Manulife Financial Corporation · TSX:MFC
Manulife Financial — Investor Day (June 2024)
36 slides from Manulife Financial's investor day presentation, Jun 25, 2024
Slide 1: Empowering Investors for a Better Tomorrow
Empowering Investors for a Better Tomorrow Investor Day 2024: Global Wealth & Asset Management Paul Lorentz President & CEO, Global Wealth & Asset Management June 25, 2024
Slide 2: Delivering results
{i) Manulife Investment Management , , N Delivering results
Slide 3: Looking back: Top takeaways
Looking back: • Excellent track record of delivering results for our customers and shareholders Top takeaways • Outperforming peers on key metrics, while maintaining superior earnings growth • Leveraging our global scale to drive value for our shareholders 3
Slide 4: Leveraging global scale and local insights in key markets
Leveraging global scale and local insights in key markets 20 geographies with local office presence 1 625+ global investment professionals 2 Access to 75%+ of world‘s investable assets 3 19 million Global WAM customers globally accessed through Retail, Retirement, and Institutional channels2 #1 Hong
Slide 5: Delivering strong results for the Manulife franchise and our shareholders
Delivering strong results for the Manulife franchise and our shareholders… 1,321 6% Institutional Investment solutions Total Manulife core earnings Core return on equity1 (C$ millions) Investment solutions 25% 38% Retail Financial and investment advice Private wealth & estate solutions Asset managem
Slide 6: …through a differentiated global platform
…through a differentiated global platform 1 2 3 Our geographic and Our business lines are We benefit from the business diversity is a highly complementary strength and stability of strength our insurance business 4 5 6 We are well-positioned to We are committed to Our greatest asset is capitalize on
Slide 7: $1T investment platform, distributed primarily by direct & affiliated channels
$1T investment platform, distributed primarily by direct & affiliated channels WAM-managed AUMA1 WAM-managed AUM1 by distribution channel (C$ billions) (C$ billions) Over 73% of AUM is distributed by direct & affiliated channels3 3rd Party AUA 182 Intermediaries 27% AUMA1 AUM1 AUM1 1,055 873 873 Dir
Slide 8: Solid investment performance across a wide range of asset classes
Solid investment performance across a wide range of asset classes WAM-managed AUM by asset class Public asset 3-year 5-year 10-year (C$ billions) class performance % of assets performing above peer, Money markets <50% 51-75% 76-100% as of 31/12/20233 Alternatives 3% 10% Equity 64% 70% 90% Equity 32%
Slide 9: Positive net flows for 13 of the past 14 years, outperforming peers
Positive net flows for 13 of the past 14 years, outperforming peers Net flows Net flows as % of AUMA (C$ billions) 34 (WAM-managed, 1Q17-4Q23)1 28 20 18 18 8.7 16 12 9 6 6 7 5 6.9 2 3 Inflow (1) Outflow 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 1Q24 Retail Retirement Inst
Slide 10: Diversified revenue sources, with over 90% driven by asset growth potential
Diversified revenue sources, with over 90% driven by asset growth potential Well diversified by business line and geography… …providing access to higher margin regions and strong revenue sources C$7.1B 21% Core revenue1 33% C$7.1B AUMA1 AUMA1 C$1,055B C$1,055B 46% Investment management & distributio
Slide 11: Diversification and scale driving resilient fee income yield
Diversification and scale driving resilient WAM-managed Net fee Core Core AUMA2 income yield2,3 revenue2 earnings2 fee income yield, and (C$ billions) (bps) (C$ billions) (C$ billions) growing revenue and earnings faster than 1,055 44.1 44.2 7.1 1.3 peers 790 5.2 0.8 2017 2023 2020 2023 2017 2023 20
Slide 12: Looking back: Summary
Looking back: • Global scale with leading local market rankings Summary • Diversified, C$1T investment platform • Outperforming peers on revenue and earnings growth 12
Slide 13: Next stage of growth
Next stage of growth 13
Slide 14: Looking ahead: Top takeaways
Looking ahead: • Ambitious objectives to further our transformation Top takeaways • Unique footprint and business mix that is difficult for peers to replicate • Clear roadmap to capitalize on opportunities 14
Slide 15: Ambitious objectives supporting growing shareholder value
Ambitious objectives supporting growing shareholder value Core EBITDA margin1 Core ROE1 (%) (%) 30+ 28+ 25 24.9 2023 2027 2023 2027 15 Note: See “Caution regarding forward looking statements” below. All footnotes are on slide 28, including the nearest comparable GAAP financial measures, where applic
Slide 16: Focused on disciplined growth and achieving a 30%+ core EBITDA margin
Focused on disciplined growth and achieving a 30%+ core EBITDA margin Core EBITDA margin1 Scale our alternative (%) capabilities 30+ +1.8-2.5 Leverage market leadership +3.1 pps (pps) in Retirement Operating leverage2 25.5 Uniquely positioned to 24.9 address global megatrends 22.4 Grow our direct an
Slide 17: Scale alternative capabilities
Operating leverage Scale alternative capabilities Average 3rd party Institutional Alternatives AUM2 (C$ billions) management fee rate1 (bps) +93.8 Continue expanding alternatives Timberland & by growing in-demand solutions, and adding agriculture investment and distribution talent 21 Real estate 26
Slide 18: Uniquely positioned to address global megatrends
Operating leverage Uniquely positioned to address global megatrends Rising middle class and Rapidly aging population2 Industry leader in Hong Kong MPF millionaire population1 (% of population aged at or above 65) with 31.7% market share3 (millions) 2022 2022-2027 growth (AUM, US$ billions) Asia Paci
Slide 19: Leverage market leadership in Retirement
Operating leverage Leverage market leadership in Retirement Global customers Net revenue by source1 (millions) (%) 9.8 8.9 8 7 Non-asset-based recordkeeping 5 8 General account margin 35 Investment management 45 includes advice, rollover and proprietary solutions 52 Asset-based 40 recordkeeping fees
Slide 20: Leverage direct and affiliated channels to scale business
Organic growth Leverage direct and affiliated channels to scale business Manulife Wealth AUA1 Rollover AUM2 +100% +40% 2023 2027 2023 2027 Expand proprietary Wealth channels Retain customer relationships to capture increased market share in addition to net new to help them transition between employe
Slide 21: Strategically enhance capabilities and grow footprint
Organic growth Strategically enhance capabilities and grow footprint JV inception: 2Q 2020 Acquired: 4Q 2022 Acquired: 2Q 2024 Market Net flows (US$ millions) Market Net flows (US$ millions) Added US$14 billion AUM in high rank1 rank2 demand liquid and semi-liquid #25 2023 231 #13 2023 1,747 credit
Slide 22: Leverage new technologies to deliver exceptional, digital-first experiences
Operational excellence Leverage new technologies to deliver exceptional, digital-first experiences Example: Canada Retirement Global WAM objectives Straight-through-processing1 Straight-through-processing1 (%) Investment in digital and self-service capabilities leads to operational efficiency… +5.2p
Slide 23: Focus on sustainable growth and operational excellence
Operational excellence Focus on Expense efficiency ratio1 sustainable growth (%) and operational excellence -3pps 68 -5 to -10pps 65 Driving slower expense growth through global efficiencies: 55-60 • Digitization and workflow automation 2023-2027 objective • Product and platform rationalization +35%
Slide 24: Looking ahead: Summary
Looking ahead: • Ambitious objectives to further our transformation Summary • Unique footprint and business mix that is difficult for peers to replicate • Clear roadmap to capitalize on opportunities 24
Slide 25: Raising the Bar
‘'' Manulife Raising the Bar
Slide 26: Appendix
Appendix • Footnotes • Caution regarding forward-looking statements • Non-GAAP and other financial measures 26
Slide 27: Footnotes
Footnotes Slide Footnote 1 Offices in the U.S., Canada, Japan, Hong Kong, Singapore, Taiwan, Indonesia, Vietnam, Malaysia, India, the Philippines, England, Ireland, Germany, Switzerland, Italy and mainland China. In addition, we have timberland/farmland offices in Australia, New Zealand and Chile. A
Slide 28: Footnotes
Footnotes Slide Footnote 1 Peer data sourced from public company disclosures and includes Allianz, Amundi, Invesco, Principal Financial Group, Prudential Financial, Sun Life, T. Rowe Price and Voya. 9 These peers were selected based on their similarities to MIM’s businesses and geographical presence
Slide 29: Footnotes
Footnotes Slide Footnote 1 Based on average management fee income over average AUM managed in the Institutional channel for 3rd party (non-Manulife-affiliated) clients. As of December 2023. 2 Global WAM-managed AUM, which includes alternatives AUM, is a non-GAAP financial measure. For more informati
Slide 30: Caution regarding forward-looking statements
Caution regarding Certain material factors or assumptions are applied in making forward-looking statements and actual results may differ materially counterparties to meet their obligations; the availability, affordability and adequacy of reinsurance; legal and regulatory proceedings, from those expr
Slide 31: Non-GAAP and other financial measures
Non-GAAP and other financial measures Manulife prepares its Consolidated Financial Statements in Core ROE for operating segments accordance with International Financial Reporting Standards (“IFRS”) Core ROE for Manulife’s operating segments is a non-GAAP ratio as issued by the International Accounti
Slide 32: Reconciliation: Core earnings, CER basis
Reconciliation: Core earnings, CER basis 2017 ($ millions, post-tax and based on actual foreign exchange rates in effect in the applicable Corporate Asia Canada U.S. Global WAM Total reporting period, unless otherwise stated) and Other Core earnings (post-tax) 1,453 1,209 1,609 816 (522) 4,565 CER a
Slide 33: Reconciliation: Global WAM net fee income yield
Reconciliation: Global WAM net fee income yield ($ millions, unless otherwise stated) 2020 Income before income taxes* 6,771 Less: Income before income taxes for segments other than Global WAM 5,499 Global WAM income before income taxes 1,272 Items unrelated to net fee income 2,225 Global WAM net fe
Slide 34: Reconciliation: Global WAM core revenue
Reconciliation: Global WAM core revenue ($ millions, unless otherwise stated) 2017 Revenue per financial statements 58,323 Less: Revenue in segments other than Global WAM 53,123 Total Global WAM revenue 5,200 Less: Total revenue reported in items excluded from core earnings - Total Global WAM core r
Slide 35: Reconciliation: Expenses
Reconciliation: Expenses ($ millions, and based on actual foreign exchange rates in effect in the ($ millions, and based on actual foreign exchange rates in effect in the 2017 2023 applicable reporting period, unless otherwise stated) applicable reporting period, unless otherwise stated) Asia 1,981
Slide 36: Reconciliation: Global WAM-managed AUMA
Reconciliation: Global WAM-managed AUMA December 31, 2017 Corporate Total Asia Canada U.S. Global WAM and Other Company Total invested assets Manulife Bank net lending assets 20,427 20,427 Derivative reclassification (7,781) (7,781) Invested assets excluding above items 72,778 87,732 150,837 5,211 5