Equitable Holdings, Inc. · NYSE:EQH
Equitable — AXA Equitable Holdings — Investor Presentation (December 2018)
15 slides from Equitable's investor presentation, Dec 17, 2018
Slide 1: Investor Update Call
Investor Update Call December 17, 2018
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: Differentiated industry leader
Differentiated industry leader Recognized for the breadth of our business and strength of our balance sheet Leading positions in select markets with premier multi-channel distribution Repositioned business towards less capital-intensive segments Robust cash flow generation drives capital return Stro
Slide 4: Delivering on 2020 commitments
AXA Equitable Holdings Delivering on 2020 commitments ✓ Completed IPO of AXA Equitable Holdings ✓ On track to deliver 5-7% Non-GAAP Operating Earnings CAGR 2018-2020 (after tax-reform) Generated 15.6% Pro Forma Non-GAAP Operating ROE1 in third quarter of ✓ 2018, in line with mid-teens target ✓ On tr
Slide 5: Multiple organic levers to drive earnings growth
Multiple organic levers to drive earnings growth On track to achieve 2020 growth targets 5-7% Target Non-GAAP Operating Earnings CAGR $2.2 - $2.3bn Tax reform GA Optimization Productivity Growth Strategic Targets GA Optimization Productivity Growth $160m $75m 3-4% Pre-tax by 2020 Pre-tax by 2020 Non
Slide 6: 2019 earnings sensitivities
2019 earnings sensitivities Resilient earnings profile following changing conditions Economic assumptions Equity markets ▪ Equity market growth of +6% Interest rates ▪ Interest rates following the forward curve Non-GAAP Operating Earnings Equity market Interest rate (S&P 500) (10-yr treasury) +/– 10
Slide 7: Balance sheet
Balance sheet Well positioned and protected balance sheet Target As of 9/30/2018 24-26% debt-to-capital ratio ✓ 25.5% debt-to-capital ratio Capital and liquidity $500m cash at HoldCo ✓ Above $500m HoldCo at present cash at CTE98 for VA business ✓ CTE98 for VA business, 350-400% RBC for non-VA Capita
Slide 8: Sustainable cash flow
Sustainable cash flow Strong track record of cash upstream from operating subsidiaries supporting cash return Cash flow upstream to Holdings 2018E annualized cash return $bn Non-Regulated1 Operating Entities Share repurchase authorization Dividends 1.3 1.2 1.2 1.4 $500m 11% $2.3 billion Annualized c
Slide 9: Robust cash flow generation drives capital return
Robust cash flow generation drives capital return Distributable earnings positive in the near-term across market environments1 2018-2020 VA distributable earnings ($bn) PV of VA free cash flows and assets ($bn)2 17.5 12.9 9.2 8.6 6.3 4.1 4.3 3.1 2.9 1.6 Base Case Upside Downside Extreme Lapse Shock
Slide 10: Capital deployment
Capital deployment Investing in growth at attractive returns and distributing cash to shareholders Sources Uses Organic growth Cash return + In-force VA book c. $0.4 bn 40-60% AllianceBernstein ▪ Invest in less capital- ▪ Targeting 40-60% return on intensive businesses at 2019 Non-GAAP Operating ope
Slide 11: 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% 40-60% Mid-teens CAGR through 2020 by 2020 (after tax reform) AXA Equitable Life AllianceBernstein
Slide 12: Key messages
Key messages Well positioned to continue executing against targets in 2019 Consistent execution toward 2020 commitments Multiple organic levers to drive earnings growth Strong balance sheet and capitalization Sustainable cash flow generation driving capital return 12 | Investor Update Call
Slide 13: Appendix
Investor Update Call Appendix December 17, 2018
Slide 14: Additional considerations
Additional considerations VA product features impacts Base case scenario + 6% equity market ║ rates following forward curve VA product features1 c. $700m o/w GMxB hedging $600m o/w Static hedge (cash) option cost $100 - $150m Additional items Separate Account ▪ Composition: c. 75% equity, c. 25% fix
Slide 15: Reconciliation of Non-GAAP and Other Financial Disclosures
Appendix Reconciliation of Non-GAAP and Other Financial Disclosures EQH Pro Forma Non-GAAP Operating Return on Equity (ROE) Three months Ended or As of Twelve Months Ended or As of (in millions USD, unless otherwise indicated) 09/30/2017 12/31/2017 03/31/2018 06/30/2018 09/30/2018 06/30/2018 09/30/2
AXA Equitable Holdings — Investor Presentation (December 2018) on 6ix