Franklin Resources, Inc. · NYSE:BEN
Franklin Resources — Q4 2024 Earnings Presentation
33 slides from Franklin Resources's earnings presentation, Nov 4, 2024
Slide 1: Preliminary Fourth Quarter and Fiscal Year 2024 Results
Franklin Resources, Inc. Preliminary Fourth Quarter and Fiscal Year 2024 Results November 4, 2024 | Investor Presentation Jenny Johnson Matthew Nicholls Adam Spector President Executive Vice President Executive Vice President Chief Executive Officer Chief Financial Officer Head of Global Distributio
Slide 2: Forward-looking statements and non-GAAP financial information
Forward-looking statements and non-GAAP financial information This commentary contains forward-looking statements that involve a number of known and unknown risks, uncertainties and other important factors. This commentary also contains non-GAAP financial measures. For the reconciliations from US GA
Slide 3: Fiscal year 2024 business highlights
Fiscal year 2024 business highlights Over the past five years, we have significantly expanded our investment capabilities and distribution reach across public and private markets. Today, we are one of the most comprehensive global asset managers. • AUM of $1.68 trillion diversified by specialist inv
Slide 4: Fourth quarter 2024 financial highlights
Fourth quarter 2024 financial highlights1 Key metrics • Adjusted revenues increased 3.8% from the prior quarter and (in US$ millions, except AUM in billions and per share data) 8.6% from the prior year quarter. Adjusted performance fees % Change were $72.0 million compared to $56.6 million in the pr
Slide 5: Fiscal year 2024 financial highlights
Fiscal year 2024 financial highlights1 Key metrics • Adjusted revenues increased by 7.5% from the prior year (in US$ millions, except AUM in billions and per share data) primarily due to nine months of Putnam and higher average % Change AUM, partially offset by lower performance fees. Adjusted FY 20
Slide 6: Fiscal Year-End Update: Review of Franklin Templeton's Evolution
Fiscal Year-End Update: Review of Franklin Templeton’s Evolution
Slide 7: Evolution of Franklin Templeton
Evolution of Franklin Templeton • Over the last 5 years, we accelerated the diversification of AUM via organic growth and targeted acquisitions into higher growth areas, increasing AUM to $1.68 trillion • Specialist investment managers (“SIMs”) acquired since the beginning of 2019 represent 64% of A
Slide 8: Evolution of Franklin Templeton
Evolution of Franklin Templeton • Adjusted operating revenues have increased through targeted M&A into higher growth areas such as alternatives, retail SMAs, customization, solutions, target date, and stable value capabilities • Specialist investment managers acquired since 2019 represent 55% of adj
Slide 9: Overview of Key Focus Areas
Overview of Key Focus Areas Last 5 years to 2024 Next 5-year objectives • Full spectrum of investment capabilities across • Continue to improve investment performance public and private markets • Investment product optimization • Added strategies relevant to retirement and Investment insurance (targ
Slide 10: Overview of Key Focus Areas
Overview of Key Focus Areas Last 5 years to 2024 Next 5-year objectives • Since 2019 returned $4.1B to shareholders: • Continued return of capital to shareholders $3.0B in dividends and $1.1B in share Capital repurchases1 • Additional balance sheet investments in support of organic growth Management
Slide 11: 2024 Focus Areas in Review
2024 Focus Areas in Review
Slide 12: 2024 Focus Areas in Review: Alternative Asset Management
2024 Focus Areas in Review Alternative Asset Management • We began a strategic initiative to increase alternative investment Diversification and Growth of Alternative AUM capabilities five years ago (in US$ billions) – AUM increased >5x through acquisition and organically Private markets has fundrai
Slide 13: 2024 Focus Areas in Review: Customization and Solutions
2024 Focus Areas in Review Customization and Solutions for Clients • Strong growth across a broad range of investment vehicles: retail SMAs, Canvas (our Custom Indexing solution platform), and ETFs • Our Investment Solutions team provides customized multi-asset portfolios for clients by leveraging o
Slide 14: 2024 Focus Areas in Review: Private Wealth Management
2024 Focus Areas in Review Private Wealth Management Private Wealth Management • Fiduciary Trust International AUM has more than doubled in the past (Fiduciary Trust International) five years from $16.9B to $39.3B (in US$ billions) – One of our priorities is to further accelerate the growth of our p
Slide 15: Fourth Quarter and Fiscal Year 2024 AUM and Investment Performance
Fourth Quarter and Fiscal Year 2024 AUM and Investment Performance
Slide 16: AUM Diversification and Investment Performance
AUM Diversification and Investment Performance Diversified by asset class, client type, and Percentage of AUM above region peer median and benchmark1 AUM of $1.68 trillion as of September 30, 2024 As of September 30, 2024 Cash 4% HNW 2% 64% 64% Americas 7% Multi-Asset 56% 10% APAC 11% 55% 55% 53% Al
Slide 17: AUM and Flows
AUM and Flows Long-term flows1 (In US$ billions) 319.0 254.9 20.7 84.9 82.7 82.5 20.6 55.2 68.9 3.1 3.2 10.8 3.6 2.7 6.9 4.1 2.8 3.3 (5.2) 16.0 (2.8) 5.7 (6.9) (5.0) (3.2) (21.3) (32.6) (31.3) (62.1) (73.9) (78.0) (85.9) (113.8) (276.2) (351.6) Sep-23 Dec-23 Mar-24 Jun-24 Sep-24 2023 2024 Long-term
Slide 18: AUM and Flows
AUM and Flows (in US$ billions, for the three months ended) Equity: $632 billion Fixed Income: $556 billion 142.5 123.3 112.7 43.8 84.4 26.2 37.4 33.0 36.8 28.3 27.5 32.0 8.3 27.0 2.0 3.6 1.7 1.4 17.1 0.2 0.8 (3.8) 6.4 (1.6) (0.3) (7.7) (5.3) (1.6) (6.0) (8.4) (4.8) (18.7) (16.2) (24.8) (27.8) (38.8
Slide 19: AUM and Flows
AUM and Flows (in US$ billions, for the three months ended) Alternative: $250 billion 22.6 Multi-Asset: $176 billion 10.2 9.9 35.2 36.5 5.9 16.7 8.7 8.0 7.7 3.9 3.4 4.0 2.7 3.4 5.9 1 1.0 1.4 5.7 2.9 1.8 2.8 7.8 8.0 0.8 1.6 1 0.5 0.5 4.2 (1.0) (2.4) (2.0) (3.1) (3.2) (12.5) (6.4) (5.9) (5.0) (7.2) (7
Slide 20: Fourth Quarter and Fiscal Year 2024 Financial Results
Fourth Quarter and Fiscal Year 2024 Financial Results
Slide 21: Financial Results
Financial Results1 (GAAP and non-GAAP in US$ millions except per share data, for the three months ended) 2 2 2 2 US GAAP Sep-23 Dec-23 Mar-24 Jun-24 Sep-24 FY2023 FY2024 US GAAP Sep-23 Dec-23 Mar-24 Jun-24 Sep-24 FY 2023 FY 2024 Operating Net 338.3 206.5 129.3 222.5 (150.7) 1,102.3 407.6 295.5 251.3
Slide 22: Financial Results
Financial Results1 (Non-GAAP in US$ millions except EFR) Adjusted operating revenue and effective fee rate 2 Adjusted operating expenses Acquisition of Putnam 6,565 40.2 39.7 38.5 6,104 37.5 37.4 4,852 Acquisition of 4,280 1,665 1,654 1,717 Putnam 1,581 1,529 1,246 1,229 1,265 1,069 1,112 3 Sep-23 D
Slide 23: Capital Management
Capital Management Dividends and share repurchases Allocation of cash and investments1 Debt3 (In US$ millions, for the trailing twelve months ended) (In US$ billions, as of September 30, 2024) (In US$ millions, as of September 30, 2024) 6.7 360 301 309 274 256 3.2 671 0.5 850 628 643 656 614 3.1 550
Slide 24: Appendix
Appendix
Slide 25: AUM and Flows
AUM and Flows Three months ended Twelve months ended Sept 30, Jun 30, September 30, (In US$ billions)1 2024 2024 % Change 2024 2023 % Change Beginning AUM $ 1,646.6 $ 1,644.7 0% $ 1,374.2 $ 1,297.4 6% Long-term inflows 82.5 82.7 0% 319.0 254.9 25% Long-term outflows (113.8) (85.9) (32%) (351.6) (276
Slide 26: Financial Results
Financial Results (GAAP and non-GAAP in US$ millions except per share data, for the three months ended) Revenues1 Sep-24 Sep-24 Adjusted vs. Adjusted vs. Sep-24 Sep-24 Jun-24 Jun-24 Sep-23 Sep-23 US GAAP Adjustments Adjusted Adjusted Adjusted Adjusted Adjusted Investment management fees, ex. 1,683.7
Slide 27: Financial Results
Financial Results (GAAP and non-GAAP in US$ millions except per share data, for the three months ended) Sep-24 Sep-24 Expenses1 Adjusted vs. Adjusted vs. Sep-24 Sep-24 Jun-24 Jun-24 Sep-23 Sep-23 US GAAP Adjustments Adjusted Adjusted Adjusted Adjusted Adjusted Compensation & benefits 940.8 (95.3) 84
Slide 28: Financial Results
Financial Results (GAAP and non-GAAP in US$ millions except per share data, for the three months ended) Other Income (Expense), Net1 Sep-24 Sep-24 Adjusted vs. Adjusted vs. Sep-24 Sep-24 Jun-24 Jun-24 Sep-23 Sep-23 US GAAP Adjustments Adjusted Adjusted Adjusted Adjusted2 Adjusted Investment and othe
Slide 29: Reconciliation: Three months ended September 30, 2024
Appendix Reconciliation of US GAAP results to Non-GAAP results: Three months ended September 30, 2024 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 30: Reconciliation: Three months ended June 30, 2024
Appendix Reconciliation of US GAAP results to Non-GAAP results: Three months ended June 30, 2024 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 31: 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) 1 Investment distribution and Termination investment Basis related Plan and
Slide 32: Reconciliation: Fiscal Year ended September 30, 2024
Appendix Reconciliation of US GAAP results to Non-GAAP results: Fiscal Year ended September 30, 2024 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 33: 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 1 related Plan and