Power Corporation of Canada

Good morning, ladies and gentlemen, and welcome to the Power Corporation fourth quarter and full year 2024 earnings conference call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question and answer session. Analysts who wish to join the question queue may press star, then 1 at any point throughout the call. If anyone has any difficulties hearing the conference, please press star then zero for operator assistance at any time. I would like to remind everyone that this call is being recorded on Thursday, March 20th, 2025. I would now like to turn the conference over to Mr. Jeffrey Orr, President and Chief Executive Officer of Power Corporation. Please go ahead.

Thank you, operator. Welcome, everyone. Thanks for joining us for our Q4 2024 results. It's our first call of 2025, and on the cover page, you'll notice our logo has got a little change to it. We're actually celebrating the 100th anniversary of Power Corporation in 2025, and so fun to be here for that. So we'll move through with the presentation. You've got over pages two and three, standard cautionary or disclaimer, I should say, regarding forward-looking information and non-GAAP measures. Page 4, joined here with Jake Lawrence for today's call, and we'll both be sharing the presentation as well as answering questions. And with that, I'm going to move right along to page 6, which is the opening page. Thank you. And so just really pleased about another strong quarter at power and for the group in a strong year. Right across the year was very strong results. Really strong earnings, double-digit earnings growth at each of Great West Life and IGM from a quarterly basis and on a yearly basis were the key drivers on our earnings, of course. Those are the main contributors to our earnings. We had good growth in that asset value across the quarter and into the first part of 2025. particularly with the release of Great West Life's earnings in early February. That really drove performance at LIFCO and our NAV, so continued strong performance in the first quarter based on the 2024 results. Good development, continued development at our alternative asset management platforms, and we announced a 9% dividend growth funded really through the strong, the 10% dividend growth that came through Great West Life Co., So really a strong quarter. Looking forward to talking about developments. But I'm going to pass it over to Jake here to walk through the results themselves.

Jake? Great. Thanks, Jeff. And good morning, everyone joining us today. I'm going to start on slide number seven. And before I get into a bit more detail on the high-level numbers Jeff just shared, I just want to provide some color on a definitional change that we made to our reporting this quarter. This quarter, we expanded the definition of adjusted net earnings. to apply it to GBL, our standalone businesses, and all of our investing activities as well. We also modified the definition to capture market-related remeasurements that occur that have been creating some accounting volatility in our numbers. We believe this new definition is going to better reflect the ongoing operating performance of the businesses. And with that, I'm going to turn to some of the numbers reporting on this basis. So in Q4, our adjusted net earnings from continuing operations were $829 million. That's up a very strong 20% compared to the same quarter last year. And on a per share basis, it's slightly higher with $1.28 or up 21% compared to Q4 2023. As Jeff noted, the results really reflect strong performances coming from our main earnings drivers, which are Great West and IGM Financial, both of whom again reported the double digit earnings growth that Jeff alluded to. Our Q4 net earnings also include a gain on sale from our investment in peak, and that's partially offset by some items that I'm going to detail in a moment. The NAV story Jeff just gave a picture on, so $60.44 at the end of the quarter, and that was up 4% in the quarter versus Q3, where we really saw a good move, as Jeff noted, as we moved through the end of the quarter and where we find ourselves today after reporting Q4 results from Great West and IGM earlier in February. We're up an additional 8% now to 6510 on a NAV basis. Another factor contributing to the NAV, I'd say both in Q4 and throughout the year, was our buyback activity. We bought in excess of 400 million shares during the year, in excess of 120 million during the quarter, and it's obviously reduced the share count and added about 70 cents to the adjusted NAV year over year. And then as Jeff noted, A good increase in the dividend now at 61.25 cents per share. That 9% increase putting us at about a 5% yield at last night's close. Turning to slide eight to provide a bit more of a breakdown on our earnings. Great West delivered those strong quarterly base earnings we talked about. It exceeded 1.1 billion and that's up 15% year over year. We did see good growth across all four segments at Great West and it marks the sixth consecutive quarter of base earnings growth at the company, which is quite impressive. And it's the third consecutive quarter where Great West has reported earnings in excess of $1 billion. And I think that really reflects some of the actions in recent years taken by Great West to support and accelerate its growth strategies, particularly in the U.S., which is now the largest segment, but also in Canada. As a result of its earnings momentum and capital position, we did see Great West announce a 10% dividend increase in the quarter. And in addition to that, they've also announced intentions to repurchase up to 500 million shares through their NCIB. IGM also reported strong year-over-year quarterly earnings growth. Our share of their earnings were up 23%. We had increased contributions from their two core businesses, IG Wealth and McKenzie, as they both reported record quarter-end assets. IGM's performance was also augmented by its four strategic investments, all of whom delivered record high client assets, including significant inflows across all of their businesses. GBL's contribution to powers adjusted net earnings did decline year over year, as GBL's share of losses from the portfolio companies it consolidates did increase on an adjusted basis. This was partially offset by fair value gains on some investment funds that are accounted through at fair value in the P&L. Moving to the alternative investment platforms, which Jeff referred to, they do continue to develop. Cigar reported fee-related earnings of $5 million. and fair value increases on its investments in private equity and venture capital funds. Power Sustainable's results were comprised of fee-related losses consistent with the prior year and power share of losses on its consolidated energy assets. Cigard and Power Sustainable continued to develop their platforms in 24. They launched new products, they acquired some stakes in GPs, and they partnered with capital allocators in a year that was marked by headwinds for alternative asset manager fundraising. In Q4, the contribution from our standalone businesses to adjusted earnings does consist of our share of LMPG's losses, and there are some other items related to standalone businesses that are reflected in the adjustment segment. These adjustments do include the gain on sale of our investment in Peak, which was $279 million. We did write down our investment in Leon to nil. That reflects the company entering CCAA protection. And then we had a non-cash impairment charge of $87 million at LMPG as the company continued to face an uncertain business and macroeconomic environment. Overall, we are pleased with a strong quarter in Q4 as well as strong 2024 results. We believe it's a reflection of the meaningful changes that have been undertaken in our groups of businesses and reinforces the future growth potential in our companies. Moving quickly to the NAV on slide nine, we do break down that year-end December 31st value. As we noted, growth in NAV was driven by strong share price performance at both Great West and IGM. The alternative asset platforms also continued with some NAV growth in the quarter. Seed capital investments were made to support new strategies, and we also had some fair value increases in private equity, venture cap, and energy assets that led to roughly a $300 million increase. The decrease in NAB for our standalone businesses was driven by the monetization of Peak. That's obviously moved over into a cash balance on our balance sheet, as well as the non-cash impairment LMPG charge I mentioned and the write-off of Lion to nil. Getting back to our cash balance, we sit at year-end at $1.6 billion. That's quite a strong position. That was partially offset in the quarter by the $120 million in buybacks I referred to. as we continue to increase efforts to return capital shareholders. And of the $1.6 billion, we consider $1.3 to be available after factoring in dividends declared by power and IGM, but not yet paid or received. So with that review of financials, I'll turn it back over to Jeff to go into a bit more detail. Okay, great.