Principal Financial Group (PFG) investor relations material

Financial performance and outlook

• Delivered strong 2025 results with adjusted EPS growth of 12% and reported EPS near 20%, both at or above targeted ranges.

• Free cash flow and ROE were at the top end or above targets, with ROE target raised to 15%-17% for 2026.

• Consistent 9%-12% EPS growth targeted for 2026, reflecting confidence in ongoing performance.

• Dividend payout ratio targeted at 40%, with a combined 75%-85% payout including buybacks.

• Low capital needs support organic growth and allow for progressive dividends and share repurchases.

Business strategy and market positioning

• Focused on retirement ecosystem, small to midsize businesses (SMB), and global asset management as growth priorities.

• SMB segment shows resilience and stability, with most clients established for decades and long-term customer relationships.

• Cross-sell opportunities exist but are challenged by distribution structure; success seen in bundled retirement solutions and expanding benefits coverage.

• International strategy leverages U.S. strengths in select markets, focusing on China, Brazil, Chile, and Mexico for pensions.

Product trends and risk management

• Employee benefits business led by dental, with claim trends shifting post-COVID; dental claims up, life and disability loss ratios down.

• Bundled approach allows annual repricing, providing premium stability and customer retention.

• Group life block focused on working populations, with no significant trend changes observed but ongoing monitoring planned.

• Real estate and private asset management remain growth areas, with strong flows and global client demand, especially in Asia and the Middle East.