Power Corporation Of Canada · TSX:POW
Power Corporation Of Canada — Q3 2022 Earnings Presentation
33 slides from Power Corporation Of Canada's earnings presentation, Nov 10, 2022
Slide 1: Investor Presentation Q3 2022 Results
Investor Presentation Q3 2022 Results November 10th, 2022
Slide 2: Forward looking statements and disclosures concerning public investees
Forward looking statements and disclosures concerning public investees 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 their remarks or in respon
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 ION | Q 3 2 0 2 2 4
Slide 5: Q3 2022 Results
POWER CORPORATION OF CANADA Q3 2022 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 ▪ Q3 2022 Conference Call November 10, 2022 ▪
Slide 7: Power’s Q3 2022 highlights
Power’s Q3 2022 highlights Solid net and adjusted net earnings at Great-West Lifeco and IGM considering multiple headwinds in the quarter ▪ Great-West Lifeco reported third quarter net earnings and adjusted net earnings1 of $688 million, compared with net earnings of $872 million and adjusted net ea
Slide 8: Current market environment
Current market environment ▪ Our businesses are well-positioned to serve clients and stakeholders amidst challenging market conditions Last Ten Years Canadian Mutual Fund Market Performance Third Quarter Industry Net Sales2 (Indexed to 100 as at Dec. 31, 2021) ($ in billions) YTD Index Growth 1 30 1
Slide 9: Power Q3 2022 financial highlights
Power Q3 2022 financial highlights ▪ Net EPS and adjusted net EPS1 were $0.63, compared with $1.09 and $1.10, respectively, in Q3 2021 • PCC’s share of Great-West Lifeco’s provision for Hurricane Ian claims was $0.13 per share ▪ Adjusted net asset value (“NAV” or “Net Asset Value”) per share1 was $3
Slide 10: Net and adjusted net earnings
Net and adjusted net earnings ▪ Net earnings and adjusted net earnings1 were $422 ($ in millions, except per share amounts) Q3 2022 Q3 2021 million or $0.63 per share Great-West Lifeco 458 580 • Diversification underpins Great-West Lifeco’s resilient IGM 134 167 business performance. PCC's share of
Slide 11: Net asset value
Net asset value ▪ NAV per share was $39.38 at September 30, 2022, compared with $41.49 at June 30, 2022 • Publicly traded operating companies represent 80.2% of gross asset value • Investments measured at market value and cash represent 88.6% of the total assets at fair value • NAV per share of $40.
Slide 12: Great-West Lifeco’s U.S. segment is positioned for future growth
Great-West Lifeco’s U.S. segment is positioned for future growth The MassMutual integration completed and the Prudential integration on track; with a new Empower digital experience available leveraging Personal Capital capabilities ▪ MassMutual integration program substantially complete ▪ On-track t
Slide 13: IG Wealth continued strong high net worth and mass affluent new client acquisition
IG Wealth continued strong high net worth and mass affluent new client acquisition • Q3 gross inflows of $2.8 billion were the 2nd best third quarter on record • Solid net flows of $406 million in the third quarter • September 30, 2022 LTM AUA1 outflows rate of 8.9% remains well-below the industry a
Slide 14: ChinaAMC continues to build business momentum
ChinaAMC continues to build business momentum On January 5, 2022, PCC announced an agreement under which the group’s combined 27.8% equity ownership stake in ChinaAMC would be consolidated at IGM ▪ AUM1 was RMB¥1,733 billion as at September 30, 2022, a 4.3% increase from RMB¥1,662 billion as at Dece
Slide 15: Northleaf Capital Partners
Northleaf Capital Partners ▪ Strong year-to-date fundraisings of $2.5 billion and AUM growth of 18.5% as at September 30, 2022 ▪ IGM Financial and Great-West Lifeco have committed capital across each of Northleaf’s three global mid-market private market platforms: private equity, private credit and
Slide 16: GBL continues to increase its exposure to private assets
GBL continues to increase its exposure to private assets ▪ Private assets represent 23% of GBL’s portfolio, with Sienna representing an additional 14% • Private assets values were up 4% in Q3 2022 and 12% year-to-date • Closed two strategic acquisitions in the growing and resilient healthcare sector
Slide 17: Power has returned $2.8 billion of capital to shareholders
Power has returned $2.8 billion1 of capital to shareholders since the beginning of 2021 $2.2 billion of dividends declared during the period and $566 million of shares repurchased, including $413 million in 2022 ▪ Quarterly dividends increased by 10.6% in November 2021 ▪ 15.2 million shares repurcha
Slide 18: Building alternative investment platforms to deliver recurring asset management earnings
Building alternative investment platforms to deliver recurring asset management earnings Power expects to generate recurring earnings from its asset management operations ▪ Sagard and Power Sustainable are focused on growing their respective platform by attracting third party capital and adhering to
Slide 19: Power’s fintech strategy delivers strategic benefits
In addition to delivering financial returns, the Power group’s fintech strategy delivers strategic benefits ▪ Direct ownership of innovative companies that have a high impact on the group’s existing financial services business models Make significant investments in • Mackenzie’s partnership with Wea
Slide 20: Standalone businesses remain an additional source of value creation
Standalone businesses remain an additional source of value creation The standalone businesses, representing $855 million1 of NAV and $769 million of carrying value in aggregate, will be managed by Power to realize value over time Nov. 9, 2022 Fair Value Business (Publicly Traded Co’s) Progress in Su
Slide 21: 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 Lifeco 40% sale of U.S. life business announced Power / PFC reorganization announced 35% WHO declares global pandemic Wealthsimple fundraising & 30% Lion merger Dec’15 to Dec
Slide 22: 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 23: Questions
POWER CORPORATION OF CANADA Questions
Slide 24: Appendix
POWER CORPORATION OF CANADA Appendix
Slide 25: Abbreviations
Abbreviations The following abbreviations are used throughout this presentation: adidas adidas AG Mowi Mowi ASA Affidea Affidea Group B.V. NAV or Net Asset Value Adjusted net asset value AUA Assets under advisement NCI Non-controlling interests AUM Assets under management NCIB Normal course issuer b
Slide 26: Power is pursuing a focused strategy emphasizing financial services
Power 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 business
Slide 27: 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 28: 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 29: GBL reported net asset value
GBL reported net asset value1 GBL net asset value per share of €112.39 at September 30, 2022, compared to €116.53 at June 30, 2022 Sep. 30, 2022 Power Share of % of % Sep. 30, 2022 Power Share of % of (2) Value (€M) Value (€M)(2) Portfolio Ownership Value (€M) Value (€M) Portfolio Listed Investments
Slide 30: Power’s alternative asset investment platforms
Power’s alternative asset investment platforms Asset Management Investing ($ millions) Q3 2022 Q3 2021 Activities Activities Asset Management Activities Sagard (1) + + = Recurring Management fees 35 29 Carried Proprietary Value Fee-Related Interest Capital to Power Investment platform expenses (38)
Slide 31: Earning attractive returns on proprietary capital
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 32: Ongoing fundraising at alternative asset investment platforms
Ongoing fundraising at alternative asset investment platforms ▪ $20.0 billion of funded and unfunded AUM1, compared with $19.2 billion as at June 30, 2022 ▪ $1.4 billion of fundraising in 2022 to date2 Funded and Unfunded AUM Total Funded AUM and Funded AUM by Platform Sagard Power Sustainable $20.0
Slide 33: Power has monetized $1.0 billion of assets since the beginning of 2021
Power has monetized $1.0 billion of assets since the beginning of 2021 Additional $575 million pre-tax proceeds expected from the pending ChinaAMC transaction Date Event Size Sale of LP interest in Sagard Europe 3 $334 million $187 million1 Wealthsimple fundraising secondary offering Power Sustainab
Power Corporation of Canada — Q3 2022 Earnings Presentation on 6ix