Sun Life Financial Inc. · TSX:SLF
Sun Life Financial — Q4 2021 Earnings Presentation
21 slides from Sun Life Financial's earnings presentation, Feb 10, 2022
Slide 1: Q4 & Full Year 2021 Financial & Operating Results
Q4 & Full Year 2021 Financial & Operating Results For the period ended December 31, 2021 Sun Life Financial Inc. (unaudited)
Slide 2: Forward-looking statements and non-IFRS measures
In this presentation, Sun Life Financial Inc. (“SLF” or “SLF Inc.”), its subsidiaries and, where applicable, its joint ventures and associates are referred to as “we”, “us”, “our”, “Sun Life” and the “Company”. Forward-looking statements Certain statements in this presentation and certain oral state
Slide 3: Kevin Strain, President and Chief Executive Officer
Kevin Strain President and Chief Executive Officer S U N L I F E • Q 4 2 0 2 1 3
Slide 4: Fourth quarter financial highlights
Fourth quarter financial highlights Executing on our ambition to be one of the best asset management and insurance companies globally Earnings Growth Financial Strength $1,078M $898M 145% 25.5% +45% +4% (2)pp +2pp Reported net income Underlying net income1 SLF Inc. LICAT ratio2 Financial leverage ra
Slide 5: Strong full year results
Strong full year results Full year 2021 results (vs . 2020) $3.9B +64% 17.1% +630bps $3.7B +5% $1.3B +17% Reported net income Reported ROE Insurance sales1 Value of New Business1 $3.5B +10% 15.4% +100bps $228B +3% $1.4T +15% Underlying net income Underlying ROE Wealth sales1 Assets Under Management
Slide 6: Strategic progress driving Client impact
Our Purpose: Help Clients achieve Strategic progress driving Client impact ❖ Surfaced shareholder value through the IPO of our India asset management joint venture 1 lifetime financial security and live healthier lives ❖ MFS delivered strong fund performance 2 for Clients throughout the year; mainta
Slide 7: Digital leadership
Digital leadership Thinking and acting like a digital company DIGITAL EXPERIENCES Creating meaningful digital experiences to drive Client impact DIGITAL CAPABILITIES Scaling our capabilities through modern technology DIGITAL WAYS OF WORKING Empowering our people to support our digital journey Digita
Slide 8: Manjit Singh, Executive Vice President & Chief Financial Officer
Manjit Singh Executive Vice President & Chief Financial Officer S U N L I F E • Q 4 2 0 2 1 8
Slide 9: Q4 2021 results
Q4 2021 results PROFITABILITY Q4’21 Q3’21 Q4’20 YoY Change Solid results driven by diversified business mix Reported net income ($ millions) 1,078 1,019 744 45% Strong contributions from wealth and Underlying net income ($ millions) 898 902 862 4% record Asset Management underlying Reported EPS ($)2
Slide 10: Business group performance
Business group performance Reported net income ($ millions) Underlying net income ($ millions) Impact of currency translation decreased reported net income by $33M1 Impact of currency translation decreased underlying net income by $22M 1 (48)% +40% (3)% +238% +15% +9% (51)% +12% Constant currency1,2
Slide 11: Sources of earnings
Sources of earnings Sources of earnings (SOE)1 Reported Underlying Common shareholders SOE highlights $ millions, pre-tax Q4’21 Q4’20 Q4’21 Q4’20 Expected profit on in-force business excluding Asset Mgmt.2 547 531 547 531 • Expected profit up 6% in constant currency 6 , driven by business growth and
Slide 12: Sales results by business group
Sales results by business group (in constant currency1) Insurance Wealth and Asset Management Individual sales Wealth sales [excluding AM] ($ millions) ($ millions) In line +21% $513 $510 $9,963 $8,244 Value of new business2 Asia $494M Asia Canada Canada +19% YoY MFS Q4'20 Q4'21 U.S. in constant Q4'
Slide 13: Strong execution positions us well for future growth
Strong execution positions us well for future growth Medium-term objectives1 Strong capital position 1-Year 5-Year2 Underlying ROE 16%+ 15.4% 14.2% 145% SLF Inc. LICAT ratio4 Underlying SLF Inc. cash and EPS growth 8-10% 10% 10% $4.7B other liquid assets5 (approx. $3.5B earmarked for DentaQuest acqu
Slide 14: Appendix
SUN LIFE & ‘Appendix Q4 2021 14
Slide 15: Operating expenses
Operating expenses Increase driven by business growth and investments, and the impact of acquisitions ($ millions) Increases in controllable 68 expenses and contractual 62 206 volumes driven by: 71 • Higher compensation costs 2,441 reflecting strong performance in Asset 2,090 Management and good bus
Slide 16: Reconciliation of underlying net income
Reconciliation of underlying net income Q4’21 Q4’21 $ millions Pre-tax Post-tax Reported net income 1,078 Net equity market impact (including basis risk impact of$10 million)1 140 107 Net interest rate impact (including credit spread impact of $3 million and swap spread impact of $(4))1 (88) (36) Im
Slide 17: SOE experience gains/(losses) - details
SOE1 experience gains/ (losses) - details Q4’21 Q4’20 Q4’21 Q4’20 $ millions Pre-tax Pre-tax Post-tax Post-tax Net equity market impact 140 141 107 108 Net interest rate impact 2 (88) (188) (35) (74) Impact of changes in the fair value of investment properties2 102 (22) 85 (18) Market-Related Impact
Slide 18: Market movements and impacts in the quarter
Market movements and impacts in the quarter Market Movements Q4’21 Q3’21 Q4’20 Equity Market Impacts Q4’21 Q3’21 Q4’20 ($millions, post-tax) S&P/ TSX +5.7% (0.5)% +8.1% Equity market movement and volatility 97 19 122 S&P 500 +10.6% +0.2% +11.7% Basis risk 10 5 (14) CA 10 - year (8) bps +12 bps +12 b
Slide 19: 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 resul ts from pe
Slide 20: Risk Factors
Risk Factors Important risk factors that could cause our assumptions and estimates, and expectations and projections to be inaccurate and our actual results or events to differ materially from those expressed in or implied by the forward-looking statements contained in this presentation, are set out
Slide 21: Footnotes continued
Footnotes continued From slide 9 2 All EPS measures refer to fully diluted EPS, unless otherwise stated. 3 Effective January 1, 2021, the methodology for gross flows and outflows was updated for SLC Management. Prior period amounts have not been updated. For more details, see the Non-IFRS Financial