Equitable Holdings, Inc. · NYSE:EQH
Equitable — Q2 2023 Earnings Presentation
24 slides from Equitable's earnings presentation, Aug 3, 2023
Slide 1: Second Quarter 2023 Earnings Results
Equitable Holdings Second Quarter 2023 Earnings Results August 3, 2023 Equitable
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: Second quarter highlights
Second quarter highlights Integrated advice, retirement and asset management businesses delivering strong results • Non-GAAP Operating Earnings1 of $1.17 per share, down 5% vs. 2Q22 and up 22% vs. 1Q23 on per share basis • Record net inflows of $1.4bn in Retirement2; low-fee redemptions driving net
Slide 4: The EQH value proposition shared at Investor Day
The EQH value proposition shared at Investor Day Our competitive edges Premier investment Risk Diversified Performance capabilities management distribution culture Capture greater margins Fair value balance sheet Affiliated advisors and Track record of execution through AB and Equitable protects cli
Slide 5: Early days, but good initial progress against our growth strategy
Early days, but good initial progress against our growth strategy Growth Initiatives Progress 2027 Growth Drivers Defend & Retirement $145bn AUM1, up 5% YTD 5-7% AUM CAGR grow core $1.4bn of net inflows; $5.4bn of sales2, up 10% YoY 5-7% VNB CAGR businesses $691bn AUM, up 7% YoY Q2 op. margin3 of 27
Slide 6: Early days, but good initial progress against our growth strategy
Early days, but good initial progress against our growth strategy Growth Initiatives Progress Seed future Higher growth China and EMEA markets China application approved, licensing currently in final phase growth Third-party insurance asset management c.100 third party insurance clients at AB, with
Slide 7: Our business mix continues to shift towards high value segments
Our business mix continues to shift towards high value segments Non-GAAP Operating Earnings (post-tax, adjusted for notable items)1,2 IPO (2017) 2Q23 2027F GR GR GR 21% 14% PS 18% 7% PS PS AB 13% 14% 15% IR 36% IR 38% IR 33% 15% AB 28% 20% Legacy 8% 7% 5% AB Legacy WM 8% Legacy WM Retirement: Leadin
Slide 8: Second quarter consolidated results summary
Second quarter consolidated results summary Non-GAAP Operating Earnings, Non-GAAP Operating EPS, adjusted for notable items1 adjusted for notable items1 Assets under management/admin GR $ $bn AUM 18% +2% +8% AUA PS 1.24 1.27 824 887 13% IR 38% $480m 15% 754 806 AB 8% 7% 70 80 Legacy WM 2Q22 2Q23 2Q2
Slide 9: Capital management delivering shareholder value
Capital management delivering shareholder value Robust and efficient capital structure Consistently delivering on payout ratio target Dividends Share Repurchases Returned $304m to shareholders in the second $304m quarter including $226m in share repurchases $286m $275m $78m On track for 2023 cash fl
Slide 10: Internal reinsurance continues track record of capital optimization
Internal reinsurance continues track record of capital optimization Unregulated IPO: Moved AB 2021: Created 2022: CarVal Unregulated cash flows units out of investment contract acquisition and GA cash flows insurance company with insurance company capital commitment 17% >50% IPO 2023E 2020: Announce
Slide 11: Second quarter highlights
Second quarter highlights Integrated advice, retirement and asset management businesses delivering strong results Strong balance sheet and resilient capital ratios drive shareholder value Early days, but good initial progress against our growth strategy Note: See appendix for explanation of footnote
Slide 12: Appendix
Appendix Equitable Holdings Second Quarter 2023 Earnings Results
Slide 13: Explanation of footnotes
Explanation of footnotes Page 3 1Non-GAAP Operating Earnings equals our consolidated after-tax net income attributable to Holdings adjusted to eliminate the impact of certain items; Please see detailed non-GAAP reconciliation in Appendix 2Includes Individual Retirement and Group Retirement segments
Slide 14: Conservative, high quality investment portfolio
Conservative, high quality investment portfolio General Account Investment Portfolio Fixed maturity portfolio U.S. Treasury, Gov’t and Agency <Baa 7% 4% 15% Structured Credit Baa Other Fixed Maturities $98 2% $73bn 34% 51% bn1 Corporates 62% 18% Mortgage Loans Aaa, Aa, A 4% 4% Policy Loans Alts. & O
Slide 15: Individual Retirement
Individual Retirement Operating Earnings, adjusted for Notable Items1 Highlights $m ▪ Operating earnings adjusted for notable items1 increased 224 primarily due to higher NII associated with SCS 204 ▪ Net inflows of $1.5bn were higher year-over-year, driven by continued demand for industry-leading R
Slide 16: Group Retirement
Group Retirement Operating Earnings, adjusted for Notable Items1 Highlights $m ▪ Operating earnings adjusted for notable items1 decreased primarily due to lower NII and lower fee-type revenue on 117 103 lower account values ▪ Net outflows of $66m, driven by outflows in older institutional products a
Slide 17: Investment Management and Research (AB)
Investment Management and Research (AB) Operating Earnings, adjusted for Notable Items1 Highlights $m ▪ Operating earnings decreased primarily due to higher compensation and benefits expenses 101 89 ▪ Net outflows of $4.0bn, which includes $6.2bn of pre- disclosed low-fee institutional redemptions ▪
Slide 18: Protection Solutions
Protection Solutions Operating Earnings, adjusted for Notable Items1 Highlights $m ▪ Operating earnings adjusted for notable items1 decreased primarily due to lower NII from lower alternative returns 92 77 ▪ Gross written premiums up 1% over prior year with Employee Benefits up 15% and Variable Univ
Slide 19: Wealth Management
Wealth Management Operating Earnings Highlights $m ▪ Operating earnings increased from higher distribution fees and interest income 42 ▪ Net inflows of $1.3bn, driving continued annualized organic 24 growth of 7% in the quarter ▪ Advisory inflows of $0.7bn supporting continued shift toward higher fe
Slide 20: Legacy
Legacy Operating Earnings, adjusted for Notable Items1 Highlights $m ▪ Operating earnings adjusted for notable items1 decreased from SA fees on lower average account balances 55 48 ▪ Net outflows of $569m in the quarter, in line with expectations as Legacy runs off $2-3bn per annum 2Q22 2Q23 AUM and
Slide 21: Reconciliation of non-GAAP and Other financial disclosures
Appendix Reconciliation of non-GAAP and Other financial disclosures EQH Non-GAAP Operating Earnings Three Months Ended June 30, (in millions) 2023 2022 Net income (loss) attributable to Holdings $ 759 $ 967 Adjustments related to: Variable annuity product features (65) (1,031) Investment gains (loss
Slide 22: Impact of notable items by segment and corporate & other and by category
Appendix Impact of notable items1 by segment and corporate & other and by category Three Months Ended Three Months Ended Non-GAAP Operating Earnings, less Notable Items, ($m) Jun 30, 2023 Jun 30, 2022 Non-GAAP Operating Earnings $ 441 $ 493 Post-tax Adjustments related to Notable Items: Individual R
Slide 23: Impact of notable items by segment and corporate & other
Appendix Impact of notable items1 by segment and corporate & other Three months ended 6/30/2023 ($m) IR GR AB PS WM L C&O Consolidated Non-GAAP Operating Earnings 234 107 99 24 42 45 (110) 441 Pre-tax adjustments related to Notable Items: Actuarial Updates/Reserve (8) (9) — — — — (5) (21) Mortality
Slide 24: Impact of notable items by segment and corporate & other
Appendix Impact of notable items1 by segment and corporate & other Three months ended 6/30/2023 ($m) IR GR AB PS WM L C&O Consolidated Total revenues (5) (1) — 16 — 4 7 21 Policy charges, fee income and premiums — — — — — — — — Net investment income 3 8 — 16 — 4 7 38 Other income (8) (9) — — — — — (