Sun Life Financial (SLF) Q2 2024 earnings summary

Executive summary

• Achieved record underlying net income of $1,000 million, up 9% year-over-year, with underlying EPS growth of 10% and ROE of 18.1%; reported net income was $646 million, down 2% due to a $108 million post-tax restructuring charge and market-related impacts.

• Strong performance in individual protection and wealth & asset management, especially in Canada and Asia, while Group Health & Protection declined due to U.S. Dental headwinds.

• Assets under management grew 7% year-over-year to $1,465 billion, despite net outflows in asset management.

• Announced a broad-based restructuring program targeting over $200 million in pre-tax savings by 2026, with benefits ramping up through 2025.

• Launched new digital and AI initiatives, issued a $750 million sustainability bond, and announced a new share buyback program for up to 15 million shares.

Financial highlights

• Underlying net income of $1,000 million, up 9% year-over-year; underlying EPS of $1.72, up 10%; reported net income of $646 million, down 2%.

• Underlying ROE was 18.1%; reported ROE was 11.7%.

• Book value per share increased to $37.70, up 8% year-over-year.

• Record new business CSM of $437 million, up 62% year-over-year; total CSM at $12.5 billion, up 11%.

• Organic capital generation was $588 million for the quarter.

Outlook and guidance

• Expect full realization of $200 million pre-tax cost savings by 2026, with benefits ramping up through 2025.

• U.S. Dental business expects underlying earnings of $100 million or more in 2025, with recovery beginning in Q3 and significant improvement in Q4.

• SLC Management remains on track for 2025 net income targets, focusing on AUM growth and product expansion.

• Pillar Two global minimum tax is expected to increase the effective tax rate on underlying net income by 1–2 percentage points.

• MFS net outflows expected to moderate if U.S. rates decline, potentially returning to net positive flows.