Sun Life Financial (SLF) Q2 2024 earnings summary

Executive summary

• Achieved record underlying net income of CAD 1 billion, up 9% year-over-year, driven by strong individual protection and wealth management growth, with continued strength in Canada and Asia, and underlying ROE at 18.1%.

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

• Wealth and asset management earnings showed momentum, supported by increased assets under management, which grew 7% year-over-year to CAD 1.47 trillion.

• Executed the largest Canadian pension risk transfer transaction by a single insurer at CAD 1.2 billion.

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

Financial highlights

• Underlying net income: CAD 1 billion, up 9% year-over-year.

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

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

• Record new business CSM of CAD 437 million, up 62% year-over-year.

• Wealth sales and asset management gross flows rose 9% to CAD 46.3 billion; Individual Protection sales increased 25% to CAD 753 million.

Outlook and guidance

• U.S. Dental expects underlying earnings of USD 100 million or more in 2025, with recovery beginning in Q3 and accelerating in Q4 2024.

• Restructuring savings to be realized ratably through 2025 and fully by 2026.

• Organic capital generation expected to normalize at 20%-30% of underlying net income over time.

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

• Continued confidence in achieving medium-term financial objectives.