IGM Financial (IGM) Q4 2023 earnings summary

Executive summary

• Q4 reported net earnings were $419.6MM, or $1.76/share; adjusted net earnings were $198.9MM, or $0.84/share. FY reported net earnings were $1,148.9MM, or $4.82/share; adjusted net earnings were $820.7MM, or $3.44/share.

• AUM & A excluding strategic investments reached $240.2B, up 7.1% YoY; including strategic investments, AUM & A was $389.4B, up 35.1%.

• IG Wealth and Mackenzie reported net outflows of $2.0B for FY23 and $1.2B in Q4, amid industry dynamics.

Financial highlights

• Q4 adjusted net earnings available to common shareholders were $198.9MM vs. $224.7MM YoY; adjusted diluted EPS was $0.84 vs. $0.94.

• FY adjusted net earnings available to common shareholders were $820.7MM vs. $867.2MM; adjusted diluted EPS was $3.44 vs. $3.63.

• Q4 adjusted EBIT was $290.1MM vs. $313.6MM YoY; adjusted EBIT margin was 1.21% of average AUM & A.

• Q4 adjusted EPS included a $9MM pre-tax negative fair-value adjustment in mortgage banking operations as interest rates declined.

Outlook and guidance

• FY24 consolidated expense growth guidance is 3.5% plus 0.5% for IG Wealth expense realignment; the realignment shifts compensation categories and is not net new spend.

• FY24 priorities include growing segmented advice and market share through Wealth Management technology, and expanding Mackenzie distribution through investment excellence and product innovation.

• Management expects higher future income to offset negative fair-value adjustments when economic hedges do not qualify for hedge accounting under IFRS.