Slide 1: Presentation to Analysts and Investors
Presentation to Analysts and Investors April 26, 2001 First Quarter 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: First Quarter 2001 - Highlights
First Quarter 2001 - Highlights • Earnings up 12 per cent despite severe declines in international equity markets • Effective response to equity market pressures maintains earnings momentum • Operating expenses reduced by $41 million from 4Q’00 • Record inflows at MFS of C$12.7 billion demonstrates
Slide 4: Shareholders' Net Income
Shareholders’ Net Income ($ Millions) 211 203 197 202 181 Q1/00 Q2/00 Q3/00 Q4/00 Q1/01 4
Slide 5: Financial Performance - EPS up 7%
Financial Performance - EPS up 7% EPS ROE $0.55 18% 0.50 16% 0.48 0.48 0.47 0.45 $0.45 14% 12% $0.35 10% Q1/00 Q2/00 Q3/00 Q4/00 Q1/01 EPS 0.45 0.47 0.48 0.50 0.48 ROE 12.6% 12.9% 12.8% 12.9% 12.0% 5
Slide 6: Premiums and Segregated Fund Deposits
Premiums and Segregated Fund Deposits ($ Billions) 5.4 4.8 4.7 4.8 3.4 Q1/00 Q2/00 Q3/00 Q4/00 Q1/01 Segregated Fund 1.2 2.2 2.1 2.9 1.9 Deposits Premiums 2.0 2.4 2.4 2.3 2.6 ASO Premium 0.2 0.2 0.2 0.2 0.3 Equivalents* * Represents in-force Administrative Services Only (ASO) premium equivalents. 6
Slide 7: First Year Annualized Premiums
First Year Annualized Premiums - Up 72 % ($ Millions) Individual Life (1) Group Life & Health 179 132 125 138 83 99 85 88 52 57 Q1/00 Q2/00 Q3/00 Q4/00 Q1/01 Q1/00 Q2/00 Q3/00 Q4/00 Q1/01 Canada 34 26 38 43 39 Canada 13 16 13 20 13 - ASO 22 8 10 10 82 US (2) 27 103 57 83 32 US 23 49 45 80 51 Asia 12
Slide 8: Assets Under Management - Down 2%
Assets Under Management - Down 2% ($ Billions) 345 330 329 321 316 Q1/00 Q2/00 Q3/00 Q4/00 Q1/01 Mutual Funds 167 170 177 163 152 Managed Funds and 53 58 63 61 61 Other Segregated Funds 48 49 50 49 45 General Funds 53 53 55 56 58 8
Slide 9: Total Net Fund Sales - Up 95%
Total Net Fund Sales - Up 95% Net New Sales Market and Currency ($Billions) Movements ($ Billions) 12.7 15.6 9.0 8.8 8.2 4.6 6.5 -1.7 -26.1 -26.6 Q1/00 Q2/00 Q3/00 Q4/00 Q1/01 Q1/00 Q2/00 Q3/00 Q4/00 Q1/01 Mutual Funds Mutual Funds 10.1 -1.8 2.2 -17.9 -17.0 Gross New Sales 12.4 11.5 11.2 10.6 12.3 R
Slide 10: MFS - Continued Strong Net New Flows
MFS - Continued Strong Net New Flows NET NEW FLO WS NET NEW FLO WS (Non-Proprietary Channel) (Overall Industry) Year to Date Year to Date March 31, 2001 $US Billions March 31, 2001 $US Billions American Funds 3.7 Vanguard 8.6 MFS 2.4 PIMCO Funds 4.2 Davis-Selected Adv 2.0 American Funds 3.7 PIMCO Fu
Slide 11: MFS Net Sales
MFS Net Sales (in Millions of US$) 2,250 2,000 1,750 1,500 1,250 1,000 750 500 250 0 1/99 3/99 5/99 7/99 9/99 11/99 1/00 3/00 5/00 7/00 9/00 11/00 1/01 3/01 -250 -500 MFS Long Term Funds All MFS Funds 11
Slide 12: U.S. Variable Annuity Sales
U.S. Variable Annuity Sales 1,500 1,441 4.0% 1,249 1,300 1,100 1,022 (US$ Millions) 917 900 771 700 3.0% 500 300 100 -100 2.0% Q1/00 Q2/00 Q3/00 Q4/00 Q1/01 Offshore 123 158 137 105 60 Multi-Manager 148 192 251 184 209 S ingle Manager -76 38 312 623 218 Total Net S ales 195 388 700 912 487 Redemptio
Slide 13: U.S. Variable Annuity Assets
U.S. Variable Annuity Assets (US$ Billions) 20.1 19.4 19.2 19.4 17.3 Q1/00 Q2/00 Q3/00 Q4/00 Q1/01 At Beginning of Period 18.3 19.4 19.2 20.1 19.4 Net Sales 0.2 0.4 0.7 0.9 0.5 Market 0.9 -0.6 0.2 -1.6 -2.6 At End of Period 19.4 19.2 20.1 19.4 17.3 13
Slide 14: Revenue - Fee Income up 6%
Revenue - Fee Income up 6% ($ Millions) 4,249 4,333 4,172 4,036 3,749 Q1/00 Q2/00 Q3/00 Q4/00 Q1/01 Fee Income 782 812 868 855 831 Investment Income 975 980 929 892 941 Life & Health 1,131 1,231 1,133 1,247 1,302 Premiums Annuity Premiums 861 1,149 1,319 1,042 1,259 14
Slide 15: Non-MFS Staffing Level
Non-MFS Staffing Level - Up 26 (FTE’s) 8,517 8,307 8,543 8,299 8,289 Q1/00 Q2/00 Q3/00 Q4/00 Q1/01 Canada 3,440 3,384 3,382 3,442 3,566 US 1,724 1,738 1,743 1,780 1,810 UK 1,597 1,557 1,543 1,463 1,436 Asia 827 797 819 819 911 Corporate & Other 929 823 802 803 820 Non MFS 8,517 8,299 8,289 8,307 8,5
Slide 16: Operating Expenses
Operating Expenses ($ Millions) Total (Non-MFS) MFS $500 40% $300 297 283 280 267 390 242 60% $400 366 30% 313 325 308 $300 $200 40% 20% $200 $100 10% $100 20% Q1/00 Q2/00 Q3/00 Q4/00 Q1/01 Q1/00 Q2/00 Q3/00 Q4/00 Q1/01 Operating 242 267 283 297 280 Operating 313 325 308 390 366 Expenses* Expenses*
Slide 17: Financial Strength
Financial Strength Debt to Total Capital MCCSR 21.4% 291% 290% 295% 288% 20.4% 20.2% 266% 19.8% 19.7% Q1/00 Q2/00 Q3/00 Q4/00 Q1/01 Q1/00 Q2/00 Q3/00 Q4/00 Q1/01 17
Slide 18: Financial Results by Country
Financial Results by Country 18
Slide 19: Canadian Operations
Canadian Operations ($ Millions) Revenue Net Income 1,200 100 1,031 1,008 1,030 980 927 80 800 60 40 400 20 0 0 Q1/00 Q2/00 Q3/00 Q4/00 Q1/01 Revenue 1,031 1,008 980 927 1,030 Net Income 35 42 45 62 49 . 19
Slide 20: U.S. Operations
U.S. Operations ($ Millions) Revenue Net Income 1,996 2,021 2,000 1,858 150 1,846 1,459 1,500 100 1,000 50 500 0 0 Q1/00 Q2/00 Q3/00 Q4/00 Q1/01 Revenue 1,459 1,846 1,996 1,858 2,021 Net Income 65 58 63 43 50 20
Slide 21: MFS
MFS Assets Under Management Net Income* ($ Billions) ($ Millions) 226 238 219 221 209 72 62 62 60 58 Q1/00 Q2/00 Q3/00 Q4/00 Q1/01 Q1/00 Q2/00 Q3/00 Q4/00 Q1/01 Mutual Funds 156 160 167 153 143 Managed 63 66 71 68 66 Funds * Represents Sun Life’s share of MFS total earnings. 21
Slide 22: U.K. Operations
U.K. Operations ($ Millions) Revenue Net Income 800 80 700 70 620 589 600 546 557 60 505 500 50 400 40 300 30 200 20 100 10 0 0 Q1/00 Q2/00 Q3/00 Q4/00 Q1/01 Revenue 589 620 546 505 557 Net Income 17 33 32 37 39 22
Slide 23: Asia Operations
Asia Operations ($ Millions) Revenue Net Income 140 20 115 100 103 103 105 95 15 70 10 35 5 0 0 Q1/00 Q2/00 Q3/00 Q4/00 Q1/01 Revenue 95 100 103 115 103 Net Income 7 5 9 6 8 23
Slide 24: Summary
Summary • Efficiency measures deployed to improve operating margin • Revenue momentum undeterred by cost cuts • Market share expansion at MFS a precusor to future earnings rebound with market recovery • U.K. actions provide basis for longer-term earnings growth through capital redeployment • Earning
Slide 25: Alda
Alda Sun “ ww: Life Financial