Great-west Lifeco Inc. · TSX:GWO
Great-west Lifeco — Investor Presentation (September 2019)
26 slides from Great-west Lifeco's investor presentation, September 2019
Slide 1: Investor Presentation Q2 2019
Investor Presentation Q2 2019
Slide 2: Cautionary notes
Cautionary notes CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION This document may contain forward-looking information. Forward-looking information includes statements that are predictive in nature, depend upon or refer to future events or conditions, or include words such as "expects", "antic
Slide 3: Company highlights
Company highlights Highly diversified business with leadership positions in key markets Proven ability to generate strong and stable long-term earnings Strong balance sheet, capital and liquidity, and strong credit ratings 3
Slide 4: Key messages
Key messages ❖ Highly diversified business delivering consistent long-term earnings growth ❖ Leadership positions in key markets supported by strong franchises and brands ❖ Strategies to drive growth through innovation and disciplined capital deployment ❖ Strong risk management culture and operation
Slide 5: Company snapshot
Company snapshot Global financial services holding company with interests in life insurance, health insurance, retirement and investment services, asset management and reinsurance • Operations in Canada, Europe and • Financial strength ratings of AA by the United States S&P and Aa3 by Moody’s2 • Ass
Slide 6: Diversified business model
Diversified business model As a percentage of 2018 net earnings of $3.0B 100% Reinsurance Reinsurance Reinsurance 12% 12% 12% US Health Benefits 80% 13% 11% Group / Wholesale Wealth & Asset 36% Mgmt Europe 22% 60% 32% Annuities 17% 40% Individual / Retail Canada 52% Protection 20% 43% 38% 0% 1 2017
Slide 7: Significant benefits from corporate structure
Significant benefits from corporate structure 66.8%1 Power Financial Corporation relationship facilitates: • Fintech collaboration via Portage3 • Distribution access to IGM platforms Board composition delivers strong 62.1% governance and oversight Note: As of June 30, 2019 1. IGM also owns 4% of Gre
Slide 8: Key company metrics
Key company metrics Net Earnings* $3.0 Holding Company Cash $0.3 ROE 12.0% Financial Leverage 28.9% 2 Sales1* $144 Financial Strength Ratings S&P AA Assets Under Management1 $747 Moody’s Aa3 Assets Under Administration1 $1,568 Regulatory Capital Ratios Book Value per Share $20.84 LICAT2 136% Market
Slide 9: Canada
Canada Protect and extend leaderships 9 positions through organic growth Segment Overview Earnings 1 (In C$ Millions) ❖ Individual Customer and Group Customer 1,275 1,275 1,228 1,228 businesses 1,218 1,218 1,219 1,195 1,195 ❖ Diverse mix of insurance and wealth management Adjusted Net products and s
Slide 10: Canada
Canada Protect and extend leaderships positions through organic growth Group Customer Individual Customer “Deliver for advisors to help “Win the workplace” Canadians” Earn the trust of groups of all sizes and Strategy Be the institution that productive be the plan member’s go-to-place for financial
Slide 11: Europe & Reinsurance
Europe & Reinsurance Targeted growth through acquisition and product expansion Segment Overview Earnings 1 (In C$ Millions) ❖ Operations in the U.K. / Isle of Man, Ireland and 1,367 1,311 Germany as well as a Reinsurance business 1,174 1,174 1,200 1,200 1,152 1,121 1,038 1,038 ❖ Market leader in gro
Slide 12: Europe & Reinsurance
Europe & Reinsurance Targeted growth through acquisition and product expansion UK Ireland Germany Reinsurance ❖ Material player in ❖ #1 in Retail and ❖ Personal and ❖ Traditional and Annuities; leading in Corporate across occupational pensions Structured Life, Payout Individual and pension, investme
Slide 13: U.S.
U.S. Invest for significant organic growth and consolidation opportunities Segment Overview Earnings 1 (In C$ Millions) ❖ Two primary businesses: Empower Retirement and 409 409 388 388 Putnam Investments 334 306 306 269 ❖ Empower Retirement: second-largest retirement plan 249 Adjusted Net record kee
Slide 14: U.S. Invest for significant organic growth and consolidation opportunities
U.S. Invest for significant organic growth and consolidation opportunities Great-West Financial1 Putnam Investments Empower Retirement ❖ Retail mutual funds and institutional asset management; AUM of US$175B ❖ Competes in the U.S. retirement market focused on defined contribution (DC) plans ❖ Offers
Slide 15: Diverse asset management platforms $747B AUM
Diverse asset management platforms $747B AUM Retail Customers Institutional Note: In C$, at June 30, 2019 15
Slide 16: History of value creation through M&A
History of value creation through M&A 1997 2003 2007 2013 2014 2016 2017 2018 JP Morgan RPS Strategic acquisition New products / services New customer segments New distribution channels Synergy target NA NA achieved Integration EPS accretive X NA ongoing NA ROE target achieved X NA NA 16
Slide 17: Company highlights
Company highlights Highly diversified business with leadership positions in key markets Proven ability to generate strong and stable long-term earnings Strong balance sheet, capital and liquidity, and strong credit ratings 17
Slide 18: Adjusted Net Earnings (C$M) and Adjusted ROE
Adjusted Net Earnings1 (C$M) $3,500 30% Empower launch $3,000 Putnam 25% $2,500 Irish Life 20% $2,000 Canada Life 15% $1,500 10% $1,000 London Life $500 5% $- 0% Adjusted Net Earnings Adjusted ROE 1. Adjusted net earnings and adjusted ROE are non-IFRS measures. Please refer to the Company’s Annual R
Slide 19: Stable earnings and dividend growth
Stable earnings and dividend growth Dividends per share (C$) Adjusted net earnings per share1(C$) 3.05 2.77 2.71 2.68 2.55 2.41 2.30 2.11 2.02 2.10 2.00 2.05 1.83 1.92 1.72 1.50 1.27 1.56 1.10 1.47 1.38 1.30 0.86 1.20 1.23 1.23 1.23 1.23 1.23 1.23 0.72 1.06 0.59 0.93 0.81 0.69 0.56 0.47 0.22 0.27 0.
Slide 20: Returning value to shareholders
Returning value to shareholders(1) 1998 2018 CAGR Earnings per share(2) $0.59 $3.05 9% Dividends per share $0.22 $1.56 10% Share price $13.00 $28.18 4% $100 Invested(3) $100 $453 8% Consistent shareholder returns over many years 1. Data adjusted for historical share splits 2. Adjusted net earnings p
Slide 21: Company highlights
Company highlights Highly diversified business with leadership positions in key markets Proven ability to generate strong and stable long-term earnings Strong balance sheet, capital and liquidity, and strong credit ratings 21
Slide 22: Strong balance sheet; conservative investment policy
Strong balance sheet; conservative investment policy Lifeco Invested Assets1 Bond Portfolio Credit Rating1 $171.8 billion $120.2 billion Loans to Cash & CD's Investment Policyholders 2% BB & Lower Properties 5% 1% 3% Stocks 6% BBB AAA 17% 19% Mortgages 14% A AA Bonds 34% 29% 70% ❖ Asset portfolio pr
Slide 23: Strong capital position
Strong capital position Regulatory Capital Ratios GWL LICAT Ratio OSFI Minimum 90% Total Regulatory Capital Available Regulatory Required Capital OSFI Supervisory Target 100% $26.5 Billion GWL Target Range 110% – 120% $19.5 Billion GWL Ratio 136% 136% ❖ GWL’s consolidated LICAT ratio is 136% ❖ GWL’s
Slide 24: Strong liquidity and credit profile
Strong liquidity and credit profile Strong Liquidity & Credit Ratings Profile Well Laddered Senior Debt Maturity Profile Senior Debentures (incl. Lifeco guaranteed debt) (C$M) GWL Lifeco Financial Strength Ratings Euro Senior Debt (Opco) (Holdco)* $989 A.M. Best A+ $900 $743 $740 DBRS AA A (high) $6
Slide 25: Efficient capital structure
Efficient capital structure Senior Debentures Lifeco Subordinated Debentures Finance LP Preferred Shares Great-West Lifeco $900m Euro Senior Debt Inc. Lifeco U.S. Senior Debt $1.9b Finance $2.7b Short-term borrowings $1.5b 2018, LP $125m $1,039m Capital Trust Securities The Great-West Life Great-Wes
Slide 26: Investor Presentation
Investor Presentation Q2 2019
Great-West Lifeco — Investor Presentation (September 2019) on 6ix