Voya Financial, Inc. · NYSE:VOYA
Voya Financial — Q1 2019 Earnings Presentation
22 slides from Voya Financial's earnings presentation, May 8, 2019
Slide 1: Voya Financial First Quarter 2019 Investor Presentation
Voya Financial First Quarter 2019 Investor Presentation May 8, 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 On Track to ■ Normalized 1Q’19 adjusted operating earnings of $1.22 per share 1 Deliver FY’19 - Alternative performance below long-term expected returns 10%+ EPS ■ Normalized 1Q’19 adjusted operating earnings per share grew 23% year- Growth over-year2 ■ Retirement Full Service recurring d
Slide 5: 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 6: Recent Enterprise Accomplishments
Recent Enterprise Accomplishments Named one of the World’s Most Ranked No. 6 on Barron’s 2019 Named as a Best Place to Work Ethical Companies for the sixth 100 Most Sustainable for LGBTQ Equality for the 14th consecutive year Companies list consecutive year Recognized by Forbes as one Recognized on
Slide 7: 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 7
Slide 8: First Quarter 2019 Results – Financial Highlights
First Quarter 2019 Results – Financial Highlights After-tax Adjusted Operating Net Income Available to Earnings Per Share¹ (Normalized) Common Shareholders2 1Q’19 1Q’19 $1.22 $64 per diluted share million Excludes: 1Q’19 Includes: 1Q’19 ■ Prepayment fees and alternative income above / $(0.16) ■ Adju
Slide 9: Retirement – Industry Leading Provider with Strong Momentum of Profitable Growth
Retirement – Industry Leading Provider with Strong Momentum of Profitable Growth Adjusted Operating Earnings1 ($ millions) Full Service Client Assets ($ billions) Current Quarter TTM Spread-based Fee-based $677 $130 $123 $119 $609 $92 $88 $99 Includes Prepayments and $150 $125 $30 $31 $31 Alternativ
Slide 10: Investment Management – Delivering Strong Investment Performance and Net Flows
Investment Management – Delivering Strong Investment Performance and Net Flows from Specialty Capabilities Adjusted Operating Earnings1 ($ millions) Assets Under Management ($ billions) Current Quarter TTM General Account External Clients $225 $222 $203 $210 $172 $141 $147 $154 $82 Includes Prepayme
Slide 11: Employee Benefits – Growing while Maintaining Underwriting Discipline
Employee Benefits – Growing while Maintaining Underwriting Discipline Adjusted Operating Earnings1 ($ millions) Annualized In-Force Premiums ($ millions) Current Quarter TTM Group Life & Disability Stop Loss Voluntary $166 $2,163 $151 $1,891 $1,939 $390 $303 $311 $1,053 $925 $969 $663 $659 $720 Incl
Slide 12: Individual Life – Disciplined Management of In-Force Block
Individual Life – Disciplined Management of In-Force Block Adjusted Operating Earnings1 ($ millions) Net Underwriting Gain4 ($ millions) Current Quarter TTM Current Quarter TTM $258 $253 $213 $180 $182 Includes Prepayments and $46 $51 Alternative Income Above/(Below) Expectations2: 1Q’18 1Q’19 Curre
Slide 13: Adjusted Operating EPS Considerations
Adjusted Operating EPS Considerations 1Q’19 Financial Results Reported 1Q’19 Adjusted Operating EPS1 $1.07 Includes: ■ DAC/VOBA and other intangibles unlocking 0.01 ■ Prepayment fees and alternative income below long-term expectations (0.16) Normalized 1Q’19 Adjusted Operating EPS1 $1.22 2Q’19 Consi
Slide 14: Alternatives Portfolio Has Delivered Favorable Investment Performance Over Time
Alternatives Portfolio Has Delivered Favorable Investment Performance Over Time Composition of $1.6 Billion Calendar Year Net Returns1,2 (%) Alternatives Portfolio Profile2 (as of 3/31/19) Long-term Return Target: 9.0% Other 9% Hedge Funds 16.6% 14% 15.7% 14.7% Real Estate & Infrastructure 9% 12.0%
Slide 15: Capital Position Remains Strong
Capital Position Remains Strong Estimated Combined Excess Capital Debt-to-Capital Ratio5 RBC Ratio¹ ($ millions)2,3,4 475% $705 28.0% Target: Target: 400% 30% $236 Entered into accelerated share repurchase program in $500 New share repurchase 1%+ Plan to introduce dividend of authorization through 2
Slide 16: Simplified, Less Risky Business Mix Enables Higher Free Cash Flow Generation
Simplified, Less Risky 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% High free cash flow generating ability 7.8% 8.4% Valuable DTA asset worth $8.82 per share 1 - Im
Slide 17: Helping Americans Get Ready to Retire Better
Helping Americans Get Ready to Retire Better 1 On Track to Deliver FY’19 10%+ EPS Growth 2 Driving Organic Growth and Cost Savings 3 Capital Position Remains Strong 17
Slide 18: Appendix
PLAN | INVEST | PROTECT 18 FINANCIAL
Slide 19: Reconciliation of 1Q'19 Adjusted Operating Earnings to Net Income
Reconciliation of 1Q’19 Adjusted Operating Earnings to Net Income ($ million; all figures are after-tax) 18 163 52 (79) (2) 64 (17) (71) 2 Adjusted Operating Net Investment Net Gains (Losses) Hedging Gains Income (Loss) Immediate Other Net Income (Loss) Earnings1 Gains (Losses) from Discontinued (Lo
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 94 91 75 73 67 68 65 45 45 40 Equity Multi-Asset Fixed Voya IM Income Total 3 Year 5 Year 10 Year 1. Voya Investment Management calculations as of March 31, 2019. Metrics pres