Alliancebernstein Holding L.p. · NYSE:AB
Alliancebernstein Holding L.p — Q1 2024 Earnings Presentation
43 slides from Alliancebernstein Holding L.p's earnings presentation, Apr 26, 2024
Slide 1: First Quarter 2024 Review
First Quarter 2024 Review April 26, 2024 Seth P. Bernstein, President & Chief Executive Officer Jackie Marks, Chief Financial Officer Mark Gessner, Head of US Retail
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 First Quarter 2024 Review 3
Slide 4: Firmwide Overview: First Quarter 2024
Firmwide Overview: First Quarter 2024 1Q:24 vs. 1Q:23 1Q:24 vs. 4Q:23 $32.6 $32.6 $25.6 $28.3 Gross Sales 1Q:24 1Q:23 1Q:24 4Q:23 $3.7 $3.7 Active Net Flows $1.8 ($2.8) 1Q:24 1Q:23 1Q:24 4Q:23 $758.7 $758.7 $725.2 $675.9 End of Period AUM 1Q:24 1Q:23 1Q:24 4Q:23 $738.9 $738.9 $666.8 $685.4 Average A
Slide 5: Asset Flows by Distribution Channel: Quarterly Trend
Asset Flows by Distribution Channel: Quarterly Trend Firmwide Retail $32.6 $25.2 $28.3 $23.8 $25.6 $22.4 $21.0 $16.8 $16.5 $16.9 $0.5 $4.2 $0.8 $1.6 $1.6 $1.3 ($1.9) ($1.8) ($0.7) ($4.0) ($24.8) ($15.2) ($17.2) ($15.3) ($26.4) ($27.1) ($30.1) ($19.7) ($19.6) ($32.1) 1Q:23 2Q:23 3Q:23 4Q:23 1Q:24 1Q:
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 83 76 77 73 73 75 74 73 71 75 75 71 62 27 1Q:23 2Q:23 3Q:23 4Q:23 1Q:24 1Q:23 2Q:23 3Q:23 4Q:23 1Q:24 1Q:23 2Q:23 3Q:23 4Q:23 1Q:24 Equities One-Year Three-Year Five-Year 74 73 48 49 45 50 52 50 50 40 38
Slide 7: Retail Highlights
Retail Highlights Strong Fixed Income Demand and Improving Equity First Quarter 2024 Highlights Highest quarterly channel sales and inflows since 4Q21 Channel Sales & Flows on Track with FY21 Record Metrics • Gross sales of $23.8B, +$7.0B / +42% Y/Y, +$2.8B / +13% Q/Q; best in 9 qtrs. 25 • Redemptio
Slide 8: Institutional Highlights
Institutional Highlights 1Q: Equity Outflows outweigh Alts/MAS AOG of +5% First Quarter 2024 Highlights (USD Billions) Sales and Flows • 1Q24 gross sales of $3.3B, up 12% both Y/Y and Q/Q 6 • Institutional net outflows -$4.2B, includes $3.0B partial, low-fee passive 2 redemption ($2.7) ($2.5) Sustai
Slide 9: Private Wealth Highlights
Private Wealth Highlights +2% AOG in 1Q Driven by Alts/MAS and Munis First Quarter 2024 Highlights Strong Q/Q Sales and Advisor Productivity Growth Drive Net Inflows (USD billions) • 1Q23 gross sales of $5.5B, -6% Y/Y, +26% Q/Q 5 • Y/Y comparison driven by lower money market sales relative to 1Q 202
Slide 10: Bernstein Research Highlights
Bernstein Research Highlights Bernstein Research Quarterly Revenues First Quarter 2024 Highlights (USD millions) Institutional Trading Volumes Remain Soft $100.0 $100.4 $96.2 • 1Q revenues of $96M, -4% Y/Y, -4% Q/Q Percent Change • Key markets remain soft; signs of improvement in Asia activity Y/Y:
Slide 11: Progress on Our Initiatives in 1Q24
Progress on Our Initiatives in 1Q24 Firmwide Initiative Progress Deliver superior • Fixed Income: 71% of assets in outperforming services for 3-yr period; 91% for 1-yr and 71% for 5-yr investment • Active Equity: 50% of assets in outperforming services for 3-yr period; 40% for 1-yr and 50% for 5-yr
Slide 12: Mark Gessner, Head of US Retail
Mark Gessner Head of US Retail First Quarter 2024 Review 12
Slide 13: AB Is Well Positioned for Growth in the US Retail Wealth Channel
AB Is Well Positioned for Growth in the US Retail Wealth Channel 1 Track record of success across market cycles 2 Increasing access to distributor partners 3 Greater vehicle flexibility aligns with advisor & investor preferences 4 Investments targeting market opportunities First Quarter 2024 Review
Slide 14: Track Record of Success Across Market Cycles
Track Record of Success Across Market Cycles 1 Seven straight years of net inflows supported by sales growth and vehicle diversification AB US Retail Sales*, Redemptions and Net Flows EoP AUM by Wrapper/Vehicle & Annual Organic Growth ($ in billions) ($in billions, except AOG) Gross Sales Net Flows
Slide 15: Deep Established Relationships with Key Distributors
Deep Established Relationships with Key Distributors 2 U.S. Retail Wealth is a large market with significant growth potential US Retail Wealth Assets AB Retail Select Distributor Relationships 2023 AUM AUM Growth AUM Growth $52 Trillion CAGR, 17-23 CAGR, 17-23 19% 6% Wirehouse #1 12% Wirehouse Broke
Slide 16: Increased Distribution Productivity and Penetration
Increased Distribution Productivity and Penetration 2 Deepening distribution coverage boosts wholesale productivity and advisor engagement Wholesaler Productivity Up 70% Last Five Years # Financial Advisors with Sales >$1M and Avg. Sales (Indexed Sales per Wholesaler) 1.7x $7 Average Sales/Advisor (
Slide 17: Greater Vehicle Flexibility Aligns with Evolving Investor Preferences
Greater Vehicle Flexibility Aligns with Evolving Investor Preferences 3 Vehicle versatility extends addressable market for our differentiated investment strategies SMAs: End-of-Period AUM Retail CITs & Active ETFs: Combined, End-of-Period AUM ($ billions) ($ billions) $40.7 Equities Munis Other $6.4
Slide 18: The Next Wave of Growth
The Next Wave of Growth 4 Market-leading investment capabilities, strong distribution relationships, customization expertise Accelerating Growth: SMAs 2.0 Emerging Growth: Active ETFs Future Growth: Private Alternatives AB SMA platform has more than tripled in Active ETFs expected to grow 17% Distri
Slide 19: Laying the Foundation for Next Wave of Growth
Laying the Foundation for Next Wave of Growth 4 Mix shift reflects growth towards specialist sales expertise Product Specialists Client Segment Specialists Dedicated ETF and Private Alternatives Specialists By YE-2024, we anticipate: Successfully attracting outside talent where needed • 200% increas
Slide 20: Jackie Marks, Chief Financial Officer
Jackie Marks Chief Financial Officer First Quarter 2024 Review 20
Slide 21: First Quarter 2024 GAAP Income Statement
First Quarter 2024 GAAP Income Statement Income Statement (in US $ Millions) 1Q24 1Q23 %∆ 4Q23 %∆ Base Fees $754 $692 9% $714 6% Performance Fees 30 37 (18)% 62 (51)% Bernstein Research Services 96 100 (4)% 100 (4)% Distribution Revenues 166 141 17 % 151 10 % Dividends & Interest 45 51 (12)% 49 (9)%
Slide 22: Adjusted Financial Highlights: First Quarter 2024
Adjusted Financial Highlights: First Quarter 2024 1Q:24 vs. 1Q:23 1Q:24 vs. 4Q:23 $884 $833 $884 $871 Adjusted Revenues 1Q:24 1Q:23 1Q:24 4Q:23 $267 $239 $267 $254 Adjusted Operating Income 1Q:24 1Q:23 1Q:24 4Q:23 30.3% 28.7% 30.3% 29.2% Adjusted Operating Margin 1Q:24 1Q:23 1Q:24 4Q:23 $0.73 $0.73
Slide 23: First Quarter 2024 Adjusted Income Statement
First Quarter 2024 Adjusted Income Statement Adjusted Income Statement (in US $ Millions) 1Q24 1Q23 %∆ 4Q23 %∆ Base Fees(1) $723 $667 8% $682 6% Performance Fees 27 33 (20)% 51 (48)% Bernstein Research Services 96 100 (4)% 100 (4)% Investment Gains (Losses) 3 (2) n/m 2 15 % Dividend & Interest Reven
Slide 24: First Quarter 2024 Adjusted Income Statement Highlights
First Quarter 2024 Adjusted Income Statement Highlights Revenues • Base Fees increased 8% versus 1Q23 driven by an 11% increase in average AUM, higher across all channels, partially offset by a 2% decrease in the fee rate, lower across all channels. Base Fees increased 6% versus 4Q23 driven by an 8%
Slide 25: Appendix
Appendix First Quarter 2024 Review 25
Slide 26: 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 0.6 54 3.6 18 2.0 23 2.9 7 Concentrated Growth (12.8) 95 (1.7) 73 (2.2
Slide 27: 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 39 (0.4) 58 (0.2) 57 0.5 23 European Income 3.7 14 (0.2) 55 0.5 32 1
Slide 28: 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 (0.6) (1.8) 2.1 2.8 Concentrated Global Growth (10.5) (7.3) (2.6) 1.3 Global Core (5.2) (2.1) (1.5) 0.2 International Strategic Core (0.0) 0.7 (1.0) 1.6 Sustainable Global Them
Slide 29: Assets Under Management: 1Q24
Assets Under Management: 1Q24 (US $ Billions) At December 31, At March 31, 2024 2023 Institutions Private Wealth Retail Total Total Equity Actively Managed $61 $53 $150 $264 $247 Passive (1) 23 5 37 65 62 Total Equity 84 58 187 329 309 Fixed Income Taxable 126 18 68 212 209 Tax-Exempt 1 28 35 64 61
Slide 30: AUM Roll-Forward by Distribution Channel
Three Months Ended 3/31/24: 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 $150.5 $2.7 $(0.5) $(3.7) $(1.5) $3.6 $2
Slide 31: AUM Roll-Forward by Investment Service
Three Months Ended 3/31/24: 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 $161.3 $9.0 $(8.6) $(1.9) $(1.5) $17.3 $1
Slide 32: Active vs. Passive Net Flows
Three Months Ended 3/31/24: Active vs. Passive Net Flows Actively Passively Managed Managed (1) Total Equity $(6.2) $(3.3) $(9.5) Fixed Income 7.5 (0.1) 7.4 Alternatives/MAS (2) 2.4 0.2 2.6 Total $3.7 $(3.2) $0.5 (1) Includes index and enhanced index services. (2) Includes certain multi-asset soluti
Slide 33: Assets Under Management By Region
Assets Under Management By Region Institutional Geographic Breakdown Retail Geographic Breakdown Japan Other Other 3% 4% 3% APAC ex Japan 7% EMEA 9% Japan 11% EMEA 12% APAC ex Japan US 17% US 75% 60% $322.5B $308.0B As of March 31, 2024 By Client Domicile Percentages may not add up to 100% due to ro
Slide 34: First Quarter 2024 Adjusted Advisory Fees
First Quarter 2024 Adjusted Advisory Fees 1Q24 1Q23 %∆ 4Q23 %∆ Ending AUM ($ Billions) $759 $676 12 % $725 5% Average AUM ($ Billions) $739 $667 11 % $685 8% By Fee Type ($ Millions): Adjusted Base Fees(1) $723 $667 8% $682 6% Adjusted Performance Fees 27 33 (20)% 51 (48)% Total $750 $700 7% $733 2%
Slide 35: First Quarter 2024 GAAP Income Statement
First Quarter 2024 GAAP Income Statement In US $ Millions (except EPU) 1Q24 1Q23 %∆ 4Q23 %∆ Net Revenues $1,104 $1,024 8% $1,090 1% Operating Expenses 862 809 7% 852 1% Operating Income 242 215 12 % 238 2% Net Income Attributable to AB Unitholders 218 194 12 % 227 (4)% AB Holding GAAP Diluted Net In
Slide 36: Consolidated Balance Sheet
Consolidated Balance Sheet In US $ Millions Assets 3/31/2024 12/31/2023 Cash and cash equivalents $894 $1,000 Cash and securities, segregated 866 868 Receivables, net 1,878 1,837 Investments: Long-term incentive compensation-related 37 40 Other 184 204 Assets of consolidated variable interest entiti
Slide 37: Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows In US $ Millions Three Months Ended 3/31/2024 3/31/2023 Net Income $226 $204 Non-cash items: Amortization of deferred sales commissions 12 8 Non-cash long-term incentive compensation expense 9 7 Depreciation and other amortization 23 23 Unrealized (gains) on inve
Slide 38: First Quarter 2024 AB Holding Financial Results
First Quarter 2024 AB Holding Financial Results In US $ Millions (excluding per Unit amounts) 1Q24 1Q23 %∆ 4Q23 %∆ AB Net Income Attributable to AllianceBernstein $218 $194 12 % $227 (4)% Weighted Average Equity Ownership Interest 39.6 % 39.3 % 38.9 % AB Holding Equity in Net Income Attributable to
Slide 39: 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) (G) Investment advisory and services fees $ 784,4
Slide 40: First Quarter 2023 GAAP to Non-GAAP Reconciliation
First Quarter 2023 GAAP to Non-GAAP Reconciliation In US $ Thousands Adjustments Distribution Pass Deferred NCI/ RE Acq Related Through Comp. Consol Credits Related Interest GAAP Payments Adjustments Inv. VIE (Charges) Expenses Expense Non-GAAP (A) (B) (C) (D) (E) (F) (G) Investment advisory and ser
Slide 41: Fourth Quarter 2023 GAAP to Non-GAAP Reconciliation
Fourth Quarter 2023 GAAP to Non-GAAP Reconciliation In US $ Thousands Adjustments Distribution Pass Deferred NCI/ Real Estate Acquisition- Related Through Comp. Consol Credits Related Interest GAAP Payments Adjustments Inv. VIE (Charges) Expenses Expense Non-GAAP (A) (B) (C) (D) (E) (F) (G) Investme
Slide 42: 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 43: AllianceBernstein
ALLIANCEBERNSTEIN'
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