Slide 1: Presentation to Analysts and Investors
Presentation to Analysts and Investors February 15, 2001 Fourth 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: Fourth Quarter 2000 - Highlights
Fourth Quarter 2000 - Highlights • Record quarterly shareholder earnings of $211 million, up 37 per cent • Record year earning $792 million, or $1.90 per share up 17% • Return on Equity of 12.9 per cent for the quarter • Consistent earnings growth despite equity market declines • Strong sales growth
Slide 4: Shareholders' Net Income
Shareholders’ Net Income ($ Millions) 250 203 211 197 200 181 154 150 100 50 0 Q4/99 Q1/00 Q2/00 Q3/00 Q4/00 Reported Net Income -56 197 197 203 211 Less Participating Policyholders Results * 3 16 - - - Adjustments ** 213 - - - - Shareholders' Net Income *** 154 181 197 203 211 * Net income attribut
Slide 5: Financial Performance - EPS up 32%
Financial Performance - EPS up 32% EPS ROE $0.60 16% 0.48 0.50 0.47 0.45 $0.40 0.38 12% $0.20 $0.00 8% Q4/99 Q1/00 Q2/00 Q3/00 Q4/00 EPS 0.38 0.45 0.47 0.48 0.50 ROE 10.7% 12.6% 12.9% 12.8% 12.9% Note: Based on shareholders’ net income. Periods prior to Q2 2000 are on an adjusted basis. 5
Slide 6: Premiums and Segregated Fund Deposits
Premiums and Segregated Fund Deposits 5.2 ($ Billions) 4.6 4.5 3.2 3.0 Q4/99 Q1/00 Q2/00 Q3/00 Q4/00 Segregated Fund 1.0 1.2 2.2 2.1 2.9 Deposits Premiums 2.0 2.0 2.4 2.4 2.3 6
Slide 7: First Year Annualized Premiums - Up 34%
First Year Annualized Premiums - Up 34 % ($ Millions) Individual Life Group Life & Health 128 140 119 127 89 89 80 72 63 63 Q4/99 Q1/00 Q2/00 Q3/00 Q4/00 Canada 14 13 16 13 20 Q4/99 Q1/00 Q2/00 Q3/00 Q4/00 US (1) 26 27 103 57 83 Canada 39 34 26 38 43 UK 12 11 8 6 3 US 72 23 49 45 80 Asia 20 12 13 13
Slide 8: Assets Under Management - Up 9%
Assets Under Management - Up 9% Q4/00 Q4/00 vs vs ($ Billions) Q4/99 Q3/00 Mutual Funds 7% -8% Total AUM 9% -5% 345 329 330 321 301 Q4/99 Q1/00 Q2/00 Q3/00 Q4/00 Mutual Funds 153 167 170 177 163 Managed Funds and 47 53 58 63 61 Other Segregated Funds 46 48 49 50 49 General Funds 55 53 53 55 56 8
Slide 9: Total Net Fund Sales - Up 188%
Total Net Fund Sales - Up 188% Net New Sales Market and Currency Movements ($ Billions) ($ Billions) 9.0 27.3 8.4 7.8 13.5 6.5 4.6 -1.0 2.7 -26.1 Q4/99 Q1/00 Q2/00 Q3/00 Q4/00 Q4/99 Q1/00 Q2/00 Q3/00 Q4/00 Mutual Funds Gross New Sales 7.8 12.4 11.5 11.2 10.6 Mutual Funds 20.9 10.1 -1.8 2.2 -17.9 Red
Slide 10: MFS has 26 Funds with a 4 or 5 Star Overall Rating
MFS has 26 Funds with a 4 or 5 Star Overall Rating 27 26 25 20 21 Q4/99 Q1/00 Q2/00 Q3/00 Q4/00 % of Total Mutual Fund AUM 81% 91% 84% 69% 58% Note: Represents Morningstar ratings of U.S. retail mutual funds. 10
Slide 11: 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 Dece mber 31, 2000 $US Billions De cembe r 31, 2000 $US Billions AIM Management 15.4 Janus 35.7 Putnam 13.4 Vanguard 18.7 MFS 11.7 Putnam 17.5 Alliance 9.1 AIM Ma
Slide 12: MFS Net Sales
MFS Net Sales (in Millions of US$) 2,250 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 10/00 11/00 12/00 -250 -500 M FS Long Term Funds All M FS Funds 12
Slide 13: Variable Annuity Product Sales
Variable Annuity Product Sales - Annual Sales up 57% over 1999 (US$ Millions) Full Year Results Quarterly Results 4,378 1,441 1,248 2,802 1,057 2,285 918 771 1998 1999 2000 Q4/99 Q1/00 Q2/00 Q3/00 Q4/00 Offshore 122 235 607 81 147 172 158 130 Multi-Manager 155 341 814 108 154 203 261 196 Single Mana
Slide 14: Revenue - Fee Income up 23%
Revenue - Fee Income up 23% Q4/00 Q4/00 vs vs ($ Millions) Q4/99 Q3/00 Fee Income 23 % -1 % 4,172 4,249 4,036 3,871 Total 4% -5 % 3,749 Revenue Q4/99 Q1/00 Q2/00 Q3/00 Q4/00 Fee Income 697 782 812 868 855 Investment Income 1,154 975 980 929 892 Life & Health 1,179 1,131 1,231 1,133 1,247 Premiums An
Slide 15: Non-MFS Staffing Level - Down 368 FTEs
Non-MFS Staffing Level - Down 368 8,675 8,517 8,299 (FTE’s) 8,289 8,307 Q4/99 Q1/00 Q2/00 Q3/00 Q4/00 Canada 3,482 3,440 3,384 3,382 3,442 US 1,718 1,724 1,738 1,743 1,780 UK 1,692 1,597 1,557 1,543 1,463 Asia 815 827 797 819 819 Corporate & Other 968 929 823 802 803 Non M FS 8,675 8,517 8,299 8,289
Slide 16: UK Recurring Expenses - Down 25%
UK Recurring Expenses - Down 25% ( £ Millions) 34 33 34 30 30 Q4/99 Q1/00 Q2/00 Q3/00 Q4/00 Project costs 6 4 8 7 13 Recurring expenses 28 26 25 23 21 16
Slide 17: Operating Expenses
Operating Expenses ($ Millions) Total (Non-MFS) MFS $500 40% $300 297 283 267 400 390 60% $400 242 30% 224 313 325 308 $300 $200 40% 20% $200 $100 10% $100 20% Q4/99 Q1/00 Q2/00 Q3/00 Q4/00 Q4/99 Q1/00 Q2/00 Q3/00 Q4/00 Operating 224 242 267 283 297 Operating 400 313 325 308 390 Expenses* Expenses*
Slide 18: Financial Strength
Financial Strength Debt to Total Capital MCCSR 21.4% 21.4% 291% 290% 295% 20.4% 20.2% 19.8% 262% 266% Q4/99 Q1/00 Q2/00 Q3/00 Q4/00 Q4/99 Q1/00 Q2/00 Q3/00 Q4/00 18
Slide 19: Financial Results by Country
Financial Results by Country 19
Slide 20: Canadian Operations
Canadian Operations ($ Millions) Revenue* Net Income** 1,200 100 1,064 1,031 1,008 980 927 80 800 60 40 400 20 0 0 Q4/99 Q1/00 Q2/00 Q3/00 Q4/00 Revenue 1,064 1,031 1,008 980 927 Net Income 45 35 42 45 62 * Excludes revenue from Sun Life Trust. ** Represents shareholders’ net income, excluding earni
Slide 21: U.S. Operations
U.S. Operations ($ Millions) Revenue Net Income* 1,996 2,000 1,846 1,858 150 1,434 1,459 1,500 100 1,000 50 500 0 0 Q4/99 Q1/00 Q2/00 Q3/00 Q4/00 Revenue 1,434 1,459 1,846 1,996 1,858 Net Income 70 65 58 63 43 * Represents shareholders’ net income. Periods prior to Q2 2000 are on a pro forma basis.
Slide 22: MFS
MFS Assets Under Management Net Income* ($ Billions) ($ Millions) 238 221 219 226 199 72 62 62 60 56 Q4/99 Q1/00 Q2/00 Q3/00 Q4/00 Q4/99 Q1/00 Q2/00 Q3/00 Q4/00 Mutual Funds 143 156 160 167 153 Managed 56 63 66 71 68 Funds * Represents Sun Life’s share of MFS total earnings. 22
Slide 23: U.K. Operations
U.K. Operations ($ Millions) Revenue Net Income* 800 80 705 700 70 620 589 600 546 60 505 500 50 400 40 300 30 200 20 100 10 0 0 -100 -10 Q4/99 Q1/00 Q2/00 Q3/00 Q4/00 Revenue 705 589 620 546 505 Net Income -5 17 33 32 37 * Represents shareholders’ net income, adjusted for special provisions related
Slide 24: Asia Operations
Asia Operations ($ Millions) Revenue Net Income* 140 20 116 115 100 103 105 95 15 70 10 35 5 0 0 -35 -5 Q4/99 Q1/00 Q2/00 Q3/00 Q4/00 Revenue 116 95 100 103 115 Net Income -2 7 5 9 6 * Represents shareholders’ net income. Periods prior to Q2 2000 are on a pro forma basis. 24
Slide 25: Summary
Summary • Outstanding sales growth enhancing franchise value. • Record annual and quarterly shareholder earnings. • Continued growth in AUM and fee income • Decisive action in U.K. repositions Company for improved profitability. 25
Slide 26: Sun Life Financial
Sun Life Financial