Manulife Financial Corporation · TSX:MFC
Manulife Financial — Merger or Acquisition (September 2003)
26 slides from Manulife Financial's merger presentation, Sep 29, 2003
Slide 1: Manulife – A New Global Insurance Leader
Manulife – A New Global Insurance Leader Dominic D’Alessandro David D’Alessandro President & CEO, Manulife Financial Chief Operating Officer and President- Designate, Manulife Financial Chairman & CEO, John Hancock Financial September 29, 2003
Slide 2: Forward-Looking Statements/Important Legal Information
Forward-Looking Statements/Important Legal Information Forward-Looking Statements The statements, analyses, and other information contained herein relating to the proposed merger and anticipated synergies, savings and financial and operating performance, including estimates for growth, trends in eac
Slide 3: A New Global Insurance Leader
A New Global Insurance Leader Global Leadership • 2nd largest life insurer in North America by market capitalization • Brand expansion across global markets • Leading market scale and share in every business segment Complementary Fit • Broad-based product leadership in all core businesses • Enhanced
Slide 4: Transaction Summary
Transaction Summary Consideration 1.1853 MFC shares per JHF share Implied Price US$37.60 per share: 18.5% premium1 US$11B (C$15B) Structure Tax-free merger for eligible shareholders Expected Closing 2Q 2004 Approvals Required JHF shareholders, Massachusetts and other state insurance regulators, Cana
Slide 5: New Manulife Leadership Structure
New Manulife Leadership Structure Dominic D’Alessandro President & CEO David D’Alessandro(1) Chief Operating Officer & President - Designate James Benson – US Protection Victor Apps – Asia Wayne Budd – Legal, HR Donald Guloien – Investments John D. DesPrez III – US Wealth Mgt John Mather – Administr
Slide 6: Financial Highlights
Financial Highlights Projected EPS accretion 2% in 2004 (JHF for 9 months)1 8% in 2005 (1st full year) Projected CGAAP net income C$2.4B in 2004 (JHF for 9 months) C$3.2B in 2005 (1st full year) Revenue synergies Product, distribution, scale and investments Cost savings Expected annual run rate of C
Slide 7: Global Leader: Top Canadian Company
Global Leader: Top Canadian Company Approximately 5% of S&P/TSX Composite Index 39.2 34.7 32.0 27.8 Market Capitalization 27.0 25.4 C$ in Billions 23.7 23.6 23.2 21.0 19.8 18.6 18.6 RoyalCombined BNS Thomson BCE TD Nortel Encana BMO CIBC MFC GWO SLF Note: Market data as at September 24, 2003. Source
Slide 8: Manulife: A Market-Leading Global Life Insurer
Manulife: A Market-Leading Global Life Insurer North American Life Insurers Global Life Insurers 204.2 204.2 34.7 Market capitalization 53.5 29.0 C$ in Billions 27.3 42.6 39.4 34.7 19.8 18.6 18.6 29.0 27.3 25.4 24.9 13.6 12.5 19.9 19.8 8.7 8.6 18.6 MET PRU MFC LNC AIG PFG AEGON SLF JHF JP MET GWO AX
Slide 9: David D’Alessandro
David D’Alessandro Chief Operating Officer & President-Designate, Manulife Financial Chairman & CEO, John Hancock Financial September 29, 2003
Slide 10: A New Global Insurance Leader
A New Global Insurance Leader Market scale and share Diversification and growth Distribution Product Geography Assets 10
Slide 11: Top Brand Positions in Global Markets
Top Brand Positions in Global Markets UNITED STATES CANADA ASIA REINSURANCE Assets1 C$238B Assets1 C$54B Assets1 C$23B Assets1 C$4B Earnings 2 C$1,169M Earnings2 C$480M Earnings2 C$377M Earnings 2 C$184M 1Funds under management excluding corporate segment in billions as at June 30, 2003. 2MFC 2002 C
Slide 12: Combination Creates Premier Market Positions
Combination Creates Premier Market Positions UNITED STATES CANADA Product Rank Product Rank Individual Life 4 Individual Life1 1 Universal Life 1 Group Life1 1 Variable Life 2 Individual Fixed Ann’y 1 Small Case 401(k) 1 Group Health 2 LTC 2 Segregated Funds 2 Variable Annuity 8 Group Pensions 4 Fix
Slide 13: US Life Insurance Sales
Demonstrated Strength of Two Superior Marketing Organizations Outperforms Industry in Life Sales US Life Insurance Sales MFC +96% JHF +78% Industry +17% 1997 1998 1999 2000 2001 2002 Source: LIMRA 13
Slide 14: Diversification: Extensive Global Distribution Platform
Diversification: Extensive Global Distribution Platform Channel Strength MFC JHF COMBINED United Signator Agents States Insurance Brokerage Bank Fixed Annuity Broker/Dealer Variable Annuity Broker/Dealer Mutual Funds 401(k) LTC Brokerage Canada Stock Brokerage MGAs Independent Financial Advisors Asi
Slide 15: Diversification: Broad Product Breadth
Diversification: Broad Product Breadth Product Strength MFC JHF COMBINED United Individual Universal Life States Individual Variable Life LTC Fixed Annuity Variable Annuity Mutual Funds 401(k) SignatureNotes 529 College Savings Plans Canada Protection Wealth Management None Modest Strong 15
Slide 16: Diversified Earnings from Broad Business Base
Diversified Earnings from Broad Business Base Manulife1 John Hancock1 Combined1 Group Group Pensions Pensions Reinsurance G&SFP Individual LTC & Inv Mgmt G&SFP Wealth Mgmt Reinsurance Inv 8% 8% Mgmt 16% 7% 6% LTC Group 11% 13% 13% 4% Individual 4% Life & Health 7% Wealth 15% Individual Mgmt Wealth 2
Slide 17: Diversified Earnings from Multiple Geographies
Diversified Earnings from Multiple Geographies Manulife1 John Hancock1 Combined1 Other Asia Asia Canada Asia 1% 13% 17% Other 26% 12% 8% Canada 22% U.S. U.S. Canada 34% 87% U.S. 27% 53% 1MFC 2002 CGAAP shareholders’ net income excluding corporate segment; JHF USGAAP 2002 net income excluding corpora
Slide 18: Diversified Asset Mix
Diversified Asset Mix Industry Manulife John Hancock Combined Average C$B % C$B % % % Bonds AAA/AA/A $34.0 46% $32.6 33% 38% 45% BBB 6.6 9 32.2 32 22 21 BB & lower 1.7 2 7.8 8 5 6 Mortgages 9.5 13 16.9 17 15 11 Total Fixed Income 51.8 70 89.5 90 81 83 Equities 6.7 9 1.5 2 5 5 Real Estate 3.8 5 0.4 0
Slide 19: Exceptional Fit for Both Organizations
Exceptional Fit for Both Organizations A leading company with enhanced scale and diversity Expand Scale Expand Scale Leadership in US, Canada and Asia Build in Growth Markets Expand Distribution Expand Distribution Diversify Products Diversify Earnings Greater US Brand Awareness Rebalance Risk Profi
Slide 20: Dominic D’Alessandro
Dominic D’Alessandro President & CEO September 29, 2003
Slide 21: Projected Immediate Earnings Accretion
Projected Immediate Earnings Accretion C$M 2004E1 2005E Manulife Shareholders’ Net Income2 $1,676 $1,894 JHF = 9 months JHF net operating income2 991 1,446 Investment gains and losses (127) (138) Other purchase and CGAAP adjustments (61) (18) Combined Net Income $2,479 $3,184 Expense synergies 91 18
Slide 22: Earnings Adjustments
Earnings Adjustments • Investment gains and losses – Balance Sheet has been fair valued to reflect unrealized gains and losses – Go forward earnings adjusted for normalized credit loss rates and modest equity gains not recognized in I/B/E/S Net Operating Income • Other purchase and CGAAP adjustments
Slide 23: Significant Cost Savings from Combined Activities
Significant Cost Savings from Combined Activities • Expected run-rate cost savings of C$350 million pre-tax achieved by 2006 – Approximately 10% of combined operating expenses • Sources of cost savings: – IT savings Expected Run-Rate – Integrate duplicate distribution channels Cost Savings (Pre-Tax)
Slide 24: Strong Capital Base to Fuel Growth
Strong Capital Base to Fuel Growth Target Post Transaction BALANCE SHEET Total projected general account assets1 C$193.8B Total projected equity1 C$20.6B Goodwill from transaction C$7.3B OPERATING COMPANY CAPITAL RATIOS MCCSR MLI 180% - 200% 200%+ RBC JHLI 300% - 325% 300%-325% LEVERAGE & COVERAGE C
Slide 25: MFC’s Proven Track Record – ROE Expansion
MFC’s Proven Track Record – ROE Expansion % 16.1 16.2 16 15.1 14.0 13.6 12.9 12.4 12 11.4 • Revenue growth 9.6 • Economies of scale 8 7.0 • Capital management • Strong growth in higher margin/higher return markets 4 0 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 25
Slide 26: A New Global Insurance Leader
A New Global Insurance Leader Global Leadership Diversification Management Depth Complementary Fit & Expertise Earnings Growth Financial Strength Scale Geography Product Distribution Brands 26
Manulife Financial — Merger or Acquisition (September 2003) on 6ix