Power Corporation Reports Third Quarter 2021 Financial Results

Canada NewsWire

MONTRÉAL, Nov. 10, 2021

Readers are referred to the sections "Non-IFRS Financial Measures and Presentation" and "Forward-Looking Statements" at the end of this release. All figures are expressed in Canadian dollars unless otherwise noted.

MONTRÉAL, Nov. 10, 2021 /CNW Telbec/ - Power Corporation of Canada (Power Corporation or the Corporation) (TSX: POW) today reported earnings results for the three and nine months ended September 30, 2021.

Power Corporation

Consolidated results for the period ended September 30, 2021

HIGHLIGHTS

Power Corporation

   -- Net earnings per share of $1.09 for the third quarter of 2021, compared 
      with $0.75 in 2020 and adjusted net earnings per share [1] of $1.10, 
      compared with $0.72 per share in 2020. 
   -- Net asset value (NAV) per share [1] increased 2% to $52.81 at September 
      30, 2021, compared with $51.60 at June 30, 2021. 
   -- Completed the sale of its 37.1% interest in the Sagard Europe 3 Fund 
      (Sagard Europe 3) in a secondary transaction in the third quarter. The 
      Corporation received proceeds of $334 million (EUR225 million) and 
      realized a gain of $66 million in net earnings. 
   -- The Corporation intends to resume normal course share buybacks under its 
      normal course issuer bid. 

Power Financial Corporation (Power Financial)

   -- Completed an offering of 8,000,000 4.50% Non-Cumulative First Preferred 
      Shares, Series 23 for gross proceeds of $200 million on October 15, and 
      on October 18 announced its intention to redeem all of its outstanding 
      $200 million 6.00% Non-Cumulative First Preferred Shares, Series I. 

Great-West Lifeco Inc. (Lifeco)

   -- Assets under administration were approximately $2.2 trillion at September 
      30, 2021, an increase of 11% from December 31, 2020. 
   -- Lifeco and Sagard Holdings Inc. (Sagard) announced, on October 7, 2021, 
      they had agreed to enter into a long-term strategic relationship, which 
      includes the sale of Lifeco's United States-based subsidiaries EverWest 
      Real Estate Investors, LLC and EverWest Advisors, LLC (EverWest) to 
      Sagard, in exchange for a minority shareholding in Sagard's subsidiary, 
      Sagard Holdings Management Inc. The strategic relationship with Sagard is 
      intended to advance Lifeco's strategy to further broaden its access to 
      alternative investment options. 
   -- On August 16, 2021, Lifeco issued $1.5 billion aggregate principal amount 
      3.60% Limited Recourse Capital Notes Series 1 (Subordinated Indebtedness), 
      maturing on December 31, 2081 and on October 8, 2021, issued 8,000,000 
      Series Y, 4.50% Non- Cumulative First Preferred Shares for gross proceeds 
      of $200 million. On November 3, 2021, Lifeco announced that it intends to 
      redeem all of its outstanding 5.90% Non-Cumulative First Preferred Shares, 
      Series F on December 31, 2021. 

IGM Financial Inc. (IGM)

   -- Record high net earnings of $270.8 million, or $1.13 per share, up 42% 
      from the third quarter of 2020 and up 14% from the second quarter of 
      2021. 
   -- Record high quarter-end assets under management and advisement of $265.2 
      billion, up 1% in the quarter and 35% from September 30, 2020 (including 
      $30.3 billion in net business acquisitions in 2020). 

Groupe Bruxelles Lambert (GBL)

   -- GBL announced measures to enhance shareholder returns including an 
      additional share buyback of up to EUR500 million. 
[1]  NAV, NAV per share and adjusted net earnings per share 
      are non-IFRS financial measures. See the Non-IFRS 
      Financial Measures and Presentation section later 
      in this news release. 

Net Asset Value

Net asset value per share represents management's estimate of the fair value of participating shareholders' equity of the Corporation. Net asset value is the fair value of the assets of the combined Power Financial and Power Corporation non-consolidated balance sheet less their net debt and preferred shares. Refer to the detailed Net Asset Value section later in this news release for a reconciliation to the non-consolidated combined balance sheet.

The Corporation's net asset value per share was $52.81 at September 30, 2021, compared with $51.60 at June 30, 2021, representing an increase of 2.3%.

              (in millions of     September 30,      June 30, 2021  Change (%) 
              dollars, except     2021 
              per share amounts) 
Publicly 
 Traded 
 Operating 
 Companies    Lifeco                         23,904         22,838           5 
 IGM                                          6,694          6,474           3 
 GBL                                          3,145          3,100           1 
                                             33,743         32,412           4 
Alternative 
 Asset 
 Investment 
 Platforms    Sagard ([1][2])                 1,407          1,790        (21) 
 Power Sustainable ([1])                      1,726          1,738         (1) 
                                              3,133          3,528        (11) 
Other         China AMC ([3])                   740            705           5 
 Standalone businesses ([4])                  1,568          2,004        (22) 
 Other assets and investments                   684            635           8 
 Cash and cash equivalents                    1,575          1,370          15 
 Gross asset value                           41,443         40,654           2 
 Liabilities and preferred 
  shares                                    (5,718)        (5,749)           1 
 Net asset value                             35,725         34,905           2 
 Shares outstanding (millions)                676.5          676.5 
 Net asset value per share                    52.81          51.60           2 
[1]  Includes the management companies of the investment 
      funds at their carrying value. 
[2]  During the third quarter, the Corporation completed 
      the sale of its 37.1% interest in Sagard Europe 3. 
[3]  China Asset Management Co., Ltd. (China AMC). 
[4]  Includes The Lion Electric Co. (Lion), LMPG Inc. (LMPG), 
      Peak Achievement Athletics Inc. (Peak) and GP Strategies. 
      The decrease in the September 30, 2021 NAV is primarily 
      due to a decrease in market value of Lion compared 
      to June 30, 2021 (US$12.62 per share at September 
      30, 2021 compared with US$19.44 per share on June 
      30, 2021). 
Power Corporation's Ownership in Publicly 
Traded Operating 
Companies 
                                                                 Share price 
         Ownership ([1])  Shares held ([1])  September 30, 2021  June 30, 2021 
          (%)              (in millions) 
Lifeco              66.7              620.3              $38.54         $36.82 
IGM                 61.8              147.9              $45.25         $43.76 
GBL 
 ([2])              14.1               22.8            EUR95.08       EUR94.34 
[1]  As at September 30, 2021. 
[2]  Held through Parjointco SA (Parjointco), a jointly 
      controlled corporation (50%). 

THIRD QUARTER

Net earnings attributable to participating shareholders were $741 million or $1.09 per share, compared with $505 million or $0.75 per share in 2020.

Adjusted net earnings attributable to participating shareholders ([1]) were $748 million or $1.10 per share, compared with $483 million or $0.72 per share in 2020.

Contributions to Power Corporation's Earnings per Share

                                    2021                         2020 
(in dollars per       Net Earnings  Adjusted       Net Earnings  Adjusted 
Power Corporation                    Net Earnings                 Net Earnings 
share) 
Lifeco ([2])                  0.86           0.86          0.82           0.67 
IGM ([2])                     0.25           0.25          0.18           0.20 
GBL ([2])                   (0.02)         (0.02)        (0.02)         (0.02) 
Effect of 
 consolidation ([3])             -         (0.01)        (0.12)         (0.06) 
                              1.09           1.08          0.86           0.79 
Alternative asset 
 investment 
 platforms and Other 
 ([4][5])                     0.06           0.06        (0.05)         (0.01) 
China AMC                     0.03           0.03          0.02           0.02 
Standalone 
 businesses ([5])             0.09           0.09          0.03           0.03 
                              1.27           1.26          0.86           0.83 
Corporate operations 
 and Other ([6])            (0.18)         (0.16)        (0.11)         (0.11) 
                              1.09           1.10          0.75           0.72 
Average shares 
 outstanding (in 
 millions)                                  676.7                        676.3 

Lifeco: contribution to net earnings per share increased by 4.9% and contribution to adjusted net earnings per share increased by 28.4%.

IGM: contribution to net earnings per share increased by 38.9% and contribution to adjusted net earnings per share increased by 25.0%.

GBL: negative contribution to net earnings per share of $0.02. Results include a charge of $0.06 per share in the quarter of both 2021 and 2020 for losses due to an increase in the put right liability of the non-controlling interests in Webhelp Group (Webhelp) and charges related to Webhelp's employee incentive plan.

Alternative asset investment platforms: net earnings per share includes realized gains of $0.03 per share on the Power Pacific portfolio and a contribution from Sagard of $0.05 to net earnings per share which includes the Corporation's realized gain on the disposition of its interest in Sagard Europe 3.