Alliancebernstein Holding L.p. · NYSE:AB

Alliancebernstein Holding L.p — Q2 2023 Earnings Presentation

35 slides from Alliancebernstein Holding L.p's earnings presentation, Jul 28, 2023

  1. Slide 1: Second Quarter 2023 Review

    Second Quarter 2023 Review July 28, 2023 Seth P. Bernstein, President & Chief Executive Officer Bill Siemers, Interim Chief Financial Officer; Controller & Chief Accounting Officer

  2. 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

  3. Slide 3: Seth P. Bernstein, President & Chief Executive Officer

    Seth P. Bernstein President & Chief Executive Officer Second Quarter 2023 Review 3

  4. Slide 4: Firmwide Overview: Second Quarter 2023

    Firmwide Overview: Second Quarter 2023 2Q:23 vs. 2Q:22 2Q:23 vs. 1Q:23 $22.4 $23.9 $22.4 $25.6 Gross Sales 2Q:23 2Q:22 2Q:23 1Q:23 $1.8 Active Net Flows ($4.0) * ($3.4) ($4.0) * 2Q:23 2Q:22 2Q:23 1Q:23 $691.5 $691.5 $675.9 $646.8 End of Period AUM 2Q:23 2Q:22 2Q:23 1Q:23 $678.4 $688.6 $678.4 $666.8

  5. Slide 5: Asset Flows by Distribution Channel: Quarterly Trend

    Asset Flows by Distribution Channel: Quarterly Trend Firmwide Retail $30.9 $17.3 $23.9 $25.6 $14.2 $16.8 $16.5 $19.8 $22.4 $13.8 $0.8 $1.6 ($2.7) ($1.9) ($4.0) ($2.2) ($3.4) ($0.7) ($10.5) ($5.0) ($26.6) ($24.8) ($26.4) ($17.6) ($15.2) ($17.2) ($30.3) ($32.8) ($19.5) ($18.8) 2Q:22* 3Q:22* 4Q:22 1Q:2

  6. Slide 6: Percentage of Assets Outperforming at Quarter-End

    Percentage of Assets Outperforming at Quarter-End Fixed Income One-Year Three-Year Five-Year 83 76 73 70 75 75 63 50 53 53 53 21 20 27 19 2Q:22 3Q:22 4Q:22 1Q:23 2Q:23 2Q:22 3Q:22 4Q:22 1Q:23 2Q:23 2Q:22 3Q:22 4Q:22 1Q:23 2Q:23 Equities One-Year Three-Year Five-Year 82 80 77 74 73 59 59 52 49 45 48

  7. Slide 7: Retail Highlights

    Retail Highlights Channel Flows Supported by Fixed Income and US Retail Second Quarter 2023 Highlights 10% annualized Fixed Income organic growth in 2Q Fixed Income and US Retail Demand Support Channel Sales & Flows (USD Billions) 25 • 2Q23 gross sales of $16.5B; -$0.8B or -4% Y/Y, and -$0.3B or -2%

  8. Slide 8: Institutional Highlights

    Institutional Highlights Second Quarter 2023 Highlights May & June Net Flows Positive following April Redemptions (USD Billions) Sales and Flows 8 • 2Q23 gross sales of $1.5B, nearly half from Active Equities • Net outflows -$3.2B, driven by $6B in pre-announced low-fee April 4 redemptions $0.7 0 •

  9. Slide 9: Private Wealth Highlights

    Private Wealth Highlights Resilient 2Q Sales Despite Sequential Seasonal Slowdown Second Quarter 2023 Highlights YTD net inflows of $1.8 billion, double vs. prior-year period levels Strong Y/Y Sales Growth and Advisor Productivity (USD billions) • 2Q23 gross sales of $4.4B, +35% Y/Y, -23% seasonally

  10. Slide 10: Bernstein Research Highlights

    Bernstein Research Highlights Bernstein Research Quarterly Revenues Second Quarter 2023 Highlights (USD millions) Institutional Trading Volumes Remain Constrained Amidst Investor Caution $106.4 • 2Q revenues of $92M, -14% Y/Y, -8% Q/Q $100.0 $91.8 • Global institutional equities trading volumes rema

  11. Slide 11: Progress on Our Initiatives in 2Q23

    Progress on Our Initiatives in 2Q23 Firmwide Initiative Progress Deliver • Fixed Income: 76% of assets in outperforming services for 3-yr period; 73% for 1-yr and 75% for 5-yr differentiated • Active Equity: 48% of assets in outperforming services for 3-yr period; 23% for 1-yr and 52% for 5-yr inves

  12. Slide 12: Bill Siemers, Interim Chief Financial Officer

    Bill Siemers Interim Chief Financial Officer; Controller & Chief Accounting Officer Second Quarter 2023 Review 12

  13. Slide 13: Second Quarter 2023 GAAP Income Statement

    Second Quarter 2023 GAAP Income Statement Income Statement (in US $ Millions) 2Q23 2Q22 %∆ 1Q23 %∆ Base Fees $703 $697 1% $692 2% Performance Fees 18 23 (20)% 37 (50)% Bernstein Research Services 92 106 (14)% 100 (8)% Distribution Revenues 145 153 (5)% 141 3% Dividends & Interest 50 22 123 % 51 (1)%

  14. Slide 14: Adjusted Financial Highlights: Second Quarter 2023

    Adjusted Financial Highlights: Second Quarter 2023 2Q:23 vs. 2Q:22 2Q:23 vs. 1Q:23 $823 $816 $823 $833 Adjusted Revenues 2Q:23 2Q:22 2Q:23 1Q:23 $222 $228 $222 $239 Adjusted Operating Income 2Q:23 2Q:22 2Q:23 1Q:23 27.0% 28.0% 27.0% 28.7% Adjusted Operating Margin 2Q:23 2Q:22 2Q:23 1Q:23 $0.61 $0.71

  15. Slide 15: Second Quarter 2023 Adjusted Income Statement

    Second Quarter 2023 Adjusted Income Statement Adjusted Income Statement (in US $ Millions) 2Q23 2Q22 %∆ 1Q23 %∆ Base Fees(1) $678 $677 —% $667 2% Performance Fees 15 18 (17)% 33 (55)% Bernstein Research Services 92 106 (14)% 100 (8)% Investment Gains (Losses) 1 (6) (123)% (2) (161)% Dividend & Inter

  16. Slide 16: Second Quarter 2023 Adjusted Income Statement Highlights

    Second Quarter 2023 Adjusted Income Statement Highlights Revenues • Base Fees were flat versus 2Q22. Base Fees increased 2% versus 1Q23 driven by a 2% increase in average AUM, higher across all three distribution channels. • Performance Fees decreased 17% versus 2Q22 driven by lower Real Estate Equi

  17. Slide 17: Appendix

    Appendix Second Quarter 2023 Review 17

  18. Slide 18: 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 (1.1) 59 1.3 45 2.4 19 3.0 7 Concentrated Growth (9.4) 91 1.2 45 1.0 3

  19. Slide 19: 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 (0.0) 47 (0.7) 65 0.1 46 0.7 20 European Income 1.5 29 (0.8) 67 0.3 35 1

  20. Slide 20: 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 (1.4) (2.5) 3.4 3.2 Concentrated Global Growth (4.0) (5.1) (0.4) 1.6 Global Core (0.3) (1.4) (0.1) 0.3 International Strategic Core (5.9) (2.4) (0.9) 1.5 Sustainable Global The

  21. Slide 21: Assets Under Management: 2Q23

    Assets Under Management: 2Q23 (US $ Billions) At June 30, 2023 At March 31, 2023 Institutions Private Wealth Retail Total Total Equity Actively Managed $57 $49 $130 $236 $229 Passive (1) 24 3 33 60 57 Total Equity 81 52 163 296 286 Fixed Income Taxable 126 17 59 202 198 Tax-Exempt 1 26 29 56 55 Pass

  22. Slide 22: Three Months Ended 6/30/23: AUM Roll-Forward by Distribution Channel

    Three Months Ended 6/30/23: 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 $141.6 $1.2 $(0.4) $3.2 $4.0 $

  23. Slide 23: Three Months Ended 6/30/23: AUM Roll-Forward by Investment Service

    Three Months Ended 6/30/23: 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 $142.8 $7.5 $(8.6) $(1.9) $(3.0) $10.7 $7

  24. Slide 24: Three Months Ended 6/30/23: Active vs. Passive Net Flows

    Three Months Ended 6/30/23: Active vs. Passive Net Flows Actively Passively Managed Managed (1) Total Equity $(6.8) $(0.3) $(7.1) Fixed Income 5.8 0.1 5.9 Alternatives/MAS (2) (3.0) 0.2 (2.8) Total $(4.0) $0.0 $(4.0) (1) Includes index and enhanced index services. (2) Includes certain multi-asset so

  25. Slide 25: Assets Under Management By Region

    Assets Under Management By Region Institutional Geographic Breakdown Retail Geographic Breakdown Other Other Japan 4% 3% APAC ex 4% Japan 6% EMEA 9% EMEA Japan 12% 11% APAC ex Japan US 18% US 74% 59% $309.1B $266.6B As of June 30, 2023 By Client Domicile Percentages may not add up to 100% due to rou

  26. Slide 26: Second Quarter 2023 Adjusted Advisory Fees

    Second Quarter 2023 Adjusted Advisory Fees 2Q23 2Q22 %∆ 1Q23 %∆ Ending AUM ($ Billions) $692 $647 7% $676 2% Average AUM ($ Billions) $678 $689 (2)% $667 2% By Fee Type ($ Millions): Adjusted Base Fees(1) $678 $677 —% $667 2% Adjusted Performance Fees 15 18 (17)% 33 (55)% Total $693 $695 —% $700 (1)

  27. Slide 27: Second Quarter 2023 GAAP Income Statement

    Second Quarter 2023 GAAP Income Statement In US $ Millions (except EPU) 2Q23 2Q22 %∆ 1Q23 %∆ Net Revenues $1,008 $971 4% $1,024 (2)% Operating Expenses 819 778 5% 809 1% Operating Income 189 193 (2)% 215 (12)% Net Income Attributable to AB Unitholders 176 209 (16)% 194 (9)% AB Holding GAAP Diluted N

  28. Slide 28: Consolidated Balance Sheet

    Consolidated Balance Sheet In US $ Millions Assets 6/30/2023 12/31/2022 Cash and cash equivalents $1,089 $1,130 Cash and securities, segregated 879 1,522 Receivables, net 2,154 2,435 Investments: Long-term incentive compensation-related 38 48 Other 175 170 Assets of consolidated variable interest en

  29. Slide 29: Consolidated Statement of Cash Flows

    Consolidated Statement of Cash Flows In US $ Millions Six Months Ended 6/30/2023 6/30/2022 Net Income $383 $418 Non-cash items: Amortization of deferred sales commissions 17 18 Non-cash long-term incentive compensation expense 15 27 Depreciation and other amortization 46 22 Unrealized (gains) losses

  30. Slide 30: Second Quarter 2023 AB Holding Financial Results

    Second Quarter 2023 AB Holding Financial Results In US $ Millions (excluding per Unit amounts) 2Q23 2Q22 %∆ 1Q23 %∆ AB Net Income Attributable to AllianceBernstein $176 $209 (16)% $194 (9)% Weighted Average Equity Ownership Interest 39.3 % 36.1 % 39.3 % AB Holding Equity in Net Income Attributable t

  31. Slide 31: Second Quarter 2023 GAAP to Non-GAAP Reconciliation

    Second Quarter 2023 GAAP to Non-GAAP Reconciliation In US $ Thousands 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 se

  32. Slide 32: Second Quarter 2022 GAAP to Non-GAAP Reconciliation

    Second Quarter 2022 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 se

  33. Slide 33: 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

  34. Slide 34: 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

  35. Slide 35: AllianceBernstein

    ALLIANCEBERNSTEIN'

AllianceBernstein Holding L.P. Units — Q2 2023 Earnings Presentation on 6ix