Franklin Resources, Inc. · NYSE:BEN
Franklin Resources — Q1 2014 Earnings Presentation
25 slides from Franklin Resources's earnings presentation, Jan 30, 2014
Slide 1: Franklin Resources, Inc. First Quarter Results
FRANKLIN RESOURCES, INC. January 30, 2014 Franklin Resources, Inc. First 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 Chairman, CEO and President Greg Johnson and CFO and Executive Vice President Ken Lewis will be available today at approximately 8:30 a.m. Eastern Time.
Slide 4: Highlights
FRANKLIN RESOURCES, INC. Highlights • Strong operating results set new highs for revenue, operating income and earnings per share • Long-term investment performance remains strong, with the majority of our U.S.-registered and cross-border mutual funds ranked in the top half of their respective peer
Slide 5: Investment Performance
FRANKLIN RESOURCES, INC. Investment Performance
Slide 6: Investment Performance – U.S.-Registered and Cross-Border Mutual Funds
FRANKLIN RESOURCES, INC. Investment Performance – U.S.-Registered and Cross-Border Mutual Funds Percentage of Long-Term Assets in Top Two Peer Group Quartiles1 10-Year Periods ended Dec. 31, 2013 Total Equity & Hybrid Fixed-Income (AUM: $594 billion) (AUM: $305 billion) (AUM: $289 billion) 84% 76% 9
Slide 7: Assets Under Management and Flows
FRANKLIN RESOURCES, INC. Assets Under Management and Flows
Slide 8: Assets Under Management
FRANKLIN RESOURCES, INC. Assets Under Management (in US$ billions, for the three months ended) End of Period Simple Monthly Average 879.1 865.9 844.7 823.7 833.2 827.8 815.0 807.3 781.8 763.6 12/12 3/13 6/13 9/13 12/13 12/12 3/13 6/13 9/13 12/13 8
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 December 31, 2013 As of December 31,2013 Latin America1 Equity 4% Cash Mgmt 41% Canada 1% 4% Asia-Pacific 10% United States 65% Europe, the Middle East Fixed-Income and Africa 41% Hybrid 17% 17% (in billio
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 62.1 48.0 49.8 46.0 33.1 36.0 18.6 24.8 24.5 7.4 1.0 0.0 (2.9) (16.3) (40.9) (44.7) (50.5) (49.7) (53.9) 1
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 33.6 27.5 28.5 25.8 25.3 23.0 23.0 22.2 24.5 (20.5) (21.5) (20.4) (23.2) (22.6) (25.5) (26.0) (24.2) (27.9) (27.9) 12/12 3/13 6/13 9/13 12/13 12/12 3/13 6/13
Slide 12: Flows by Investment Objective: Global / International Equity and Fixed-Income
FRANKLIN RESOURCES, INC. Flows by Investment Objective: Global / International Equity and Fixed-Income (in US$ billions, for the three months ended) Global / International Equity Global / International Fixed Income 29.6 30.2 19.7 15.1 15.3 16.1 15.9 12.0 11.4 12.5 9.6 10.2 5.9 3.1 0.7 1.2 (2.2) (3.6
Slide 13: Flows by Investment Objective: U.S. Equity & Hybrid
FRANKLIN RESOURCES, INC. Flows by Investment Objective: U.S. Equity & Hybrid (in US$ billions, for the three months ended) U.S. Equity Hybrid 7.9 6.8 6.5 6.1 6.2 5.5 5.5 4.5 4.0 3.4 2.8 3.2 3.2 2.7 1.2 0.5 0.4 (0.5) (1.2) (2.0) (3.8) (4.1) (4.6) (4.8) (5.1) (5.2) (5.1) (5.6) (6.1) (6.1) 12/12 3/13 6
Slide 14: Flows by Investment Objective: Tax-Free and Taxable U.S. Fixed-Income
FRANKLIN RESOURCES, INC. Flows by Investment Objective: Tax-Free and Taxable U.S. Fixed-Income (in US$ billions, for the three months ended) Tax-Free Fixed-Income Taxable U.S. Fixed-Income 5.2 4.5 4.6 4.3 3.8 4.0 3.2 2.9 2.5 1.9 0.6 0.4 0.4 0.5 0.2 0.1 (0.2) (2.5) (3.4) (2.8) (3.2) (5.4) (3.8) (4.0)
Slide 15: Operating Results and Capital Management
FRANKLIN RESOURCES, INC. Operating Results and Capital Management
Slide 16: 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 813 772 $0.96 729 735 685 $0.90 $0.86 604 $0.81 573 $0.80 552 516 509 12/12 3/13 6/13 9/13 12/13 12/12 3/13 6/13
Slide 17: Operating Revenues
Unaudited FRANKLIN RESOURCES, INC. Operating Revenues (in millions, for the three months ended) 31-Dec-13 30-Sep-13 Dec-13 vs. Sep-13 30-Jun-13 31-Mar-13 31-Dec-12 Dec-13 vs. Dec-12 Investment management fees $ 1,373.8 $ 1,285.7 7% $ 1,318.3 $ 1,267.5 $ 1,199.9 14% Sales and distribution fees 636.7
Slide 18: Operating Expenses
Unaudited FRANKLIN RESOURCES, INC. Operating Expenses (in millions, for the three months ended) 31-Dec-13 30-Sep-13 Dec-13 vs. Sep-13 30-Jun-13 31-Mar-13 31-Dec-12 Dec-13 vs. Dec-12 Sales, distribution and marketing $ 776.7 $ 717.6 8% $ 812.8 $ 780.8 $ 730.9 6% Compensation and benefits 349.0 348.8
Slide 19: Other Income – U.S. GAAP
Unaudited FRANKLIN RESOURCES, INC. Other Income – U.S. GAAP (in US$ millions, for the three months ended December 31, 2013) 3.4 (12.6) 12.6 18.6 (4.5) (5.3) 5.7 48.2 24.9 35.6 5.4 Dividend and Equity Available- Trading Interest Other Consolidated Consolidated Total other Noncontrolling Other income,
Slide 20: Operating Results
Unaudited FRANKLIN RESOURCES, INC. Operating Results (in millions, except per share data, for the three months ended) 31-Dec-13 30-Sep-13 Dec-13 vs. Sep-13 30-Jun-13 31-Mar-13 31-Dec-12 Dec-13 vs. Dec-12 Income Before Taxes $ 848.7 $ 723.5 17% $ 772.0 $ 815.0 $ 716.1 19% Taxes on income 252.7 213.0
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 38.5% 37.3% 36.6% 34.8% 35.4% 33.3% 33.5% 32.3% 866 29.9% 28.7% 808 27.1% 706 694 Avg. AUM: 10 % CAGR 582 605 571 482 442 411 340 9/04
Slide 22: 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: 2.2% 5% Compound Annual Dilution 0% -5% BEN: 2.0% Compound Annual -10% Accretion -15% 12/08 6/09 12/09 6
Slide 23: Appendix
FRANKLIN RESOURCES, INC. Appendix
Slide 24: Sales and Distribution Summary
Unaudited FRANKLIN RESOURCES, INC. Sales and Distribution Summary (in millions, for the three months ended) 31-Dec-13 30-Sep-13 Change % Change The table to the left summarizes the asset and sales Asset based fees, net $ (125.0) $ (94.0) $ (31.0) 33% based distribution fees, net of expense. Sales ba
Slide 25: Consolidated SIPs and VIEs Related Adjustments
Unaudited FRANKLIN RESOURCES, INC. Consolidated SIPs and VIEs Related Adjustments (in millions, for the three months ended) 31-Dec-13 30-Sep-13 The table to the left summarizes the impact of consolidating Operating Revenues $ 12.1 $ 5.1 SIPs and VIEs on the Company’s reported U.S. GAAP Operating Exp