Power Corporation Of Canada · TSX:POW
Power Corporation Of Canada — Q3 2021 Earnings Presentation
31 slides from Power Corporation Of Canada's earnings presentation, Nov 11, 2021
Slide 1: Investor Presentation Q3 2021 Quarterly Results
Investor Presentation Q3 2021 Quarterly Results November 11th, 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 | Q3 2021 4
Slide 5: Q3 2021 Highlights
Q3 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 Q3 2021 Earnings Release November 10, 2021 inve
Slide 7: Power Corporation – Recent business highlights
Power Corporation – Recent business highlights Strong earnings growth and momentum at Great-West and IGM Great-West reported Q3 2021 results with strong underlying business performance across segments IGM reported record earnings, net sales and assets under management & advisement Asset divestit
Slide 8: Power Corporation financial highlights – Q3 2021
Power Corporation financial highlights – Q3 2021 NAV per share1 of $52.81 at September 30, 2021, up 2% vs. June 30, 2021 and an additional 2% to $53.98 at November 10, 20212 • NAV per share up 51% from September 30, 2020 Net earnings per share were $1.09, compared to $0.75 in Q3 2020 Adjusted
Slide 9: Net asset value
Net asset value NAV per share of $52.81 at September 30, 2021, up 2% vs. June 30, 2021 and an additional 2% to $53.98 at November 10, 20211 • NAV per share up 51% from September 30, 2020 % of Gross ($ billions) Sep. 30, 2021 Asset Value Publicly Great-West $23.9 57.7% Traded IGM 6.7 16.2% Operatin
Slide 10: PCC earnings per share
PCC earnings per share Net earnings per share of $1.09, compared to $0.75 in Q3’20 Adjusted net earnings per share of $1.10, compared to $0.72 in Q3’20 ($ per share) Q3'21 Q3'20 Great-West 0.86 0.67 IGM 0.25 0.20 GBL (0.02) (0.02) Effect of consolidation (1) (0.01) (0.06) 1.08 0.79 Alternative a
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: 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 13: 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 14: Strong earnings growth and momentum at Great-West and IGM
Strong earnings growth and momentum at Great-West and IGM Q3’21 base EPS up 27% from Q3’20 to $0.93 Record all-time quarterly adjusted EPS up 26% from Q3’20 to $1.13 Driven by strong underlying performances across businesses, strength in markets and the benefits of Record high total AUM&A of
Slide 15: PCC has monetized assets during 2021
PCC has monetized assets during 2021 $0.8 billion in pre-tax proceeds year to date from the sale of investments and standalone businesses In Q3, PCC completed the sale of its 37.1% LP interest in Sagard Europe 3 in a secondary transaction to institutional investors, receiving $334 million in proce
Slide 16: PCC share buybacks, capital and leverage
PCC share buybacks, capital and leverage PCC share buybacks PCC intends to resume normal course share buybacks under its NCIB program • NCIB program temporarily suspended end of March 2020 As cash is realized from monetizations of assets, excess cash will be returned to shareholders in the absen
Slide 17: Sagard and Power Sustainable continue to drive growth in AUM by attracting third party capital
Sagard and Power Sustainable continue to drive growth in AUM by attracting third party capital $3.4 billion1 raised from 3rd party investors year-to-date across all 6 strategies 2021 Highlights to Date Funded and Unfunded AUM ($ billions) Launch of Power Sustainable Energy Infrastructure 12.5 Part
Slide 18: Ongoing fundraising at alternative asset investment platforms
Ongoing fundraising at alternative asset investment platforms $12.5 billion of funded and unfunded AUM as of September 30, 2021 • $0.4 billion increase in funded AUM and $0.5 billion increase in unfunded AUM compared to Q2’21 Funded and Unfunded AUM Total Funded AUM and Funded AUM by Platform Tota
Slide 19: Sagard establishes real estate capability through transaction with Great-West
Sagard establishes real estate capability through transaction with Great-West Great-West has agreed to sell EverWest, a US based real estate investment platform with US$3.8 billion in assets under management, to Sagard Great-West will become a minority equity holder in Sagard Holdings Management
Slide 20: PCC’s alternative asset management strategy is part of the group’s broader strategy in alternatives
PCC’s alternative asset management strategy is part of the group’s broader strategy in alternatives Limited partner (LP) in Power Sustainable’s Energy Infrastructure Partnership, Sagard’s Portage and private credit funds, and investor in Northleaf and Sagard Holdings Management Inc. • Advance stra
Slide 21: China AMC’s growth has accelerated
China AMC’s growth has accelerated A leading asset manager in China across mutual funds, ETFs and institutional AUM1 was RMB¥1,607 billion as at Jun’21, a 10% increase from RMB¥1,461 billion as at Dec’20 PCC’s share of China AMC earnings2 was $17 million in Q3’21, compared to $11 million in Q3
Slide 22: Standalone businesses – An additional source of value creation
Standalone businesses – An additional source of value creation PCC will manage standalone businesses, representing $1.6 billion1 of NAV in aggregate, to realize value over time In October 2021, PCC monetized its interest in GP Strategies through its merger with Learning Technologies Group, receivi
Slide 23: Operating expense reduction
Operating expense reduction We have implemented actions to achieve 93% of the targeted expense reductions, or $47 million on an annual run-rate basis to date Reorganization of asset management activities Rationalization of real estate business Restructuring of the Group’s research and advisory
Slide 24: 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 Enhanced investment platform and non-consolidated MD&A disclosure Meeting
Slide 25: PCC Group continues to make progress on ESG initiatives and positions itself for further achievements
PCC Group continues to make progress on ESG initiatives and positions itself for further achievements PCC published its 2020 annual ESG data supplement • Now includes an ESG Index for GRI, SASB, WEF and TCFD related indicators Great-West announced commitment to net zero greenhouse gas emissions
Slide 26: 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 fundraising & 30% Dec’15 to Dec’18 Lion merger 34% average
Slide 27: Opportunities for further value creation
Opportunities for further value creation PCC will continue to exercise its three levers for value creation, with concrete actions and opportunities available in the short to medium-term OpCo Continue to drive earnings growth at OpCos, building on significant business momentum 1 Organic • Broad-bas
Slide 28: Questions
Questions POWER CORPORATION OF CANADA
Slide 29: Appendix
Appendix POWER CORPORATION OF CANADA
Slide 30: Abbreviations
Abbreviations The following abbreviations are used throughout this presentation: adidas adidas AG NAV Net asset value Ark Life Ark Life Assurance Company dac NCI Non-controlling interests AUM Assets under management NCIB Normal course issuer bid AUM&A Assets under management and advisement Northleaf
Slide 31: 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 % Sep. 30, 2021 PCC Share of (1) Ownership Value (€M) Value (€M) Listed and Private Investments Pernod Ricard 7.6% 3,
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