Great-west Lifeco Inc. · TSX:GWO
Great-west Lifeco — Investor Presentation (September 2023)
29 slides from Great-west Lifeco's investor presentation, September 2023
Slide 1: Investor Presentation Q2 2023
1 Investor Presentation Q2 2023 GREAT-WEST LIFECO Note: All dollar amounts are expressed in Canadian dollars and references to “dollars” or “$” are to Canadian dollars, unless otherwise stated.
Slide 2: Cautionary Note Regarding Forward-Looking Information
CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION INVESTOR OVERVIEW This document contains forward-looking information. Forward-looking information includes statements that are predictive in nature, depend upon or refer to future events or conditions, or include words such as "will", "may", "exp
Slide 3: A global financial services company
A global financial services company INVESTOR OVERVIEW Capital & Risk Solutions 15% Canada 40% 175+ Years 6th $3.6B Largest Life Insurer Net Earnings4 Of History in North America1 Europe 33% US 12% 3 $2.6T $1.0T Capital & Assets Under Administration2,3 Assets Under Management2,3 Risk Solutions 18% Ca
Slide 4: Great-West Lifeco at-a-glance
Great-West Lifeco at-a-glance INVESTOR OVERVIEW A global financial services holding company with interests in life insurance, health insurance, retirement and investment services, asset management and reinsurance businesses. Key Metrics Financial Strength Ratings3, Regulatory Capital In $B, unless o
Slide 5: Diversified, market-leading franchises
Diversified, market-leading franchises INVESTOR OVERVIEW Canada U.S. Europe Capital & Risk Solutions A leader in insurance and A U.S. financial services Ireland: Leading life assurance Top-4 global reinsurer and #1 wealth management serving challenger brand serving company; #1 in workplace global li
Slide 6: Value drivers
INVESTOR OVERVIEW Value drivers Portfolio strategies that extend across operating segments Operating Segments1 Canada U.S. Europe CRS Workplace Solutions Group Life & Health Empower Defined Group Life & Health 6 Broad reach Contribution Group Retirement Group Retirement Wealth & Asset Individual Wea
Slide 7: Value drivers
INVESTOR OVERVIEW Value drivers Play complementary roles and highlight the benefits of diversification Relative potential Higher Lower Workplace Wealth & Asset Insurance & Risk Solutions Management Solutions 7 Cash generation Steady, stable returns “Capital-light” GREAT-WEST LIFECO Organic growth po
Slide 8: Medium-term objectives
INVESTOR OVERVIEW Medium-term1 objectives Supported by our repositioned portfolio with significant organic and extension growth potential 8-10% 16-17% 45-55% base EPS2 growth p.a. base ROE2 target dividend payout ratio, base earnings2 • Organic earnings growth from market- • Diversified businesses d
Slide 9: Our Commitment: Better Financial Futures
INVESTOR OVERVIEW Our Commitment Better Financial Futures $127 Billion $6.35+ Billion $16.3 Million Managed in ESG-related strategies Invested in wind, solar, and hydroelectric Invested by Great-West Lifeco in 2022 renewable energy projects (2022) companies to build community capacity in 2022 Inclus
Slide 10: Consistent Long-Term Earnings and Successful M&A Track Record
10 Consistent Long-Term Earnings and Successful M&A Track Record GREAT-WEST LIFECO
Slide 11: Earnings expansion underpinned by stable returns on capital
INVESTOR OVERVIEW Earnings expansion underpinned by stable returns on capital Net EPS in C$, rounded to the nearest cent $4.00 30.0% 3.86 3.46 $3.50 3.37 3.17 6.2% 25.0% 3.00 2.77 $3.00 2.67 2.55 2.49 20.0% 10-year EPS CAGR1,2 $2.50 2.34 1.90 2.17 17.2% 11 $2.00 16.6% 15.0% 15.7% 15.3% 14.7% 14.1% $
Slide 12: A long history of consistent and growing dividends
INVESTOR OVERVIEW A long history of consistent and growing dividends Annual dividends per common share1 6.3% 2022 dividend yield2 ‘15 – ‘22 CAGR 6.0% 45% - 55% Target dividend payout ratio 12 (base)3 Base3 Net4 56.7% 56.7% 2022 dividend payout ratio 1.23 1.23 1.30 1.38 1.47 1.56 1.65 1.75 1.80 1.96
Slide 13: Repositioning the portfolio in recent years
INVESTOR OVERVIEW Repositioning the portfolio in recent years Focused on acquisitions to create scale and reach, acquisitions to add strategic capabilities, and dispositions and organic actions that unlock value and enable focus Lifeco base earnings ($M) Lifeco net earnings ($M) and % by segment1,2,
Slide 14: Value-creating acquisitions and divestitures
INVESTOR OVERVIEW Value-creating acquisitions and divestitures ACQUISITIONS DIVESTITURES 2018 - 2019 2020 2021 2022 2023 2019 2020 2023 1 Canada 1 14 Retirement Services U.S. individual life 1 Business & annuity business US Full-Service Retirement Business GREAT-WEST LIFECO Europe U.K. block of heri
Slide 15: Repositioned portfolio driving a shift in earnings mix
INVESTOR OVERVIEW Repositioned portfolio driving a shift in earnings mix Toward capital-light growth in workplace and wealth businesses 2022 2027 Base Earnings Mix Base Earnings Mix2 Workplace Solutions 30% 46% $1.6B 15 Higher growth targeted $3.3B 1 15% Wealth & Asset Base Earnings 20% Management $
Slide 16: Strong Balance Sheet and Capital Position
16 Strong Balance Sheet and Capital Position GREAT-WEST LIFECO
Slide 17: Diversified, high-quality asset mix
Diversified, high-quality asset mix INVESTOR OVERVIEW Conservative investment portfolio, predominantly comprised of fixed income instruments – 99% of which are investment-grade • Invested assets of ~$219B Invested Asset Distribution Bond Portfolio Quality • Bonds represent 69% – 99% are investment g
Slide 18: Robust capital and liquidity
Robust capital and liquidity INVESTOR OVERVIEW • Liquidity requirements are largely self-funded – Short-term obligations 31% 126% met by internal funds and Financial Leverage Ratio1,2 LICAT Ratio3 maintaining levels of liquid investments adequate to meet anticipated liquidity needs 18 – Committed li
Slide 19: Strong credit ratings
Strong credit ratings INVESTOR OVERVIEW Canada Life Lifeco (Opco) 1 (Holdco) 2 Outlook A+ Stable AA A (High) Stable 19 AA A Stable Aa3 Stable A+ Stable GREAT-WEST LIFECO AA Footnotes 1 - 2: Refer to slide 28
Slide 20: Efficient capital structure
Efficient capital structure INVESTOR OVERVIEW Carrying values as at June 30, 2023, unless otherwise noted, C$m Lifeco Finance (Delaware) LP U.S. Senior Debt $909m Lifeco Finance 2018, LP U.S. Senior Debt $1,048m Senior Debentures $2.5b Lifeco U.S. Finance 2020, LP Preferred Shares $2.7b U.S. Senior
Slide 21: Appendix
21 GREAT-WEST LIFECO Appendix
Slide 22: Canada
Canada CANADA Our Business Key Metrics We are strengthening our relationship with annual base earnings / 1 in 3 Canadians $1.2B/$1.4B net earnings1 More employers are turning to Canada Life than any other2 base ROE / We offer a preeminent platform for 17%/21% net ROE1 workplace, wealth and insurance
Slide 23: U.S.
U.S. US Our Business Key Metrics Empower is the second-largest retirement annual base earnings / services provider in the U.S.4, serving 82k plans and over 18m5 individuals with AUA1 of $0.8B/$0.5B net earnings1,2 US$1.5T5 base ROE / We have a strong offering and are a leading provider. Well positio
Slide 24: Europe
Europe EUROPE Our Business Key Metrics Operations in the U.K., Ireland and Germany annual base earnings / Market leader in group risk, a leading $0.8B/$1.2B net earnings1 player in payout annuities and a strong competitor in the equity release base ROE / mortgage market in the U.K. 17 %/25% net ROE1
Slide 25: Capital and Risk Solutions
Capital and Risk Solutions CRS Our Business Key Metrics Operations in the U.S., Ireland, Barbados and Bermuda and annual base earnings / includes both reinsurance and retrocession business transacted directly with clients or through reinsurance $0.6B/$0.5B net earnings1 brokers base ROE / Products i
Slide 26: Non-GAAP Financial Measures
Non-GAAP Financial Measures The Company uses several non-GAAP financial measures to measure overall performance of the Company and to assess each of its business units. A financial measure is considered a non-GAAP measure for Canadian securities law purposes if it is presented other than in accordan
Slide 27: Footnotes
Footnotes Slide 3 1. By market capitalization; Source: S&P Global Market Intelligence, June 30, 2023 2. As of June 30, 2023 4. Net earnings of $3.6B, base earnings of $3.3B for the year ended December 31, 2022 as reported for IFRS 17 comparatives and excluding discontinued operations related to Putn
Slide 28: Footnotes
Footnotes Slide 13 1. Lifeco Corporate base earnings not displayed separately. 2. Effective January 1, 2020, as a result of strategic operational changes, Lifeco divided the previously reported Europe segment into two separate reporting segments – Europe and CRS. 2017 figures were reported under the
Slide 29: Great-West Lifeco
29 Investor Presentation Q2 2023 GREAT-WEST LIFECO Note: All dollar amounts are expressed in Canadian dollars and references to “dollars” or “$” are to Canadian dollars, unless otherwise stated.
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