Principal Financial Group Inc · NASDAQ:PFG
Principal Financial — Q4 2024 Earnings Presentation
23 slides from Principal Financial's earnings presentation, Feb 7, 2025
Slide 1: Fourth Quarter 2024 and 2025 Outlook
Bye © Principal RETIREMENT | ASSET MANAGEMENT Fourth Quarter 2024 and 2025 Outlook PRINCIPAL FINANCIAL GROUP February 6, 2025 Earnings | BENEFITS & PROTECTION
Slide 2: Key takeaways
Key takeaways Delivering on 11% 13.7% 80% long-term EPS growth’ ROE? FCF 93 guidance (9-12% target) (14-16% target) (75-85% target) * Strong excess and available capital position of $1.6B Cc it l * Seasonally strong free capital flow conversion in 4Q24; full year conversion within our 75-85% targete
Slide 3: Full year 2024 financial highlights
Full year 2024 financial highlights Delivering on long-term guidance 11% 13.7% 80% EPS growth! ROE? FCF %3 (9-12% target) (14-16% target) (75-85% target) FY 2024 operating results Reported non-GAAP Non-GAAP operating earnings, operating earnings® excluding significant variances (xSV)" $1,641M $1,799
Slide 4: 4Q 2024 financial highlights
4Q 2024 financial highlights Announced additional $1.5B share repurchase authorization $0.8B remains on existing authorization 4Q 2024 Operating results Reported non-GAAP Capital deployments 4Q 2024 capital deployments $466M returned to shareholders: $300M of share repurchases $166M of common stock
Slide 5: Priorities to drive sustained growth
Priorities to drive sustained growth Retirement Small and Global Asset Ecosystem Midsized Business Management Uniquely positioned to capture Built to serve diverse SMB Driving global asset workplace opportunities segments with a resilient, long- management growth with through expertise and tenured c
Slide 6: Retirement and Income Solutions
Retirement and Income Solutions Delivered above guided revenue growth and top end of margin guidance Pre-tax operating earnings, xSV' ox Highlights ($ in millions) 4151 * Pre-tax operating earnings xSV' increased 6% primarily 1,058 u due to growth in the business, favorable market performance and hi
Slide 7: Principal Asset Management
Principal Asset Management Delivered 100 bps of margin expansion in 2024 Pre-tax operating earnings, xSV" 925 853 ($ in millions) 274 @ Investment Management 277 © International Pension +14% 202 230 66 “ 4Q23 4Q24 2023 2024 International Pension’s impact of 17 (14) (7) 8 significant variances" Repor
Slide 8: Benefits and Protection
Benefits and Protection Delivered on premium and fees growth and Specialty Benefits margin Pre-tax operating earnings, xSV' 43% ($ in millions) 568 586 @ Specialty Benefits 117 110 © Life Insurance +9% 151 a - 41 476 121 141 4Q23 4Q24 2023 2024 Impact of significant variances" ”) (10) (30) (123) Rep
Slide 9: High quality and diversified investment portfolio
High quality and diversified investment portfolio U.S. invested assets and cash; excluding funds withheld, as of 12/31/2024 Government Agencies, State & Political, 7.6% Cash, 3.5% Other’, 10.7% Real Estate Equity and Equity Securities, 4.8% Commerical $ 8 2 . 9 B Corporate Mortgage Loans Bonds, 32.1
Slide 10: 2025 Outlook
2025 Outlook
Slide 11: 2025 Outlook
an 2025 Outlook Well-positioned to deliver strong enterprise growth aligned with long-term targets * 2025 outlook aligned with long-term guidance o 9-12% growth in EPS" o Above targeted range on a reported basis Enterprise o 75-85% free capital flow conversion? outlook © 14-16% ROE? * Focused on ret
Slide 12: 2025 Outlook
2025 Outlook Guidance ranges on an excluding significant variances basis 2024 EPS1 x-SV Long-term guidance Total Company EPS growth $7.65 9 - 12% Growth above range on a reported basis Effective tax rate 17 - 20% Medium-term 2024 x-SV2 guidance 2025 considerations (2025-2027) Retirement and Income S
Slide 13: Appendix
Appendix © Principal’
Slide 14: Investment performance
Investment performance 54% of fund-level AUM has 4 or 5 star rating from Morningstar 1 , 2 Asset Weighted % of AUM outperforming Morningstar median3 % of composite AUM outperforming benchmarks4 As of 12/31/2024 1-Year 3-Year 5-Year 10-Year 1-Year 3-Year 5-Year 10-Year Equity 71% 43% 62% 97% 79% 46%
Slide 15: Disciplined capital management strategy
Disciplined capital management strategy With emphasis on actively returning excess capital to shareholders Targeted range as a percentage of net income1: Organic capital deployment 15-25% Capital efficient business mix Consistent dividend payout ratio 40% Growth of dividend will track growth in net
Slide 16: Market sensitivities
Market 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 If macroeconomics Equity market return 1 Interest rates +/-100 bps FX: U.S. Dollar2
Slide 17: Full year 2024 significant variances
Full year 2024 significant variances Earnings impacts of significant variances (in millions) 3Q Actuarial assumption Variable investment . . Total significant . . EncaJe and m flat'I0n Oth er 1 . review income variances Retirement and Income Solutions $(16.7) $(78.5) $(95.2) International Pension $2
Slide 18: Full year 2024 significant variances
Full year 2024 significant variances Revenue impacts of significant variances (in millions) 2024 revenue, Actuarial assumption Variable investment Encaje and 2024 revenue, B usmess . U ni·t Revenue met nc . as reported review . . income . . inflation X-SV Retirement and Net revenue $2,801 $(17) $(78
Slide 19: 4Q 2024 significant variances
4Q 2024 significant variances Business unit impacts of significant variances (in millions) Variable investment income Encaje and inflation Other 1 Total significant variances Retirement and Income $(16.0) $(16.0) Solutions International Pension $(4.9) $(8.7) $(13.6) Specialty Benefits $(4.0) $9.7 $5
Slide 20: Non-GAAP financial measure reconciliations
Non-GAAP financial measure reconciliations Three months ended Three months ended (in millions) Diluted earnings per common share 12/31/24 12/31/23 Investment Management operating revenues less 12/31/24 12/31/23 pass-through expenses Net income $3.92 $(3.66) Net realized capital (gains) losses, as ad
Slide 21: Non-GAAP financial measure reconciliations
Non-GAAP financial measure reconciliations Twelve months ended Twelve months ended (in millions) (in millions) Non-GAAP operating earnings (Losses) 12/31/24 12/31/23 Income taxes 12/31/24 12/31/23 Total GAAP income taxes $291.7 $68.7 Net income attributable to PFG $1,571.0 $623.2 Net realized capita
Slide 22: Non-GAAP financial measure reconciliations
Non-GAAP financial measure reconciliations Period ended Period ended (in millions) Stockholders' equity x- cumulative change in fair value of funds Non-GAAP operating earnings ROE (x- cumulative change in fair value withheld embedded derivative and AOCI other than foreign currency 12/31/24 of funds
Slide 23: Additional Disclosures
Additional Disclosures 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 f
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