AllianceBernstein Holding L.P. · NYSE:AB
AllianceBernstein Holding L.P — Q4 2020 Earnings Presentation
40 slides from AllianceBernstein Holding L.P's earnings presentation, Feb 11, 2021
Slide 1: Fourth Quarter 2020 Review
February 11, 2021 FOURTH QUARTER 2020 REVIEW Seth P. Bernstein President & Chief Executive Officer Ali Dibadj Head of Finance & Strategy
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
Seth P. Bernstein President & Chief Executive Officer Fourth Quarter 2020 Review | 3
Slide 4: Firmwide Overview: Fourth Quarter and Full Year 2020
Firmwide Overview: Fourth Quarter and Full Year 2020 4Q20 vs. 4Q19 2020 vs. 2019 $31.3 $27.0 $124.1 $103.7 Gross Sales 4Q20 4Q19 2020 2019 $8.1 $29.7 $5.2 ex-AXA Active Net Flows(1) $14.9 ex-AXA $4.5 $3.1 4Q20 4Q19 2020 2019 $685.9 $622.9 $685.9 $622.9 End of Period AUM 4Q20 4Q19 2020 2019 $651.7 $6
Slide 5: Asset Flows by Distribution Channel: Quarterly Trend
Asset Flows by Distribution Channel: Quarterly Trend Firmwide Retail 31.6 31.8 29.3 31.3 24.2 27.0 18.9 19.6 17.5 17.7 5.2 3.8 6.5 4.6 5.3 3.9 0.7 (4.6) 3.2 3.1 (0.7) (3.3) (5.6) (5.4) (2.2) (13.7) (20.5) (0.7) (15.8) (16.8) (18.4) (1.0) (7.9) (29.6) (26.2) (28.1) (37.2) (35.1) 4Q19 1Q20* 2Q20* 3Q20
Slide 6: Asset Flows by Distribution Channel: Annual Trend
Asset Flows by Distribution Channel: Annual Trend Firmwide 124.1 Retail 103.7 93.8 75.3 78.9 73.0 78.7 53.8 54.2 25.2 41.2 13.2 9.2 23.8 8.9 0.0 (9.8) (8.1) (2.6) (4.8) (1.6) (65.5) (78.5) (82.8) (46.0) (44.9) (101.9) (54.2) (51.5) (126.7) (80.5) 2016 2017 2018 2019 2020* 2016 2017 2018 2019 2020 In
Slide 7: Percentage of Assets Outperforming at Quarter-End
Percentage of Assets Outperforming at Quarter-End One-Year Three-Year Five-Year Fixed Income One-Year Three-Year Five-Year Equities Percentage of active fixed income and equity assets in institutional services that outperformed their benchmark gross of fees and percentage of active fixed income and
Slide 8: Retail Highlights
Retail Highlights 4th Consecutive Year of Active Equity Organic Growth Fourth Quarter and Full Year 2020 Highlights 7% Organic Growth in 2020, 8% Avg. since 2017 Sales and Flows $B • 4Q gross sales $17.7B, -6% Y/Y, +1% Q/Q • Record full year gross sales of $79B, up 5% Y/Y • Strong growth in US +21%
Slide 9: Institutional Highlights
Institutional Highlights 3rd Consecutive Year of Active Equity Organic Growth Fourth Quarter and Full Year 2020 Highlights 16% Organic Growth in 2020; 13% Avg. since 2018 Sales and Flows $B • 4Q gross sales of $9.9B up 83% Y/Y and 19% Q/Q • 2020 gross sales of $30.9 up 81% Y/Y to highest level in 12
Slide 10: Private Wealth Management Highlights
Private Wealth Management Highlights Significant Gains in Advisor Productivity Fourth Quarter and Full Year 2020 Highlights $M Sales Up, Flows Reflect Continued Client Risk Aversion + 16% • 4Q gross sales of $3.7B up 37% Y/Y and 6% Q/Q • Full year gross sales exceeded $14B, up 27% Y/Y; highest since
Slide 11: Bernstein Research Highlights
Bernstein Research Highlights Bernstein Research Quarterly and Annual Revenues Fourth Quarter and Full Year 2020 Highlights $M Increased Market Volatility Drives Higher Trading Volumes % Change • Full Year Revenues of $460M, +13% Y/Y 4Q20/4Q19: +7% • Strong full year growth in Asia, US trading volum
Slide 12: Progress on Our Strategy in 2020
Progress on Our Strategy in 2020 Firmwide Initiative Progress Deliver superior • Active Equity: 61% of assets in outperforming services for 3-yr period; 41% for 1-yr and 53% for 5-yr investment solutions • Fixed Income: 62% of assets in outperforming services for 3-yr period; 43% for 1-yr and 79% fo
Slide 13: Ali Dibadj
Ali Dibadj Head of Finance & Strategy Fourth Quarter 2020 Review | 13
Slide 14: Fourth Quarter and Full Year 2020 GAAP Income Statement
Fourth Quarter and Full Year 2020 GAAP Income Statement Income Statement (in US $ Millions) 4Q20 4Q19 %∆ FY 2020 FY 2019 %∆ Base Fees $ 656 $ 626 5% $ 2,463 $ 2,372 4% Performance Fees 109 76 43% 132 100 32% Bernstein Research Services 118 110 7% 460 408 13% Distribution Revenues 143 128 12% 530 455
Slide 15: Adjusted Financial Highlights: Fourth Quarter and Full Year 2020
Adjusted Financial Highlights: Fourth Quarter and Full Year 2020 In US $ Millions; scales may differ 4Q20 vs. 4Q19 2020 vs. 2019 Adjusted Revenues Adjusted Operating Income Adjusted Operating Margin Adjusted EPU Please refer to pages 35-39 for additional information on the reconciliation of GAAP fin
Slide 16: Fourth Quarter and Full Year 2020 Adjusted Income Statement
Fourth Quarter and Full Year 2020 Adjusted Income Statement Adjusted Income Statement (in US $ Millions) 4Q20 4Q19 %∆ FY 2020 FY 2019 %∆ Base Fees(1) $ 632 $ 607 4% $ 2,380 $ 2,306 3% Performance Fees 109 74 47% 130 97 34% Bernstein Research Services 118 110 7% 460 408 13% Investment (Losses) Gains
Slide 17: Adjusted Income Statement Highlights
Fourth Quarter and Full Year 2020 Adjusted Income Statement Highlights Revenues • Base Fees increased 4% versus 4Q19 and 3% versus FY19 driven by higher average AUM across all channels partially offset by lower fee rates across all channels. • Performance Fees were up versus 4Q19 and FY19 due mainly
Slide 18: The AB Investment Opportunity
The AB Investment Opportunity Differentiated investment performance and distribution capabilities driving sustained best-in-class Sustained Growth organic growth and accelerating inorganic growth opportunities Demonstrated expansion in higher-fee, persistent-AUM alternatives platforms Expanding Alte
Slide 19: Appendix
APPENDIX Fourth Quarter 2020 Review | 19
Slide 20: Retail Mutual Funds Relative Performance vs. Morningstar Average
Top quartile Retail Mutual Funds Relative Performance vs. Morningstar Average 2nd quartile 1 Year 3 Year 5 Year 10 Year Service Relative (%) Percentile Relative (%) Percentile Relative (%) Percentile Relative (%) Percentile Equity Large Cap Growth 0.2 47 2.1 37 1.8 37 2.5 13 Concentrated Growth (14.
Slide 21: Retail Mutual Funds Relative Performance vs. Morningstar Average
Top quartile Retail Mutual Funds Relative Performance vs. Morningstar Average 2nd quartile 1 Year 3 Year 5 Year 10 Year Service Relative (%) Percentile Relative (%) Percentile Relative (%) Percentile Relative (%) Percentile Fixed Income American Income (0.9) 55 1.7 23 1.3 25 1.3 12 European Income 3
Slide 22: 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 20.9 12.6 9.3 5.3 Concentrated Global Growth 8.4 7.0 4.9 3.7 Global Core (5.0) 1.0 1.2 N/A International Strategic Core (0.9) 1.2 0.9 N/A Sustainable Global Thematic 24.6 8.9 6
Slide 23: Assets Under Management: 4Q20
Assets Under Management: 4Q20 (US $ Billions) At December 31, 2020 At September 30, 2020 Institutions Private Wealth Retail Total Total Equity Actively Managed $60 $51 $107 218 189 Passive (1) 28 — 36 64 57 Total Equity 88 51 143 282 246 Fixed Income Taxable 164 14 85 263 254 Tax-Exempt 1 26 23 50 4
Slide 24: Three Months Ended 12/31/20: AUM Roll-Forward by Distribution Channel
Three Months Ended 12/31/20: 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 Transfers Performance Change of Period Institutions US 154.6 6.9 (1.3) (2.2) 3.4 0.3
Slide 25: Twelve Months Ended 12/31/20: AUM Roll-Forward by Distribution Channel
Twelve Months Ended 12/31/20: AUM Roll-Forward by Distribution Channel In US $ Billions Beginning Sales/New Redemptions/ Net Cash Net AUM Investment Net End Investment Service: of Period Accounts Terminations Flows Flows Adjustment Transfers Performance Change of Period Institutions US 149.5 16.6 (1
Slide 26: Three Months Ended 12/31/20: AUM Roll-Forward by Investment Service
Three Months Ended 12/31/20: 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 108.8 8.8 (6.4) (1.9) 0.5 15.8 16.3 125.
Slide 27: Twelve Months Ended 12/31/20: AUM Roll-Forward by Investment Service
Twelve Months Ended 12/31/20: 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 Acquisition Performance Change of Period Equity Active US 97.8 31.1 (22.7) (4.8) 3.6
Slide 28: Active vs. Passive Net Flows
Active vs. Passive Net Flows Three Months Ended 12/31/20 Actively Passively Managed Managed (1) Total Equity $ 1.0 $ (0.9) $ 0.1 Fixed Income (2) 2.5 (0.6) 1.9 Alternatives/MAS (3) 1.0 0.2 1.2 Total $ 4.5 $ (1.3) $ 3.2 Twelve Months Ended 12/31/20 Actively Passively Managed Managed (1) Total Equity
Slide 29: AUM by Region
AUM by Region Institutional Retail Other 4% NA ex US Japan 5% 12% UK 4% EMEA US Asia ex Jap… 21% 55% 6% Japan 8% EMEA US Asia ex Japan 10% 67% 8% $315.6B $265.3B As of December 31, 2020 By client domicile Fourth Quarter 2020 Review | 29
Slide 30: Fourth Quarter and Full Year 2020 Adjusted Advisory Fees
Fourth Quarter and Full Year 2020 Adjusted Advisory Fees 4Q20 4Q19 %∆ FY 2020 FY 2019 %∆ Ending AUM ($ Billions) $686 $623 10% $686 $623 10% Average AUM ($ Billions) $652 $607 7% $620 $574 8% By Fee Type ($ Millions): Adjusted Base Fees(1) $632 $607 4% $2,380 $2,306 3% Adjusted Performance Fees 109
Slide 31: Fourth Quarter and Full Year 2020 GAAP Income Statement
Fourth Quarter and Full Year 2020 GAAP Income Statement In US $ Millions (except EPU) 4Q20 4Q19 %∆ FY 2020 FY 2019 %∆ Net Revenues $ 1,063 $ 987 8% $ 3,708 $ 3,518 5% Operating Expenses 761 719 6% 2,801 2,695 4% Operating Income 302 268 13% 907 823 10% Net Income Attributable to AB Unitholders 286 2
Slide 32: Consolidated Balance Sheet
Consolidated Balance Sheet In US $ Millions Assets December 31, 2020 December 31, 2019 Cash and cash equivalents $1,037 $680 Cash and securities, segregated 1,754 1,095 Receivables, net 2,280 2,045 Investments: Long-term incentive compensation-related 60 51 Other 193 216 Assets of consolidated varia
Slide 33: Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows In US $ Millions Twelve months ended December 31, December 31, 2020 2019 Net Income $ 862 $ 782 Non-cash items: Amortization of deferred sales commissions 27 15 Non-cash long-term incentive compensation expense 196 208 Depreciation and other amortization 138 167
Slide 34: Fourth Quarter and Full Year 2020 AB Holding Financial Results
Fourth Quarter and Full Year 2020 AB Holding Financial Results In US $ Millions (excluding per Unit amounts) 4Q20 4Q19 %∆ FY 2020 FY 2019 %∆ AB Net Income Attributable to AllianceBernstein $286 $249 15 % $866 $752 15 % Weighted Average Equity Ownership Interest 35.4% 35.3% 35.6% 35.4% AB Holding Equ
Slide 35: Fourth Quarter 2020 GAAP to Non-GAAP Reconciliation
Fourth Quarter 2020 GAAP to Non-GAAP Reconciliation In US $ Thousands Adjustments Distribution Pass Deferred NCI/ Real Estate Acquisition- Contingent Related Through Comp. Consol Credits Related Payment GAAP Payments Adjustments Inv. VIE (Charges) Expenses Adjustment Non-GAAP (A) (B) (C) (D) (E) (F)
Slide 36: Fourth Quarter 2019 GAAP to Non-GAAP Reconciliation
Fourth Quarter 2019 GAAP to Non-GAAP Reconciliation In US $ Thousands Adjustments Distribution Pass Deferred NCI/ Real Estate Acquisition- Contingent Related Through Comp. Consol Credits Related Payment GAAP Payments Adjustments Inv. VIE (Charges) Expenses Adjust. Non-GAAP (A) (B) (C) (D) (E) (F) (G
Slide 37: Full Year 2020 GAAP to Non-GAAP Reconciliation
Full Year 2020 GAAP to Non-GAAP Reconciliation In US $ Thousands Adjustments Distribution Pass Deferred NCI/ Real Estate Acquisition- Contingent Related Through Comp. Consol Credits Related Payment GAAP Payments Adjustments Inv. VIE (Charges) Expenses Adjustment Other Non-GAAP (A) (B) (C) (D) (E) (F
Slide 38: Full Year 2019 GAAP to Non-GAAP Reconciliation
Full Year 2019 GAAP to Non-GAAP Reconciliation In US $ Thousands Adjustments Distribution Pass Deferred NCI/ Real Estate Acquisition- Contingent Related Through Comp. Consol Credits Related Payment GAAP Payments Adjustments Inv. VIE (Charges) Expenses Adjust. Non-GAAP (A) (B) (C) (D) (E) (F) (G) Inv
Slide 39: 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 40: AllianceBernstein
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