|
Sun Life Financial Inc.
("SLF Inc."), its subsidiaries and, where applicable, its joint
ventures and associates are collectively referred to as "the
Company", "Sun Life", "we", "our", and "us". We manage our
operations and report our financial results in five business
segments: Canada, United States ("U.S."), Asset Management, Asia,
and Corporate. The information in this document is based on the
unaudited interim financial results of SLF Inc. for the period
ended September 30, 2024 and should be read in conjunction
with the interim management's discussion and analysis ("MD&A")
and our unaudited interim consolidated financial statements and
accompanying notes ("Interim Consolidated Financial Statements")
for the period ended September 30, 2024, prepared in
accordance with International Financial Reporting Standards
("IFRS"). We report certain financial information using non-IFRS
financial measures. For more details, refer to the Non-IFRS
Financial Measures section in this document. Additional information
relating to SLF Inc. is available on www.sunlife.com under
Investors – Financial results and reports, on the SEDAR+ website at
www.sedarplus.ca, and on the U.S. Securities and Exchange
Commission's website at www.sec.gov. Reported net income
(loss) refers to Common shareholders' net income (loss) determined
in accordance with IFRS. Unless otherwise noted, all amounts are in
Canadian dollars. Amounts in this document may be impacted by
rounding. Certain 2023 results in the Drivers of Earnings and
Contractual Service Margin ("CSM") Movement Analysis were refined
to more accurately reflect how the business is managed.
|
TORONTO, Nov. 4, 2024
/PRNewswire/ - Sun Life Financial Inc. (TSX: SLF) (NYSE: SLF)
announced its results for the third quarter ended
September 30, 2024.
- Underlying net income(1) of $1,016 million increased $86 million or 9% from Q3'23; underlying return
on equity ("ROE")(1) was 17.9%.
- Wealth & asset management underlying net
income(1): $474
million, up $17 million or 4%.
- Group - Health & Protection underlying net
income(1): $345 million, up $60 million or
21%.
- Individual - Protection underlying net
income(1): $306
million, up $9 million or 3%.
- Corporate expenses &
other(1): $(109)
million net loss, consistent with the prior year.
- Reported net income of $1,348
million increased $477 million
or 55% from Q3'23; reported ROE(1) was 23.8%.
- Assets under management ("AUM")(1) of $1,515 billion increased $175 billion or 13% from Q3'23.
- Increase to common share dividend from $0.81 to $0.84 per
share.
"Sun Life had a strong quarter with more than $1 billion in both underlying and reported net
income, showcasing the strength and diversity of our businesses,"
said Kevin Strain, President and CEO
of Sun Life. "These results reflect our leadership positions in
asset management and insurance, driven by strong insurance growth,
and a return on equity of close to 18 percent. Our results
demonstrate our resolve to deliver on our Purpose to help Clients
achieve lifetime financial security and live healthier lives."
Financial and Operational Highlights
|
|
Quarterly
results
|
Year-to-date
|
|
Profitability
|
Q3'24
|
Q3'23
|
2024
|
2023
|
|
Underlying net income
($ millions)(1)
|
1,016
|
930
|
2,891
|
2,745
|
|
Reported net income -
Common shareholders ($ millions)
|
1,348
|
871
|
2,812
|
2,337
|
|
Underlying EPS
($)(1)(2)
|
1.76
|
1.59
|
4.98
|
4.68
|
|
Reported EPS
($)(2)
|
2.33
|
1.48
|
4.83
|
3.97
|
|
Underlying
ROE(1)
|
17.9 %
|
17.7 %
|
17.2 %
|
17.6 %
|
|
Reported
ROE(1)
|
23.8 %
|
16.6 %
|
16.8 %
|
14.9 %
|
|
|
|
|
|
|
|
Growth
|
Q3'24
|
Q3'23
|
2024
|
2023
|
|
Wealth sales &
asset management gross flows ($ millions)(1)
|
41,915
|
39,324
|
135,075
|
128,070
|
|
Group - Health &
Protection sales ($ millions)(1)(3)
|
445
|
374
|
1,467
|
1,483
|
|
Individual - Protection
sales ($ millions)(1)
|
730
|
669
|
2,240
|
1,784
|
|
Assets under management
("AUM") ($ billions)(1)
|
1,515
|
1,340
|
1,515
|
1,340
|
|
New business
Contractual Service Margin ("CSM") ($
millions)(1)
|
383
|
370
|
1,167
|
872
|
|
|
|
|
|
|
|
Financial
Strength
|
Q3'24
|
Q3'23
|
|
|
|
LICAT ratios (at period
end)(4)
|
|
|
|
|
|
Sun Life Financial
Inc.
|
152 %
|
147 %
|
|
|
|
Sun Life
Assurance(5)
|
147 %
|
138 %
|
|
|
|
Financial leverage
ratio (at period end)(1)(6)
|
20.4 %
|
21.8 %
|
|
|
|
___________
|
|
(1)
|
Represents a non-IFRS
financial measure. For more details, see the Non-IFRS Financial
Measures section in this document and in the Q3'24
MD&A.
|
|
(2)
|
All earnings per share
("EPS") measures refer to fully diluted EPS, unless otherwise
stated.
|
|
(3)
|
Prior period amounts
related to U.S. Dental sales have been restated to reflect new
information.
|
|
(4)
|
Life Insurance Capital
Adequacy Test ("LICAT") ratio. Our LICAT ratios are calculated in
accordance with the OSFI-mandated guideline, Life Insurance Capital
Adequacy Test.
|
|
(5)
|
Sun Life Assurance
Company of Canada ("Sun Life Assurance") is SLF Inc.'s principal
operating life insurance subsidiary.
|
|
(6)
|
The calculation for the
financial leverage ratio includes the CSM balance (net of taxes) in
the denominator. The CSM (net of taxes) was $9.9 billion as at
September 30, 2024 (September 30, 2023 - $9.3 billion).
|
Financial and Operational Highlights - Quarterly Comparison (Q3'24
vs. Q3'23)
|
($ millions)
|
Q3'24
|
|
Underlying net
income by business type(1)(2):
|
Sun
Life
|
Asset
Management
|
Canada
|
U.S.
|
Asia
|
Corporate
|
|
Wealth & asset
management
|
474
|
344
|
101
|
—
|
29
|
—
|
|
Group - Health &
Protection
|
345
|
—
|
172
|
173
|
—
|
—
|
|
Individual -
Protection
|
306
|
—
|
102
|
46
|
158
|
—
|
|
Corporate expenses
& other
|
(109)
|
—
|
—
|
—
|
(17)
|
(92)
|
|
Underlying net
income(1)
|
1,016
|
344
|
375
|
219
|
170
|
(92)
|
|
Reported net income
- Common shareholders
|
1,348
|
644
|
382
|
339
|
32
|
(49)
|
|
Change in underlying
net income (% year-over-year)
|
9 %
|
4 %
|
11 %
|
18 %
|
2 %
|
nm(3)
|
|
Change in reported net
income (% year-over-year)
|
55 %
|
140 %
|
5 %
|
157 %
|
(85) %
|
nm(3)
|
|
Wealth sales &
asset management gross flows(1)
|
41,915
|
36,259
|
3,755
|
—
|
1,901
|
—
|
|
Group - Health &
Protection sales(1)
|
445
|
—
|
124
|
300
|
21
|
—
|
|
Individual -
Protection sales(1)
|
730
|
—
|
112
|
—
|
618
|
—
|
|
Change in wealth sales
& asset management gross flows
(%
year-over-year)
|
7 %
|
6 %
|
11 %
|
—
|
14 %
|
—
|
|
Change in group sales
(% year-over-year)
|
19 %
|
—
|
4 %
|
26 %
|
31 %
|
—
|
|
Change in individual
sales (% year-over-year)
|
9 %
|
—
|
(24) %
|
—
|
19 %
|
—
|
|
|
|
(1)
|
Represents a non-IFRS
financial measure. For more details, see the Non-IFRS Financial
Measures section in this document and in the Q3'24
MD&A.
|
|
(2)
|
For more information
about the business types in Sun Life's business groups, see section
A - How We Report Our Results in the Q3'24 MD&A.
|
|
(3)
|
Not
meaningful.
|
Underlying net income(1) of $1,016 million increased $86 million or 9% from prior year, driven by:
- Wealth & asset management(1) up $17
million: Higher fee income in Asset Management, Asia, and Canada, partially offset by unfavourable
credit experience in Canada.
- Group - Health & Protection(1)(2)
up $60 million: Strong business growth in U.S. Group
Benefits and Canada, higher
fee-based income in Canada, and
improved group life mortality experience in the U.S., partially
offset by lower U.S. Dental results.
- Individual - Protection(1)(2) up $9
million: Business growth in Asia
and Canada partially offset by
unfavourable mortality experience in Asia.
- Corporate expenses & other(1) were
in line with prior year.
Reported net income of $1,348
million increased $477 million
or 55% from prior year, driven by:
- A decrease in SLC Management's estimated
acquisition-related liabilities(3); and
- The increase in underlying net income.
- Favourable equity market impacts and improved real estate
experience(4) were offset by interest rate impacts.
Underlying ROE was 17.9% and reported ROE was 23.8% (Q3'23 -
17.7% and 16.6%, respectively). SLF Inc. ended the quarter with a
LICAT ratio of 152%.
|
__________
|
|
(1)
|
Refer to section C -
Profitability in the Q3'24 MD&A for more information on notable
items attributable to reported and underlying net income items and
the Non-IFRS Financial Measures in this document for a
reconciliation between reported net income and underlying net
income. For more information about the business types in Sun Life's
operating segments/business groups, see section A - How We Report
Our Results in the Q3'24 MD&A.
|
|
(2)
|
Effective Q1'24,
reflects a refinement in the allocation methodology for expenses
from Individual - Protection to Group - Health & Protection
business types in the U.S. business group.
|
|
(3)
|
Reflects a decrease of
$334 million in estimated future payments for acquisition-related
contingent considerations and options to purchase remaining
ownership interests of SLC Management affiliates (Q3'23 - an
increase of $42 million). For additional information, refer to Note
5 of our Interim Consolidated Financial Statements for the period
ended September 30, 2024.
|
|
(4)
|
Real estate experience
reflects the difference between the actual value of real estate
investments compared to management's longer-term expected returns
supporting insurance contract liabilities ("real estate
experience").
|
Business Group Highlights
Asset Management: A global leader in both public and
alternative asset classes through MFS and SLC Management
Asset Management underlying net income of $344 million increased $14
million or 4% from prior year, driven by:
- MFS(1) up $20
million (up US$11 million):
Higher fee income from higher average net assets ("ANA") partially
offset by higher expenses. The MFS pre-tax net operating profit
margin(2) was 40.5% for Q3'24, compared to 40.8% in
the prior year.
- SLC Management down $6 million: Higher fee-related
earnings more than offset by a favourable tax rate(3) in
the prior year and lower net seed investment income. Fee-related
earnings(2) increased 6% driven by higher AUM,
reflecting strong capital raising and deployment across the
platform, partially offset by higher expenses. Fee-related earnings
margin(2) was 24.2% for Q3'24, compared to 23.8% in the
prior year.
Reported net income of $644
million increased $376 million
or 140% from prior year, driven by a decrease in SLC Management's
estimated acquisition-related liabilities(4), partially
offset by fair value changes in management's ownership of MFS
shares.
Foreign exchange translation led to an increase of $5 million in underlying net income and an
increase of $11 million in reported
net income.
Asset Management ended Q3'24 with $1,103
billion of AUM(2), consisting of
$873 billion (US$645 billion) in
MFS and $230 billion in SLC
Management. Total Asset Management net outflows of $17.4 billion in Q3'24 reflected MFS net outflows
of $19.1 billion (US$14.0 billion) partially offset by SLC
Management net inflows of $1.7
billion.
Asset Management experienced solid fixed income flows, with MFS
generating US$1.1 billion in net
inflows for this asset class during the quarter. Further, SLC
Management delivered strong capital raising in the quarter, driven
by a large strategic multi-platform mandate where they were chosen
to manage approximately $3.7 billion
of fixed income investments.
On August 22, 2024, we acquired
the remaining 20% interest in InfraRed Capital Partners
("lnfraRed"). Since our initial acquisition of the majority stake
in InfraRed on July 1, 2020, InfraRed
has broadened SLC Management's suite of alternative investment
solutions while also creating the opportunity for InfraRed to
access North American investors through our distribution networks,
contributing over $17.4 billion in
AUM(2). InfraRed continues to invest in early-stage
companies with long-term growth potential and build its active
pipeline of growth and core yielding opportunities through
co-investments. In the third quarter, InfraRed invested, directly
and through co-investments, in several opportunities in the energy
and fibre communications sectors, with co-investments totalling
$340 million over the last 18
months.
Canada: A leader in health,
wealth, and insurance
Canada underlying net income of
$375 million increased $37 million or 11% from prior year,
reflecting:
- Wealth & asset management down $15 million: Unfavourable credit experience
partially offset by higher fee income driven by higher AUM.
- Group - Health & Protection up $36 million: Business growth and higher fee-based
income.
- Individual - Protection up $16 million: Business growth and higher
investment contributions.
Reported net income of $382
million increased $17 million
or 5% from prior year, driven by the increase in underlying net
income and favourable market-related impacts, partially offset by
unfavourable ACMA(5) impacts. The market-related impacts
were primarily from favourable equity market impacts and improved
real estate experience, partially offset by interest rate
impacts.
Canada's
sales(6):
- Wealth sales & asset management gross flows of $4 billion were up 11%, driven by higher mutual
fund sales in Individual Wealth, partially offset by lower defined
benefit solution sales in Group Retirement Services ("GRS") and
guaranteed product sales in Individual Wealth.
- Group - Health & Protection sales of $124 million were up 4%, driven by higher health
sales.
- Individual - Protection sales of $112
million were down 24%, reflecting lower third-party
sales.
In the third quarter, we accelerated our wealth strategy of
providing innovative product solutions and expanding distribution
capabilities with the launch of MyRetirement Income, an innovative
first for Canadians that aims to provide retirees with a reliable
source of income, while maintaining flexibility and the potential
for continued investment growth. This solution leverages automated
calculations to help ease the transition from saving to drawing
income in retirement so that Clients can focus on living their best
retirement. Additionally, we have launched our securities
investment dealer platform, Sun Life Canada Securities Inc.
("SLCSI"). Our wealth offerings in SLCSI will broaden our Clients'
access to wealth solutions and help them achieve lifetime financial
security.
|
__________
|
|
(1)
|
MFS Investment
Management ("MFS").
|
|
(2)
|
Represents a non-IFRS
financial measure. For more details, see the Non-IFRS Financial
Measures section in this document and in the Q3'24
MD&A.
|
|
(3)
|
Underlying net income
in the prior year included favourable adjustments related to tax
filings.
|
|
(4)
|
Reflects a decrease of
$334 million in estimated future payments for acquisition-related
contingent considerations and options to purchase remaining
ownership interests of SLC Management affiliates (Q3'23 - an
increase of $42 million). For additional information, refer to Note
5 of our Interim Consolidated Financial Statements for the period
ended September 30, 2024.
|
|
(5)
|
Assumption changes and
management actions ("ACMA").
|
|
(6)
|
Compared to the prior
year.
|
U.S.: A leader in health and benefits
U.S. underlying net income of US$161
million increased US$21
million or 15% ($219
million increased $34 million or
18%) from prior year, driven by:
- Group - Health & Protection(1) up
US$15 million: Strong business
growth in Group Benefits and improved group life mortality
experience partially offset by lower Dental results. Dental results
were impacted by a continued acuity shift reflecting higher average
utilization in remaining members as a result of Medicaid
redeterminations following the end of the Public Health Emergency,
partially offset by Medicaid pricing updates and claim and expense
management actions.
- Individual - Protection(1) up US$6
million: Higher net investment results, including a partial offset
from unfavourable credit experience.
Reported net income of US$250
million increased US$145
million or 138% ($339 million
increased $207 million or 157%) from prior year, driven by
favourable ACMA impacts, the increase in underlying net income, and
lower DentaQuest integration costs, partially offset by
market-related impacts primarily from interest rate impacts and
unfavourable real estate experience.
Foreign exchange translation led to an increase of $4 million in underlying net income and an
increase of $6 million in reported
net income.
U.S. group sales of US$219 million were up 22%
($300 million, up 26%), driven by
higher Dental and employee benefits sales. Dental sales reflected
higher Medicaid and commercial dental sales.
As a leader in health and benefits in the U.S., helping members
access the healthcare and coverage they need is at the core of our
strategy. We recently reached the milestone of becoming the largest
dental benefits provider in the U.S.(2) based on
membership with approximately 35 million members. This enables us
to reach even more communities throughout the U.S. including
underserved areas.
We are also making it faster and easier for members to use their
benefits. In the third quarter, we enhanced claims connectivity
across our disability, supplemental health, stop-loss, and dental
products. When a member has more than one of these products and
files a single claim, all other applicable Sun Life benefits will
be processed automatically, ensuring members receive all the
coverage they elected without having to file additional claims.
This creates an advantage for employers who buy multiple Sun Life
U.S. products by ensuring members receive all of their benefits
quickly and seamlessly when they need it most.
Asia: A regional leader
focused on fast-growing markets
Asia underlying net income of
$170 million increased $4 million or 2% from prior year, driven by:
- Wealth & asset management up $18 million: Higher fee income primarily driven
by higher AUM.
- Individual - Protection down $17 million: Good sales momentum and
in-force business growth, and contributions from joint ventures,
were more than offset by unfavourable mortality experience, lower
earnings on surplus, and higher expenses primarily reflecting
continued investments in the business.
- Regional office expenses & other $3 million
improved net loss primarily driven by lower incentive
compensation.
Reported net income of $32 million
decreased $179 million or 85% from
prior year, reflecting unfavourable ACMA and market-related
impacts. The market-related impacts were primarily from interest
rate impacts partially offset by improved real estate experience
and favourable equity market impacts.
Foreign exchange translation led to an increase of $2 million in underlying net income and an
increase of $4 million in
reported net income.
Asia's sales(3):
- Individual sales of $618 million
were up 19%, driven by higher sales in Hong Kong reflecting expanded distribution
capabilities, and India reflecting
growth mainly in the bancassurance channel, partially offset
by lower sales in International due to higher large case sales in
the prior year.
- Wealth sales & asset management gross flows of $2 billion were up 14%, driven by higher fixed
income fund and mutual fund sales in India, partially offset by lower money market
fund sales in the Philippines and
lower Mandatory Provident Fund ("MPF") sales in Hong Kong.
New business CSM of $267 million
in Q3'24 was up from $238 million in
the prior year, primarily driven by higher sales and stronger
profit margins in Hong Kong,
partially offset by lower sales in High-Net-Worth.
We are committed to helping our Clients achieve lifetime
financial security by offering a broad suite of products that
fulfill their needs. During the third quarter, we launched a new
product(4) for high-net-worth Clients, which
addresses a market need for long-term wealth accumulation potential
while offering built-in estate planning.
We continue to expand our capabilities to make it easier for
Clients to do business with us. In the
Philippines, we implemented a new automated underwriting
platform, resulting in a 50% increase in
straight-through-processing by Q3, enhancing the Client experience
through faster turnaround times while also delivering operating
efficiencies.
|
__________
|
|
(1)
|
Effective Q1'24,
reflects a refinement in the allocation methodology for expenses
from Individual - Protection to Group - Health & Protection
business types in the U.S. business group.
|
|
(2)
|
Based on membership as
of August 2024. Ranking compiled by Sun Life and based on data
disclosed by competitors.
|
|
(3)
|
Compared to prior
year.
|
|
(4)
|
Sun Global
Luna.
|
Corporate
Underlying net loss was $92
million compared to underlying net loss of $89 million in the prior year, primarily
reflecting lower investment income from surplus assets.
Reported net loss was $49 million
compared to reported net loss of $105
million in the prior year, driven by market-related
impacts.
Earnings Conference Call
The Company's Q3'24 financial results will be reviewed at a
conference call on Tuesday, November 5, 2024, at
10:00 a.m. ET. Visit www.sunlife.com/QuarterlyReports 10
minutes prior to the start of the event to access the call through
either the webcast or conference call options. Individuals
participating in the call in a listen-only mode are encouraged to
connect via our webcast. Following the call, the webcast and
presentation will be archived and made available on the Company's
website, www.sunlife.com, until the Q3'25 period end.
|
Media Relations
Contact:
|
Investor Relations
Contact:
|
|
Kim Race
|
David Garg
|
|
Director, Corporate
Communications
|
Senior Vice-President,
Capital Management and Investor Relations
|
|
Tel:
416-779-4574
|
Tel:
416-408-8649
|
|
kim.race@sunlife.com
|
david.garg@sunlife.com
|
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
period to period. These non-IFRS financial measures do not have any
standardized meaning and may not be comparable with similar
measures used by other companies. For certain non-IFRS financial
measures, there are no directly comparable amounts under IFRS.
These non-IFRS financial measures should not be viewed in isolation
from or as alternatives to measures of financial performance
determined in accordance with IFRS. Additional information
concerning non-IFRS financial measures and, if applicable,
reconciliations to the closest IFRS measures are available in the
Q3'24 MD&A under the heading N - Non-IFRS Financial Measures
and the Supplementary Financial Information packages that are
available on www.sunlife.com under Investors – Financial results
and reports.
1. Underlying Net Income and Underlying EPS
Underlying
net income is a non-IFRS financial measure that assists in
understanding Sun Life's business performance by making certain
adjustments to IFRS income. Underlying net income, along with
common shareholders' net income (Reported net income), is used as a
basis for management planning, and is also a key measure in our
employee incentive compensation programs. This measure reflects
management's view of the underlying business performance of the
company and long-term earnings potential. For example, due to the
longer term nature of our individual protection businesses, market
movements related to interest rates, equity markets and investment
properties can have a significant impact on reported net income in
the reporting period. However, these impacts are not necessarily
realized, and may never be realized, if markets move in the
opposite direction in subsequent periods or in the case of interest
rates, the fixed income investment is held to maturity.
Underlying net income removes the impact of the following items
from reported net income:
- Market-related impacts reflecting the after-tax difference in
actual versus expected market movements;
- Assumptions changes and management actions;
- Other adjustments:
i) Management's ownership
of MFS shares;
ii) Acquisition,
integration, and restructuring;
iii) Intangible asset
amortization;
iv) Other items that are
unusual or exceptional in nature.
For additional information about the adjustments removed from
reported net income to arrive at underlying net income, refer to
section N - Non-IFRS Financial Measures - 2 - Underlying Net Income
and Underlying EPS in the Q3'24 MD&A.
The following table sets out the post-tax amounts that were
excluded from our underlying net income (loss) and underlying EPS
and provides a reconciliation to our reported net income and EPS
based on IFRS.
|
Reconciliations of
Select Net Income Measures
|
Quarterly
results
|
Year-to-date
|
|
($ millions,
after-tax)
|
Q3'24
|
Q3'23
|
2024
|
2023
|
|
Underlying net
income
|
1,016
|
930
|
2,891
|
2,745
|
|
Market-related
impacts
|
|
|
|
|
|
Equity market
impacts
|
36
|
(21)
|
40
|
(21)
|
|
Interest rate
impacts(1)
|
38
|
127
|
26
|
39
|
|
Impacts of changes in
the fair value of investment properties (real estate
experience)
|
(45)
|
(83)
|
(260)
|
(279)
|
|
Add:
|
Market-related
impacts
|
29
|
23
|
(194)
|
(261)
|
|
Add:
|
Assumption changes and
management actions
|
36
|
35
|
45
|
37
|
|
Other
adjustments
|
|
|
|
|
|
Management's ownership of MFS shares
|
(10)
|
7
|
(22)
|
23
|
|
Acquisition, integration and
restructuring(2)(3)(4)(5)(6)(7)
|
312
|
(89)
|
170
|
(113)
|
|
Intangible asset amortization
|
(35)
|
(35)
|
(109)
|
(94)
|
|
Other(8)(9)
|
—
|
—
|
31
|
—
|
|
Add:
|
Total of other
adjustments
|
267
|
(117)
|
70
|
(184)
|
|
Reported net income -
Common shareholders
|
1,348
|
871
|
2,812
|
2,337
|
|
Underlying EPS
(diluted) ($)
|
1.76
|
1.59
|
4.98
|
4.68
|
|
Add:
|
Market-related impacts
($)
|
0.05
|
0.04
|
(0.34)
|
(0.44)
|
|
Assumption changes and
management actions ($)
|
0.06
|
0.06
|
0.08
|
0.06
|
|
Management's ownership
of MFS shares ($)
|
(0.02)
|
0.01
|
(0.04)
|
0.04
|
|
Acquisition,
integration and restructuring ($)
|
0.54
|
(0.16)
|
0.29
|
(0.20)
|
|
Intangible asset
amortization ($)
|
(0.06)
|
(0.06)
|
(0.19)
|
(0.17)
|
|
Other ($)
|
—
|
—
|
0.05
|
—
|
|
Reported EPS (diluted)
($)
|
2.33
|
1.48
|
4.83
|
3.97
|
|
|
|
(1)
|
Our results are
sensitive to long term interest rates given the nature of our
business and to non-parallel yield curve movements (for example
flattening, inversion, steepening, etc.).
|
|
(2)
|
Amounts relate to
acquisition costs for our SLC Management affiliates,
BentallGreenOak, InfraRed Capital Partners, Crescent Capital Group
LP and Advisors Asset Management, Inc, which include the unwinding
of the discount for Other financial liabilities of $19 million in
Q3'24 and $63 million for the first nine months of 2024 (Q3'23 -
$21 million; for the first nine months of 2023 - $62
million).
|
|
(3)
|
Q3'24 reflects a
decrease of $334 million in estimated future payments for
acquisition-related contingent considerations and options to
purchase the remaining ownership interests of SLC Management
affiliates (Q3'23 - an increase of $42 million). For additional
information, refer to Note 5 of our Interim Consolidated Financial
Statements for the period ended September 30,
2024.
|
|
(4)
|
Includes integration
costs associated with DentaQuest, acquired on June 1,
2022.
|
|
(5)
|
Q2'24 includes a
restructuring charge of $108 million in the Corporate business
group.
|
|
(6)
|
To meet regulatory
obligations, in Q1'24, we sold 6.3% of our ownership interest in
Aditya Birla Sun Life AMC Limited ("partial sale of ABSLAMC"),
generating a gain of $84 million. As a result of the transaction,
our ownership interest in ABSLAMC was reduced from 36.5% to 30.2%
for gross proceeds of $136 million. Subsequently, in Q2'24, we sold
an additional 0.2% of our ownership interest.
|
|
(7)
|
Includes a $65 million
gain on the sale of the sponsored markets business in Canada in
Q1'23 and a $19 million gain on the sale of Sun Life UK in
Q2'23.
|
|
(8)
|
Includes a Pillar Two
global minimum tax adjustment in Q2'24. For additional information,
refer to Note 9 of our Interim Consolidated Financial Statements
for the period ended September 30, 2024 and section C -
Profitability in the Q3'24 MD&A.
|
|
(9)
|
Includes the early
termination of a distribution agreement in Asset Management in
Q1'24.
|
The following table shows the pre-tax amount of underlying net
income adjustments:
|
Quarterly
results
|
Year-to-date
|
|
($ millions)
|
Q3'24
|
Q3'23
|
2024
|
2023
|
|
Underlying net income
(after-tax)
|
1,016
|
930
|
2,891
|
2,745
|
|
Underlying net income
adjustments (pre-tax):
|
|
|
|
|
|
Add:
|
Market-related
impacts
|
(12)
|
107
|
(207)
|
(290)
|
|
Assumption changes and
management actions ("ACMA")(1)
|
63
|
41
|
73
|
47
|
|
Other
adjustments
|
246
|
(156)
|
33
|
(255)
|
|
Total underlying net
income adjustments (pre-tax)
|
297
|
(8)
|
(101)
|
(498)
|
|
Add:
|
Taxes related to
underlying net income adjustments
|
35
|
(51)
|
22
|
90
|
|
Reported net income -
Common shareholders (after-tax)
|
1,348
|
871
|
2,812
|
2,337
|
|
|
|
(1)
|
In this document, the
reported net income impact of ACMA excludes amounts attributable to
participating policyholders and includes non-liability impacts. In
contrast, the net income impacts of method and assumption changes
in the Interim Consolidated Financial Statements for the period
ended September 30, 2024 includes amounts attributable to
participating policyholders and excludes non-liability
impacts.
|
Taxes related to underlying net income adjustments may vary from
the expected effective tax rate range reflecting the mix of
business based on the Company's international operations and other
tax-related adjustments.
2. Additional Non-IFRS Financial Measures
Management also uses the following non-IFRS financial measures,
and a full listing is available in section N - Non-IFRS Financial
Measures in the Q3'24 MD&A.
Assets under management. AUM is a non-IFRS financial
measure that indicates the size of our Company's assets across
asset management, wealth, and insurance. There is no standardized
financial measure under IFRS. In addition to the most directly
comparable IFRS measures, which are the balance of General funds
and Segregated funds on our Statements of Financial Position, AUM
also includes Third-party AUM and Consolidation adjustments.
"Consolidation adjustments" is presented separately as
consolidation adjustments apply to all components of total AUM. For
additional information about Third-party AUM, refer to sections D -
Growth - 2 - Assets Under Management and N - Non-IFRS Financial
Measures in the Q3'24 MD&A.
|
Quarterly
results
|
|
($ millions)
|
Q3'24
|
Q3'23
|
|
Assets under
management
|
|
|
|
General fund
assets
|
216,180
|
193,858
|
|
Segregated
funds
|
145,072
|
119,988
|
|
Third-party
AUM(1)
|
1,196,332
|
1,063,075
|
|
Consolidation
adjustments(1)
|
(43,014)
|
(36,780)
|
|
Total assets under
management
|
1,514,570
|
1,340,141
|
|
|
|
(1)
|
Represents a non-IFRS
financial measure. For more details, see section N - Non-IFRS
Financial Measures in the Q3'24 MD&A.
|
Cash and other liquid assets. This measure is comprised of
cash, cash equivalents, short-term investments, and publicly traded
securities, net of loans related to acquisitions and short-term
loans that are held at SLF Inc. (the ultimate parent company), and
its wholly owned holding companies. This measure is a key
consideration of available funds for capital re-deployment to
support business growth.
|
($ millions)
|
As at September 30,
2024
|
As at December 31,
2023
|
|
Cash and other
liquid assets (held at SLF Inc. and its wholly owned holding
companies):
|
|
|
|
Cash, cash equivalents
& short-term securities
|
75
|
712
|
|
Debt
securities(1)
|
1,032
|
1,228
|
|
Equity
securities(2)
|
107
|
102
|
|
Sub-total
|
1,214
|
2,042
|
|
Less: Loans related to
acquisitions and short-term loans(3) (held at SLF Inc.
and its wholly owned holding companies)
|
—
|
(411)
|
|
Cash and other liquid
assets (held at SLF Inc. and its wholly owned holding
companies)
|
1,214
|
1,631
|
|
|
|
(1)
|
Includes publicly
traded bonds.
|
|
(2)
|
Includes ETF
Investments.
|
|
(3)
|
Includes drawdowns from
credit facilities to manage timing of cash flows.
|
3. Reconciliations of Select Non-IFRS Financial
Measures
Underlying Net Income to Reported Net Income Reconciliation -
Pre-tax by Business Group
|
Q3'24
|
|
($ millions)
|
Asset
Management
|
Canada
|
U.S.
|
Asia
|
Corporate
|
Total
|
|
Underlying net income
(loss)
|
344
|
375
|
219
|
170
|
(92)
|
1,016
|
|
Add:
|
Market-related impacts
(pre-tax)
|
(7)
|
13
|
14
|
(55)
|
23
|
(12)
|
|
ACMA
(pre-tax)
|
—
|
(47)
|
180
|
(74)
|
4
|
63
|
|
Other adjustments
(pre-tax)
|
304
|
(8)
|
(43)
|
(7)
|
—
|
246
|
|
Tax expense
(benefit)
|
3
|
49
|
(31)
|
(2)
|
16
|
35
|
|
Reported net income
(loss) - Common shareholders
|
644
|
382
|
339
|
32
|
(49)
|
1,348
|
|
Q3'23
|
|
Underlying net income
(loss)
|
330
|
338
|
185
|
166
|
(89)
|
930
|
|
Add:
|
Market-related impacts
(pre-tax)
|
(3)
|
94
|
39
|
(1)
|
(22)
|
107
|
|
ACMA
(pre-tax)
|
—
|
20
|
(30)
|
51
|
—
|
41
|
|
Other adjustments
(pre-tax)
|
(81)
|
3
|
(71)
|
(7)
|
—
|
(156)
|
|
Tax expense
(benefit)
|
22
|
(90)
|
9
|
2
|
6
|
(51)
|
|
Reported net income
(loss) - Common shareholders
|
268
|
365
|
132
|
211
|
(105)
|
871
|
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 legislation. Forward-looking statements
contained in this document include statements (i) relating to our
strategies, plans, targets, goals and priorities; (ii) relating to
our growth initiatives and other business objectives; (iii)
relating to SLC Management's estimated acquisition-related
liabilities; (iv) that are predictive in nature or that depend upon
or refer to future events or conditions; and (v) that include words
such as "achieve", "aim", "ambition", "anticipate", "aspiration",
"assumption", "believe", "could", "estimate", "expect", "goal",
"initiatives", "intend", "may", "objective", "outlook", "plan",
"project", "seek", "should", "strategy", "strive", "target",
"will", and similar expressions. Forward-looking statements include
the information concerning our possible or assumed future results
of operations. These statements represent our current expectations,
estimates, and projections regarding future events and are not
historical facts, and remain subject to change.
Forward-looking statements are not a guarantee of future
performance and involve risks and uncertainties that are difficult
to predict. Future results and shareholder value may differ
materially from those expressed in these forward-looking statements
due to, among other factors, the matters set out in the Q3'24
MD&A under the headings C - Profitability - 5 - Income taxes, F
- Financial Strength and I - Risk Management and in SLF Inc.'s 2023
AIF under the heading Risk Factors, and the factors detailed in SLF
Inc.'s other filings with Canadian and U.S. securities regulators,
which are available for review at www.sedarplus.ca and www.sec.gov,
respectively.
Important risk factors that could cause our assumptions and
estimates, and expectations and projections to be inaccurate and
our actual results or events to differ materially from those
expressed in or implied by the forward-looking statements contained
in this document, are set out below. The realization of our
forward-looking statements essentially depends on our business
performance which, in turn, is subject to many risks. Factors that
could cause actual results to differ materially from expectations
include, but are not limited to: market risks - related to
the performance of equity markets; changes or volatility in
interest rates or credit spreads or swap spreads; real estate
investments; fluctuations in foreign currency exchange rates; and
inflation; insurance risks - related to mortality
experience, morbidity experience and longevity; policyholder
behaviour; product design and pricing; the impact of
higher-than-expected future expenses; and the availability, cost
and effectiveness of reinsurance; credit risks - related to
issuers of securities held in our investment portfolio, debtors,
structured securities, reinsurers, counterparties, other financial
institutions and other entities; business and strategic
risks - related to global economic and geopolitical conditions;
the design and implementation of business strategies; changes in
distribution channels or Client behaviour including risks relating
to market conduct by intermediaries and agents; the impact of
competition; the performance of our investments and investment
portfolios managed for Clients such as segregated and mutual funds;
shifts in investing trends and Client preference towards products
that differ from our investment products and strategies; changes in
the legal or regulatory environment, including capital requirements
and tax laws; the environment, environmental laws and regulations;
operational risks - related to breaches or failure of
information system security and privacy, including cyber-attacks;
our ability to attract and retain employees; legal, regulatory
compliance and market conduct, including the impact of regulatory
inquiries and investigations; the execution and integration of
mergers, acquisitions, strategic investments and divestitures; our
information technology infrastructure; a failure of information
systems and Internet-enabled technology; dependence on third-party
relationships, including outsourcing arrangements; business
continuity; model errors; information management; liquidity
risks - the possibility that we will not be able to fund all
cash outflow commitments as they fall due; and other risks -
changes to accounting standards in the jurisdictions in which we
operate; risks associated with our international operations,
including our joint ventures; market conditions that affect our
capital position or ability to raise capital; downgrades in
financial strength or credit ratings; and tax matters, including
estimates and judgements used in calculating taxes.
The Company does not undertake any obligation to update or
revise its forward-looking statements to reflect events or
circumstances after the date of this document or to reflect the
occurrence of unanticipated events, except as required by law.
About Sun Life
Sun Life is a leading international financial services
organization providing asset management, wealth, insurance and
health solutions to individual and institutional Clients. Sun Life
has operations in a number of markets worldwide, including
Canada, the United States, the United Kingdom, Ireland, Hong
Kong, the Philippines,
Japan, Indonesia, India, China,
Australia, Singapore, Vietnam, Malaysia and Bermuda. As of September 30, 2024, Sun
Life had total assets under management of $1.51 trillion. For more information, please
visit www.sunlife.com.
Sun Life Financial Inc. trades on the Toronto (TSX), New
York (NYSE) and Philippine (PSE) stock exchanges under the
ticker symbol SLF.
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SOURCE Sun Life Financial Inc.