Sun Life Financial Inc. · TSX:SLF
Sun Life Financial — Q2 2020 Earnings Presentation
17 slides from Sun Life Financial's earnings presentation, Aug 7, 2020
Slide 1: Q2 2020 Financial & Operating Results
Q2 2020 Financial & Operating Results For the period ended June 30, 2020 Sun Life Financial Inc. (unaudited)
Slide 2: Forward-looking statements and non-IFRS 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: Dean Connor, President and Chief Executive Officer
Dean Connor President and Chief Executive Officer S U N L I F E • Q 2 2 0 2 0 3
Slide 4: Supporting our Employees, Clients, and Communities
Supporting our Employees, Clients, and Communities Employees and Advisors Clients Communities • Majority of North American • Ella, our digital coach, has proactively • Signed commitments for the employees continue to work from home, connected with Clients over 13.5 million times BlackNorth Initiativ
Slide 5: Key highlights
Key highlights Executing on our ambition to be one of the best insurance and asset management companies globally Financial (vs. Q2 2019) Accomplishments MFS US$5.4B net $519M (13)% $739M 0% inflows Sixth consecutive quarter of positive flows from U.S. retail Reported net income Underlying net income
Slide 6: Kevin Strain, Executive Vice President & Chief Financial Officer
KEVIN STRAIN Executive Vice President & Chief Financial Officer S U N L I F E • Q 2 2 0 2 0 6
Slide 7: Q2 2020 results
Q2 2020 results Capital management $ millions YoY LICAT Ratio(3) (rounded impacts) SLF SLA (except EPS, ROE, AUM, Book Q2’20 Q1’20 Q2’19 value per share) Change Q1 2020 – Total Ratio 143% 130% Reported net income 519 391 595 (13)% Sub debt issuance 5% 0% Scenario switch with smoothing (1)% (1)% Unde
Slide 8: Business group performance
Business group performance Reported net income ($ millions) Underlying net income(1) ($ millions) Impact of currency increased reported net income by $17M Impact of currency increased underlying net income by $21M 229 223 281 259 243 245 148 134 126 117 118 147 144 94 110 123 CORP CORP CAN U.S. AM A
Slide 9: Sources of earnings
Sources of earnings Sources of earnings Common shareholders Q2’20 Q2’19 $ millions (pre-tax) Q2’20 $ millions Net equity market impact 84 Expected profit on in-force business 871 784 Net interest rate impact (465) Impact of new business (5) (5) Impact of changes in the fair value of investment prope
Slide 10: Sales results by business group
Sales results by business group Insurance sales by business(1) Wealth sales by business(1) $619M $56.6B (6)% YoY +53% YoY Value of new business(1)(2) Canada U.S. Asia $206M Asset Management Canada Asia (12)% YoY • Canada insurance sales decreased by 22%, reflecting lower large • Asset Management sal
Slide 11: Operating expenses
Operating expenses Expenses up 3% on a constant currency basis ($ millions) Year-to-date 53 37 17 3,504 3,365 36 32 21 controllable expenses (57) increased 2% Q2 YTD Controllable Contractual Currency Fair Value Impact of Restructuring Other Q2 YTD 2019 Expenses Volumes Adjustments Acquisitions 2020
Slide 12: Appendix
Appendix S U N L I F E • Q 2 2 0 2 0 12
Slide 13: Reconciliation of underlying net income
Reconciliation of underlying net income Q2’20 Q2’20 $ millions Pre-tax Post-tax Reported net income 519 Net equity market impact (including basis risk impact of $(46) million)(1) 84 59 Net interest rate impact (including credit spread impact of $(72) and swap spread impact of $(10) million)(1) (465)
Slide 14: Other notable items
Other notable items Impact of other items on our net income Q2’20 Q2’20 $ millions Pre-tax Post-tax Experience related items Impact of investment activity on insurance contract liabilities 124 97 Credit (72) (58) Mortality (15) (12) Morbidity 31 27 Lapse and other policyholder behaviour (24) (19) Ex
Slide 15: Market movements and impacts in the quarter
Market movements and impacts in the quarter Market Movements QTD YTD Equity Market Impacts June 30, 2020 June 30, 2020 Q2 2020 Q1 2020 ($millions, after-tax) S&P/ TSX 16.0% (9.1)% Equity market movement and volatility 105 (303) S&P 500 20.0% (4.0)% Basis risk (46) (57) CA 10 - year (17) bps (117) bp
Slide 16: 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 measure provide information that is useful to investors in understanding our performance and facilitate a comparison of our quarterly and full year results from peri
Slide 17: Forward-Looking Statements
Forward-Looking Statements From time to time, the Company makes written or oral forward-looking statements within the meaning of certain securities laws, including the "safe harbour" provisions of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities l