Sun Life Financial Inc. · TSX:SLF
Sun Life Financial — Q4 2014 Earnings Presentation
26 slides from Sun Life Financial's earnings presentation, February 2015
Slide 1: Building Sustainable Shareholder Value Q4 2014
BUILDING SUSTAINABLE SHAREHOLDER VALUE Q4 2014
Slide 2: 109,765 advisors, P&D $122 billion, AUM of $734 billion
109,765 advisors(1) · P&D(2) $122 billion · AUM(3) of $734 billion (1) All information as at December 31, 2014. (2) Premiums and deposits (“P&D”). Includes Birla Sun Life Asset Management Company’s equity and fixed income mutual funds, based on our proportionate equity interest. Represents a non-IFR
Slide 3: Executing on Our Four Pillar Strategy
EXECUTING ON OUR FOUR PILLAR STRATEGY A growth strategy focused on high ROE and strong capital generation through leading positions in attractive markets globally LEADER in FINANCIAL PROTECTION and WEALTH SOLUTIONS in our Canadian home market ✓ ✓ PREMIER GLOBAL ASSET MANAGER, anchored by MFS LEADER
Slide 4: Products & Markets Positioned for Growth
PRODUCTS & MARKETS POSITIONED FOR GROWTH AGING DOWNLOADING of responsibility from GROWTH of the middle class in the of baby boomers government & employers to emerging markets of Asia employees LONG TERM MACRO DRIVERS OF CONSUMER DEMAND 4
Slide 5: Ambitious and Achievable Objectives
AMBITIOUS AND ACHIEVABLE OBJECTIVES(1) Operating Net Income 2011 Adjusted 2015 Objectives (C$ millions) Net Income(2) 2015 operating net income objective of SLF Canada 900 660 $1.85 BILLION SLF U.S. 345 273 MFS 450 275 SLF Asia 225 110 2015 ROE objective of 12% - 13% Corporate (70) (73) Total compan
Slide 6: Robust Sales & Earnings Growth
ROBUST SALES & EARNINGS GROWTH Continuing Operations Change C$ millions 2014 2013 • 2014 expected profit(1) up 15% (unless otherwise noted) • 2014 earnings on surplus(1) up 38% Life and Health sales(1)(2) 2,068 10% Wealth sales(1)(2) 20,374 30% OPERATING NET INCOME(1) UNDERLYING NET INCOME(1)(3) (ex
Slide 7: Wealth Management
WEALTH MANAGEMENT(1)(2) Sales Value of new business 2014 (C$ billions) C$1.1 billion 114.5 Wealth 111.5 100.0 Protection 43% 70.5 57% 2011 2012 2013 2014 Fee income Assets under management (C$ millions) (C$ billions) 606.0 4,052 528.0 3,339 398.2 2,632 2,370 328.8 2011 2012 2013 2014 2011 2012 2013
Slide 8: Did You Know?
DID YOU KNOW? • Voted by Canadians as “Most Trusted Life Insurance Company” in the country for the sixth consecutive year(1) STRONG BRAND • Achieved gold certification in the Progressive Excellence Program® (PEP)(2) • CARP(3) recommended provider for retirement and estate planning (1) Source: Reader
Slide 9: Strong Sales, Improved Profitability
STRONG SALES, IMPROVED PROFITABILITY LEADER in FINANCIAL PROTECTION and WEALTH SOLUTIONS in our Canadian home market ✓ SLGI(2) CLIENT ASSETS UNDER MANAGEMENT(1) (C$ millions) NEW BUSINESS STRAIN(1) (C$ millions) 4 9,526 2014 HIGHLIGHTS 2014 2012 2013 • Achieved growth across 7,241 individual busines
Slide 10: Strategy & Key Initiatives
STRATEGY & KEY INITIATIVES Capture the • Expand retirement distribution RETIREMENT • Grow retail and institutional retirement assets; grow SLGI MARKET assets OPPORTUNITY • Drive growth in Defined Benefit Solutions Extend #1 • Total Benefits and Mobile Initiatives to differentiate plan MARKET SHARE s
Slide 11: Record Performance at MFS
RECORD PERFORMANCE AT MFS(1) PREMIER GLOBAL ASSET MANAGER, anchored by MFS ✓ MFS ASSETS UNDER MANAGEMENT(2) (US$ billions) MFS OPERATING NET INCOME(2) (US$ millions) 2014 HIGHLIGHTS 557 • Achieved record average net 431 assets 413 465 • Grew and diversified AUM(2) • Won multiple industry awards 323
Slide 12: Strategy & Key Initiatives
STRATEGY & KEY INITIATIVES Deliver consistent, • Enhance global research platform strong • Strengthen unique, collaborative culture INVESTMENT PERFORMANCE Broaden • Diversify product sales and grow in our markets GLOBAL • Add investment offices and staff to cover more regions PRESENCE • Expand globa
Slide 13: Continued Growth, Lower Volatility
CONTINUED GROWTH, LOWER VOLATILITY LEADER in U.S. GROUP BENEFITS and INTERNATIONAL high net worth solutions ✓ VOLUNTARY SALES(1) (US$ millions) GROUP BENEFITS BUSINESS IN-FORCE (US$ millions) 178 2014 HIGHLIGHTS 2,555 2,467 • Transformed Group Benefits sales 579 145 524 and service model 141 2,298 4
Slide 14: Strategy & Key Initiatives
STRATEGY & KEY INITIATIVES Transform • Improve distribution effectiveness, enhance customer GROUP experience and create a scalable operating model BENEFITS • Differentiate through medical stop-loss offering BUSINESS Grow • Expand product portfolio • Enhance enrollment, distribution and technology VO
Slide 15: Sales Growth, Expanded Footprint
SALES GROWTH, EXPANDED FOOTPRINT GROWING Asia through DISTRIBUTION EXCELLENCE in HIGHER GROWTH MARKETS ✓ INDIVIDUAL LIFE INSURANCE SALES (5)(6) (C$ millions) ASSETS UNDER ADMINISTRATION(5) (C$ billions) 61 2014 HIGHLIGHTS • Sun Life of Canada (Philippines), Inc. was number one for the third consecut
Slide 16: Strategy & Key Initiatives
STRATEGY & KEY INITIATIVES Expand • Expand our agency force and improve productivity MULTI- • Grow distribution through alternative channels, in particular CHANNEL bancassurance DISTRIBUTION Expand • Grow new ventures in Vietnam and Malaysia PRODUCTS • Expand accident and health business and MARKETS
Slide 17: Disciplined Cash Deployment
DISCIPLINED CASH DEPLOYMENT DATE AMOUNT APPLICATION Q2 2013 $300 million Acquisition of Malaysia business Q4 2013 $250 million Recapture of U.S. reinsurance arrangement Q1 2014 $500 million Redemption of debt Q1 2014 $250 million Cash injected into Sun Life Investment Management Up to 9 million Q3 2
Slide 18: Diversified Revenue Base
DIVERSIFIED REVENUE BASE REVENUE BY BUSINESS SEGMENT (1) (%) Corporate 3% SLF Asia 8% SLF Canada 44% MFS 15% SLF U.S. 30% (1) Based on 2014; revenue excludes the fair value change in Fair Value Through Profit and Loss (“FVTPL”) assets. Based on Continuing Operations. 18
Slide 19: Strong Capital and Financial Position
STRONG CAPITAL AND FINANCIAL POSITION MCCSR(1) Ratio – SUN LIFE $1.8 billion cash level at Sun Life Financial Inc. as ASSURANCE COMPANY at December 31, 2014 OF CANADA 219% 217% 209% Financial Strength Rating Sun Life Assurance Q4’14 2013 2012 2011 Company of Canada A.M Best A+ A+ A+ A+ DBRS IC-1 IC-
Slide 20: Quality Asset Portfolio
QUALITY ASSET PORTFOLIO • Investment portfolio is well diversified 2014 INVESTED ASSETS by geography, asset class, industry (C$125 billion) sector or issuer Equities • High quality asset base 4% • Self originated mortgage portfolio is Investment diversified across approximately 2,400 Properties loan
Slide 21: Disciplined Execution
DISCIPLINED EXECUTION INTENSIFY OUR FOCUS ON GREATER CUSTOMERS DISCIPLINE AROUND HIGH PRODUCTIVITY PERFORMANCE AND EXPENSES CULTURE 21
Slide 22: Sustainable Shareholder Value
SUSTAINABLE SHAREHOLDER VALUE COMPELLING FOUR PILLAR STRATEGY EXECUTING ON GROWTH LOWER RISK, HIGHER ROE BUSINESSES DISCIPLINED CAPITAL DEPLOYMENT AMBITIOUS & ACHIEVABLE OBJECTIVES 22
Slide 23: Contact
INVESTOR RELATIONS CONTACT GREG DILWORTH REKHA SAMPATH Vice President Assistant Vice President greg.dilworth@sunlife.com rekha.sampath@sunlife.com 416-979-6230 416-979-6010 23
Slide 24: 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 25: 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 26: Material assumptions and risk factors
Material assumptions and risk factors Our 2015 financial objectives are based on the assumptions set out in our 2013 annual MD&A. They are also based on best estimate actuarial assumptions as at December 31, 2012. The Company’s operating ROE is dependent upon its capital levels and options for deplo