Principal Financial Group Inc · NASDAQ:PFG
Principal Financial — Q3 2023 Earnings Presentation
18 slides from Principal Financial's earnings presentation, Oct 27, 2023
Slide 1: Third Quarter 2023 Earnings Call Presentation
e) Principal’ Third Quarter 2023 Earnings Call Presentation PRINCIPAL FINANCIAL GROUP October 26, 2023 RETIREMENT ASSET MANAGEMENT BENEFITS & PROTECTION
Slide 2: 3Q 2023 key takeaways
3Q 2023 key takeaways * Non-GAAP EPS! excluding significant variances? of $1.83 increased 14% from 3Q22; non-GAAP operating earnings’ excluding significant variances? increased 11% Earnings * YTD non-GAAP EPS' excluding significant variances growth of 5%, compared to 2023 outlook range of 3-6% * Imm
Slide 3: 3Q 2023 financial highlights
3Q 2023 financial highlights 3Q 2023 OPERATING EARNINGS AND EPS Reported non-GAAP Impact of significant variances to Non-GAAP operating earnings, operating earnings! non-GAAP operating earnings? excluding significant variances (xSV) $420M $(27)M after-tax $446M (+4% vs. 3Q 2022) (+$40M pre-tax) (+11
Slide 4: Investment performance
Investment performance % of funds outperforming Morningstar median’? As of 9/30/2023 1-Year 3-Year 5-Year 10-Year Equity 47% 45% 57% 84% ASSET WEIGHTED4 Fixed Income 69% 56% 67% 73% 5 5 % Asset Allocation 30% 61% 63% 86% Oo Total 45% 54% 61% 83% of rated fund AUM has a4 or 5 star rating % of composi
Slide 5: Retirement and Income Solutions
Retirement and Income Solutions HIGHLIGHTS Net revenue ($M) * Pre-tax operating earnings excluding significant variances! increased due . Quarterly basis to higher net revenue and lower operating expenses * Net revenue excluding significant variances’ increased due to favorable $710 (ase) equity mar
Slide 6: Principal Global Investors (PGI)
Principal Global Investors (PGI) HIGHLIGHTS Operating revenues less ; oo , , pass-through expenses’ ($M) * Pre-tax operating earnings increased due to the impact of higher real Quarterly basis estate performance fees * 3Q23 operating margin of 39% $373 $394 * Real estate net cash flow of $0.8B, near
Slide 7: Principal International
Principal International HIGHLIGHTS * Pre-tax operating earnings excluding significant variances’ increased primarily due to higher combined net revenue as a result of higher AUM, partially offset by increased operating expenses * Net cash flow of $0.8B primarily driven by $1.0B in Brazil * AUM incre
Slide 8: Specialty Benefits
Specialty Benefits HIGHLIGHTS * Pre-tax operating earnings excluding significant variances’ increased due to growth in the business and lower claims experience * Premium and fees increased 8% driven by strong sales, retention, employment and wage growth * Incurred loss ratio excluding significant va
Slide 9: Life Insurance
Life Insurance HIGHLIGHTS Premium and fees ($M) + Pre-tax operating earnings excluding significant variances' decreased, Quarterly basis due to higher mortality as well as lower net investment income driven by a lower capital base as a result of the 2022 reinsurance transactions * Premium and fees e
Slide 10: Appendix
Appendix
Slide 11: 3Q 2023 significant variances
3Q 2023 significant variances Business unit impacts of significant variances (in millions) Actuarial assumption Variable investment Retirement and Income Solutions $53.4 $(9.0) - $44.4 Principal International - - $(5.1) $(5.1) Specialty Benefits $16.2 - - $16.2 Life Insurance $(6.4) $(2.0) - $(8.4)
Slide 12: Non-GAAP operating earnings
Non-GAAP operating earnings Excluding impacts from actuarial assumption review and other significant variances 3Q23 vs 3Q22 (in millions, except per share data) Actuarial Other —_3Q2 a Other umption significant 22 0 nificant 3Q2 cluding ariances Retirement and Income Solutions $ 3047 $534 $ 9.0] $ 2
Slide 13: Impacts of 3Q 2023 actuarial assumption review
13 Impacts of 3Q 2023 actuarial assumption review Income statement line item impacts of the annual actuarial assumption review (in millions) Line Item Premiums and other considerations Fees and other revenues Net investment income Total operating revenues Benefits, claims and settlement expenses Lia
Slide 14: Non-GAAP operating earnings sensitivities
Non-GAAP operating earnings 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 Equity market investment If macroeconomics return? Interest rat
Slide 15: Non-GAAP financial measure reconciliations
15 Non-GAAP financial measure reconciliations Three months ended (in millions) Principal Global Investors operating (in millions) Three months ended as eee 9/30/23 9/30/22 Non-GAAP operating earnings (losses) 9/30/23 9/30/22 Principal Global Investors operating revenues $424.6 $406.0 Net income attr
Slide 16: Non-GAAP financial measure reconciliations
16 Non-GAAP financial measure reconciliations Period ended (in millic Stockholders’ equity x- cumulative change in fair value of funds withheld embedded derivative and AOC! other than foreign currency translation adjustment, available to common stockholders 9/30/23 Non-GAAP operating earnings ROE (x
Slide 17: Use of non-GAAP financial measures
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 financial measures manag
Slide 18: Forward looking statements
18 Forward looking statements Certain statements made by the company which are not historical facts may be considered forward-looking statements, including, without limitation, statements as to non-GAAP operating earnings, net income attributable to PFG, net cash flow, realized and unrealized gains
Principal Financial Group — Q3 2023 Earnings Presentation on 6ix