Manulife Financial Corporation · TSX:MFC
Manulife Financial — Q1 2025 Earnings Presentation
42 slides from Manulife Financial's earnings presentation, May 8, 2025
Slide 1: First Quarter 2025 Financial & Operating Results
First Quarter 2025 Financial & Operating Results May 8, 2025
Slide 2: Caution regarding forward-looking statements
conditions (including but not limited to the performance, volatility and property and exposure to claims of infringement; our inability to Caution regarding correlation of equity markets, interest rates, credit and swap spreads, inflation rates, currency rates, investment losses and defaults, market
Slide 3: Conference call participants
Conference call participants Roy Gori, Paul Lorentz President & Chief Executive Officer. President & CEO, Manulife Wealth and Asset Management Marc Costantini Colin Simpson Global Head of Strategy & Inforce Management Chief Financial Officer Steve Finch Brooks Tingle Chief Actuary President & CEO, J
Slide 4: Agenda
Agenda • Overview and strategic update Roy Gori, President & Chief Executive Officer • Financial and operating results Colin Simpson, Chief Financial Officer • Closing remarks Roy Gori, President & Chief Executive Officer • Question & Answer session 4
Slide 5: Overview and strategic update
Overview and strategic update Roy Gori President & Chief Executive Officer 5
Slide 6: Strong results and robust balance sheet
Strong results and robust balance sheet Growth Profitability Balance sheet Note: All changes reflect 1Q25 results compared with 1Q24 results. Certain 2024 figures and growth rates have been updated to align with the presentation of Global Minimum Taxes (“GMT”) in 2025 throughout the presentation. Se
Slide 7: Manulife's low risk profile provides a strong foundation
Manulife’s low risk profile provides a strong foundation Equity markets Interest rates2 Potential impact on total comprehensive income from a 10% decline in public equity Potential impact on total comprehensive income from an immediate parallel 50-bp returns, as a percentage of book value from the r
Slide 8: Reinsurance transactions have further transformed our portfolio to higher return and lower risk
Reinsurance transactions have further transformed our portfolio to higher return and lower risk Attractive reinsurance transaction outcomes1 Reduced direct shareholder exposure to ALDA Proportion of ALDA with direct shareholder exposure has ~$2.8B Capital release decreased to 7% of total invested as
Slide 9: The diversity of Manulife's businesses is a key source of strength
The diversity of Manulife’s businesses is a key source of strength Core earnings1 Asia APE sales2 Global WAM core earnings3 (C$ billions) 9 Note: Based on full year 2024 results, unless noted otherwise. Operating segment core earnings contributions expressed as percentages exclude Corporate & Other.
Slide 10: Strong track record of execution in Asia
Strong track record of execution in Asia Strong execution over the short- and long-term, …supported by agent productivity and improved outgrowing peers… customer satisfaction Asia new business value (“NBV”)1 NBV per active agent Asia Net Promoter Score (“NPS”)3 10 Note: All footnotes are on slide 38
Slide 11: Financial and operating results
Financial and operating results Colin Simpson Chief Financial Officer 11
Slide 12: Strong top-line momentum in Asia; double-digit new business value growth
Strong top-line momentum in Asia; double-digit new business value growth across all insurance segments APE sales1 New business CSM2 New business value1 Global WAM net flows1 12 Note: All footnotes are on slide 39.
Slide 13: Strong Global WAM and insurance results partially offset by higher ECL
Strong Global WAM and insurance results partially offset by higher expected credit loss (“ECL”) and a provision for California wildfires Drivers of earnings1 (C$ millions) 1Q24 1Q25 Risk adjustment release 223 212 CSM recognized for service provided 513 529 1Q25 core earnings decreased 1%2 from the
Slide 14: Net income includes $732 million realized loss related to RGA U.S. Reinsurance Transaction
Net income includes $732 million realized loss on debt instruments related to RGA U.S. Reinsurance Transaction; offsetting change in OCI neutralizes book value impact Core earnings1 Earnings for the first quarter 2025 (C$ millions) (C$ millions, except per share amounts) 1Q25 1Q25 Post-tax Per share
Slide 15: Asia: Strong momentum in new business growth
Asia: Strong momentum in new business growth; record levels of APE sales, new business CSM, and new business value APE sales1 New business CSM2 New business value1 Core earnings2 Net income (US$ millions) (US$ millions) (US$ millions) (US$ millions) (US$ millions) • Higher sales reflect strong growt
Slide 16: Global WAM: Continued margin expansion driven by strong growth in AUM
Global WAM: Continued margin expansion driven by strong growth in AUM Net flows by Average AUMA1 Core EBITDA margin2 Core earnings3 Net income business line1 (C$ billions) (%) (C$ millions) (C$ millions) (C$ billions) • Net inflows of $0.5 billion reflect positive flows from Institutional, largely o
Slide 17: Canada: Strong new business results
Canada: Strong new business results APE sales1 New business CSM2 New business value1 Core earnings2 Net income (C$ millions) (C$ millions) (C$ millions) (C$ millions) (C$ millions) • Strong sales growth reflects higher volumes across all business lines • Solid growth in core earnings reflects overal
Slide 18: U.S.: Solid new business results; core earnings impacted by lower spreads and ECL
U.S.: Solid new business results; core earnings impacted by lower investment spreads and ECL APE sales1 New business CSM2 New business value1 Core earnings2 Net income (US$ millions) (US$ millions) (US$ millions) (US$ millions) (US$ millions) • Solid sales growth reflects continued demand for accumu
Slide 19: Steady growth in adjusted book value per share while returning capital
Steady growth in adjusted book value per share while continuing to return capital to shareholders Adjusted book value per Capital returned to common share1 shareholders (C$) (C$ billions) 19 Note: All footnotes are on slide 40.
Slide 20: Maintained strong balance sheet, providing financial flexibility
Maintained strong balance sheet, providing financial flexibility Capital metrics Financial leverage ratio1 (%) 20 Note: All footnotes are on slide 40.
Slide 21: Focused execution on all targets
Focused execution on all targets 2023 2024 1Q25 2027 targets Core ROE1 15.9% 16.2% 15.6% 18%+ Remittances2 $5.5B $7.0B N/A $22B+ cumulative Medium-term targets New business CSM growth3 12% 32% 31% 15% CSM balance growth3 21% 3% 1% 8-10% Core EPS growth1,4 17% 10% 3% 10-12% Expense efficiency ratio1
Slide 22: Closing remarks
Closing remarks Roy Gori President & Chief Executive Officer 22
Slide 23: Question & Answer session
{\)_ Manulife Question & Answer : session
Slide 24: Appendix
Appendix • Financial KPI summary • Insurance experience, ECL and OCI • Changes in CSM • Global WAM investment performance • Invested assets • Sensitivities • Non-GAAP and other financial measures • Footnotes 24
Slide 25: 1Q25 financial KPI summary
1Q25 financial KPI summary (C$ millions, unless noted) 1Q24 1Q25 Change APE sales1 (C$ billions) $1.9 $2.7 ▲ 37% New business CSM2 $658 $907 ▲ 31% New business value1 $641 $907 ▲ 36% Growth CSM balance growth2 23% 1% ▼ 22 pps Global WAM net flows1 (C$ billions) $6.7 $0.5 ▼ $6.2 Global WAM core EBITD
Slide 26: Insurance experience impacts on core earnings and CSM
Insurance experience impacts on core earnings and CSM 1Q25 insurance experience gains/(losses) (C$ millions, pre-tax) Core earnings CSM (net of NCI) Total • Insurance experience is reflected in core earnings impact1 impact impact and in the CSM – the impacts need to be considered together Asia 25 16
Slide 27: Change in ECL for 1Q25 was a charge
Change in ECL for 1Q25 was a charge Change in ECL, (charges)/recoveries Change in ECL for 1Q25, (charges)/recoveries (C$ millions, pre-tax) (C$ millions, pre-tax) Stage 1 Stage 2 Stage 3 Total Net transfers between stages - 5 (5) - Net new originations or purchases (8) 8 - - Changes to risk, paramet
Slide 28: Other comprehensive income reflects the recent reinsurance transaction
Other comprehensive income reflects the recent reinsurance transaction 1Q25 total comprehensive income (C$ millions) Net income attributed to shareholders 485 Net gain in other comprehensive income driven by: Other comprehensive income (OCI) • Net favourable impact from the sale of fair value throug
Slide 29: Generated strong annualized organic growth in CSM of 11%
Generated strong annualized organic growth in CSM of 11%1 1Q25 changes in CSM (C$ millions, pre-tax) • Strong annualized growth of 11% in organic CSM during 1Q251 was supported by contributions from new business CSM, which increased 31% year-over-year • Inorganic CSM movement reflects the unfavourab
Slide 30: Global WAM: Solid long-term investment performance
Global WAM: Solid long-term investment performance Public asset class 3-year 5-year 10-year % of assets above peer 0-50% 51-75% 76-100% % of total Equity 50% 67% 68% 92% • Our strategies are performing in Fixed income 24% 24% 74% 87% line with expectations given the current market conditions and our
Slide 31: Diversified high quality asset mix avoids risk concentrations
Diversified high quality asset mix avoids risk concentrations Total invested assets (C$445.7 billion, carrying values as of March 31, 2025) • High quality and diverse asset mix • 96% of bonds are investment grade • Large holdings in defensive government and utility bonds • 70% of bonds are rated A o
Slide 32: Interest rate related sensitivities remain within our risk appetite limits
Interest rate related sensitivities remain within our risk appetite limits 4Q24 1Q25 Potential impacts1 of an immediate parallel change in “interest rates”: (C$ millions, post-tax except CSM) -50bp +50bp -50bp +50bp CSM 100 (200) 100 (200) Net income attributed to shareholders 100 (100) 100 (100) Ot
Slide 33: Potential immediate impact on CSM and total comprehensive income from 10% equity change
Potential immediate impact1 on CSM and total comprehensive income arising from a 10% change in public equity returns 1Q25 (C$ millions) -10% +10% Other Total Other Total CSM Net income comprehensive comprehensive CSM Net income comprehensive comprehensive (pre-tax) (post-tax) income income (pre-tax)
Slide 34: Non-GAAP and other financial measures
Non-GAAP and other Non-GAAP ratios include core return on common shareholders’ equity (“core ROE”); diluted core earnings per common share For more information on the non-GAAP and other financial measures in this document, please see “Non-GAAP and Other financial measures (“core EPS”); core EPS excl
Slide 35: Reconciliation: Core earnings for operating segments
Reconciliation: Core earnings for operating segments 2017 ($ millions, post-tax and based on actual foreign exchange rates in effect in the applicable Corporate Asia Canada U.S. Global WAM Total reporting period, unless otherwise stated) and Other Net income (loss) attributed to shareholders (post-t
Slide 36: Reconciliation: Core earnings excluding P&C and ECL
Reconciliation: Core earnings excluding P&C and ECL ($ millions, post-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated) 1Q25 1Q24 Net income (loss) attributed to shareholders (post-tax) per financial statement 485 866 Less: Items ex
Slide 37: Reconciliation: Net income excluding P&C, ECL and transaction impacts
Reconciliation: Net income attributed to shareholders excluding P&C, ECL and transaction impacts ($ millions, post-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated) 1Q25 1Q24 Net income (loss) attributed to shareholders (post-tax) p
Slide 38: Footnotes
Footnotes Slide Footnote 1 Percentage changes in diluted earnings per common share (“EPS”), diluted core earnings per common share (“core EPS”), EPS excluding P&C, ECL and transaction impacts, core EPS excluding P&C and ECL, and new business CSM net of non-controlling interests (“NCI”) stated on a c
Slide 39: Footnotes
Footnotes Slide Footnote 1 Percentage change in APE sales and NBV are stated on a constant exchange rate basis. For more information on APE sales, NBV and net flows, see “Non-GAAP and Other Financial 12 Measures” above. 2 Percentage change in new business CSM net of NCI stated on a constant exchange
Slide 40: Footnotes
Footnotes Slide Footnote 1 Adjusted book value per common share and CSM balance per common share are non-GAAP ratios. Adjusted book value per common share represents book value per common share plus 19 CSM balance (post-tax) net of NCI per common share. 20 1 Financial leverage ratio is a non-GAAP ra
Slide 41: Footnotes
Footnotes Slide Footnote 31 1 Includes government-insured mortgages (C$8.0 billion or 14% of total mortgages). 1 All estimated sensitivities are approximate and based on a single parameter. No simple formula can accurately estimate ultimate future impact. Refer to the “Interest Rate and Spread Risk
Slide 42: Manulife
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