Readers are referred to
the sections Non-IFRS Financial Measures and Forward-Looking
Statements later in this release. All figures are expressed in
Canadian dollars unless otherwise noted.
|
|
MONTRÉAL, Aug. 10,
2023 /CNW/ - Power Corporation of Canada (Power Corporation or the Corporation)
(TSX: POW) today reported earnings results for the three and six
months ended June 30, 2023.
Power Corporation
Consolidated results for the
period ended June 30, 2023
HIGHLIGHTS [1]
Power Corporation
- Net earnings [2] were $501
million or $0.75 per share
[3] for the second quarter of 2023, compared with
$601 million or $0.89 per share in 2022.
Adjusted net earnings [2][4] were $847 million or $1.27 per share, compared with $647 million or $0.97 per share in the second quarter of
2022.
- Adjusted net asset value per share [4] was
$48.86 at June
30, 2023, compared with $41.91
at December 31, 2022, an increase of
16.6%. The Corporation's book value per participating share
[5] was $31.43 at
June 30, 2023, comparable with
December 31, 2022.
- In 2023, the Corporation purchased for cancellation 3.5 million
subordinate voting shares for a total of $123 million as at June
30, 2023.
- Contribution to net earnings from the publicly traded operating
companies was $496 million in the
second quarter of 2023, compared with $669
million in 2022.
Contribution to adjusted net earnings from the publicly traded
operating companies was $842 million
in the second quarter of 2023, compared with $715 million in 2022.
Great-West Lifeco Inc. (Lifeco)
- Second quarter net earnings were $498
million, compared with $823
million in the second quarter of 2022.
Adjusted net earnings [6] were $920 million, compared with $903 million in the second quarter of 2022.
- On May 31, 2023, Lifeco
announced an agreement to sell Putnam Investments to Franklin Templeton, unlocking shareholder value
and further focusing its U.S. operations on highly attractive
retirement and personal wealth markets.
- In the second quarter of 2023, Lifeco announced complementary
acquisitions of Investment Planning Counsel and Value Partners,
which will enable its Canadian business with new capabilities to
offer a leading end-to-end wealth and insurance platform for
independent advisors.
IGM Financial Inc. (IGM or IGM Financial)
- Second quarter net earnings were $138.2
million, compared with $207.1
million in the second quarter of 2022.
Adjusted net earnings were $205.5
million for the second quarter of 2023, compared with
$207.1 million in 2022.
- Assets under management and advisement including Strategic
Investments [5] were $402.8
billion as at June 30, 2023,
compared with $376.5 billion at
March 31, 2023 and $305.0 billion at June 30,
2022.
Groupe Bruxelles Lambert (GBL)
- GBL reported a net asset value [5] of
€17.5 billion at June 30, 2023, or
€119.30 per share, compared with €17.8 billion or €116.18 per share
at December 31, 2022.
- In the second quarter of 2023, GBL completed €132 million of
share buybacks and a total of €279 million of share buybacks in the
six months ended June 30, 2023.
Sagard Holdings Inc. (Sagard)
- On July 6, 2023, Sagard
announced new strategic partnerships with Abu Dhabi Developmental
Holding Co. (ADQ), an Abu
Dhabi-based investment and holding company, and Bank of
Montreal. Sagard will also expand its existing
partnership with Lifeco.
|
[1]
|
Comparative periods
have been restated subsequent to the adoption of IFRS 17 and IFRS 9
on January 1, 2023. As well, comparative results have been restated
to exclude discontinued operations related to Putnam from adjusted
net earnings. See the Basis of Presentation and Non-IFRS Financial
Measures sections later in this news release.
|
[2]
|
Attributable to
participating shareholders.
|
[3]
|
All per share amounts
are per participating share of the Corporation.
|
[4]
|
Adjusted net earnings
and adjusted net asset value are non-IFRS financial measures.
Adjusted net earnings per share and adjusted net asset value per
share are non-IFRS ratios. See the Non-IFRS Financial Measures
section later in this news release.
|
[5]
|
See the Other Measures
section later in this news release.
|
[6]
|
Defined as "base
earnings" by Lifeco, a non-IFRS financial measure; see the Non-IFRS
Financial Measures section later in this news release.
|
|
|
SECOND QUARTER
Net earnings attributable to participating shareholders were
$501 million or $0.75 per share, compared with $601 million or $0.89 per share in 2022.
Adjusted net earnings attributable to participating shareholders
[1] were $847 million or
$1.27 per share, compared with
$647 million or $0.97 per share in 2022.
Contributions to Power Corporation's Earnings
(in millions of
dollars, except per share amounts)
|
Adjusted Net
Earnings
|
Net
Earnings
|
|
2023
|
2022
|
2023
|
2022
|
Lifeco
[2]
|
628
|
601
|
340
|
548
|
IGM
[2]
|
128
|
129
|
86
|
129
|
GBL
[2]
|
90
|
(44)
|
90
|
(44)
|
Effect of consolidation
[3]
|
(4)
|
29
|
(20)
|
36
|
Publicly traded
operating companies
|
842
|
715
|
496
|
669
|
|
|
|
|
|
Sagard and Power
Sustainable [4]
|
3
|
(56)
|
3
|
(56)
|
ChinaAMC
[5]
|
−
|
15
|
−
|
15
|
Other investments and
standalone businesses
|
110
|
49
|
110
|
49
|
|
955
|
723
|
609
|
677
|
Corporate operations
and Other [6]
|
(108)
|
(76)
|
(108)
|
(76)
|
|
847
|
647
|
501
|
601
|
|
|
|
|
|
Per participating
share
|
1.27
|
0.97
|
0.75
|
0.89
|
Average shares
outstanding (in millions)
|
665.8
|
670.9
|
665.8
|
670.9
|
Publicly traded operating companies: contribution to net
earnings was $496 million and to
adjusted net earnings was $842 million, representing a
decrease of 25.9% and an increase of 17.8%, respectively, from the
second quarter of 2022:
Lifeco: contribution to net and
adjusted net earnings decreased by 38.0% and increased by 4.5%,
respectively. The results of Putnam have been classified as discontinued
operations and excluded from adjusted net earnings.
IGM: contribution to net earnings
decreased by 33.3% and contribution to adjusted net earnings was
comparable with 2022. Net earnings in the second quarter of 2023
include a restructuring charge of $76
million after tax as IGM implemented actions in the quarter
enabling it to invest in its businesses while sustainably reducing
expenses.
GBL: contribution to net earnings of
$90 million. Results include the Corporation's share of a net
recovery of $37 million in the second
quarter of 2023 related to a decrease in the put right liability of
the non-controlling interests in Webhelp Group (Webhelp) net of
charges related to Webhelp's employee incentive plan. Upon
completion of the Webhelp and Concentrix Corporation combination
transaction announced at the end of the first quarter of 2023,
GBL's liabilities to non-controlling interests will be extinguished
without any cash impact for GBL.
Sagard and Power Sustainable
Capital Inc. (Power Sustainable): net earnings include a
negative contribution of $2 million
from Power Sustainable and a positive contribution of
$5 million from Sagard.
Other investments and standalone businesses: net
earnings include a recovery of $97
million related to the sale of the Corporation's investment
in Bellus Health Inc. (Bellus) in the second quarter of 2023.
Adjustments in the second quarter of 2023, excluded from
adjusted net earnings, were a negative net impact to earnings of
$346 million or $0.52 per share, mainly related to the
Corporation's share of Lifeco's and IGM's adjustments. In the
second quarter of 2022, Adjustments were a negative net impact to
earnings of $46 million or $0.08 per share, mainly related to the
Corporation's share of Lifeco's adjustments.
|
[1]
|
A non-IFRS
financial measure; see the
Non-IFRS Financial Measures
section later in this news release.
|
[2]
|
As reported
by Lifeco, IGM and GBL.
|
[3]
|
Refer to the detailed
table in the Contribution to Net Earnings and Adjusted Net Earnings
section of the Corporation's most recent Management's Discussion
and Analysis (MD&A) for additional information.
|
[4]
|
Consists of earnings
(losses) from the alternative asset investment platforms, including
controlled and consolidated subsidiaries.
|
[5]
|
China Asset Management
Co., Ltd. (ChinaAMC).
|
[6]
|
Includes operating and
other expenses, dividends on non-participating shares of the
Corporation and Power Financial Corporation (Power Financial)
corporate operations; refer to the Earnings Summary
below.
|
SIX MONTHS
Net earnings attributable to participating shareholders were
$814 million or $1.22 per share, compared with $1,463 million or $2.17 per share in 2022.
Adjusted net earnings attributable to participating shareholders
[1] were $1,373 million or
$2.06 per share, compared with
$1,089 million or $1.62 per share in 2022.
Contributions to Power Corporation's Earnings
(in millions of
dollars, except per share amounts)
|
Adjusted Net
Earnings
|
Net
Earnings
|
|
2023
|
2022
|
2023
|
2022
|
Lifeco
[2]
|
1,189
|
1,075
|
744
|
1,436
|
IGM
[2]
|
256
|
264
|
323
|
264
|
GBL
[2]
|
109
|
(73)
|
109
|
(73)
|
Effect of consolidation
[3]
|
(18)
|
62
|
(145)
|
85
|
Publicly traded
operating companies
|
1,536
|
1,328
|
1,031
|
1,712
|
|
|
|
|
|
Sagard and Power
Sustainable [4]
|
(85)
|
(137)
|
(85)
|
(147)
|
ChinaAMC
|
2
|
28
|
(52)
|
28
|
Other investments and
standalone businesses
|
126
|
48
|
126
|
48
|
|
1,579
|
1,267
|
1,020
|
1,641
|
Corporate operations
and Other [5]
|
(206)
|
(178)
|
(206)
|
(178)
|
|
1,373
|
1,089
|
814
|
1,463
|
|
|
|
|
|
Per participating
share
|
2.06
|
1.62
|
1.22
|
2.17
|
Average shares
outstanding (in millions)
|
666.3
|
673.3
|
666.3
|
673.3
|
|
[1]
|
A non-IFRS
financial measure; see the Non-IFRS Financial Measures section
later in this news release.
|
[2]
|
As reported
by Lifeco, IGM and GBL.
|
[3]
|
Refer to the detailed
table in the Contribution to Net Earnings and Adjusted Net Earnings
section of the Corporation's most recent Management's Discussion
and Analysis (MD&A) for additional information.
|
[4]
|
Consists of earnings
(losses) from the alternative asset investment platforms, including
controlled and consolidated subsidiaries.
|
[5]
|
Includes operating and
other expenses, dividends on non-participating shares of the
Corporation and Power Financial corporate operations; refer to the
Earnings Summary below.
|
Great-West Lifeco, IGM Financial and Groupe Bruxelles
Lambert
Results for the quarter ended June 30, 2023
The information below
is derived from Lifeco and IGM's second quarter 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.ca) or from
their websites, www.greatwestlifeco.com and www.igmfinancial.com.
The information below related to GBL is derived from publicly
disclosed information, as issued by GBL in its half-year report at
June 30, 2023. Further information on GBL's results is available on
its website at www.gbl.be.
|
|
GREAT-WEST LIFECO INC.
SECOND QUARTER
Net earnings attributable to common shareholders were
$498 million or $0.53 per share,
compared with $823 million or $0.88 per share in 2022.
Adjusted net earnings [1] attributable to common
shareholders were $920 million or $0.99 per share, compared with $903 million
or $0.97 per share in 2022.
Adjustments in the second quarter of 2023, excluded from
adjusted net earnings, were a net negative impact of $422 million, compared with a net negative impact
of $80 million in 2022. Lifeco's adjustments consisted of:
- Market experience relative to expectations of negative
$79 million;
- Realized losses [2] of $121
million from rebalancing U.K. surplus assets to capitalize
on higher short-term rates and improve future interest rate
sensitivities;
- Negative earnings impact from assumption changes and management
actions of $4 million;
- Acquisition and divestiture costs of $158 million in the
United States and Europe
segments;
- Restructuring and integration costs of $20 million in the
United States segment;
- Amortization of acquisition-related finite life intangibles of
$36 million; and
- Discontinued operations related to Putnam representing a net loss of $4 million.
IGM FINANCIAL INC.
SECOND QUARTER
Net earnings available to common shareholders were $138.2 million or $0.58 per share, compared with $207.1 million or $0.87 per share in 2022.
Adjusted net earnings [3] available to common
shareholders were $205.5 million
or $0.86 per share for the
second quarter of 2023, compared with $207.1 million or $0.87 per share in 2022. Adjustments in the
second quarter of 2023, excluded from adjusted net earnings, were a
net negative impact of $67.3 million
consisting of:
- Restructuring and other charges of $76.2
million resulting from streamlining and simplifying IGM's
business;
- A decrease of $6.2 million
recorded on a prospective basis in the second quarter related to
the gain recognized by IGM in the first quarter on the sale of a
portion of its interest in Lifeco [4];
- Lifeco IFRS 17 adjustment of $15.1
million, representing a change of estimate which has been
recorded on a prospective basis [4].
Assets under management and advisement [5] at
June 30, 2023 were $261.1 billion, an increase of 7.9% from the
second quarter of 2022 and an increase from $260.4 billion at March
31, 2023.
GROUPE BRUXELLES
LAMBERT
SECOND QUARTER
GBL reported net earnings of €373 million, compared
with a net loss of €204 million in 2022.
GBL reported a net asset value [5] of
€17,502 million at June 30, 2023, or €119.30 per share,
compared with €17,775 million or €116.18 per share at
December 31, 2022.
|
[1]
|
Defined as "base
earnings" by Lifeco. For additional information, please refer
to the Non-IFRS Financial Measures section later in this news
release.
|
[2]
|
Related to assets
measured at fair value through other comprehensive income
(FVOCI).
|
[3]
|
Adjusted net earnings
is a non-IFRS financial measure. For additional information,
please refer to the Non-IFRS Financial Measures section later in
this news release.
|
[4]
|
Eliminated in the Effect of consolidation.
|
[5]
|
See the Other Measures
section later in this news release.
|
Sagard and Power
Sustainable
Results for the quarter ended June 30, 2023
Sagard and Power
Sustainable comprise the results of the Corporation's alternative
asset investment platforms, which includes income earned from asset
management and investing activities. Asset management activities
includes fee-related earnings (a non-IFRS financial measure, see
the Non-IFRS Financial Measures section later in this news
release), which is comprised of management fees less investment
platform expenses. Asset management activities also includes
carried interest and income from other management activities.
Investing activities comprises income earned on the capital
invested by the Corporation (proprietary capital) in the investment
funds managed by each platform and the share of earnings (losses)
of controlled and consolidated subsidiaries held within the
alternative asset investment platforms. For additional information,
refer to the table later in this news release.
|
|
|
|
SECOND QUARTER
Net income of the alternative asset investment platforms was
$3 million, compared with net loss of $56 million in the
corresponding quarter in 2022.
Net income of $3 million in the
second quarter is comprised of:
- A negative contribution of $18
million from the asset management activities of Sagard and Power Sustainable;
- A positive contribution of $21
million from investing activities, including a positive
contribution of $18 million from
Sagard and $3 million from Power Sustainable.
Summary of assets under
management [1] (including unfunded
commitments):
(in billions of dollars)
|
June 30,
2023
|
June 30,
2022
|
Sagard [2]
|
18.5
|
16.4
|
Power
Sustainable
|
3.3
|
2.8
|
Total
|
21.8
|
19.2
|
Percentage of
third-party and associated companies
|
87 %
|
85 %
|
Other Investments and Standalone Businesses
Results for
the quarter ended June 30,
2023
Other investments and
standalone businesses includes the Corporation's investments in
investment and hedge funds and the share of earnings (losses) of
standalone businesses.
|
|
SECOND QUARTER
OTHER INVESTMENTS
Other income from investments includes a recovery of $97 million from the sale of the Corporation's
investment in Bellus, a Canada-based late-stage biopharmaceutical
company. On June 28, 2023, Bellus
completed a transaction in which it was acquired by GSK
plc for US$14.75 per share in
cash. Subsequent to quarter-end, the Corporation received proceeds
of approximately $97 million
(US$73 million). The investment in Bellus was accounted for as
an associate using the equity method, with a carrying value of
nil.
STANDALONE BUSINESSES
Net earnings of the standalone
businesses in the second quarter of 2023 were $8 million,
compared with net earnings of $27 million in 2022.
At June 30, 2023, the fair value
of standalone businesses was $0.8 billion, compared with $1.0 billion at June
30, 2022.
|
[1]
|
See the Other Measures
section later in this news release.
|
[2]
|
Includes ownership in
Wealthsimple Financial Corp. (Wealthsimple) valued at $0.9
billion at June 30, 2023 (same at June 30, 2022) and excludes
assets under management of Sagard's wealth management
business.
|
Adjusted Net Asset Value and Participating Shareholders'
Equity
At June 30,
2023
ADJUSTED NET ASSET VALUE
Adjusted net asset
value is presented for Power Corporation and represents
management's estimate of the fair value of the participating
shareholders' equity of the Corporation. Adjusted net asset value
is calculated as the fair value of the assets of the combined Power
Corporation and Power Financial holding company (the gross asset
value) less their net debt and preferred shares. Refer to the
Non-IFRS Financial Measures section later in this news release for
a description and reconciliation.
|
|
|
|
The Corporation's adjusted net asset value per share was
$48.86 at June
30, 2023, compared with $41.91
at December 31, 2022, representing an increase of 16.6%.
|
(in millions of
dollars, except per share amounts)
|
June 30,
2023
|
December 31,
2022
|
Variation %
|
Publicly
Traded
Operating
Companies
|
Lifeco
[1]
|
24,446
|
19,414
|
26
|
IGM
|
5,966
|
5,592
|
7
|
GBL
|
2,303
|
2,388
|
(4)
|
|
|
32,715
|
27,394
|
19
|
|
|
|
|
|
Alternative
Asset
Investment
Platforms
|
Sagard
[2]
|
970
|
977
|
(1)
|
Power Sustainable
[2]
|
1,340
|
1,478
|
(9)
|
|
2,310
|
2,455
|
(6)
|
|
|
|
|
|
Other
|
ChinaAMC
[1]
|
−
|
1,150
|
−
|
Standalone businesses
[3]
|
813
|
829
|
(2)
|
Other assets and
investments
|
527
|
559
|
(6)
|
Cash and cash
equivalents
|
1,717
|
1,277
|
34
|
|
|
3,057
|
3,815
|
(20)
|
|
|
|
|
|
|
Gross asset
value
|
38,082
|
33,664
|
13
|
|
Liabilities and
preferred shares
|
(5,634)
|
(5,701)
|
1
|
|
Adjusted net asset
value
|
32,448
|
27,963
|
16
|
|
|
|
|
|
|
Shares outstanding
(millions)
|
664.0
|
667.1
|
|
|
Adjusted net asset
value per share
|
48.86
|
41.91
|
17
|
[1]
|
On January 12, 2023,
the Corporation and IGM completed a transaction in which the
interest in ChinaAMC was combined under IGM. In a separate
agreement, IGM sold approximately 15.2 million common shares of
Lifeco, representing a 1.6% interest in Lifeco, to Power
Financial.
|
[2]
|
Includes the management
companies of the investment platforms at their carrying
value.
|
[3]
|
Includes The Lion
Electric Company (Lion), LMPG Inc. (LMPG) and Peak Achievement
Athletics Inc. (Peak).
|
Power Corporation's
Ownership in Publicly Traded Operating Companies
|
|
|
Shares
held [1]
(in millions)
|
Share price
|
|
Ownership [1]
(%)
|
June 30,
2023
|
December 31,
2022
|
Lifeco
|
68.2
|
635.5
|
$38.47
|
$31.30
|
IGM
|
62.1
|
147.9
|
$40.33
|
$37.80
|
GBL [2]
|
15.5
|
22.8
|
€72.16
|
€74.58
|
[1]
|
At June 30,
2023.
|
[2]
|
Held through Parjointco
SA (Parjointco), a jointly controlled corporation (50%).
|
PARTICIPATING SHAREHOLDERS' EQUITY
Book value per
participating share represents Power Corporation's participating
shareholders' equity divided by the number of participating shares
outstanding at the end of the reporting period. Participating
shareholders' equity is calculated as the total assets of the
combined Power Corporation and Power Financial holding company,
including investments in subsidiaries presented using the equity
method, less their net debt and preferred shares.
|
|
The Corporation's book value per participating share was
$31.43 at June
30, 2023, comparable with December 31, 2022.
|
(in millions of
dollars, except per share amounts)
|
June 30,
2023
|
December 31,
2022
|
Variation %
|
Publicly
Traded
Operating
Companies
|
Lifeco
|
14,870
|
14,579
|
2
|
IGM
|
3,464
|
3,607
|
(4)
|
GBL
|
3,498
|
3,314
|
6
|
|
|
21,832
|
21,500
|
2
|
|
|
|
|
|
Alternative
Asset
Investment
Platforms
|
Sagard
|
712
|
714
|
−
|
Power
Sustainable
|
1,037
|
1,134
|
(9)
|
|
1,749
|
1,848
|
(5)
|
|
|
|
|
|
Other
|
ChinaAMC
|
−
|
783
|
−
|
Standalone businesses
[1]
|
683
|
678
|
1
|
Other assets and
investments
|
527
|
504
|
5
|
Cash and cash
equivalents
|
1,717
|
1,277
|
34
|
|
|
2,927
|
3,242
|
(10)
|
|
|
|
|
|
|
Total assets
|
26,508
|
26,590
|
−
|
|
Liabilities and
preferred shares
|
(5,634)
|
(5,664)
|
1
|
|
Participating
shareholders' equity
|
20,874
|
20,926
|
−
|
|
|
|
|
|
|
Shares outstanding
(millions)
|
664.0
|
667.1
|
|
|
Book value per
participating share
|
31.43
|
31.37
|
−
|
[1]
Includes Lion, LMPG and Peak.
|
Dividend on Power Corporation Participating Shares
The Board of Directors declared a quarterly dividend of
52.50 cents per share on the Participating Preferred Shares
and the Subordinate Voting Shares of the Corporation, payable
November 1, 2023 to shareholders of
record September 29, 2023.
Dividends on Power Corporation Non-Participating Preferred
Shares
The Board of Directors also declared quarterly dividends on the
Corporation's preferred shares, payable October 15, 2023 to shareholders of record
September 22, 2023:
Series
|
Stock
Symbol
|
Amount
|
|
Series
|
Stock
Symbol
|
Amount
|
Series A
|
POW.PR.A
|
35¢
|
|
Series D
|
POW.PR.D
|
31.25¢
|
Series B
|
POW.PR.B
|
33.4375¢
|
|
Series G
|
POW.PR.G
|
35¢
|
Series C
|
POW.PR.C
|
36.25¢
|
|
|
|
|
Investor Information
Access to Quarterly
Results Materials:
|
Quarterly Earnings Conference
Call:
|
The second quarter
earnings
news release and shareholder
report are available on the
Power Corporation website at www.powercorporation.com/en/
investors
|
Power Corporation will
host an earnings call and live audio webcast on Friday, August 11,
2023 at 8:30 a.m. (Eastern Time). A question-and-answer period with
analysts will follow the presentation. Shareholders, investors, and
other stakeholders are welcome to participate on a listen-only
basis.
The live audio webcast
and presentation materials will be available at:
www.powercorporation.com/en/investors/events-presentations/.
To listen via
telephone, please dial 1-800-319-4610 toll-free in North America or
416-915-3239 for local calls made in the Toronto area.
A replay of the
conference call will be available from August 11, 2023 at 11:30
a.m. (Eastern Time) until November 12, 2023 by calling
1-855-669-9658 toll-free in North America, using the access code
0289#. A webcast archive will also be available on Power
Corporation's website.
|
Investor Relations Contact:
|
514-286-7400
investor.relations@powercorp.com
|
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 June 30, 2023, Power
Corporation held the following economic interests:
100% – Power Financial
|
|
www.powerfinancial.com
|
68.2 %
|
|
Great-West
Lifeco (TSX: GWO)
|
|
www.greatwestlifeco.com
|
62.1 %
|
|
IGM Financial
(TSX: IGM)
|
|
www.igmfinancial.com
|
15.5 %
|
|
GBL [1] (Euronext:
GBLB)
|
|
www.gbl.be
|
54.2 %
|
|
Wealthsimple [2]
|
|
www.wealthsimple.com
|
|
|
Investment Platforms
|
|
100 %
|
|
Sagard [3]
|
|
www.sagard.com
|
100 %
|
|
Power
Sustainable
|
|
www.powersustainable.com
|
[1]
|
Held
through Parjointco, a jointly controlled corporation
(50%).
|
[2]
|
Undiluted equity
interest held by Portag3 Ventures Limited Partnership (Portage
Ventures I), Power Financial and IGM, representing a fully
diluted equity interest of 42.5%.
|
[3]
|
The Corporation holds a
78.5% interest in Sagard Holdings Management Inc.
|
Earnings Summary
Contribution to Adjusted Net Earnings and Net
Earnings
(in millions of
dollars, except per share amounts)
|
Three months ended June
30,
|
Six months ended June
30,
|
|
2023
|
2022
(restated)
|
2023
|
2022
(restated)
|
Adjusted net
earnings [1]
|
|
|
|
|
Lifeco [2][3]
|
628
|
601
|
1,189
|
1,075
|
IGM [2]
|
128
|
129
|
256
|
264
|
GBL [2]
|
90
|
(44)
|
109
|
(73)
|
Effect of consolidation
[4]
|
(4)
|
29
|
(18)
|
62
|
|
842
|
715
|
1,536
|
1,328
|
Sagard and Power
Sustainable [5]
|
3
|
(56)
|
(85)
|
(137)
|
ChinaAMC
|
−
|
15
|
2
|
28
|
Other investments and
standalone businesses [6]
|
110
|
49
|
126
|
48
|
Corporate operating and
other expenses
|
(60)
|
(29)
|
(111)
|
(85)
|
Dividends on
non-participating and perpetual preferred shares
|
(48)
|
(47)
|
(95)
|
(93)
|
Adjusted net
earnings [3][7]
|
847
|
647
|
1,373
|
1,089
|
Adjustments
[8]
|
(346)
|
(46)
|
(559)
|
374
|
Net
earnings
|
|
|
|
|
Lifeco
[2]
|
340
|
548
|
744
|
1,436
|
IGM
[2]
|
86
|
129
|
323
|
264
|
GBL
[2]
|
90
|
(44)
|
109
|
(73)
|
Effect of consolidation
[4]
|
(20)
|
36
|
(145)
|
85
|
|
496
|
669
|
1,031
|
1,712
|
Sagard and Power
Sustainable [5]
|
3
|
(56)
|
(85)
|
(147)
|
ChinaAMC
|
−
|
15
|
(52)
|
28
|
Other investments and
standalone businesses [6]
|
110
|
49
|
126
|
48
|
Corporate operating and
other expenses
|
(60)
|
(29)
|
(111)
|
(85)
|
Dividends on
non-participating and perpetual preferred shares
|
(48)
|
(47)
|
(95)
|
(93)
|
Net
earnings [7]
|
501
|
601
|
814
|
1,463
|
|
|
|
|
|
Earnings per share –
basic [7]
|
|
|
|
|
Adjusted net
earnings
|
1.27
|
0.97
|
2.06
|
1.62
|
Adjustments
|
(0.52)
|
(0.08)
|
(0.84)
|
0.55
|
Net
earnings
|
0.75
|
0.89
|
1.22
|
2.17
|
[1]
|
For a reconciliation of
Lifeco, IGM, and Sagard and Power Sustainable's non-IFRS adjusted
net earnings to their net earnings, refer to the Non-IFRS Financial
Measures, and Sagard and Power Sustainable sections
below.
|
[2]
|
As reported by Lifeco,
IGM and GBL.
|
[3]
|
Comparative results
have been restated to exclude net earnings (losses) from
discontinued operations related to Putnam from adjusted net
earnings.
|
[4]
|
The Effect of
consolidation reflects: i) the elimination of intercompany
transactions; ii) the application of the Corporation's accounting
method for investments under common control to the reported net
earnings of the publicly traded operating companies, which include:
a) an adjustment related to Lifeco's investment in Power
Sustainable Energy Infrastructure Partnership (PSEIP); and b) an
allocation of the results of the fintech portfolio, including
Wealthsimple, Portage Ventures I, Portag3 Ventures II Limited
Partnership (Portage Ventures II) and Portage Ventures III Limited
Partnership (Portage Ventures III), to the contributions from
Lifeco and IGM based on their respective interest; and iii)
adjustments in accordance with IAS 39 for IGM and GBL for
comparative periods presented prior to the Corporation's adoption
of IFRS 9 on January 1, 2023. Refer to the detailed table in the
Contribution to Net Earnings and Adjusted Net Earnings section of
the Corporation's most recent MD&A.
|
[5]
|
Consists of earnings of
the Corporation's alternative asset investment platforms, including
investments held through Power Financial.
|
[6]
|
Includes the results of
Lion, LMPG and Peak.
|
[7]
|
Attributable to
participating shareholders.
|
[8]
|
Refer to the detailed
table of Adjustments in the Non-IFRS Financial Measures section
below.
|
Sagard and Power
Sustainable
(in millions of
dollars)
|
Three months ended June
30,
|
Six months ended June
30,
|
|
2023
|
2022
|
2023
|
2022
|
Adjusted net
earnings (loss)
|
|
|
|
|
Asset management
activities [1]
|
|
|
|
|
Sagard
|
(13)
|
(35)
|
(23)
|
(49)
|
Power
Sustainable
|
(5)
|
(3)
|
(17)
|
(15)
|
Investing activities
(proprietary capital)
|
|
|
|
|
Sagard
[2]
|
18
|
30
|
17
|
44
|
Power
Sustainable
|
|
|
|
|
China public equity
[3]
|
1
|
(69)
|
(1)
|
(139)
|
Energy Infrastructure
[4][5]
|
(1)
|
23
|
(19)
|
22
|
|
−
|
(54)
|
(43)
|
(137)
|
Revaluation of
non-controlling interests liabilities [5][6]
|
3
|
(2)
|
(42)
|
−
|
Adjusted net
earnings (loss)
|
3
|
(56)
|
(85)
|
(137)
|
Adjustments
[7]
|
−
|
−
|
−
|
(10)
|
Net earnings
(loss)
|
3
|
(56)
|
(85)
|
(147)
|
[1]
|
Includes management
fees charged by the investment platforms on proprietary capital and
management of standalone businesses. Management fees paid by the
Corporation are deducted from income from investing
activities.
|
[2]
|
Includes the
Corporation's share of earnings (losses) of Wealthsimple. The first
and second quarters of 2022 included a reversal of carried interest
payable of $13 million and $25 million, respectively,
mainly due to a decrease in the fair value of Wealthsimple and
investments held in Portage II in the periods. The net decrease in
fair value of the Corporation's investments, including its
investments held through Power Financial, in Portage Ventures I,
Portage Ventures II, Portage Ventures III, and Wealthsimple was
$5 million in the six-month period ended June 30, 2023,
compared with a decrease of $428 million in fair value in the
corresponding period in 2022.
|
[3]
|
The fair value of the
Corporation's investments was $558 million at June 30, 2023,
compared with $666 million at December 31, 2022. On adoption of
IFRS 9 on January 1, 2023, the Corporation has classified
its investments in Chinese public equities as fair value through
other comprehensive income (FVOCI), an elective classification for
equity instruments in which all fair value changes remain
permanently in equity. Going forward, the contribution from
investing activities will consist of dividend income and management
and performance fee expenses. In 2022, the Corporation recognized
realized losses on the disposal of investments in Power Sustainable
China of $54 million and $70 million in the first and second
quarters, respectively, and recognized $13 million in
impairments recorded in the first quarter due to declines in
Chinese equity markets.
|
[4]
|
Consists of the
Corporation's share of earnings (losses) from direct investments in
energy infrastructure and in the consolidated activities of PSEIP.
The first quarter of 2023 includes the Corporation's share of
carried interest expense of $9 million, which resulted from an
increase in fair value of assets held in PSEIP and operating losses
mainly related to seasonality. The second quarter of 2022 included
a gain on disposal of a portfolio of solar assets of
$17 million, and unrealized gains on derivative contracts
hedging energy infrastructure projects of $12 million in each
of the first and second quarters of 2022. As well, the first
quarter of 2022 excluded a charge of $10 million due to
impairments on direct investments in energy infrastructure assets,
recorded as an Adjustment (see the section Adjustments
below).
|
[5]
|
Comparative information
has been restated in accordance with the current
presentation.
|
[6]
|
Consists of the
Corporation's share of the revaluation of non-controlling interests
liabilities which result from changes in fair value of assets held
in PSEIP and the share of earnings (losses) from the consolidated
activities of PSEIP which are attributable to third-party
investors. The Corporation controls and consolidates the activities
of PSEIP on a historical cost basis; however, equity interests held
by third parties have redemption features and are classified as a
financial liability, which are remeasured at their redemption
value. The first quarter of 2023 included a charge of $33 million
related to the Corporation's share of the revaluation of
non-controlling interests liabilities which mainly resulted from an
increase in fair value of assets held in PSEIP. The NAV of PSEIP
was $1,168 million at June 30, 2023, compared with
$1,035 million at December 31, 2022.
|
[7]
|
Refer to the detailed
table of Adjustments in the Non-IFRS Financial Measures section
below.
|
Other Investments and Standalone Businesses
(in millions of
dollars)
|
Three months ended June
30,
|
Six months ended June
30,
|
|
2023
|
2022
|
2023
|
2022
|
Net
earnings
|
|
|
|
|
Investment and hedge
funds and Other [1]
|
102
|
22
|
123
|
17
|
Standalone businesses
[2]
|
8
|
27
|
3
|
31
|
Net
earnings
|
110
|
49
|
126
|
48
|
[1]
|
Other includes foreign
exchange gains or losses and interest on cash and cash equivalents.
The second quarter of 2023 includes a recovery of $97 million
related to the sale of the Corporation's investment in
Bellus.
|
[2]
|
Includes the
Corporation's share of earnings (losses) of Lion, LMPG, and
Peak.
|
BASIS OF PRESENTATION
The condensed consolidated interim unaudited financial
statements for the period ended June 30, 2023 of the
Corporation, which reflect the adoption of IFRS 17 and 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 attributable to participating shareholders are
comprised of:
- 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 on assets
and liabilities, 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 restructuring or reorganization and integration
costs, acquisition and divestiture costs, material legal
settlements, material impairment charges, impact of substantially
enacted 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, net earnings (loss)
from discontinued operations and other items that, when removed,
assist in explaining underlying operating performance.
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. Lifeco's base earnings (losses) continues to represent
its management's view of the underlying business performance of
Lifeco and provides an alternate measure to understand the
underlying business performance of Lifeco compared to its
IFRS-reported net earnings. The definition of Adjustments continues
to include what the Corporation previously presented, including
Lifeco's impact of assumption changes and management actions that
impact the measurement of assets and liabilities, and
market-related impacts where actual market returns in the current
period are different than longer-term expected returns on assets
and liabilities. The definition of Lifeco's base earnings has been
refined 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
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.
The Corporation updated its definition of adjusted net earnings
in line with Lifeco's change. The comparative periods 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 comparing 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 and excludes
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
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 intangibles,
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 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 most recent
MD&A present the segmented balance sheets and cash flow
statements of the holding company, which are presented in Note 23
of the unaudited Interim Condensed 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
(in millions of
dollars)
|
Three months ended June
30,
|
Six months ended June
30,
|
|
2023
|
2022
(restated)
|
2023
|
2022
(restated)
|
Adjusted net earnings –
Non-IFRS financial measure [1]
|
847
|
647
|
1,373
|
1,089
|
Share of Adjustments
[2], net of tax
|
|
|
|
|
Lifeco
|
(290)
|
(53)
|
(447)
|
362
|
IGM
|
(56)
|
7
|
(58)
|
22
|
ChinaAMC
|
−
|
−
|
(54)
|
−
|
Sagard and Power
Sustainable
|
−
|
−
|
−
|
(10)
|
|
(346)
|
(46)
|
(559)
|
374
|
Net earnings – IFRS
financial measure [1]
|
501
|
601
|
814
|
1,463
|
[1]
|
Attributable to
participating shareholders of Power Corporation.
|
[2]
|
Refer to the
Adjustments section for more detail on Adjustments from Lifeco,
IGM, ChinaAMC, Sagard and Power Sustainable.
|
ADJUSTMENTS (excluded from Adjusted net earnings)
(in millions of
dollars)
|
Three months ended June
30,
|
Six months ended June
30,
|
|
2023
|
2022
(restated)
|
2023
|
2022
(restated)
|
Lifeco [1]
|
|
|
|
|
Market experience
relative to expectations (pre-tax)
|
(63)
|
100
|
(205)
|
676
|
Income tax (expense)
benefit
|
9
|
(48)
|
37
|
(167)
|
Realized OCI gains
(losses) from asset rebalancing (pre-tax)
|
(99)
|
−
|
(99)
|
−
|
Income tax (expense)
benefit
|
16
|
−
|
16
|
−
|
Assumption changes and
management actions (pre-tax)
|
(3)
|
(11)
|
3
|
(24)
|
Income tax (expense)
benefit
|
−
|
1
|
(1)
|
2
|
Acquisition and
divestiture costs (pre-tax)
|
(142)
|
(46)
|
(142)
|
(52)
|
Income tax (expense)
benefit
|
34
|
8
|
34
|
9
|
Restructuring and
integration costs (pre-tax)
|
(18)
|
(40)
|
(36)
|
(51)
|
Income tax (expense)
benefit
|
5
|
11
|
10
|
14
|
Amortization of
acquisition-related finite life intangible assets
(pre-tax)
|
(33)
|
(32)
|
(62)
|
(55)
|
Income tax (expense)
benefit
|
9
|
9
|
16
|
14
|
Discontinued
operations – Putnam (post-tax)
|
(3)
|
(5)
|
(16)
|
(5)
|
|
(288)
|
(53)
|
(445)
|
361
|
Effect of consolidation
(pre-tax) [2]
|
(3)
|
−
|
(3)
|
1
|
Income tax (expense)
benefit
|
1
|
−
|
1
|
−
|
|
(290)
|
(53)
|
(447)
|
362
|
IGM [1]
|
|
|
|
|
Gain on disposal of
Lifeco shares (pre-tax)
|
(4)
|
−
|
108
|
−
|
Income tax (expense)
benefit
|
−
|
−
|
(3)
|
−
|
Restructuring charges
(pre-tax)
|
(64)
|
−
|
(64)
|
−
|
Income tax (expense)
benefit
|
17
|
−
|
17
|
−
|
IFRS 17
adjustment (Lifeco)
(pre-tax)
|
9
|
−
|
9
|
−
|
Income tax (expense)
benefit
|
−
|
−
|
−
|
−
|
|
(42)
|
−
|
67
|
−
|
Effect of consolidation
(pre-tax) [2]
|
(16)
|
9
|
(137)
|
28
|
Income tax (expense)
benefit
|
2
|
(2)
|
12
|
(6)
|
|
(56)
|
7
|
(58)
|
22
|
ChinaAMC
|
|
|
|
|
Transaction costs on
disposal of ChinaAMC (pre-tax)
|
−
|
−
|
(14)
|
−
|
Income tax (expense)
benefit
|
−
|
−
|
−
|
−
|
Income taxes on
disposal of ChinaAMC
|
−
|
−
|
(40)
|
−
|
|
−
|
−
|
(54)
|
−
|
Sagard and Power
Sustainable
|
|
|
|
|
Impairment charges on
direct investments in energy infrastructure (pre-tax)
|
−
|
−
|
−
|
(13)
|
Income tax (expense)
benefit
|
−
|
−
|
−
|
3
|
|
−
|
−
|
−
|
(10)
|
|
(346)
|
(46)
|
(559)
|
374
|
[1]
|
As reported by Lifeco
and IGM.
|
[2]
|
The Effect of
consolidation reflects i) the elimination of intercompany
transactions, including the gain recognized by IGM on the sale of a
portion of its interest in Lifeco to the Corporation, as well as
IGM's share of Lifeco's IFRS 17 adjustment; ii) the
application of the Corporation's accounting method for investments
under common control to the Adjustments reported by Lifeco and IGM;
iii) IGM's share of Lifeco's Adjustments, in accordance with the
Corporation's definition of Adjusted net earnings; and iv)
adjustments in accordance with IAS 39 for IGM comparative
periods presented prior to the Corporation's adoption of IFRS 9 on
January 1, 2023.
|
ADJUSTED NET ASSET VALUE
Adjusted net asset
value represents management's estimate of the fair value of the
participating shareholders' equity of the 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 Corporation's adjusted net
asset value per share is presented on a look-through
basis.
|
|
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:
(in millions of
dollars, except per share amounts)
|
June 30,
2023
|
|
December 31,
2022
(restated)
|
|
Participating
shareholders' equity – IFRS financial measure
|
|
|
|
|
Stated capital –
participating shares
|
9,447
|
|
9,486
|
|
Retained
earnings
|
9,461
|
|
9,099
|
|
Reserves
|
1,966
|
|
2,341
|
|
|
20,874
|
|
20,926
|
|
Fair value
adjustments [1]
|
|
|
|
|
Lifeco
|
9,576
|
|
4,835
|
|
IGM
|
2,502
|
|
1,985
|
|
GBL
|
(1,195)
|
|
(926)
|
|
Alternative asset
investment platforms
|
561
|
|
607
|
|
ChinaAMC
|
−
|
|
367
|
|
Other investments and
standalone businesses
|
130
|
|
206
|
|
Adjustments to Other
liabilities [1]
|
−
|
|
(37)
|
|
|
11,574
|
|
7,037
|
|
Adjusted net asset
value – Non-IFRS financial measure
|
32,448
|
|
27,963
|
|
Per
share [2]
|
|
|
|
|
Participating
shareholders' equity (book value)
|
31.43
|
|
31.37
|
|
Adjusted net asset
value
|
48.86
|
|
41.91
|
|
[1]
|
Refer to the table
below for more details on the fair value and other
adjustments.
|
[2]
|
Attributable to
participating shareholders.
|
The Corporation's adjusted net asset value per share was
$48.86 at June
30, 2023, compared with $41.91
at December 31, 2022, representing an increase of 16.6%.
The Corporation's book value per participating share was
$31.43 at June
30, 2023, comparable with December 31, 2022.
|
|
|
June 30,
2023
|
|
|
December 31,
2022
|
|
(in millions of
dollars, except per share
amounts)
|
Holding
company
balance sheet
|
Fair value
adjustment
|
Adjusted net
asset value
|
|
Holding
company
balance sheet
|
Fair value
adjustment
|
Adjusted net
asset value
|
|
Holding company
assets
|
|
|
|
|
(restated)
|
(restated)
|
|
|
Investments
|
|
|
|
|
|
|
|
|
Power
Financial
|
|
|
|
|
|
|
|
|
Lifeco
|
14,870
|
9,576
|
24,446
|
|
14,579
|
4,835
|
19,414
|
|
IGM
|
3,464
|
2,502
|
5,966
|
|
3,607
|
1,985
|
5,592
|
|
GBL
[1]
|
3,498
|
(1,195)
|
2,303
|
|
3,314
|
(926)
|
2,388
|
|
Alternative asset investment platforms
|
|
|
|
|
|
|
|
|
Asset management
companies [2]
|
|
|
|
|
|
|
|
|
Sagard
|
47
|
−
|
47
|
|
60
|
−
|
60
|
|
Power
Sustainable
|
23
|
−
|
23
|
|
33
|
−
|
33
|
|
Investing
activities
|
|
|
|
|
|
|
|
|
Sagard [3]
|
665
|
258
|
923
|
|
654
|
263
|
917
|
|
Power Sustainable
|
1,014
|
303
|
1,317
|
|
1,101
|
344
|
1,445
|
|
ChinaAMC
|
−
|
−
|
−
|
|
783
|
367
|
1,150
|
|
Other
investments and standalone businesses
|
|
|
|
|
|
|
|
|
Other
investments [4]
|
261
|
−
|
261
|
|
192
|
55
|
247
|
|
Standalone
businesses [5]
|
683
|
130
|
813
|
|
678
|
151
|
829
|
|
Cash and cash
equivalents
|
1,717
|
−
|
1,717
|
|
1,277
|
−
|
1,277
|
|
Other
assets
|
266
|
−
|
266
|
|
312
|
−
|
312
|
|
Total holding company
assets
|
26,508
|
11,574
|
38,082
|
|
26,590
|
7,074
|
33,664
|
|
Holding company
liabilities and
non-participating shares
|
|
|
|
|
|
|
|
|
Debentures and other
debt instruments
|
897
|
−
|
897
|
|
897
|
−
|
897
|
|
Other liabilities
[6][7]
|
957
|
−
|
957
|
|
987
|
37
|
1,024
|
|
Non-participating
shares and perpetual
preferred shares
|
3,780
|
−
|
3,780
|
|
3,780
|
−
|
3,780
|
|
Total holding company
liabilities and non-
participating shares
|
5,634
|
−
|
5,634
|
|
5,664
|
37
|
5,701
|
|
Net
value
|
|
|
|
|
|
|
|
|
Participating
shareholders' equity (IFRS) /
Adjusted net asset value (non-IFRS)
|
20,874
|
11,574
|
32,448
|
|
20,926
|
7,037
|
27,963
|
|
Per
share
|
31.43
|
|
48.86
|
|
31.37
|
|
41.91
|
|
[1]
|
The Corporation's share
of GBL's reported net asset value was $3.9 billion
(€2.7 billion) at June 30, 2023 ($3.8 billion
(€2.6 billion) at December 31, 2022).
|
[2]
|
The management
companies of the investment funds are presented at their carrying
value and are primarily composed of cash and net carried interest
receivable.
|
[3]
|
Includes the
Corporation's investments in Portage Ventures I, Portage Ventures
II and Wealthsimple, held by Power Financial.
|
[4]
|
Includes the proceeds
receivable of $97 million from the sale of the Corporation's 3.9%
interest in Bellus.
|
[5]
|
An additional deferred
tax liability of $8 million has been included in the adjusted net
asset value at June 30, 2023 ($13 million at December 31, 2022)
with respect to the investments in standalone businesses at fair
value, without taking into account possible tax planning
strategies. The Corporation has tax attributes (not otherwise
recognized on the balance sheet) that could be available to
minimize the tax if the Corporation were to dispose of its
interests held in the standalone businesses.
|
[6]
|
In accordance with IAS
12, Income Taxes, no deferred tax liability is recognized
with respect to temporary differences associated with investments
in subsidiaries and jointly controlled corporations as the
Corporation is able to control the timing of the reversal of the
temporary differences and it is probable that the temporary
differences will not reverse in the foreseeable future. If the
Corporation were to dispose of an investment in a subsidiary or a
jointly controlled corporation, income taxes payable on such
disposition would be minimized through careful and prudent tax
planning and structuring, as well as with the use of available tax
attributes not otherwise recognized on the balance sheet, including
tax losses, tax basis, safe income and foreign tax surplus
associated with the subsidiary or jointly controlled
corporation.
|
[7]
|
At December 31, 2022,
an additional deferred tax liability of $37 million was included in
the adjusted net asset value related to the investment in ChinaAMC
at fair value.
|
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 second quarter
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.ca) or
from their websites, www.greatwestlifeco.com and
www.igmfinancial.com.
Lifeco
ADJUSTED NET EARNINGS ATTRIBUTABLE TO
LIFECO'S COMMON SHAREHOLDERS
Adjusted net earnings (loss) [1] 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 on
assets and liabilities;
- Assumption changes and management actions that impact the
measurement of assets and liabilities;
- Acquisition and divestiture costs;
- 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.
(in millions of
dollars)
|
Three months ended June
30,
|
Six months ended June
30,
|
|
2023
|
2022
(restated)
|
2023
|
2022
(restated)
|
Adjusted net earnings –
Non-IFRS financial measure [1][2]
|
920
|
903
|
1,746
|
1,615
|
Adjustments
|
|
|
|
|
Market experience
relative to expectations (pre-tax)
|
(92)
|
152
|
(301)
|
1,016
|
Income tax (expense)
benefit
|
13
|
(73)
|
54
|
(251)
|
Realized OCI gains
(losses) from asset rebalancing (pre-tax)
|
(158)
|
−
|
(158)
|
−
|
Income tax (expense)
benefit
|
37
|
−
|
37
|
−
|
Assumption changes and
management actions (pre-tax)
|
(5)
|
(17)
|
4
|
(36)
|
Income tax (expense)
benefit
|
1
|
2
|
(1)
|
3
|
Acquisition and
divestiture costs (pre-tax)
|
(208)
|
(71)
|
(208)
|
(79)
|
Income tax (expense)
benefit
|
50
|
14
|
50
|
15
|
Restructuring and
integration costs (pre-tax)
|
(28)
|
(60)
|
(54)
|
(77)
|
Income tax (expense)
benefit
|
8
|
16
|
15
|
21
|
Amortization of
acquisition-related finite life intangible assets
(pre-tax)
|
(49)
|
(49)
|
(92)
|
(84)
|
Income tax (expense)
benefit
|
13
|
13
|
24
|
21
|
Discontinued
operations – Putnam (post-tax)
|
(4)
|
(7)
|
(23)
|
(7)
|
|
(422)
|
(80)
|
(653)
|
542
|
Net earnings – IFRS
financial measure [2]
|
498
|
823
|
1,093
|
2,157
|
[1]
|
Defined as "base
earnings" and identified as a non-GAAP financial measure by
Lifeco.
|
[2]
|
Attributable
to Lifeco common shareholders.
|
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 considers to be of a
non‐recurring nature, or that could make the period‐over‐period
comparison of results from operations less meaningful.
(in millions of
dollars)
|
Three months ended June
30,
|
Six months ended June
30,
|
|
2023
|
2022
|
2023
|
2022
|
Adjusted net earnings –
Non-IFRS financial measure [2]
|
205.5
|
207.1
|
412.0
|
426.4
|
Adjustments
[1]
|
|
|
|
|
Restructuring and
other (pre-tax)
|
(103.3)
|
−
|
(103.3)
|
−
|
Income tax (expense)
benefit
|
27.1
|
−
|
27.1
|
−
|
Gain on disposal of
Lifeco shares (pre-tax)
|
(6.2)
|
−
|
172.9
|
−
|
Income tax (expense)
benefit
|
−
|
−
|
(4.3)
|
−
|
Lifeco IFRS 17
adjustment
|
15.1
|
−
|
15.1
|
−
|
|
(67.3)
|
−
|
107.5
|
−
|
Net earnings – IFRS
financial measure [2]
|
138.2
|
207.1
|
519.5
|
426.4
|
[1]
|
Described as "Other
items" by IGM.
|
[2]
|
Available to IGM
common shareholders.
|
OTHER MEASURES
This news release and other continuous disclosure documents also
include other measures used to discuss activities of the
Corporation's, 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 most recent MD&A, which
can be located in the Corporation's profile on SEDAR+ at
www.sedarplus.ca, 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 completion of the sale of Putnam U.S. Holdings I,
LLC to Franklin Templeton, the
completion of the acquisitions of Investment Planning Counsel Inc.
and Value Partners Group Inc., the pending strategic partnerships
with ADQ and the Bank of Montreal and expansion of Sagard's existing partnership with Lifeco, and
the pending completion of the Webhelp transaction. 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 (such as the invasion of
Ukraine), 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.ca. 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 most recent
Management's Discussion and Analysis and Annual Information Form,
filed with the securities regulatory authorities in Canada and available at www.sedarplus.ca.
SOURCE Power Corporation of Canada