Sun Life Financial Inc. · TSX:SLF
Sun Life Financial — Q4 2020 Earnings Presentation
20 slides from Sun Life Financial's earnings presentation, Feb 11, 2021
Slide 1: Q4 & Full Year 2020 Financial & Operating Results
Q4 & Full Year 2020 Financial & Operating Results For the period ended December 31, 2020 Sun Life Financial Inc. (unaudited)
Slide 2: Forward-looking statements and non-IFRS financial 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: Dean Connor, President and Chief Executive Officer
Dean Connor President and Chief Executive Officer S U N L I F E • Q 4 2 0 2 0 3
Slide 4: Fourth quarter key highlights
Fourth quarter key highlights Executing on our ambition to be one of the best insurance and asset management companies globally Financial (vs. Q4 2019) Accomplishments $744M $862M US$610B AUM(1) at MFS MFS US$1.5B net flows and pre-tax net (1) operating profit margin ratio of 41.3% +3% +9% Reported
Slide 5: Digital achievements across our businesses
Digital achievements across our businesses Digital enterprise is the next step in the evolution of our Client strategy, bringing the business and IT closer than ever before and transforming the way we work Ella, our digital coach, proactively New digital tools and updates on the Sun Launched a
Slide 6: Solid 2020 results in a challenging year
Solid 2020 results in a challenging year Full year 2020 results Business Group highlights 5-year total (vs. 2019) shareholder return(1) US$13.1B Net flows at MFS (at December 31, 2020) $2.4B (8)% $3.5B (1)% Underlying net income(2) $94M Sun Life 9.6% Reported net income Insurance sales(2) at SLC Man
Slide 7: Clients at the centre of everything we do
Clients at the centre of everything we do Introduced virtual health care services through Lumino Health Virtual care, powered by Dialogue; CAN extended premium deferrals, provided dental and paramedical premiums credits to sponsors during the initial lockdown, and held 164,000+ virtual advisor-Cli
Slide 8: Kevin Strain, Executive Vice President & Chief Financial Officer
KEVIN STRAIN Executive Vice President & Chief Financial Officer S U N L I F E • Q 4 2 0 2 0 8
Slide 9: Q4 2020 results
Q4 2020 results Capital management $ millions YoY (except EPS, ROE, AUM, Book value per Q4’20 Q3’20 Q4’19 Change share) 147% SLF LICAT ratio(3) Reported net income 744 750 719 3% 127% SLA LICAT ratio(3) Underlying net income(1) 862 842 792 9% Reported EPS(2) 1.27 1.28 1.22 4% Underlying EPS(1)(2) 1.
Slide 10: Business group performance
Business group performance Reported net income ($ millions) Underlying net income(1) ($ millions) Impact of currency decreased reported net income by $1M Impact of currency decreased underlying net income by $3M 275 267 255 228 333 264 243 281 131 136 132 88 137 148 143 116 2 22 CAN U.S. AM ASIA CAN
Slide 11: Sources of earnings
Sources of earnings Sources of earnings Common shareholders Q4’20 Q4’19 $ millions Expected profit: continued growth in all business groups, with particular strength in Canada and Asset Management Expected profit on in-force business 985 849 Impact of new business: benefiting from higher sales in Ho
Slide 12: Sales results by business group
Sales results by business group Insurance sales by business(1) Wealth sales by business(1) $1,425M $51.6B +2% YoY +15% YoY Value of new business(1)(2) Canada U.S. Asia $293M Asset Management Canada Asia (13)% YoY Canada insurance sales decreased by 18%, from lower sales in Asset Management sales
Slide 13: Operating expenses
Operating expenses Expenses up 4% on a constant currency basis ($ millions) 7,401 Year-to-date controllable expenses 7,033 increased 2% Q4 YTD Controllable Contractual Currency Other Restructuring Impact of Fair Value Q4 YTD 2019 Expenses Volumes Acquisitions Adjustments 2020 S U N L I F E • Q 4 2 0
Slide 14: Delivering on medium-term objectives
Delivering on medium-term objectives Starting 2021 from a position of strength 1-Year 5-Year(2) Strong capital position Underlying Q4 Actual [Proforma3] ROE(1) 14.4% 13.5% 12-14% 147% [141%] SLF LICAT ratio Underlying EPS growth(1) 8-10% 6% 8% $3.1B [$2.4B] Cash at the holding company (4) Dividend $
Slide 15: Appendix
Appendix S U N L I F E • Q 4 2 0 2 0 15
Slide 16: Reconciliation of underlying net income
Reconciliation of underlying net income Q4’20 Q4’20 $ millions Pre-tax Post-tax Reported net income 744 Net equity market impact (including basis risk impact of $(14) million)(1) 141 108 Net interest rate impact (including credit spread impact of $(63) and swap spread impact of $(16) million)(1) (18
Slide 17: Other notable items
Other notable items Impact of other items on our net income Q4’20 Q4’20 $ millions Pre-tax Post-tax Experience related items Impact of investment activity on insurance contract liabilities (4) 3 Credit 24 18 Mortality (12) (4) Morbidity 28 24 Lapse and other policyholder behaviour (20) (18) Expenses
Slide 18: Market movements and impacts in the quarter
Market movements and impacts in the quarter Market Movements QTD YTD Equity Market Impacts Q4’20 Q3’20 Q2’20 Q1’20 December 31, 2020 December 31, 2020 ($millions, post-tax) S&P/ TSX +8.1% +2.2% Equity market movement and 122 42 105 (303) volatility S&P 500 +11.7% +16.3% Basis risk (14) 8 (46) (57) C
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 results from per
Slide 20: 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