Alliancebernstein Holding L.p. · NYSE:AB
Alliancebernstein Holding L.p — Q2 2022 Earnings Presentation
38 slides from Alliancebernstein Holding L.p's earnings presentation, Jul 29, 2022
Slide 1: Second Quarter 2022 Review
Second Quarter 2022 Review July 29, 2022 Seth P. Bernstein, President & Chief Executive Officer Kate Burke, Chief Operating Officer and Chief Financial Officer Matt Bass, SVP & Head of Private Alternatives
Slide 2: Cautions Regarding Forward-Looking Statements
Cautions Regarding Forward-Looking Statements Certain statements provided by management in this presentation are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks, uncertainties and other fact
Slide 3: Seth P. Bernstein, President & Chief Executive Officer
Seth P. Bernstein President & Chief Executive Officer Second Quarter 2022 Review 3
Slide 4: Firmwide Overview: Second Quarter 2022
Firmwide Overview: Second Quarter 2022 2Q:22 vs. 2Q:21 2Q:22 vs. 1Q:22 $45.0 $40.9 $23.9 $23.9 Gross Sales $36.3 Ex- Venerable 2Q:22 2Q:21† 2Q:22 1Q:22* $9.3 (ex-AXA & Venerable) $12.2 Active Net Flows ($2.8) (ex-AXA) $6.7 ($2.8) (ex-AXA) ($3.4) ($3.4) 2Q:22 2Q:21 2Q:22 1Q:22* $738.4 $735.4 $646.8 $
Slide 5: Asset Flows by Distribution Channel: Quarterly Trend
Asset Flows by Distribution Channel: Quarterly Trend Firmwide Retail $45.0 $27.6 $40.9 $23.8 $25.6 $39.4 $20.6 $36.3 ex- $32.3 $17.3 Venerable $23.9 $7.5 $7.2 $7.4 $11.4 $5.2 $6.6 $6.3 $6.2 ($2.1) ($2.7) ($1.0) ($2.2) (0.6) ($10.0) ($25.1) ($1.3) ($32.0) ($29.5) ($26.6) ($38.8) ($18.6) ($19.0) ($21.
Slide 6: Percentage of Assets Outperforming at Quarter-End
Percentage of Assets Outperforming at Quarter-End Fixed Income One-Year Three-Year Five-Year 91 92 89 69 70 72 72 68 70 70 71 64 63 50 21 2Q:21 3Q:21 4Q:21 1Q:22 2Q:22 2Q:21 3Q:21 4Q:21 1Q:22 2Q:22 2Q:21 3Q:21 4Q:21 1Q:22 2Q:22 Equities One-Year Three-Year Five-Year 76 78 75 82 73 66 71 70 58 44 45
Slide 7: Retail Highlights
Retail Highlights Negative Market Sentiment Drives 2Q Outflows Second Quarter 2022 Highlights Continued organic growth in Municipals, MAS and Active Equities Sales continue to moderate from record 2021 levels 40 30 • Gross sales of $17.3B; -$6.5B or -27% Y/Y, and -$3.3B or -16% Q/Q 20 • Redemption r
Slide 8: Institutional Highlights
Institutional Highlights 8th Consecutive Quarter of Organic Growth (13th ex AXA) Second Quarter 2022 Highlights (USD billions) Sales and Flows 20 • Gross sales of $3.3B, down from prior periods which had large one-time 10.2 sales (2Q21 $8.7B EQH-Venerable transaction, 1Q 22 $9.6B CRS sale) 10 5.0 4.
Slide 9: Private Wealth Highlights
Private Wealth Highlights Gross Sales, Redemptions and Net Flows Second Quarter 2022 Highlights Net Flows Positive 6 of last 8 quarters 2Q Net Outflows driven by Cap Gains-related Tax Payments (USD billions) • 2Q gross sales of $3.3B, -8% Y/Y; YTD gross sales + 4% Y/Y 5 • 2Q net outflows of $1.2B, d
Slide 10: Bernstein Research Highlights
Bernstein Research Highlights Bernstein Research Quarterly Revenues Second Quarter 2022 Highlights (USD millions) Higher Revenues in US Offset by Slowdown in Europe and Asia $117.8 • 2Q Revenues of $106M, +1% Y/Y, -10% Q/Q $105.7 $106.4 • Despite more volatility, Institutional trading constrained am
Slide 11: Status on Our Initiatives in 2Q22
Status on Our Initiatives in 2Q22 Firmwide Initiative Status Deliver superior • Fixed Income: 50% of assets in outperforming services for 3-yr period; 21% for 1-yr and 63% for 5-yr investment • Active Equity: 36% of assets in outperforming services for 3-yr period; 49% for 1-yr and 82% for 5-yr solu
Slide 12: Kate Burke, Chief Operating Officer & Chief Financial Officer
Kate Burke Chief Operating Officer & Chief Financial Officer Second Quarter 2022 Review 12
Slide 13: Second Quarter 2022 GAAP Income Statement
Second Quarter 2022 GAAP Income Statement Income Statement (in US $ Millions) 2Q22 2Q21 %∆ 1Q22 %∆ Base Fees $697 $724 (4)% $748 (7)% Performance Fees 23 54 (58)% 76 (70)% Bernstein Research Services 106 106 1% 118 (10)% Distribution Revenues 153 155 (2)% 168 (9)% Dividends & Interest 22 9 160 % 11
Slide 14: Adjusted Financial Highlights: Second Quarter 2022
Adjusted Financial Highlights: Second Quarter 2022 2Q:22 vs. 2Q:21 2Q:22 vs. 1Q:22 $816 $881 $816 $904 Adjusted Revenues 2Q:22 2Q:21 2Q:22 1Q:22 $279 $285 Adjusted Operating $226 $226 Income 2Q:22 2Q:21 2Q:22 1Q:22 Adjusted Operating 27.7% 31.7% 27.7% 31.5% Margin 2Q:22 2Q:21 2Q:22 1Q:22 $0.91 $0.90
Slide 15: Second Quarter 2022 Adjusted Income Statement
Second Quarter 2022 Adjusted Income Statement Adjusted Income Statement (in US $ Millions) 2Q22 2Q21 %∆ 1Q22 %∆ Base Fees(1) $677 $698 (3)% $725 (7)% Performance Fees 18 54 (67)% 45 (61)% Bernstein Research Services 106 106 1% 118 (10)% Investment (Losses) Gains (6) 0 n/m (6) (4)% Other Revenues 30
Slide 16: Second Quarter 2022 Adjusted Income Statement Highlights
Second Quarter 2022 Adjusted Income Statement Highlights Revenues • Base Fees decreased 3% vs. 2Q21 driven by a 5% decrease in avg. AUM that is lower across all channels, partially offset by a mix-driven fee rate improvement of 2%. Base Fees decreased 7% vs. 1Q22 driven by an 8% decrease in avg. AUM
Slide 17: Matt Bass, Head of Private Alternatives
Matt Bass Head of Private Alternatives Second Quarter 2022 Review 17
Slide 18: AB and CarVal Combine as a Leading Private Markets Business
AB and CarVal Combine as a Leading Private Markets Business AB Private Markets Capabilities Corporate Direct Lending Other (Energy, PE, Commercial Real Estate Debt RE Equity, CLO)* $4 Euro CRED $1 Private Placements AB CarVal Energy Private Equity US CRED $15 ~$54 Bil. $9 Private Markets Collaterali
Slide 19: 2Q22 in Review: AB's 5-part Strategy Statement
2Q22 in Review: AB’s 5-part Strategy Statement • 82% of Equities and 63% of Fixed Income assets outperforming over long-term (5 years) Deliver • Growth in Institutional (8 of last 8 quarters); overall, 3% TTM organic growth • Munis 6% AOG, Alts/MAS 5% AOG, Active Equities 1% AOG, offset by Taxable F
Slide 20: Appendix
Appendix Second Quarter 2022 Review 20
Slide 21: Retail Mutual Funds Relative Performance vs. Morningstar Averages
Retail Mutual Funds Relative Performance vs. Morningstar Averages 1 Year 3 Year 5 Year 10 Year Relative Relative Relative Relative Retail Service (%) Percentile (%) Percentile (%) Percentile (%) Percentile Equity Large Cap Growth 4.1 39 3.2 23 2.9 14 3.3 4 Concentrated Growth 6.3 29 0.5 52 1.2 34 1.
Slide 22: Retail Mutual Funds Relative Performance vs. Morningstar Averages
Retail Mutual Funds Relative Performance vs. Morningstar Averages 1 Year 3 Year 5 Year 10 Year Service Relative (%) Percentile Relative (%) Percentile Relative (%) Percentile Relative (%) Percentile Fixed Income American Income (2.0) 70 (1.2) 88 (0.4) 73 0.1 36 European Income (5.1) 86 (1.5) 77 (0.2
Slide 23: Institutional Composite Relative Performance vs. Benchmarks
Institutional Composite Relative Performance vs. Benchmarks Service 1 Year 3 Year 5 Year 10 Year Equity US Small Cap Growth (4.0) 2.0 6.2 3.1 Concentrated Global Growth (9.0) (1.9) 1.6 1.7 Global Core (3.1) (1.8) 0.2 1.3 International Strategic Core 3.9 0.2 1.0 1.7 Sustainable Global Thematic (5.4)
Slide 24: Assets Under Management: 2Q22
Assets Under Management: 2Q22 (US $ Billions) June 30, 2022 March 31, 2022 Institutions Private Wealth Retail Total Total Equity Actively Managed $ 58 $ 47 $ 118 $ 223 $ 265 Passive (1) 23 2 31 56 66 Total Equity 81 49 149 279 331 Fixed Income Taxable 133 13 55 201 226 Tax-Exempt 1 25 28 54 55 Passi
Slide 25: AUM Roll-Forward by Distribution Channel
Three Months Ended 6/30/22: AUM Roll-Forward by Distribution Channel In US $ Billions Beginning Sales/New Redemptions/ Net Cash Net Investment Net End Investment Service: of Period Accounts Terminations Flows Flows Performance Change of Period Institutions US $ 154.1 $1.4 $(0.8) $— $0.6 $(15.8) $(15
Slide 26: AUM Roll-Forward by Investment Service
Three Months Ended 6/30/22: AUM Roll-Forward by Investment Service In US $ Billions Beginning Sales/New Redemptions/ Net Cash Net Investment Net End Investment Service: of Period Accounts Terminations Flows Flows Performance Change of Period Equity Active US $ 159.8 $ 8.0 $ (6.4) $ (0.8) $ 0.8 $ (27
Slide 27: Active vs. Passive Net Flows
Three Months Ended 6/30/22: Active vs. Passive Net Flows Actively Passively Managed Managed (1) Total Equity $ 0.3 $ (0.3) $ — Fixed Income (4.8) 0.7 (4.1) Alternatives/MAS (2) 1.1 0.3 1.4 Total $ (3.4) $ 0.7 $ (2.7) (1) Includes index and enhanced index services. (2) Includes certain multi-asset so
Slide 28: Assets Under Management By Region
Assets Under Management By Region Institutional Geographic Breakdown Retail Geographic Breakdown Other Japan 3% 5% APAC ex Other Japan 5% EMEA 7% 11% Japan EMEA 11% 13% US APAC ex US 71% Japan 57% 18% $290.5B $251.0B As of June 30, 2022 By Client Domicile Percentages may not add up to 100% due to ro
Slide 29: Second Quarter 2022 Adjusted Advisory Fees
Second Quarter 2022 Adjusted Advisory Fees 2Q22 2Q21 %∆ 1Q22 %∆ Ending AUM ($ Billions) $ 647 $ 738 (12)% $ 735 (12)% Average AUM ($ Billions) $ 689 $ 723 (5)% $ 751 (8)% By Fee Type ($ Millions): Adjusted Base Fees(1) $ 677 $ 698 (3)% $ 725 (7)% Adjusted Performance Fees 18 54 (67)% 45 (61)% Total
Slide 30: Second Quarter 2022 GAAP Income Statement
Second Quarter 2022 GAAP Income Statement In US $ Millions (except EPU) 2Q22 2Q21 %∆ 1Q22 %∆ Net Revenues $ 971 $ 1,077 (10)% $ 1,105 (12)% Operating Expenses 778 793 (2)% 857 (9)% Operating Income 193 284 (32)% 248 (22)% Net Income Attributable to AB Unitholders 209 268 (22)% 261 (20)% AB Holding G
Slide 31: Consolidated Balance Sheet
Consolidated Balance Sheet In US $ Millions Assets 6/30/2022 12/31/2021 Cash and cash equivalents $ 1,206 $ 1,286 Cash and securities, segregated 1,747 1,504 Receivables, net 2,726 2,651 Investments: Long-term incentive compensation-related 47 64 Other 169 209 Assets of consolidated variable interes
Slide 32: Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows In US $ Millions Six Months Ended 6/30/2022 6/30/2021 Net Income $ 418 $ 515 Non-cash items: Amortization of deferred sales commissions 18 16 Non-cash long-term incentive compensation expense 27 28 Depreciation and other amortization 22 22 Unrealized losses on in
Slide 33: Second Quarter 2022 AB Holding Financial Results
Second Quarter 2022 AB Holding Financial Results In US $ Millions (excluding per Unit amounts) 2Q22 2Q21 %∆ 1Q22 %∆ AB Net Income Attributable to AllianceBernstein $ 209 $ 268 (22)% $ 261 (20)% Weighted Average Equity Ownership Interest 36.1 % 36.4 % 36.2 % AB Holding Equity in Net Income Attributab
Slide 34: Second Quarter 2022 GAAP to Non-GAAP Reconciliation
Second Quarter 2022 GAAP to Non-GAAP Reconciliation In US $ Thousands Adjustments Distribution Pass Deferred NCI/ Real Estate Acquisition- Related Through Comp. Consol Credits Related GAAP Payments Adjustments Inv. VIE (Charges) Expenses Non-GAAP (A) (B) (C) (D) (E) (F) Investment advisory and servi
Slide 35: Second Quarter 2021 GAAP to Non-GAAP Reconciliation
Second Quarter 2021 GAAP to Non-GAAP Reconciliation In US $ Thousands Adjustments Distribution Pass Deferred NCI/ Real Estate Acquisition- Related Through Comp. Consol Credits Related GAAP Payments Adjustments Inv. VIE (Charges) Expenses Non-GAAP (A) (B) (C) (D) (E) (F) Investment advisory and servi
Slide 36: First Quarter 2022 GAAP to Non-GAAP Reconciliation
First Quarter 2022 GAAP to Non-GAAP Reconciliation In US $ Thousands Adjustments Distribution Pass Deferred NCI/ Real Estate Acquisition- Related Through Comp. Consol Credits Related GAAP Payments Adjustments Inv. VIE (Charges) Expenses Non-GAAP (A) (B) (C) (D) (E) (F) Investment advisory and servic
Slide 37: AB Adjusted Financial Results Reconciliation
AB Adjusted Financial Results Reconciliation Notes to Consolidated Statements of Income and Supplemental Information (Unaudited) A. We exclude all of the company’s distribution revenues, which are recorded as a separate line item on the consolidated statement of income, as well as a portion of inves
Slide 38: AllianceBernstein
ALLIANCEBERNSTEIN'
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