Alliancebernstein Holding L.p. · NYSE:AB

Alliancebernstein Holding L.p — Q4 2022 Earnings Presentation

38 slides from Alliancebernstein Holding L.p's earnings presentation, Feb 9, 2023

  1. Slide 1: Fourth Quarter 2022 Review

    Fourth Quarter 2022 Review February 9, 2023 Seth P. Bernstein, President & Chief Executive Officer Kate Burke, Chief Operating Officer & Chief Financial Officer Onur Erzan, Head of Global Client Group & Private Wealth

  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 Fourth Quarter 2022 Review 3

  4. Slide 4: Firmwide Overview: Fourth Quarter and Full Year 2022

    Firmwide Overview: Fourth Quarter and Full Year 2022 4Q:22 vs. 4Q:21 2022 vs. 2021 $39.4 $150.0 $30.9 $115.6 Gross Sales 4Q:22 4Q:21 2022 2021 $6.4 $27.6 (Ex-AXA) Active Net Flows $26.3 $3.2 (Ex-AXA) ($0.1) $0.9 4Q:22 4Q:21 2022 2021 $778.6 $778.6 $646.4 $646.4 End of Period AUM 4Q:22 4Q:21 2022 202

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

    Asset Flows by Distribution Channel: Quarterly Trend Firmwide Retail $39.4 $40.9 $30.9 $27.6 $23.9 $20.6 $17.3 $11.4 $19.8 $13.8 $14.2 $7.4 $6.3 ($2.1) ($2.8) ($6.6) ($2.7) ($1.9) ($1.0) ($2.2) ($5.0) ($3.4) ($10.5) ($2.2) ($0.6) ($3.9) ($17.6) ($21.6) ($19.5) ($18.8) ($26.6) ($21.3) ($29.5) ($30.3)

  6. Slide 6: Asset Flows by Distribution Channel: Annual Trend

    Asset Flows by Distribution Channel: Annual Trend Annual Organic Growth Rate Firmwide Retail 4.0%* 1.5%* 0.1%* $100.0 4.9% $150.0 -1.1% $124.1 $75.3 $78.9 $115.6 $65.9 $103.7 $93.8 $54.2 $27.4 $23.8 $20.8 $25.2 $9.2 $0.9 $0.0 $26.1 ($9.4) ($2.6) ($3.6) ($1.6) ($8.1) ($11.6) ($78.5) ($54.2) ($51.5) (

  7. Slide 7: Percentage of Assets Outperforming at Quarter-End

    Percentage of Assets Outperforming at Quarter-End Fixed Income One-Year Three-Year Five-Year 89 72 72 70 71 70 64 63 50 53 53 53 21 19 20 4Q:21 1Q:22 2Q:22 3Q:22 4Q:22 4Q:21 1Q:22 2Q:22 3Q:22 4Q:22 4Q:21 1Q:22 2Q:22 3Q:22 4Q:22 Equities One-Year Three-Year Five-Year 75 82 80 77 73 59 59 58 45 49 45

  8. Slide 8: Retail Highlights

    Retail Highlights Fourth Quarter and Full Year 2022 Highlights 6th Consecutive Year of Active Equity Organic Growth (USD Billions) 4Q Sales Reflect Continued Challenging Markets; Redemptions Improve 60 • 4Q gross sales of $14.2B; -$13B or -48% Y/Y, +$0.4B or +3% Q/Q 40 • 2022 gross sales of $66B, -$

  9. Slide 9: Institutional Highlights

    Institutional Highlights Fourth Quarter and Full Year 2022 Highlights 4th Consecutive Year of Institutional Organic Growth (USD Billions) (Org. Growth Rate) Sales and Flows 40 4.5% 1.1% 2.6% 10% • 4Q22 gross sales of $12.6B, incl. $6.4B custom target-date mandate; up 1.0% 93% Y/Y and +6x compared wi

  10. Slide 10: Private Wealth Highlights

    Private Wealth Highlights Fourth Quarter and Full Year 2022 Highlights Gross Sales, Redemptions and Net Flows as % of Private Wealth AUM Generating Organic Growth 5 of last 7 years Gross Sales Redemptions Net Flows • 4Q gross sales of $4.1B, -21% Y/Y, +1% Q/Q • 2022 gross sales of $17.5B, -4% Y/Y vs

  11. Slide 11: Bernstein Research Highlights

    Bernstein Research Highlights Fourth Quarter and Full Year 2022 Highlights Bernstein Research Quarterly Revenues (USD millions) Institutional Trading Volumes Improved Sequentially, though Remain Constrained 452 • 4Q revenues of $100M, -12% Y/Y, +10% Q/Q 416 114 • Recovery in trading activity followi

  12. Slide 12: Progress on Our Initiatives in 2022

    Progress on Our Initiatives in 2022 Firmwide Initiative Progress Deliver superior • Fixed Income: 53% of assets in outperforming services for 3-yr period; 20% for 1-yr and 70% for 5-yr investment • Active Equity: 59% of assets in outperforming services for 3-yr period; 59% for 1-yr and 77% for 5-yr

  13. Slide 13: Kate Burke, Chief Operating Officer & Chief Financial Officer

    Kate Burke Chief Operating Officer & Chief Financial Officer Fourth Quarter 2022 Review 13

  14. Slide 14: Fourth Quarter and Full Year 2022 GAAP Income Statement

    Fourth Quarter and Full Year 2022 GAAP Income Statement Income Statement (in US $ Millions) 4Q22 4Q21 %∆ FY 2022 FY 2021 %∆ Base Fees $680 $780 (13)% $2,826 $2,949 (4)% Performance Fees 33 157 (79)% 145 245 (41)% Bernstein Research Services 100 114 (12)% 416 452 (8)% Distribution Revenues 138 178 (2

  15. Slide 15: Adjusted Financial Highlights: Fourth Quarter and Full Year 2022

    Adjusted Financial Highlights: Fourth Quarter and Full Year 2022 4Q:22 vs. 4Q:21 2022 vs. 2021 $1,024 $3,336 $3,610 $802 Adjusted Revenues 4Q:22 4Q:21 2022 2021 $394 $1,214 $947 Adjusted Operating $232 Income 4Q:22 4Q:21 2022 2021 38.5% 33.6% Adjusted Operating 28.9% 28.4% Margin 4Q:22 4Q:21 2022 20

  16. Slide 16: Fourth Quarter and Full Year 2022 Adjusted Income Statement

    Fourth Quarter and Full Year 2022 Adjusted Income Statement Adjusted Income Statement (in US $ Millions) 4Q22 4Q21 %∆ FY 2022 FY 2021 %∆ Base Fees(1) $659 $753 (12)% $2,742 $2,841 (3)% Performance Fees 18 134 (87)% 91 222 (59)% Bernstein Research Services 100 114 (12)% 416 452 (8)% Investment (Losse

  17. Slide 17: Fourth Quarter and Full Year 2022 Adjusted Income Statement Highlights

    Fourth Quarter and Full Year 2022 Adjusted Income Statement Highlights Revenues • Base Fees decreased 12% vs. 4Q21 driven by a 16% decrease in average AUM, lower across all channels, partially offset by fee rate improvement of 5%, flat to higher across all channels, driven by asset mix and the impac

  18. Slide 18: 2022 in Review: Execution Across our Strategy

    2022 in Review: Execution Across our Strategy • 77% of Equities and 70% of Fixed Income assets outperforming over long-term (5 years) Deliver • Fourth straight year of Active organic growth, outperforming the industry • Institutional, Private Wealth channels both positive for full year, with Alts/MA

  19. Slide 19: Appendix

    Appendix Fourth Quarter 2022 Review 19

  20. Slide 20: 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 44 2.5 28 2.8 12 3.0 4 Concentrated Growth 5.3 27 1.6 40 2.9 11 1.

  21. Slide 21: 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 (3.0) 68 (1.2) 78 0.1 43 0.5 27 European Income (5.4) 87 (1.1) 70 0.1 42

  22. 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 (12.0) 1.3 4.3 2.8 Concentrated Global Growth (6.8) (1.2) 1.7 1.7 Global Core (1.2) (1.8) 0.4 1.0 International Strategic Core 0.6 (0.2) 0.8 2.2 Sustainable Global Thematic (8.

  23. Slide 23: Assets Under Management: 4Q22

    Assets Under Management: 4Q22 (US $ Billions) At September 30, At December 31, 2022 2022 Institutions Private Wealth Retail Total Total Equity Actively Managed $56 $46 $116 218 203 Passive (1) 21 2 31 54 52 Total Equity 77 48 147 272 255 Fixed Income Taxable 122 14 54 190 187 Tax-Exempt 1 25 27 53 5

  24. Slide 24: Three Months Ended 12/31/22: AUM Roll-Forward by Distribution Channel

    Three Months Ended 12/31/22: 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 $134.1 $3.5 $(1.7) $(4.0) $(2

  25. Slide 25: Twelve Months Ended 12/31/22: AUM Roll-Forward by Distribution Channel

    Twelve Months Ended 12/31/22: 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 Acquisitions Transfers Performance Change of Period Institutions US

  26. Slide 26: Three Months Ended 12/31/22: AUM Roll-Forward by Investment Service

    Three Months Ended 12/31/22: 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 $126.1 $6.3 $(5.5) $(0.8) $— $8.7 $8.7 $

  27. Slide 27: Twelve Months Ended 12/31/22: AUM Roll-Forward by Investment Service

    Twelve Months Ended 12/31/22: AUM Roll-Forward by Investment Service In US $ Billions Beginning Sales/New Redemptions/ Net Cash Net AUM Investment Net End Investment Service: of Period Accounts Terminations Flows Flows Adj Acq Performance Change of Period Equity Active US $173.7 $32.3 $(23.5) $(3.6)

  28. Slide 28: Active vs. Passive Net Flows

    Active vs. Passive Net Flows Three Months Ended 12/31/22 Actively Passively Managed Managed (1) Total Equity $ (2.6) $ (2.3) $ (4.9) Fixed Income (5.1) (0.3) (5.4) Alternatives/MAS (3) 7.6 0.8 8.4 Total $ (0.1) $ (1.8) $ (1.9) Twelve Months Ended 12/31/22 Actively Passively Managed Managed (1) Total

  29. Slide 29: Assets Under Management By Region

    Assets Under Management By Region Institutional Geographic Breakdown Retail Geographic Breakdown Other Other Japan 4% 3% 5% APAC ex Japan EMEA 7% 10% Japan EMEA 11% 12% APAC ex US Japan US 72% 18% 58% $297.3B $242.9 As of December 31, 2022 By Client Domicile Percentages may not add up to 100% due to

  30. Slide 30: Fourth Quarter and Full Year 2022 Adjusted Advisory Fees

    Fourth Quarter and Full Year 2022 Adjusted Advisory Fees 4Q22 4Q21 %∆ FY 2022 FY 2021 %∆ Ending AUM ($ Billions) $646 $779 (17)% $646 $779 (17)% Average AUM ($ Billions) $636 $761 (16)% $687 $731 (6)% By Fee Type ($ Millions): Adjusted Base Fees(1) $659 $753 (12)% $2,742 $2,841 (3)% Adjusted Perform

  31. Slide 31: Fourth Quarter 2022 and Full Year GAAP Income Statement

    Fourth Quarter 2022 and Full Year GAAP Income Statement In US $ Millions (except EPU) 4Q22 4Q21 %∆ FY 2022 FY 2021 %∆ Net Revenues $990 $1,265 (22)% $4,054 $4,442 (9)% Operating Expenses 786 872 (10)% 3,239 3,226 —% Operating Income 204 393 (48)% 815 1,216 (33)% Net Income Attributable to AB Unithol

  32. Slide 32: Fourth Quarter and Full Year 2022 AB Holding Financial Results

    Fourth Quarter and Full Year 2022 AB Holding Financial Results In US $ Millions (excluding per Unit amounts) 4Q22 4Q21 %∆ FY 2022 FY 2021 %∆ AB Net Income Attributable to AllianceBernstein $187 $372 (50)% $832 $1,149 (28)% Weighted Average Equity Ownership Interest 38.4% 36.0% 36.7% 36.2% AB Holding

  33. Slide 33: Fourth Quarter 2022 GAAP to Non-GAAP Reconciliation

    Fourth Quarter 2022 GAAP to Non-GAAP Reconciliation In US $ Thousands Adjustments Distribution Pass Deferred NCI/ Real Estate Acquisition- Related Through Comp. Consol Credits Related GAAP Payments Adjustments Inv. VIE (Charges) Expenses Non-GAAP (A) (B) (C) (D) (E) (F) Investment advisory and servi

  34. Slide 34: Fourth Quarter 2021 GAAP to Non-GAAP Reconciliation

    Fourth Quarter 2021 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) (

  35. Slide 35: Full Year 2022 GAAP to Non-GAAP Reconciliation

    Full Year 2022 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) (G)

  36. Slide 36: Full Year 2021 GAAP to Non-GAAP Reconciliation

    Full Year 2021 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

  37. Slide 37: 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

  38. Slide 38: AllianceBernstein

    ALLIANCEBERNSTEIN'

AllianceBernstein Holding L.P. Units — Q4 2022 Earnings Presentation on 6ix