Alliancebernstein Holding L.p. · NYSE:AB
Alliancebernstein Holding L.p — Q3 2023 Earnings Presentation
35 slides from Alliancebernstein Holding L.p's earnings presentation, Oct 27, 2023
Slide 1: Third Quarter 2023 Review
Third Quarter 2023 Review October 27, 2023 Seth P. Bernstein, President & Chief Executive Officer Bill Siemers, Interim Chief Financial Officer
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
Slide 3: Seth P. Bernstein, President & Chief Executive Officer
Seth P. Bernstein President & Chief Executive Officer Third Quarter 2023 Review 3
Slide 4: Firmwide Overview: Third Quarter 2023
Firmwide Overview: Third Quarter 2023 3Q:23 vs. 3Q:22 3Q:23 vs. 2Q:23 $25.2 $25.2 $22.4 $19.8 Gross Sales 3Q:23 3Q:22 3Q:23 2Q:23 ($0.1) ($0.1) Active Net Flows ($7.8) * ($4.0) † 3Q:23 3Q:22 3Q:23 2Q:23 $669.0 $669.0 $691.5 $612.7 End of Period AUM 3Q:23 3Q:22 3Q:23 2Q:23 $689.6 $653.9 $689.6 $678.4
Slide 5: Asset Flows by Distribution Channel: Quarterly Trend
Asset Flows by Distribution Channel: Quarterly Trend Firmwide Retail $30.9 $16.8 $16.9 $25.6 $22.4 $25.2 $13.8 $14.2 $16.5 $19.8 $0.8 $1.6 $1.6 ($1.9) ($0.7) ($4.0) ($1.9) ($3.4) ($10.5) ($5.0) ($24.8) ($26.4) ($27.1) ($15.2) ($17.2) ($15.3) ($30.3) ($18.8) ($17.6) ($32.8) 3Q:22* 4Q:22 1Q:23 2Q:23 3
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 73 74 70 75 75 62 53 53 53 20 27 19 3Q:22 4Q:22 1Q:23 2Q:23 3Q:23 3Q:22 4Q:22 1Q:23 2Q:23 3Q:23 3Q:22 4Q:22 1Q:23 2Q:23 3Q:23 Equities One-Year Three-Year Five-Year 74 80 77 73 59 59 52 45 48 49 50
Slide 7: Retail Highlights
Retail Highlights Organic Growth Supported by Fixed Income and US Retail Third Quarter 2023 Highlights 10% annualized Fixed Income organic growth in 3Q Continued Broad-Based US Retail Market Share Gains (USD Billions) 25 • 3Q23 gross sales of $16.9B; +$3.1B or +22% Y/Y, and +$0.4B or +3% Q/Q 15 • Im
Slide 8: Institutional Highlights
Institutional Highlights 3Q: FI, Passive Outflows offset Active Equity AOG of +7% Third Quarter 2023 Highlights (USD Billions) Sales and Flows • 3Q23 gross sales of $4.3B, 50% from active equities 6 • Net outflows -$3.5B, driven by active FI and passive equity 2 • Positive net flows in active equity
Slide 9: Private Wealth Highlights
Private Wealth Highlights Tracking to Third Straight Year of Organic Growth Third Quarter 2023 Highlights YTD net inflows of $1.7 billion Sales Continue to be Driven by Cash Products (% of AUM) • 3Q23 gross sales of $4.0B, -2% Y/Y, -9% Q/Q 20% 17.4% 17.9% 14.4% • Continued strong sales in money mark
Slide 10: Bernstein Research Highlights
Bernstein Research Highlights Bernstein Research Quarterly Revenues Third Quarter 2023 Highlights (USD millions) Institutional Trading Volumes Remain Constrained Amidst Investor Caution $91.6 $91.8 $93.9 • 3Q revenues of $94M, +3% Y/Y, +2% Q/Q • Growth in research payments versus both prior periods
Slide 11: Progress on Our Initiatives in 3Q23
Progress on Our Initiatives in 3Q23 Firmwide Initiative Progress Deliver • Fixed Income: 74% of assets in outperforming services for 3-yr period; 73% for 1-yr and 62% for 5-yr differentiated • Active Equity: 49% of assets in outperforming services for 3-yr period; 32% for 1-yr and 50% for 5-yr inves
Slide 12: Bill Siemers, Interim Chief Financial Officer
Bill Siemers Interim Chief Financial Officer Third Quarter 2023 Review 12
Slide 13: Third Quarter 2023 GAAP Income Statement
Third Quarter 2023 GAAP Income Statement Income Statement (in US $ Millions) 3Q23 3Q22 %∆ 2Q23 %∆ Base Fees $721 $701 3% $703 3% Performance Fees 28 14 103 % 18 53 % Bernstein Research Services 94 92 3% 92 2% Distribution Revenues 149 148 1% 145 3% Dividends & Interest 50 30 64 % 50 (1)% Investment
Slide 14: Adjusted Financial Highlights: Third Quarter 2023
Adjusted Financial Highlights: Third Quarter 2023 3Q:23 vs. 3Q:22 3Q:23 vs. 2Q:23 $846 $814 $846 $823 Adjusted Revenues 3Q:23 3Q:22 3Q:23 2Q:23 $237 $210 $237 $222 Adjusted Operating Income 3Q:23 3Q:22 3Q:23 2Q:23 28.0% 25.8% 28.0% 27.0% Adjusted Operating Margin 3Q:23 3Q:22 3Q:23 2Q:23 $0.65 $0.64
Slide 15: Third Quarter 2023 Adjusted Income Statement
Third Quarter 2023 Adjusted Income Statement Adjusted Income Statement (in US $ Millions) 3Q23 3Q22 %∆ 2Q23 %∆ Base Fees(1) $690 $680 1% $678 2% Performance Fees 28 10 174 % 15 86 % Bernstein Research Services 94 92 3% 92 2% Investment Gains (Losses) — 10 n/m 1 n/m Dividend & Interest Revenue 46 27
Slide 16: Third Quarter 2023 Adjusted Income Statement Highlights
Third Quarter 2023 Adjusted Income Statement Highlights Revenues • Base Fees increased 1% versus 3Q22 driven by a 5% increase in average AUM, higher across all channels, partially offset by a 4% decrease in the fee rate, lower across all channels. Base Fees increased 2% versus 2Q23 driven by a 2% in
Slide 17: Appendix
Appendix Third Quarter 2023 Review 17
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 0.9 52 2.2 38 2.5 17 2.7 8 Concentrated Growth (7.4) 88 1.5 45 0.3 50
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 1.2 27 (0.9) 68 (0.0) 51 0.7 27 European Income 2.9 22 (1.1) 68 0.3 39 1
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 1.6 (3.5) 2.5 2.8 Concentrated Global Growth (8.9) (7.0) (1.2) 1.1 Global Core 1.9 (0.7) (0.2) 0.4 International Strategic Core (7.1) (2.6) (0.9) 1.7 Sustainable Global Themati
Slide 21: Assets Under Management: 3Q23
Assets Under Management: 3Q23 (US $ Billions) September 30, 2023 June 30, 2023 Institutions Private Wealth Retail Total Total Equity Actively Managed $56 $47 $124 $227 $236 Passive (1) 21 3 32 56 60 Total Equity 77 50 156 283 296 Fixed Income Taxable 119 17 59 195 202 Tax-Exempt 1 26 29 56 56 Passiv
Slide 22: Three Months Ended 9/30/23: AUM Roll-Forward by Distribution Channel
Three Months Ended 9/30/23: 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 Performance Change of Period Institutions US $147.4 $2.4 $(0.2) $(3.8) $(1.6) $(4.3)
Slide 23: Three Months Ended 9/30/23: AUM Roll-Forward by Investment Service
Three Months Ended 9/30/23: 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 $150.5 $7.8 $(6.1) $(0.3) $1.4 $(5.6) $(4
Slide 24: Three Months Ended 9/30/23: Active vs. Passive Net Flows
Three Months Ended 9/30/23: Active vs. Passive Net Flows Actively Passively Managed Managed (1) Total Equity $(0.2) $(2.4) $(2.6) Fixed Income (1.1) 0.4 (0.7) Alternatives/MAS (2) 1.2 0.2 1.4 Total $(0.1) $(1.8) $(1.9) (1) Includes index and enhanced index services. (2) Includes certain multi-asset
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% 10% APAC ex Japan 18% US US 74% 60% $296.9B $259.2B As of September 30, 2023 By Client Domicile Percentages may not add up to 100% due t
Slide 26: Third Quarter 2023 Adjusted Advisory Fees
Third Quarter 2023 Adjusted Advisory Fees 3Q23 3Q22 %∆ 2Q23 %∆ Ending AUM ($ Billions) $669 $613 9% $692 (3)% Average AUM ($ Billions) $690 $654 6% $678 2% By Fee Type ($ Millions): Adjusted Base Fees(1) $690 $680 1% $678 2% Adjusted Performance Fees 28 10 174 % 15 86 % Total $718 $690 4% $693 4% Ad
Slide 27: Third Quarter 2023 GAAP Income Statement
Third Quarter 2023 GAAP Income Statement In US $ Millions (except EPU) 3Q23 3Q22 %∆ 2Q23 %∆ Net Revenues $1,032 $987 5% $1,008 2% Operating Expenses 857 817 5% 819 5% Operating Income 175 170 3% 189 (7)% Net Income Attributable to AB Unitholders 167 175 (5)% 176 (5)% AB Holding GAAP Diluted Net Inco
Slide 28: Consolidated Balance Sheet
Consolidated Balance Sheet In US $ Millions Assets 9/30/2023 12/31/2022 Cash and cash equivalents $923 $1,130 Cash and securities, segregated 928 1,522 Receivables, net 2,017 2,435 Investments: Long-term incentive compensation-related 37 48 Other 201 170 Assets of consolidated variable interest enti
Slide 29: Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows In US $ Millions Nine Months Ended 9/30/2023 9/30/2022 Net Income $548 $583 Non-cash items: Amortization of deferred sales commissions 27 27 Non-cash long-term incentive compensation expense 19 36 Depreciation and other amortization 69 45 Unrealized losses on inv
Slide 30: Third Quarter 2023 AB Holding Financial Results
Third Quarter 2023 AB Holding Financial Results In US $ Millions (excluding per Unit amounts) 3Q23 3Q22 %∆ 2Q23 %∆ AB Net Income Attributable to AllianceBernstein $167 $175 (5)% $176 (5)% Weighted Average Equity Ownership Interest 39.3 % 36.5 % 39.3 % AB Holding Equity in Net Income Attributable to
Slide 31: Third Quarter 2023 GAAP to Non-GAAP Reconciliation
Third Quarter 2023 GAAP to Non-GAAP Reconciliation In US$ 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 serv
Slide 32: Third Quarter 2022 GAAP to Non-GAAP Reconciliation
Third 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 ser
Slide 33: 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
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
Slide 35: AllianceBernstein
ALLIANCEBERNSTEIN'
AllianceBernstein Holding L.P. Units — Q3 2023 Earnings Presentation on 6ix