Great-west Lifeco Inc. · TSX:GWO
Great-west Lifeco — Q3 2024 Earnings Presentation
29 slides from Great-west Lifeco's earnings presentation, 2024
Slide 1: Investor Presentation Third Quarter 2024
1 Investor Presentation Third Quarter 2024 GREAT-WEST LIFECO Note: All dollar amounts are expressed in Canadian dollars and references to “dollars” or “$” are to Canadian dollars, unless otherwise stated.
Slide 2: Cautionary Note Regarding Forward-Looking Information
CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION INVESTOR OVERVIEW This document contains 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 "will", "may", "exp
Slide 3: A global financial services company
A global financial services company INVESTOR OVERVIEW Capital & Risk Solutions 21% Canada 31% 175+ Years 6th $3.7B Of History Largest Life Insurer Base Earnings3,4 in North America1 Europe 21% US 3 $3.1T $1.0T 27% Assets Under Administration2,3 Assets Under Management2,3 Capital & Risk Solutions 28%
Slide 4: Great-West Lifeco at-a-glance
Great-West Lifeco at-a-glance INVESTOR OVERVIEW A global financial services company with interests in life insurance, health insurance, retirement and investment services, asset management and reinsurance businesses. Key Metrics Financial Strength Ratings3, Regulatory Capital In C$, unless otherwise
Slide 5: Diversified, market-leading franchises
Diversified, market-leading franchises INVESTOR OVERVIEW Canada U.S. Europe Capital & Risk Solutions A leader in workplace and A U.S. financial services Irish Life is #1 in workplace Top-10 global reinsurer9 wealth management serving challenger brand serving retirement and risk6, #1 in 18m+ American
Slide 6: Value drivers
Value drivers INVESTOR OVERVIEW Portfolio strategies that extend across operating segments Operating Segments1 Canada U.S. Europe CRS Workplace Solutions Group Life & Health Empower Defined Group Life & Health 6 Broad reach Contribution Group Retirement Group Retirement Wealth & Asset Individual Wea
Slide 7: Value drivers
Value drivers INVESTOR OVERVIEW Play complementary roles and highlight the benefits of diversification Higher Lower Workplace Wealth & Asset Insurance & Risk Solutions Management Solutions 7 Cash generation Steady, stable returns “Capital-light” GREAT-WEST LIFECO Organic growth potential
Slide 8: Medium-term objectives
Medium-term1 objectives INVESTOR OVERVIEW Supported by our repositioned portfolio with significant organic and extension growth potential 8-10% 16-17% 45-55% base EPS2 growth p.a. base ROE2 target dividend payout ratio, base earnings2 • Organic earnings growth from market- • Diversified businesses d
Slide 9: Our ambitions
Our ambitions INVESTOR OVERVIEW Building Better Financial Futures $127 Billion $6.35+ Billion $150+ Million Managed in ESG-related strategies Invested in wind, solar, and hydroelectric Delivered by Great-West Lifeco in 2022 renewable energy projects1 companies to charitable initiatives over the past
Slide 10: Successful Portfolio Repositioning and Strong Shareholder Returns
10 Successful Portfolio Repositioning and Strong Shareholder Returns GREAT-WEST LIFECO
Slide 11: Repositioning the portfolio in recent years
INVESTOR OVERVIEW Repositioning the portfolio in recent years Focused on acquisitions to create scale and reach, acquisitions to add strategic capabilities, and dispositions and organic actions that unlock value and enable focus Lifeco base earnings ($M) Lifeco net earnings ($M) and % by segment 1,2
Slide 12: Strategic repositioning of U.S. business accelerating growth in retirement and wealth
Strategic repositioning of U.S. business accelerating growth in INVESTOR OVERVIEW retirement and wealth 2018 LAST 5 YEARS 2024 2019 2020 2021 2022 2023 Acquisitions 12 Retirement Services Business Full-Service Retirement Business Launched Divestments Personal Wealth GREAT-WEST LIFECO U.S. individual
Slide 13: Repositioned portfolio driving a shift in earnings mix
Repositioned portfolio driving a shift in earnings mix INVESTOR OVERVIEW Toward capital-light growth in workplace and wealth businesses 2023 2027 Base Earnings Mix Target Base Earnings Mix3 Workplace Solutions 49% $1.9B 50% Higher growth targeted 13 $3.7B1,2 Wealth & Asset Management 20% Base Earnin
Slide 14: Long history of consistent and growing dividends
Long history of consistent and growing dividends INVESTOR OVERVIEW Annual dividends per common share1 ‘14 – ‘23 CAGR 6.0% 4.7% 2023 dividend yield2 14 Quarterly dividends per share increased 7% from $0.52 to $0.56 in Q1 2024 1.23 1.30 1.38 1.47 1.56 1.65 1.75 1.80 1.96 2.08 GREAT-WEST LIFECO 2014 20
Slide 15: Delivering significant shareholder returns
INVESTOR OVERVIEW Delivering significant shareholder returns Total return1 Annualized total return1 From September 30, 2019 to September 30, 2024 As at September 30, 2024 2.00 1 year 3 years 5 years 1.80 GWO 25.7% 11.7% 13.3% 1.60 15 1.40 S&P TSX 28.0% 9.2% 10.6% 1.20 Over/(Under) ∆ (2.3%) +2.4% +2.
Slide 16: Strong Balance Sheet and Capital Position
16 Strong Balance Sheet and Capital Position GREAT-WEST LIFECO
Slide 17: Diversified, high-quality asset mix
Diversified, high-quality asset mix INVESTOR OVERVIEW Conservative investment portfolio, mainly fixed income instruments – 98% investment-grade • Invested assets of ~$237.1B • Bonds represent 68% Invested Asset Distribution Bond Portfolio Quality – 98% are investment grade Investment Properties Cash
Slide 18: Robust capital and liquidity
INVESTOR OVERVIEW Robust capital and liquidity • Liquidity requirements are largely self-funded – Short-term obligations 29% 134% met by internal funds and Financial Leverage Ratio1,2 LICAT Ratio3 maintaining levels of liquid investments adequate to meet anticipated liquidity needs 18 – Committed li
Slide 19: Strong credit ratings
INVESTOR OVERVIEW Strong credit ratings Canada Life Lifeco (Opco) 1 (Holdco) 2 Outlook A+ Stable AA A (High) Stable 19 AA A Stable Aa3 Stable A+ Stable GREAT-WEST LIFECO AA Footnotes 1 - 2: Refer to slide 28
Slide 20: Efficient capital structure
Efficient capital structure INVESTOR OVERVIEW Carrying values as of September 30, 2024, unless otherwise noted, C$m Lifeco Finance (Delaware) LP U.S. Senior Notes $931m Lifeco Finance 2018, LP U.S. Senior Notes $1,073m Senior Debentures $2.5b Lifeco U.S. Finance 2020, LP Preferred Shares $2.7b U.S.
Slide 21: Appendix
21 GREAT-WEST LIFECO Appendix
Slide 22: Canada
Canada CANADA Our Business 2023 Key Metrics base earnings1 / We are strengthening our relationship with 1 in 3 Canadians $1.2B/$1.0B net earnings We offer a preeminent platform for base ROE1 / workplace, wealth and insurance advisors 17%/14% net ROE We are one of the largest non-bank wealth Base Ear
Slide 23: U.S.
US U.S. Our Business 2023 Key Metrics Empower is the second-largest retirement base earnings1,2 / services provider in the U.S.3, serving over 18m4 individuals with AUA1 of US$1.8T4 $1.0B/$0.8B net earnings2 base ROE1,2 / Empower Personal Wealth is a fast-growing wealth management business with AUA
Slide 24: Europe
Europe EUROPE Our Business 2023 Key Metrics Operations in the U.K., Ireland and Germany base earnings1 / Market leader in group risk, a leading player in $0.8B/$0.4B net earnings payout annuities and a key player in the equity release mortgage market in the U.K. base ROE1 / Irish Life is one of the
Slide 25: Capital and Risk Solutions
Capital and Risk Solutions CRS Our Business 2023 Key Metrics Operations in the U.S., Ireland, Barbados and base earnings1 / Bermuda and includes both reinsurance and retrocession business transacted directly with $0.8B/$0.8B net earnings clients or through reinsurance brokers base ROE1 / Products in
Slide 26: Non-GAAP Financial Measures and Ratios
NON-GAAP FINANCIAL MEASURES AND RATIOS This document contains some non-Generally Accepted Accounting Principles (GAAP) financial measures and non-GAAP ratios as defined in National Instrument 52-112 “Non-GAAP and Other Financial Measures Disclosure”. Non-GAAP financial measures and ratios are used t
Slide 27: Footnotes
Footnotes All references to the Company’s Q3 2024 MD&A in the below footnotes are to the Company’s management’s discussion and analysis for the nine months ended September 30, 2024, which is available on SEDAR+ at www.sedarplus.com. Slide 3 1. By market capitalization; Source: S&P CapIQ, September 3
Slide 28: Footnotes
Footnotes Slide 11 1. Lifeco Corporate base and net earnings not displayed separately. 2. Effective January 1, 2020, as a result of strategic operational changes, Lifeco has divided the previously reported Europe segment into two separate reporting segments – Europe and CRS. 2018 figures were report
Slide 29: Third Quarter 2024
29 Investor Presentation Third Quarter 2024 GREAT-WEST LIFECO Note: All dollar amounts are expressed in Canadian dollars and references to “dollars” or “$” are to Canadian dollars, unless otherwise stated.