Power Corporation Of Canada · TSX:POW
Power Corporation Of Canada — Q2 2023 Earnings Presentation
33 slides from Power Corporation Of Canada's earnings presentation, Aug 11, 2023
Slide 1: Investor Presentation Q2 2023 Results
Investor Presentation Q2 2023 Results August 11th, 2023
Slide 2: Forward looking statements, disclosures concerning public investees and basis of presentation
Forward looking statements, disclosures concerning public investees and basis of presentation 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 the
Slide 3: Non-IFRS financial measures and other measures
Non-IFRS financial measures and other measures Non-IFRS Financial Measures Management uses these financial measures in its presentation and analysis of the financial performance of Power Corporation and believes that they provide additional meaningful information to listeners/readers in their analys
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 2 2 0 2 3 4
Slide 5: Q2 2023 Results
POWER CORPORATION OF CANADA Q2 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 Q2 2023 Conference Call August 11 investor.
Slide 7: Power highlights
Power highlights Strong results at Great-West and IGM reflect consistent performance across all businesses Great-West Q2 2023 base earnings1 of $920 million vs. $903 million2 in Q2 2022 and net earnings of $498 million vs. $823 million in Q2 2022 IGM Q2 2023 adjusted net earnings3 of $205 millio
Slide 8: Current market environment
Current market environment Our businesses are well-positioned to serve clients and stakeholders amidst uncertain market conditions Last 10 Years Canadian Mutual Fund Monthly Change in Term Deposits Central Bank Lending Rates Second Quarter Industry Net Sales1 at Big Six Banks Canada and U.S. ($ in
Slide 9: Power Q2 2023 financial highlights
Power Q2 2023 financial highlights1 Net earnings were $501 million or $0.75 per share, compared with $601 million or $0.89 per share in Q2 2022 Adjusted net earnings2 were $847 million or $1.27 per share, compared with $647 million or $0.97 per share in Q2 2022 Adjusted net asset value (“NAV”
Slide 10: Net and adjusted net earnings
Net and adjusted net earnings ($ in millions, except per share amounts) Q2 2023 Q2 2022 Great-West and IGM contributions: Adjusted net earnings (2) Great-West 628 601 Earnings Focused • Great-West results reflect higher investment IGM 128 129 returns, increased fees driven by higher average Effect
Slide 11: Net asset value
Net asset value NAV per share was $48.86 at June 30, 2023, compared with $46.89 at March 31, 2023 • Publicly traded operating companies represent 85.9% of gross asset value • Publicly traded investments and cash represent 93.3% of gross asset value • NAV per share of $49.95 at August 10, 20231 B
Slide 12: Great-West sale of Putnam to Franklin Templeton
Great-West sale of Putnam to Franklin Templeton On May 31, Great-West announced the sale of Putnam to Franklin Templeton and a strategic partnership to drive value for all stakeholders Unlocks the economic value of Putnam and facilitates the continued focus of Great-West’s U.S. growth strategy on
Slide 13: Great-West has repositioned its U.S. business and built the 2nd largest retirement provider
Great-West has repositioned its U.S. business and built the 2nd largest retirement provider1 with a growing wealth management presence 2019 Sale of individual life and annuity business to Protective Life U.S. Individual Life Insurance & Annuity Business Insurance Company 2020 Purchase added retail s
Slide 14: 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 15: ADQ and BMO to join Great-West as strategic partners of Sagard
ADQ and BMO to join Great-West as strategic partners of Sagard On July 6, Sagard announced new strategic partnerships with ADQ and BMO, and an expanded partnership with Great-West The strategic partners have agreed to invest capital to drive Sagard’s future growth, including through M&A transactio
Slide 16: The Power group has announced a number of value-enhancing transactions in 2023
The Power group has announced a number of value-enhancing transactions in 2023 Date Transaction Size Apr’23 IGM acquires interest in Rockefeller Capital Management US$622 million Apr’23 Canada Life agrees to acquire Investment Planning Counsel from IGM1 $575 million Apr’23 Power sells its interest i
Slide 17: Ongoing fundraising at alternative asset investment platforms
Ongoing fundraising at alternative asset investment platforms $21.8 billion of funded and unfunded AUM1, compared with $19.2 billion as at June 30, 2022 $649 million of fundraising in Q2 2023 • Includes $511 million of fundraising in Portage Capital Solutions • Subsequent to Q2 2023, Sagard Heal
Slide 18: Building alternative investment platforms
Building alternative investment platforms Sagard and Power Sustainable are focused on growing by attracting third party capital and targeting fee-related earnings contribution as they scale Recurring fees generated on committed capital, invested capital or NAV • Base management fees range from 0
Slide 19: 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
Slide 20: Lion and LMPG have been financing their growth from third party investors
Lion and LMPG have been financing their growth from third party investors Power continues to manage its standalone businesses to surface and realize value over time In 2021, merged with Northern Genesis, a special purpose acquisition company, raised approximately US$490 million2 and began trading
Slide 21: Returning capital to shareholders
Returning capital to shareholders Power continued to return capital to shareholders in 2023 $680 million of dividends paid to participating shareholders at June 30, 2023 $282 million of shares repurchased under the NCIB program in 20231 • 7.7 million shares or 1.2% of participating shares • Incl
Slide 22: Power's shareholder returns
Power’s shareholder returns Power’s shareholder returns have compared favourably to the S&P TSX and S&P TSX Financials indices in recent periods Total Shareholder Return As at July 31, 2023 Years Last 12 Months Last 3 Years Last 5 Years Annualized Annualized Power Corporation 14.0% 23.0% 11.3% S&P T
Slide 23: 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 PCC / PFC reorganization announced 35% WHO declares global pandemic Wealthsimple fundraising & 30% Lion merger Dec’15 to Dec’18 34% a
Slide 24: 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 25: Questions
POWER CORPORATION OF CANADA Questions
Slide 26: Appendix
POWER CORPORATION OF CANADA Appendix
Slide 27: Abbreviations
Abbreviations The following abbreviations are used throughout this presentation: adidas adidas AG NAV or Net Asset Value Adjusted net asset value ADQ Abu Dhabi Developmental Holding Co. NCI Non-controlling interests Affidea Affidea Group B.V. NCIB Normal course issuer bid AFS Available for sale Nort
Slide 28: Power has been pursuing a new value creation strategy since the reorganization announced in late 2019
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 29: 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 30: 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 31: 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 32: GBL reported net asset value
GBL reported net asset value1 Net asset value per share reported by GBL of €119.30 at June 30, 2023 Jun. 30, 2023 Power Share of % of % Jun. 30, 2023 Power Share of % of Value (€M) Value (€M)(2) Portfolio Ownership Value (€M) Value (€M) (2) Portfolio Listed Investments Listed Investments 12,270 1,90
Slide 33: Alternative asset investment platforms
Alternative asset investment platforms ($ millions) Q2 2023 Q2 2022 Asset Management Investing Activities Activities Asset Management Activities Sagard Management fees (1) 45 43 + + = Recurring Investment platform expenses (46) (37) Carried Proprietary Value Fee-Related Interest Capital to Power Fee
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