Sun Life Financial (SLF) Q2 2024 earnings summary

Executive summary

• Achieved record underlying net income of CAD 1 billion, up 9% year-over-year, with underlying EPS growth of 10% and ROE of 18.1%.

• Reported net income was CAD 646 million, down 2% year-over-year, reflecting restructuring charges and market-related impacts.

• Wealth and asset management and Individual Protection segments drove earnings growth, while Group Health & Protection saw declines.

• Announced a restructuring program targeting over CAD 200 million in pre-tax savings by 2026, with a one-time charge of up to CAD 138 million this quarter.

• Assets under management grew 7% year-over-year to CAD 1.47 trillion.

Financial highlights

• Underlying EPS was CAD 1.72, up 10% year-over-year; reported EPS was CAD 1.11, down 1%.

• Book value per share increased by 8% year-over-year to CAD 37.70.

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

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

• Group Health & Protection sales fell 18% year-over-year; Individual Protection sales rose 25%.

Outlook and guidance

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

• U.S. Dental business expected to deliver underlying earnings of approximately $100 million by 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.

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

• AUM not yet earning fees in SLC Management is expected to generate over $180 million in annualized fee-related revenue once invested.