Janus Henderson Group Plc · NYSE:JHG
Janus Henderson — Q2 2017 Earnings Presentation
38 slides from Janus Henderson's earnings presentation, Aug 8, 2017
Slide 1: Executive summary
Executive summary Investment performance improved significantly US$1.0bn net outflow reflects a US$6.0bn improvement, driven by positive Equity flows and moderation in Quantitative Equity outflows AUM increased to US$345bn, up 4%, driven by positive markets and FX US$0.32 per share dividend Solid pr
Slide 2: 2Q17 results Business update
Andrew Formica Co-Chief Executive Officer 2Q17 results Business update
Slide 3: Market and industry environment
Market and industry environment 1 All market metrics are as at 30 Jun 2017. 2 Bloomberg Barclays US Aggregate Bond Index. 3 Source: Strategic Insight. Industry flows reflect US-domiciled, actively-managed, mutual fund flows (all money market flows have been excluded). Actively-managed flows exclude
Slide 4: Firm-wide investment performance
Capability 1 year 3 years 5 years Equities Fixed Income Quantitative Equity Multi-Asset Alternatives Firm-wide Investment performance Firm-wide investment performance is strong across time periods % of AUM outperforming benchmark (31 Dec 2016 to 30 Jun 2017) % of AUM outperforming benchmark (as at 3
Slide 5: Total pro forma flows
Total pro forma flows Total pro forma flows (US$bn) 23% 20% 26% 24% 24% (25%) (24%) (28%) (33%) (26%) 23% (24%) Note: Data presents the pro forma flows of JHG as if the merger had occurred at the beginning of the period shown. 1 Annualised gross sales and redemption rates calculated as a percentage
Slide 6: 2Q17 pro forma flows by capability
2Q17 pro forma flows by capability 28% 6% 16% 54% 26% (33%) (22%) (21%) (35%) (23%) 2Q17 pro forma flows by capability (US$bn) Annualised gross sales¹ Annualised gross redemptions¹ Note: Data presents the pro forma flows of JHG as if the merger had occurred at the beginning of the period shown. 1 An
Slide 7: 2Q17 results Financial update
Roger Thompson Chief Financial Officer 2Q17 results Financial update
Slide 8: Presentation of financial results
Presentation of financial results Post-merger, the 2Q17 results are presented in three ways Pro forma adjusted Pro forma adjusted view represents 3 months Henderson 3 months Janus Operating expenses adjusted to exclude non-recurring and acquisition related items including: Integration and deal costs
Slide 9: Statement of income
US$m 3 months ended 30 Jun 2017 US GAAP (2) Pro forma US GAAP Adjustments (3) Pro forma adjusted Revenue Management fees 296.0 454.3 Performance fees 57.7 52.3 Shareowner servicing fees 9.9 29.5 Other revenue 21.2 30.0 Total revenue 384.8 566.1 (83.9) 482.2 Operating expenses Employee compensation a
Slide 10: Financial highlights
Financial highlights 2Q17 1Q17 Change 2Q17 vs 1Q17 2Q16 Change 2Q17 vs 2Q16 Average AUM 339.9bn 329.0bn 3% 322.4bn 5% Total revenue 566.1m 487.1m 16% 509.0m 11% Operating income 88.5m 105.9m (16%) 123.4m (28%) Operating margin 15.6% 21.7% (610bps) 24.2% (860bps) US GAAP pro forma EPS 0.29 0.36 (19%)
Slide 11: Pro forma adjusted revenue
Pro forma adjusted revenue (US$m) Revenue 2Q17 pro forma adjusted revenue increased 19% +19% 406.0 482.2 (US$m) 2Q17 1Q17 Change Total performance fees 52.3 1.0 nm Other performance fees 60.0 14.0 329% US mutual fund performance fees (7.7) (13.2) 42% Performance fees Performance fees in 2Q17 driven
Slide 12: Performance fees
2Q17 (US$m) 1Q17 (US$m) AUM generating 2Q17 pfees (US$bn) # of funds generating 2Q17 pfees Frequency Timing SICAVs 29.6 8.2 10.0 17 23 annually; 2 quarterly 23 at June; 2 on quarters Offshore Absolute Return Funds 2.0 1.0 0.2 4 Quarterly / Annually Various Segregated Mandates 1.5 2.3 3.8 4 Quarterly
Slide 13: Operating expenses
Operating expenses US$m 2Q17 Pro forma US GAAP Adj. 2Q17 Pro forma adjusted 1Q17 Pro forma adjusted Change 2Q17 vs 1Q17 Pro forma adj. Notes to adjustments Employee compensation and benefits 185.7 (25.4) 160.3 159.7 0.4% 23.8 severance (integration); 1.6 (non-deal) Long-term incentive plans 61.2 (13
Slide 14: Profitability
Profitability Focus remains on delivering sustainable profit Pro forma adjusted operating income and margin (US$m unless otherwise stated) Pro forma adjusted net income and EPS (US$m, except per share data) Note: Data presents the results of JHG as if the merger had occurred at the beginning of the
Slide 15: Balance sheet
Balance sheet At the end of 2Q17, total cash and investment securities of US$1,342m compared to outstanding debt of US$439m The Board approved a dividend of US$0.32 per share, which will be paid on 1 September to stockholders on record at the close of business on 18 August Looking forward, we plan t
Slide 16: 2Q17 results Merger update
Dick Weil Co-Chief Executive Officer 2Q17 results Merger update
Slide 17: Janus Henderson integration
Janus Henderson integration Early integration efforts successful; execution ongoing Preparations ahead of completion Integration efforts ongoing Rebranded: 10,000 items of literature 4,000 fund factsheets 330+ institutional client reports 70 websites 27 offices, in a single weekend 7 offices consoli
Slide 18: Cost synergies
Cost synergies Expect to be able to realise at least US$85m by the end of the first 12 months US$57m of synergies completed as at 30 June 2017, comprised largely of savings from a reduced combined headcount In aggregate, we remain confident we will be able to achieve at least US$110m of recurring an
Slide 19: Revenue growth opportunities
Revenue growth opportunities Revenue synergies expected to be realised in three stages Dai-ichi strategic relationship c.US$350m funding to date into Global Growth and European Corporate Bond Potential for distribution of additional products through Asset Management One Broader global product offeri
Slide 20: 2Q17 summary
2Q17 summary Solid 2Q17 business results, with financials reflecting strong top line growth and improving profitability Investment performance improving, with notable short-term recovery at INTECH While total Group net flows still negative, seeing significant improvement across the business Strong t
Slide 21: 2Q17 summary
2Q17 summary Results reflect improving fundamentals and execution of deal synergies + Solid 2Q17 business results, with financials reflecting strong top line growth and improving profitability + Investment performance improving, with notable short-term recovery at INTECH + While total Group net flow
Slide 22: Q&A
Q&A Janus Henderson
Slide 23: Assets under management as at Jun 2017
Assets under management as at 30 Jun 2017 By client type By capability By client domicile US$173.4bn US$77.2bn US$46.6bn US$29.4bn US$18.4bn US$58.9bn US$150.3bn US$135.7bn US$182.7bn US$109.8bn US$52.4bn AUM: US$344.9bn Note: Numbers may not cast due to rounding. 50% 22% 14% 9% 5% Equity Fixed Inco
Slide 24: Pro forma flows: Equity and Fixed Income
Pro forma flows: Equity and Fixed Income Equity (US$bn) Fixed Income (US$bn) 20% 22% 26% 22% 26% (24%) (25%) (26%) (28%) (23%) 34% 26% 38% 31% 28% (27%) (24%) (36%) (30%) (33%) Redemptions Sales Net sales / (redemptions) Note: Data presents the pro forma flows of JHG as if the merger had occurred at
Slide 25: Pro forma flows: Quantitative Equity, Multi-Asset, Alternatives
Pro forma flows: Quantitative Equity, Multi-Asset, Alternatives Quantitative Equity (US$bn) Multi-Asset (US$bn) Alternatives (US$bn) 42% 28% 32% 31% 54% 13% 10% 15% 12% 16% 10% 5% 8% 26% 6% (54%) (31%) (45%) (45%) (35%) (20%) (21%) (22%) (20%) (21%) (16%) (19%) (22%) (58%) (22%) Note: Data presents
Slide 26: Total pro forma net flows by capability
Total pro forma net flows by capability (1.9) (3.2) (2.1) (7.0) (1.0) Total pro forma net flows by capability 1Q16 to 2Q17 (US$bn) (1.2) Note: Data presents the pro forma flows of JHG as if the merger had occurred at the beginning of the period shown. 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 Equities Fixed Inc
Slide 27: Pro forma AUM and flows by capability
Pro forma AUM and flows by capability Note: Data presents the pro forma AUM and flows of JHG as if the merger had occurred at the beginning of the period shown. Numbers may not cast due to rounding. Updated historical AUM and flow data in comparison to information presented in the 8-K announcement t
Slide 28: Investment performance
Investment performance Capability 4Q16 1Q17 2Q17 1 year 3 years 5 years 1 year 3 years 5 years 1 year 3 years 5 years Equities 30% 57% 74% 38% 64% 73% 68% 77% 84% Fixed Income 90% 93% 96% 92% 90% 93% 93% 92% 91% Quantitative Equity 7% 5% 40% 0% 12% 92% 6% 48% 91% Multi-Asset 21% 22% 90% 86% 22% 89%
Slide 29: Mutual fund investment performance
Mutual fund investment performance Capability 4Q16 1Q17 2Q17 1 year 3 years 5 years 1 year 3 years 5 years 1 year 3 years 5 years Equities 49% 80% 75% 46% 87% 71% 53% 87% 90% Fixed Income 36% 42% 96% 38% 44% 98% 38% 41% 98% Quantitative Equity 30% 79% 86% 3% 80% 100% 3% 58% 100% Multi-Asset 5% 81% 9
Slide 30: Statement of income
US$m, except per share data or as noted 3 months ended 30 Jun 2017 31 Mar 2017 Revenue Management fees 296.0 197.5 Performance fees 57.7 14.8 Shareowner servicing fees 9.9 – Other revenue 21.2 17.2 Total revenue 384.8 229.5 Operating expenses Employee compensation and benefits (123.6) (70.4) Long-te
Slide 31: Quarterly pro forma statement of income
US$m, except per share data 3 months ended 30 Jun 2017 31 Mar 2017 31 Dec 2016 30 Sep 2016 30 Jun 2016 31 Mar 2016 Revenue Management fees 454.3 427.6 432.2 444.4 440.8 428.6 Performance fees 52.3 1.0 2.7 (2.5) 5.6 12.4 Shareowner servicing fees 29.5 28.6 28.6 29.1 28.4 27.3 Other revenue 30.0 29.9
Slide 32: Reconciliation of pro forma adjusted financial measures
3 months ended US$m, except per share data 30 Jun 2017 31 Mar 2017 31 Dec 2016 30 Sep 2016 30 Jun 2016 31 Mar 2016 Reconciliation of pro forma revenue to pro forma adjusted revenue Pro forma revenue 566.1 487.1 494.8 503.9 509.0 502.9 Distribution expenses¹ (83.9) (81.1) (79.8) (84.7) (90.6) (87.0)
Slide 33: Reconciliation of pro forma adjusted net income
3 months ended US$m, except per share data 30 Jun 2017 31 Mar 2017 31 Dec 2016 30 Sep 2016 30 Jun 2016 31 Mar 2016 Reconciliation of pro forma net income to pro forma adjusted net income, attributable to JHG Pro forma net income attributable to JHG 59.0 74.4 61.2 104.2 86.4 87.6 Employee compensatio
Slide 34: Alternative performance measures (cont'd)
Alternative performance measures (cont’d) Footnotes to reconciliation of pro forma adjusted financial measures 1 Distribution expenses are paid to financial intermediaries for the distribution of JHG’s investment products. JHG management believe that the deduction of third-party distribution, servic
Slide 35: US mutual funds with performance fees
US mutual funds with performance fees 1 The funds listed have a performance-based investment advisory fee that adjusts up or down based on performance relative to a benchmark over 36-month rolling periods. Please see the funds’ Statements of Additional Information for more details and benchmark info
Slide 36: Contacts
Contacts Investor enquiries John Groneman Head of Investor Relations +44 (0) 20 7818 2106 john.groneman@janushenderson.com Louise Curran Non-US Investor Relations +44 (0) 20 7818 5927 louise.curran@janushenderson.com Jim Kurtz US Investor Relations +1 (303) 336 4529 jim.kurtz@janushenderson.com Inve
Slide 37: Forward looking information
Janus Henderson Investors 201 Bishopsgate, London EC2M 3AE Tel: 020 7818 1818 Fax: 020 7818 1819 Past performance is no guarantee of future results. Investing involves risk, including the possible loss of principal and fluctuation of value. Forward looking information This presentation includes stat
Slide 38: Forward looking information
Janus Henderson Investors 201 Bishopsgate, London EC2M 3AE Tol: 020 7818 1818 Fax: 020 7818 1819 Past performances no guarantee of future results. Investing involves risk, including the possible oss of principal and fluctuation of value. Forward looking information ‘This presentation includes statem
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