Great-West Lifeco (GWO) Q4 2024 earnings summary

Executive summary

• Achieved record 2024 results with base earnings of $1.1 billion in Q4 and $4.2 billion for the year, up 15% and 14% year-over-year, respectively, with strong performance across all segments and Empower becoming the largest contributor.

• Base ROE reached 18%, exceeding medium-term objectives, and book value per share rose 12% to $27.17.

• Strategic acquisitions, divestitures, and portfolio repositioning enhanced offerings and market positioning, including the sale of Putnam and acquisition of Plan Management Corporation.

• Board approved a 10% dividend increase to $0.61 per share and an additional $500 million share repurchase under the NCIB.

• Assets under administration exceeded $3.2 trillion as of December 31, 2024.

Financial highlights

• Q4 2024 base earnings were $1,115M, up 15% year-over-year; full-year base EPS was $4.50, up 14%; book value per share increased 12% to $27.17.

• Base ROE was 17.5% for 2024, with net ROE at 16.7%; dividend payout ratio at 49% for the year.

• LICAT ratio stood at 130%, up 2 points from prior year; leverage ratio at 29%.

• Cash position reached $2.2 billion by year-end, supporting financial flexibility.

• Assets under administration grew to $3.27 trillion, up from $2.85 trillion year-over-year.

Outlook and guidance

• Expect continued double-digit base earnings growth in the U.S. (Empower) in 2025, with a focus on expanding wealth and retirement businesses.

• Maintaining medium-term objectives: base EPS growth of 8%-10% and base ROE of 16%-17%.

• Will revisit ROE target at upcoming Investor Day.

• Intends to continue share repurchases and maintain strong dividend policy, subject to market and regulatory conditions.

• Management remains focused on disciplined risk management and growth strategies to weather economic uncertainty.