Voya Financial, Inc. · NYSE:VOYA
Voya Financial — Q4 2019 Earnings Presentation
21 slides from Voya Financial's earnings presentation, Feb 11, 2020
Slide 1: Voya Financial Fourth Quarter 2019 Investor Presentation
Voya Financial Fourth Quarter 2019 Investor Presentation February 11, 2020
Slide 2: Forward-Looking and Other Cautionary Statements
Forward-Looking and Other Cautionary Statements This presentation and the remarks made orally contain forward-looking statements. The company does not assume any obligation to revise or update these statements to reflect new information, subsequent events or changes in strategy. Forward-looking stat
Slide 3: Agenda
Agenda 1. Key Themes and Strategic Priorities ■ Rod Martin, Chairman and Chief Executive Officer 2. Business Segment Performance and Financial Highlights ■ Mike Smith, Chief Financial Officer 3
Slide 4: Key Themes
Key Themes ■ Normalized 4Q’19 adjusted operating earnings of $1.19 per share1, excluding: Achieved ■ $0.12 of prepayment and alternative income above our long-term expectations ■ $(0.06) of DAC/VOBA and other intangibles unlocking Solid EPS Growth ■ $(0.18) of stranded costs2 from the sale of Indivi
Slide 5: Recent Enterprise Accomplishments
Recent Enterprise Accomplishments 2020 100 Most Sustainable Companies List Ranked No. 3 overall; Highest-ranked Named to Fortune’s list of the 2020 financial services company World’s Most Admired Companies Best Places to Work for Member of the 2020 Bloomberg LGBTQ Equality for the 15th Gender-Equali
Slide 6: Agenda
Agenda 1. Key Themes and Strategic Priorities ■ Rod Martin, Chairman and Chief Executive Officer 2. Business Segment Performance and Financial Highlights ■ Mike Smith, Chief Financial Officer 6
Slide 7: Fourth Quarter and Full Year 2019 Results – Financial Highlights
Fourth Quarter and Full Year 2019 Results – Financial Highlights Net Income Available to After-tax Adjusted Operating Common Shareholders – Earnings Per Share¹ (Normalized) Includes Impact from Individual Life sale 4Q’19 FY’19 4Q’19 FY’19 $1.19 $4.22 $(776) $(379) per diluted share per diluted share
Slide 8: Retirement – Industry Leading Provider of Retirement Solutions
Retirement – Industry Leading Provider of Retirement Solutions across all Plan Sizes and Markets Adjusted Operating Earnings1 ($ millions) Full Service Client Assets ($ billions) Current Quarter TTM Spread-based Fee-based FY’19 includes higher notable and volume related admin $702 expenses5 as well
Slide 9: Investment Management – Delivering Strong Investment Performance and Net Flows
Investment Management – Delivering Strong Investment Performance and Net Flows Adjusted Operating Earnings1 ($ millions) Assets Under Management ($ billions) Current Quarter TTM General Account External Clients $217 $223 $190 $203 $180 $147 $161 $167 Includes Prepayments and $44 $59 $56 $56 $57 Alte
Slide 10: Employee Benefits – Growing while Maintaining Underwriting and Expense Discipline
Employee Benefits – Growing while Maintaining Underwriting and Expense Discipline Adjusted Operating Earnings1 ($ millions) Annualized In-Force Premiums ($ millions) Current Quarter TTM Group Life & Disability Stop Loss Voluntary $2,144 $2,138 $1,939 $392 $390 $199 $311 $160 $969 $1,037 $1,038 Inclu
Slide 11: Adjusted Operating EPS Considerations
Adjusted Operating EPS Considerations 4Q’19 Financial Results Reported 4Q’19 Adjusted Operating EPS1 $1.07 Includes: ■ DAC/VOBA and other intangibles unlocking (0.06) ■ Prepayment fees and alternative income above long-term expectations 0.12 ■ Stranded costs from Individual Life transaction (0.18) N
Slide 12: Strong Capital Position
Strong Capital Position Estimated Combined Excess Capital Debt-to-Capital Ratio3 RBC Ratio¹ ($ millions)2 489% $896 30.4% Target: Target: 400% 30% Shares repurchased in Expected 2020 share Targeted annual $1.1B FY’19 $1B+ repurchases 1%+ dividend yield 1. Estimated combined RBC ratio primarily for o
Slide 13: Tax Benefits Remain a Key Source of Value
Tax Benefits Remain a Key Source of Value Deferred Tax Asset Attributes1,2,3 Voya Implied Valuation ex-DTA $62.34 $8.94 ■ Nominal DTA Value of $2,017 million as of 12/31/19 $53.40 ■ NPV of DTA of $1,180 million as of 12/31/19 Implied forward 11.2x ■ Effective tax rate of 15 - 18% P/E multiple6 ■ Exp
Slide 14: Long-Term Targets Enhanced Following Announcement of Sale of Individual Life Business
Long-Term Targets Enhanced Following Announcement of Sale of Individual Life Business High End of Streamlined EPS Growth Target1 Free Cash Flow Share Repurchases Businesses Conversion 3 10%+ 85 - 95% $1 billion+ High Growth, Normalized FCF Share High Return, EPS Growth Conversion Repurchases Capital
Slide 15: Helping Americans Get Ready to Retire Better
Helping Americans Get Ready to Retire Better 1 Achieved Solid EPS Growth in 2019 2 Driving Organic Growth and Cost Savings 3 Further Simplified Business via Sale of Individual Life 4 Capital Position Remains Strong 15
Slide 16: Appendix
PLAN | INVEST | PROTECT 16 FINANCIAL
Slide 17: Near-Term EPS Growth Path Following Sale of Individual Life
Near-Term EPS Growth Path Following Sale of Individual Life $0.36 - $0.46 $0.15 - $0.20 $0.18 - $0.22 ($0.28) - ($0.30) ($0.18) - ($0.22) $1.80 - $1.90 $1.57 Reduce legal entities and administrative $1.45 $1.27 systems $1.27 $1.07 Streamline $1.07 operations and reporting TSA / ASA revenues 3
Slide 18: Reconciliation of 4Q'19 and FY'19 Adjusted Operating Earnings to Net Income
Reconciliation of 4Q’19 and FY’19 Adjusted Operating Earnings to Net Income ($ million; all figures are after-tax) 4Q’19 153 (37) (1,084) 6 14 0 (50) 222 (776) 2 Adjusted Net Investment Net Gains Net Guaranteed Income Related Income (Loss) on Immediate Other Net Income Operating Gains (Losses) (Loss
Slide 19: Seasonality of Financial Items
Seasonality of Financial Items 1Q 2Q 3Q 4Q ■ Corporate Markets tends to have ■ Education Tax-Exempt ■ Corporate Markets typically see the highest recurring deposits Markets typically see lowest highest transfer / single deposits Retirement recurring deposits ■ Withdrawals also tend to ■ Withdrawals
Slide 20: Analyst Modeling Considerations
Analyst Modeling Considerations Prepayment Income ■ Long-term prepayment income quarterly expectation in 2020 (pre-tax, pre-DAC): $8 million for Retirement and Alternative ■ Approximately 9% annual long-term expected returns (pre-tax, pre-DAC) for alternative income Income ■ Annual full service recu
Slide 21: Continued Reliable Long-Term Investment Performance Will Lead to Future Success
Continued Reliable Long-Term Investment Performance Will Lead to Future Success % AUM Above Benchmark or Peer Median1 97 99 100 84 78 76 73 72 70 47 36 35 Equity Multi-Asset Fixed Voya IM Income Total 3 Year 5 Year 10 Year 1. Voya Investment Management calculations as of December 31, 2019. Metrics p