Alliancebernstein Holding L.p. · NYSE:AB
Alliancebernstein Holding L.p — Q2 2024 Earnings Presentation
32 slides from Alliancebernstein Holding L.p's earnings presentation, Jul 26, 2024
Slide 1: Second Quarter 2024 Review
Second Quarter 2024 Review July 26, 2024 Seth P. Bernstein, President & Chief Executive Officer Jackie Marks, Chief Financial Officer
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: Second Quarter 2024 Highlights
Second Quarter 2024 Highlights Sustained Organic Growth • Firmwide net inflows +$0.9 billion and active net inflows +$1.3 billion, +0.5% and +0.8% annualized organic growth Continued Growth in Private Markets • Private Markets AUM $64 billion, +5% Y/Y driven by strong deployments and completion of E
Slide 4: Firmwide Overview: Second Quarter 2024
Firmwide Overview: Second Quarter 2024 2Q:24 vs. 2Q:23 2Q:24 vs. 1Q:24 $31.9 $31.9 $32.6 $22.4 Gross Sales 2Q:24 2Q:23 2Q:24 1Q:24 $1.3 $3.7 Active Net Flows $1.3 ($4.0) 2Q:24 2Q:23 2Q:24 1Q:24 $769.5 $769.5 $758.7 $691.5 End of Period AUM 2Q:24 2Q:23 2Q:24 1Q:24 $755.5 $678.4 $755.5 $738.9 Average
Slide 5: Asset Flows by Distribution Channel: Quarterly Trend
Asset Flows by Distribution Channel: Quarterly Trend Firmwide Retail $32.6 $31.9 $23.8 $28.3 $23.2 $22.4 $25.2 $21.0 $16.5 $16.9 $0.9 $1.3 $4.2 $2.8 $0.5 $1.6 ($4.0) ($1.9) ($1.8) ($0.7) ($26.4) ($17.2) ($15.3) ($19.7) ($27.1) ($30.1) ($32.1) ($19.6) ($20.4) ($31.0) 2Q:23 3Q:23 4Q:23 1Q:24 2Q:24 2Q:
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 89 73 73 75 76 74 73 71 74 77 70 68 62 60 2Q:23 3Q:23 4Q:23 1Q:24 2Q:24 2Q:23 3Q:23 4Q:23 1Q:24 2Q:24 2Q:23 3Q:23 4Q:23 1Q:24 2Q:24 Equities One-Year Three-Year Five-Year 68 63 65 64 63 63 64 54 55 45 48
Slide 7: Retail Highlights
Retail Highlights Resilient Fixed Income Demand and Improving Equity Second Quarter 2024 Highlights Quarterly sales hover slightly below record FY21 levels Channel Sales & Flows • Gross sales of $23.2B, +$6.7B / +41% Y/Y, -$0.6B / -3% Q/Q 25 • Improved Redemption rate of 26%, down from 27% both prio
Slide 8: Institutional Highlights
Institutional Highlights 2Q Equity Outflows Outweigh Fixed Income Growth Second Quarter 2024 Highlights (USD Billions) Channel Sales and Flows 4 • 2Q24 gross sales of $3.3B, up $1.8B Y/Y • Institutional net outflows -$1.8B 0 ($1.8) • Organic growth in Fixed Income offset by Equity attrition ($3.2) (
Slide 9: Private Wealth Highlights
Private Wealth Highlights Strong 2Q Sales; Net Flows Reflect Seasonal Tax Selling Second Quarter 2024 Highlights (USD billions) Strong Q/Q Sales and Advisor Productivity Growth • 2Q24 gross sales of $5.4B, +20% Y/Y, flat Q/Q 5 • Advisor productivity: +24% Y/Y, +3% Q/Q • 2Q net flows -$0.1B, with gro
Slide 10: Second Quarter 2024 GAAP Income Statement
Second Quarter 2024 GAAP Income Statement Income Statement (in US $ Millions) 2Q24 2Q23 %∆ 1Q24 %∆ Base Fees $774 $703 10 % $754 3% Performance Fees 43 18 137 % 30 44 % Bernstein Research Services 0 92 n/m 96 n/m Distribution Revenues 173 145 19 % 166 4% Dividends & Interest 44 50 (12)% 45 (1)% Inve
Slide 11: Adjusted Financial Highlights: Second Quarter 2024
Adjusted Financial Highlights: Second Quarter 2024 2Q:24 vs. 2Q:23 2Q:24 vs. 1Q:24 $826 $823 $826 $884 Adjusted Revenues 2Q:24 2Q:23 2Q:24 1Q:24 $254 $254 $267 $222 Adjusted Operating Income 2Q:24 2Q:23 2Q:24 1Q:24 30.8% 27.0% 30.8% 30.3% Adjusted Operating Margin 2Q:24 2Q:23 2Q:24 1Q:24 $0.71 $0.71
Slide 12: Second Quarter 2024 Adjusted Income Statement
Second Quarter 2024 Adjusted Income Statement Adjusted Income Statement (in US $ Millions) 2Q24 2Q23 %∆ 1Q24 %∆ Base Fees(1) $742 $678 9% $723 3% Performance Fees 42 15 183 % 27 58 % Bernstein Research Services(2) 0 92 n/m 96 n/m Investment Gains 4 1 187 % 3 32 % Dividend & Interest Revenue 41 46 (1
Slide 13: Progress on Our Initiatives in 2Q24
Progress on Our Initiatives in 2Q24 Global Diversification Coupled with Improved Investment Performance Driving Sustained Organic Growth • Net Flows positive in 2Q and YTD; 9% annualized organic growth in Fixed Income which continues to gain Retail market share Investing to Develop, Commercialize an
Slide 14: Appendix
Appendix Second Quarter 2024 Review 14
Slide 15: 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 2.7 42 2.7 33 2.1 26 2.8 9 Concentrated Growth (13.6) 96 (3.5) 84 (4.1
Slide 16: 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 0.6 33 (0.8) 67 (0.5) 66 0.3 36 European Income 2.7 18 (0.4) 58 0.1 42 1
Slide 17: 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 0.1 (2.3) 1.0 2.8 Concentrated Global Growth (10.8) (8.2) (4.0) 0.7 Global Core (4.6) (2.8) (2.0) 0.2 International Strategic Core 4.4 1.1 (0.1) 1.9 Sustainable Global Thematic
Slide 18: Assets Under Management: 2Q24
Assets Under Management: 2Q24 (US $ Billions) June 30, 2024 March 31, 2024 Institutions Private Wealth Retail Total Total Equity Actively Managed $56 $53 $155 $264 $264 Passive (1) 24 5 37 66 65 Total Equity 80 58 192 330 329 Fixed Income Taxable 128 18 70 216 212 Tax-Exempt 2 28 37 67 64 Passive (1
Slide 19: AUM Roll-Forward by Distribution Channel
Three Months Ended 6/30/24: 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 $152.6 $1.6 $(1.5) $1.8 $1.9 $0.2 $2.1 $
Slide 20: AUM Roll-Forward by Investment Service
Three Months Ended 6/30/24: 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 $177.1 $9.9 $(8.9) $(2.5) $(1.5) $5.0 $3.
Slide 21: Active vs. Passive Net Flows
Three Months Ended 6/30/24: Active vs. Passive Net Flows Actively Passively Managed Managed (1) Total Equity $(6.1) $(0.7) $(6.8) Fixed Income 6.3 — 6.3 Alternatives/MAS (2) 1.1 0.3 1.4 Total $1.3 $(0.4) $0.9 (1) Includes index and enhanced index services. (2) Includes certain multi-asset solutions
Slide 22: Assets Under Management By Region
Assets Under Management By Region Institutional Geographic Breakdown Retail Geographic Breakdown Japan Other Other APAC ex 3% 4% 3% Japan 6% EMEA 9% Japan EMEA 11% 12% APAC ex Japan 17% US US 60% 75% $322.7B $316.4B As of June 30, 2024 By Client Domicile Percentages may not add up to 100% due to rou
Slide 23: Second Quarter 2024 Adjusted Advisory Fees
Second Quarter 2024 Adjusted Advisory Fees 2Q24 2Q23 %∆ 1Q24 %∆ Ending AUM ($ Billions) $770 $692 11 % $759 1% Average AUM ($ Billions) $756 $678 11 % $739 2% By Fee Type ($ Millions): Adjusted Base Fees(1) $742 $678 9% $723 3% Adjusted Performance Fees 42 15 183 % 27 58 % Total $784 $693 13 % $750
Slide 24: Second Quarter 2024 GAAP Income Statement
Second Quarter 2024 GAAP Income Statement In US $ Millions (except EPU) 1Q24 1Q23 %∆ 4Q23 %∆ Net Revenues $1,028 $1,008 2% $1,104 (7)% Operating Expenses 829 819 1% 862 (4)% Operating Income 199 189 6% 242 (18)% Net Income Attributable to AB Unitholders 310 176 76 % 218 42 % AB Holding GAAP Diluted
Slide 25: Consolidated Balance Sheet
Consolidated Balance Sheet In US $ Millions Assets 6/30/2024 12/31/2023 Cash and cash equivalents $871 $1,000 Cash and securities, segregated 592 868 Receivables, net 1,869 1,837 Investments: Joint ventures 295 — Other 229 244 Assets of consolidated variable interest entities 261 430 Goodwill 3,599
Slide 26: Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows In US $ Millions Six Months Ended June 30, 2024 June 30, 2023 Net Income $540 $383 Non-cash items: Amortization of deferred sales commissions 25 17 Non-cash long-term incentive compensation expense 21 15 Depreciation and other amortization 46 46 Unrealized (gains
Slide 27: Second Quarter 2024 AB Holding Financial Results
Second Quarter 2024 AB Holding Financial Results In US $ Millions (excluding per Unit amounts) 2Q24 2Q23 %∆ 1Q24 %∆ AB Net Income Attributable to AllianceBernstein $310 $176 76 % $218 42 % Weighted Average Equity Ownership Interest 39.6 % 39.3 % 39.6 % AB Holding Equity in Net Income Attributable to
Slide 28: Second Quarter 2024 GAAP to Non-GAAP Reconciliation
Second Quarter 2024 GAAP to Non-GAAP Reconciliation In US $ Thousands Adjustments Distribution Pass Deferred NCI/ Real Estate Acquisition- Equity (Gain) loss Related Through Comp. Consol Credits Related Method Interest on GAAP Payments Adjustments Inv. VIE (Charges) Expenses Investment Expense Dives
Slide 29: Second Quarter 2023 GAAP to Non-GAAP Reconciliation
Second Quarter 2023 GAAP to Non-GAAP Reconciliation In US $ Thousands Adjustments Distribution Pass Deferred NCI/ Real Est. Acq Related Through Comp. Consol Credits Related Interest GAAP Payments Adj. Inv. VIE (Charges) Expenses Expense Non-GAAP (A) (B) (C) (D) (E) (F) (H) Investment advisory and se
Slide 30: First Quarter 2024 GAAP to Non-GAAP Reconciliation
First Quarter 2024 GAAP to Non-GAAP Reconciliation Adjustments Distribution Pass Deferred NCI/ Real Est. Acq Related Through Comp. Consol Credits Related Interest GAAP Payments Adj. Inv. VIE (Charges) Expenses Expense Non-GAAP (A) (B) (C) (D) (E) (F) (H) Investment advisory and services fees $ 784,4
Slide 31: 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 32: AllianceBernstein
ALLIANCEBERNSTEIN'
AllianceBernstein Holding L.P. Units — Q2 2024 Earnings Presentation on 6ix