Power Corporation Of Canada · TSX:POW
Power Corporation Of Canada — CIBC Eastern Institutional Investor Conference 2024
49 slides from Power Corporation Of Canada's conference presentation, Sep 26, 2024
Slide 1: Introduction to Power Corporation
1 INTRODUCTION TO Power Corporation September 2024 1 POWER CORPORATION OF CANADA
Slide 2: Forward looking statements and disclosures concerning public investees
Forward looking statements and disclosures concerning public investees For definitions of capitalized terms used herein, see "Abbreviations". Forward Looking Statements In the course of today’s meeting, representatives of the Corporation may make, in their remarks or in response to questions, and th
Slide 3: Basis of presentation, non-IFRS financial measures and other measures
Basis of presentation, non-IFRS financial measures and other measures Basis of Presentation The condensed consolidated interim financial statements of the Corporation have been prepared in accordance with International Financial Reporting Standards (IFRS) unless otherwise noted and are the basis for
Slide 4: Abbreviations
Abbreviations The following abbreviations are used throughout this presentation: Ark Life Ark Life Assurance Company dac M&A Mergers and acquisitions AUA Assets under administration Mackenzie Mackenzie Financial Corporation AUM Assets under management MassMutual Massachusetts Mutual Life Insurance C
Slide 5: Reference information
Reference information Websites Recent Events Date CIBC Eastern Institutional Investor Conference September 26, 2024 Scotiabank Financials Summit September 5, 2024 www.powercorporation.com Q2 2024 Conference Call August 9, 2024 Q2 2024 Earnings Release August 8, 2024 Scotiabank Financials Summit Sept
Slide 6: Table of contents
Table of contents • Power Corporation Overview • Value Creation Strategy • Appendix 1: Recent Transaction Activity • Appendix 2: Sustainability and Community POWER CORPORATION OF CANADA SEPTEMBER 2024 6
Slide 7: Power Corporation Overview
Power Corporation Overview POWER CORPORATION OF CANADA QUARTERLY 2024 SEPTEMBER RESULTS PRESENTATION | Q1 2024 7
Slide 8: Power Corporation is an international management company focused on financial services
Power Corporation is an international management company focused on financial services $26.7 BILLION Market Capitalization 5.4% Dividend Yield [1] 68.1% [3] 62.5% [3] 16.5% [4] 52.0% [5] 74.7% [5] $2.28 BILLION 2023 Net Earnings [2] $41.2 BILLION $9.4 BILLION $14.4 BILLION ALTERNATIVE ASSET Market C
Slide 9: Adjusted net asset value
Adjusted net asset value (“NAV” or “Net asset value”) NAV per share [3] was $50.48 at June 30, 2024 Contribution to Gross Asset Value Jun. 30, % of Gross ($ billions, except per share amounts) 2024 Asset Value 7.2% Other 19% Sagard and Power Sustainable Great-West $25.4 66.0% NAV 6.6% Publicly Trade
Slide 10: Net and adjusted net earnings from continuing operations
Net and adjusted net earnings from continuing operations Power’s earnings underscored by stable recurring earnings contribution from Great-West and IGM, with other investment businesses and investments focused on value appreciation ($ in millions, except per share amounts) 2023 2022 (restated) Adjus
Slide 11: Great-West Lifeco overview
Great-West Lifeco overview 2023 Highlights Q2 2024 Great-West Lifeco is an international financial services holding company with interests in life insurance, health insurance, retirement and $2.74 BILLION 12.4% $750 BILLION Net Earnings [1] Return on Equity – Continuing Operations [1,2] Consolidated
Slide 12: Great-West has set out and delivered strong performance against its financial objectives
Great-West has set out and delivered strong performance against its financial objectives Medium-term financial objectives first announced at Great-West’s June 2021 Investor Day 2023 2018-2023 Medium-Term Financial Objectives 1-Year 5-Year [2] 8-10% base EPS [1] growth per annum 11% 11% CAGR 16-17% b
Slide 13: Great-West has repositioned its U.S. business to become a more meaningful contributor to earnings
Great-West has repositioned its U.S. business to become a more meaningful contributor to earnings • In 2018, U.S. business was U.S. Segment Contribution to Earnings per Share U.S. spread across 3 sub-scale 27% franchises in life insurance, asset management and U.S. retirement 13% $3.94 • Great-West
Slide 14: IGM Financial overview
IGM Financial overview 2023 Highlights Q2 2024 IGM Financial is a leading wealth and asset management company supporting advisors and the clients they serve in Canada, and $1.15 BILLION 18.2% $431.7 BILLION Net Earnings [1] Return on Equity [1] AUM&A Incl. Strategic Investments [3] institutional inv
Slide 15: IGM announced medium-term objectives as part of its December 2023 Investor Day
IGM announced medium-term objectives as part of its December 2023 Investor Day IGM Financial 5-Year EPS Growth Wealth Asset management management 5-Year 7%+ [1] Earnings CAGR 5-Year 9%+ Adjusted EPS CAGR [1,2] Sum-of-the-parts shareholder value creation 5-Year 15%+ [1][2] Earnings CAGR [1] “Adjusted
Slide 16: IGM's strategic investments diversify and accelerate earnings growth profile
IGM’s strategic investments diversify and accelerate earnings growth profile [1] • Target recruiting of $120 million in annual production acquired [2] • Target organic growth of 6-8% [3] Medium-term objectives • Current capacity to scale and create operating leverage & expected benefits • • Strong h
Slide 17: GBL overview
GBL overview Transition toward fast-growing private assets GBL is a leading and active investor in Europe, focused on long-term value creation with a % of Portfolio [5] Investment Strategy diversified high-quality portfolio of listed and • Leading companies in their sector, • Net asset value growth
Slide 18: GBL is refocusing its portfolio on higher-growth private assets while returning capital
GBL is refocusing its portfolio on higher-growth private assets while returning capital to shareholders GBL is executing on its value creation strategy of focusing its portfolio on private investments, streamlining its public investments and returning capital to shareholders CAPITAL RETURNED TO SHAR
Slide 19: Alternative asset investment platforms
Alternative asset investment platforms Asset Management Activities Investing Activities Recurring Carried Proprietary Value Fee-Related + Interest + Capital = to Power Earnings Asset Management Activities – Building investment platforms to deliver recurring asset management earnings • Through owners
Slide 20: Asset Management Activities – Building investment platforms to deliver recurring earnings
Asset Management Activities – Building investment platforms Asset Management Activities Recurring to deliver recurring asset management earnings Carried Fee-Related Earnings + Interest Sagard and Power Sustainable continue to scale through different Carried interest represent a meaningful driver of
Slide 21: Asset Management Activities – Ongoing fundraising at alternative asset investment platforms
Asset Management Activities – Ongoing fundraising at Asset Management Activities Recurring alternative asset investment platforms Carried Fee-Related Earnings + Interest • 37.5 billion of AUM [1][2] as at June 30, 2024 • Over $1 billion of fundraising in 2024 to date across multiple strategies • Sag
Slide 22: Investing Activities – Earning attractive returns on its proprietary capital
Investing Activities – Earning attractive returns on its Investing proprietary capital across multiple strategies Proprietary Capital Power’s $2.2 billion of proprietary capital targeted to generate 10%+ net returns Power Fair Value Strategies of Investments [1] Target Net IRR [2] Value Realization
Slide 23: Value Creation Strategy
Value Creation Strategy POWER CORPORATION OF CANADA QUARTERLY 2024 SEPTEMBER RESULTS PRESENTATION | Q1 2024 23
Slide 24: Power has been pursuing a new value creation strategy since the 2019 reorganization
Power has been pursuing a new value creation strategy since the reorganization announced in late 2019 • Focused upon financial services, not diversification • Publicly traded companies investing organically and through active M&A to position for higher growth • At the Power level, adding additional
Slide 25: Value creation strategy is focused on three key levers
Power group of companies’ value creation strategy is focused on three key levers Organic growth strategies at each of our publicly traded operating 1 OpCo Organic Levers companies (OpCos) 2 OpCo M&A Levers Deployment and redeployment of capital Power Company 3 Level Levers Actions we can take at Pow
Slide 26: Value creation strategy consistent with Power's key principles
Value creation strategy launched during reorganization consistent with Power’s key principles Our key principles reflect the long-term orientation of the Desmarais family, controlling shareholders of Power since 1968 • Long-term perspective & investment horizon • Build industry leaders with attracti
Slide 27: Simplification of Power's group structure
Simplification of Power’s group structure Pre-December 2019 Reorganization Present 64% 68% [1] 63% [1] 17% [2] Power Power Non-Public Non-Public Investments Investments 67% 62% 28% 50% [1] As of June 30, 2024. Power held 68.1% of Great-West; IGM held an additional 2.4% of Great-West. Power held 62.5
Slide 28: Power has re-positioned its businesses for higher growth
Power has re-positioned its businesses for higher growth Great-West OpCo • Re-positioned through M&A and organic investments 1 Organic • Attractive, diversified growth prospects led by Empower’s retirement and wealth business in Levers the U.S. IGM Financial • Leading core franchises and high-growth
Slide 29: Strategic repositioning of Great-West's U.S. business
Strategic repositioning of Great-West’s U.S. business to accelerate growth in retirement and wealth 2018 Last Five Years Today 2019 2020 2021 2022 2023 Acquisitions Retirement Services Business Full-Service Retirement Business Divestments 2nd largest U.S. retirement services provider [1] U.S. Indivi
Slide 30: Great-West combined its three Canadian franchises into Canada Life
In Canada, Great-West combined its three franchises into Canada Life and has been investing to enhance product, distribution and efficiency 2020 Amalgamation to simplify the business, unite its employees and better serve its client base Leading provider of insurance, wealth management, and healthcar
Slide 31: IGM owns leading wealth and asset management franchises in Canada
IGM owns leading wealth and asset management franchises in Canada and has high growth plays in the U.S. and China Wealth management • IG Wealth has strengthened its advisor force, product suite and technology platform for the benefit of its clients and to cater to the high-net-worth market • In Apri
Slide 32: GBL asset rotation strategy focusing on private and alternative assets
GBL has embarked on an asset rotation strategy focusing on private and alternative assets As at Q2 2024 • Close to €33 billion in asset rotation since 2012 €10.0 BILLION (61%) • Investments in leading companies in their sector, Listed Investments with a clear and sustainable business model • Focus o
Slide 33: Development of Power's alternative asset management businesses
Development of Power’s alternative asset management businesses • Operate in asset classes where we can create competitive advantage • Platforms’ growth strategy is focused on raising 3rd party capital • Power invests proprietary capital in the strategies of Sagard and Power Sustainable to support th
Slide 34: Sagard pursuing growth through a number of strategic transactions
Sagard pursuing growth through a number of strategic transactions (formerly ADQ) • In September 2023, Sagard closed • In January 2024, Sagard acquired a • In March 2024, Sagard acquired a new strategic partnerships with strategic interest in Performance 40% stake in HalseyPoint Lunate (formerly ADQ)
Slide 35: Power Sustainable strategic partnership with Great-West
Power Sustainable strategic partnership with Great-West • In May 2024, Power Sustainable announced a new long-term strategic partnership with Great-West o Enables Power Sustainable to accelerate its growth and market penetration in sustainable private equity and infrastructure credit o Supports Grea
Slide 36: Returning capital to Power shareholders
Returning capital to Power shareholders Approaching $1 billion of capital returned to shareholders Power’s dividends paid per share have increased in 2024 for 10 consecutive years • Quarterly dividend increased 7.1% to 56.25¢ 2020 2021 2022 2023 YTD 2024 ($ millions) per participating share in March
Slide 37: Returning capital to Power shareholders (cont'd)
Returning capital to Power shareholders (cont’d) Capacity for further share buybacks • $1.5 billion of cash and cash equivalents at June 30, 2024, of which $1.2 billion of available cash [1] • Power generally targets to maintain minimum available cash of 2x fixed charges, currently approximately $80
Slide 38: Power and its OpCos have elevated their communication programs
Power Corporation and its OpCos have elevated their communication programs with the investment community • Increased communication with stakeholders • Launched quarterly earnings call in Q1’20 • Enhanced investment platform disclosure aligned with business model in Q2’20 • Base earnings metric, new
Slide 39: Power's shareholder returns
Power’s shareholder returns Power has delivered strong shareholder returns in recent periods Total Shareholder Return As at August 31, 2024 Years Last 12 Months Last 3 Years Last 5 Years Annualized Annualized Power Corporation 18.8% 4.0% 14.8% S&P TSX Financials 27.3% 8.8% 12.2% Over / (Under) S&P T
Slide 40: Power discount to NAV
Power discount to NAV [1] Power’s discount to NAV has been narrowing through execution of its value creation strategy 40% Great-West sale of U.S. life business announced PCC / PFC reorganization announced Putnam sale 35% announced WHO declares global pandemic Wealthsimple fundraising 30% & Lion merg
Slide 41: Opportunities for further value creation
Opportunities for further value creation Power will continue to exercise its three levers for value creation, with concrete actions and opportunities available in the short to medium-term • Public OpCos positioned for organic growth: OpCo o Diversified, broadly-based growth at Great-West led by Empo
Slide 42: Appendix 1: Recent Transaction Activity
Appendix 1: Recent Transaction Activity POWER CORPORATION OF CANADA QUARTERLY 2024 SEPTEMBER RESULTS PRESENTATION | Q1 2024 42
Slide 43: Value-enhancing transactions announced since the reorganization
A significant number of value-enhancing transactions have been announced since the reorganization Date Event Size Overview Feb’20 Reorganization of Power and PFC $8.7 billion • Completed the reorganization of PFC and Power to eliminate dual holding company structure Mar’20 Reorganization of Pargesa
Slide 44: Value-enhancing transactions announced since the reorganization (cont'd)
A significant number of value-enhancing transactions have been announced since the reorganization (cont’d) Date Event Size Overview $750 million • Valued Power group’s interest at $2.6 billion as of the transaction date, including May’21 Wealthsimple Fundraising $250 million primary $500 million ret
Slide 45: Value-enhancing transactions announced since the reorganization (cont'd)
A significant number of value-enhancing transactions have been announced since the reorganization (cont’d) Date Event Size Overview • Combination creates a prominent global player in customer experience • GBL to be paid with a combination of Concentrix shares, earn-out shares and a seller note to be
Slide 46: Value-enhancing transactions announced since the reorganization (cont'd)
A significant number of value-enhancing transactions have been announced since the reorganization (cont’d) Date Event Size Overview • Fast-growing Winnipeg-based investment firm known for its positive impact in serving clients with complex and sophisticated wealth needs Jun’23 Canada Life acquires V
Slide 47: Appendix 2: Sustainability and Community
Appendix 2: Sustainability and Community POWER CORPORATION OF CANADA QUARTERLY 2024 SEPTEMBER RESULTS PRESENTATION | Q1 2024 47
Slide 48: Sustainability highlights
Sustainability highlights Our deeply rooted tradition of responsible management underpins our approach to how we are building a resilient business focused on driving sustainable long-term value CDP Leadership Commitments to global initiatives level ranking for climate disclosure 36% women on the Boa
Slide 49: Investing in our communities
Investing in our communities We believe in the power of the voluntary sector and social entrepreneurs, working in partnership with governments and businesses, to build a better, more inclusive society with improved opportunities for all. 2023 Highlights Among the initiatives funded by the Power grou
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