Power Corporation Of Canada · TSX:POW
Power Corporation Of Canada — Q2 2021 Earnings Presentation
33 slides from Power Corporation Of Canada's earnings presentation, Aug 9, 2021
Slide 1: Investor Presentation Q2 2021 Quarterly Results
Investor Presentation Q2 2021 Quarterly Results August 9th, 2021
Slide 2: Forward looking statements and COVID-19
Forward looking statements and COVID-19 Forward Looking Statements In the course of today’s meeting, representatives of the Corporation may make, in their remarks or in response to questions, and the accompanying materials may include, statements containing forward-looking information. Certain state
Slide 3: Disclosures concerning public investees, non-IFRS measures and net asset value
Disclosures concerning public investees, non-IFRS measures and clarifications on net asset value Disclosures Concerning Public Investees Information in this presentation and any accompanying oral statements, including in response to questions, (i) concerning Great-West Lifeco and IGM, as applicable,
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 POWER CORPORATION OF CANADA QUARTERLY RESULTS PRESENTATION | Q2 2021 4
Slide 5: Q2 2021 Highlights
Q2 2021 Highlights POWER CORPORATION OF CANADA
Slide 6: PCC and publicly traded operating companies
PCC and publicly traded operating companies This call follows a number of recent events held by PCC and its publicly traded operating companies Investors are encouraged to contact the companies directly for specific inquiries Event / Date Contact Q2 2021 Earnings Release August 6, 2021 investo
Slide 7: Power Corporation – Recent business highlights
Power Corporation – Recent business highlights Great-West reports strong Q2 2021 base earnings across all its businesses led by organic and inorganic growth at Empower Retirement IGM reports record earnings, net sales and assets under management & advisement GBL’s net asset value reaches €23.1
Slide 8: Power Corporation financial highlights – Q2 2021
Power Corporation financial highlights – Q2 2021 NAV per share1 up 12% to $51.60 at June 30, 2021, compared to $45.94 at March 31, 2021 • NAV per share increased an additional 3% to $53.10 at August 6, 20212 Net earnings per share were $1.47, compared to $0.99 in Q2 2020 Adjusted net earnings
Slide 9: Net asset value
Net asset value NAV per share of $51.60 at June 30, 2021, up 12% from March 31, 2021 $53.10 per share at August 6, 20211, up an additional $1.50 or 3% % of Gross ($ billions) Jun. 30, 2021 Asset Value Publicly Great-West Lifeco $22.8 56.2% Traded IGM Financial 6.5 15.9% Operating Companies(2) GB
Slide 10: PCC earnings per share
PCC earnings per share Net earnings per share of $1.47, compared with $0.99 in Q2’20 Adjusted net earnings per share of $1.51, compared with $0.79 in Q2’20 ($ per share) Q2'21 Q2'20 Great-West Lifeco 0.81 0.70 IGM 0.22 0.17 GBL 0.03 0.12 Effect of consolidation (1) 0.14 (0.07) 1.20 0.92 Alternat
Slide 11: PCC is pursuing a focused strategy emphasizing financial services
PCC 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 businesses
Slide 12: PCC group value creation strategy focused on three key levers
PCC group of companies’ ongoing value creation strategy is focused on three key levers Organic growth strategies at each of our 1 OpCo Organic Levers publicly traded operating companies (OpCos): Great-West Lifeco, IGM & GBL 2 OpCo M&A Levers Deployment and redeployment of capital Actions we can take
Slide 13: Value creation focus of the publicly traded operating companies
Value creation focus of the publicly traded operating companies Capitalize on business momentum to continue driving higher earnings and cash flow growth Pursue M&A transactions to enhance earnings and strategic positioning Continuously manage portfolio to ensure growth / return objectives are
Slide 14: Significant momentum generated by publicly traded OpCos
Significant momentum generated by publicly traded OpCos $2.2 trillion of AUA EPS of $0.99, all-time highest €23.1 billion NAV, up 9% over Q1 quarter in IGM’s history Canada continues strategic €3.3 billion portfolio rotation in advancements, including Record $262 billion of AUM&A 2021 to
Slide 15: Empower Retirement's acquisition of Prudential's full-service retirement business
Empower Retirement’s acquisition of Prudential’s full-service retirement business On July 21, Empower Retirement announced an agreement to acquire Prudential’s full-service retirement business for a total transaction value of $4.45 billion (US$3.55 billion) Strengthens leadership position as clear
Slide 16: Combination strengthens Empower's position as the clear #2
Combination strengthens Empower’s position as the clear #2 Top 10 Defined Contribution Players by Participants (millions) 25.7 #2 16.6 #2 12.6 8.4 #9 6.4 6.1 5.5 4.8 4.0 4.0 3.6 Fidelity Empower Empower Principal + TIAA Voya Vanguard Alight Bank of Prudential Transamerica Pro Forma Retirement Wells
Slide 17: Acquisitions have made Empower an industry leader
Acquisitions have contributed to making Empower an industry leader and transformed Great-West’s business mix and earnings profile 2014 2020 2020 2021 Retirement Plan Services Retirement Services Business Full-Service Retirement Business AUA1 $167 $14 $190 $314 (billions) Participants 1.9 n.a. 2.5 4.
Slide 18: Sagard and Power Sustainable continue to attract third party capital
Sagard and Power Sustainable continue to attract third party capital driving growth in AUM $11.6 billion of funded and unfunded AUM as of June 30, 2021, of which 65% from 3rd parties Significant ongoing fundraising and product development1 • Additional close of Credit Partners II in Q2’21 and su
Slide 19: Building alternative investment platforms to deliver recurring asset management earnings
Building alternative investment platforms to deliver recurring asset management earnings In addition to realizing returns on seed investments in Sagard and Power Sustainable funds, PCC expects to generate recurring earnings from its asset management operations Recurring fees generated on committed
Slide 20: PCC's alternative asset management strategy
PCC’s alternative asset management strategy part of the group’s broader strategy in alternatives Limited partner (LP) in Power Sustainable’s Energy Infrastructure Partnership, Sagard Holdings’ Portage and private credit funds, and investor in Northleaf • Advance strategy to expand alternative inve
Slide 21: China AMC's growth has accelerated
China AMC’s growth has accelerated A leading asset manager in China across mutual funds, ETFs and institutional AUM1 was RMB¥1,607 billion as at Jun’21, a 10% increase from RMB¥1,461 billion as at Dec’20 PCC’s share of China AMC earnings2 was $15 million in Q2’21, compared to $10 million in Q2
Slide 22: Standalone businesses – An additional source of value creation
Standalone businesses – An additional source of value creation PCC will manage standalone businesses, representing $2.0 billion1 of NAV in aggregate, to realize value over time 73% of standalone businesses’ NAV is publicly traded (i.e. Lion & GP Strategies) Standalone businesses decreased to $1.
Slide 23: Operating expense reduction
Operating expense reduction We have implemented actions to achieve 89% of the targeted expense reductions, or $45 million on an annual run-rate basis to date Retirement of Co-CEOs and changes in governance Reduction of real estate footprint through the sale of Certain PFC public company expens
Slide 24: Elevated communication programs with the investment community
Power Corporation and its OpCos have elevated their communication programs with the investment community Launched quarterly earnings call in Q1’20 New investment platform disclosure aligned with business model in Q2’20 Enhanced investment platform and non-consolidated MD&A disclosure Meeting
Slide 25: PCC liquidity, cash and leverage
PCC liquidity, cash and leverage PCC continues to assess market conditions with a goal to re-commence NCIB program • NCIB program temporarily suspended end of March 2020 in light of pandemic-driven market environment • Limited share buybacks to date in 2021 – sufficient to offset dilutive effect o
Slide 26: PCC discount to NAV
PCC discount to NAV Power Corporation’s discount to NAV has been narrowing with increased corporate activity Great-West sale of 40% U.S. life business announced PCC / PFC reorganization 35% announced WHO declares Wealthsimple global pandemic fundraising & Lion merger 30% Dec’15 to Dec’18 34% average
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 2 M&A Augment earni
Slide 28: Ongoing ESG activity and achievements across the PCC group
Ongoing ESG activity and achievements across the PCC group Continued progress in 2021 positioning the group for further accomplishments Sagard and Power Sustainable (PCC’s alternative asset investment platforms) became signatories to the Principles for Responsible Investment PCC and IGM were rec
Slide 29: Summary
Summary PCC continues to make progress on its value creation strategy Strong organic growth in publicly-traded OpCos with business momentum generated Continued focus on M&A opportunities, including Prudential’s full-service retirement business, ClaimSecure and Ark Life Continued progress on
Slide 30: Questions
Questions POWER CORPORATION OF CANADA
Slide 31: Appendix
Appendix POWER CORPORATION OF CANADA
Slide 32: Abbreviations
Abbreviations The following abbreviations are used throughout this presentation: adidas adidas AG NCIB Normal course issuer bid Ark Life Ark Life Assurance Company dac Northleaf Northleaf Capital Partners AUA Assets under administration NYSE New York Stock Exchange AUM Assets under management Ontex
Slide 33: GBL net asset value
GBL net asset value Portfolio companies have shown adaptability and resilience, attributable to their position as sector leaders, critical size and robustness of their balance sheets % Jun. 30, 2021 PCC Share of (1) Ownership Value (€M) Value (€M) Listed and Private Investments adidas 6.8% 4,305 607
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