Equitable Holdings, Inc. · NYSE:EQH
Equitable — Q3 2023 Earnings Presentation
20 slides from Equitable's earnings presentation, October 2023
Slide 1: The EQH investment opportunity
The EQH investment opportunity As of third quarter 2023 October 2023 Equitable
Slide 2: Note Regarding Forward-Looking and Non-GAAP Financial Measures
Note Regarding Forward-Looking and Non-GAAP Financial Measures This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “expects,” “believes,” “anticipates,” “intends,” “seeks,” “aims,” “plans,” “assumes,” “estima
Slide 3: Integrated businesses capturing the full insurance value chain
Integrated businesses capturing the full insurance value chain 100% owned 62% owned 100% owned Retirement Asset Management Wealth Management All weather product portfolio Leading active manager Holistic advice platform to meet the varying retirement with global distribution footprint & providing ins
Slide 4: Equitable Holdings value proposition
Equitable Holdings value proposition Strategy Competitive edges Financial principles how we will drive long-term value what sets us apart how we manage the business Defend & grow core businesses Premier investment capabilities Market neutral balance sheet • Retirement Capture greater margins through
Slide 5: Key financial goals to 2027
Key financial goals to 2027 Cash generation Payout ratio EPS growth $2bn 60-70% 12-15% of annual cash of Non-GAAP Non-GAAP operating generation by 2027 operating earnings EPS CAGR through 2027 Strategic targets support growth $110m $150m $10bn +350-500bps Incremental GA income Productivity savings C
Slide 6: We expect 12-15% growth in non-GAAP operating EPS driven by organic growth and capital return
We expect 12-15% growth in non-GAAP operating EPS driven by organic growth and capital return 12-15% CAGR Organic Growth Share Repurchases $4.97 4-5% 8-10% Strong organic growth Higher cash flow conversion drives increased earnings drives 60-70% payout ratio 2022 2027F 6
Slide 7: Positioned to grow cash flows to Holdings by 50%
Positioned to grow cash flows to Holdings by 50% Expect to increase cash flows 50% by 2027 $2.0bn $1.3bn 2023F Retirement Legacy capital release Asset Management Wealth Management 2027F 7
Slide 8: Business mix continues to shift towards high value segments
Business mix continues to shift towards high value segments Non-GAAP Operating Earnings (post-tax, adjusted for notable items)1,2 IPO (2017) 3Q23 2027F GR GR GR 21% 14% PS 20% 7% PS PS AB 11% 14% 15% IR 36% IR 38% IR 33% 17% 28% AB 20% Legacy 7% 7% 5% AB Legacy WM 8% Legacy WM Retirement: Shift from
Slide 9: Consistent RBC ratio and capital return across markets while reducing risk
Consistent RBC ratio and capital return across markets while reducing risk 10yr UST S&P 500 2018 2019 2020 2021 2022 Combined RBC Ratio 440% 510% 410% 450% 425% CTE98 Reserves ($bn) $14.7 $12.3 $14.4 $1.7 $4.0 Capital Return ($bn) $0.8 $1.2 $1.1 $1.8 $1.3 9
Slide 10: More resilient cash flows through different environments
More resilient cash flows through different environments Annual cash flows to the HoldCo Base case: 6% equity return & 2% dividend $2.0bn yield, 10-year UST follows forward curve Severe downturn: -25% equity shock, $1.7bn 10-year UST -100bps1 $1.3bn Deep recession: -40% equity shock, $1.4bn 10-year
Slide 11: Higher interest rates a significant positive for Equitable
Higher interest rates a significant positive for Equitable Consistent capital position despite volatile markets Higher rates = higher earnings & growth Market neutral balance sheet ‘locks in’ economics of Highest rate environment in over 15 years presents inforce guarantees by neutralizing rates sig
Slide 12: Individual Retirement
Individual Retirement Segment overview First year premiums ▪ #1 VA provider1; #1 RILA provider1, fastest $3,650m $3,804m growing portion of the VA market Other $3,043m $3,021m $2,975m $2,773m $2,843m ▪ Differentiated distribution platform with IE $2,594m access to c.4,100 affiliated advisors and RC
Slide 13: Group Retirement
Group Retirement Segment overview Total premiums ▪ #1 in the K-12 educator market1; $1,502m providing supplemental retirement income for over 40 years Other $1,078m $1,133m $952m $897m $994m ▪ Worksite advice model with over 1,000 K- Institutional $861m $817m 12 dedicated advisors and access to 9,00
Slide 14: AllianceBernstein
AllianceBernstein Segment overview Asset flows1 ▪ Leading global active manager with global $39.4bn $40.9bn Inflows Outflows Net flows distribution footprint in 21 countries $30.9bn $23.9bn $25.6bn $25.2bn ▪ Capabilities across asset classes including $19.8bn $22.4bn active equity, active fixed inco
Slide 15: EQH AllianceBernstein Ownership Structure as of 3Q23
EQH AllianceBernstein Ownership Structure as of 3Q23 Ownership breakdown AB Units % of Total AB Units EQH direct ownership of ABLP Units 170.1m 59.3% 62% EQH EQH ownership through 1% interest in General Partnership 2.9m 1.0% economic interest in AB EQH indirect ownership through AB Holding units 4.1
Slide 16: Wealth Management
Wealth Management Segment overview Sales $6,439m $6,718m $6,606m ▪ Affiliated advice platform with c.4,100 $6,015m $5,630m $5,632m $5,634m advisors, including 700 wealth planners, generating fees from commissions, advisory Retirement fees and cash sweeps Brokerage ▪ Top 10 player amongst independent
Slide 17: Protection Solutions
Protection Solutions Segment overview Gross written premiums ▪ #5 VUL provider1 with concentration in $801m $778m $760m $769m $776m $786m $769m $756m accumulation-oriented VUL and COLI Other EB ▪ Primarily sold through affiliated distribution, expertise integrating into retirement planning Term VUL
Slide 18: Legacy
Legacy Segment overview Run-off of block (net flows) ▪ Consists of our capital intensive fixed-rate GMxB business written prior to 2011, began reporting this separately from Individual Retirement in 2023 ▪ Legacy VA exposure significantly reduced with over 70% risk reduction since IPO in 2018 -$532m
Slide 19: Conservative, high quality investment portfolio
Conservative, high quality investment portfolio General Account Investment Portfolio Fixed Maturity Portfolio U.S. Treasury, Gov’t and Agency <Baa 6% 4% Structured Credit 16% Baa Other Fixed Maturities $99 $74bn 2% 34% 51% bn1 Corporates 18% 62% Mortgage Loans Aaa, Aa, A 3% 4% Policy Loans Alts. & O
Slide 20: Investment portfolio can withstand stress events & recover quickly
Investment portfolio can withstand stress events & recover quickly High quality general account portfolio, supported by strong capital position Independent test: stress scenario Stress with similar corporate credit and real estate losses as GFC Peers1 EQH Credit stress test 39 pts 33 pts 96% investm