Sun Life Financial Inc. · TSX:SLF
Sun Life Financial — Q1 2015 Earnings Presentation
29 slides from Sun Life Financial's earnings presentation, May 6, 2015
Slide 1: Building Sustainable Shareholder Value Q1 2015
BUILDING SUSTAINABLE SHAREHOLDER VALUE Q1 2015
Slide 2: Forward-looking statements, Non-IFRS Financial Measures, Sources of earnings
Forward-looking statements Certain statements in this presentation and certain oral statements made during the earnings conference call on May 6, 2015 (collectively, this “presentation”), including, but not limited to, statements that are not historical facts, are forward-looking and are subject to
Slide 3: Sun Life Financial in 2015
SUN LIFE FINANCIAL SUN LIFE FINANCIAL IN 2015 A leading, international financial services provider… operating through a balanced and diversified model… focused on creating shareholder value now and in the future 3
Slide 4: Our Four Pillar Strategy
SUN LIFE FINANCIAL OUR FOUR PILLAR STRATEGY A growth strategy focused on high ROE and strong capital generation through leading positions in attractive markets globally LEADER in FINANCIAL PROTECTION and WEALTH SOLUTIONS in our Canadian home market ✓✓ PREMIER GLOBAL ASSET MANAGER, anchored by MFS LE
Slide 5: Management at a Glance
SUN LIFE FINANCIAL SUN LIFE AT A GLANCE Lifetime Financial Security • Brand • Customer Insights • The Brighter Way—Lean Six Sigma LEVERAGE • Digital and Data Analytics • Third Party Investment Sourcing • Risk and Capital Diversification • Distribution MANAGEMENT CANADA ASSET ASIA U.S. FOUR PILLARS H
Slide 6: Long Term Macro Drivers of Consumer Demand
SUN LIFE FINANCIAL PRODUCTS & MARKETS POSITIONED FOR GROWTH LONG TERM MACRO DRIVERS OF CONSUMER DEMAND RETIREMENT DOWNLOADING GROWTH of baby boomers of responsibility from of the middle class in the government & employers to emerging markets of Asia employees 6
Slide 7: Compared to Other North American Life Insurers
SUN LIFE FINANCIAL COMPARED TO OTHER NORTH AMERICAN LIFE INSURERS 1. Leadership position in Canada, one of the best financial markets in the world 2. First-rate investment manager in MFS 3. Significant and growing business in Asia, exclusively in higher growth markets 4. Leading medical stop-loss bu
Slide 8: Q1'15 Results
SUN LIFE FINANCIAL Q1’15 RESULTS C$ millions Q1’15 Q4’14 Q1’14 (except EPS and ROE) Operating net income 446 511 454 Underlying net income 516 360 440 Reported net income 441 502 400 Diluted operating earnings per share (EPS) (C$) 0.73 0.83 0.74 Diluted underlying EPS (C$) 0.84 0.59 0.72 Operating r
Slide 9: Sales Results
SUN LIFE FINANCIAL SALES RESULTS C$ millions (unless otherwise noted) Q1’15 Change over Q1’14 Individual life and health 199 9% Group life and health 249 (1)% Total Insurance sales 448 3% Wealth sales (excl. MFS and longevity sale) 5,148 (11)% MFS sales 28,236 15% Total Wealth sales 33,384 10% Large
Slide 10: On Track to Exceed 2015 Earnings Objective
SUN LIFE FINANCIAL ON TRACK TO EXCEED 2015 EARNINGS OBJECTIVE(1) UNDERLYING NET INCOME (C$ millions) 1,892 1,816 637 1,581 616 MFS 481 28% CAGR 1,271 302 1,255 1,200 1,100 969 Protection & Wealth 9% CAGR LTM 2012 2013 2014 Q1’15 Protection & Wealth MFS • Q1’15 Underlying ROE 12.1% versus 2015 object
Slide 11: New Medium-Term Objectives
SUN LIFE FINANCIAL NEW MEDIUM-TERM OBJECTIVES(1) Average EPS growth: 8-10% per annum ROE objective: 12-14% Payout ratio(2): 40-50% (1) The objectives are forward-looking non-IFRS financial measures and are not earnings guidance. 11 (2) Dividend payout ratio is based on underlying net income.
Slide 12: SLF Canada Strategic Focus
SLF CANADA STRATEGIC FOCUS LEADER in FINANCIAL PROTECTION and WEALTH SOLUTIONS in our Canadian home market ✓ A strong and growing foundation in core businesses Growing leadership in Group Benefits Growing leadership in Group Retirement Services Growing and evolving Career Sales Force and indep
Slide 13: SLF Canada Growing Earnings Power
SLF CANADA GROWING EARNINGS POWER ASSETS UNDER UNDERLYING NET INCOME HIGHLIGHTS MANAGEMENT (C$ millions) • Strengthened leadership (C$ millions) position in Defined Benefit 149,099 Solutions with ground 141,689 823 814 breaking longevity insurance 127,906 799 agreement • Product expansion and strong
Slide 14: Asset Management Strategic Focus
ASSET MANAGEMENT STRATEGIC STRATEGICFOCUS FOCUS GROWING MFS by being MARKET and Client Driven • INVESTMENT PERFORMANCE: winning today and positioning ourselves for the future of investment management • CLIENT SERVICE: making client service a true differentiator across all client segments • GROW IN O
Slide 15: Strong Asset Management Capabilities
ASSET MANAGEMENT STRONG ASSET MANAGEMENT CAPABILITIES MFS ASSETS UNDER MFS OPERATING NET MANAGEMENT(1) INCOME(1) HIGHLIGHTS (US$ billions) (US$ millions) • Achieved record average net assets 557 559 441 • Grew and diversified AUM(1) 413 431 465 • Strong long term fund performance • Completed the pur
Slide 16: U.S. Group Benefits Strategic Focus
SUN LIFE U.S. STRATEGIC FOCUS STRATEGIC FOCUS GROUP BENEFITS Small to large national employers, excluding jumbo cases Market Solutions delivered through brokers, consultants and private Focus exchanges Stop-loss Product Group and voluntary life, disability, dental Breadth Cancer, critical
Slide 17: U.S. Continuing the Evolution
SUN LIFE U.S. CONTINUING THE EVOLUTION SLF U.S. TOTAL GROUP BENEFIT SALES HIGHLIGHTS (US$ millions) • Grew stop-loss business to US$1 billion of in- 666 force premium, solidifying leadership position 599 • Medical stop-loss sales increased 21% in local 592 currency • Selected to participate on the M
Slide 18: Asia Strategic Focus
SUN LIFE ASIA STRATEGIC FOCUS Market Seven higher growth markets Focus Partners that share our values and have impact in their markets A mix of products by market that bring favourable return-risk Product results Breadth Insurance in seven markets, health and accident in six markets, wealth
Slide 19: Asia Sales Growth, Expanded Footprint
SUN LIFE ASIA SALES GROWTH, EXPANDED FOOTPRINT UNDERLYING NET INDIVIDUAL LIFE AND INCOME HEALTH INSURANCE HIGHLIGHTS (C$ millions) SALES(2) (C$ millions) Wealth Protection • Sun Life of Canada (Philippines), Inc. was CAGR +10% number one for the fourth consecutive year(1) CAGR +27% 422 448 • Signifi
Slide 20: Deliberate Capital and Cash Allocation
SUN LIFE FINANCIAL DELIBERATE CAPITAL AND CASH ALLOCATION DATE AMOUNT APPLICATION RESULTS Q2 2013 $300 million Acquisition of Malaysia business Meeting business case expectations Restructure of U.S. reinsurance $480 million of net income Q4 2013 $250 million arrangement (Q4’13 and 2014) Q1 2014 $500
Slide 21: Balanced and Diversified Business Model
SUN LIFE FINANCIAL BALANCED AND DIVERSIFIED BUSINESS MODEL BY GEOGRAPHY(1) – LTM Q1’15 BY BUSINESS TYPE – LTM Q1’15 Underlying net income $2 billion Underlying net income $2 billion Asia 10% Canada 35% Wealth 45% Protection 55% U.S. 47% U.K. 8% 21 (1) Canada includes SLF Canada and Corporate Support
Slide 22: Wealth Management
SUN LIFE FINANCIAL WEALTH MANAGEMENT(1)(2) Sales Fee income Assets under management (C$ billions) (C$ millions) (C$ billions) 114.5 114.5 674.3 111.5 4,227 4,052 606.0 100.0 528.0 3,339 2,632 398.2 2013 LTM 2012 2014 Q1’15 2012 2013 2014 LTM 2012 2013 2014 Q1’15 Q1’15 Wealth Protection Value of new
Slide 23: Strong Capital and Financial Position
SUN LIFE FINANCIAL STRONGCAPITAL STRONG CAPITALAND ANDFINANCIAL FINANCIALPOSITION POSITION MCCSR RATIO – • $1.7 billion cash level at Sun Life Financial Inc. as at SUN LIFE ASSURANCE March 31, 2015 COMPANY OF CANADA • $500 million minimum cash target 219% 217% 216% Financial Strength Rating Sun Life
Slide 24: Quality Asset Portfolio
SUN LIFE FINANCIAL QUALITY ASSET PORTFOLIO Q1’15 INVESTED ASSETS • Investment portfolio is well diversified by Equities (C$133 billion) geography, asset class, industry sector or issuer 4% Investment • High quality asset base Properties • Self originated mortgage portfolio is diversified 5% across a
Slide 25: Sustainable Shareholder Value
SUN LIFE FINANCIAL SUSTAINABLE SHAREHOLDER VALUE COMPELLING FOUR PILLAR STRATEGY EXECUTING ON GROWTH AMBITIOUS AND ACHIEVABLE OBJECTIVES DISCIPLINED CAPITAL/RISK MANAGEMENT EXECUTION EXCELLENCE 25
Slide 26: Contact
SUN LIFE FINANCIAL INVESTOR RELATIONS CONTACT GREG DILWORTH Vice President, Investor Relations gregory.dilworth@sunlife.com 416‐979‐6230
Slide 27: Use of Non-IFRS Financial Measures
In this presentation, Sun Life Financial Inc. and its subsidiaries, joint ventures and associates are referred to as “we”, “us”, “our” and the “Company”. Use of Non‐IFRS Financial Measures We report certain financial information using non‐IFRS financial measures, as we believe that they provide info
Slide 28: Forward-Looking Statements
Forward‐Looking Statements Certain statements in this presentation, including statements (i) concerning the low interest rate environment, (ii) statements relating to our growth strategies, (iii) statements concerning our 2015 financial objectives, (iv) statements relating to productivity and expens
Slide 29: Material assumptions and risk factors
Material assumptions and risk factors The Company’s medium-term financial objectives do not constitute guidance. Our ability to achieve our medium-term financial objectives is dependent on the Company’s success in achieving the growth initiatives, business objectives and productivity and expense tar