Power Corporation Of Canada · TSX:POW
Power Corporation Of Canada — Q1 2021 Earnings Presentation
35 slides from Power Corporation Of Canada's earnings presentation, May 14, 2021
Slide 1: Investor Presentation Q1 2021 Quarterly Results
Investor Presentation Q1 2021 Quarterly Results May 14th, 2021
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, non-IFRS measures and clarifications on Net Asset Value
Disclosures concerning public investees, non-IFRS measures and clarifications on Net Asset Value 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,
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 | Q1 2021 4
Slide 5: Q1 2021 Highlights
Q1 2021 Highlights POWER CORPORATION OF CANADA
Slide 6: PCC and publicly traded operating companies
PCC and publicly traded operating companies This call follows a number of recent events held by PCC and its publicly traded operating companies Investors are encouraged to contact the companies directly for specific inquiries Event / Date Contact Annual General Meeting May 14, 2021 investor.re
Slide 7: Power Corporation – Recent business highlights
Power Corporation – Recent business highlights March 24 Portage Ventures launches Portage Ventures III with US$148 million of commitments at March 31, 2021 March 30 IPO of Dialogue, founded by Diagram – an incubator launched in collaboration with PCC via Sagard April 7 IGM announces record hig
Slide 8: Power Corporation financial highlights – Q1 2021
Power Corporation financial highlights – Q1 2021 NAV per share1 up 11% to $45.94 at March 31, 2021, compared to $41.27 at December 31, 2020 • NAV per share increased an additional 10% to $50.37 at May 12, 20212 Net earnings per share were $0.82, compared to $0.36 in Q1 2020 Adjusted net earnin
Slide 9: Net asset value
Net asset value NAV per share of $45.94 at Mar. 31, 2021, up 11% from Dec. 31, 2020 $50.37 per share at May 12, 20211, up an additional $4.43 or 10%, driven by: • $3.91 per share from increase in value of publicly traded OpCos • $0.52 per share from increase in value of investment in Lion Electr
Slide 10: PCC earnings per share
PCC earnings per share Net earnings per share of $0.82, compared with $0.36 in Q1’20 Adjusted net earnings per share of $1.16, compared with $0.62 in Q1’20 ($ per share) Q1'21 Q1'20 Great-West Lifeco 0.73 0.52 IGM 0.18 0.15 GBL 0.08 0.01 effect of consolidation (0.02) 0.06 0.97 0.74 Alternative
Slide 11: PCC is pursuing a focused strategy emphasizing financial services
PCC 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 businesses
Slide 12: PCC group of companies’ ongoing value creation strategy is focused on three key levers
PCC group of companies’ ongoing value creation strategy is focused on three key levers Organic growth strategies at each of our 1 OpCo Organic Levers publicly traded operating companies (OpCos): Great-West Lifeco, IGM & GBL 2 OpCo M&A Levers Deployment and redeployment of capital Actions we can take
Slide 13: Value creation focus of the publicly traded operating companies
Value creation focus of the publicly traded operating companies Capitalize on significant past investments to drive higher earnings and cash flow growth Pursue M&A transactions to enhance earnings and strategic positioning Continuously manage portfolio to ensure growth / return objectives are
Slide 14: Significant momentum generated by publicly traded OpCos
Significant momentum generated by publicly traded OpCos $2.1 trillion of AUA EPS of $0.85, highest Q1 in IGM’s €21.1 billion NAV, up 32.9% YoY history Record Canadian Individual €1.4 billion of portfolio rotation Wealth and Group Insurance Record $248.5 billion of AUM&A Continuation of
Slide 15: Empower business well positioned to target a large and growing segment of the U.S. financial services market
Empower business well positioned to target a large and growing segment of the U.S. financial services market Integration of Personal Capital and MassMutual acquisitions are on track Empower growth driven both organically and inorganically U.S. Household Investable Assets (2019, US$ trillions)
Slide 16: IG Wealth building momentum in high-net-worth and mass affluent market segments
IG Wealth building momentum in high-net-worth and mass affluent market segments Sales growth driven by high-net-worth and Exceptional performance and further mass affluent segments enhancements to iProfile managed solutions $1.98 billion gross inflows from households $22 billion+ client assets i
Slide 17: Strong rebound and outperformance, proof of GBL’s resilience and solid fundamentals
Strong rebound and outperformance, proof of GBL’s resilience and solid fundamentals GBL continues its path of delivering meaningful growth with a focus on mega-trends 32.9% year-over-year NAV growth, outperforming the Stoxx Europe 50 Continued asset rotation to reshape the portfolio with a focus
Slide 18: PCC’s fintech strategy is creating shareholder value
PCC’s fintech strategy is creating shareholder value Direct ownership of innovative companies that have a high impact on the group’s existing financial Make significant services business models investments in 1 critical future • Mackenzie’s partnership with Wealthsimple to deliver socially respons
Slide 19: Portage Ventures Overview
Portage Ventures Overview Portage invests in promising technology companies globally within select core verticals US$803M US$625M 55 2016 20%+ COMMITTED THIRD-PARTY & PORTFOLIO AND FUND LAUNCHED IN TARGET IRR2 CAPITAL1 ASSOCIATED INVESTMENTS CAPITAL SINCE INCEPTION Personal / SMB Wealth Management I
Slide 20: Equity offerings accelerate momentum and enhance value to PCC group’s shareholders
Equity offerings accelerate momentum and enhance value to PCC group’s shareholders On May 3, Wealthsimple announced a $750 million offering led by Meritech and Greylock, as well as new best-in-class investors PCC group’s interest valued at $2.6 billion based on the fundraising, including $500 mill
Slide 21: Lion Electric merger with Northern Genesis
Lion Electric merger with Northern Genesis On May 6, Lion Electric closed its merger with Northern Genesis and began trading under the new ticker symbol “LEV” on the TSX and NYSE North American leader in electric transportation. The company creates, designs, and manufactures all-electric class 5 t
Slide 22: Sagard Holdings and Power Sustainable have both developed their businesses substantially
Sagard Holdings and Power Sustainable have both developed their businesses substantially Significant ongoing fundraising and product development • Launch of $1 billion Power Sustainable Energy Infrastructure Partnership in Jan’21 • Launch of Portage Ventures III with initial capital commitments of
Slide 23: PCC’s alternative asset management strategy part of the group’s broader strategy in alternatives
PCC’s alternative asset management strategy part of the group’s broader strategy in alternatives LP in Power Sustainable’s Energy Infrastructure Partnership, Sagard Holdings’ Portage and private credit funds, and investor in Northleaf • Advance strategy to expand alternative investments for its ba
Slide 24: China AMC’s growth has accelerated
China AMC’s growth has accelerated #1 onshore ETF issuer, #2 Chinese long-term mutual fund manager by market share AUM1 was RMB¥ 1,461 billion as at Dec’20, a 42% increase from RMB¥ 1,032 billion as at Dec’19 PCC’s share of China AMC earnings1 was $13 million in Q1’21, compared to $9 million i
Slide 25: Standalone businesses – An additional source of value creation
Standalone businesses – An additional source of value creation PCC will manage standalone businesses, representing $1.4 billion of NAV in aggregate, to realize value over time Based on May 12, 2021 Lion share price, $1.7 billion value of standalone businesses 70% of NAV is publicly traded (i.e.
Slide 26: Operating expense reduction
Operating expense reduction We have implemented actions to achieve 66% of the targeted expense reductions, or $33 million on an annual run-rate basis to date Retirement of Co-CEOs and changes in governance Certain PFC public company expenses eliminated Restructuring of Group’s research and adv
Slide 27: Power Corporation and its OpCos have elevated their communication programs with the investment community
Power Corporation and its OpCos have elevated their communication programs with the investment community Launched quarterly earnings call in Q1’20 New investment platform disclosure aligned with business model in Q2’20 63 meetings with investors and analysts in 2021 year-to-date Enhanced con
Slide 28: PCC liquidity and cash
PCC liquidity and cash PCC continues to assess market conditions with a goal to re-commence NCIB program • NCIB program temporarily suspended end of March 2020 in light of pandemic-driven market environment • Limited share buybacks to date in 2021 – sufficient to offset dilutive effect of options
Slide 29: PCC discount to NAV
PCC discount to NAV Power Corporation’s discount to NAV has been narrowing with increased corporate activity Great-West sale of 40% U.S. life business announced PCC / PFC reorganization 35% announced WHO declares global pandemic Wealthsimple 30% fundraising & Dec’15 to Dec’18 Lion merger 34% average
Slide 30: 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 2 M&A Augment earni
Slide 31: Summary
Summary PCC continues to make progress on its value creation strategy Strong organic growth in publicly-traded OpCos with business momentum generated Continued focus on M&A opportunities Realization of value on standalone businesses Alternate asset investment platforms attracting and raisi
Slide 32: Questions
Questions POWER CORPORATION OF CANADA
Slide 33: Appendix
Appendix POWER CORPORATION OF CANADA
Slide 34: Abbreviations
Abbreviations The following abbreviations are used throughout this presentation: adidas adidas AG NAV Net asset value AUA Assets under administration NCIB Normal course issuer bid AUM Assets under management Northern Genesis Northern Genesis Acquisition Corp. Canada Life The Canada Life Assurance Co
Slide 35: GBL net asset value
GBL net asset value Portfolio companies have shown adaptability and resilience, attributable to their position as sector leaders, critical size and robustness of their balance sheets % Mar. 31, 2021 PCC Share of Dec. 31, 2020 Ownership Value (€M) Value (€M) (1) Value (€M) Listed and Private Investme
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