Blackrock, Inc. · NYSE:BLK
Blackrock — Q4 2023 Earnings Presentation
28 slides from Blackrock's earnings presentation, Jan 12, 2024
Slide 1: Q4 2023 Earnings
January 12, 2024 Q4 2023 Earnings Earnings Release Supplement
Slide 2: A broadly diversified business across clients, products and geographies
A broadly diversified business across clients, products and geographies Assets Under Management of $10.0 trillion at December 31, 2023 Q4 2023 Base Fees and Securities Lending Revenue of $3.6 billion Client Type Style Product Type Region Active Institutional 26% 32% Active 45% Equity Equity Institut
Slide 3: Net flows
Net flows ($ in billions) Total BlackRock Retail Long-term 6% 5% 5% 4% 3% 3% 4% 4% 3% 12% 8% 4% 2% (2)% (3)% (2)% (2)% (1)% 11% 8% 5% 2% 0% 0% 0% 1% 1% Long-term Cash Advisory $212 $44 $114 $22 $87 $110 $90 $8 $80 $96 $10 $169 $21 $17 $33 $4 $146 $23 $0.3 $114 $103 $3 $69 $65 $57 $15 $63 $(5) $(4) $
Slide 4: Profitability
Profitability ($ in millions, except per share data) Operating Income and Margin, as adjusted Net Income and EPS, as adjusted $2,040 $10.91 $10.68 $2,700 $1,920 50.0% $9.66 $2,600 46.6% $9.52 $9.55 $9.28 $2,500 $1,800 $2,400 44.2% 43.7% $8.93 $2,300 42.5% 42.3% 45.0% $7.36 $7.93 $2,200 42.0% 41.6% $
Slide 5: Capital management
Capital management (amounts in millions, except per share data) Share repurchases and Dividends per share weighted-average diluted shares $5.00 $5.00 $5.00 $5.00 $4.88 $4.88 $4.88 $4.88 154.6 153.5 152.5 152.0 $4.13 151.8 151.3 150.7 150.5 150.2 $500 $500 $500 $375 $375 $375 $375 $375 $300 Q4 Q1 Q2
Slide 6: Major market indices and exchange rates
Major market indices and exchange rates % Change % Change Spot 12/31/2023 vs. Average Q4 2023 vs. 12/31/2022 9/30/2023 12/31/2023 9/30/2023 12/31/2022 Q4 2022 Q3 2023 Q4 2023 Q3 2023 Q4 2022 Equity Indices Domestic S&P 500 3,840 4,288 4,770 11% 24% 3,855 4,459 4,471 -% 16% Global MSCI Barra World In
Slide 7: Quarterly revenue
Quarterly revenue ($ in millions) Percentage Change Year-over-Year Sequential 74% Base fees Base fees 6% (2)% Securities lending revenue Securities lending revenue 13% (6)% Performance fees Performance fees 36% 344% Technology services revenue Technology services revenue 7% (7)% 1% 7% Distribution f
Slide 8: Quarterly investment advisory, administration fees and securities lending revenue
Quarterly investment advisory, administration fees and securities lending revenue ($ in millions) Q4 2023 compared to Q4 2022 Q4 2023 compared to Q3 2023 $206 $(76) $3,681 $13 $6 $(3) $(4) $(8) $(9) $(11) $(26) $13 $6 $6 $6 $3,605 $(34) $3,605 $28 $24 $42 $81 $3,399 Q4 2022 ETFs Alts ETFs Non-ETF Ca
Slide 9: Quarterly expense, as adjusted
Quarterly expense, as adjusted ($ in millions) 17% Employee comp. & benefits Percentage Change Year-over-Year Sequential Employee comp. & benefits 3% 4% Distribution & servicing costs Distribution & servicing costs 1% (5)% 11% Direct fund expense 16% (10)% 51% Direct fund expense (100)% -% Product l
Slide 10: Full year revenue
Full year revenue ($ in millions) Percentage Change Year-over-Year 77% Base fees Base fees (1)% Securities lending revenue Securities lending revenue 13% Performance fees Performance fees 8% Technology services revenue Technology services revenue 9% 1% 7% Distribution fees Distribution fees (9)% 8%
Slide 11: Full year investment advisory, administration fees and securities lending revenue
Full year investment advisory, administration fees and securities lending revenue ($ in millions) 2023 compared to 2022 $(52) $56 $45 $32 $(43) $(80) $108 $73 $(96) $(147) $14,451 $14,399 2022 ETFs ETFs Alts Cash Non-ETF Non-ETF Active Multi- Active 2023 FI EQ EQ FI FI Asset EQ 10 10
Slide 12: Full year expense, as adjusted
Full year expense, as adjusted ($ in millions) Percentage Change Year-over-Year Employee comp. & benefits Employee comp. & benefits 1% 18% Distribution & servicing costs (6)% Distribution & servicing costs 12% Direct fund expense 9% Product launch costs (100)% 51% Direct fund expense General & admin
Slide 13: Alternatives client assets
Alternatives client assets ($ in billions, as of December 31, 2023) Non-Fee Client Fee Paying Paying Assets AUM Commitments Illiquid alternatives: Alternative solutions $13 $7 $6 Private equity 42 35 7 Opportunistic & credit strategies 34 31 3 Real assets: Real estate 28 28 - Infrastructure 51 36 15
Slide 14: Reconciliation between GAAP and as adjusted
Reconciliation between GAAP and as adjusted ($ in millions) 2021 2022 2023 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Operating Income GAAP $ 2,039 $ 1,764 $ 1,668 $ 1,526 $ 1,427 $ 1,438 $ 1,615 $ 1,637 $ 1,585 Non-GAAP expense adjustments 68 58 59 59 150 73 60 54 131 As Adjusted $ 2,107 $ 1,822 $ 1,727 $ 1,585 $
Slide 15: Important notes
Important notes This presentation, and other statements that BlackRock may make, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act, with respect to BlackRock’s future financial or business performance, strategies or expectations. Forward-lookin
Slide 16: Acquisition of Global Infrastructure Partners (GIP)
Investor Presentation January 12, 2024 Acquisition of Global Infrastructure Partners (GIP)
Slide 17: Forward looking statements
Forward looking statements This presentation, and other statements that BlackRock may make, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act, with respect to BlackRock’s future financial or business performance, strategies or expectations, inc
Slide 18: A transformational opportunity
A transformational opportunity BlackRock to acquire GIP for $3B cash and approximately 12M BlackRock shares Strategic Creates a world-leading infrastructure private markets manager1 expansion in • Highly complementary platforms with over $150 billion in pro-forma client assets2 fast-growing • Indust
Slide 19: Infrastructure is forecasted to be one of the fastest-growing segments of private markets
Infrastructure is forecasted to be one of the fastest-growing segments of private markets Industry infrastructure AUM1 $75T global infrastructure funding need2 2022-2040 cumulative infrastructure investment & needs, $T Investment 40 16% CAGR 2,541 Needs 10% CAGR 23 1,190 729 7 5 2017 2022 2027 Energ
Slide 20: Global Infrastructure Partners overview
Global Infrastructure Partners overview Leading globall infrastructure manager with strong track record and reputation for operational excellence; $45 billion returned to investors through successful exits1 Largest independent infrastructure manager2, with $100+ billion in client assets across equit
Slide 21: BlackRock's existing infrastructure platform
BlackRock’s existing infrastructure platform Key highlights Platform • 200+ investment professionals overview2 • $240M+ revenue in 2023 $9B $21B • 300+ clients globally • 46% of commitments over $250 million $50B+ Leading • Infrastructure Debt infrastructure • Diversified Infrastructure client asset
Slide 22: Combination creates second-largest global infrastructure private markets business
Combination creates second-largest global infrastructure private markets business Significant scaled infrastructure platform1… …creates #2 private markets infra manager Infrastructure Infrastructure Rank Asset manager client assets ($B)3 #14 #3 #1 Competitor #1 243 by client assets2 by client assets
Slide 23: Opportunities for significant value creation via growth
Opportunities for significant value creation via growth Proprietary • Brings together deep network of relationships with global corporates and public sectors origination • Strong track records across both firms in originating differentiated, landmark transactions Scaled • Significant platform across
Slide 24: Compelling value for BlackRock shareholders
Compelling value for BlackRock shareholders Consideration1 • $3 billion of cash delivered at closing, funded by incremental debt • BlackRock is currently rated AA- with S&P2 and Aa3 with Moody’s2 • This transaction is not expected to meaningfully change its leverage profile • Approximately 12 millio
Slide 25: Compelling value for BlackRock shareholders (cont'd)
Compelling value for BlackRock shareholders (cont’d) Governance • Bayo Ogunlesi, GIP founder, Chairman & CEO, to join BlackRock Board of Directors following closing of transaction1 • Each GIP owner-seller will execute a shareholders’ agreement requiring that shares be voted in line with recommendati
Slide 26: End notes
End notes These notes refer to the financial metrics and/or defined term presented on: Slide 3 – A transformational opportunity: BlackRock to acquire GIP for $3B cash and approximately 12M BlackRock shares 1. Source: Preqin. Ranking based on aggregate capital raised via closed-end commingled funds o
Slide 27: End notes (cont'd)
End notes (cont’d) These notes refer to the financial metrics and/or defined term presented on: Slide 7 – Combination creates second-largest global infrastructure private markets business 1. Source: BlackRock and GIP. BlackRock client assets as of December 31, 2023 and GIP client assets as of Septem
Slide 28: Important notes
Important notes The opinions expressed herein are as of January 2024 and are subject to change at any time due to changes in the market, the economic or regulatory environment or for other reasons. The information should not be construed as research or relied upon in making investment decisions or b