Principal Financial Group Inc · NASDAQ:PFG
Principal Financial — Q2 2023 Earnings Presentation
17 slides from Principal Financial's earnings presentation, Jul 28, 2023
Slide 1: Second Quarter 2023 Earnings Call Presentation
e) Principal’ Second Quarter 2023 Earnings Call Presentation PRINCIPAL FINANCIAL GROUP July 27, 2023 RETIREMENT ASSET MANAGEMENT BENEFITS & PROTECTION
Slide 2: 2Q 2023 key takeaways
2Q 2023 key takeaways Balance Sheet Capital 1 As of July 27, 2023 Second quarter results demonstrate the value of our diversified business model Financial results consistent with 2023 outlook; beginning to benefit from market tailwinds Strength and resilience of our small to mid-sized customer segme
Slide 3: 2Q 2023 financial highlights
2Q 2023 financial highlights 2Q 2023 OPERATING EARNINGS AND EPS Reported non-GAAP Impact of significant variances to Non-GAAP operating earnings, operating earnings! non-GAAP operating earnings? excluding significant variances (xSV) $376M $39M after-tax $415M (-11% vs. 2Q 2022) ($53M pre-tax) (flat
Slide 4: Investment performance
Investment performance % of funds outperforming Morningstar median’? As of 6/30/2023 1-Year 3-Year 5-Year 10-Year Equity 53% 48% 68% 89% Fixed Income 81% 63% 73% 82% Asset Allocation 85% 73% 84% 83% Total 71% 62% 76% 85% % of composites outperforming benchmarks"? As of 6/30/2023 1-Year 3-Year 5-Year
Slide 5: High quality and diversified investment portfolio
High quality and diversified investment portfolio U.S. invested assets and cash; excluding funds withheld, as of June 30, 2023 Government Cash, 3.6% Agencies, State Other’, 10.4% & Political, 9.1% Residential Loans, 4.6% Commerical $ Mortgage Loan: 7 2 ° 8 B Corporate (ex-Office), U.S. invested asse
Slide 6: Retirement and Income Solutions
Retirement and Income Solutions HIGHLIGHTS * Pre-tax operating earnings excluding significant variances! increased due Net revenue (9M) Quarterly basis to benefits from rising interest rates and disciplined expense management * Quarterly PRT sales of $0.6B; year-to-date sales $1.2B $652 $640 —(2%) *
Slide 7: Principal Global Investors (PGI)
Principal Global Investors (PGI) HIGHLIGHTS Operating revenues less . . pass-through expenses! ($M) * Pre-tax operating earnings decreased due to lower net performance fees Quarterly basis of $30M, lower management fees from a decrease in average AUM, and lower transaction and borrower fees $429 * 2
Slide 8: Principal International
Principal International HIGHLIGHTS * Pre-tax operating earnings excluding significant variances’ increased primarily due to higher combined net revenue as a result of higher AUM * Net cash flow slightly negative primarily due to outflows from Chile annuitizations as a result of high interest rates O
Slide 9: Specialty Benefits
Specialty Benefits HIGHLIGHTS Premium and fees ($M) * Pre-tax operating earnings excluding significant variances’ increased Quarterly basis due to growth in the business and lower claims experience fo $750-—{ +8% } / * Premium and fees increased 8% driven by strong sales, retention, employment and w
Slide 10: Life Insurance
Life Insurance HIGHLIGHTS Premium and fees ($M) + Pre-tax operating earnings excluding significant variances' decreased, Quarterly basis driven by lower net investment income from a lower capital base as a result of the 2022 reinsurance transactions * Premium and fees excluding impacts from the rein
Slide 11: Appendix
Appendix
Slide 12: 2Q 2023 significant variances
2Q 2023 significant variances Business unit impacts of significant variances (in millions) Variable investment income Inflation Retirement and Income $(23.0) . . §(23.0) Principal International §(7.0) $(6.2) $(6.4) $(19.6) Specialty Benefits $(4.5) - - $(4.5) Individual Life $(6.1) - - $(6.1) Total
Slide 13: Non-GAAP operating earnings sensitivities
Non-GAAP operating earnings sensitivities Estimated impacts of changes in key macroeconomic conditions on annual non-GAAP pre-tax operating earnings relative to the next 12 months, prior to management expense actions Certain alternative Equity market investment If macroeconomics return! Interest rat
Slide 14: Non-GAAP financial measure reconciliations
14 Non-GAAP financial measure reconciliations Three months ended (in millions) Principal Global Investors operating revenues less pass-through expenses Geers Ceser) Non-GAAP operating earnings (losses) (in millions) 6/30/23 Three months ended 6/30/22 Principal Global Investors operating revenues $39
Slide 15: Non-GAAP financial measure reconciliations
15 Non-GAAP financial measure reconciliations Period ended (in millic Stockholders’ equity x- cumulative change in fair value of funds withheld embedded derivative and AOC! other than foreign currency translation adjustment, available to common stockholders 6/30/23 Non-GAAP operating earnings ROE (x
Slide 16: Use of non-GAAP financial measures
Use of non-GAAP financial measures A non-GAAP financial measure is a numerical measure of performance, financial position, or cash flow that includes adjustments from a comparable financial measure presented in accordance with U.S. GAAP, The company uses a number of non-GAAP financial measures manag
Slide 17: Forward looking statements
17 Forward looking statements Certain statements made by the company which are not historical facts may be considered forward-looking statements, including, without limitation, statements as to non-GAAP operating earnings, net income attributable to PFG, net cash flow, realized and unrealized gains
Principal Financial Group — Q2 2023 Earnings Presentation on 6ix