Voya Financial, Inc. · NYSE:VOYA
Voya Financial — Q2 2018 Earnings Presentation
22 slides from Voya Financial's earnings presentation, Aug 2, 2018
Slide 1: Voya Financial Second Quarter 2018 Investor Presentation
Voya Financial Second Quarter 2018 Investor Presentation August 2, 2018
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. Forward-looking statements include statements relating to future developments in our business or expectations for our future financial performance and any statement not i
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 Adjusted operating earnings grew 20% year-over-year (excluding Earnings Tracking DAC/VOBA and other intangibles unlocking) to Target Retirement and Employee Benefits grew at top quartile returns Retirement achieved record quarterly earnings in 2Q’18 Closed CBVA and Annuities sale
Slide 5: Continued Progress on Executing 2018 Priorities
Continued Progress on Executing 2018 Priorities CBVA & Annuities Cost Savings Capital Initiatives Growth Transaction Carved out businesses Generate $110 - $130 Completed $1 billion of Increase number of firms were divested from Voya million of annual cost share repurchases1 by and advisors selli
Slide 6: Recent Enterprise Accomplishments
Recent Enterprise Accomplishments Fifth consecutive year as one of the Named one of Fortune’s World’s World’s Most Ethical Companies Most Admired Companies in the Joined first industry-neutral Bloomberg Securities and Asset Management Gender-Equality Index Industry Named Employer of the Year: Named
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: Second Quarter 2018 Results – Financial Highlights
Second Quarter 2018 Results – Financial Highlights After-tax Adjusted Operating Net Income Available to Common Earnings¹ Shareholders² $195 million or $166 million $1.13 per diluted share Includes: 2Q’18 Includes: 2Q’18 Deferred acquisition costs and value of $(0.13) Discontinued operations $28
Slide 9: Retirement – Leading Franchise Driving Long-Term Growth and Improving Returns
Retirement – Leading Franchise Driving Long-Term Growth and Improving Returns Adjusted Operating Earnings ($ millions)1 AUM ($ billions)3 Current Quarter TTM $138 $144 $146 $628 $130 $135 $561 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 Net Flows ($ millions) Full Service $914 $924 $(27) $47 $127 Stable Value and
Slide 10: Investment Management – Continued Strong Performance Across Multiple Platforms
Investment Management – Continued Strong Performance Across Multiple Investment Platforms and Distribution Channels Assets Adjusted Operating Earnings ($ millions)1 AUM ($ billions) transferred in sale of Annuities business Current Quarter TTM $217 $222 $224 $222 $207 $248 $227 $140 $142 $141 $135 $
Slide 11: Employee Benefits – High Return and Capital Generation Business
Employee Benefits – High Return and Capital Generation Business Adjusted Operating Earnings ($ millions)1 Annualized In-Force Premiums ($ millions) Current Quarter TTM $1,849 $1,891 $1,914 $158 $1,714 $1,604 $257 $303 $312 $213 $183 $112 $969 $925 $938 $824 $874 $597 $627 $623 $663 $664 $28 $35 4Q'1
Slide 12: Individual Life – Improved Mortality
Individual Life – Improved Mortality Adjusted Operating Earnings ($ millions)1 Net Underwriting Gain ($ millions) Current Quarter TTM $213 $213 $210 $266 $194 $181 $194 $55 $59 $57 $52 $42 2Q'17 3Q'17 4Q'17 1Q'18 2Q'18 $63 $72 Current Quarter TTM 2Q'17 2Q'18 Key Initiatives 2Q’17 2Q’18 Progressing
Slide 13: Adjusted Operating EPS Considerations
Adjusted Operating EPS Considerations 2Q’18 Financial Results Reported 2Q’18 Adjusted Operating EPS1 $1.13) Includes: DAC/VOBA and other intangibles unlocking $(0.13) Prepayment fees and alternative income above long-term expectations $0.06) 3Q’18 Considerations2 Potential Beneficial Items: Sh
Slide 14: Capital Position is Strong
Capital Position is Strong Statutory Total Adjusted Capital and Excess Capital2 Debt-to-Capital Ratio4 Estimated Combined RBC Ratio¹ (millions) Target: 425% Target: 30% $699 Due to the 29.0% 28.1% sale of $6.5 $6.6 $6.5 Annuities $6.4 business $284 23.0% Estimated 480% 483% Statutory Surplus 476% 46
Slide 15: Attractive Valuation with Share Repurchases on Track for 2018
Attractive Valuation with Share Repurchases on Track for 2018 Implied Voya Valuation Share Repurchases ($ per share) ($ billions) $50.52 $8.69 $0.5 $1.5 $41.83 $1.0 Implied 7.9x forward P/E multiple3 $247 Current Deferred Adjusted 1H’18 Share Expected Share Target Share Stock Price1 Tax Assets 2 Sto
Slide 16: Earnings Tracking to Target; Track Record of Execution; Capital Position
Helping Americans Get Ready to Retire Better 1 Earnings Tracking to Target 2 Building on Track Record of Execution 3 Capital Position is Strong 16
Slide 17: Appendix
Appendix ee VOYA. PLAN | INVEST | PROTECT 17 FINANCIAL
Slide 18: Reconciliation of 2Q'18 Adjusted Operating Earnings to Net Income
Reconciliation of 2Q’18 Adjusted Operating Earnings to Net Income ($ million; all figures are after-tax) 195 (32) 166 (11) 28 (14) Adjusted Operating Net Realized Gains / Other 2 Other Tax-Related 3 Income from Discontinued Net Income (Loss) Earnings 1 (Losses) Operations Available to Common Shareho
Slide 19: Growth Initiatives in 2Q'18
Growth Initiatives in 2Q’18 2018 Growth Metrics 2018 Results • 2Q’18: -8% y-o-y Small/Mid Corporate: Deposits +5% to +10% • YTD’18: -9% y-o-y Retirement • 2Q’18: +6% y-o-y Tax-exempt: Deposits 0% to +5% • YTD’18: -11% y-o-y • 2Q’18: -23% y-o-y Institutional: Sales -5% to 0% • YTD’18: -21% y-o-
Slide 20: Seasonality of Financial Items
Seasonality of Financial Items 9. 1Q 2Q 3Q 4Q Corporate Markets tends to Education Tax-Exempt Markets Corporate Markets typically see have the highest recurring typically see lowest recurring highest transfer / single Retirement deposits deposits deposits Withdrawals also tend to Withdrawa
Slide 21: Analyst Modeling Considerations
Analyst Modeling Considerations Long-term prepayment income expectation in 2018 (pre-tax, pre-DAC): $8 million for Retirement; $3 million for Prepayment Income and Individual Life Alternative Income Approximately 9% annual long-term expected returns (pre-tax, pre-DAC) for alternative income Fu
Slide 22: Voya Financial
® FINANCIAL FINANCIAL PLAN | INVEST | PROTECT 22