An anonymous director reports

POWER CORPORATION REPORTS SECOND QUARTER 2023 FINANCIAL RESULTS

Power Corp. of Canada has released its earnings results for the three and six months ended June 30, 2023.

Consolidated results for the period ended June 30, 2023

Highlights

Power Corp.:

• Net earnings were $501-million or 75 cents per share for the second quarter of 2023, compared with $601-million or 89 cents per share in 2022.
• Adjusted net earnings were $847-million or $1.27 per share, compared with $647-million or 97 cents per share in the second quarter of 2022.
• Adjusted net asset value per share was $48.86 at June 30, 2023, compared with $41.91 at Dec. 31, 2022, an increase of 16.6 per cent. The corporation's book value per participating share was $31.43 at June 30, 2023, comparable with Dec. 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 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 advisers.

IGM Financial Inc.:

• 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, 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 of 17.5 billion euros or 119.30 euros per share at June 30, 2023, compared with 17.8 billion euros or 116.18 euros per share at Dec. 31, 2022.
• In the second quarter of 2023, GBL completed 132 million euros of share buybacks and a total of 279 million euros of share buybacks in the six months ended June 30, 2023.

Sagard Holdings Inc.:

• 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.

Second quarter

Net earnings attributable to participating shareholders were $501-million or 75 cents per share, compared with $601-million or 89 cents per share in 2022.

Adjusted net earnings attributable to participating shareholders were $847-million or $1.27 per share, compared with $647-million or 97 cents per share in 2022.

Publicly traded operating companies: The contribution to net earnings was $496-million and to adjusted net earnings was $842-million, representing a decrease of 25.9 per cent and an increase of 17.8 per cent, respectively, from the second quarter of 2022:

• Lifeco: The contribution to net and adjusted net earnings decreased by 38.0 per cent and increased by 4.5 per cent, respectively. The results of Putnam have been classified as discontinued operations and excluded from adjusted net earnings.
• IGM: The contribution to net earnings decreased by 33.3 per cent 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: The 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, net of charges related to Webhelp's employee incentive plan. Upon completion of the Webhelp and Concentrix Corp. 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.: Net earnings include a negative contribution of $2-million from Power Sustainable and a positive contribution of $5-million from Sagard.

Other investments and stand-alone businesses: Net earnings include a recovery of $97-million related to the sale of the corporation's investment in Bellus Health Inc. 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 52 cents 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 eight cents per share, mainly related to the corporation's share of Lifeco's adjustments.

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 were $1,373-million or $2.06 per share, compared with $1,089-million or $1.62 per share in 2022.

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 (management's discussion and analysis documents), 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 the websites of the respective companies. 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.

Great-West Lifeco

Second quarter

Net earnings attributable to common shareholders were $498-million or 53 cents per share, compared with $823-million or 88 cents per share in 2022.

Adjusted net earnings attributable to common shareholders were $920-million or 99 cents per share, compared with $903-million or 97 cents 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 of $121-million from rebalancing United Kingdom 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 U.S. segment;
• Amortization of acquisition-related finite life intangibles of $36-million;
• Discontinued operations related to Putnam representing a net loss of $4-million.

IGM Financial

Second quarter

Net earnings available to common shareholders were $138.2-million or 58 cents per share, compared with $207.1-million or 87 cents per share in 2022.

Adjusted net earnings available to common shareholders were $205.5-million or 86 cents per share for the second quarter of 2023, compared with $207.1-million or 87 cents 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;
• Lifeco IFRS 17 (international financial reporting standards) adjustment of $15.1-million, representing a change of estimate that has been recorded on a prospective basis.

Assets under management and advisement at June 30, 2023, were $261.1-billion, an increase of 7.9 per cent 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 euros, compared with a net loss of 204 million euros in 2022.

GBL reported a net asset value of 17,502 million euros or 119.30 euros per share at June 30, 2023, compared with 17,775 million euros or 116.18 euros per share at Dec. 31, 2022.

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 include income earned from asset management and investing activities. Asset management activities includes fee-related earnings (a non-IFRS financial measure), comprising management fees less investment platform expenses. Asset management activities also include carried interest and income from other management activities. Investing activities comprise 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.

Second quarter

Net income of the alternative asset investment platforms was $3-million, compared a with net loss of $56-million in the corresponding quarter in 2022.

Net income of $3-million in the second quarter comprises:

• 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.

Other investments and stand-alone businesses

Results for the quarter ended June 30, 2023

Other investments and stand-alone businesses includes the corporation's investments in investment and hedge funds and the share of earnings (losses) of stand-alone 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 $14.75 (U.S.) per share in cash. Subsequent to the quarter-end, the corporation received proceeds of approximately $97-million ($73-million (U.S.)). The investment in Bellus was accounted for as an associate using the equity method, with a carrying value of nil.

Stand-alone businesses

Net earnings of the stand-alone 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 stand-alone businesses was $800-million, compared with $1.0-billion at June 30, 2022.

Adjusted net asset value and participating shareholders' equity

At June 30, 2023

Adjusted net asset value

Adjusted net asset value is presented for Power Corp. 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 Corp. and Power Financial holding company (the gross asset value) less their net debt and preferred shares.

The corporation's adjusted net asset value per share was $48.86 at June 30, 2023, compared with $41.91 at Dec. 31, 2022, representing an increase of 16.6 per cent.

Participating shareholders' equity

Book value per participating share represents Power Corp.'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 Corp. 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 Dec. 31, 2022.

Dividend on Power Corp. 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 on Nov. 1, 2023, to shareholders of record on Sept. 29, 2023.

Dividends on Power Corp. non-participating preferred shares

The board of directors also declared quarterly dividends on the corporation's preferred shares, payable on Oct. 15, 2023, to shareholders of record on Sept. 22, 2023.

About Power Corp. of Canada

Power Corp. 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 June 30, 2023, Power Corp. held the economic interests as shown in the attached table.

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 Jan. 1, 2023, which resulted in the restatement of certain comparative amounts, have been prepared in accordance with IFRS unless otherwise noted and are the basis for the figures presented in this news release, unless otherwise noted.

We seek Safe Harbor.