Voya Financial, Inc. · NYSE:VOYA
Voya Financial — Q2 2019 Earnings Presentation
23 slides from Voya Financial's earnings presentation, Aug 7, 2019
Slide 1: Voya Financial Second Quarter 2019 Investor Presentation
Voya Financial Second Quarter 2019 Investor Presentation August 7, 2019
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 revise or update them to reflect new information, subsequent events or changes in strategy. Forward-looking statements include statements relating to
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 2Q’19 adjusted operating earnings1 of $1.30 per share is 11% On Track to higher year-over-year despite 2Q’19 adverse Individual Life mortality Deliver FY’19 - Prepayment and alternative income above long-term expectations 10%+ EPS - 2Q’19 adjusted operating earnings2 of $1.52
Slide 5: Recent Enterprise Accomplishments
Recent Enterprise Accomplishments Maintained spot on MSCI ESG Leaders Index Reconfirmed as a constituent of MSCI ESG rating upgraded the FTSE4Good Index for meeting globally-recognized ESG practices 5
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: Second Quarter 2019 Results – Financial Highlights
Second Quarter 2019 Results – Financial Highlights After-tax Adjusted Operating Net Income Available to Earnings Per Share¹ (Normalized) Common Shareholders3 2Q’19 2Q’19 $1.30 $226 per diluted share million Excludes: 2Q’19 Includes: 2Q’19 ■ Prepayment fees and alternative income above / 0.23 ■ Adjus
Slide 8: Retirement – Industry Leading Provider with Strong Momentum of Profitable Growth
Retirement – Industry Leading Provider with Strong Momentum of Profitable Growth Adjusted Operating Earnings1 ($ millions) Full Service Client Assets ($ billions) Current Quarter TTM Spread-based Fee-based $686 $628 $130 $134 $125 $94 $99 $103 Includes Prepayments and $166 $175 $31 $31 $31 Alternati
Slide 9: Investment Management – Delivering Strong Investment Performance and Net Flows
Investment Management – Delivering Strong Investment Performance and Net Flows Including Specialty Capabilities Adjusted Operating Earnings1 ($ millions) Assets Under Management ($ billions) Current Quarter TTM General Account External Clients $207 $210 $214 $195 $167 $152 $154 $158 Includes Prepaym
Slide 10: Employee Benefits – Growing while Maintaining Underwriting Discipline
Employee Benefits – Growing while Maintaining Underwriting Discipline Adjusted Operating Earnings1 ($ millions) Annualized In-Force Premiums ($ millions) Current Quarter TTM Group Life & Disability Stop Loss Voluntary $158 $180 $2,163 $2,152 $1,914 $390 $392 $312 $1,053 $1,045 $938 $664 $720 $715 In
Slide 11: Individual Life – Disciplined Management of In-Force Block
Individual Life – Disciplined Management of In-Force Block Adjusted Operating Earnings1 ($ millions) Net Underwriting Gain4 ($ millions) Current Quarter TTM Current Quarter TTM $267 $210 $234 $182 $144 Includes Prepayments and $72 $53 $52 $44 Alternative Income $14 Above/(Below) Expectations2: 2Q’18
Slide 12: Adjusted Operating EPS Considerations
Adjusted Operating EPS Considerations 2Q’19 Financial Results Reported 2Q’19 Adjusted Operating EPS1 $1.52 Includes: ■ DAC/VOBA and other intangibles unlocking 0.01 ■ Prepayment fees and alternative income above long-term expectations (0.23) Normalized 2Q’19 Adjusted Operating EPS1 $1.30 3Q’19 Consi
Slide 13: Macroeconomic Sensitivities
Macroeconomic Sensitivities Diversified Sources of Earnings Impacts2 Adjusted Operating Revenue1 $4 – 5 million annual, pre-tax operating earnings impact for 23% every 1% move in S&P 500 44% Fee Income Investment Spread Net Underwriting 2 – 4% annual, pre-tax operating earnings impact 33% from 1
Slide 14: Strong Capital Position
Strong Capital Position Estimated Combined Excess Capital Debt-to-Capital Ratio4 RBC Ratio¹ ($ millions)3 429% $540 27.0% Target: Target: 400% 30% $446 Of shares repurchased $300 Remaining share repurchase $0.15 Announced 3Q’19 in 2Q’192 authorization through 2Q’20 common stock dividend million mill
Slide 15: Simpler Business Mix Enables Higher Free Cash Flow Generation
Simpler Business Mix Enables Higher Free Cash Flow Generation of 85 – 95% Voya Today Projected Free Cash Flow Yield Complementary high growth, high return, capital-light businesses 10.2% 9.2% High free cash flow generating ability 7.8% Valuable deferred tax asset (DTA) worth $9.32 per share1 - Im
Slide 16: Helping Americans Get Ready to Retire Better
Helping Americans Get Ready to Retire Better 1 On Track to Deliver FY’19 10%+ EPS Growth 2 Driving Organic Growth and Cost Savings 3 Capital Position Remains Strong 16
Slide 17: Appendix
PLAN | INVEST | PROTECT 17 FINANCIAL
Slide 18: On Track with Goals Announced at Investor Day 2018
On Track with Goals Announced at Investor Day 2018 Normalized Pre-Tax EPS Growth Target Annual Organic Growth Adjusted Operating Earnings for 2019 – 2021 Targets for 2019 – 2021 Growth Targets (CAGR)2 10 – 12% 4 – 7% Retirement Full Service Retirement Recurring Deposits (TTM) 10%+ 2 – 4% 5 – 8% Annu
Slide 19: Reconciliation of 2Q'19 Adjusted Operating Earnings to Net Income
Reconciliation of 2Q’19 Adjusted Operating Earnings to Net Income ($ million; all figures are after-tax) 43 2 229 (3) (7) 226 (38) Adjusted Operating Net Investment Gains Net Gains (Losses) Hedging Gains Income (Loss) Related Other 2 Net Income (Loss) Earnings 1 (Losses) from Discontinued (Losses) t
Slide 20: 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 21: Analyst Modeling Considerations
Analyst Modeling Considerations Prepayment Income ■ Long-term prepayment income expectation in 2019 (pre-tax, pre-DAC): $8 million for Retirement; $3 million for Individual Life and Alternative ■ Approximately 9% annual long-term expected returns (pre-tax, pre-DAC) for alternative income Income ■ Fu
Slide 22: 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 100 99 91 88 93 71 73 75 61 41 35 30 Equity Multi-Asset Fixed Voya IM Income Total 3 Year 5 Year 10 Year 1. Voya Investment Management calculations as of June 30, 2019. Metrics prese
Slide 23: We Have Repurchased $646 million of Shares Year-to-Date
We Have Repurchased $646 million of Shares Year-to-Date Accelerated Share Completed Completed Total Repurchase Entered in 1Q’191 in 2Q’191 January $250 million $200 million $50 million $250 million April $236 million NA $236 million $486 million Shares repurchased June $200 million NA $160 million $