is the listed equity slide. We're looking at showing you four of our largest or the four largest strategies or funds that we run in listed equities. So water, leaders, specialists, global opportunities. So those are certainly in the case of Three of them are impact jargon, but essentially leaders and specialists are thematic funds, whereas global opportunities is best seen as a core equity fund with a moderate thematic tilt. So each of the pairs of bars, blue and orange, are in the case of blue, the performance in the calendar years to date of our funds or strategies, and in the case of orange, the benchmark. So if you take leaders, for example, in the top right, you can see in the highlighted box, which is calendar year to date, the blue bar is bigger than the orange bar, so we've been outperforming the benchmark, whereas in the previous four years we were underperforming the benchmark. That's the same story for water and specialists. So that's illustrating the point that I was making before, that we've now been able to return to investment outperformance in a significant percentage, 70% of our asset management. By contrast, global opportunities hasn't quite kept up with the benchmark. So that is the one which is behind calendar year to date. Next slide. I feel like I'm a bit of a school teacher, but I hope you'll bear with me as I try to explain these complicated slides. So anyway, this is fixed income and same format. So our four largest fixed income strategies, and it's exactly the same arrangement. But if you look at the red boxes, then you can see the calendar year to date chart. Moderate, but still measurable outperformance compared to benchmarks. And actually, in the previous four years, generally speaking, these strategies have more often than not outperformed their benchmarks, which of course means that the track record from a communication perspective when we talk to prospective investors is stronger. And although these funds under management are still relatively modest, there's quite a powerful storage depth. I'll come back to that in a moment. Next slide. The breakdown of our asset center management and revenue by various criteria are shown here. So on the left, again, blue bar is what we were reporting at the end of March this year compared to the period 12 months earlier. So I think the key points without getting lost in the detail are on the left, active thematic equities which will be that leaders specialist water and a couple of other strategies from two slides ago is still nearly three quarters of sorry two-thirds of the assets in the management and noticeably or notably then systematic equities and fixed income are larger percentages and if you add those two together with private markets I think work where We like to note or draw your attention to the fact that nearly a quarter of the asset and management are outside listed equities. The objective is to grow those. By region in the middle, not much change, but notably we have North America is over a third of our client base and the EMEA region, so outside the UK, as the majority. Revenue by product type. Probably the thing to point to there is the BNP Paribas mutual funds, which are around a quarter of our revenue, and they've been our largest external shareholder, if you like, for nearly 20 years, actually, and remain our, if you like, most important client from a revenue perspective. Next slide. So just focusing in on where we are in May 2026, I think it's just important to look at what's going on in energy markets in the AI revolution or the trends for AI in wider environmental factors. And these new snippets essentially point to what I was saying at the start, which is that energy security and clean energy issues are really very prominent at the moment and prospects for many of the companies in the space have improved quite considerably. Meanwhile, the AI stocks are not dominant in markets in the way that they've been in the last couple of years and that means that areas of the market that are not in the AI space have had an opportunity to bounce back on a relative basis. And then there's plenty of evidence that the risk around extreme weather and other environmental factors is starting to really impact on corporate decisions and investment risk about long-term prospects for earnings in some areas. Next slide. So in that context, we do believe that with our thematic tilt or our investment pieces, that we've got quite a strong position. The chart here on the left shows the breakdown of our leader strategy by subsector. So this is the definition that we've created over 20 years ago. But hopefully you can see from a qualitative perspective that, broadly speaking, these areas are – well, let me start again. So the bar charts show that there's a broad spread of exposure that this strategy offers to energy efficiency, digital infrastructure, resource efficiency, and several other groups or sectors. On the right, you can see the mapping of the energy security and AI infrastructure build out to those subsectors, illustrating that this strategy does have broad exposure to these pretty prominent themes. Next slide. So a couple of slides now just showing how the net flows broke down. Remember the number from the bar chart stack from five or six slides ago. This is the breakdown of how that's changed both by distribution channel. So again, the blue bars are the period that we've just reported on and the orange bars are 12 months previously. So anything to the left of the The line is negative, and fortunately on this chart, we don't have anything to the right of the line, which would be positive. So the outflows basically are where the bars are longest. I think the positive point from this slide is that with BNP Paribas, the outflows have been materially less negative. So not out of the woods yet, but there is a... a set of indicators, which we think that over time will lead to better results from a flows perspective from our wholesale channels, including this one. The next slide is just rounding off the channel breakdown. So the left, the distributors from the rest of the EMEA region on the right, the Asia Pacific region. Next slide. So, and then the next one, please. So our strategy is, really breaks down into six components reading across the top we are looking to organically grow our list of equities offerings and then build scale in both fixed income and private equity and then on the bottom we already have a nicely diversified global distribution network but there's still some work to do to expand and deepen those that will include in the middle on the bottom work with client partnerships and brand differentiation, which, as I was saying right at the start, is a big opportunity as many of our competitors drop away from this area given the relative underperformance of the whole space. And then, of course, we are committed to running an efficient Agile and scalable operating model. So a little bit more color on those six factors over three charts, first of which is this one. So going left in listed equities, then we are further enhancing our investment process, team structure, and launching some new products, including our first ETF product in the United States, which will probably be the first of several. In fixed income, we've now integrated the Sky Harbor and Absalon teams and client groups into a cohesive investment team with a strong connection to our sustainability center, which does provide for quite a differentiated offering for the market where that fixed income sustainability link is not very well provided for by my competitors. And then in private markets, ongoing progress with the commitment and exit of our third and all funds, and then a plan to raise additional capital. Next slide, please. Our client work continues to build, so this idea of a specialist manager in the transition to a more sustainable economy is increasingly differentiated and popular, supported by the work of our sustainability center around thought leadership. We are extending our work to build relationships with major institutional asset owners. We hired a senior executive with a very strong background in that area who joined us in January. And we are working with several new potential partners on co-developing investment solutions. And meanwhile, as I just mentioned, many of the larger branded asset managers are pulling out of the space. because they are unable to justify continuing to market the funds that have got weak historical, let's say, two, three-year track records against generic indices, even though in many cases they've also seen a turnaround in performance. And then the third slide in the series is this one. So our operating model really depends, of course, in part on our talent and with a a brand in this area, we are continuing to find that we're a very attractive target for external talent. We've also got a very high staff retention rate and a very good track record in succession planning, which has been implemented in the context of a number of senior individuals retiring in the last couple of years. And then efficiency and technology. So we have, as we've seen a reduction in the asset management. We've had a couple of rounds of reducing the number of people who work at impacts. So if you can see the footnote, we entered the period at 269 individuals, now from a peak of about 315, and there will be another 30 redundancies, most of which are already announced in the second half of our actual year. So that's underway at the moment. We've made those adjustments with a very explicit focus on not reducing our capabilities or growth potential. And as I said at the start, there is a very strong focus on efficiency and with the adoption of technology, including AI, then we do believe that we can contribute to margin preservation through that initiative as well. I'm now handing over to Karen, I think.

So, Thank you and good afternoon all. So I would like to take you through the financials in some more detail. To start with, sort of saying that for those that are following sort of guidance closely, there's no surprises relative to the recent market up that we've had. But as Ian has articulated, that challenging environment for net flows has continued. And with that backdrop, the results... summarized in revenue headwinds countered by our continued cost discipline, but supported by a strong balance sheet. So just running through the numbers very quickly, underlying operating profit for the first six months of 11.3, corresponding to 7.4. The reduced AUM is the revenue decline to 58 from half one in 25. And with costs continuing to reduce to 47.5 million, which is more than 8 million below where we were this time last year. And that's as our efficiency programs continue to deliver. And as Ian has pointed out, without compromising our capability for growth. And finally, reflecting confidence in our cash position, the board has announced an interim dividend of two pence per share. So unpacking that in a little more detail on the next slide, we'll talk about revenue. So really looking at the group revenue in half one, that would be 8.8 compared to 65.4 in the previous six months. Now, given on page six on the bar chart that Ian had walked across, there was 3.8 million of net outflow, and that has resulted in the largest impact, really, negative impact on that profit or the revenue we have there. The improving performance, that was... have articulated, that's helping uplifting the revenue line by that 2.8, and then it's pegged back just slightly by just some timing on our private equity to come in in the second half. To the right-hand side, you can see the average fee margin, a very key measure for the business, has held up well over a 12-month period, slightly below where we were at half 2, and that was really just because there was some paper Hi, Karen, it's Andy here.