Franklin Resources, Inc. · NYSE:BEN
Franklin Resources — Q2 2023 Earnings Presentation
16 slides from Franklin Resources's earnings presentation, May 1, 2023
Slide 1: Franklin Resources, Inc. Second Quarter Results
Franklin Resources, Inc. Second Quarter Results May 1, 2023 | 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 Cont
Slide 2: Second quarter highlights
Second quarter highlights Key metrics ($ in millions, except AUM in billions % Change (except adj. EFR and margin) and per share data) Q2 2023 vs. Q1 2023 vs. Q2 2022 Ending AUM1 $1,422.1 2.5% (3.7%) Average AUM1 1,419.5 4.9% (6.4%) Adj. revenue 1,521.7 5.7% (5.8%) Adj. operating income 440.2 11.4%
Slide 3: Second quarter highlights: financial results, performance, AUM and flows
Second quarter highlights Financial results (cont’d) • Adjusted net income and adjusted diluted earnings per share increased by 20.7% and 19.6% from the prior quarter to $316.7 million and $0.61, respectively. Investment performance • Investment performance continued to improve across asset classes.
Slide 4: Second quarter highlights: AUM and flows, cont'd
Second quarter highlights AUM and Flows, Cont’d. • We further diversified our business across products, vehicles, and asset classes to create broader sources of revenue. – Six of our top 20 funds1 by AUM generated net inflows. In addition, 15 of our top 20 net inflow generating funds were outside ou
Slide 5: 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 $1.42 trillion as March 31, 2023 As of March 31, 2023 Cash 5% HNW 2% Americas 8% Multi-Asset 10% APAC 9% 67% 66% 64% 63% 63% 61% Alternative EMEA 11% Retail 56%
Slide 6: AUM and flows
AUM and flows Mar 31, Dec 31, Mar 31, (In US$ billions)1 2023 2022 % Change 2022 % Change Beginning AUM $1,387.7 $1,297.4 7% $1,578.1 (12%) Long-term inflows 61.8 70.5 (12%) 76.1 (19%) Long-term outflows (65.5) (81.4) 20% (87.8) 25% Long-term net flows (3.7) (10.9) 66% (11.7) 68% Cash management net
Slide 7: Long-term flows by asset class
Fixed Income: $510 billion Equity: $437 billion (in US$ billions, for the three months ended) (in US$ billions, for the three months ended) 33.3 35.2 28.5 31.5 29.8 26.2 27.2 24.5 22.6 17.1 1.8 0.3 (6.1) (6.0) (8.3) (7.9) (9.2) (14.3) (13.3) (16.1) (26.9) (25.4) (29.7) (28.6) (35.9) (33.7) (41.2) (4
Slide 8: Financial results
Financial results1 (GAAP and non-GAAP in US$ millions except per share data, for the three months ended) US GAAP Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 US GAAP Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Operating Net 463.0 404.7 348.5 194.0 255.1 349.6 256.4 232.7 165.6 194.2 Income Income Operating Diluted 22.
Slide 9: Revenues
Revenues1 (GAAP and non-GAAP in US$ millions except per share data, for the three months) Mar-23 Mar-23 Adjusted Adjusted vs. vs. Mar-23 Mar-23 Dec-22 Dec-22 Mar-22 Mar-22 US GAAP Adjustments Adjusted Adjusted Adjusted Adjusted Adjusted Investment management fees, ex. 1,462.1 (96.1) 1,366.0 1,330.6
Slide 10: Expenses
Expenses1 (GAAP and non-GAAP in US$ millions except per share data, for the three months) Mar-23 Mar-23 Adjusted Adjusted vs. vs. Mar-23 Mar-23 Dec-22 Dec-22 Mar-22 Mar-22 US GAAP Adjustments Adjusted Adjusted Adjusted Adjusted Adjusted Compensation & benefits 847.3 (84.0) 763.3 744.5 3% 729.2 5% Sa
Slide 11: Other Income (Expense), Net
Other Income (Expense), Net1 (GAAP and non-GAAP in US$ millions except per share data, for the three months) Mar-23 Mar-23 Adjusted Adjusted vs. vs. Mar-23 Mar-23 Dec-22 Dec-22 Mar-22 Mar-22 US GAAP Adjustments Adjusted Adjusted Adjusted Adjusted Adjusted Investment and other income, net 125.6 (15.4
Slide 12: 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 March 31, 2023) 6.8 219 224 181 173 96 3.2 592 598 604 583 587 0.3 3.3 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Total cash Product Regulato
Slide 13: Appendix: Reconciliation, three months ended March 31, 2023
Appendix Reconciliation of US GAAP results to Non-GAAP results: Three months ended March 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 other
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: Reconciliation, three months ended March 31, 2022
Appendix Reconciliation of US GAAP results to Non-GAAP results: Three months ended March 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 other
Slide 16: 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