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AGF Management Limited Reports Fourth Quarter and Fiscal Year 2018 Financial Results

January 23, 2019 • Quarterly Reports/Dividends
  • Diluted EPS from continuing operations of $0.19 for the quarter, improved to $0.92 for fiscal 2018
  • Mutual fund net sales increased to $136.0 million for fiscal 2018
  • Total assets under management increased to $37.7 billion

AGF Management Limited (AGF or the Company) (TSX: AGF.B) today announced financial results for the fourth quarter and fiscal year ended November 30, 2018.

Total assets under management (AUM) increased 1.1% to $37.7 billion compared to the same period in 2017.

Mutual fund net sales for the year ended November 30, 2018, were $136.0 million, an improvement from net redemptions of $405.0 million for the year ended November 30, 2017, reflecting the Company’s continued focus on its clients. Included in net sales are $194.0 million and $28.0 million in net sales from institutional clients invested in its mutual funds for fiscal 2018 and 2017, respectively.

"In a year that will be remembered for market volatility, political uncertainty and ongoing regulatory debate, we continued to execute against our strategic plan and experienced organic growth across all business lines,” said Kevin McCreadie, Chief Executive Officer and Chief Investment Officer, AGF. “This success can be attributed to the work we have done to purposefully diversify our business and investment management capabilities, positioning us well to deliver against the evolving needs of our clients.”

Key Business Highlights:

  • In September 2018, Blake Goldring announced his decision to transition to the role of Executive Chairman for the firm, and together with the Board, to name Kevin McCreadie as the new Chief Executive Officer in conjunction with his Chief Investment Officer role for AGF. Additionally, Judy Goldring was named to President and Chief Administration Officer. These changes were effective December 1, 2018.
  • AGF achieved net sales of $478.0 million in the Institutional channel for fiscal 2018.
  • AGF launched AGFiQ Enhanced Core Global Multi-Sector Bond ETF (QGB) during the fourth quarter. This is in addition to the launch of AGFiQ Enhanced Global ESG Factors ETF (QEF) and AGFiQ Enhanced Global Infrastructure ETF (QIF) launched earlier in the year to bring the Canadian exchange-listed ETF lineup to 10.
  • AGF expanded its preferred pricing offering, allowing eligible investors to automatically benefit from the lowest fee option.
  • Achieved final resolution of AGF’s transfer pricing case and recognized a $24.1 million tax provision release related to the relief of penalties.
  • Repurchased 996,400 Class B Non-Voting shares under the Company’s normal course issuer bid during the year for a total cash consideration of $6.0 million.
  • AGF’s “Invested in Discipline” campaign was recognized with a Canadian Marketing Association (CMA) Award in the Business Impact category.
  • AGF announced that the Company will be moving its Toronto headquarters to CIBC SQUARE by 2022.
  • On January 11, 2019, AGF committed an additional $75.0 million to a closed-end fund, managed by InstarAGF Asset Management Inc., that invests in North American, middle-market infrastructure.

Income for the three months and year ended November 30, 2018 was $108.5 million and $450.2 million, compared to $120.9 million and $455.5 million for the three months and year ended November 30, 2017. EBITDA was $28.7 million and $106.5 million for the three months and year ended November 30, 2018, compared to $33.1 million and $116.4 million for the same period in 2017. Adjusting for one-time items, EBITDA was $27.2 million and $110.2 million, compared to $23.1 million and $106.4 million for the same period in 2017.

Selling, general and administration expenses (SG&A) for the year ended November 30, 2018 were $213.3 million compared to $211.0 million in 2017. Adjusting for $5.2 million in one-time items recorded in 2018, SG&A was $208.1 million, a decrease of 1.4% from prior year. In 2019, AGF targets further savings of approximately 4%.

“We have invested in improving our internal systems and processes to prepare for changes in market dynamics and customer preferences,” said Adrian Basaraba, Chief Financial Officer, AGF. “As a result of these investments we have been able to reduce our expense base while investing in new capabilities and avenues for growth.”

Diluted earnings per share (EPS) from continuing operations for the three months and year ended November 30, 2018 was $0.19 and $0.92, compared to $0.21 and $0.64 for the comparative period. Adjusting for one-time items, diluted EPS for the three months and year ended November 30, 2018 was $0.17 and $0.64, compared to $0.11 and $0.53 for the same period in 2017.

For the three months ended November 30, 2018, AGF declared an eight cent per share dividend on Class A Voting common shares and Class B Non-Voting shares, which was paid on January 16, 2019 to shareholders on record as at January 8, 2019.


(from continuing operations) Three months ended Years ended
(in millions of Canadian dollars, except per share data) November 30, 2018 August 31, 2018 November 30, 2017 November 30, 2018 November 30, 2017
Income 108.5 116.5 120.9 450.2 455.5
Net Income attributable to equity owners of the Company 14.7 20.7 17.3 73.9 52.1
EBITDA 1 28.7 32.2 33.1 106.5 116.4
Adjusted EBITDA 1 27.2 32.2 23.1 110.2 106.4
Diluted earnings per share attributable to equity owners of the Company 0.19 0.26 0.21 0.92 0.64
Adjusted diluted earnings per share attributable to equity owners of the Company 1 0.17 0.20 0.11 0.64 0.53
Free Cash Flow 1 16.1 12.8 21.6 41.4 58.7
Dividends per share 0.08 0.08 0.08 0.32 0.32
Long-term debt 188.6 168.7 138.6 188.6 138.6

(end of period) Three months ended Years ended
(in millions of Canadian dollars) November 30, 2018 August 31, 2018 November 30, 2017 November 30, 2018 November 30, 2017
Mutual fund assets under management (AUM) 2
(including retail pooled funds)
18,713 19,401 19,111 18,713 19,111
Institutional, sub-advisory and ETF accounts AUM 12,475 12,694 11,782 12,475 11,782
Private client AUM 5,513 5,714 5,517 5,513 5,517
Alternative asset management platform AUM 3 1,011 1,009 902 1,011 902
Total AUM, including alternative asset management platform 37,712 38,818 37,312 37,712 37,312
Net mutual fund redemptions 2 111 (9) (139) 136 (405)
Average daily mutual fund AUM 2 18,382 18,788 18,220 18,643 18,228

1EBITDA (earnings before interest, taxes, depreciation and amortization), adjusted EBITDA, adjusted diluted earnings per share and Free Cash Flow are not standardized measures prescribed by IFRS. The Company utilizes non-IFRS measures to assess our overall performance and facilitate a comparison of quarterly and full-year results from period to period. They allow us to assess our investment management business without the impact of non-operational items. These non-IFRS measures may not be comparable with similar measures presented by other companies. These non-IFRS measures and reconciliations to IFRS, where necessary, are included in the Management’s Discussion and Analysis available at www.agf.com
2 Mutual fund AUM includes retail AUM and institutional client AUM invested in customized series offered within mutual funds.
3 Represents fee-earning committed and/or invested capital from AGF and external investors held through joint ventures. AGF’s portion of this commitment is $150.0 million, of which $115.1 million has been funded as at November 30, 2018, which includes $10.1 million return of capital related to the monetization of its seed assets.

Conference Call

AGF will host a conference call to review its earnings results today at 11 a.m. ET.

The live audio webcast with supporting materials will be available in the Investor Relations section of AGF’s website at www.agf.com or at  https://edge.media-server.com/m6/p/f4i8y58h. Alternatively, the call can be accessed toll-free in North America by dialing 1 (800) 708-4539 (Passcode #: 48038792).

A complete archive of this discussion along with supporting materials will be available at the same webcast address within 24 hours of the end of the conference call.

About AGF Management Limited

Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.

AGF has investment operations and client servicing teams on the ground in North America, Europe and Asia. With nearly $36 billion in total assets under management, AGF serves more than one million investors. AGF trades on the Toronto Stock Exchange under the symbol AGF.B.

AGF Management Limited shareholders, analysts and media, please contact:

Adrian Basaraba
Senior Vice-President and Chief Financial Officer
416-865-4203, InvestorRelations@agf.com

Caution Regarding Forward-Looking Statements

This press release includes forward-looking statements about the Company, including its 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,’ ‘estimates,’ ‘anticipates,’ ‘intends,’ ‘plans,’ ‘believes’ or negative versions thereof and similar expressions, or future or conditional verbs such as ‘may,’ ‘will,’ ‘should,’ ‘would’ and ‘could.’ In addition, any statement that may be made concerning future financial performance (including income, revenues, earnings or growth rates), ongoing business strategies or prospects, fund performance, and possible future action on our part, is also a forward-looking statement. Forward-looking statements are based on certain 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 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, client-driven asset allocation decisions, pipeline, 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 general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, taxation, changes in government regulations, unexpected judicial or regulatory proceedings, technological changes, cybersecurity, catastrophic events, and our ability to complete strategic transactions and integrate acquisitions, and attract and retain key personnel. We caution that the foregoing list is not exhaustive. The reader is cautioned to consider these and other factors carefully and not place undue reliance on forward-looking statements. Other than 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 the ‘Risk Factors and Management of Risk’ section of the 2018 Annual MD&A.

MEDIA

Media Contact

Amanda Marchment
Director, Corporate Communications
Phone: 416-865-4160
Email: amanda.marchment@agf.com

Karrie Van Belle
SVP, Head of Marketing and Communications
Phone: 416-865-4320

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