Franklin Resources, Inc. · NYSE:BEN
Franklin Resources — Q3 2012 Earnings Presentation
21 slides from Franklin Resources's earnings presentation, Jul 30, 2012
Slide 1: Franklin Resources, Inc. Third Quarter Results
FRANKLIN RESOURCES, INC. July 30, 2012 Franklin Resources, Inc. Third Quarter Results
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.
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
Slide 4: Highlights
FRANKLIN RESOURCES, INC. Highlights • Relative investment performance remains solid over the 1-, 3-, 5- and 10-year periods • Long-term net new flows were $4.7 billion, reflecting continued penetration of our global investment capabilities into institutional distribution channels • Combination of op
Slide 5: Investment Performance
FRANKLIN RESOURCES, INC. Investment Performance
Slide 6: Investment Performance – Lipper Rankings of U.S.-Registered Long-Term Mutual Funds
FRANKLIN RESOURCES, INC. Investment Performance – Lipper Rankings of U.S.-Registered Long-Term Mutual Funds1 Percentage of Assets in the Top Two Quartiles Franklin Templeton By Category As of June 30, 2012 94% 75% 86% Franklin 81% 83% Equity 82% 77% 82% 3% 69% 70% 71% Templeton Equity 21% 57% 67% 69
Slide 7: Assets Under Management and Flows
FRANKLIN RESOURCES, INC. Assets Under Management and Flows
Slide 8: Assets Under Management
FRANKLIN RESOURCES, INC. Assets Under Management (in US$ billions, for the three months ended) End of Period Simple Monthly Average 734.2 725.7 726.7 707.1 714.4 706.9 710.7 659.9 670.3 675.0 6/11 9/11 12/11 3/12 6/12 6/11 9/11 12/11 3/12 6/12 8
Slide 9: Assets Under Management By Investment Objective and Sales Region
FRANKLIN RESOURCES, INC. Assets Under Management (in billions) By Investment Objective By Sales Region As of June 30, 2012 As of June 30, 2012 Equity Latin America1 39% 4% Cash Mgmt Canada 1% 4% Asia-Pacific 10% United States 66% Europe, the Hybrid Middle East 15% and Africa Fixed-Income 16% 45% (in
Slide 10: Market Appreciation (Depreciation) and Long-Term Flows Summary
FRANKLIN RESOURCES, INC. Market Appreciation (Depreciation) and Long-Term Flows Summary (in US$ billions, for the three months ended) Appreciation (Depreciation) and Other Long-Term Flows1 57.4 50.9 52.9 48.5 41.6 38.2 27.2 9.6 21.4 6.0 4.7 2.5 (22.5) (3.8) (14.9) (41.9) (14.9) (35.9) (36.8) (42.7)
Slide 11: United States and International Flows
FRANKLIN RESOURCES, INC. United States and International Flows1 (in US$ billions, for the three months ended) United States2 International 31.6 28.7 25.8 24.2 25.2 23.4 23.3 21.2 17.0 18.2 (17.3) (16.4) (18.6) (20.7) (20.4) (19.9) (22.0) (22.0) (24.8) (24.9) (33.1) 6/11 9/11 12/11 3/12 6/12 6/11 9/1
Slide 12: Net New Flows by Investment Objective
FRANKLIN RESOURCES, INC. Net New Flows by Investment Objective (in billions, for the three months ended) 30-Jun-12 31-Mar-12 Jun-12 vs. Mar-12 30-Jun-11 Jun-12 vs. Jun-11 Equity sales $ 13.5 $ 16.5 (18%) $ 16.7 (19%) Equity redemptions (14.2) (16.1) (12%) (16.7) (15%) Equity net exchanges (0.4) - NM
Slide 13: Operating Results and Capital Management
FRANKLIN RESOURCES, INC. Operating Results and Capital Management
Slide 14: 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 $2.26 $2.32 683 688 $2.20 643 $2.12 632 617 $1.88 503 503 481 455 416 6/11 9/11 12/11 3/12 6/12 6/11 9/11 12/11
Slide 15: Operating Revenues
Unaudited FRANKLIN RESOURCES, INC. Operating Revenues (in millions, for the three months ended) 30-Jun-12 31-Mar-12 Jun-12 vs. Mar-12 31-Dec-11 30-Sep-11 30-Jun-11 Jun-12 vs. Jun-11 Investment management fees $ 1,114.4 $ 1,126.4 (1%) $ 1,075.1 $ 1,193.2 $ 1,169.0 (5%) Sales and distribution fees 569
Slide 16: Operating Expenses
Unaudited FRANKLIN RESOURCES, INC. Operating Expenses (in millions, for the three months ended) 30-Jun-12 31-Mar-12 Jun-12 vs. Mar-12 31-Dec-11 30-Sep-11 30-Jun-11 Jun-12 vs. Jun-11 Sales, distribution and marketing $ 692.0 $ 715.5 (3%) $ 630.6 $ 669.4 $ 719.3 (4%) Compensation and benefits 314.6 32
Slide 17: Other Income – U.S. GAAP
Unaudited FRANKLIN RESOURCES, INC. Other Income – U.S. GAAP (in US$ millions, for the three months ended June 30, 2012) 3.1 22.9 10.2 5.0 (11.3) (10.1) (1.2) (47.5) (28.1) 77.7 72.8 26.9 1.0 (1.4) Dividend and Equity Available- Trading Interest Other Trading Non-current Consolidated Total other Nonc
Slide 18: Consolidation of Sponsored Investment Products and Variable Interest Entities Summary
Unaudited FRANKLIN RESOURCES, INC. Consolidation of Sponsored Investment Products and Variable Interest Entities Summary (in millions, for the three months ended) The tables below summarize the impact of consolidating sponsored investment products and variable interest entities on the Company’s repo
Slide 19: Operating Results
Unaudited FRANKLIN RESOURCES, INC. Operating Results (in millions, except per share data, for the three months ended) 30-Jun-12 31-Mar-12 Jun-12 vs. Mar-12 31-Dec-11 30-Sep-11 30-Jun-11 Jun-12 vs. Jun-11 Income Before Taxes $ 614.9 $ 689.9 (11%) $ 695.0 $ 560.8 $ 687.1 (11%) Taxes on income 184.9 20
Slide 20: Profitability
FRANKLIN RESOURCES, INC. Profitability (for the fiscal period) Operating Margin Return on Average AUM1 37.3% 27.7 bps 27.6 bps 35.8% 33.5% 25.3 bps FY 2010 FY 2011 FYTD 2012 FY 2010 FY 2011 FYTD 2012 1. Return on average AUM is net income attributable to Franklin Resources, Inc., divided by simple m
Slide 21: 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 20% 15% U.S. Asset Managers (ex-BEN)1: 3% 10% Compound Annual 5% Dilution 0% -5% BEN: 3% Compound -10% Annual Accretion -15% 6/07 12/07 6/08 12