Sun Life Financial Inc. · TSX:SLF
Sun Life Financial — Q4 2001 Earnings Presentation
24 slides from Sun Life Financial's earnings presentation, Feb 4, 2002
Slide 1: Presentation to Analysts and Investors
Presentation to Analysts and Investors Fourth Quarter 2001 February 4, 2002
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: Non-solicitation Caution
Non-solicitation Caution Certain aspects of this presentation relate to Sun Life Financial’s proposed combination with Clarica Life Insurance Company. This presentation does not constitute an offer to sell or a solicitation of an offer to exchange any securities, or the solicitation of a proxy from
Slide 4: Fourth Quarter and 2001 - Highlights
Fourth Quarter and 2001 - Highlights · Record quarter to finish a record year, despite equity market challenges · Strong progress from Keyport/IFMG integration · Effective cost control · MFS continues to increase market share · Decisive actions in U.K. raise returns to acceptable levels 4
Slide 5: Shareholders' Net Income
Shareholders’ Net Income ($ Millions) 1,366 1,273 1,234 S&P 500 (average) 1,154 1,115 253 10 211 212 215 202 243 Q4/00 Q1/01 Q2/01 Q3/01 Q4/01 5 Non-recurring gains
Slide 6: Non-Recurring Items
Non-Recurring Items ($ Millions) Sale of U.K. Assets Net proceeds 386 Net gains 125 U.K. outsourcing and restructuring related costs (88) Subordinated debt redemption costs (30) Net gains after charges 7 Accounting Policy Changes 3 Total Non-Recurring Gains 10 EPS Impact $0.02/share 6
Slide 7: Financial Performance
Financial Performance EPS ROE* 0.59 0.60 16.0% 0.02 0.55 0.51 0.57 0.50 0.50 14.0% 0.50 0.48 0.45 12.0% 0.40 0.35 10.0% Q4/00 Q1/01 Q2/01 Q3/01 Q4/01 EPS 0.50 0.48 0.50 0.51 0.59 ROE* 13.2% 12.3% 12.6% 12.5% 13.4% Non-recurring gains ROE for periods prior to Q4 2001 has been restated to reflect the
Slide 8: Premiums and Segregated Fund Deposits
Premiums and Segregated Fund Deposits ($ Billions) 5.4 4.8 4.5 4.0 3.2 Q4/00 Q1/01 Q2/01 Q3/01 Q4/01 Segregated Fund 2.9 1.9 1.5 1.0 1.5 Deposits Premiums 2.3 2.6 2.2 1.9 2.7 ASO Premium 0.2 0.3 0.3 0.3 0.3 Equivalents* * Represents in-force Administrative Services Only (ASO) premium equivalents. 8
Slide 9: First Year Annualized Premiums
First Year Annualized Premiums ($ Millions) Individual Life Group Life & Health 170 202 138 130 129 116 122 74 66 53 Q4/00 Q1/01 Q2/01 Q3/01 Q4/01 Q4/00 Q1/01 Q2/01 Q3/01 Q4/01 Canada 43 39 23 26 21 Canada 20 13 16 14 18 -ASO 10 73 21 20 12 US (1) 80 28 47 37 157 US 80 51 77 64 86 Asia 22 12 11 15 2
Slide 10: Assets Under Management
Assets Under Management ($ Billions) 329 326 352 316 299 Q4/00 Q1/01 Q2/01 Q3/01 Q4/01 Mutual Funds 163 152 158 137 153 Managed Funds and 61 61 66 61 70 Other Segregated Funds 50 46 46 43 49 General Funds 55 57 56 58 80 10
Slide 11: Total Net Fund Sales
Total Net Fund Sales Net New Sales Market and Currency ($ Billions) Movements ($ Billions) 13.1 26.4 3.8 8.2 8.1 4.1 3.3 -26.1 -26.6 -33.6 Q4/00 Q1/01 Q2/01 Q3/01 Q4/01 Q4/00 Q1/01 Q2/01 Q3/01 Q4/01 Mutual Funds Mutual Funds -17.9 -17.0 2.1 -21.2 15.8 Gross New Sales 10.6 12.3 10.3 8.1 8.7 Redemptio
Slide 12: MFS - Continued Net New Flows
MFS - Continued Net New Flows NET NEW FLOWS NET NEW FLOWS (Non-Proprietary Channel) (Overall Industry) Year to Date Year to Date December 31, 2001 $US Billions December 31, 2001 $US Billions American Funds 23.2 Vanguard 33.5 PIMCO Funds 7.9 American Funds 23.2 MFS 6.3 PIMCO Funds 14.2 Oppenheimer Fu
Slide 13: U.S. Annuity Sales
U.S. Annuity Sales (US$ Millions) 1,441 1,007 1,022 791 540 Q4/00 Q1/01 Q2/01 Q3/01 Q4/01 Gross Sales Variable Annuity Offshore 130 85 97 66 72 Multi-Manager 196 228 203 156 355 Single Manager 1,115 709 491 318 287 Fixed Annuity - - - - 293 Total 1,441 1,022 791 540 1,007 Redemptions/Surrenders 529
Slide 14: Revenue
Revenue ($ Millions) 4,885 4,333 4,036 3,945 3,526 Q4/00 Q1/01 Q2/01 Q3/01 Q4/01 Fee Income 855 831 819 762 803 Investment Income 892 941 925 891 1,363 Life & Health Premiums 1,247 1,302 1,256 1,216 1,384 Annuity Premiums 1,042 1,259 945 657 1,335 14
Slide 15: Operating Expenses
Operating Expenses ($ Millions) Total (Non-MFS) MFS $500 40% $350 390 $400 366 357 357 297 30% 280 60% 298 263 249 $300 236 20% $225 $200 40% 10% $100 $100 20% $0 0% Q4/00 Q1/01 Q3/01 Q4/01 Q4/00 Q1/01 Q2/01 Q3/01 Q4/01 Operating 390 366 357 298 357 Operating 297 280 236 249 Expenses Expenses Exp. R
Slide 16: Financial Strength
Financial Strength Debt to Total Capital MCCSR 25.8%* 295% 299% 288% 284% 20.2% 20.2% 19.8% 190% 19.3% Q4/00 Q1/01 Q2/01 Q3/01 Q4/01 Q4/00 Q1/01 Q2/01 Q3/01 Q4/01 * Includes SLEECS as part of debt capital. 16
Slide 17: Financial Results by Country
Financial Results by Country 17
Slide 18: Canadian Operations
Canadian Operations ($ Millions) 1,200 70 800 Revenue Net Income 50 400 0 30 Q4/00 Q1/01 Q2/01 Q3/01 Q4/01 Revenue 927 1,030 932 896 997 Net Income 62 49 55 51 57 ROE 15.8% 13.6% 17.6% 16.5% 18.6% 18
Slide 19: U.S. Annuity and Insurance Operations
U.S. Annuity and Insurance Operations ($ Millions) 100 2,500 2,000 80 Net Income Revenue 1,500 60 1,000 40 500 0 20 Q4/00 Q1/01 Q2/01 Q3/01 Q4/01 Revenue 1,858 2,021 1,755 1,528 2,507 Net Income 43 50 27 55 90 ROE 13.7% 15.8% 7.7% 15.1% 10.6% 19
Slide 20: MFS
MFS Assets Under Management Net Income* & ROE ($ Billions) 1,366 (average) S&P 500 1,273 1,234 1,154 1,115 221 220 218 209 65 192 60 58 58 50 Net Income ($ Millions) Q4/00 Q1/01 Q2/01 Q3/01 Q4/01 Q4/00 Q1/01 Q2/01 Q3/01 Q4/01 Net Income 60 58 65 58 50 Mutual Funds 153 143 149 129 146 ROE 75.1% 76.6%
Slide 21: U.K. Operations
U.K. Operations ($ Millions) 600 60 400 Net Income Revenue 40 200 0 20 Q4/00 Q1/01 Q2/01 Q3/01 Q4/01 Revenue 505 557 538 449 523 Net Income 37 39 50 37 54 ROE* 13.7% 13.9% 17.5% 12.2% 19.9% * As restated for periods prior to Q4 2001. 21
Slide 22: Asia Operations
Asia Operations ($ Millions) 150 15 10 100 Net Income Revenue 5 50 0 0 -5 Q4/00 Q1/01 Q2/01 Q3/01 Q4/01 Revenue 115 103 106 107 148 Net Income 6 8 10 3 -1 ROE 6.0% 7.5% 8.6% 2.5% -0.8% 22
Slide 23: Summary
Summary · Keyport acquisition making tangible contribution to performance · Prudent cost control offsets revenue pressures · Market share growth continues at MFS · Record year and quarter in a challenging environment · Strong finish with specific action plans to drive next leg of earnings growth 23
Slide 24: Sun Life Financial
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