Sun Life Financial Inc. · TSX:SLF
Sun Life Financial — Q2 2001 Earnings Presentation
23 slides from Sun Life Financial's earnings presentation, Jul 25, 2001
Slide 1: Presentation to Analysts and Investors
Presentation to Analysts and Investors Second Quarter 2001 July 25, 2001
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: Second Quarter 2001 - Highlights
Second Quarter 2001 - Highlights • Record net income of $212 million • Protection businesses in North America stabilize aggregate earnings • Diligent cost control offsets challenge from equity market valuations • MFS sales growth remains robust • Underemployed “Keyport equity” restrains ROE growth 3
Slide 4: Shareholders' Net Income
Shareholders’ Net Income ($ Millions) 211 212 203 202 197 Q2/00 Q3/00 Q4/00 Q1/01 Q2/01 4
Slide 5: Financial Performance - EPS up 6%
Financial Performance - EPS up 6% EPS ROE $0.55 18% 0.50 0.50 16% 0.48 0.48 0.47 $0.45 14% 12% $0.35 10% Q2/00 Q3/00 Q4/00 Q1/01 Q2/01 EPS 0.47 0.48 0.50 0.48 0.50 ROE 12.9% 12.8% 12.9% 12.0% 12.3% 5
Slide 6: Premiums and Segregated Fund Deposits
Premiums and Segregated Fund Deposits ($ Billions) 5.4 4.8 4.7 4.8 4.0 Q2/00 Q3/00 Q4/00 Q1/01 Q2/01 Segregated Fund 2.2 2.1 2.9 1.9 1.5 Deposits Premiums 2.4 2.4 2.3 2.6 2.2 ASO Premium 0.2 0.2 0.2 0.3 0.3 Equivalents* * Represents in-force Administrative Services Only (ASO) premium equivalents. 6
Slide 7: First Year Annualized Premiums
First Year Annualized Premiums ($ Millions) Individual Life (1) Group Life & Health 170 133 122 138 130 99 81 88 74 53 Q2/00 Q3/00 Q4/00 Q1/01 Q2/01 Q2/00 Q3/00 Q4/00 Q1/01 Q2/01 Canada 26 38 43 39 23 Canada 16 13 20 13 16 - ASO 8 10 10 73 21 US (2) 104 55 80 28 47 US 49 45 80 51 77 Asia 13 13 22 12
Slide 8: Assets Under Management
Assets Under Management ($ Billions) 345 329 330 316 326 Q2/00 Q3/00 Q4/00 Q1/01 Q2/01 Mutual Funds 170 177 163 152 158 Managed Funds and 58 63 61 61 66 Other Segregated Funds 49 50 49 45 46 General Funds 53 55 56 58 56 8
Slide 9: Total Net Fund Sales
Total Net Fund Sales Net New Sales Market and Currency Movements ($ Billions) ($ Billions) 13.1 9.0 8.9 4.6 3.8 8.2 8.1 -1.7 -26.1 -26.6 Q2/00 Q3/00 Q4/00 Q1/01 Q2/01 Q2/00 Q3/00 Q4/00 Q1/01 Q2/01 Mutual Funds Gross New Sales 11.5 11.2 10.6 12.3 10.3 Mutual Funds -1.8 2.2 -17.9 -17.0 2.1 Redemptions
Slide 10: MFS - Continued Strong Net New Flows
MFS - Continued Strong Net New Flows NET NEW FLOWS NET NEW FLOWS (Non-Proprietary Channel) (Overall Industry) Year to Date Year to Date May 31, 2001 $US Billions May 31, 2001 $US Billions American Funds 8.2 Vanguard 15.1 MFS 4.6 American Funds 8.2 Davis-Selected Adv 3.1 PIMCO Funds 6.4 PIMCO Funds 2
Slide 11: U.S. Variable Annuity Sales
U.S. Variable Annuity Sales (US$ Millions) 1,441 1,248 1,022 918 791 Q 2/00 Q 3/00 Q 4/00 Q 1/01 Q 2/01 Gross S al e s O ffs h ore 172 158 130 85 97 Mu l ti -Man age r 203 261 196 228 203 S i n gl e Man age r 543 829 1,115 709 491 Total 918 1,248 1,441 1,022 791 Re de m pti on s 530 548 529 535 508
Slide 12: Revenue
Revenue ($ Millions) 4,249 4,333 4,172 4,036 3,945 Q2/00 Q3/00 Q4/00 Q1/01 Q2/01 Fee Income 812 868 855 831 819 Investment Income 980 929 892 941 925 Life & Health 1,231 1,133 1,247 1,302 1,256 Premiums Annuity Premiums 1,149 1,319 1,042 1,259 945 12
Slide 13: Staffing Levels
Staffing Levels (FTE’s) 8,413 8,543 8,438 8,322 8,289 Q2/00 Q3/00 Q4/00 Q1/01 Q2/01 Canada 3,407 3,382 3,488 3,566 3,600 US 1,738 1,743 1,780 1,810 1,881 UK 1,557 1,543 1,464 1,436 1,177 Asia 797 819 878 911 962 Corporate & Other 823 802 803 820 818 Non MFS 8,322 8,289 8,413 8,543 8,438 MFS 2,629 2,
Slide 14: Operating Expenses
Operating Expenses ($ Millions) Total (Non-MFS) MFS $500 40% $350 390 297 $400 283 280 60% 366 357 267 30% 263 325 308 $300 $225 40% 20% $200 $100 20% $100 10% Q2/00 Q3/00 Q4/00 Q1/01 Q2/01 Q2/00 Q3/00 Q4/00 Q1/01 Q2/01 Operating 325 308 390 366 357 Operating 267 283 297 280 263 Expenses* Expenses*
Slide 15: Financial Strength
Financial Strength Debt to Total Capital MCCSR 299% 20.4% 20.2% 291% 290% 295% 288% 19.8% 19.7% 19.4% Q2/00 Q3/00 Q4/00 Q1/01 Q2/01 Q2/00 Q3/00 Q4/00 Q1/01 Q2/01 15
Slide 16: Financial Results by Country
Financial Results by Country 16
Slide 17: Canadian Operations
Canadian Operations ($ Millions) Revenue Net Income 1,008 1,030 980 70 1,000 927 932 60 750 50 500 250 40 0 30 Q2/00 Q3/00 Q4/00 Q1/01 Q2/01 Revenue 1,008 980 927 1,030 932 Actual Net Income 42 45 62 49 55 . 17
Slide 18: U.S. Annuity and Insurance Operations
U.S. Annuity and Insurance Operations ($ Millions) Revenue Net Income 2,021 1,996 2,000 1,846 1,858 1,755 80 1,500 60 1,000 40 500 20 0 0 Q2/00 Q3/00 Q4/00 Q1/01 Q2/01 Revenue 1,846 1,996 1,858 2,021 1,755 Actual Net Income 58 63 43 50 27 18
Slide 19: MFS
MFS Assets Under Management Net Income* ($ Billions) ($ Millions) 238 225 221 209 220 72 62 65 60 58 Q2/00 Q3/00 Q4/00 Q1/01 Q2/01 Q2/00 Q3/00 Q4/00 Q1/01 Q2/01 Mutual Funds 160 167 153 143 149 Managed 65 71 68 66 71 Funds * Represents Sun Life’s share of MFS total earnings. 19
Slide 20: U.K. Operations
U.K. Operations ($ Millions) Revenue Net Income 800 700 70 620 600 546 557 538 505 500 50 400 300 30 200 100 0 10 Q2/00 Q3/00 Q4/00 Q1/01 Q2/01 Revenue 620 546 505 557 538 Actual Net Income 33 32 37 39 50 20
Slide 21: Asia Operations
Asia Operations ($ Millions) Revenue Net Income 140 20 115 103 103 106 105 100 15 70 10 35 5 0 0 Q2/00 Q3/00 Q4/00 Q1/01 Q2/01 Revenue 100 103 115 103 106 Actual Net Income 5 9 6 8 10 21
Slide 22: Summary
Summary • A solid quarter despite market pressures on wealth management businesses • Protection businesses in North America stabilized aggregate performance • MFS continues to capture incremental market share • Efficiency measures contribute to performance • US Variable annuity business down due to
Slide 23: Alda
Alda Sun “ ww: Life Financial