POW Power Corp of Canada

MONTRÉAL, March 20, 2024 /CNW/ - Power Corporation of Canada (Power Corporation or the Corporation) (TSX: POW) (TSX: POW.PR.E) today reported earnings results for the three and twelve months ended December 31, 2023.

Power Corporation
Consolidated results for the period ended December 31, 2023

HIGHLIGHTS ^[1]

POWER CORPORATION

• Net earnings from continuing operations ^[2] for the fourth quarter were $409 million or $0.63 per share ^[3], compared with $106 million or $0.16 per share in 2022.
  Adjusted net earnings from continuing operations ^[2][4] were $579 million or $0.89 per share, compared with $395 million or $0.59 per share in the fourth quarter of 2022.
• Net earnings from continuing operations in 2023 were $2,282 million or $3.45 per share, compared with $2,216 million or $3.30 per share in 2022.
  Adjusted net earnings from continuing operations were $2,959 million or $4.47 per share in 2023, compared with $2,004 million or $2.99 per share in 2022.
• Adjusted net asset value per share ^[4] was $53.53 at December 31, 2023, compared with $41.91 at December 31, 2022, an increase of 27.7%.
  The Corporation's book value per share ^[5] was $32.49 at December 31, 2023, compared with $31.37 at December 31, 2022, an increase of 3.6%.
• In 2023, the Corporation purchased for cancellation 16.1 million subordinate voting shares for a total of $583 million. Subsequent to year-end, the Corporation has purchased an additional 2.4 million subordinate voting shares for a total of $94 million.
• Contribution to net earnings from continuing operations from the publicly traded operating companies was $588 million in the fourth quarter, compared with $453 million in the fourth quarter of 2022. Contribution to adjusted net earnings from continuing operations from the publicly traded operating companies was $758 million in the fourth quarter, compared with $742 million in the fourth quarter of 2022.

GREAT-WEST LIFECO INC. (LIFECO)

• Fourth quarter net earnings from continuing operations were $743 million, compared with $478 million in the fourth quarter of 2022. Adjusted net earnings from continuing operations ^[6] were $971 million, compared with $894 million in the fourth quarter of 2022.
• Lifeco announced an increase in its quarterly dividend, from $0.520 to $0.555 per share, payable March 28, 2024.
• Lifeco completed actions to reposition and improve capital efficiency to support its near and long-term growth ^[7] including the sale of Putnam on January 1, 2024, and the acquisition of Investment Planning Counsel from IGM Financial in the fourth quarter.

IGM FINANCIAL INC. (IGM OR IGM FINANCIAL)

• Fourth quarter net earnings were $419.6 million, compared with $224.7 million in the fourth quarter of 2022. Adjusted net earnings were $198.9 million, compared with $224.7 million in the fourth quarter of 2022.
• IGM closed the sale of Investment Planning Counsel in the fourth quarter of 2023, for approximately $575 million ^[8], resulting in a net gain of $220.7 million.
• Assets under management and advisement including Strategic Investments ^[5] were $389.4 billion at December 31, 2023, compared with $372.9 billion at September 30, 2023 and $288.3 billion at December 31, 2022.

GROUPE BRUXELLES LAMBERT (GBL)

• GBL reported a net asset value ^[5] of €16.7 billion at December 31, 2023, compared with €17.8 billion at December 31, 2022.
• In 2023, GBL completed a total of €816 million of share buybacks and cancelled 6.3 million treasury shares.

SAGARD HOLDINGS INC. (SAGARD) AND POWER SUSTAINABLE CAPITAL INC. (POWER SUSTAINABLE)

• In January 2024, Sagard completed the previously announced agreement to acquire a strategic interest in Performance Equity Management, LLC, a private equity firm with over US$8.9 billion in assets under management ^[5], marking its establishment of a fund of funds, secondary and co-investment platform.
• On March 13, 2024, Sagard announced the acquisition of a 40% interest and strategic partnership with HalseyPoint Asset Management, LLC, a U.S.-based Collateralized Loan Obligations (CLO) manager, broadening Sagard's overall credit offering.
• The alternative asset investment platforms raised a total of $2.7 billion in new capital commitments ^[9] in 2023.

Fourth Quarter

Net earnings from continuing operations attributable to participating shareholders were $409 million or $0.63 per share, compared with $106 million or $0.16 per share in 2022.

Adjusted net earnings from continuing operations attributable to participating shareholders ^[1] were $579 million or $0.89 per share, compared with $395 million or $0.59 per share in 2022.

Net earnings attributable to participating shareholders were $406 million or $0.63 per share, compared with $89 million or $0.14 per share in 2022.

Publicly traded operating companies: contribution to net earnings from continuing operations was $588 million and to adjusted net earnings from continuing operations was $758 million, representing an increase of 29.8% and 2.2%, respectively, from the fourth quarter of 2022:

Lifeco: contribution to net and adjusted net earnings increased by 59.4% and 11.3%, respectively. The results of Putnam have been classified as discontinued operations, representing a negative contribution to net earnings of $3 million.

IGM: contribution to net and adjusted net earnings increased by 86.4% and decreased by 11.4%, respectively. Net earnings reported by IGM include a net gain on its sale of IPC to Lifeco of $221 million, which has been eliminated by the Corporation on consolidation ^[7].

GBL: contribution to net earnings of negative $1 million in the fourth quarter of 2023. Net earnings of GBL include a negative contribution from its controlled subsidiary, Imerys SA (Imerys), as a result of the impairment of its assets serving the paper market, of which the Corporation's share represents $24 million.

Sagard and Power Sustainable: net earnings include a negative contribution of $86 million from Power Sustainable, mainly related to a charge for the revaluation of non-controlling interests of $48 million due to fair value increases within the Power Sustainable Energy Infrastructure Partnership (PSEIP) and operating losses in its energy infrastructure platform. Sagard had a positive contribution of $21 million.

Adjustments in the fourth quarter of 2023, excluded from adjusted net earnings from continuing operations, were a negative net impact to earnings of $170 million or $0.26 per share, mainly related to the Corporation's share of Lifeco's adjustments. In the fourth quarter of 2022, Adjustments were a negative net impact to earnings of $289 million or $0.43 per share, mainly related to the Corporation's share of Lifeco's adjustments.

Twelve Months

Net earnings from continuing operations attributable to participating shareholders were $2,282 million or $3.45 per share, compared with $2,216 million or $3.30 per share in 2022.

Adjusted net earnings from continuing operations attributable to participating shareholders ^[1] were $2,959 million or $4.47 per share, compared with $2,004 million or $2.99 per share in 2022.

Net earnings attributable to participating shareholders were $2,195 million or $3.32 per share, compared with $2,195 million or $3.27 per share in 2022.

Great-West Lifeco, IGM Financial and Groupe Bruxelles Lambert
Results for the quarter ended December 31, 2023

GREAT-WEST LIFECO INC.

Fourth Quarter

Net earnings from continuing operations attributable to common shareholders were $743 million or $0.80 per share, compared with $478 million or $0.51 per share in 2022.

Adjusted net earnings from continuing operations ^[1] attributable to common shareholders were $971 million or $1.04 per share, compared with $894 million or $0.96 per share in 2022.

Net earnings attributable to common shareholders were $740 million or $0.79 per share, compared with $452 million or $0.48 per share in 2022.

Adjustments in the fourth quarter of 2023, excluded from adjusted net earnings, were a net negative impact of $228 million, compared with a net negative impact of $416 million in 2022. Lifeco's adjustments consisted of:

• Market experience relative to expectations of negative $213 million;
• Business transformation impacts of $67 million; and
• Amortization of acquisition-related finite life intangibles of $31 million;
• Partially offset by a positive earnings impact from assumption changes and management actions of $83 million.

IGM FINANCIAL INC.

Fourth Quarter

Net earnings available to common shareholders were $419.6 million or $1.76 per share, compared with $224.7 million or $0.94 per share in 2022.

Adjusted net earnings attributable to common shareholders were $198.9 million or $0.84 per share, compared with $224.7 million or $0.94 per share in 2022. Adjusted net earnings of IGM exclude the net gain on the sale of IPC ^[2] of $220.7 million.

Assets under management and advisement (AUM&A) ^[3][4] at December 31, 2023 were $240.2 billion, an increase of 5.6% from September 30, 2023 and an increase of 7.1% from the fourth quarter of 2022.

GROUPE BRUXELLES LAMBERT

Fourth Quarter

GBL reported a net loss of €3 million, compared with a net loss of €112 million in 2022. Net loss in the fourth quarter includes a negative contribution from Imerys of €73 million which includes an impairment of its assets serving the paper markets.

GBL reported a net asset value ^[3] of €16,671 million at December 31, 2023, or €113.64 per share, compared with €17,775 million or €116.18 per share at December 31, 2022.

Sagard and Power Sustainable
Results for the quarter ended December 31, 2023

Fourth Quarter

Net loss of the alternative asset investment platforms was $65 million, compared with a net loss of $183 million in 2022.

The net loss of $65 million is comprised of:

• A negative contribution of $12 million from the asset management activities, including a positive contribution of $4 million from Sagard and a negative contribution of $16 million from Power Sustainable;
• A negative contribution of $53 million from investing activities, including a positive contribution of $17 million from Sagard related to net fair value changes within its portfolio and a negative contribution of $70 million from Power Sustainable, comprised of:

1. 1.  the Corporation's share of losses before the revaluation of non-controlling interests liabilities of $21 million in its energy infrastructure platform; and
   2. fair value increases within the Power Sustainable Energy Infrastructure Partnership resulting in a revaluation of non-controlling interests liabilities ^[1] of $48 million.

Summary of assets under management ^[2] (including unfunded commitments):

Other Investments and Standalone Businesses
Results for the quarter ended December 31, 2023

Fourth Quarter

The net loss of the other investments and standalone businesses was $12 million, compared with a net loss of $82 million in 2022.

The net loss of the standalone businesses was $21 million, compared with a net loss of $102 million in 2022. The net loss in the fourth quarter of 2023 includes a non-cash impairment charge of $7 million after tax ($8 million pre-tax) on the Corporation's investment in The Lion Electric Company (Lion) due to a decline in market value at December 31, 2023.

At December 31, 2023, the fair value of standalone businesses was $0.8 billion, same as at December 31, 2022.

Adjusted Net Asset Value and Participating Shareholders' Equity
At December 31, 2023

Adjusted Net Asset Value

The Corporation's adjusted net asset value per share was $53.53 at December 31, 2023, compared with $41.91 at December 31, 2022, representing an increase of 27.7%.

Participating Shareholders' Equity

The Corporation's book value per participating share was $32.49 at December 31, 2023, compared with $31.37 at December 31, 2022, representing an increase of 3.6%.

Dividend on Power Corporation Participating Shares

The Board of Directors declared a quarterly dividend of 56.25 cents per share on the Participating Preferred Shares and the Subordinate Voting Shares of the Corporation, an increase of 7.1%, payable May 1, 2024 to shareholders of record March 28, 2024.

Dividends on Power Corporation Non-Participating Preferred Shares

The Board of Directors also declared quarterly dividends on the Corporation's preferred shares, payable April 15, 2024 to shareholders of record at March 28, 2024:

Investor information

About Power Corporation

Power Corporation is an international management and holding company that focuses on financial services in North America, Europe and Asia. Its core holdings are leading insurance, retirement, wealth management and investment businesses, including a portfolio of alternative asset investment platforms. To learn more, visit www.powercorporation.com.

At December 31, 2023, Power Corporation held the following economic interests:

Earnings Summary

Sagard and Power Sustainable

Other Investments and Standalone Businesses

BASIS OF PRESENTATION

The 2023 Consolidated Financial Statements of the Corporation, which reflect the adoption of IFRS 17, Insurance Contracts (IFRS 17) and IFRS 9, Financial Instruments (IFRS 9) on January 1, 2023 that resulted in the restatement of certain comparative amounts, have been prepared in accordance with International Financial Reporting Standards (IFRS) unless otherwise noted and are the basis for the figures presented in this news release, unless otherwise noted.

NON-IFRS FINANCIAL MEASURES

Net earnings from continuing operations attributable to participating shareholders are comprised of:

• Adjusted net earnings from continuing operations (adjusted net earnings) attributable to participating shareholders; and
• Adjustments, which include the after-tax impact of any item that in management's judgment, including those identified by management of its publicly traded operating companies, would make the period-over-period comparison of results from operations less meaningful. Includes the Corporation's share of Lifeco's impact of market-related impacts, where actual market returns in the current period are different than longer-term expected returns, assumption changes and management actions that impact the measurement of assets and liabilities, realized gains (losses) on the sale of assets measured at FVOCI, direct equity and interest rate impacts on the measurement of surplus assets and liabilities and amortization of acquisition-related finite life intangible assets, as well as items that management believes are not indicative of the underlying business results which include those identified by a subsidiary or a jointly controlled corporation. Items that management and management of its subsidiaries believe are not indicative of the underlying business results include business transformation impacts (including restructuring or reorganization and integration costs, acquisition and divestiture costs), material legal settlements, material impairment charges, impacts of income tax rate changes and other tax impairments, certain non-recurring material items, net gains, losses or costs related to the disposition or acquisition of a business and other items that, when removed, assist in explaining underlying operating performance.

Adjusted net earnings from continuing operations (or adjusted net earnings) represents net earnings from continuing operations excluding Adjustments.

Effective the first quarter of 2023, the Corporation introduced a refined definition of its non-IFRS financial measure, adjusted net earnings. This change is consistent with the introduction of a refined definition of base earnings (losses) by Lifeco with the adoption of IFRS 17 on January 1, 2023. The definition of Lifeco's base earnings has been refined by Lifeco to exclude the following impacts that are included in IFRS-reported net earnings for an improved representation of Lifeco's underlying business performance, as well as for consistency and comparability with its financial services peers:

• Realized gains (losses) on the sale of assets measured at FVOCI;
• The direct equity and interest rate impacts on the measurement of surplus assets and liabilities; and
• Amortization of acquisition-related finite life intangible assets.

The Corporation updated its definition of adjusted net earnings in line with Lifeco's change. The comparative periods in 2022 have been restated to reflect this change.

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 readers in their analysis of the results of the Corporation. Adjusted net earnings, as defined by the Corporation, assists the reader in the comparison of the current period's results to those of previous periods as it reflects management's view of the operating performance of the Corporation and its subsidiaries, excluding items that are not considered to be part of the underlying business results.

Fee-related earnings is presented for Sagard and Power Sustainable and includes revenues from management fees earned across all asset classes, less investment platform expenses which include i) fee-related compensation including salary, bonus, and benefits, and ii) operating expenses. Fee-related earnings is presented on a gross basis, including non-controlling interests. Fee-related earnings excludes i) share-based compensation expenses, ii) amortization of acquisition-related intangible assets, iii) foreign exchange-related gains and losses, iv) net interest, and v) other items that in management's judgment are not indicative of underlying operating performance of the alternative asset investment platforms, which include restructuring costs, transaction and integration costs related to business acquisitions and certain non-recurring material items. Management uses this measure to assess the profitability of the asset management activities of the alternative asset investment platforms. This financial measure provides insight as to whether recurring revenues from management fees, which are not based on future realization events, are sufficient to cover associated operating expenses.

Adjusted net asset value is commonly used by holding companies to assess their value. Adjusted net asset value represents the fair value of the participating shareholders' equity of Power Corporation. Adjusted net asset value is calculated as the fair value of the assets of the combined Power Corporation and Power Financial holding company less their net debt and preferred shares. The investments held in public entities (including Lifeco, IGM and GBL) are measured at their market value and investments in private entities and investment funds are measured at management's estimate of fair value. This measure presents the fair value of the participating shareholders' equity of the holding company, and assists the reader in determining or comparing the fair value of investments held by the holding company or its overall fair value.

Adjusted net earnings attributable to participating shareholders, fee-related earnings, adjusted net asset value, gross asset value, adjusted net earnings from continuing operations per share (adjusted net earnings per share) and adjusted net asset value per share are non-IFRS financial measures and ratios that do not have a standard meaning and may not be comparable to similar measures used by other entities.

Presentation of Holding Company Activities

The Corporation's reportable segments include Lifeco, IGM and GBL, which represent the Corporation's investments in publicly traded operating companies, as well as the holding company. These reportable segments, in addition to the asset management activities, reflect Power Corporation's management structure and internal financial reporting. The Corporation evaluates its performance based on the operating segment's contribution to earnings.

The holding company comprises the corporate activities of the Corporation and Power Financial, on a combined basis, and presents the investment activities of the Corporation. The investment activities of the holding company, including the investments in Lifeco, IGM and controlled entities within the alternative asset investment platforms, are presented using the equity method. The holding company activities present the holding company's assets and liabilities, including cash, investments, debentures and non-participating shares. The discussions included in the sections Financial Position and Cash Flows of the Corporation's annual MD&A present the segmented balance sheets and cash flow statements of the holding company, which are presented in Note 36 of the 2023 Consolidated Financial Statements. This presentation is useful to the reader as it presents the holding company's (parent) results separately from the results of its consolidated operating subsidiaries.

RECONCILIATIONS OF NON-IFRS FINANCIAL MEASURES

Power Corporation

Adjusted net earnings

Adjustments (excluded from Adjusted net earnings)

Adjusted net asset value

The following table presents a reconciliation of the participating shareholders' equity reported in accordance with IFRS to the adjusted net asset value, a non-IFRS financial measure:

The Corporation's adjusted net asset value per share was $53.53 at December 31, 2023, compared with $41.91 at December 31, 2022, representing an increase of 27.7%. The Corporation's book value per participating share was $32.49 at December 31, 2023, compared with $31.37 at December 31, 2022, representing an increase of 3.6%.

This news release also contains other non-IFRS financial measures which are publicly disclosed by the Corporation's subsidiaries including adjusted net earnings and adjusted net earnings per share. The section below includes the description and reconciliation of the non-IFRS financial measures included in this news release as reported by the Corporation's subsidiaries. The information below is derived from Lifeco's and IGM's annual MD&As, as prepared and disclosed by the respective companies in accordance with applicable securities legislation, and which are also available either directly from SEDAR+ (www.sedarplus.com) or from their websites, www.greatwestlifeco.com and www.igmfinancial.com.

Lifeco

Adjusted net earnings (loss) from continuing operations attributable to Lifeco's common shareholders

Adjusted net earnings (loss) from continuing operations ^[1] (adjusted net earnings (loss)) reflects Lifeco management's view of the underlying business performance of Lifeco and provides an alternate measure to understand the underlying business performance compared with IFRS net earnings. Adjusted net earnings (loss) excludes the following items from IFRS-reported net earnings:

• Market-related impacts, where actual market returns in the current period are different than longer-term expected returns;
• Assumption changes and management actions that impact the measurement of assets and liabilities;
• Business transformation impacts which include acquisition and divestiture costs and restructuring and integration costs;
• Material legal settlements, material impairment charges related to goodwill and intangible assets, impacts of income tax rate changes and other tax impairments, net gains, losses or costs related to the disposition or acquisition of a business, net earnings (loss) from discontinued operations; and
• Other items that, when removed, assist in explaining Lifeco's underlying business performance.

The definition of adjusted net earnings (loss) has been refined (in 2023 and applied to 2022 comparative results) to also exclude the following impacts that are included in IFRS-reported net earnings for an improved representation of Lifeco's underlying business performance, as well as for consistency and comparability with its financial services industry peers:

• Realized gains (losses) on the sale of assets measured at fair value through other comprehensive income;
• The direct equity and interest rate impacts on the measurement of surplus assets and liabilities; and
• Amortization of acquisition-related finite life intangible assets.
  
  

IGM Financial

Adjusted net earnings attributable to IGM's common shareholders

Adjusted net earnings attributable to common shareholders excludes Adjustments ^[1], which includes the after‐tax impact of any item that management of IGM considers to be of a non‐recurring nature, or that could make the period‐over‐period comparison of results from operations less meaningful.

OTHER MEASURES

This news release and other continuous disclosure documents also include other measures used to discuss activities of the Corporation, its consolidated publicly traded operating companies and alternative asset investment platforms including, but not limited to, "assets under management", "assets under administration", "assets under management and advisement", "assets under management and advisement including Strategic Investments", "book value per participating share", "carried interest", "net asset value", and "unfunded commitments". Refer to the section "Other Measures" in the Corporation's annual MD&A, which can be located in the Corporation's profile on SEDAR+ at www.sedarplus.com, for definitions of such measures, which definitions are incorporated herein by reference.

ELIGIBLE DIVIDENDS

For purposes of the Income Tax Act (Canada) and any similar provincial legislation, all of the above dividends on the Corporation's preferred shares (including the Participating Preferred Shares) and Subordinate Voting Shares are eligible dividends.

FORWARD-LOOKING STATEMENTS

Certain statements in this news release, other than statements of historical fact, are forward-looking statements based on certain assumptions and reflect the Corporation's current expectations, or with respect to disclosure regarding the Corporation's public subsidiaries, reflect such subsidiaries' disclosed current expectations. Forward-looking statements are provided for the purposes of assisting the reader in understanding the Corporation's financial performance, financial position and cash flows as at and for the periods ended on certain dates and to present information about management's current expectations and plans relating to the future and the reader is cautioned that such statements may not be appropriate for other purposes. These statements may include, without limitation, statements regarding the operations, business, financial condition, expected financial results, performance, prospects, opportunities, priorities, targets, goals, ongoing objectives, strategies and outlook of the Corporation and its subsidiaries, the Corporation's normal course issuer bid commenced in 2024, as well as capital commitments to strategies of the investment platforms. Forward-looking statements include statements that are predictive in nature, depend upon or refer to future events or conditions, or include words such as "expects", "anticipates", "plans", "believes", "estimates", "seeks", "intends", "targets", "projects", "forecasts" or negative versions thereof and other similar expressions, or future or conditional verbs such as "may", "will", "should", "would" and "could".

By its nature, this information is subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved. A variety of factors, many of which are beyond the Corporation's and its subsidiaries' control, affect the operations, performance and results of the Corporation and its subsidiaries and their businesses, and could cause actual results to differ materially from current expectations of estimated or anticipated events or results. These factors include, but are not limited to: the impact or unanticipated impact of general economic, political and market factors in North America and internationally, fluctuations in interest rates, inflation and foreign exchange rates, monetary policies, business investment and the health of local and global equity and capital markets, management of market liquidity and funding risks, risks related to investments in private companies and illiquid securities, risks associated with financial instruments, changes in accounting policies and methods used to report financial condition (including uncertainties associated with significant judgments, estimates and assumptions), the effect of applying future accounting changes, business competition, operational and reputational risks, technological changes, cybersecurity risks, changes in government regulation and legislation, changes in tax laws, unexpected judicial or regulatory proceedings, catastrophic events, man-made disasters, terrorist attacks, wars and other conflicts, or an outbreak of a public health pandemic or other public health crises (such as COVID-19), the Corporation's and its subsidiaries' ability to complete strategic transactions, integrate acquisitions and implement other growth strategies, the Corporation's and its subsidiaries' success in anticipating and managing the foregoing factors and with respect to forward-looking statements of the Corporation's subsidiaries disclosed in this news release, the factors identified by such subsidiaries in their respective MD&A.

The reader is cautioned to consider these and other factors, uncertainties and potential events carefully and not to put undue reliance on forward-looking statements. Information contained in forward-looking statements is based upon certain material assumptions that were applied in drawing a conclusion or making a forecast or projection, including management's perceptions of historical trends, current conditions and expected future developments, as well as other considerations that are believed to be appropriate in the circumstances, including that the list of risks and uncertainties in the previous paragraph, collectively, are not expected to have a material impact on the Corporation and its subsidiaries and with respect to forward-looking statements of the Corporation's subsidiaries disclosed in this news release, the risks identified by such subsidiaries in their respective MD&A and Annual Information Form most recently filed with the securities regulatory authorities in Canada and available at www.sedarplus.com. While the Corporation considers these assumptions to be reasonable based on information currently available to management, they may prove to be incorrect.

Other than as specifically required by applicable Canadian law, the Corporation undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made, or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results, or otherwise.

Additional information about the risks and uncertainties of the Corporation's business and material factors or assumptions on which information contained in forward-looking statements is based is provided in its disclosure materials, including its annual MD&A and Annual Information Form, filed with the securities regulatory authorities in Canada and available at www.sedarplus.com.

SOURCE Power Corporation of Canada