Sun Life Financial Inc. · TSX:SLF
Sun Life Financial — Q3 2022 Earnings Presentation
24 slides from Sun Life Financial's earnings presentation, Nov 3, 2022
Slide 1: Q3 2022 Financial & Operating Results
Q3 2022 Financial & Operating Results For the period ended September 30, 2022 Sun Life Financial Inc. (unaudited)
Slide 2: Forward-looking statements and non-IFRS financial measures
In this presentation, Sun Life Financial Inc. (“SLF” or “SLF Inc.”), its subsidiaries and, where applicable, its joint ventures and associates are referred to as “we”, “us”, “our”, “Sun Life” and the “Company”. Forward-looking statements Certain statements in this presentation and certain oral state
Slide 3: Kevin Strain, President and Chief Executive Officer
Kevin Strain President and Chief Executive Officer S U N L I F E • Q 3 2 0 2 2 3
Slide 4: Third quarter financial highlights
Third quarter financial highlights Executing on our ambition to be one of the best asset management and insurance companies globally Financial Earnings Growth Financial Strength Strength Diversified Business Mix 3 Reported net income SLF Inc. LICAT ratio2 $466M (54)% 129% (14) pp 19% Underlying net
Slide 5: Progress on our Client Impact strategy
Our Purpose: Help Clients achieve Progress on our Client Impact strategy Announced intention to acquire a 51% stake1 in Advisors Asset Management, a leading lifetime financial security and live independent U.S. retail wealth distribution firm, through SLC Management to distribute healthier lives alt
Slide 6: Digital Leadership
Digital Leadership Thinking and acting like a digital company DIGITAL EXPERIENCES Amazing Client, employee, advisor, and partner experiences DIGITAL CAPABILITIES Enable our experiences and improve our digital maturity DIGITAL WAYS OF WORKING Empowering our people to support our digital journey Stron
Slide 7: Manjit Singh, Executive Vice President & Chief Financial Officer
Manjit Singh Executive Vice President & Chief Financial Officer S U N L I F E • Q 3 2 0 2 2 7
Slide 8: Q3 2022 results
Q3 2022 results PROFITABILITY Q3’22 Q3’21 Change Results Highlights Reported net income ($ millions) 466 1,019 (54)% Results reflect strength of diversified business mix Underlying net income ($ millions)1 949 902 +5% • Strong Stronghealth health&&protection protectionbusiness businessgrowth, growth
Slide 9: Third quarter business group performance
Third quarter business group performance Reported net income ($ millions) Underlying net income1 ($ millions) Impact of currency translation increased reported net income by $24M1 Impact of currency translation increased underlying net income by $10M1 (29)% (47)% +104% (57)% (19)% +3% +96% +21% Cons
Slide 10: MFS: A global leader in public asset management
MFS: A global leader in public asset management Business Group Results Quarterly Highlights (US$) • Underlying Underlyingnet netincome incomedown down18%18%y/y y/ydriven drivenby bylower loweraverage averagenet net PROFITABILITY (US$ millions) Q3’22 Q3’21 Change assets, largely from declines in glob
Slide 11: SLC Management: Growing a premier alternatives platform
SLC Management: Growing a premier alternatives platform Business Group Results Quarterly Highlights • Fee-relatedearnings Fee-related earnings(FRE) (FRE)up up12% 12%y/y, y/y,reflecting reflectinghigher higherfee-related fee-related PROFITABILITY ($ millions) Q3’22 Q3’21 Change revenue on growth in f
Slide 12: Canada: A leader in insurance and asset management
Canada: A leader in insurance and asset management Business Group Results Quarterly Highlights • Underlying Underlyingnet netincome incomeof of$300 $300million, million,up up3% 3%y/y: y/y: PROFITABILITY ($ millions) Q3’22 Q3’21 Change • Insurance Insuranceearnings earningsreflect reflectstrong stron
Slide 13: U.S.: A leader in health & benefits
U.S.: A leader in health & benefits Business Group Results Quarterly Highlights (US$) • Underlying Underlyingnetnetincome incomeof of$166 $166million millionup up89% 89%y/y y/yon onstrong strongGroup Group PROFITABILITY (US$ millions) Q3’22 Q3’21 Change Benefits performance and contribution from Den
Slide 14: Asia: A regional leader focused on fast-growing markets
Asia: A regional leader focused on fast-growing markets Business Group Results Quarterly Highlights (constant currency1) • Underlying net income of $175 million, up 23% y/y driven by: PROFITABILITY ($ millions) Q3’22 Q3’21 Change CC1 • Improved ImprovedCOVID-19 COVID-19mortality, mortality,investing
Slide 15: Appendix
SUN LIFE & ‘Appendix Q3 2022 15
Slide 16: Sources of earnings
Sources of earnings Sources of earnings (SOE)1 Reported Underlying SOE highlights Common shareholders $ millions, pre-tax pre-tax Q3’22 Q3’21 Q3’22 Q3’21 • Expected Expected profit profitup up5% 5% in inconstant constant currency currency4, driven by business growth, partially offset by Expected pro
Slide 17: SOE experience gains/(losses) - details
SOE1 experience gains/ (losses) - details Q3’22 Q3’21 Q3’22 Q3’21 $ millions Pre-tax Pre-tax Post-tax Post-tax Net equity market impact2 (71) 37 (52) 24 Net interest rate impact2 (144) 31 (115) 2 Impact of changes in the fair value of investment properties2 (4) 153 1 137 Market-related Impacts2 (219
Slide 18: Reconciliation of underlying net income
Reconciliation of underlying net income Q3’22 Q3’22 $ millions Pre-tax Post-tax Reported net income 466 Net equity market impact (including basis risk impact of $5 million)1 (67) (48) Net interest rate impact (including credit spread impact of $6 million and swap spread impact of $2 (144) (115) mill
Slide 19: Market movements and impacts in the quarter
Market movements and impacts in the quarter Change in Interest Rates 5 Market Movements Q3’22 Q3’21 Equity Market Impacts Q3’22 Q3’21 ($millions, post-tax) post-tax) S&P/ TSX (2.2)% (0.5)% Equity market movement and volatility (53) 19 S&P 500 (5.3)% +0.2% Basis risk 5 5 CA 10 - year (5) bps +12 bps
Slide 20: Operating expenses
Operating expenses Core expense growth reflects continued investments, mostly offset by productivity savings and lower incentive compensation ($ millions) Highlights: • Business Businessgrowth growthand andstrategic strategic Core Expenses initiatives spend 2,399 • Decline Declineininvariable variab
Slide 21: Use of Non-IFRS Financial Measures
Use of Non-IFRS Financial Measures We report certain financial information using non-IFRS financial measures, as we believe that these measures provide information that is useful to investors in understanding our performance and facilitate a comparison of our quarterly and full year results from per
Slide 22: Risk Factors
Risk Factors Important risk factors that could cause our assumptions and estimates, and expectations and projections to be inaccurate and our actual results or events to differ materially from those expressed in or implied by the forward-looking statements contained in this document, are set out bel
Slide 23: Footnotes continued
Footnotes continued From slide 8 2 All EPS measures refer to fully diluted EPS, unless otherwise stated. 3 LICAT ratio of SLF and of Sun Life Assurance Company of Canada (“SLA”). Our LICAT ratios are calculated in accordance with OSFI-mandated guideline, Life Insurance Capital Adequacy Test. 4 On Se
Slide 24: Footnotes continued
Footnotes continued From slide 14 1 Percentage change is reported on a constant currency basis, which excludes the impacts of foreign exchange translation. Refer to the Non-IFRS Financial Measures section in the appendix to these slides and in our Q3 2022 MD&A. 2 Represents a non-IFRS financial meas