Sun Life Financial Inc. · TSX:SLF
Sun Life Financial — Q3 2000 Earnings Presentation
26 slides from Sun Life Financial's earnings presentation, Nov 2, 2000
Slide 1: Presentation to Analysts and Investors
Presentation to Analysts and Investors November 2, 2000 Third Quarter 2000
Slide 2: Forward Looking Information
Forward Looking Information This presentation contains forward looking statements with respect to the Company, including its business operations and strategy and financial performance and condition. Although Management believes that the expectations reflected in such forward looking statements are r
Slide 3: Third Quarter 2000 - Highlights
Third Quarter 2000 - Highlights • Record quarterly earnings of $203 million ($.48 per share), up 38% from $147 million in 1999. Year to date earnings of $581 million were up 17%. ROE increased to 12.8% (12.7% YTD) compared to 10.1% (11.4% YTD) in 1999. • Strong sales growth with first year annualize
Slide 4: Financial Performance - EPS up 26%
Financial Performance - EPS up 26% EPS ROE $0.60 16% 0.47 0.48 0.45 0.38 0.39 $0.40 12% $0.20 $0.00 8% Q3/99 Q4/99 Q1/00 Q2/00 Q3/00 EPS 0.38 0.39 0.45 0.47 0.48 ROE 10.1% 10.7% 12.6% 12.9% 12.8% Note: Based on shareholders’ net income. Periods prior to Q2 2000 are on an adjusted basis. 4
Slide 5: Shareholders' Net Income
Shareholders’ Net Income ($ Millions) 220 170 120 197 203 181 70 147 154 20 -30 -80 Q3/99 Q4/99 Q1/00 Q2/00 Q3/00 Reported Net Income 170 -56 197 193 202 Less Participating Policyholders Results * 16 3 16 -4 -1 Adjustments ** -7 213 - - - Shareholders' Net Income *** 147 154 181 197 203 * Net income
Slide 6: First Year Annualized Premiums - Up 52%
First Year Annualized Premiums - Up 52% ($ Millions) Individual Life Group Life & Health 89 119 72 68 63 89 50 80 67 63 Q3/99 Q4/99 Q1/00 Q2/00 Q3/00 11 14 13 16 13 Q3/99 Q4/99 Q1/00 Q2/00 Q3/00 Canada (1) US 16 26 27 31 57 Canada 47 39 34 26 38 UK 11 12 11 8 6 US 15 72 23 49 45 Asia 12 20 12 13 13
Slide 7: Assets Under Management - Up 30%
Assets Under Management - Up 30% Q3/00 Q3/00 vs vs ($ Billions) Q3/99 Q2/00 Mutual Funds 35% 4% Total AUM 30% 5% 330 345 321 301 265 Q3/99 Q4/99 Q1/00 Q2/00 Q3/00 Mutual Funds 131 153 167 170 177 Managed Funds and 39 47 53 58 63 Other Segregated Funds 40 46 48 49 50 General Funds 55 55 53 53 55 7
Slide 8: Total Net Fund Sales - Up 155%
Total Net Fund Sales - Up 155% Net New Sales Market and Currency ($ Billions) Movements ($ Billions) 9.0 8.4 27.3 6.5 13.5 3.3 4.6 2.7 -1.0 -5.3 Q3/99 Q4/99 Q1/00 Q2/00 Q3/00 Q3/99 Q4/99 Q1/00 Q2/00 Q3/00 Mutual Funds Gross New Sales 8.4 7.8 12.4 11.5 11.2 Mutual Funds -4.2 20.9 10.1 -1.8 2.2 Redemp
Slide 9: MFS - Continued Strong Net New Flows
MFS - Continued Strong Net New Flows NET NEW FLO WS NET NEW FLO WS (Non-Proprietary Channel) (Overall Industry) Year to Date Year to Date Se pte mbe r 30, 2000 $US Billions Se pte mbe r 30, 2000 $US Billions AIM Management 12.4 Janus 37.1 Putnam 12.2 Putnam 15.5 MFS 8.1 Vanguard 13.2 Alliance 8.0 AI
Slide 10: MFS Net Sales
MFS Net Sales (in Millions of US$) 2,000 1,750 1,500 1,250 1,000 750 500 250 0 1/99 2/99 3/99 4/99 5/99 6/99 7/99 8/99 9/99 10/99 11/99 12/99 1/00 2/00 3/00 4/00 5/00 6/00 7/00 8/00 9/00 -250 -500 M FS Long Term Funds All M FS Funds 10
Slide 11: Variable Annuity Product Sales - Up 38%
Variable Annuity Product Sales - Up 38% (US$ Millions) Year-to-date Results Quarterly Results 1,248 2,937 918 771 1,687 2,121 1998 1999 2000 Q1/00 Q2/00 Q3/00 Offshore 119 154 477 Offshore 147 172 158 Multi-Manager 64 233 618 Multi-Manager 154 203 261 Single Manager 1,495 1,358 1,842 Single Manager
Slide 12: Revenue - Up 16%
Revenue - Up 16% Q3/00 Q3/00 vs vs ($ Millions) Q3/99 Q2/00 Fee Income 29% 7% 4,172 4,249 3,871 Total 16% 2% 3,656 3,749 Revenue Q3/99 Q4/99 Q1/00 Q2/00 Q3/00 Fee Income 672 697 782 812 868 Investment Income 950 1,154 975 980 929 Life & Health 1,099 1,179 1,131 1,231 1,133 Premiums Annuity Premiums
Slide 13: Non-MFS Staffing Level - Down 386 (FTE's)
Non-MFS Staffing Level - Down 386 8,675 8,517 8,299 (FTE’s) 8,289 Q4/99 Q1/00 Q2/00 Q3/00 Canada 3,482 3,440 3,384 3,382 US 1,718 1,724 1,738 1,743 UK 1,692 1,597 1,557 1,543 Asia 815 827 797 819 Corporate & Other 968 929 823 802 Non MFS 8,675 8,517 8,299 8,289 MFS 2,371 2,496 2,629 2,804 Total 11,0
Slide 14: UK Recurring Expenses - Down 12%
UK Recurring Expenses - Down 12% ( £ Millions) 33 34 33 30 30 Q3/99 Q4/99 Q1/00 Q2/00 Q3/00 Project costs 7 6 4 8 7 Recurring expenses 26 28 26 25 23 14
Slide 15: Operating Expenses - Improved Productivity
Operating Expenses - Improved Productivity ($ Millions) Total (Non-MFS) MFS 267 286 $500 20% $270 242 416 220 224 60% $400 334 328 342 324 $300 15% $185 40% $200 $100 10% $100 20% Q3/99 Q4/99 Q1/00 Q2/00 Q3/00 Q3/99 Q4/99 Q1/00 Q2/00 Q3/00 Operating 334 416 328 342 324 Operating 220 224 242 267 286
Slide 16: Financial Strength
Financial Strength Debt to Total Capital MCCSR 21.2% 21.4% 21.4% 291% 290% 20.4% 20.2% 271% 262% 266% Q3/99 Q4/99 Q1/00 Q2/00 Q3/00 Q3/99 Q4/99 Q1/00 Q2/00 Q3/00 16
Slide 17: Capitalization
Capitalization • Well capitalized with MCCSR of 290% and excess capital of $1.5 billion. • Local capitalization in many instances is in excess of 185% MCCSR levels in part due to local regulatory requirements. Currently in the process of reviewing options to free up additional capital. • Excess capi
Slide 18: Financial Results by Country
Financial Results by Country 18
Slide 19: Canadian Operations
Canadian Operations ($ Millions) Revenue* Net Income** 1,200 100 1,064 1,005 1,008 980 933 80 800 60 40 400 20 0 0 Q3/99 Q4/99 Q1/00 Q2/00 Q3/00 Revenue 933 1,064 1,005 1,008 980 Net Income 40 45 34 42 45 * Excludes Sun Life Trust revenue and earnings. ** Represents shareholders’ net income. Periods
Slide 20: U.S. Operations
U.S. Operations ($ Millions) Revenue Net Income* 1,996 2,000 1,847 150 1,506 1,459 1,500 1,434 100 1,000 50 500 0 0 Q3/99 Q4/99 Q1/00 Q2/00 Q3/00 Revenue 1,506 1,434 1,459 1,847 1,996 Net Income 13 70 65 58 63 * Represents shareholders’ net income. Periods prior to Q2 2000 are on a pro forma basis.
Slide 21: MFS - Continued Strong Earnings
MFS - Continued Strong Earnings Assets Under Management Net Income* ($ billions) ($ millions) 238 219 226 199 72 167 62 62 56 49 Q3/99 Q4/99 Q1/00 Q2/00 Q3/00 Q3/99 Q4/99 Q1/00 Q2/00 Q3/00 Mutual Funds 123 143 156 160 167 Managed 44 56 63 66 71 Funds * Represents Sun Life’s share of MFS total earnin
Slide 22: U.K. Operations
U.K. Operations ($ Millions) Revenue Net Income* 790 70 705 620 590 581 590 546 50 390 30 190 10 -10 -10 Q3/99 Q4/99 Q1/00 Q2/00 Q3/00 Revenue 590 705 581 620 546 Net Income 32 -5 17 33 32 * Represents shareholders’ net income, adjusted for special provisions related to UK pension business. Periods
Slide 23: Asian Operations
Asian Operations ($ Millions) Revenue Net Income* 150 20 120 116 15 100 102 95 95 90 10 60 5 30 0 0 -5 Q3/99 Q4/99 Q1/00 Q2/00 Q3/00 Revenue 95 116 95 100 102 Net Income 5 -2 7 5 9 * Represents shareholders’ net income. Periods prior to Q2 2000 are on a pro forma basis. 23
Slide 24: Legacy Issues
Legacy Issues • Unicover maximum exposure has been reduced from $1 bil. to $0.3 bil. Negotiations and preparations for arbitration continue with no major settlements expected in the near term. SLC is well provided for Unicover • Pension Redress is progressing according to plan. The latest FSA announ
Slide 25: Summary
Summary • Record quarterly shareholders’ earnings. • Continued strong growth in AUM and fee income. • Excellent results across all business lines. • U.K. continued to deliver targeted results as its turnaround moves ahead. • Capital efficiency and productivity improvement remain management prioritie
Slide 26: Sun Life Financial
Sun Life Financial