Sun Life Financial Inc. · TSX:SLF
Sun Life Financial — Q3 2001 Earnings Presentation
23 slides from Sun Life Financial's earnings presentation, Oct 24, 2001
Slide 1: Presentation to Analysts and Investors
Presentation to Analysts and Investors Third Quarter 2001 October 24, 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: Third Quarter 2001 - Highlights
Third Quarter 2001 - Highlights • Protection business earnings offset adverse impact of equity markets on wealth management. • Expense reductions offset earnings impact of revenue decline. • MFS extends favorable sales trend with $3.9 billion in quarterly net sales. • Reconfiguration of the business
Slide 4: Shareholders' Net Income
Shareholders’ Net Income ($ Millions) 215 211 212 203 202 Q3/00 Q4/00 Q1/01 Q2/01 Q3/01 4
Slide 5: Financial Performance - EPS up 6%
Financial Performance - EPS up 6% EPS ROE 0.55 16.0% 0.51 0.50 0.50 0.50 0.48 0.48 14.0% 0.45 12.0% 0.40 0.35 10.0% Q3/00 Q4/00 Q1/01 Q2/01 Q3/01 EPS 0.48 0.50 0.48 0.50 0.51 ROE 12.8% 12.9% 12.0% 12.3% 12.1% 5
Slide 6: Premiums and Segregated Fund Deposits
Premiums and Segregated Fund Deposits ($ Billions) 5.4 4.7 4.8 4.0 3.2 Q3/00 Q4/00 Q1/01 Q2/01 Q3/01 Segregated Fund 2.1 2.9 1.9 1.5 1.0 Deposits Premiums 2.4 2.3 2.6 2.2 1.9 ASO Premium 0.2 0.2 0.3 0.3 0.3 Equivalents* * Represents in-force Administrative Services Only (ASO) premium equivalents. 6
Slide 7: First Year Annualized Premiums
First Year Annualized Premiums ($ Millions) Individual Life (1) Group Life & Health 170 122 138 130 116 81 99 74 68 53 Q3/00 Q4/00 Q1/01 Q2/01 Q3/01 Q3/00 Q4/00 Q1/01 Q2/01 Q3/01 Canada 38 43 39 23 26 Canada 13 20 13 16 14 -ASO 10 10 73 21 20 (2) US 55 80 28 47 37 US 45 80 51 77 64 Asia 13 22 12 11
Slide 8: Assets Under Management
Assets Under Management ($ Billions) 345 329 316 326 299 Q3/00 Q4/00 Q1/01 Q2/01 Q3/01 Mutual Funds 177 163 152 158 137 Managed Funds 63 61 61 66 61 and Other Segregated Funds 50 49 45 46 42 General Funds 55 56 58 56 59 8
Slide 9: Total Net Fund Sales
Total Net Fund Sales Net New Sales Market and Currency Movements ($ Billions) ($ Billions) 12.7 8.8 4.6 3.8 8.2 8.1 4.1 -26.1 -26.6 -33.6 Q3/00 Q4/00 Q1/01 Q2/01 Q3/01 Q3/00 Q4/00 Q1/01 Q2/01 Q3/01 Mutual Funds Mutual Funds 2.2 -17.9 -17.0 2.1 -21.2 Gross New Sales 11.2 10.6 12.3 10.3 8.1 Managed 2.
Slide 10: 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 August 31, 2001 $US Billions August 31, 2001 $US Billions American Funds 14.7 Vanguard 25.1 MFS 5.3 American Funds 14.7 PIMCO Funds 4.6 PIMCO Funds 9.5 Oppenheimer Funds 3
Slide 11: U.S. Variable Annuity Sales
U.S. Variable Annuity Sales (US$ Millions) 1,441 1,248 1,022 791 540 Q3/00 Q4/00 Q1/01 Q2/01 Q3/01 Gross Sales Offshore 158 130 85 97 66 Multi-Manager 261 196 228 203 156 Single Manager 829 1,115 709 491 318 Total 1,248 1,441 1,022 791 540 Redemptions 548 529 535 508 530 Net Sales 700 912 487 283 10
Slide 12: Revenue
Revenue ($ Millions) 4,249 4,333 4,036 3,945 3,526 Q3/00 Q4/00 Q1/01 Q2/01 Q3/01 Fee Income 868 855 831 819 762 Investment Income 929 892 941 925 891 Life & Health Premiums 1,133 1,247 1,302 1,256 1,216 Annuity Premiums 1,319 1,042 1,259 945 657 12
Slide 13: Staffing Levels
Staffing Levels (FTE’s) 8,413 8,543 8,438 8,454 8,289 Q3/00 Q4/00 Q1/01 Q2/01 Q3/01 Canada 3,382 3,488 3,566 3,600 3,601 US 1,743 1,780 1,810 1,881 1,933 UK 1,543 1,464 1,436 1,177 1,125 Asia 819 878 911 962 984 Corporate & Other 802 803 820 818 811 Non MFS 8,289 8,413 8,543 8,438 8,454 MFS 2,804 2,
Slide 14: Operating Expenses
Operating Expenses ($ Millions) Total (Non-MFS) MFS $500 40% $350 297 390 283 280 60% $400 366 357 263 30% 308 236 298 $300 $225 40% 20% $200 $100 10% $100 20% Q3/00 Q4/00 Q1/01 Q2/01 Q3/01 Q3/00 Q4/00 Q1/01 Q2/01 Q3/01 Operating 308 390 366 357 298 Operating 283 297 280 263 236 Expenses* Expenses*
Slide 15: Financial Strength
Financial Strength Debt to Total Capital MCCSR 20.2% 299% 19.8% 19.7% 295% 19.4% 290% 288% 284% 18.9% Q3/00 Q4/00 Q1/01 Q2/01 Q3/01 Q3/00 Q4/00 Q1/01 Q2/01 Q3/01 15
Slide 16: Financial Results by Country
Financial Results by Country 16
Slide 17: Canadian Operations Net Income
Canadian Operations e ($ Millions) u 17.6% 16.5% 15.8% n 1,200 13.6% 12.1% e 1,000 v 70 Net Income 800 e 600 50 400 R 200 0 30 Q3/00 Q4/00 Q1/01 Q2/01 Q3/01 Revenue 980 927 1,030 932 896 Net Income 45 62 49 55 51 ROE 12.1% 15.8% 13.6% 17.6% 16.5% . 17
Slide 18: U.S. Annuity and Insurance Operations
U.S. Annuity and Insurance Operations ($ Millions) 21.4% 15.8% 15.1% 13.7% 80 7.7% 2,000 Net Income Revenue 1,500 60 1,000 40 500 0 20 Q3/00 Q4/00 Q1/01 Q2/01 Q3/01 Revenue 1,996 1,858 2,021 1,755 1,528 Net Income 63 43 50 27 55 ROE 21.4% 13.7% 15.8% 7.7% 15.1% 18
Slide 19: MFS
MFS Assets Under Management Net Income* & ROE ($ Billions) 86.7% 76.6% 80 75.8% 238 221 60.4% 220 75.1% 209 ($ Millions) 192 60 40 20 0 Q3/00 Q4/00 Q1/01 Q2/01 Q3/01 Q3/00 Q4/00 Q1/01 Q2/01 Q3/01 Mutual Funds 167 153 143 149 129 Net Income 72 60 58 65 58 Managed 71 68 66 71 63 ROE 86.7% 75.1% 76.6%
Slide 20: U.K. Operations
U.K. Operations ($ Millions) 15.2% 11.7% 12.0% 10.7% 10.7% 600 500 60 Revenue 400 300 40 200 Net 100 0 20 Q3/00 Q4/00 Q1/01 Q2/01 Q3/01 Revenue 546 505 557 538 449 Net Income 32 37 39 50 37 ROE 10.7% 11.7% 12.0% 15.2% 10.7% 20
Slide 21: Asia Operations
n Asia Operations e ($ Millions) 8.6% 8.5% 7.5% 6.0% v 2.5% 125 15 e 100 Net Income 10 75 R 50 5 25 0 0 Q3/00 Q4/00 Q1/01 Q2/01 Q3/01 Revenue 103 115 103 106 107 Net Income 9 6 8 10 3 ROE 8.5% 6.0% 7.5% 8.6% 2.5% 21
Slide 22: Summary
Summary • Balanced business mix produces strong aggregate results. • Decisive action on expenses. • Favourable sales help offset market pressures. • Execution of growth strategy undeterred by market downturn. 22
Slide 23: Sun Life Financial
—~* rm Sun “ we: Life Financial