Slide 1: Preliminary Fourth Quarter and Fiscal Year 2023 Results
Franklin Resources, Inc. Preliminary Fourth Quarter and Fiscal Year 2023 Results October 31, 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 Dis
Slide 2: Fourth quarter and fiscal year 2023 highlights
Fourth quarter and fiscal year 2023 highlights Key metrics ($ in millions, except AUM in billions % Change % Change and per share data) Q4 2023 vs. Q3 2023 FY 2023 vs. FY 2022 Ending AUM1 $ 1,374.2 (4.0%) $ 1,374.2 5.9% Average AUM1 1,419.1 (0.0%) 1,400.4 (4.7%) Adj. revenue 1,580.6 1.1% 6,104.1 (5.
Slide 3: Fourth quarter and fiscal year 2023 highlights (continued)
Fourth quarter and fiscal year 2023 highlights Fiscal Year 2023 Summary, Cont’d • We strengthened the foundation of our business through disciplined expense management and operational efficiencies. This year, we outsourced the non-US portion of our global transfer agency (“TA”) function, simplifying
Slide 4: Fiscal year 2023 highlights: AUM and flows
Fiscal year 2023 highlights AUM and flows • Ending AUM was $1.37 trillion, an increase of 5.9% from the prior year primarily due to market appreciation and the acquisition of Alcentra, partially offset by long-term net outflows. Average AUM decreased by 4.7% to $1.40 trillion. • Long-term inflows of
Slide 5: Fiscal year 2023 highlights: Other highlights
Fiscal year 2023 highlights Other highlights • Wealth Management Alternatives: Retail and high-net-worth investors continue to remain under-allocated to alternatives relative to institutional investors. Providing wealth clients the opportunity to benefit from potentially higher returns and lower cor
Slide 6: 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 $1.37 trillion as September 30, 2023 As of September 30, 2023 Cash 4% HNW 2% Americas 8% Multi-Asset 11% APAC 9% 61% 61% Alternative EMEA 12% 19% Retail 50% 54%
Slide 7: AUM and flows
AUM and flows Three months ended Twelve months ended Sep 30, Jun 30, September 30, (In US$ billions)1 2023 2023 % Change 2023 2022 % Change Beginning AUM $ 1,431.5 $ 1,422.1 1% $ 1,297.4 $ 1,530.1 (15%) Long-term inflows 55.2 67.4 (18%) 254.9 320.4 (20%) Long-term outflows (62.1) (67.2) 8% (276.2) (
Slide 8: Long-term flows by asset class
Fixed Income: $483 billion Equity: $430 billion (in US$ billions, for the three months ended) (in US$ billions, for the three months ended) 31.5 26.2 28.5 26.5 26.2 27.2 22.6 23.0 17.1 17.1 1.8 0.3 (3.1) (1.6) (3.0) (6.0) (8.3) (7.7) (13.3) (16.1) (25.4) (26.0) (24.8) (29.7) (29.6) (27.8) (28.6) (26
Slide 9: Financial results
Financial results1 (GAAP and non-GAAP in US$ millions except per share data, for the three months ended) US GAAP Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 FY2022 FY2023 US GAAP Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 FY 2022 FY 2023 Operating Net Income 348.5 194.0 255.1 314.9 338.3 1,773.9 1,102.3 Income 232.7
Slide 10: Revenues
Revenues1 (GAAP and non-GAAP in US$ millions except per share data, for the three months) Sep-23 Sep-23 Adjusted Adjusted vs. vs. Sep-23 Sep-23 Jun-23 Jun-23 Sep-22 Sep-22 US GAAP Adjustments Adjusted Adjusted Adjusted Adjusted Adjusted Investment management fees, ex. 1,530.4 (93.5) 1,436.9 1,395.0
Slide 11: Expenses
Expenses1 (GAAP and non-GAAP in US$ millions except per share data, for the three months) Sep-23 Sep-23 Adjusted Adjusted vs. vs. Sep-23 Sep-23 Jun-23 Jun-23 Sep-22 Sep-22 US GAAP Adjustments Adjusted Adjusted Adjusted Adjusted Adjusted Compensation & benefits 826.3 (76.4) 749.9 773.9 (3%) 711.6 5%
Slide 12: Other Income (Expense), Net
Other Income (Expense), Net1 (GAAP and non-GAAP in US$ millions except per share data, for the three months) Sep-23 Sep-23 Adjusted Adjusted vs. vs. Sep-23 Sep-23 Jun-23 Jun-23 Sep-22 Sep-22 US GAAP Adjustments Adjusted Adjusted Adjusted Adjusted Adjusted Investment and other income, net 72.1 34.1 1
Slide 13: 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 September 30, 2023) 256 6.9 181 173 96 96 3.2 604 610 614 592 598 0.3 3.4 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 Total cash Product Regul
Slide 14: 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 15: Reconciliation: Three months ended June 30, 2023
Appendix Reconciliation of US GAAP results to Non-GAAP results: Three months ended June 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 other
Slide 16: Reconciliation: Three months ended September 30, 2022
Appendix Reconciliation of US GAAP results to Non-GAAP results: Three months ended September 30, 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 o
Slide 17: Reconciliation: Fiscal Year ended September 30, 2023
Appendix Reconciliation of US GAAP results to Non-GAAP results: Fiscal Year 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 ot
Slide 18: Reconciliation: Fiscal Year ended September 30, 2022
Appendix Reconciliation of US GAAP results to Non-GAAP results: Fiscal Year ended September 30, 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 19: 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