Power Corporation Of Canada · TSX:POW
Power Corporation Of Canada — Investor Presentation (September 2021)
30 slides from Power Corporation Of Canada's investor presentation, September 2021
Slide 1: Introduction to Power Corporation
Introduction to Power Corporation September 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 clarifications on 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: Abbreviations
Abbreviations The following abbreviations are used throughout this presentation: adidas adidas AG NAV Net asset value Ark Life Ark Life Assurance Company dac NCIB Normal course issuer bid AUA Assets under administration Northleaf Northleaf Capital Partners AUM Assets under management NYSE New York S
Slide 5: Reference information
Reference information Websites Second Quarter Results & Recent Events Q2 2021 Conference Call August 9, 2021 www.powercorporation.com Q2 2021 Earnings Release August 6, 2021 Q2 2021 Conference Call August 4, 2021 Q2 2021 Earnings Release August 3, 2021 www.greatwestlifeco.com Prudential Re
Slide 6: Introduction to Power Corporation
Introduction to Power Corporation
Slide 7: Power Corporation of Canada is a publicly-listed holding company controlled by the Desmarais family since 1968
Power Corporation of Canada (PCC) is a publicly-listed holding company controlled by the Desmarais family since 1968 International management and holding company that focuses on financial services in North America, Europe and Asia. Its core holdings are leading insurance, retirement, wealth manageme
Slide 8: Great-West Lifeco overview
Great-West Lifeco overview 2020 Net 2020 Base Total Assets Great-West Lifeco is an international Earnings1 Earnings1,2 Under Administration2,4 financial services holding company with interests in life insurance, health insurance, $2.943 $2.669 $2.2 retirement and investment services, asset BILLION B
Slide 9: IGM Financial overview
IGM Financial overview IGM Financial Inc. is a leading wealth and The company creates value for shareholders through three key areas asset management company supporting financial advisors and the clients they Wealth Asset Strategic serve in Canada, and institutional investors Management Management I
Slide 10: GBL overview
GBL overview 2020 Net 2020 Cash 2020 Total GBL is a leading investor in Europe, Results1 Earnings2 Distribution building leading companies through long- €391 €440 €396 term engaged and responsible ownership. MILLION MILLION MILLION Invests in and supports European industry leaders with strong mark
Slide 11: Net asset value
Net asset value NAV per share of $51.60 at June 30, 2021, up 12% from March 31, 2021 $53.42 per share at September 3, 20211, up an additional $1.82 or 4% % of Gross ($ billions) Jun. 30, 2021 Asset Value Publicly Great-West Lifeco $22.8 56.2% Traded IGM Financial 6.5 15.9% Operating Companies(2)
Slide 12: 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 13: Simplification of PCC’s group structure
Simplification of PCC’s group structure Pre-December 2019 Reorganization June 30, 2021 64% 67% 62% 14% PCC Non- PCC Non-Public Public Investments Investments 67% 62% 28% 50% POWER CORPORATION OF CANADA | SEPTEMBER 2021 8
Slide 14: Focused business model in financial services
Focused business model in financial services Two main distribution …offering three …in a limited number of channels product offerings developed markets Group Accumulation Decumulation Advisor Insurance POWER CORPORATION OF CANADA | SEPTEMBER 2021 9
Slide 15: Guiding principles underlying PCC’s value creation strategy
Guiding principles underlying PCC’s value creation strategy Long-term perspective & investment horizon Build industry leaders with attractive growth profiles Provide active & strong governance oversight of our companies Strong financial position & prudent approach to risk management POWER CO
Slide 16: PCC group of companies’ ongoing value creation strategy is 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 17: Value creation levers focused on increasing earnings and net asset value
Value creation levers focused on increasing earnings and net asset value PCC TSX: POW Discount to underlying value Alternative Investment Publicly-Traded Platforms1 Great-West IGM GBL Power Standalone Cash & Asset TSX: GWO TSX: IGM Euronext: GBLB Sagard Sustainable China AMC Businesses Other Assets
Slide 18: 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 19: A significant number of value-enhancing transactions were completed since the reorganization
A significant number of value-enhancing transactions were completed since the reorganization Date Event Size Overview Reorganization of Completed the reorganization of PFC and PCC to eliminate dual holding company Feb’20 $8.7 billion PCC and PFC structure Reorganization of Announced reorganizati
Slide 20: A significant number of value-enhancing transactions were completed since the reorganization (cont’d)
A significant number of value-enhancing transactions were completed since the reorganization (cont’d) Date Event Size Overview $750 million PCC group’s interest valued at $2.6 billion, including $500 million returned as part of a Wealthsimple $250 million primary, secondary offering, a $2.3 billio
Slide 21: Development of PCC’s investment platforms
Development of PCC’s investment platforms Operate in asset classes where we can create competitive advantage Raise and manage primarily third-party capital, with PCC acting as a provider of seed capital Demonstrate the ability to be profitable as an asset manager within a reasonable time perio
Slide 22: Sagard and Power Sustainable continue to attract third party capital driving growth in AUM
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 23: PCC’s alternative asset management strategy part of the group’s broader strategy in alternatives
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’s Portage and private credit funds, and investor in Northleaf • Advance strategy to expand alternative investments
Slide 24: 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 25: 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 as at June 30, 2021, to realize value over time 73% of standalone businesses’ NAV is publicly traded (i.e. Lion & GP Strategies) Standalone busines
Slide 26: Power Corporation and its OpCos have elevated their 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 27: 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 global pandemic Wealthsimple fundraising & Lion merger 30% Dec’15 to Dec’18 34% average
Slide 28: 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 29: Appendix
Appendix POWER CORPORATION OF CANADA
Slide 30: 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
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