Sun Life Financial Inc. · TSX:SLF
Sun Life Financial — Q3 2015 Earnings Presentation
29 slides from Sun Life Financial's earnings presentation, Nov 5, 2015
Slide 1: Building Sustainable Shareholder Value Q3 2015
BUILDING SUSTAINABLE SHAREHOLDER VALUE Q3 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 November 5, 2015 (collectively, this “presentation”), including, but not limited to, statements that are not historical facts, are forward-looking and are subjec
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 management businesses – MFS and Sun Life Investment Management 3. Significant and growing business in Asia, exclusively in highe
Slide 8: Relative Stock Performance from Announcement of Four Pillar Strategy
SUN LIFE FINANCIAL RELATIVE STOCK PERFORMANCE FROM ANNOUNCEMENT OF FOUR PILLAR STRATEGY(1) YTD 8% increase in quarterly common share dividend for 2015 Stock Appreciation % SLF 127.7% Dividend Yield 3.5% 8 (1) Period December 31, 2011 to September 30, 2015
Slide 9: Q3'15 Results
SUN LIFE FINANCIAL Q3’15 RESULTS C$ millions Q3’15 Q2’15 Q3’14 (except EPS and ROE) Operating net income 478 731 467 Underlying net income 528 615 517 Reported net income 482 726 435 Diluted operating earnings per share (EPS) (C$) 0.78 1.19 0.76 Diluted underlying EPS (C$) 0.86 1.00 0.84 Operating r
Slide 10: Sales Results
SUN LIFE FINANCIAL SALES RESULTS C$ millions (unless otherwise noted) Q3’15 Change over Q3’14 Individual life and health 227 4% Group life and health 303 49% Total Insurance sales 530 26% Wealth sales – SLF Asset Management 22,748 4% Wealth sales – Non SLF Asset Management 5,111 34% Total Wealth sal
Slide 11: On Track to Exceed 2015 Earnings Objective
SUN LIFE FINANCIAL ON TRACK TO EXCEED 2015 EARNINGS OBJECTIVE(1) UNDERLYING NET INCOME (C$ millions) 2,019 1,816 670 1,581 616 MFS 481 30% CAGR 1,271 1,349 302 1,200 1,100 969 Protection & Wealth 12% CAGR LTM 2012 2013 2014 Q3’15 Protection & Wealth MFS (1) The 2015 operating net income and operatin
Slide 12: 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. These objectives were provided on March 5, 2015 (Investor Day). 12 (2)
Slide 13: SLF Canada: Growing Earnings Power
SLF CANADA GROWING EARNINGS POWER ASSETS UNDER UNDERLYING NET INCOME Q3’15 HIGHLIGHTS MANAGEMENT (C$ millions) (C$ millions) • Strong gross sales in Insurance and Wealth; up 52% and 44%, 148,175 141,689 respectively 127,906 823 806 799 • Record sales in individual insurance, and large client wins in
Slide 14: Strong Asset Management Capabilities
ASSET MANAGEMENT STRONG ASSET MANAGEMENT CAPABILITIES MFS ASSETS UNDER MFS OPERATING NET Q3’15 HIGHLIGHTS MANAGEMENT(1) INCOME(1) (US$ billions) (US$ millions) • Completed the acquisitions of Bentall Kennedy and Prime Advisors 557 546 • Sun Life Investment Management gross 413 431 404 465 sales of $
Slide 15: MFS Investment Management
ASSET MANAGEMENT MFS INVESTMENT MANAGEMENT Percentage of Assets Ranked in Top Half Market Volatility Drives Elevated of Lipper Peer Group, 10-Year period Level of Net Outflows TOTAL • Retail net outflows of US$0.3billion • Market volatility resulting in 97% reduced sales • Institutional net outflows
Slide 16: Financial Asset Management: Assets Under Management
SUN LIFE FINANCIAL SUN LIFE FINANCIAL ASSET MANAGEMENT SUN LIFE FINANCIAL ASSET MANAGEMENT ASSETS UNDER MANAGEMENT C$537 billion C$56 billion $29 $18 $7 $2
Slide 17: SLF U.S.: Continuing the Evolution
SUN LIFE U.S. CONTINUING THE EVOLUTION SLF U.S. TOTAL GROUP BENEFIT SALES Q3’15 HIGHLIGHTS (US$ millions) • Accelerated growth in U.S. Group Benefits with 666 the acquisition of Assurant’s Employee Benefits 599 business 582 • Progress in expense management and pricing actions, improving underlying e
Slide 18: SLF Asia: Sales Growth, Expanded Footprint
SUN LIFE ASIA SALES GROWTH, EXPANDED FOOTPRINT UNDERLYING NET INDIVIDUAL LIFE AND INCOME HEALTH INSURANCE Q3’15 HIGHLIGHTS (C$ millions) SALES(1) (C$ millions) Wealth Protection • Underlying earnings up 40% from Q3’14 250 CAGR +13% 473 CAGR +43% 422 • Solid progress on Most Respected Agency 203 373
Slide 19: 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 $480 million of net income Q4 2013 $250 million Restructure of U.S. reinsurance arrangement (Q4’13 and 2014) Q1 2014 $500
Slide 20: Balanced and Diversified Business Model
SUN LIFE FINANCIAL BALANCED AND DIVERSIFIED BUSINESS MODEL BY BUSINESS GROUP(1) – Q3’15 STRONG UNDERLYING EARNINGS GROWTH FROM BOTH Underlying net income $528 million WEALTH AND INSURANCE BUSINESSES(2) (C$ millions) 517 528 SLF Asia 12% SLF Canada 30% SLF Asset Management 31% SLF U.K. 10% SLF U.S. 1
Slide 21: Wealth Management
SUN LIFE FINANCIAL WEALTH MANAGEMENT(1) Sales Fee income Assets under management (C$ billions) (C$ millions) (C$ billions) 123 4,639 706 114 111 4,053 606 100 3,339 528 2,632 398 LTM 2012 2013 2014 2012 2013 2014 LTM 2012 2014 Q3’15 Q3’15 2013 Q3’15 Wealth Protection Value of new 40% business LTM Q3
Slide 22: 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 September 30, 2015 COMPANY OF CANADA • $500 million minimum cash target 219% 217% 229% Financial Strength Rating Sun
Slide 23: Capital Model
SUN LIFE FINANCIAL CAPITAL MODEL $1.7 billion cash at Holding SLF Company(1) Sun Life Asset SLA MCCSR of 229% Management Sun Life MFS Investment Management U.S. U.K. Canada Bermuda Asia Branch Book value excl. from MCCSR Capitalized to meet local capital rules (1) At September 30, 2015. 23
Slide 24: Quality Asset Portfolio
SUN LIFE FINANCIAL QUALITY ASSET PORTFOLIO Q3’15 INVESTED ASSETS • Investment portfolio is well diversified by Equities (C$135 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: Investor Relations Contact
SUN LIFE FINANCIAL INVESTOR RELATIONS CONTACT GREG DILWORTH JUSTIN WANG Vice President, IR Assistant Vice President, IR gregory.dilworth@sunlife.com justin.wang@sunlife.com 416-979-6230 416-496-3553
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 these measures pr
Slide 28: Non-IFRS financial measures definitions
Management also uses the following non-IFRS financial measures: 1. Adjusted revenue. This measure adjusts revenue for the impact of: (i) the effects of exchange rate fluctuations, from the translation of functional currencies to the Canadian dollar, for comparisons (the “Constant Currency Adjustment
Slide 29: Forward-Looking Statements
Forward-Looking Statements Certain statements in this presentation, including statements (i) related to our proposed acquisition of the U.S Employee Benefits Business of Assurant Inc., (ii) statements relating to our growth strategies, (iii) statements concerning our 2015 financial objectives, (iv)