Equitable Holdings, Inc. · NYSE:EQH
Equitable — AXA Equitable Holdings — Q1 2019 Earnings Presentation
17 slides from Equitable's earnings presentation, May 10, 2019
Slide 1: AXA Equitable Holdings First Quarter 2019 Earnings Results
AXA Equitable Holdings First Quarter 2019 Earnings Results May 10, 2019
Slide 2: Note Regarding Forward-Looking and Non-GAAP Financial Measures
Note Regarding Forward-Looking and Non-GAAP Financial Measures 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,” “estima
Slide 3: Highlights
Highlights Mixed macro ▪ Favorable equity markets in Q1; S&P 500 +13% environment in the quarter ▪ 10-year UST rate down approximately 30 basis points Robust capital ▪ Returned $818m to shareholders in the quarter management ▪ Raised $1bn of contingent capital, enhancing long-term flexibility ▪ Succ
Slide 4: First quarter 2019 Financial Summary
First quarter 2019 Financial Summary Non-GAAP Operating Earnings1 increased 5% to $509 million ▪ Non-GAAP Operating EPS2 increased 14% to $0.98 Business segment highlights: ▪ Individual Retirement first year premiums increased 16% to $1.9 billion ▪ Group Retirement operating earnings increased 7% to
Slide 5: Strategic Priorities
Strategic Priorities 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 Productivity Growth $160m $75m
Slide 6: First Quarter 2019 Consolidated Results Summary
First Quarter 2019 Consolidated Results Summary Non-GAAP Operating Earnings1 Non-GAAP Operating EPS1,2 Financial Highlights $m $ Non-GAAP Operating EPS increased 14% to $0.98 per share +5% +14% primarily driven by: 483 509 0.98 ▪ Higher net investment income due 0.86 to higher asset balances, yields
Slide 7: Individual Retirement
Individual Retirement Operating Earnings1 Highlights $m ▪ Operating earnings increased, primarily due to: +1% o Higher net investment income reflecting growth in 368 370 asset balances and yields and our GA optimization o Improvement in GMxB results ▪ 16% YOY growth in FYP led by SCS sales, driven b
Slide 8: Group Retirement
Group Retirement Operating Earnings Highlights $m ▪ Operating earnings increased primarily due to higher +7% fee-type revenue on higher average separate account assets and an increase in net investment 76 81 income due to our GA optimization ▪ Net inflows of $107 million driven by strong inflows in
Slide 9: Investment Management and Research (AB)
Investment Management and Research (AB) Operating Earnings Highlights $m ▪ Operating earnings decline driven by: (5)% o A decrease in revenue due to lower performance- 81 based fees and lower Bernstein Research revenues 77 o Partially offset by increased ownership in AB ▪ Net inflows of $1.1 billion
Slide 10: Protection Solutions
Protection Solutions Operating Earnings Highlights $m ▪ Operating earnings growth benefitting from: +40% o Higher net investment income from GA optimization o Lower DAC amortization as we exited loss 49 recognition in 3Q18 35 ▪ Higher annualized premiums driven by continued growth in VUL and Employe
Slide 11: Capital Position and Management
Capital Position and Management Capital return supported by strong earnings and capitalization Capital return ($m) Highlights Dividends Capital return to shareholders Repurchase from AXA 818 Repurchases from market ▪ Repurchased 30 million shares from AXA S.A., 68 leaving c. $200m remaining on 2019
Slide 12: Highlights
Highlights Mixed macro ▪ Favorable equity markets in Q1; S&P 500 +13% environment in the quarter ▪ 10-year UST rate down approximately 30 basis points Robust capital ▪ Returned $818m to shareholders in the quarter management ▪ Raised $1bn of contingent capital, enhancing long-term flexibility ▪ Succ
Slide 13: Appendix
AXA Equitable Holdings First Quarter 2019 Earnings Results Appendix May 10, 2019
Slide 14: 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 15: Net Income to Non-GAAP Operating Earnings, 1Q19
Net Income to Non-GAAP Operating Earnings, 1Q19 $m 81 (337) 509 1,540 (775) Net Income (loss) VA Product Features All other adjustments1 Income tax expense Non-GAAP Operating Earnings All figures $m Description 1Q19 GMxB accounting asymmetry: • GMxB hedging 1,127 • Static hedge cash option cost (gui
Slide 16: Reconciliation of Non-GAAP and Other Financial Disclosures
Reconciliation of Non-GAAP and Other Financial Disclosures EQH Non-GAAP Operating Earnings Three Months Ended March 31, 2019 2018 (in millions) Net income (loss) attributable to Holdings $ (775) $ 214 Adjustments related to: Variable annuity product features 1,540 176 Investment (gains) losses 11 (1
Slide 17: Reconciliation of Non-GAAP and Other Financial Disclosures
Reconciliation of Non-GAAP and Other Financial Disclosures EQH Pro Forma Non-GAAP Operating Return on Equity (ROE) Balances as of (in millions USD, unless otherwise indicated) 06/30/2017 09/30/2017 12/31/2017 3/31/2018 06/30/2018 09/30/2018 12/31/2018 3/31/2019 Pro forma Equity Reconciliation Total
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