Sun Life Financial Inc. · TSX:SLF
Sun Life Financial — Investor Day (2024)
23 slides from Sun Life Financial's investor day presentation, 2024
Slide 1: Total Company Financial Update: Playing to Win
Total Company Financial Update Playing to Win
Slide 2: Tim Deacon, Executive Vice President & Chief Financial Officer
TIM DEACON Executive Vice President & Chief Financial Officer 2
Slide 3: Focusing on capital light businesses delivers superior risk adjusted returns
• Winning track record of executing on our Medium-Term Objectives and value creation • Capital light business mix supports strong Focusing on capital capital generation light businesses • Industry leading capital position provides resilience and optionality delivers superior risk • Disciplined expen
Slide 4: Delivered strong returns
DELIVERED STRONG RETURNS Underlying EPS1 Underlying ROE1 Dividend per Share Target Underlying EPS growth per annum: Target underlying ROE: 18%+ Target underlying dividend payout ratio: 40-50% 8-10% 42% average underlying dividend payout ratio1 +9% $6.36 +620 bps +8% 17.8% CAGR growth CAGR $3.00 11.6
Slide 5: Delivered peer-leading growth across financial metrics
DELIVERED PEER-LEADING GROWTH ACROSS FINANCIAL METRICS Underlying EPS1, 2 Growth in Underlying ROE1, 2 Underlying Dividend Payout Ratio1, 2 CAGR since 2014 since 2014 10-year average 46.5% 8.9% 42.3% 34.4% 620bps 20bps 5.3% 3.9% (370)bps Sun Life Insurance & Banks Sun Life Insurance & Banks Sun Life
Slide 6: High quality earnings
HIGH QUALITY EARNINGS Differential between underlying and reported earnings over last 10-years is modest and/or transitory1 Long-term neutral 2 Primarily due Integration & Increase in fair to interest Restructuring value of MFS rates shares to Will reduce as employees is an integrations and expense
Slide 7: Strong CSM growth: a store of future value and earnings
STRONG CSM GROWTH: A STORE OF FUTURE VALUE AND EARNINGS Total CSM ($B) New Business CSM1 ($M) +8% +64% +34% 1,253 1,167 11.8 872 10.9 762 2022 2023 2022 2023 YTD 2023 YTD 2024 Average Canadian Lifeco2 growth Average Canadian Lifeco2 new business CSM growth +7% +0% +24% Organic CSM1,3 Growth New Busi
Slide 8: Unmatched capital strength across multiple measures provides significant flexibility
UNMATCHED CAPITAL STRENGTH ACROSS MULTIPLE MEASURES PROVIDES SIGNIFICANT FLEXIBILITY Q3 2024 LICAT ratios1,2,3 Q3 2024 Financial leverage ratio1,3 Industry leading ratings Industry leading capital Industry leading leverage AM Best: A+ 25.3% 152% 147% 136% 20.4% DBRS: AA Moody’s: Aa3 SLF SLA Canadian
Slide 9: Capital light businesses support high capital generation
CAPITAL LIGHT BUSINESSES SUPPORT HIGH CAPITAL GENERATION Underlying net income by business type1,2 15-25% 41% ~45% Canada 10% Asia 14% 27% U.S. IFM 3% 30-40% 32% Wealth & Asset Management Group - Health & Protection 1 1,3 Individual - Protection Income Reinvestment Dividend Generation Organic capita
Slide 10: Strong capital generation supports deployment priorities
STRONG CAPITAL GENERATION SUPPORTS DEPLOYMENT PRIORITIES Organic capital generation1 of $1B+ per annum after organic investments and dividends 1. Funding organic 2. Common share 3. M&A and strategic 4. Share buybacks growth dividend increases investments ~$4 billion ~$7.3 billion ~$6.2 billion ~$1 b
Slide 11: Strategically invested in high growth areas
STRATEGICALLY INVESTED IN HIGH GROWTH AREAS Alternative Asset Health Asia Management ~$1.4 billion invested, with further ~$0.9 billion invested, with a further amounts committed to buy-ups1 ~$3.9 billion invested ~$0.5 billion committed to Indonesia1 1 These statements are forward-looking statement
Slide 12: Disciplined and prudent approach to M&A
DISCIPLINED AND PRUDENT APPROACH TO M&A After funding organic growth and dividends, we evaluate inorganic deployment opportunities on both strategic and financial merit Strategic – strategically complements our existing businesses with potential to meaningfully and sustainably improve competitive po
Slide 13: Growth in capital light businesses unlocks significant value creation
GROWTH IN CAPITAL LIGHT BUSINESSES UNLOCKS SIGNIFICANT VALUE CREATION1 Where we have added Peer average multiples 33.1x Peer leading multiples 20.6x 16.5x 13.3x 10.1x 18.6x 12.0x 10.6x 12.7x 8.2x US Insurers 10 largest Asia Insurers U.S. Asset Canadian Financial Institutions Healthcare Management We
Slide 14: Financial discipline through effective cost management
FINANCIAL DISCIPLINE THROUGH EFFECTIVE COST MANAGEMENT 1 Efficiency contribution from restructuring program Additional opportunities for increased efficiency Operating Real estate & Operating and Automation Continued model procurement productivity digitization of efficiencies operations 57% 24% 19%
Slide 15: Winning objectives: net income growth targets by business group
WINNING OBJECTIVES A path to achieving execution excellence Underlying Net Income1,2 growth target by business group SLC MFS Asia U.S. Canada 20%+ 5%+ 15%+ 12%+ 6%+ 1 Represents a non-IFRS financial measure. Refer to the non-IFRS Financial Measures section in the appendix to these slides. 2 These gr
Slide 16: Winning objectives: underlying ROE targets by pillar
WINNING OBJECTIVES Underlying ROE targets by pillar1,2 30bps 20% 40bps 60bps 70bps 18% Previous Target Asset Managment U.S. Canada Asia Updated Target 1 Represents a non-IFRS financial measure. Refer to the non-IFRS Financial Measures section in the appendix to these slides. 2 These growth targets a
Slide 17: Increasing our medium-term financial objectives
INCREASING OUR MEDIUM-TERM FINANCIAL OBJECTIVES UNDERLYING EPS GROWTH UNDERLYING DIVIDEND UNDERLYING ROE 1,2 PER ANNUM 1,2 PAYOUT RATIO 1,2 10% 20% 40-50% Previous target: 8-10% Previous target: 18%+ Unchanged 1 Underlying EPS, underlying ROE and underlying dividend payout ratio are non-IFRS financi
Slide 18: Focusing on capital light businesses delivers superior risk adjusted returns
• Winning track record of executing on our Medium-Term Objectives and value creation • Capital light business mix supports strong Focusing on capital capital generation light businesses • Industry leading capital position provides resilience and optionality delivers superior risk • Disciplined expen
Slide 19: Appendix
Appendix Sun Life | investor vay 19
Slide 20: Forward-Looking Statements
In this presentation, Sun Life Financial Inc. (“SLF” or “SLF Inc.”), its subsidiaries and, where applicable, its joint ventures and associates are collectively referred to as “we”, “us”, “our”, “Sun Life” and the “Company”. Reported net income (loss) refers to Common shareholders' net income (loss)
Slide 21: Use of Non-IFRS Financial Measures
Use of Non-IFRS Financial Measures The Company prepares its financial statements in accordance with international financial reporting standards (“IFRS”). This presentation includes financial measures that are not based on IFRS (“non-IFRS financial measures”). We report certain financial information
Slide 22: Medium-Term Financial Objectives
Medium-Term Financial Objectives The Company’s Medium-Term Financial Objectives are forward-looking non-IFRS financial measures. Our ability to achieve those objectives is dependent on our success in achieving growth initiatives and business objectives and on certain key assumptions that include: (i
Slide 23: Endnotes
Endnotes Slide 5: 2 ROE, EPS, and Dividend Payout Ratio are on an adjusted basis for Sun Life and peers. Insurance & Asset Management Peers: Great-West Life, Industrial Alliance Insurance and Financial Services, Lincoln National, Manulife Financial, MetLife, Principal Financial Group, Prudential Fin