Equitable Holdings, Inc. · NYSE:EQH
Equitable — Q3 2024 Earnings Presentation
23 slides from Equitable's earnings presentation, Nov 5, 2024
Slide 1: Equitable Holdings Third Quarter 2024 Earnings Results
Equitable Holdings Third Quarter 2024 Earnings Results November 4, 2024 Equitable
Slide 2: Note Regarding Forward-Looking Statements and Non-GAAP Financial Measures
Note Regarding Forward-Looking Statements 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,” “assume
Slide 3: Third quarter 2024 highlights
Third quarter 2024 highlights Sustained earnings growth momentum • Non-GAAP operating earnings1 per share of $1.53, or $1.59 per share after adjusting for notable items2 • Growth in non-GAAP operating EPS ex. notable items of 22% vs Q3’23, above 12-15% annual guidance • $1.0T AUM/A, up 20% vs. 3Q’23
Slide 4: Our business model positions us well in the Retirement market
Our business model positions us well in the Retirement market Equitable captures the full retirement value chain Product manufacturing Asset management Distribution Our integrated model provides synergies that allow us to generate value for all stakeholders Investment yield Achieve competitive ris
Slide 5: Broad solutions set to capitalize on growing retirement need
Broad solutions set to capitalize on growing retirement need Rising demand driven by multiple factors Fueling strong Retirement2 net flows ▲ Organic growth Increased need for retirement solutions $6.8bn 4.1 million Americans turning 65 every year $30 trillion expected wealth transfer by 20301 $5
Slide 6: Third quarter consolidated results summary
Third quarter consolidated results summary Non-GAAP Operating Earnings, Non-GAAP Operating EPS, Assets under management adjusted for notable items1 adjusted for notable items1 and administration GR $ $bn AUM 21% +22% +20% AUA 1.59 1,034 PS 860 12% 1.30 IR 36% $521m 934 781 18% AB 6% 8% 79 100 3Q23 3
Slide 7: Strong growth in spread and fee-based income
Strong growth in spread and fee-based income Spread income, net interest margin $millions Fee-based revenue, $millions Individual Retirement Group Retirement Retirement1 Asset Mgmt.2 Wealth Mgmt.3 +5% +14% 281 294 +10% 785 690 +18% +12% 418 458 82 141 167 73 3Q’23 3Q’24 3Q’23 3Q’24 3Q’23 3Q’24 3Q’23
Slide 8: Diversified portfolio well-positioned across different environments
Diversified portfolio well-positioned across different environments Short-term rates Long-term rates Equity markets +/-100bps Fed Funds Rate = +/-50bps = c.$40-45m +/-10% = c.$150m Earnings sensitivity 70bps cash sweep yield non-GAAP op. earnings impact non-GAAP op. earnings impact Group Retirement
Slide 9: Capital management driving shareholder value
Capital management driving shareholder value Consistent capital return Delivering on 60-70% payout ratio target1 Dividends Share Repurchases Returned $330m to shareholders in 3Q’24 $326m $330m $315m $325m including $254m in share repurchases $73m $78m $76m $74m Cash & liquid assets of $2.0bn at
Slide 10: Third quarter 2024 highlights and 2027 guidance
Third quarter 2024 highlights Key messages 2027 guidance Cash generation $2bn Sustained earnings growth momentum of annual cash generation by 2027 Payout ratio 60-70% Consistent cash generation and capital return of Non-GAAP Operating Earnings EPS growth Executing on our growth strategy 12-15% Non-G
Slide 11: Appendix
Appendix Equitable Holdings Third Quarter 2024 Earnings Results
Slide 12: 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 2Non-GAAP Operating Earnings adjusted for Notable Items; Pleas
Slide 13: 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 5% 2% Structured Credit 20% Baa 31% Corporates 49% $109bn 1 1% Other Fixed Maturities $81bn 18% 67% Mortgage Loans Aaa, Aa, A 3% 4% Policy Loans Alts. &
Slide 14: Alternatives portfolio has produced strong returns over time
Alternatives portfolio has produced strong returns over time Historical Alternative Investment Portfolio Annualized Returns $millions, pre-tax 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 1Q24 2Q24 3Q24 GAAP Carrying Value Private Equity 995 941 877 820 825 857 850 934 1,462 1,670 1,824 1,
Slide 15: Individual Retirement
Individual Retirement Operating Earnings, adjusted for Notable Items1 Highlights $m Operating Earnings adjusted for Notable Items1 decreased as higher fee-based revenue and NIM were offset by higher 233 231 commission expense Net inflows of $1.9bn in 3Q’24; organic growth of 9% on a trailing twe
Slide 16: Group Retirement
Group Retirement Operating Earnings, adjusted for Notable Items1 Highlights $m Operating Earnings adjusted for Notable Items1 increased primarily due to growth in fee-based revenue and higher NIM 134 113 Net outflows of $246m include $87m tax-exempt net outflows, primarily due to seasonality in
Slide 17: Asset Management (AB)
Asset Management (AB) Operating Earnings Highlights $m Operating earnings increased primarily due to higher base fees and lower expenses 111 Net inflows of $1.1bn, with active net inflows of $2.2bn 99 driven by continued momentum in Retail channel Adjusted operating margin1 improved 330bps to
Slide 18: Protection Solutions
Protection Solutions Operating Earnings, adjusted for Notable Items1 Highlights $m Operating earnings adjusted for notable items1 on track for $200m to $300m annual guidance 73 62 Gross mortality claims improved sequentially and YoY with YTD reinsurance coverage consistent with expectations An
Slide 19: Wealth Management
Wealth Management Operating Earnings Highlights $m Operating earnings increased primarily due to higher advisory and distribution fees 50 40 Advisory net inflows of $1.9bn in 3Q’24; 8% organic growth over the trailing twelve months Total AUA of $100bn, up 26% YoY, with two-thirds in fee- based
Slide 20: Legacy
Legacy Operating Earnings, adjusted for Notable Items1 Highlights $m Operating Earnings adjusted for Notable Items1 increased primarily due to higher fee-type revenue 34 29 Net outflows of $712m in the quarter, in line with expectations as the business runs off 3Q23 3Q24 Account Value and Traili
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 September 30, (in millions) 2024 2023 Net income (loss) attributable to Holdings $ (134) $ 1,064 Adjustments related to: Variable annuity product features (1) 738 (1,380) Investment
Slide 22: Impact of notable items by segment and corporate & other
Appendix Impact of notable items1 by segment and corporate & other Q3 (2024) reported Alternatives adjustment Assumption Updates Actuarial Items & Model Updates Mortality vs. plan Tax Rate Q3 (2024) adjusted After-tax Pre-tax After-tax Pre-tax After-tax Pre-tax After-tax Pre-tax After-tax True-up Af
Slide 23: Impact of notable items by segment and corporate & other
Appendix Impact of notable items1 by segment and corporate & other Investment Individual Protection Corporate and Wealth Three Months Ended Q3 (2024) Group Retirement Management and Legacy Segment Consolidated Retirement Solutions Other Management Research Non-GAAP Operating Earnings 225 141 111 46