Power Corporation Of Canada · TSX:POW
Power Corporation Of Canada — Q3 2020 Earnings Presentation
31 slides from Power Corporation Of Canada's earnings presentation, Nov 12, 2020
Slide 1: Investor Presentation Q3 2020 Quarterly Results
Investor Presentation Q3 2020 Quarterly Results November 12th, 2020
Slide 2: Forward looking statements and COVID-19
Forward looking statements and COVID-19 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 the accompanying materials may include, statements containing forward-looking information. Certain state
Slide 3: Disclosures concerning public investees and non-IFRS measures
Disclosures concerning public investees and non-IFRS measures Disclosures Concerning Public Investees Information in this presentation and any accompanying oral statements, including in response to questions, (i) concerning Great-West Lifeco and IGM, as applicable, has been derived from Great-West L
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 POWER CORPORATION OF CANADA QUARTERLY RESULTS PRESENTATION | Q3 2020 4
Slide 5: Q3 2020 Highlights
Q3 2020 Highlights POWER CORPORATION OF CANADA QUARTERLY RESULTS PRESENTATION | Q3 2020 5
Slide 6: Publicly traded operating companies
Publicly traded operating companies This call follows a number of recent events held by our publicly traded operating companies Investors are encouraged to contact the companies directly for specific inquiries Event / Date Contact Q3 2020 Conference Call November 5, 2020 deirdre.neary@canadali
Slide 7: Power Corporation – Recent business highlights
Power Corporation – Recent business highlights August 4 Great-West Lifeco and IGM announce the sale of GLC Asset Management to Mackenzie and Quadrus fund management contracts to Canada Life August 17 Empower Retirement closes its acquisition of Personal Capital September 8 Empower Retirement a
Slide 8: Power Corporation financial highlights – Q3 2020
Power Corporation financial highlights – Q3 2020 NAV per share1 of $34.94 at September 30, 2020, compared with $32.96 at June 30, 2020, a 6% increase • NAV per share increased an additional 9% to $37.97 at November 9, 20202 Net earnings per share of $0.75, compared with $0.84 in Q3 2019 Adjust
Slide 9: Net asset value
Net asset value Net asset value per share has grown since the beginning of the pandemic from $30.79 per share at March 31, 2020 to $34.94 per share at Sep. 30, 2020, a 13.5% increase driven by publicly traded OpCos, Power Pacific and Wealthsimple ($ millions) Sep. 30, 2020 Jun. 30, 2020 Mar. 31, 2
Slide 10: PCC earnings per share
PCC earnings per share Net earnings per share of $0.75, compared with $0.84 in Q3 2019 Adjusted net earnings per share1 of $0.65, compared with $0.72 in Q3 2019 • Remeasurement of the put right liability of the non-controlling interests in Wealthsimple and Webhelp and the carried interests payab
Slide 11: Power Corporation is pursuing a focused strategy emphasizing financial services
Power Corporation is pursuing a focused strategy emphasizing financial services Based on Power Corporation’s existing core principles Focused upon financial services, not diversification Public operating companies will continue to pursue organic and inorganic strategies At the Power Corporat
Slide 12: The Power Group's ongoing value creation strategy is focused on 3 key levers
The Power Group’s ongoing value creation strategy is focused on 3 key levers Organic growth strategies at each of our 1 OpCo Organic Levers public operating companies1 2 OpCo M&A Levers Deployment and redeployment of capital Actions we can take at the Power level and 3 Holding Company Levers between
Slide 13: GLC Asset Management and Quadrus fund management contracts
GLC Asset Management and Quadrus fund management contracts On August 4, Great-West Lifeco and IGM announced the sale of GLC Asset Management to Mackenzie for $175 million; Canada Life will acquire the fund management contracts relating to the Quadrus Group of Funds for $30 million Solidifies Macke
Slide 14: Empower Retirement's acquisition of Personal Capital
Empower Retirement’s acquisition of Personal Capital On June 29, Empower Retirement announced an agreement to acquire Personal Capital for US$825 million and deferred consideration of up to US$175 million Personal Capital is a hybrid wealth manager that combines a leading-edge digital experience w
Slide 15: Empower Retirement's acquisition of the Retirement Services Business of MassMutual
Empower Retirement’s acquisition of the Retirement Services Business of MassMutual On September 8, Empower Retirement announced an agreement to acquire the retirement services business of MassMutual for a total transaction value of approximately US$3.35 billion Strengthens Empower’s #2 position in
Slide 16: Mackenzie Investments and Great-West establish strategic relationship with Northleaf Capital Partners
Mackenzie Investments and Great-West establish strategic relationship with Northleaf Capital Partners On September 17, IGM (80%) and Great-West Lifeco (20%) announced the acquisition of a 70% economic interest1 in Northleaf Capital Partners Expands Mackenzie’s capabilities to offer global private
Slide 17: Wealthsimple external financing announced at a $1.4 billion pre-money valuation
Wealthsimple external financing announced at a $1.4 billion pre-money valuation On October 14, Wealthsimple announced a $114 million investment led by TCV The $114 million investment, for a 7.5% fully diluted interest, was led by TCV, one of the largest growth equity investors focused on technolog
Slide 18: Each of Sagard Holdings and Power Sustainable Capital have developed their businesses substantially
Each of Sagard Holdings and Power Sustainable Capital have developed their businesses substantially Development of multi-year strategies Significant ongoing fundraising at each of Sagard Holdings and Power Sustainable Capital • Launch of Sagard NewGen in Sep’20 and US$450 million first close of
Slide 19: Sagard Holdings is a multi-strategy alternative asset manager with a global presence
Sagard Holdings is a multi-strategy alternative asset manager with a global presence US$4.9B 4 6 100+ Assets Under Management1 Asset Classes Strategies Professionals Diversified LP base of leading Multi-strategy alternative asset Canadian base with a global investors manager with a wealth pres
Slide 20: Power Sustainable Capital invests in sustainable strategies with a focus on long-term profitability
Power Sustainable Capital invests in sustainable strategies with a focus on long-term profitability Power Sustainable leverages its investment capabilities and those of its partners to build projects of significance that benefit the planet, assure steady growth and create long-term value Teams a
Slide 21: China AMC's growth has accelerated in 2020
China AMC’s growth has accelerated in 2020 #1 onshore ETF issuer, #2 Chinese long-term mutual fund manager by market share 31% increase in net profit in Q3’20 versus Q3’19 PCC’s share of China AMC income was $11M in Q3’20, compared to $8M in Q3’19, a 38% increase Chinese equity market return
Slide 22: Standalone businesses – An additional source of value creation
Standalone businesses – An additional source of value creation PCC will continue to manage standalone businesses to realize value over time Strong unfilled order book Peak Achievement Rawlings Sporting Goods has agreed to purchase Easton Diamond Athletics Sports, a Peak Achievement Athletics-con
Slide 23: Operating expense reduction
Operating expense reduction To date, we have implemented actions to achieve 47% of the targeted expense reductions, or $23.5M on an annual run-rate basis Retirement of Co-CEOs and changes in governance Certain PFC public company expenses eliminated Restructuring of Group’s research and advisor
Slide 24: Progress in communicating with the investment community in 2020
Each of Power Corporation and its OpCos have made progress in communicating with the investment community in 2020 Base earnings metric introduced in Q1’20 New segment disclosure in Q1’20: Canada, U.S., Europe and Capital & Risk Solutions Enhanced Source of Earnings disclosure in Q2’20 New se
Slide 25: Value creation roadmap
Value creation roadmap OpCo Investing to drive higher organic earnings growth 1 Organic Enhanced disclosure to provide market Levers greater visibility Drive higher earnings and NAV OpCo + 2 M&A Augment value through acquisitions Levers and associated synergies Potential multiple revisions at
Slide 26: Summary
Summary Power group of companies continue to respond well in the COVID-19 pandemic • High levels of engagement across group of companies with clients, investors and shareholders • Results reflect the strength and resiliency of the group’s businesses • Momentum on key value levers sustained during
Slide 27: Questions
Questions POWER CORPORATION OF CANADA QUARTERLY RESULTS PRESENTATION | Q3 2020 27
Slide 28: Appendix
Appendix POWER CORPORATION OF CANADA QUARTERLY RESULTS PRESENTATION | Q3 2020 28
Slide 29: Abbreviations
Abbreviations The following abbreviations are used throughout this presentation: adidas adidas AG MassMutual Massachusetts Mutual Life Insurance Company AUA Assets under administration NAV Net asset value AUM Assets under management NCIB Normal course issuer bid Canada Life The Canada Life Assurance
Slide 30: PCC NAV and discount to NAV
PCC NAV and discount to NAV 35% average discount from the end of 2015 to 2018, decreased to 21% immediately after the close of the reorganization in February 2020, shortly before the World Health Organization declared a global pandemic Prior to the reorganization, the dual holding company structur
Slide 31: Corporate Social Responsibility (CSR) at PCC
Corporate Social Responsibility (CSR) at PCC CSR is fundamental to the way we, and our group of companies, do business — what we refer to as “responsible management”. It has been at the core of our investment philosophy, enabling us to build a resilient and sustainable business, through our role as
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