Power Corporation Of Canada · TSX:POW
Power Corporation Of Canada — Q1 2023 Earnings Presentation
31 slides from Power Corporation Of Canada's earnings presentation, May 16, 2023
Slide 1: Investor Presentation Q1 2023 Results
Investor Presentation Q1 2023 Results May 16th, 2023
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" in the Appendix hereto. Forward Looking Statements In the course of today’s meeting, representatives of the Corporation may make, in their remarks or in respon
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 unaudited financial statements for the period ended March 31, 2023 of the Corporation, which reflect the adoption of IFRS 17, Insurance Contracts (IFRS 17) and IFRS 9, Finan
Slide 4: Conference call participants
Conference call participants R. Jeffrey Orr President and Chief Executive Officer Gregory D. Tretiak, FCPA, FCA Executive Vice-President and Chief Financial Officer P O W E R C O R PO RA T ION O F C A N A D A Q U A RT E RL Y R E S U L TS P R E S E N T A T IO N | Q 1 2 0 2 3 4
Slide 5: Q1 2023 Results
POWER CORPORATION OF CANADA Q1 2023 Results
Slide 6: Power and publicly traded operating companies
Power and publicly traded operating companies This call follows a number of recent events held by Power and its publicly traded operating companies Investors are encouraged to contact the companies directly for specific inquiries Event / Date Contact Annual General Meeting May 16 Q1 2023 Con
Slide 7: Power highlights
Power highlights Strong results at Great-West and IGM reflect consistent performance across all businesses Great-West Q1 2023 base earnings1 of $808 million vs. $712 million2 in Q1 2022 and net earnings of $595 million vs. $1,334 million in Q1 2022 IGM Q1 2023 adjusted net earnings3 of $207 mill
Slide 8: Current market environment
Current market environment Our businesses are well-positioned to serve clients and stakeholders amidst challenging market conditions Last Ten Years Canadian Mutual Fund Market Performance First Quarter Industry Net Sales1 (Indexed to 100 as at Dec. 31, 2021) ($ in billions) 105 YTD 50 Index Growth
Slide 9: Power Q1 2023 financial highlights
Power Q1 2023 financial highlights1 Net earnings were $313 million or $0.47 per share, compared with $862 million or $1.28 per share in Q1 2022 Book value per participating share2 was $31.81 at March 31, 2023, compared with $31.37 at December 31, 2022 Adjusted net earnings3 were $514 million o
Slide 10: Adopting IFRS 17 and 9
Adopting1 IFRS 17 and 9 Classifications and enhancements made as part of the adoption of new standards aimed at improving transparency and enhancing disclosures Great-West results are in accordance with IFRS 17 Power has classified the investments held by GBL and IFRS 9 consistent with GBL's IFR
Slide 11: Net and adjusted net earnings
Net and adjusted net earnings ($ in millions, except per share amounts) Q1 2023 Q1 2022 Great-West and IGM contributed: Adjusted net earnings (3) Great-West 549 474 Earnings Focused • $516 million to net earnings IGM 128 135 Effect of consolidation (4) • $663 million to adjusted net earnings (14)
Slide 12: Net asset value
Net asset value NAV per share was $46.89 at March 31, 2023, compared with $41.91 at December 31, 2022 • Publicly traded operating companies represent 84.9% of gross asset value • Publicly traded investments and cash represent 92.7% of gross asset value • NAV per share of $48.96 at May 15, 20231
Slide 13: Canada Life acquisition of Investment Planning Counsel
Canada Life acquisition of Investment Planning Counsel On April 3, Canada Life announced the acquisition of IPC – a leading independent Canadian wealth management firm – from IGM for cash consideration of $575 million1 Canada Life will be one of the largest non-bank wealth management providers in
Slide 14: IGM acquisition of an interest in Rockefeller Capital Management
IGM acquisition of an interest in Rockefeller Capital Management On April 3, IGM announced its acquisition of a 20.5% interest in Rockefeller – a leading U.S. independent financial services advisory firm – for US$622 million Strategic investment into the largest and deepest wealth market globally
Slide 15: Webhelp transaction will result in a strong fair value gain
Webhelp transaction will result in a strong fair value gain On March 30, Webhelp and Concentrix announced an agreement to combine, creating a prominent global player in customer experience Transaction values GBL’s stake in Webhelp at €1,529 million at the time of announcement • 1.8x multiple on in
Slide 16: Ongoing fundraising at alternative asset investment platforms
Ongoing fundraising at alternative asset investment platforms $21.5 billion of funded and unfunded AUM1, compared with $21.1 billion as at December 31, 2022 $389 million of fundraising in Q1 2023 from third parties and associated companies Funded and Unfunded AUM Total Funded AUM and Funded AUM
Slide 17: Building alternative investment platforms
Building alternative investment platforms Sagard and Power Sustainable are focused on growing by attracting third party capital and adhering to sound financial disciplines that target a positive fee-related earnings contribution as they scale Recurring fees generated on committed capital, invest
Slide 18: Standalone businesses remain an additional source of value creation
Standalone businesses remain an additional source of value creation The standalone businesses, representing $813 million1 of NAV and $675 million of carrying value in aggregate, will be managed by Power to realize value over time On April 18, Bellus announced an agreement in which it will be acqui
Slide 19: Returning capital to shareholders
Returning capital to shareholders Power continued to return capital to shareholders during the first quarter $330 million of dividends paid to participating shareholders $42 million of shares repurchased under the NCIB program • 1.2 million shares, or 0.2% of participating shares While building
Slide 20: Power discount to NAV
Power discount to NAV1 Power’s discount to NAV has been narrowing through execution of its value creation strategy Great-West sale of 40% U.S. life business announced Power / PFC reorganization announced 35% WHO declares global pandemic Wealthsimple fundraising & 30% Lion merger Dec’15 to Dec’18 34%
Slide 21: 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 Targeting earnings growth at OpCos, building on significant business momentum OpCo • Diversified, broad-based
Slide 22: Questions
POWER CORPORATION OF CANADA Questions
Slide 23: Appendix
POWER CORPORATION OF CANADA Appendix
Slide 24: Abbreviations
Abbreviations The following abbreviations are used throughout this presentation: adidas adidas AG NAV or Net Asset Value Adjusted net asset value Affidea Affidea Group B.V. NCI Non-controlling interests AFS Available for sale NCIB Normal course issuer bid AUM Assets under management NYSE New York St
Slide 25: Power is pursuing a focused strategy emphasizing financial services
Power is pursuing a focused strategy emphasizing financial services Focused upon financial services, not diversification Publicly traded operating companies pursuing organic and inorganic value creation strategies Surfacing incremental value by: • Building alternative asset management business
Slide 26: Value creation roadmap
Value creation roadmap Capitalize on significant past investments to drive higher organic OpCo earnings growth 1 Organic Enhance communications to provide Levers market greater visibility of earnings potential Higher EPS growth Potential multiple revisions at OpCos OpCo Augment earnings an
Slide 27: Value creation focus of the publicly traded operating companies
Value creation focus of the publicly traded operating companies Drive higher earnings and cash flow growth Pursue M&A transactions to enhance earnings and strategic positioning Continuously manage portfolio to ensure growth and return objectives are met Clearly communicate strategy to all st
Slide 28: IFRS 9 classification of Power's financial assets
IFRS 9 classification of Power’s financial assets Previous Classification (IAS 39) Current Classification (IFRS 9) Listed & Private AFS FVOCI(1) Investments GBL Investments GBL Capital AFS FVPL(1) Investments within AFS (Portage I) FVPL Consolidated Funds FVPL (Portage II, III) FVPL Alternative AFS
Slide 29: GBL reported net asset value
GBL reported net asset value1 Net asset value per share reported by GBL of €121.54 at March 31, 2023, compared with €116.18 at December 31, 2022 Mar. 31, 2023 Power Share of % of % Mar. 31, 2023 Power Share of % of (2) Value (€M) Value (€M)(2) Portfolio Ownership Value (€M) Value (€M) Portfolio List
Slide 30: Power's alternative asset investment platforms
Power’s alternative asset investment platforms ($ millions) Q1 2023 Q1 2022 Asset Management Investing Asset Management Activities Activities Activities Sagard Management fees (1) 45 34 + + = Recurring Investment platform expenses (47) (36) Carried Proprietary Value Fee-Related Interest Capital to P
Slide 31: Earning attractive returns on its proprietary capital across multiple strategies
Earning attractive returns on its proprietary capital across multiple strategies Returns are expected to be realized over differing time horizons • Capital appreciation strategies are expected to generate returns as investments are monetized • Income strategies are expected to generate returns on
Power Corporation of Canada — Q1 2023 Earnings Presentation on 6ix