Sun Life Financial Inc. · TSX:SLF
Sun Life Financial — Q1 2016 Earnings Presentation
32 slides from Sun Life Financial's earnings presentation, May 11, 2016
Slide 1: Building Sustainable Shareholder Value
Q1’16 BUILDING SUSTAINABLE SHAREHOLDER VALUE Life’s brighter under the sun
Slide 2: Forward-looking statements
Forward-looking statements Certain statements in this presentation and certain oral statements made during the earnings conference call on May 11, 2016 (collectively, this “presentation”), including, but not limited to, statements that are not historical facts, are forward-looking and are subject to
Slide 3: Sun Life Financial in 2016
SUN LIFE FINANCIAL Q1 SUN LIFE FINANCIAL IN 2016 2016 A leading, international financial services provider… operating through a balanced and diversified model… focused on creating shareholder value now and in the future Click to edit Master title style 3
Slide 4: Our Four Pillar Strategy
SUN LIFE FINANCIAL Q1 OUR FOUR PILLAR STRATEGY 2016 A strategy focusing on growth, higher ROE, and less volatile businesses Click to edit Master title style Leader in U.S. Group Benefits Leader in Financial and International high net worth Protection and Wealth solutions Solutions in our Canadian ho
Slide 5: Management at a Glance
SUN LIFE FINANCIAL Q1 SUN LIFE AT A GLANCE 2016 Lifetime Financial Security Click to edit Master •title style • Brand • Customer Insights • The Brighter Way—Lean Six Sigma LEVERAGE Digital and Data Analytics • Third Party Investment Sourcing • Risk and Capital Diversification • Distribution MANAGEME
Slide 6: Products & Markets Positioned for Growth
SUN LIFE FINANCIAL Q1 PRODUCTS & MARKETS POSITIONED FOR GROWTH 2016 LONG Click to edit MasterTERM title styleMACRO DRIVERS OF CONSUMER DEMAND RETIREMENT DOWNLOADING GROWTH of baby boomers of responsibility from of the middle class in the government & employers to emerging markets of Asia employees 6
Slide 7: Compared to Other North American Life Insurers
SUN LIFE FINANCIAL Q1 COMPARED TO OTHER NORTH AMERICAN LIFE INSURERS 2016 1. Leadership position in Canada, one of the best financial markets in the world Click to edit Master 2. First-rate title investment style management businesses – MFS and Sun Life Investment Management 3. Significant and growi
Slide 8: Relative Stock Performance from Announcement of Four Pillar Strategy
SUN LIFE FINANCIAL RELATIVE STOCK PERFORMANCE FROM ANNOUNCEMENT OF FOUR PILLAR Q1 STRATEGY(1) 2016 4% increase in quarterly common share dividend for Q1 2016 Click 160 to edit Master title style 140 Stock Appreciation % 120 SLF 122% 100 80 60 Dividend Yield 3.7%* 40 20 0 (1) Period December 31, 2011
Slide 9: Balanced and Diversified Business Model by Business Group
SUN LIFE FINANCIAL Q1 BALANCED AND DIVERSIFIED BUSINESS MODEL 2016 BY BUSINESS GROUP – STRONG UNDERLYING EARNINGS GROWTH Q1 2016 Underlying Net Income FROM BOTH WEALTH AND INSURANCE(2) Click to edit Master title style $582 million(1) (C$ millions) 582 SLF Asia 516 11% SLF Canada 35% SLF Asset Manage
Slide 10: Q1'16 Results
SUN LIFE FINANCIAL Q1 Q1’16 RESULTS 2016 C$ millions Q1’16 Q4’15 Q1’15 (except EPS and ROE) Click to edit Master title style Operating net income Underlying net income 531 582 598 646 446 516 Reported net income 540 536 441 Diluted operating EPS (C$) 0.87 0.98 0.73 Diluted underlying EPS (C$) 0.95 1
Slide 11: Business Group Performance
SUN LIFE FINANCIAL Q1 BUSINESS GROUP PERFORMANCE 2016 SOLID GROWTH IN UNDERLYING NET SLF Canada SLF Canada INCOME ACROSS BUSINESSES • Favourable investing activity, net gains on available-for- (C$ MILLONS) Click to edit Master title style • sale assets Continued investment in Individual Wealth SLF U
Slide 12: New Medium-Term Objectives
SUN LIFE FINANCIAL Q1 NEW MEDIUM-TERM OBJECTIVES(1) 2016 Average Click to edit Master titleEPS stylegrowth: 8-10% per annum ROE objective: 12-14% Payout ratio(2): 40-50% (1) The objectives are forward-looking non-IFRS financial measures and are not earnings guidance. These objectives were provided o
Slide 13: SLF Canada: Growing Earnings Power
SLF CANADA Q1 GROWING EARNINGS POWER 2016 Q1’16 HIGHLIGHTS ASSETS UNDER UNDERLYING NET INCOME MANAGEMENT (C$MILLIONS) (C$MILLIONS) Strong net flows in Sun Life Global Investments mutual funds and Sun Life Guaranteed Investment segregated funds Launched an innovative digital 127,906 141,689 152,560
Slide 14: Increasing Market Presence in Canadian Mutual Fund Market
SLF CANADA Q1 INCREASING MARKET PRESENCE IN CANADIAN MUTUAL FUND MARKET 2016 Year over Year change in Net Sales(1) Sun Life Granite Managed Portfolios(2) Industry SLGI 73% 30,000 1200 25,418 25,000 1000 887 20,000 57% 800 C$ millions C$ millions 15,000 514 600 11,019 10,000 400 5,000 200 0 0 Q1 15 Q
Slide 15: Defined Benefits Solutions - A Market Leader
SLF CANADA Q1 DEFINED BENEFITS SOLUTIONS - A MARKET LEADER 2016 8,000 7,558 Liability driven investing Annuities Longevity insurance 6,000 $C millions Reduced 4,000 2,460 51% equity 41% 2,218 allocations(1) 2,000 1,362 1,054 2,558 0 2011 2012 2013 2014 2015 8 annuity deals over $100M in 2015 58%
Slide 16: Premier Global Asset Management Operations
SUN LIFE ASSET MANAGEMENT Q1 PREMIER GLOBAL ASSET MANAGEMENT OPERATIONS 2016 SUN LIFE FINANCIAL ASSET MANAGEMENT AUM C$544 billion AUM C$57 billion MFS among the top 10 retail fund groups in the Sun Life Investment Management (SLIM) net United States(1) flows of $1.0 billion Global assets unde
Slide 17: MFS Blended Research – A Unique Source of Alpha
SUN LIFE ASSET MANAGEMENT Q1 MFS BLENDED RESEARCH – A UNIQUE SOURCE OF ALPHA 2016 Fundamental U.S. Core Equity median manager return (%) minus quantitative U.S. Core Equity median manager return (%) Blending two complementary research signals • Past performance is no guarantee of future results. • •
Slide 18: SLF U.S.: Continuing the Evolution
SLF U.S. Q1 CONTINUING THE EVOLUTION 2016 Q1’16 HIGHLIGHTS SLF U.S. UNDERLYING NET INCOME (US$MILLIONS) Completed the purchase of Assurant’s U.S. employee benefits business Strong growth in Group Life & Health, Voluntary and Stop Loss sales, contribution from Assurant employee benefits business 28
Slide 19: Combination Results in Complete Portfolio of Group Businesses
SLF U.S. Q1 COMBINATION RESULTS IN COMPLETE PORTFOLIO OF GROUP BUSINESSES 2016 Group Dental Partnership Life & Disability & Vision Voluntary Stop Loss Business COMBINED BUSINESS: COMBINED BUSINESS: COMBINED BUSINESS: COMBINED BUSINESS: Disability RMS: • BIF: US$1.7 billion • BIF: US$0.6 billion • BI
Slide 20: SLF Asia: Sales Growth, Expanded Footprint
SLF ASIA Q1 SALES GROWTH, EXPANDED FOOTPRINT 2016 UNDERLYING NET INCOME INDIVIDUAL LIFE AND Q1’16 HIGHLIGHTS (C$MILLIONS) HEALTH INSURANCE SALES (2) Strengthened presence in Asia, by (C$MILLIONS) increasing ownership levels in India, Vietnam and Indonesia and investment in the Mandatory Provident
Slide 21: Building Asia's Most Respected Agency
SLF ASIA Q1 BUILDING ASIA’S MOST RESPECTED AGENCY 2016 CHINA 1,616 HONG KONG 1,921 VIETNAM 1,991 INDIA PHILIPPINES 67,704 7,746 INDONESIA 9,783 21
Slide 22: Deliberate Capital and Cash Allocation
SUN LIFE FINANCIAL Q1 DELIBERATE CAPITAL AND CASH ALLOCATION 2016 DATE AMOUNT APPLICATION RESULTS Q2 2013 $300 million Acquisition of Malaysia business Meeting business case expectations Click to edit Q4 2013 Master title $250 million style Restructure of U.S. reinsurance arrangement $480 million of
Slide 23: Strong Capital and Financial Position
SUN LIFE FINANCIAL Q1 STRONG CAPITAL AND FINANCIAL POSITION 2016 MCCSR RATIO – SUN LIFE • $1 billion cash level at Sun Life Financial Inc. as at ASSURANCE COMPANY OF March 31, 2016 Click to edit Master title style CANADA • $500 million minimum cash target Financial Strength Rating Sun Life Assurance
Slide 24: Capital Model
SUN LIFE FINANCIAL Q1 CAPITAL MODEL 2016 $1 billion cash at Holding Company(1) SLF MCCSR of 231% Click to edit Master title style Sun Life Asset SLA MCCSR of 216% Management Sun Life MFS Investment Management U.S. U.K. Canada Bermuda Asia Branch Book value excl. from MCCSR Capitalized to meet local
Slide 25: Assets Under Management
SUN LIFE FINANCIAL Q1 SUN LIFE ASSETS UNDER MANAGEMENT 2016 Click to edit Master title style 25
Slide 26: Quality Asset Portfolio
SUN LIFE FINANCIAL Q1 QUALITY ASSET PORTFOLIO 2016 Q1’16 INVESTED ASSETS (C$139 billion) Investment portfolio is well diversified Equities by geography, asset class, industry Click to edit Master title style 4% Investment sector or issuer Properties 5% High quality asset base Other 6% Cash & Deb
Slide 27: Energy Exposure
SUN LIFE FINANCIAL Q1 ENERGY EXPOSURE 2016 Debt Securities & Corporate Loan Carrying Value by Rating Highlights (as of March 31, 2016) Click to$5.4 edit Master title debt style Credit BB and AAA AA A BBB Total of billion in energy securities Quality Below and corporate loans, 4% of total invested %
Slide 28: Sustainable, Healthier Communities for Life
SUN LIFE FINANCIAL Q1 SUSTAINABLE, HEALTHIER COMMUNITIES FOR LIFE 2016 Sun Life has been named one of 12 Canadian companies Sun Life Financial is one of 2016 Global 100 Most In December 2014, Sun Life Assurance Company of and the only North American life insurer to be included in Sustainable Corpora
Slide 29: 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 these measures pr
Slide 30: Information Regarding SLGI Mutual Funds
Information Regarding SLGI Mutual Funds On April 2, 2012, the Sun Life Granite Conservative Portfolio underwent a merger that was a material change for the fund under applicable securities laws. Sun Life Granite Managed Solutions invest in mutual funds Portfolio Conservative Moderate Balanced Balanc
Slide 31: Forward-Looking Statements
Forward-Looking Statements Certain statements in this presentation, including statements (i) relating to our growth strategies, (ii) statements concerning our medium-term financial objectives, (iii) statements relating to productivity and expense initiatives, growth initiatives and other business ob
Slide 32: Financial Objectives
Financial Objectives Our 2015 overall company financial objectives, as updated in 2013, were operating net income of $1.85 billion and operating ROE of 12%-13%. Our 2015 results exceeded our net income objective with operating net income of $2.25 billion, and we achieved our objective with an ROE of