Franklin Resources, Inc. · NYSE:BEN
Franklin Resources — Q1 2024 Earnings Presentation
15 slides from Franklin Resources's earnings presentation, Jan 29, 2024
Slide 1: Franklin Resources, Inc. First Quarter Results
Franklin Resources, Inc. First Quarter Results January 29, 2024| Executive earnings commentary Jenny Johnson Matthew Nicholls Adam Spector President Executive Vice President Executive Vice President Chief Executive Officer Chief Financial Officer Head of Global Distribution Chief Operating Officer C
Slide 2: First quarter highlights
First quarter highlights Key metrics ($ in millions, except AUM in billions and per share data) % Change (except adj. EFR and margin) Q1 2024 vs. Q4 2023 vs. Q1 2023 1 Ending AUM $1,455.5 5.9% 4.9% Average AUM1 1,394.2 (1.8%) 3.0% Adj. revenue 1,529.1 (3.3%) 6.3% Adj. operating income 417.0 (18.5%)
Slide 3: First quarter highlights
First quarter highlights • Alternatives: Our three largest alternative managers, Benefit Street Partners, Clarion Partners, and Lexington Partners each had net inflows in the current quarter with a combined total of $3.8 billion. We continued to see strong client demand in secondary private equity a
Slide 4: AUM and investment performance
AUM and investment performance Diversified by asset class, Percentage of AUM above client type, and region peer median and benchmark1 AUM of $1.46 trillion as of December 31, 2023 As of December 31, 2023 Cash 4% HNW 2% Americas 7% Multi-Asset 11% APAC 11% 61% 60% 61% Alternative Retail EMEA 12% 18%
Slide 5: AUM and flows
AUM and flows December 31, September 30, December 31, 1 (In US$ billions) 2023 2023 % Change 2022 % Change Beginning AUM $1,374.2 $1,431.5 -4% $1,297.4 6% Long-term inflows 68.9 55.2 25% 70.5 -2% Long-term outflows (73.9) (62.1) 19% (81.4) -9% Long-term net flows (5.0) (6.9) -28% (10.9) -54% Cash ma
Slide 6: Net flows by asset class
Fixed Income: $512 billion Equity: $468 billion (in US$ billions, for the three months ended) (in US$ billions, for the three months ended) Fixed income net outflows were $8.4 billion. We saw client Equity net inflows were $0.2 billion, including reinvested interest reflected in positive net flows i
Slide 7: Financial results
Financial results1 (GAAP and non-GAAP in US$ millions except per share data, for the three months ended) US GAAP Dec-22 Mar-23 Jun-23 Sep-23 Dec-23 US GAAP Dec-22 Mar-23 Jun-23 Sep-23 Dec-23 Operating Net 194.0 255.1 314.9 338.3 206.5 165.6 194.2 227.5 295.5 251.3 Income Income Operating Diluted 9.9
Slide 8: Revenues
Revenues1 (GAAP and non-GAAP in US$ millions except per share data, for the three months) Dec-23 Dec-23 Adjusted Adjusted vs. vs. Dec-23 Dec-23 Sep-23 Sep-23 Dec-22 Dec-22 US GAAP Adjustments Adjusted Adjusted Adjusted Adjusted Adjusted Investment management fees, ex. 1,485.8 (93.0) 1,392.8 1,436.9
Slide 9: Expenses
Expenses1 (GAAP and non-GAAP in US$ millions except per share data, for the three months) Dec-23 Dec-23 Adjusted Adjusted vs. vs. Dec-23 Dec-23 Sep-23 Sep-23 Dec-22 Dec-22 US GAAP Adjustments Adjusted Adjusted Adjusted Adjusted Adjusted 2 Compensation & benefits 968.3 (179.1) 789.2 749.9 5% 744.5 6%
Slide 10: Other Income (Expense), Net
Other Income (Expense), Net1 (GAAP and non-GAAP in US$ millions except per share data, for the three months) Dec-23 Dec-23 Adjusted Adjusted vs. vs. Dec-23 Dec-23 Sep-23 Sep-23 Dec-22 Dec-22 US GAAP Adjustments Adjusted Adjusted Adjusted Adjusted Adjusted Investment and other income, net 173.2 (104.
Slide 11: Capital management
Capital management Dividends and share repurchases Allocation of cash and investments1 (In US$ millions, for the trailing twelve months ended) (In US$ billions, as of December 31, 2023) 301 256 6.7 173 96 96 614 628 3.3 598 604 610 0.3 3.1 Dec-22 Mar-23 Jun-23 Sep-23 Dec-23 Total cash Product Regula
Slide 12: Appendix: Reconciliation, three months ended December 31, 2023
Appendix Reconciliation of US GAAP results to Non-GAAP results: Three months ended December 31, 2023 Consolidated Sales, Special Unrealized US GAAP Acquisition- Deferred Comp Non-GAAP (in US$ millions except per share data) Investment distribution and Termination investment Basis related Plan and ot
Slide 13: Appendix: Reconciliation, three months ended September 30, 2023
Appendix Reconciliation of US GAAP results to Non-GAAP results: Three months ended September 30, 2023 Consolidated Sales, Special Unrealized US GAAP Acquisition- Deferred Comp Non-GAAP (in US$ millions except per share data) Investment distribution and Termination investment Basis related Plan and o
Slide 14: Appendix: Reconciliation, three months ended December 31, 2022
Appendix Reconciliation of US GAAP results to Non-GAAP results: Three months ended December 31, 2022 Consolidated Sales, Special Unrealized US GAAP Acquisition- Deferred Comp Non-GAAP (in US$ millions except per share data) Investment distribution and Termination investment Basis related Plan and ot
Slide 15: Appendix: Forward-looking statements
Appendix Some of the statements herein may include forward-looking statements that reflect our current views with respect to future events, financial performance and market conditions. Such statements are provided under the “safe harbor” protection of the Private Securities Litigation Reform Act of