Equitable Holdings, Inc. · NYSE:EQH
Equitable — AXA Equitable Holdings — Barclays Global Financial Services Conference 2019
22 slides from Equitable's conference presentation, Sep 9, 2019
Slide 1: AXA Equitable Holdings
AXA Equitable Holdings Barclays Global Financial Services Conference Mark Pearson, President and CEO September 9, 2019
Slide 2: Note Regarding Forward-Looking Statements
Note Regarding Forward-Looking Statements 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,” “estimates,” “projects,” “sh
Slide 3: Delivering on commitments
AXA Equitable Holdings Delivering on commitments Target 5-7% Non-GAAP Operating Earnings1 growth annually through ✓ 2020 (after tax-reform) Returned c. $1.7 billion to shareholders since IPO, including $891 million ✓ year-to-date Revised target payout range upward from 40-60% to 50-60% of Non- ✓ GAA
Slide 4: Established in 1859, now one of America's leading financial services companies
AXA Equitable Holdings Established in 1859, now one of America’s leading financial services companies Our mission Since 1859, we have been providing advice and solutions that help our clients retire with dignity, protect their families and prepare for their financial future with confidence. Our heri
Slide 5: Operating through two well-established and iconic brands
AXA Equitable Holdings Operating through two well-established and iconic brands NYSE: EQH Mkt cap.: $10.3bn¹ 100% 65% owned owned NYSE: AB Mkt cap.: $7.7bn2 Employees & c. 8,4003 c. 3,8003 Advisors AUM4 $214bn5 $581bn6 73% of General Account with AB Connected and 30% of Separate Account with AB comp
Slide 6: Strategic priorities
Strategic priorities We aim to be the most trusted partner to our clients by providing advice and solutions that help them retire with dignity, protect their families and prepare for their financial future with confidence Growth Productivity Capital optimization ▪ Focus on less capital- ▪ Use techno
Slide 7: Recognized for the breadth of our business and strength of our balance sheet
AXA Equitable Holdings Recognized for the breadth of our business and strength of our balance sheet 1 Leading positions in select markets with premier multi-channel distribution 2 Repositioned business towards less capital-intensive segments 3 Robust cash flow generation drives capital return 4 Stro
Slide 8: Leading positions in select markets with premier multi-channel distribution
1 Leading positions in select markets with premier multi-channel distribution Focus where we have scale, strong value propositions and competitive advantages Clients1 Value proposition Market position ▪ Innovative product manufacturing Individual 900k ▪ Certainty of retirement income #2 Retirement P
Slide 9: Leading positions in select markets with premier multi-channel distribution
1 Leading positions in select markets with premier multi-channel distribution Diversified business mix across four core segments TTM 6/30/2019 Non-GAAP Individual Retirement Group Retirement Operating Earnings1 ▪ Account value: $104bn (at ▪ Account value: $36bn (at 6/30/19) 6/30/19) ▪ Return on Asse
Slide 10: Leading positions in select markets with premier multi-channel distribution
1 Leading positions in select markets with premier multi-channel distribution Distribution platform provides access to over 150,000 advisors Affiliated Third-party partners 1,000 agreements with banks, 4,400 AXA Advisors financial broker-dealers, insurance carriers, professionals and 200 AB advisors
Slide 11: Repositioned business towards less capital-intensive segments
2 Repositioned business towards less capital-intensive segments Significant change to Individual Retirement in-force and new business mix 2008 As of 2Q19 Non-GMxB 65% Fixed rate Non-GMxB GMxB 1% New 90% ROP Death Fixed rate business $11bn Benefit Only GMxB $8bn (TTM) 9% (FYP) 1% Floating Rate GMxB R
Slide 12: Repositioned business towards less capital-intensive segments
2 Repositioned business towards less capital-intensive segments AB provides a good source of non-regulated cash flows (c. 35% of annual cash flows)1 AB margin expansion ▪ EQH: 65% economic interest in AB ▪ Repositioning mix of business and Adjusted Operating Margin (%)2 scaling diverse product set ‒
Slide 13: Robust cash flow generation drives capital return
3 Robust cash flow generation drives capital return Returned c. $1.7 billion to shareholders since IPO Capital Management Capital Management Program Program Dividends $m Repurchase from AXA 818 Repurchases from market Upstream Upstream distributions distributions 661 600 130 592 3Q18 4Q18 1Q19 2Q19
Slide 14: Robust cash flow generation drives capital return
3 Robust cash flow generation drives capital return Distributable earnings positive in the near-term across market environments1 2019-2021 VA distributable earnings ($bn) PV of VA free cash flows and assets ($bn)2 (25%) shock to (40%) shock to (25%) shock to Equity return 6.25% 10% equities, then sl
Slide 15: Strong balance sheet and sophisticated risk management practices
4 Strong balance sheet and sophisticated risk management practices Well positioned and protected balance sheet Hedging approach Strong balance sheet and capitalization Strategy seeks to immunize rider while allowing Key metrics at or exceeding targets as of 1H19: business to continue to profit from
Slide 16: Multiple organic levers to drive earnings growth
5 Multiple organic levers to drive earnings growth Non-GAAP Operating Earnings growth is expected to result in Non-GAAP Operating ROE in the mid-teens by 2020 5-7% Target Non-GAAP Operating Earnings CAGR $2.2-$2.3bn Tax reform GA Optimization Productivity Growth Strategic priorities GA Optimization
Slide 17: First Half 2019 Consolidated Results
First Half 2019 Consolidated Results Non-GAAP Operating Earnings Non-GAAP Operating Earnings Per Share $m $ +10% +22% 1H18 1H19 1H18 1H19 Total AUM Non-GAAP Operating ROE $bn % +12% +100 bps 14.9%1 15.9% YE 2018 2Q19 YE 2018 2Q19 1 Presented on a pro forma basis. Pro forma adjustments relate to cert
Slide 18: Recognized for the breadth of our business and strength of our balance sheet
AXA Equitable Holdings Recognized for the breadth of our business and strength of our balance sheet 1 Leading positions in select markets with premier multi-channel distribution 2 Repositioned business towards less capital-intensive segments 3 Robust cash flow generation drives capital return 4 Stro
Slide 19: Appendix
AXA Equitable Holdings Appendix
Slide 20: Key Financial Targets
Key Financial Targets Maintain strong balance sheet while delivering disciplined financial growth AXA Equitable Holdings Non-GAAP Op. Earnings growth Payout ratio1 Pro Forma Non-GAAP Operating ROE 5-7% 50-60% Mid-teens CAGR through 2020 by 2020 (after tax reform) AXA Equitable Life AllianceBernstein
Slide 21: Reconciliation of Non-GAAP and Other Financial Disclosures
Appendix Reconciliation of Non-GAAP and Other Financial Disclosures EQH Non-GAAP Operating Earnings Six Months Ended June 30, 2019 2018 (in millions) Net income (loss) attributable to Holdings $ (412) $ 378 Adjustments related to: Variable annuity product features 1,740 425 Investment (gains) losses
Slide 22: Reconciliation of Non-GAAP and Other Financial Disclosures
Appendix Reconciliation of Non-GAAP and Other Financial Disclosures Impact of Actuarial Assumption Updates on Non-GAAP Operating Earnings Year Ended December 31, 2018 Individual Protection Corporate and Non-GAAP Operating Earnings Line Group Retirement Total Retirement Solutions Other (in millions)
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