An anonymous director reports

POWER CORPORATION REPORTS FIRST QUARTER 2023 FINANCIAL RESULTS

Power Corp. of Canada has released its earnings results for the three months ended March 31, 2023.

Power Corp.

Consolidated results for the period ended March 31, 2023

Highlights (1)

Power Corp.:

• Net earnings (2) were $313-million or 47 cents per share (3) for the first quarter of 2023, compared with $862-million or $1.28 per share in 2022.
• Adjusted net earnings (2)(4) were $514-million or 77 cents per share, compared with $442-million or 65 cents per share in the first quarter of 2022.
• Adjusted net asset value per share (4) was $46.89 at March 31, 2023, compared with $41.91 at Dec. 31, 2022, an increase of 11.9 per cent. The corporation's book value per participating share (5) was $31.81 at March 31, 2023, compared with $31.37 at Dec. 31, 2022.
• The corporation purchased for cancellation 1.2 million subordinate voting shares for a total of $42-million.
• Contribution to net earnings from the publicly traded operating companies was $535-million in the first quarter of 2023, compared with $1,043-million in 2022.
• Contribution to adjusted net earnings from the publicly traded operating companies was $682-million in the first quarter of 2023, compared with $613-million in 2022.

Great-West Lifeco Inc. (Lifeco):

• First quarter net earnings were $595-million, compared with $1,334-million in the first quarter of 2022.
• Adjusted net earnings (6) were $808-million, compared with $712-million in the first quarter of 2022.
• Results reported for the first quarter of 2023 are in accordance with IFRS 17 -- Insurance Contracts (IFRS 17) and IFRS 9 -- Financial Instruments (IFRS 9), a milestone which marks the successful implementation of IFRS 17 and culmination of a multiyear enterprise-wide initiative.
• On April 3, 2023, Lifeco announced an agreement to acquire Investment Planning Counsel Inc. (IPC), a leading independent wealth management firm, from IGM Financial.
• Putnam Investments LLC ranked second, third and ninth on a 10-, five- and one-year performance basis, respectively, in the 2022 Barron's Annual Best Fund Families rankings.

IGM Financial Inc. (IGM or IGM Financial)

• First quarter net earnings were $381.3-million, compared with $219.3-million in the first quarter of 2022.
• Adjusted net earnings were $206.5-million for the first quarter of 2023, compared with $219.3-million in 2022.
• Assets under management and advisement (5) were $260.4-billion at March 31, 2023, a decrease of 2.9 per cent from March 31, 2022, and an increase of 4.4 per cent from Dec. 31, 2022.
• Net inflows (7) were $990-million in the first quarter of 2023, compared with net inflows of $2.5-billion in the first quarter of 2022.
• On Jan. 12, 2023, IGM and Power Corp. closed the transaction to combine the group's interest in China Asset Management Co. Ltd. (ChinaAMC) under IGM, increasing IGM's investment in ChinaAMC to 27.8 per cent.
• In April, 2023, IGM announced the acquisition of a 20.5-per-cent interest in Rockefeller Capital Management.

Groupe Bruxelles Lambert (GBL):

• On March 30, 2023, GBL's largest private asset, Webhelp Group (Webhelp), a global business process outsourcer, announced a transaction to combine with Concentrix Corp. to create a prominent global player in customer experience.
• GBL reported a net asset value (5) of 18.6 billion euros at March 31, 2023, or 121.54 euros per share, compared with 17.8 billion euros or 116.18 euros per share at Dec. 31, 2022.
• In the first quarter of 2023, GBL completed 147 million euros of share buybacks.

(1) Comparative periods have been restated subsequent to the adoption of IFRS 17 and IFRS 9. 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.

(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.

(7) Related to assets under management and advisement.

First quarter

Net earnings attributable to participating shareholders were $313-million or 47 cents per share, compared with $862-million or $1.28 per share in 2022.

Adjusted net earnings attributable to participating shareholders (1) were $514-million or 77 cents per share, compared with $442-million or 65 cents per share in 2022.

Publicly traded operating companies: contribution to net earnings was $535-million and to adjusted net earnings was $682-million, representing a decrease of 48.7 per cent and an increase of 11.3 per cent, respectively, from the first quarter of 2022:

• Lifeco: contribution to net and adjusted net earnings decreased by 54.5 per cent and increased by 15.8 per cent, respectively. The adoption of IFRS 17 on January 1, 2023 has introduced net earnings volatility, primarily driven by the removal of the direct link between asset and liability measurement and Lifeco's accounting policy decisions that were made to maintain regulatory capital stability.
• IGM: contribution to net and adjusted net earnings increased by 75.6 per cent and decreased by 5.2 per cent, respectively. Net earnings in the first quarter of 2023 include IGM's gain recognized on the sale of a portion of its interest in Lifeco to the corporation, eliminated in the Effect of consolidation.
• GBL: contribution to net earnings of $19-million. Results include the corporation's share of a charge of $20-million in the first quarter of 2023 for losses due to an increase in the put right liability of the non-controlling interests in Webhelp and charges related to Webhelp's employee incentive plan. Upon completion of the Webhelp and Concentrix combination transaction, expected by the end of 2023, GBL's liabilities to non-controlling interests will be extinguished without any cash impact for GBL.

Sagard Holdings Inc. (Sagard) and Power Sustainable Capital Inc. (Power Sustainable): net earnings include a negative contribution of $77-million from Power Sustainable, mainly related to a charge for the revaluation of non-controlling interests of $33-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 negative contribution of $11-million.

ChinaAMC: net earnings include a charge of $54-million related to the sale of the corporation's interest in ChinaAMC to IGM, primarily consisting of transaction costs and income taxes. As the Power group continues to hold a 27.8 per cent interest in ChinaAMC, the corporation did not recognize a gain on the disposal of its interest.

Adjustments in the first quarter of 2023, excluded from adjusted net earnings, were a negative net impact to earnings of $201-million or $0.30 per share, mainly related to the corporation's share of Lifeco's adjustments and charges incurred by the corporation related to the combination of the group's interest in ChinaAMC under IGM, including transaction costs and income taxes. Adjustments in the first quarter of 2022 were a positive net impact to earnings of $420-million or $0.63 per share, mainly related to the corporation's share of Lifeco's adjustments and the corporation's share of an impairment charge of $10-million recognized by Power Sustainable on direct investments in energy assets.

(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 earnings (losses) from the corporation's other investments and standalone businesses.

(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.

Great-West Lifeco, IGM Financial and Groupe Bruxelles Lambert

Results for the quarter ended March 31, 2023

The information below is derived from Lifeco and IGM's first 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 or from their websites. The information below related to GBL is derived from publicly disclosed information, as issued by GBL in its first quarter press release at March 31, 2023. Further information on GBL's results is available on its website.

GREAT-WEST LIFECO INC.

FIRST QUARTER

Net earnings attributable to common shareholders were $595-million or $0.64 per share, compared with $1,334-million or $1.43 per share in 2022.

Adjusted net earnings (1) attributable to common shareholders were $808-million or $0.87 per share, compared with $712-million or $0.76 per share in 2022.

Adjustments in the first quarter of 2023, excluded from adjusted net earnings, were a net negative impact of $213-million, compared with a net positive impact of $622-million in 2022. Lifeco's adjustments consisted of:

• Market experience losses of $168-million;
• Restructuring and integration costs of $19-million in the United States segment; and
• Amortization of acquisition-related finite life intangibles of $33-million.

Partially offset by:

Positive earnings impact from assumption changes and management actions of $7-million.

IGM FINANCIAL INC.

FIRST QUARTER

Net earnings available to common shareholders were $381.3-million or $1.60 per share, compared with $219.3-million or $0.91 per share in 2022.

Adjusted net earnings (2) available to common shareholders were $206.5-million or $0.87 per share for the first quarter of 2023, compared with $219.3-million or $0.91 per share in 2022. Adjustments in the first quarter of 2023, excluded from adjusted net earnings, were a positive impact of $174.8-million consisting of a gain on the sale of Lifeco's shares.

Assets under management and advisement (3) at March 31, 2023 were $260.4-billion, a decrease of 2.9 per cent from the first quarter of 2022 and an increase of 4.4 per cent from December 31, 2022.

GROUPE BRUXELLES LAMBERT

FIRST QUARTER

GBL reported net earnings of euros77-million, compared with a net loss of euros126-million in 2022.

GBL reported a net asset value (3) of euros18,596-million at March 31, 2023, or euros121.54 per share, compared with euros17,775-million or euros116.18 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) 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.

(3) See the Other Measures section later in this news release.

Sagard and Power Sustainable

Results for the quarter ended March 31, 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.

FIRST QUARTER

Net loss and adjusted net loss (1) of the alternative asset investment platforms was $88-million, compared with net loss of $91-million and adjusted net loss of $81-million in the corresponding period in 2022.

Net loss in the first quarter is comprised of:

• A negative contribution of $22-million from the asset management activities of Sagard and Power Sustainable;
• A negative contribution of $66-million from investing activities, which is primarily related to Power Sustainable and is comprised of:

i. losses before the revaluation of non-controlling interests liabilities of $30-million in its energy infrastructure platform due to seasonality; and

ii. fair value increases within the Power Sustainable Energy Infrastructure Partnership resulting in a revaluation of non-controlling interests liabilities (2) of $33-million.

Other Investments and Standalone Businesses

Results for the quarter ended March 31, 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.

FIRST QUARTER

OTHER INVESTMENTS

The corporation holds an investment in Bellus Health Inc. (Bellus), with a carrying value of nil at March 31, 2023. On April 18, 2023, subsequent to quarter-end, Bellus announced an agreement in which it will be acquired by GSK Inc. for US$14.75 per share in cash. The corporation expects to receive proceeds of approximately US$73-million. The transaction is expected to close in the third quarter of 2023.

STANDALONE BUSINESSES

Net loss of the standalone businesses in the first quarter of 2023 was $5-million, compared with net earnings of $4-million in 2022.

At March 31, 2023, the fair value of standalone businesses was $0.8-billion, compared with $1.3-billion at March 31, 2022.

Adjusted Net Asset Value and Participating Shareholders' Equity

At March 31, 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 $46.89 at March 31, 2023, compared with $41.91 at December 31, 2022, representing an increase of 11.9 per cent.

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.

Transition to IFRS 17 and IFRS 9

The corporation and its subsidiaries adopted IFRS 17, Insurance Contracts (IFRS 17) which replaced IFRS 4, Insurance Contracts (IFRS 4) effective January 1, 2023. IFRS 17 impacted only Lifeco due to its insurance activities. While the new standard changes Lifeco's recognition and measurement of insurance contracts and the corresponding presentation and disclosures in the corporation's financial statements, it did not have a material impact. The accounting change does not impact the underlying economics of Lifeco's business activities nor change Lifeco's business strategy. The corporation and its subsidiaries also adopted IFRS 9, Financial Instruments (IFRS 9) which replaced IAS 39, Financial Instruments: Recognition and Measurement effective January 1, 2023, which did not lead to a material change in the level of investments. The corporation has also applied IFRS 9 as at January 1, 2023 when applying the equity method of accounting to GBL's results. Lifeco expects an increase in net earnings volatility primarily driven by the de-linking of asset and liability measurement and accounting policy decisions to maintain regulatory capital stability.

The corporation's January 1, 2022 participating shareholders' equity decreased by approximately 10 per cent on the adoption of IFRS 17 on January 1, 2023, in line with original expectations, primarily due to Lifeco's establishment of the contractual service margin (CSM), partially offset by the removal of provisions no longer required under IFRS 17.

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 August 1, 2023 to shareholders of record June 30, 2023.

Dividends on Power corporation Non-Participating Preferred Shares

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.

At March 31, 2023, Power corporation held the following economic interests:

We seek Safe Harbor.