Voya Financial, Inc. · NYSE:VOYA
Voya Financial — Q3 2019 Earnings Presentation
23 slides from Voya Financial's earnings presentation, Nov 6, 2019
Slide 1: Voya Financial Third Quarter 2019 Investor Presentation
Voya Financial Third Quarter 2019 Investor Presentation November 6, 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 3Q’19 adjusted operating earnings1 of $1.36 per share, excluding: On Track to ■ $(0.63) of DAC/VOBA and other intangibles unlocking, largely reflecting our Deliver FY’19 annual review and update of actuarial assumptions 10%+ EPS ■ $0.08 of prepayment and alternative income ab
Slide 5: Recent Enterprise Accomplishments
Recent Enterprise Accomplishments Named a Great Place to Work® by Named to the Dow Jones the Great Place to Work Institute Sustainability Index for the fourth for the fourth consecutive year consecutive year Recognized as one of the 2019 100 Supported more than Best Companies by Working Mother 2,100
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: Third Quarter 2019 Results – Financial Highlights
Third Quarter 2019 Results – Financial Highlights After-tax Adjusted Operating Net Income Available to Earnings Per Share¹ (Normalized) Common Shareholders3 3Q’19 3Q’19 $1.36 $106 per diluted share million Excludes: 3Q’19 Includes: 3Q’19 ■ Prepayment fees and alternative income above / $0.08 ■ Adjus
Slide 8: Retirement – Industry Leading Provider of Retirement Solutions
Retirement – Industry Leading Provider of Retirement Solutions across all Plan Sizes and Markets Adjusted Operating Earnings1 ($ millions) Full Service Client Assets ($ billions) Current Quarter TTM Spread-based Fee-based $680 $629 $134 $135 $129 Includes $33 million higher admin expense YoY driven
Slide 9: Investment Management – Delivering Strong Investment Performance and Net Flows
Investment Management – Delivering Strong Investment Performance and Net Flows Adjusted Operating Earnings1 ($ millions) Assets Under Management ($ billions) Current Quarter TTM General Account External Clients $214 $217 $210 $198 $165 $155 $158 $161 Includes Prepayments and $48 $46 $56 $56 $56 Alte
Slide 10: Employee Benefits – Growing while Maintaining Underwriting and Expense Discipline
Employee Benefits – Growing while Maintaining Underwriting and Expense Discipline Adjusted Operating Earnings1 ($ millions) Annualized In-Force Premiums ($ millions) Current Quarter TTM Group Life & Disability Stop Loss Voluntary $188 $2,152 $2,144 $1,916 $392 $392 $148 $309 $1,045 $1,037 $953 Inclu
Slide 11: Individual Life – Disciplined Management of In-Force Block
Individual Life – Disciplined Management of In-Force Block Adjusted Operating Earnings1 ($ millions) Net Underwriting Gain4 ($ millions) Current Quarter TTM Current Quarter TTM $192 $256 $223 $144 $127 Includes Prepayments and $66 $55 $41 $14 $24 Alternative Income Above/(Below) Expectations2: 3Q’18
Slide 12: Assumption Review has no Impact on Voya's Excess Capital
Assumption Review has no Impact on Voya’s Excess Capital US GAAP Pre-Tax Retirement Individual Other Total Gain / (Loss) Life Long Term Interest Rate Assumption $(15) $(37) NA $(52) Lowered by 50 bps1 Other Assumptions Update2 (10) (35) (4) $(49) Total $(25) $(72) (4) $(101)3 Modest GAAP impact driv
Slide 13: Adjusted Operating EPS Considerations
Adjusted Operating EPS Considerations 3Q’19 Financial Results Reported 3Q’19 Adjusted Operating EPS1 $0.81 Includes: ■ DAC/VOBA and other intangibles unlocking, including ($0.54) driven by annual actuarial assumption review (0.63) ■ Prepayment fees and alternative income above long-term expectations
Slide 14: Macroeconomic Sensitivities
Macroeconomic Sensitivities Diversified Sources of Normalized Adjusted Operating Revenue1 Earnings Impacts2 $4 – 5 million annual, pre-tax operating earnings impact for every 1% move in S&P 500 23% ~2% first year pre-tax operating earnings impact from 100bps change in interest Fee Income rates 4
Slide 15: Strong Capital Position
Strong Capital Position Estimated Combined Excess Capital Debt-to-Capital Ratio4 RBC Ratio¹ ($ millions)3 450% $471 27.4% Target: Target: 400% 30% Current share repurchase Shares repurchased Paid 3Q’19 common stock $936 YTD, including $290 $850 authorization (includes new repurchase authorization of
Slide 16: 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 9.7% 8.7% High free cash flow generating ability 7.8% Valuable deferred tax asset (DTA) worth $9.67 per share1 - Imp
Slide 17: Helping Americans Get Ready to Retire Better
Helping Americans Get Ready to Retire Better 1 On Track to Deliver FY’19 10%+ EPS Growth 2 Driving Organic Growth and Cost Savings 3 Capital Position Remains Strong 17
Slide 18: Appendix
PLAN | INVEST | PROTECT 18 FINANCIAL
Slide 19: Goals Announced at Investor Day 2018
Goals Announced at Investor Day 2018 Normalized Pre-Tax EPS Growth Target Annual Organic Growth Adjusted Operating Earnings for 2019 – 2021 Targets for 2019 – 2021 Growth Targets (CAGR)2 10 – 12% 4 – 7% Retirement Full Service Retirement Recurring Deposits (TTM) 10%+ 2 – 4% 5 – 8% Annual Target Inve
Slide 20: Reconciliation of 3Q'19 Adjusted Operating Earnings to Net Income
Reconciliation of 3Q’19 Adjusted Operating Earnings to Net Income ($ million; all figures are after-tax) 13 21 115 (9) 106 (15) (19) Adjusted Operating Net Investment Gains Income (Loss) on Hedging Gains Income (Loss) Related Other 2 Net Income (Loss) Earnings1 (Losses) early extinguishment (Losses)
Slide 21: 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 22: 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 23: 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 98 100 100 86 74 73 70 75 69 54 36 35 Equity Multi-Asset Fixed Voya IM Income Total 3 Year 5 Year 10 Year 1. Voya Investment Management calculations as of September 30, 2019. Metrics