Voya Financial, Inc. · NYSE:VOYA
Voya Financial — Q1 2021 Earnings Presentation
25 slides from Voya Financial's earnings presentation, May 11, 2021
Slide 1: Voya Financial First Quarter 2021 Investor Presentation
Voya Financial First Quarter 2021 Investor Presentation May 11, 2021
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 ■ 1Q’21 adjusted operating earnings of $1.70 per share1 ■ Notable items for 1Q’21 are: Delivering Strong EPS ■ $0.66 of prepayment and alternative income above our long-term expectations2 in 1Q’21 ■ $(0.17) of COVID-19 related claims impact ■ $(0.03) of other notable items3 ■ Wealth Solut
Slide 5: Advancing our Culture and Values
Advancing our Culture and Values Named one of the World’s Most Ethical Companies for the eighth consecutive year 2021 100 Most Sustainable Companies List Named to Fortune’s list of the 2021 Ranked No. 5 overall; Highest-ranked Best Workplaces in Financial financial services company Services and Insu
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: First Quarter 2021 Results – Financial Highlights
First Quarter 2021 Results – Financial Highlights After-tax Adjusted Operating Net Income (Loss) Available to Earnings Per Share¹ Common Shareholders 1Q’21 1Q’21 $1.70 $1,086 per diluted share million Notable Items 1Q’21 Includes 1Q’21 ■ Prepayment fees and alternative income above 0.66 ■ Adjusted o
Slide 8: Wealth Solutions – Industry Leading Provider of Outcome-Oriented Solutions
Wealth Solutions – Industry Leading Provider of Outcome-Oriented Solutions and Capabilities across all Plan Sizes and Markets Adjusted Operating Earnings1 ($ millions) Full Service Client Assets ($ billions) Current Quarter TTM Spread-based Fee-based $165 $171 $583 $575 $125 $133 $138 $93 Includes:
Slide 9: Investment Management – Delivering Strong Investment Performance and Net Flows
Investment Management – Delivering Strong Investment Performance and Net Flows Adjusted Operating Earnings1 ($ millions) Assets Under Management ($ billions) Current Quarter TTM General Account External Clients $209 $246 $249 $186 $211 $187 $210 $154 Includes Prepayments and $40 $52 $57 $58 $39 Alte
Slide 10: Health Solutions – Growing while Maintaining Underwriting and Expense Discipline
Health Solutions – Growing while Maintaining Underwriting and Expense Discipline Adjusted Operating Earnings1 ($ millions) Annualized In-Force Premiums ($ millions) Current Quarter TTM Group Life & Disability Stop Loss Voluntary $2,466 $2,271 $2,282 $554 $222 $483 $472 $179 $1,084 $1,096 $1,182 Incl
Slide 11: Adjusted Operating EPS Considerations
Adjusted Operating EPS Considerations 2Q’21 Considerations1 Reported 1Q’21 Adjusted Operating EPS2 $1.70 Potential Beneficial Items: ■ 1Q seasonal administrative expenses not recurring in 2Q 0.16 ■ 1Q seasonally higher loss ratios in Health Solutions not recurring in 2Q and lower COVID-claims 0.05 ■
Slide 12: Robust Capital Position with Strong Free Cash Flow Generation
Robust Capital Position with Strong Free Cash Flow Generation Capital Returned to Shareholders Excess Capital ($ millions) ($ billions)1 $1,131 $1,140 $1,031 $8 $6 $44 Paused repurchases in 2Q’20 to be prudent during COVID-19. Resumed repurchases in 4Q’20. $1.6 $602 Projected Free Cash Flow $1,125 $
Slide 13: Helping Americans Get Ready to Retire Better Delivered Strong EPS in 1Q'21
Helping Americans Get Ready to Retire Better 1 Delivered Strong EPS in 1Q’21 2 Continued Momentum Across All Businesses 3 Strong Shareholder Return 13
Slide 14: Appendix
PLAN | INVEST | PROTECT 14 FINANCIAL
Slide 15: Guidance 2021
Guidance 2021 Target Metrics 2021 Guidance1 4Q’21 YoY Voya Normalized Adjusted Operating EPS Growth2 8 – 12% growth expected to be 12 – 18% Full Service Recurring Deposits Growth, TTM 6 – 8% Wealth Solutions Pre-tax Normalized Adjusted Operating Earnings Growth2 8 – 12% AUM Organic Growth Rate3 2 –
Slide 16: Seasonality of Financial Items
Seasonality of Financial Items 1Q 2Q 3Q 4Q ■ Corporate Markets tends to have ■ 91 fee and crediting interest ■ Education Tax-Exempt ■ Corporate Markets typically see the highest recurring deposits days in quarter Markets typically see lowest highest transfer / single deposits Retirement recurring de
Slide 17: Analyst Modeling Considerations
Analyst Modeling Considerations Prepayment Income ■ Long-term prepayment income quarterly expectation in 2021 (pre-tax, pre-DAC): $8 million for Wealth Solutions and Alternative Income ■ Approximately 9% annual long-term expected returns (pre-tax, pre-DAC) for alternative income ■ Recurring deposit
Slide 18: 1Q'21 and 1Q'20 Notable Items Impacts
1Q’21 and 1Q’20 Notable Items Impacts Prepays and DAC/VOBA Covid-19 Adjusted Alt Income and Other Related Other Operating Above/(Below) Intangibles Claims Notables3 Earnings1 1Q’21 Expectations2 Unlocking Impact Wealth Solutions $255 $81 $2 – $3 Investment Management 52 22 – – (4) Health Solutions 3
Slide 19: Reliable Long-Term Investment Performance Critical to Future Success
Reliable Long-Term Investment Performance Critical to Future Success % AUM Above Benchmark or Peer Median1 98 94 95 85 81 83 72 65 65 40 19 19 Equity Multi-Asset Fixed Voya IM Income Total 3 Year 5 Year 10 Year 1. Voya Investment Management calculations as of March 31, 2021. Metrics presented are ba
Slide 20: Emphasis on ESG and Leading ESG Practices
Emphasis on ESG and Leading ESG Practices Governance Social Environmental Robust, independent Aligned social purpose Encouraging oversight aligning and empowering sustainable practices business with individuals at home and the shareholder interests workplace • Board Gender parity • Socially responsi
Slide 21: Well-Diversified Investment Portfolio Built for Through-The-Cycle Risk Adjusted Returns
Well-Diversified Investment Portfolio Built for Through-The- Cycle Risk Adjusted Returns $39 Billion General Account Investment Portfolio1 Munis LP/Equity 2% Short 4% Term/Treasury 2% 6% Public CML 43% Corporate 14% 31% 52% Securitized 25% 2 Private Fixed Maturity Ratings Credit 21% NAIC 1 NAIC 2 BI
Slide 22: Spotlight: Commercial Mortgage Loans
Spotlight: Commercial Mortgage Loans Key Message: ~$5.6 billion allocation1 with weighted average debt service coverage ratio (DSCR) of 2.2x and weighted average loan-to-value (LTV) ratio of 46%2. Retail focus on need driven properties, such as grocery anchored. No material exposure to real estate e
Slide 23: Spotlight: BBB Exposure
Spotlight: BBB Exposure Key Message: ~$14.7 billion NAIC 2 portfolio1,2 is approximately 64%/36% split between Public and Private. Private exposure provides combination of structural protections and attractive value. Minimal below investment grade allocation is opportunistic. 100% % of Fixed Maturit
Slide 24: Investment Portfolio COVID-19 Exposure and Stress Tests
Investment Portfolio COVID-19 Exposure and Stress Tests COVID-19 Sector Exposure1 Investment Portfolio Stress Test1 Prospective Impact to Excess Capital Remaining GA from Rating Migration and Impairments in 20212 89% Stress Case One Stress Case Two ~$170 million ~$320 million COVID-19 Prospective
Slide 25: Reconciliation of 1Q'21 Adjusted Operating Earnings to Net Income
Reconciliation of 1Q’21 Adjusted Operating Earnings to Net Income ($ million; all figures are after-tax) 1Q’21 804 (8) 15 1,086 30 14 8 223 Adjusted Net Investment Income (Loss) Net Guaranteed Income (Loss) Income (Loss) on Other 2 Net Income Operating Gains (Losses) from Benefit Hedging Related to