Power Corporation Of Canada · TSX:POW
Power Corporation Of Canada — Q4 2022 Earnings Presentation
35 slides from Power Corporation Of Canada's earnings presentation, Mar 17, 2023
Slide 1: Investor Presentation Q4 2022 Results
Investor Presentation Q4 2022 Results March 17th, 2023
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 PO W E R CO R PO R AT I O N O F CAN ADA Q UAR T E R L Y R E SUL T S PR E SE N T AT I O N | Q 4 2 0 2 2 4
Slide 5: Q4 2022 and Year-End Results
POWER CORPORATION OF CANADA Q4 2022 and Year-End 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 Q4 2022 Conference Call March 17, 2023 Q4
Slide 7: Power highlights
Power highlights Power dividend increased 6.1% Power declared a quarterly dividend of $0.5250 per participating share Strong earnings at Great-West and IGM in a challenging environment Great-West Q4 2022 net earnings of $1,026 million vs. $765 million in Q4 2021 • Great-West announced a 6.1% inc
Slide 8: Current market environment
Current market environment Our businesses are well-positioned to serve clients and stakeholders amidst challenging market conditions Last Ten Years Canadian Mutual Fund Market Performance Fourth Quarter Industry Net Sales1 (Indexed to 100 as at Dec. 31, 2021) ($ in billions) 105 YTD 30 Index Growt
Slide 9: Power Q4 2022 financial highlights
Power Q4 2022 financial highlights Net earnings were $486 million or $0.73 per share, compared with $626 million or $0.93 per share in 2021 Adjusted net earnings1 were $394 million or $0.59 per share, compared with $676 million or $1.00 per share in 2021 Adjusted net asset value (“NAV” or “Net
Slide 10: Net and adjusted net earnings
Net and adjusted net earnings ($ in millions, except per share amounts) Q4 2022 Q4 2021 Publicly traded operating companies contributed Adjusted net earnings (3) $833 million to net earnings and $741 million to Great-West 594 550 adjusted net earnings IGM 140 161 GBL (24) (3) • Great-West results
Slide 11: Net asset value
Net asset value NAV per share was $41.91 at December 31, 2022, compared with $39.38 at September 30, 2022 • Publicly traded operating companies represent 81.4% of gross asset value • Publicly traded investments and cash represent 88.7% of gross asset value • NAV per share of $46.19 at March 16, 20
Slide 12: Great-West delivered strong results in 2022
Great-West delivered strong results in 2022 2022 Overview Outlook Discipline and diversification driving strong Reconfirmed medium-term financial objectives, returns and resilient performance including base EPS1 growth of 8% to 10% p.a. Acquired U.S. businesses performing well, in-line Empow
Slide 13: Great-West’s U.S. segment is positioned for future growth
Great-West’s U.S. segment is positioned for future growth MassMutual and Personal Capital integration completed while Prudential integration on track; Empower poised to grow wealth management business leveraging Personal Capital MassMutual integration program complete US$160 million run-rate pre
Slide 14: Empower Personal Wealth launched in March 2023
Empower Personal Wealth launched in March 2023 In March 2023, Empower announced expansion in consumer wealth management to make money management simpler, clearer, and more accessible Combination of Personal Capital and Empower’s consumer wealth business Continuing the buildout of Empower’s brand
Slide 15: IGM delivered strong results in 2022, led by wealth management
IGM delivered strong results in 2022, led by wealth management 2022 Overview Outlook Results in 2022 led by wealth management and Well positioned for an improved operating reflect continued focus on expense management environment Ending AUM&A of $249.4 billion, up 4.7% during • Position busine
Slide 16: 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 Q4 gross inflows of $3.0 billion were the 2nd best fourth quarter on record Net flows of $429 million in Q4 2022 marked the 9th consecutive quarter of positive net flows LTM AUA1 outflows rate of 9.1% remains we
Slide 17: IG Wealth strategic partnership with nesto
IG Wealth strategic partnership with nesto In December 2022, IG Wealth announced a strategic agreement to have nesto provide next generation white-label mortgage services to IG clients across Canada Latest initiative in IG Wealth’s ongoing strategy to transform its business • Follows the firm’s mo
Slide 18: Closing of ChinaAMC transaction in January 2023
Closing of ChinaAMC transaction in January 2023, combining Power group’s 27.8% interest under IGM ChinaAMC continues to build business momentum AUM1 was RMB¥1,722 billion at December 31, 2022, a 4% increase from RMB¥1,662 billion at December 31, 2021 in contrast with a 22% decrease in the CSI 300
Slide 19: GBL focused on its transition toward fast-growing private assets
GBL focused on its transition toward fast-growing private assets, supported by a strong balance sheet Net asset value per share reported by GBL1 of €116.18 at December 31, 2022, up 3.4% compared with September 30, 2022 and down 19.3% for the year, reflecting broader market declines Private asset
Slide 20: Ongoing fundraising at alternative asset investment platforms
Ongoing fundraising at alternative asset investment platforms $21.1 billion of funded and unfunded AUM1, compared with $20.0 billion as at September 30, 2022 $2.4 billion of fundraising in 20222, primarily from third parties Funded and Unfunded AUM Total Funded AUM and Funded AUM by Platform Sag
Slide 21: Building alternative investment platforms
Building alternative investment platforms Sagard and Power Sustainable are focused on growing their platforms by attracting third party capital and adhering to sound financial disciplines that target a positive fee-related earnings contribution as they scale Recurring fees generated on committed
Slide 22: Standalone businesses remain an additional source of value creation
Standalone businesses remain an additional source of value creation The standalone businesses, representing $829 million1 of NAV and $678 million of carrying value in aggregate, will be managed by Power to realize value over time Mar. 16, 2023 Fair Value Business (Publicly Traded Co’s) Progress in S
Slide 23: Returning capital to shareholders
Returning capital to shareholders $1.7 billion of capital returned to shareholders in 2022 $1.3 billion of dividends paid to participating shareholders $415 million of shares repurchased under the NCIB program • 11.2 million shares, or 1.7% of participating shares While building cash and maintai
Slide 24: 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 Power / PFC reorganization announced 35% WHO declares global pandemic Wealthsimple fundraising & 30% Lion merger Dec’15 to Dec’18 34%
Slide 25: 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 26: Questions
POWER CORPORATION OF CANADA Questions
Slide 27: Appendix
POWER CORPORATION OF CANADA Appendix
Slide 28: Abbreviations
Abbreviations The following abbreviations are used throughout this presentation: adidas adidas AG NAV or Net Asset Value Adjusted net asset value Affidea Affidea Group B.V. NCI Non-controlling interests AUA Assets under advisement NCIB Normal course issuer bid AUM Assets under management nesto nesto
Slide 29: 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 30: 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 31: 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 32: GBL reported net asset value
GBL reported net asset value1 Net asset value per share reported by GBL of €116.18 at December 31, 2022, compared with €112.39 at September 30, 2022 Dec. 31, 2022 Power Share of % of % Dec. 31, 2022 Power Share of % of (2) (2) Value (€M) Value (€M) Portfolio Ownership Value (€M) Value (€M) Portfolio
Slide 33: Power’s alternative asset investment platforms
Power’s alternative asset investment platforms ($ millions) Q4 2022 Q4 2021 Asset Management Investing Asset Management Activities Activities Activities Sagard Management fees (1) 45 32 + + = Recurring Investment platform expenses (50) (33) Carried Proprietary Value Fee-Related Fee-related earnings
Slide 34: 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 35: Power has monetized $1.6 billion of assets since the beginning of 2021
Power has monetized $1.6 billion of assets since the beginning of 2021 Date Event Size Sale of LP interest in Sagard Europe 3 $334 million $187 million 1 Wealthsimple fundraising secondary offering Power Sustainable launches Power Sustainable Power sells assets for 2021 Energy Infrastructure Partner
Power Corporation of Canada — Q4 2022 Earnings Presentation on 6ix