Sun Life Financial Inc. · TSX:SLF
Sun Life Financial — Q3 2021 Earnings Presentation
20 slides from Sun Life Financial's earnings presentation, Nov 4, 2021
Slide 1: Q3 2021 Financial & Operating Results
Q3 2021 Financial & Operating Results For the period ended September 30, 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 3 2 0 2 1 3
Slide 4: Refreshing our Client strategy and executing on our Purpose
Refreshing our Client strategy Help Clients achieve lifetime financial security and live healthier lives and executing on our Purpose Four Pillar Strategy Key Priorities A global leader in both public and AM alternative asset classes through 1 Think and act like a digital company MFS and SLC Managem
Slide 5: Strategic progress driving Client impact
Strategic progress driving Client impact St rategic Highlights D igital Leadership Our Purpose: Help Clients CANADA Ella, our digital coach, connected with Clients over achieve lifetime financial ✓ Announced intention to ac quire 13 million times so far in 2021, driving an additional DentaQuest1,2,
Slide 6: Business mix shift and strong execution support an increase in our underlying ROE objective
Business mix shift and strong execution support an increase in our underlying ROE1 objective We’ve shifted our mix to capital-light Strong track-record of execution on and lower interest sensitive businesses our medium-term financial objectives Mix as % of Medium-term 5-year 2021 2012 20202 Underlyi
Slide 7: Third quarter financial highlights
Third quarter financial highlights Executing on our ambition to be one of the best asset management and insurance companies globally Earnings Growth Financial Strength $1,019M $902M 143% 22.2% +36% +7% (1)pp +0.7pp Reported net income Underlying net income1 SLF Inc. LICAT ratio2 Financial leverage r
Slide 8: Manjit Singh, Executive Vice President & Chief Financial Officer
Manjit Singh Executive Vice President & Chief Financial Officer S U N L I F E • Q 3 2 0 2 1 8
Slide 9: Q3 2021 results
Q3 2021 results PROFITABILITY Q3’21 Q2’21 Q3’20 YoY Change Strong results driven by a diversified business mix Reported net income ($ millions) 1,019 900 750 36% Underlying net income ($ millions)1 902 883 842 7% Strong contributions from wealth and asset management businesses, more Reported EPS ($)
Slide 10: Business group performance
Business group performance Reported net income ($ millions) Underlying net income1 ($ millions) Impact of currency translation decreased reported net income by $41M Impact of currency translation decreased underlying net income by $36M +2% +141% +20% +22% (1)% (19)% +23% (12)% Constant currency +2%
Slide 11: Sources of earnings
Sources of earnings Sources of earnings Common shareholders Q3’21 Q3’20 Expected profit: up 12% (17% in constant currency) driven by $ millions growth in Asset Management, higher fee income in Canada and Asia Wealth businesses Expected profit on in-force business1 1,036 926 Impact of new business1 6
Slide 12: Sales results by business group
Sales results by business group (in constant currency) Insurance Wealth and Asset Management Individual sales1 Wealth sales1 [excluding AM] ($ millions) ($ millions) +7% (7)% $10,312 $9,618 $378 $350 Value of new business1,2 Asia Asia Canada $290M Canada Q3'20 Q3'21 +14% YoY Q3'20 Q3'21 MFS U.S. in
Slide 13: Operating expenses
Operating expenses Increase driven by business growth, higher compensation costs, and the impact of acquisitions Increases in controllable (76) 87 6 expenses and contractual 107 85 ($ millions) volumes driven by: • Higher compensation costs 2,016 reflecting strong revenue 1,807 growth and overall pe
Slide 14: Appendix
SUN LIFE & ‘Appendix Q3 2021 14
Slide 15: Reconciliation of underlying net income
Reconciliation of underlying net income Q3’21 Q3’21 $ millions Pre-tax Post-tax Reported net income 1,019 Net equity market impact (including basis risk impact of$5 million)1 37 24 Net interest rate impact (including credit spread impact of $4 million and swap spread impact of $0)1 31 2 Impact of ch
Slide 16: SOE experience gains/(losses) - details
SOE experience gains/ (losses) - details Q3’21 Q3’20 Q3’21 Q3’20 $ millions Pre-tax Pre-tax Post-tax Post-tax Net equity market impact 37 65 24 50 Net interest rate impact 31 (68) 2 (14) Impact of changes in the fair value of investment properties1 153 (42) 137 (34) Market-Related Impacts 1 221 (45)
Slide 17: Market movements and impacts in the quarter
Market movements and impacts in the quarter Market Movements Q3’21 Q2’21 Q3’20 Equity Market Impacts Q3’21 Q2’21 Q3’20 ($millions, post-tax) S&P/ TSX (0.5)% +7.8% +3.9% Equity market movement and volatility 19 95 42 S&P 500 +0.2% +8.2% +8.5% Basis risk 5 4 8 CA 10 - year +12 bps (17) bps +3 bps Tota
Slide 18: 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 19: Forward-Looking Statements
Forward-Looking Statements From time to time, the Company makes written or oral forward-looking statements within the meaning of certain securities laws, including the “safe harbour” provisions of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities l
Slide 20: Footnotes
Footnotes From slide 5 1 See “Forward-looking Statements” on slide 19. 2 DentaQuest Group, Inc. (“DentaQuest”). 3 Net-zero greenhouse gas emissions by 2050. 4 Aditya Birla Sun Life AMC Limited (ABSLAMC) IPO subscription included a three day offer period between September 29 and October 1, 2021. 5 Su