Franklin Resources, Inc. · NYSE:BEN

Franklin Resources — Q2 2013 Earnings Presentation

23 slides from Franklin Resources's earnings presentation, Apr 30, 2013

  1. Slide 1: Franklin Resources, Inc. Second Quarter Results

    FRANKLIN RESOURCES, INC. April 30, 2013 Franklin Resources, Inc. Second Quarter Results

  2. Slide 2: Forward-Looking Statements

    FRANKLIN RESOURCES, INC. Forward-Looking Statements Statements in this presentation regarding Franklin Resources, Inc. (“Franklin”) and its subsidiaries, which are not historical facts, are "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995.

  3. Slide 3: Audio Commentary and Conference Call Details

    FRANKLIN RESOURCES, INC. Audio Commentary and Conference Call Details Pre-recorded audio commentary on the results from Franklin Resources, Inc.’s President and Chief Executive Officer Greg Johnson and Executive Vice President and Chief Financial Officer Ken Lewis will be available today at approxim

  4. Slide 4: Highlights

    FRANKLIN RESOURCES, INC. Highlights • Strong long-term net new flows of $18.6 billion, as sales improved materially and redemptions eased • Relative investment performance remains strong, and equity performance improved across multiple categories and time periods • Another strong quarter of operatin

  5. Slide 5: Investment Performance

    FRANKLIN RESOURCES, INC. Investment Performance

  6. Slide 6: Investment Performance By Category

    FRANKLIN RESOURCES, INC. Investment Performance Percentage of U.S.-Registered Long-Term Mutual Fund Assets in Top Two Lipper Quartiles1 Franklin Templeton By Category As of March 31, 2013 78% 86% 86% Franklin 79% 83% 82% Equity 85% 79% 80% 73% 73% 94% 66% Templeton 94% Equity 94% 89% 100% Mutual Ser

  7. Slide 7: Assets Under Management and Flows

    FRANKLIN RESOURCES, INC. Assets Under Management and Flows

  8. Slide 8: Assets Under Management

    FRANKLIN RESOURCES, INC. Assets Under Management (in US$ billions, for the three months ended) End of Period Simple Monthly Average 823.7 807.3 781.8 763.6 749.9 725.7 726.7 707.1 706.9 710.7 3/12 6/12 9/12 12/12 3/13 3/12 6/12 9/12 12/12 3/13 8

  9. Slide 9: Assets Under Management By Investment Objective and Sales Region

    FRANKLIN RESOURCES, INC. Assets Under Management By Investment Objective By Sales Region As of March 31, 2013 As of March 31, 2013 Equity Latin America1 39% 4% Cash Mgmt Canada 1% 4% Asia-Pacific 10% United States 65% Europe, the Hybrid Middle East 15% and Africa Fixed-Income 17% 45% (in billions) 3

  10. Slide 10: Long-Term Flows and Market Appreciation (Depreciation) Summary

    FRANKLIN RESOURCES, INC. Long-Term Flows and Market Appreciation (Depreciation) Summary (in US$ billions, for the three months ended) Long-Term Flows1 Appreciation (Depreciation) and Other 59.5 48.5 46.0 50.9 41.6 42.5 40.8 18.6 24.8 24.5 6.0 4.7 2.3 1.0 (36.8) (14.9) (40.2) (40.9) (22.5) (42.7) (44

  11. Slide 11: United States and International Flows

    FRANKLIN RESOURCES, INC. United States and International Flows (in US$ billions, for the three months ended) United States International 32.0 25.2 27.5 23.4 21.7 23.0 23.3 23.0 18.2 20.8 (16.4) (20.7) (20.4) (19.0) (20.5) (20.4) (23.2) (22.0) (21.2) (21.5) 3/12 6/12 9/12 12/12 3/13 3/12 6/12 9/12 12

  12. Slide 12: Net New Flows by Investment Objective

    FRANKLIN RESOURCES, INC. Net New Flows by Investment Objective (in billions, for the three months ended) 31-Mar-13 31-Dec-12 Mar-13 vs. Dec-12 31-Mar-12 Mar-13 vs. Mar-12 Equity sales $ 16.0 $ 13.0 23% $ 16.5 (3%) Equity redemptions (16.0) (18.9) (15%) (16.1) (1%) Equity net exchanges 0.2 (0.5) NM -

  13. Slide 13: Historical Pre-Market Organic Growth and Top Selling Funds

    FRANKLIN RESOURCES, INC. Historical Pre-Market Organic Growth1 and Top Selling Funds (Percent, for the fiscal period) Flash Crash Housing Bubble Asian Financial Crisis Burst 13.4 TMT Bubble European Russian Crisis LTCM Burst 9.9 9.1 Global Debt Crisis 9/11 7.4 Financial 7.5 6.0 5.8 Crisis 5.0 4.7 2.

  14. Slide 14: Operating Results and Capital Management

    FRANKLIN RESOURCES, INC. Operating Results and Capital Management

  15. Slide 15: Quarterly Financial Highlights

    Unaudited FRANKLIN RESOURCES, INC. Quarterly Financial Highlights (in US$ millions, except per share data, for the three months ended) Operating and Net Income1 Diluted Earnings Per Share 729 $2.69 685 643 617 623 $2.42 573 $2.32 $2.31 503 516 492 455 $2.12 3/12 6/12 9/12 12/12 3/13 3/12 6/12 9/12 1

  16. Slide 16: Operating Revenues

    Unaudited FRANKLIN RESOURCES, INC. Operating Revenues (in millions, for the three months ended) 31-Mar-13 31-Dec-12 Mar-13 vs. Dec-12 30-Sep-12 30-Jun-12 31-Mar-12 Mar-13 vs. Mar-12 Investment management fees $ 1,267.5 $ 1,199.9 6% $ 1,142.8 $ 1,114.4 $ 1,126.4 13% Sales and distribution fees 642.7

  17. Slide 17: Operating Expenses

    Unaudited FRANKLIN RESOURCES, INC. Operating Expenses (in millions, for the three months ended) 31-Mar-13 31-Dec-12 Mar-13 vs. Dec-12 30-Sep-12 30-Jun-12 31-Mar-12 Mar-13 vs. Mar-12 Sales, distribution and marketing $ 780.8 $ 730.9 7% $ 701.6 $ 692.0 $ 715.5 9% Compensation and benefits 355.1 335.1

  18. Slide 18: Other Income – U.S. GAAP

    Unaudited FRANKLIN RESOURCES, INC. Other Income – U.S. GAAP (in US$ millions, for the three months ended March 31, 2013) (7.7) (12.9) 41.5 22.3 85.6 6.6 8.3 (10.9) 72.7 20.4 5.1 Dividend and Equity Available- Trading Interest Other Consolidated Consolidated Total other Noncontrolling Other income, i

  19. Slide 19: Consolidation of SIPs and VIEs Summary

    Unaudited FRANKLIN RESOURCES, INC. Consolidation of SIPs and VIEs Summary (in millions, for the three months ended) The table below summarizes the impact of consolidating SIPs and VIEs on the Company’s reported U.S. GAAP operating results. SIP and VIE Related Adjustments 31-Mar-13 31-Dec-12 Operatin

  20. Slide 20: Operating Results

    Unaudited FRANKLIN RESOURCES, INC. Operating Results (in millions, except per share data, for the three months ended) 31-Mar-13 31-Dec-12 Mar-13 vs. Dec-12 30-Sep-12 30-Jun-12 31-Mar-12 Mar-13 vs. Mar-12 Income Before Taxes $ 815.0 $ 716.1 14% $ 678.4 $ 614.9 $ 689.9 18% Taxes on income 221.6 211.4

  21. Slide 21: Profitability

    Unaudited FRANKLIN RESOURCES, INC. Profitability (in US$ billions, except as noted, for the fiscal period ended) Operating Margin vs. Average Assets Under Management 37.3% 35.4% 36.1% 34.8% 33.3% 33.5% 32.3% 29.9% 786 28.4% 27.1% 706 694 Avg. AUM: 24.6% 28.7% 10 % CAGR 23.2% 605 582 571 482 21.7% 44

  22. Slide 22: Countries and Regions with Over $3 Billion in AUM

    FRANKLIN RESOURCES, INC. Countries and Regions with Over $3 Billion in AUM (in US$ billions, as of March 31, 2013) 532.9 35.1 36.0 29.4 26.0 23.2 20.4 18.6 14.5 15.1 8.8 9.1 10.2 6.5 7.4 7.7 3.6 3.9 4.9 3.4 Malaysia Japan Iberia France Central & India Singapore Korea Benelux Hong Kong United Gulf &

  23. Slide 23: Capital Management

    Unaudited FRANKLIN RESOURCES, INC. Capital Management (in US$ billions, except as noted, as of and for the period ended) Change in Ending Shares Outstanding 15% U.S. Asset Managers 10% (ex-BEN)1: 2.4% 5% Compound Annual Dilution 0% -5% BEN: 2.1% Compound Annual -10% Accretion -15% 3/08 9/08 3/09 9/0

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