Sun Life Financial Inc. · TSX:SLF
Sun Life Financial — Q2 2024 Earnings Presentation
40 slides from Sun Life Financial's earnings presentation, August 2024
Slide 1: Q2'24 Delivering sustainable shareholder value
Q2’24 Delivering sustainable shareholder value
Slide 2: Agenda
• Business overview • Strategic overview • Business group results & highlights • Capital management • Asset portfolio Sun Life – Q2 2024 2
Slide 3: A leading global financial services organization
A leading global financial services organization Balanced & diversified $1.46T business model2 85M+ 58,200 91,700 Offices in Assets Under $38.8B Year-to-date at June 30, 2024 Clients3,4 Employees3,5 Advisors3,6 28 markets3 Management market cap7 (AUM)1,7 Group - Health & Protection 28% Wealth & asse
Slide 4: The Sun Life story
The Sun Life story • A diversified business model, with four well-positioned business groups, focused on creating value and positively impacting our Clients, employees and shareholders • Portfolio of businesses that have strong growth prospects and capital generation in attractive global markets • S
Slide 5: Leveraging global trends
Leveraging global trends • Individual and employer attention on physical and mental health • Demographic shifts in developed markets • Increased economic, market and geopolitical volatility • Gig economy and shift in nature of work • Digital acceleration • Adoption of digital health technologies • G
Slide 6: Agenda
• Business overview • Strategic overview • Business group results & highlights • Capital management • Asset portfolio Sun Life – Q2 2024 6
Slide 7: Executing on our ambition to be one of the best asset management and insurance companies
Executing on our ambition to be one of the best asset management and insurance companies in the world Four Strategic Pillars Our Purpose Strategic Imperatives Help Clients achieve lifetime financial security and live healthier lives AM A global leader in both public • Develop deep Client relationshi
Slide 8: Consistently delivering value to shareholders
Consistently delivering value to shareholders 5-year annualized total shareholder return2 Performance against medium-term financial objectives At June 30, 2024 Medium-term financial objective3,4 Q2’24 2-Year3,5 Sun Life 8.7% Underlying EPS growth1 10% 11% 8-10% Canadian Lifecos 13.4% Underlying ROE1
Slide 9: Our Sustainability Plan brings our Purpose to life
Our Sustainability Plan brings our Purpose to life Aligned to our Purpose, we’re focused on the areas where we can have the greatest impact: Increasing Fostering Advancing financial security healthier lives sustainable investing • We aspire to increase the • We aspire to improve health and • We mana
Slide 10: Sustainability highlights show progress against our plan
Sustainability highlights show progress against our plan In line with our commitment to sustainable investing, this quarter we completed our third sustainability bond offering, issuing $750 million. An amount equal to the net proceeds from the offering will be used to finance or refinance, in whole
Slide 11: Digital leadership
Digital leadership Q2 2024 highlights Thinking and acting more like a digital company focused on: Entered a new technology partnership with UKG in the U.S. • Entered into a new technology partnership with UKG, a leading provider of human resources, payroll, and workforce management solutions Digital
Slide 12: Distribution excellence
Distribution excellence Distribution across the four pillars AM • MFS partners with leading retail intermediary firms and global institutional consultants Omni-channel approach • SLC Management distributes products through affiliates Crescent Capital, to serving Clients, including BentallGreenOak, I
Slide 13: Agenda
• Business and strategic overview • Strategic overview • Business group results & highlights • Capital management • Asset portfolio Sun Life – Q2 2024 13
Slide 14: Q2 2024 results
Q2 2024 results Profitability Q2’24 Q2’23 Change Results Highlights Underlying net income1 ($ millions) 1,000 920 +9% Strong financial performance, reflecting strength of diversified business: Reported net income ($ millions) 646 660 (2)% • Wealth & asset management: up 9% y/y on higher fee income a
Slide 15: Q2 2024 results
Q2 2024 results Underlying net income1 ($ millions) Reported net income ($ millions) Impact of currency translation increased underlying net income by $9M2 Impact of currency translation increased reported net income by $10M2 AM CAN U.S. ASIA CORP AM CAN U.S. ASIA CORP 402 372 307 296 292 274 248 20
Slide 16: Asset Management: A global leader in both public and alternative asset classes
Asset Management: A global leader in both public and alternative asset classes through MFS and SLC Management Business Group Results (C$) Q2 2024 strategic highlights Profitability Q2’24 Q2’23 Change MFS Underlying net income1 ($ millions) 307 296 +4% • MFS experienced solid fixed income investment
Slide 17: MFS: US$618B AUM
Wealth & asset management RETAIL INSTITUTIONAL TOTAL MFS US$420B AUM1 US$198B AUM1 US$618B AUM1 Distributed through financial advisors Partner with leading consultants to manage MFS is a strong strategic and financial affiliated with brokerage houses, financial assets for public and corporate pensio
Slide 18: SLC Management
Wealth & asset management Real Estate IG Credit Alternative Credit Infrastructure Distribution $88B AUM1,2 $63B AUM1,2 $57B AUM1,2 $17B AUM1,2 $2B AUM1,2,3 Top global ranking in the Invests across spectrum Seeks investments in high- 230+ infrastructure One of the largest ⬤ ⬤ ⬤ of investment grade qu
Slide 19: Canada: A leader in health, wealth, and insurance
Canada: A leader in health, wealth, and insurance Business Group Results Q2 2024 strategic highlights Profitability Q2’24 Q2’23 Change • Launched Sun Life Term Insurance for Diabetes, an industry-first Wealth & asset management ($ millions) 130 110 +18% insurance solution designed to empower Canadia
Slide 20: Canada overview
Wealth & asset Individual - Group - Health management Protection & Protection Group Retirement Services (GRS) Individual Wealth Individual Insurance Sun Life Health $142B AUM1,3,4 $32B AUM1,3,4 $5.9B Net premiums1,5 $6.4B Net premiums1,5 Canada ~1.3M Clients2 ~0.7M Clients2 ~1.8M Clients2 ~2.7M Clie
Slide 21: U.S.: A leader in health and benefits
U.S.: A leader in health and benefits Business Group Results (US$) Q2 2024 strategic highlights Profitability Q2’24 Q2’23 Change • In Employee Benefits, we expanded our partnership with Goodpath Group - Health & Protection ($ millions) 112 149 (25)% to offer disability members virtual whole-person c
Slide 22: U.S. overview
Group - Health Individual - & Protection Protection Dental Health Group Individual US$3.0B Net premiums1,3 US$2.5B Net premiums1,3 US$2.2B Net premiums1,3 US$15.2B AUM1,7 ~36M Members ~10M Members ~9M Members ~0.2M Members Second largest Dental Largest independent Stop- Top ten U.S. Group Life Close
Slide 23: Asia: A regional leader focused on fast-growing markets
Asia: A regional leader focused on fast-growing markets Business Group Results Q2 2024 strategic highlights Profitability Q2’24 Q2’23 Change CC1 • Launched the SunWell Series4 in Hong Kong, a new critical illness Individual - Protection ($ millions) 176 144 +22% +21% protection plan series offering
Slide 24: Asia overview
Philippines Hong Kong Vietnam Indonesia $269M ins. sales1,2 $740M ins. sales1,2 $115M ins. sales1,2 $62M ins. sales1,2 • 1st in total premiums1,3 for • 3rd in MPF net inflows and • 7th in insurance sales and 4th Asia 13 consecutive years 3rd based on AUM1,6 in bancassurance sales1,8 • 12th in insura
Slide 25: Agenda
• Business overview • Strategic overview • Business group results & highlights • Capital management • Asset portfolio Sun Life – Q2 2024 25
Slide 26: Capital model provides financial flexibility
Capital model provides financial flexibility SLF Inc. SLF In c. - Ext ernal Capit al Securit ies LICAT1 150% Sub ord inated Debt Co upon Principa l, SM Par Call Dat e SLF Ser ies 2007 - 1 5.40% S400 29 - May- 37 SLF Series 20 19 - 1 Susta inability Bond.l 2 .38% $750 13 -Aug- 24 SLF Series 2020 - 1
Slide 27: Capital strength & flexibility
Capital strength & flexibility • Target minimum cash and other liquid assets at the holding company of $500 million1,2,3 Q2’24 Capital Q2’24 Capital metrics SLF Inc. ($ millions) Deployment opportunities LICAT4 150% Subordinated debt5 6,926 • Organic investments Financial leverage ratio1 22.6% Innov
Slide 28: M&A activity reflects strategic priorities
M&A activity reflects strategic priorities • Activity over last ten years promotes growth in Asia and Asset Management and builds out group benefits/dental capabilities in the U.S. Asset Management Canada U.S. Asia 2023 – Divestiture 2016 – Acquisition of 2016 – Expanded 2016 – Expanded 2018 – of th
Slide 29: Agenda
• Business overview • Strategic overview • Business group results & highlights • Capital management • Asset portfolio Sun Life – Q2 2024 29
Slide 30: High quality, well-diversified investment portfolio
High quality, well-diversified investment portfolio Investment profile Debt securities by credit rating • 75% of the portfolio is fixed As of June 30, 2024 As of June 30, 2024 income; 97% of fixed income BB and lower rated investment grade1 BBB- 1% Equity BBB 2% AAA Investment securities 13% 20% • O
Slide 31: Mortgages and investment property exposures
Mortgages and investment property exposures Mortgages by type and geography1 Mortgages by type and rating1,3 As of June 30, 2024 As of June 30, 2024 Multi-family % of Multi-family ($millions) Office Industrial Retail Other Total ($millions) Office Industrial Retail Other Total residential Total resi
Slide 32: Appendix
Appendix Sun Life – Q2 2024 32
Slide 33: Ratings and recognitions in Sustainability
Ratings and recognitions in Sustainability For the 15th consecutive year, Sun Life has earned a spot on the Corporate Knights’ 2024 Global 100 Most Sustainable Corporations in the World. Awarded a Platinum level Parity CertificationTM by Women in Governance. This certification recognizes organizatio
Slide 34: Market sensitivities
Market sensitivities Change in Private and Public Equity Markets1,2,3 Change in Credit Spreads3,8 As at June 30, 2024 25% 10% 10% 25% As at June 30, 2024 As at December 31, 2023 ($millions, unless otherwise noted) decrease decrease increase increase ($millions, unless otherwise noted) 50 basis point
Slide 35: Forward-Looking Statements
In this document, 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) dete
Slide 36: 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 measures provide information that is useful to investors in understanding our performance and facilitate a comparison of our quarterly and full year results from per
Slide 37: Footnotes
Footnotes From slide 3 2 Business Mix based on underlying net income, excluding Corporate expenses and other. Wealth & asset management includes MFS Investment Management, SLC Management, Canada Individual Wealth, Group Retirement Services, Asia Wealth & asset management. Group – Health & Protection
Slide 38: Footnotes continued
Footnotes continued From slide 16 2 MFS pre-tax gross operating margin was 32.7% in Q2 2024 and 32.7% in Q2 2023. 3 Based on a trailing 12-month basis. 4 Does not include the General Account. SLC total AUM including the General Account was $377 billion at June 30, 2024. From slide 17 2 As at Decembe
Slide 39: Footnotes continued
Footnotes continued From slide 24 2 FY2023 Individual – Protection sales. These include the sales in the company’s joint ventures and associates with local partners in Asia based on our proportionate equity interest. 3 Insurance Commission of the Philippines, based on Q1 2024 year-to-date total prem
Slide 40: Sun Life Investor Relations
Sun Life Investor Relations David Garg Senior Vice-President, Capital Management and Investor Relations 416-408-8649 david.garg@sunlife.com Paul Poon Assistant Vice President, Investor Relations 416-305-3389 paul.poon@sunlife.com Sun Life – Q2 2024 40