Manulife Financial Corporation · TSX:MFC
Manulife Financial — Q2 2004 Earnings Presentation
22 slides from Manulife Financial's earnings presentation, Aug 12, 2004
Slide 1: Investor Presentation
Investor Presentation Peter Rubenovitch Senior Executive Vice President & Chief Financial Officer August 12, 2004 Montreal, Canada
Slide 2: A Global Insurance Leader
A Global Insurance Leader [7 Manulife Financial &
Slide 3: Integration on Track
Integration on Track • On target to complete restructuring by YE 2005 • About 120 distinct integration projects in progress • Expect to achieve or slightly exceed targeted expense synergies of US$255m • Leveraging significant revenue synergies • Essex and Signator channels selling Manulife variable
Slide 4: Purchase Equation
Purchase Equation • John Hancock assets and liabilities fair valued at closing • Other than actuarial liabilities, fair values largely consistent with Hancock’s previous practices • Fair valuing of actuarial liabilities required elimination of DAC, VOBA, and actuarial reserves – replacement with rev
Slide 5: Purchase Balance Sheet
Purchase Balance Sheet Canadian GAAP US$ Millions C$ Millions ASSETS Invested assets $77,805 $106,647 Intangible assets 1,489 2,041 Goodwill 5,429 7,441 Other assets 3,313 4,542 Total assets acquired 88,036 120,671 LIABILITIES Actuarial liabilities 66,700 91,426 Policyholder benefits and amounts on
Slide 6: Restructuring Costs & Synergies
Restructuring Costs & Synergies US$ Millions Severance $70 Facilities 56 Consolidation of systems 8 Capitalized integration costs $ 134 Synergies Target by 2006 US$255 million 6
Slide 7: Strong Second Quarter Earnings
Strong Second Quarter Earnings Shareholders’ Net Income 2Q04 2Q03 $800 SH Net Income $660 m $386 m E.P.S. $0.93 $0.83 $600 R.O.E. 14.0% 18.0% $400 Initially Indicated 2004 ROE 12.7% $200 $0 2Q03 3Q03 4Q03* 1Q04 2Q04 MFC (C$m) 386 396 428 428 494 JHF (C$m) 166 7
Slide 8: Earnings Diversification
Earnings Diversification Q1 2004 Q2 2004 Reinsurance G&SFP Reinsurance Japan US Protection Japan US Protection Asia US Wealth Mgmt Asia US Wealth Mgmt Canada Canada 8
Slide 9: Impact of Share Buybacks
Impact of Share Buybacks Return on Common Earnings Per Share Shareholders’ Equity Canadian Dollars $1.00 20% $0.98 $0.96 $0.95 15% 15.2% 14.5% $0.93 12.7% $0.90 10% $0.85 5% $0.80 0% 2Q03 3Q03 4Q03 1Q04 2Q04 2Q03 3Q03 4Q03 1Q04 2Q04 Reported Initially Indicated FY 2004 Excluding integration expenses
Slide 10: Sales Successes
Sales Successes 9 #1 in Canadian Group Benefits sales 9 #1 in Retail Long-Term Care sales 9 #1 in US Group Pension sales – 401(k) plans 9 #2 in US Life Insurance sales 9 #2 in Canadian Life Insurance sales Based on Q1 2004 LIMRA 10
Slide 11: Operating Highlights
Operating Highlights • Strong top-line momentum in North America, with no signs of post-merger sales attrition • Added and expanded businesses in Asia • Japan VA sales rose sharply, benefiting from BOTM strategic alliance • Maintaining a disciplined approach to G&SFP sales 11
Slide 12: U.S. Protection Ranked Second Overall in Sales
U.S. Protection Ranked Second Overall in Sales Insurance Sales - New Annualized Premiums $150 y + 10% $125 In d ustr rsus % ve $100 HF + 40 C/J MF $75 $50 $25 $0 2Q03 3Q03 4Q03 1Q04 2Q04 MFC (US$m) 57 66 101 77 77 JHF (US$m) 38 12
Slide 13: U.S. Wealth Management Leveraging VA Distribution
U.S. Wealth Management Leveraging VA Distribution Variable Annuities Sales $ 2,000 $ 1,500 • New Principal Plus GMWB rider • Cross-selling of variable $ 1,000 annuity products through Hancock distribution channels • #6 market share in non- $ 500 proprietary broker/dealer segment $0 2Q03 3Q03 4Q03 1Q
Slide 14: U.S. Wealth Management #1 401(k) Pension Provider
U.S. Wealth Management #1 401(k) Pension Provider 401(k) Full Service Plans 30,000 25,000 20,000 • #1 full service provider • 1.2 million participants 15,000 • Industry leading 52% YOY asset growth in 10,000 2003 5,000 0 2000 2001 2002 2003 2Q04 # of Plans 16,775 19,895 23,600 27,143 29,396 Market S
Slide 15: Canada Expanded Distribution
Canada Expanded Distribution Insurance Sales by Channel Q1 2004 Q2 2004 (C$28.9m) (C$48.2m) 4% 4% 28% 26% 31% 40% 29% 37% Advisors MGA National Accounts Other 15
Slide 16: Canada Individual Wealth Management
Canada Individual Wealth Management Individual Wealth Management Sales $3,000 $2,500 $2,000 +51% $1,500 $1,000 $500 $0 2001 2002 2003 1H03 1H04 C$m 1,726 1,979 2,414 1,221 1,842 16
Slide 17: Asia Agent Growth Drives Sales
Asia Agent Growth Drives Sales $5,000 25,000 $4,000 20,000 $3,000 15,000 $2,000 10,000 $1,000 5,000 $0 0 2000 2001 2002 2003 1H04 Premiums & Deposits (C$m) 1,611 2,637 3,075 3,424 2,006 Number of Agents 9,864 15,675 18,556 21,730 23,191 17
Slide 18: Japan BOTM Alliance Lifts VA Sales
Japan BOTM Alliance Lifts VA Sales Variable Annuities Sales 600 500 • “Premiere” variable 400 annuity launched April 1st – first new product 300 developed for The Bank of Tokyo Mitsubishi partnership 200 100 0 2Q03 3Q03 4Q03 1Q04 2Q04 C$m 190 221 132 135 510 18
Slide 19: Delivering Shareholder Value Dividend Increased 24%
Delivering Shareholder Value Dividend Increased 24% C$ 0.30 MFC Quarterly Dividend Per Share 0.25 0.20 0.15 0.10 0.05 0.00 99 99 00 00 00 00 01 01 01 01 02 02 02 02 03 03 03 03 04 04 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q Dividend Payout Increased to New Target of 25-35% of Earn
Slide 20: Delivering Shareholder Value Performance Since Announcement
Delivering Shareholder Value Performance Since Announcement 40.00% MFC +36% (on TSX) 30.00% S&P/TSX 20.00% Canadian Financials +16% 10.00% S&P/ TSX Index +10% 0.00% -10.00% 5 2 1 7 5 2 10 9 12 8 19 16 15 29 12 26 10 24 21 19 10 3 11 7 11 0 4 2 1/ 2/ 3/ 6/ 7/ 8/ /1 /2 /1 /2 /2 / 2 12 9/ 1/ 2/ 3/ 3/ 4
Slide 21: Question and Answer Session
Question and Answer Session 21
Slide 22: Legal Disclaimer
Legal Disclaimer Forward-Looking Statements This presentation may contain forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. Investors are cautioned that all forward-looking statements involve risk and uncertainties and actual results may differ mater