IGM Financial Inc.

Thank you for standing by. This is the conference operator. Welcome to the IGM Financial second quarter 2023 analyst call and webcast. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star, then zero. I would now like to turn the conference over to Kyle Margins, Treasurer and Head of Investor Relations. Please go ahead.

Thank you, Cherie, and good morning, and thank you everyone for joining our call this morning. Joining me on the call today, we have James O'Sullivan, President and CEO of iGEM Financial. Damon Murchison, President and CEO of IG Wealth Management. Luke Gould, President and CEO of McKenzie Investments. And Keith Potter, Executive Vice President and CFO of IGEM Financial. Before we get started, I would like to draw your attention to our cautions concerning four liquid statements on slide three of the presentation. Slides four and five summarize non-FRS financial measures and other financial measures used in our material. And on slide six, we provide a list of our documents that are available on our website related to iGEM Financial's second quarter results. I'll now turn it over to James.

Good. Well, thank you, Kyle, and good morning, everyone. I'll start on slide eight and cover some of the highlights for the second quarter. Adjusted EPS of 86 cents. Another strong result, I think, in the current environment. Reported EPS of 58 cents. That includes a restructuring charge we took during the quarter, as well as two adjustments related to Great West Lifeco's adoption of IFRS 17. Our operating company's AUM&A stood at $261 billion at the end of June, and our reported net outflows were $821 million during the quarter. While not included in this calculation, we do think it is important to note the strong growth in our other businesses. For example, Northleaf had $700 million of new commitments during the quarter. And China AMC generated investment fund net sales of approximately $14 billion in Canadian dollar terms. That's $14 billion in Canadian dollar terms. I think these are very important examples of the growth that exists outside of our consolidated financial statements. In this presentation, along with our MD&A, we are now highlighting IGM's consolidated AUM&A, including our proportionate share of our strategic investments, which at the end of the second quarter stood at $403 billion. Each of these companies' primary business is in wealth management and asset management. This includes Rockefeller Capital Management and Wealthsimple, two businesses focused on wealth management, as well as asset managers China AMC and Northleaf Capital Markets. Along with IG Wealth and McKinsey Investments, each of these businesses are leaders in their respective markets with compelling strategies to drive long-term profitable growth and value for IGM Financial. At the investor day in December, we will share more about the opportunities ahead for each of these businesses. Turning to slide nine, financial markets during the second quarter were mixed, with most equity markets posting positive returns, while the Canadian fixed income market was relatively flat. The Chinese equity markets had a soft Q2, erasing gains realized in the first quarter, and the Chinese currency depreciated approximately 7% relative to the Canadian dollar. During July, equity markets were positive across major markets, a strong start, I think, to the third quarter. Turning to slide 10, the industry operating environment remained soft during the second quarter, as the combined effects of recent market volatility, the impact of higher interest rates and high inflation continued to weigh on investor sentiment and savings levels. Canadians are reviewing their financial picture in light of elevated interest rates. Paying down floating rate and other high-cost debt is being prioritized by many Canadians across wealth segments. Savings are also being consumed to support consumption during this period of high inflation. We expect these factors to continue as headwinds for the overall industry net sales during the second half of the year. However, our businesses will continue to compete well and will be positioned very well when sentiment improves and industry net sales accelerate. Slide 11 presents IGM's consolidated average AUM&A and earnings results. Q2 2023 adjusted EPS of 86 cents was down one cent relative to the same quarter last year. As I mentioned, reported EPS of 58 cents includes a restructuring charge and two adjustments relating to our investment in Great West Life Co. Slide 12 highlights earnings across our core operating companies and strategic investments. I'd remind that our earnings pickup from China AMC and LIFCO include the impact of the transactions that closed earlier this year, increasing our ownership position in China AMC to 27.8% and decreasing our stake in LIFCO to 2.4%. Turning to slide 13, while Q2 average AUM&A at our core operating companies was relatively unchanged from last year, ending AUM&A is up 8% over the past 12 months. The growth in our proportionate share of our strategic investments AUM&A includes both the investments we've made in recent quarters as well as strong underlying asset growth at each of these companies. I'd note that China AMC's AUM grew by approximately 4% over the past year in local currency. However, this increase was offset by the depreciation of the currency relative to the Canadian dollar over the same time period. Slide 14 breaks down IGM's net flows by company, along with Northleaf's fundraising activity during the second quarter. Before turning the call over, I'm going to end my remarks by touching on the June 29th announcement where we shared via press release the high-level details of an important exercise that our management team has been very focused on over the past 12 months. First, I'd remind that IGM Financial has been on a journey since 2017 when our digital transformation was launched and we committed to thoughtfully manage expense growth while positioning our businesses for long-term success. I believe we have delivered on these promises and then some. In addition to successfully executing on an ambitious digital transformation that elevated our employee, advisor, and client experiences, we have tactically managed expenses year after year. This initiative is different. We conducted a comprehensive strategic review of our businesses and carefully considered how we were matching our efforts against business priorities. This strategic exercise uncovered meaningful opportunities to stop doing some things, change how we were doing some other things, and start doing some things that we had not done previously. Roughly half of the savings from this exercise will result in a structural reduction to our cost base over the next two years. This is important as it reflects our commitment to grow earnings. The other half of the cost savings will be reinvested in IG Wealth and McKenzie to drive revenue growth. As a result of this work, our businesses are better positioned for the future. Finally, We have been active allocating capital in recent quarters, including reinventing our mortgage business in partnership with Nesto, closing the additional stake in China AMC, the second largest fund company in China, purchasing a strategic stake in Rockefeller Capital Management, the leading independent wealth management firm of choice for advisors in the United States, and selling IPC to Canada Life. In short, we believe we have positioned IGM for growth. Growth through incremental investment and growth through intelligent capital allocation. And we look forward to sharing all of this in detail with you at our Investor Day on December 5th. I'll turn it over to Damon.