Janus Henderson Group Plc · NYSE:JHG
Janus Henderson — Q3 2022 Earnings Presentation
46 slides from Janus Henderson's earnings presentation, Oct 27, 2022
Slide 1: Third Quarter 2022 Results
Thursday 27 October 2022 THIRD QUARTER 2022 RESULTS Ali Dibadj Chief Executive Officer Roger Thompson Chief Financial Officer
Slide 2: Key metrics – Q3 2022 vs Q2 2022
2 1 Represents percentage of AUM outperforming the relevant benchmark. Full performance disclosures detailed in the appendix on s li de 32. 2 See the US GAAP Statement of Income on slide 37 for detail on the revision to Q2 2022 diluted EPS on a GAAP basis. 3 See adjusted financial measures reconcili
Slide 3: Investment performance
3 Note: Full performance disclosures detailed in the appendix on slides 32 and 33. The top two Morningstar quartiles represent funds in the top half of their category based on total return. The top quartile r ep resents those in the top 25%. Refer to slide 33 for the percent of funds in the top 2 qu
Slide 4: Quarterly flows
4 14.5 22.9 20.5 18.2 15.9 19.2 17.7 16.4 11.4 (17.3) (20.6) (21.7) (19.4) (16.7) (20.2) (23.9) (24.2) (17.2) (2.8) 2.3 (1.2) (1.2) (0.8) (1.0) (6.2) (7.8) (5.8) Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Total flows (US$bn) Redemptions Sales Net sales / (redemptions) 19
Slide 5: Flows by client type
5 2.4 4.2 3.1 6.5 3.0 (3.9) (4.3) (6.8) (7.7) (5.6) (1.5) (0.1) (3.6) (1.2) (2.6) Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 12.8 14.0 14.0 9.5 8.1 (11.6) (14.1) (15.6) (15.2) (10.6) 1.2 (0.1) (1.7) (5.7) (2.5) Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 0.7 1.0 0.6 0.4 0.3 (1.2) (1.7) (1.5) (1.3) (1.0) (0
Slide 6: Flows by capability
6 4.8 4.4 1.5 0.7 (8.9) (5.6) (1.7) (1.0) (4.1) (1.2) (0.2) (0.3) Equities Fixed Income Multi-Asset Alternatives Annualised gross sales¹ Redemptions Sales Net sales / (redemptions) 11% 27% 13% 23% Annualised gross redemptions¹ (20%) (34%) (15%) (34%) Q3 2022 flows by capability (US$bn) 1 Annualised
Slide 7: US GAAP Financial Results
7 US GAAP FINANCIAL RESULTS Note: See US GAAP Statement of Income on slide 37 for detail, including detail on the revision to Q2 2022 diluted EPS on a GAAP basis. (US$m, except per share data or as noted) Q3 2022 Q2 2022 Change Q3 2022 vs Q2 2022 Q3 2021 Change Q3 2022 vs Q3 2021 Revenue Management
Slide 8: Adjusted Financial Results
8 ADJUSTED FINANCIAL RESULTS Note: See adjusted financial measures reconciliation on slides 38 and 39 for additional information. 1 Net margin is based on management fees net of distribution expenses and excludes Intech. Including Intech, average net mgmt. fe e margin for Q3 2021 was 47.0bps. (US$m,
Slide 9: Q3 2022 Adjusted Financial Highlights
9 Q3 2022 ADJUSTED FINANCIAL HIGHLIGHTS Adjusted Revenue ▪ Decline from Q2 2022 adjusted revenue driven primarily by lower average AUM and performance fees ▪ At current investment performance, estimated aggregate performance fee range for full - year 2022 is US$(38)m to US$(42)m Adjusted Expenses ▪
Slide 10: Cost Discipline and 'Fuel for Growth'
10 COST DISCIPLINE AND ‘FUEL FOR GROWTH’ Maintaining expense discipline whilst investing for growth ▪ We have maintained a high degree of financial operating leverage with continuous cost discipline, balanced with strategic investments in our business ▪ We have performed an extensive review of our e
Slide 11: Capital Resources
11 CAPITAL RESOURCES Strong liquidity position ▪ Cash and investment securities 1 totalled US$1,370m compared to outstanding debt of US$308m ▪ Decrease in investments primarily due to lower global markets ▪ Board declared a dividend of US$0.39 per share to be paid on 23 November to shareholders on r
Slide 12: Strategy Update
STRATEGY UPDATE
Slide 13: Strategy Update: Last earnings call, we started talking strategy
13 STRATEGY UPDATE Last earnings call, we started talking strategy
Slide 14: Senior leaders identified and prioritised strategic opportunities
14 Since then, a team of senior leaders from around the firm have identified and prioritised strategic opportunities 15 prioritised Advanced 25 to be profiled and evaluated Clustered into 50 distinct opportunities 200 ideas captured <10 planned execution STRATEGY UPDATE
Slide 15: We brought the client voice into our process
15 STRATEGY UPDATE We brought the client voice purposefully into our process I 1. Higher client expectations for differentiated products 2. Greater client service desires 3. Faster client growth outside traditional markets 4. Formation of new asset classes 5. Technological change Opportunity 1 ✓ ✓ O
Slide 16: Opportunities evaluated on Right to Win and Future Importance
16 STRATEGY UPDATE Opportunities were evaluated along two dimensions: Right to Win and Future Client/Industry Importance Low High Low High Future Client/Industry Importance Janus Henderson Right to Win Illustrative Opportunity Opportunity Opportunity Opportunity Opportunity Opportunity Opportunity O
Slide 17: Expanding Addressable Market
17 EXPANDING ADDRESSABLE MARKET We operate in large markets and are strategically expanding into large asset categories to increase addressable assets Current State Note: ‘TAM’ is ‘Total Addressable Market’. Sources: BCG Global Asset Management Market Sizing 2022; BCG Global Asset Management Benchma
Slide 18: Early Strategic Framework
18 EARLY STRATEGIC FRAMEWORK We built upon the early strategic framework outlined on last earnings call Protect & Grow o ur core businesses Amplify strengths not fully leveraged Diversify where clients give us the right to win ▪ Janus Henderson US mutual fund sales are <1% of industry gross sales… ▪
Slide 19: Protect and Grow: Reinvesting in US Intermediary
19 PROTECT AND GROW: Reinvesting in US Intermediary US Intermediary is our largest client segment; the market is highly competitive but one of the fastest growing Protect & Grow o ur core businesses Amplify strengths not fully leveraged Diversify where clients give us the right to win ▪ Over a third
Slide 20: Amplify: New product expansion
20 1Q16 1Q17 1Q18 1Q19 1Q20 1Q21 1Q22 AMPLIFY: New product expansion We have utilised successful product and investment teams to target addressable markets with growth potential Protect & Grow our core businesses Diversify where clients give us the right to win Amplify strengths not fully leveraged
Slide 21: Diversify: History of growing from M&A
21 DIVERSIFY: History of growing from M&A Bolt - on acquisitions and team lift - outs have played a key role in strategic product development Amplify strengths not fully leveraged Protect & Grow our core businesses Diversify where clients give us the right to win ▪ We are actively looking at opportu
Slide 22: Early Wins
22 EARLY WINS Success will not happen overnight, but energy is continuing to build, and some early wins are appearing ▪ Early success in EMD with US$500m of AUM anticipated by year end ▪ Activity levels and client engagement is increasing ▪ Q3 2022 client interaction in US Intermediary increased mor
Slide 23: Summary
23 SUMMARY We believe our strategy will lead to organic revenue growth over time Historical JHG Future JHG Organic Growth Protect & Grow o ur core businesses Amplify strengths not fully leveraged Diversify where clients give us the right to win Time Illustrative
Slide 24: Q&A
Q&A Janus Henderson
Slide 25: Appendix
APPENDIX
Slide 26: Assets Under Management
26 ASSETS UNDER MANAGEMENT AUM as at 30 September 2022: US$274.6bn 59% 21% 16% 4% Equities Fixed Income Multi-Asset Alternatives 55% 23% 22% Intermediary Institutional Self-Directed 59% 30% 11% North America EMEA & LatAm Asia Pacific By client type By capability By client location US$161.8bn US$58.5
Slide 27: Investment Management Capabilities
27 INVESTMENT MANAGEMENT CAPABILITIES Diversified product range Equities US$161.8bn AUM 30 Sep 22 US$274.6bn Fixed Income US$58.5bn Multi - Asset US$43.8bn Self - Directed Intermediary Intermediary Institutional Institutional Alternatives US$10.5bn Intermediary Equities ▪ Wide range of equity strate
Slide 28: Largest Strategies by Capability
28 Capability Strategy AUM (US$bn) 30 Sep 22 US Mid Cap Growth 21.2 US Concentrated Growth 19.5 US Research Growth Equity 14.7 Global Life Sciences 11.1 US SMID Cap Growth 7.5 Absolute Return Income 8.0 Global Strategic Fixed Income 7.1 Australian Fixed Income 6.0 Core Plus Fixed Income 4.9 Sterling
Slide 29: Quarterly Flows by Capability: Equities and Fixed Income
29 7.5 8.1 8.5 5.5 4.8 (10.1) (11.3) (12.3) (11.3) (8.9) (2.6) (3.2) (3.8) (5.8) (4.1) Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Equities (US$bn) 1 Annualised gross sales and redemption rates calculated as a percentage of beginning period AUM. QUARTERLY FLOWS BY CAPABILITY Equities and Fixed Income 4.
Slide 30: Quarterly Flows by Capability: Multi-Asset and Alternatives
30 2.6 4.3 2.3 1.6 1.5 (1.8) (2.2) (4.5) (2.5) (1.7) 0.8 2.1 (2.2) (0.9) (0.2) Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Multi - Asset (US$bn) 1 Annualised gross sales and redemption rates calculated as a percentage of beginning period AUM. QUARTERLY FLOWS BY CAPABILITY Multi - Asset and Alternatives
Slide 31: Net Flows by Capability
31 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Equities Fixed Income Multi-Asset Alternatives Total net flows by capability (US$bn) NET FLOWS BY CAPABILITY ¹ (2.8) 2.3 (1.2) (1.2) (0.8) (1.0) (6.2) (7.8) 1 Net flows across all time periods exclude Intech, the sale of whic
Slide 32: Investment Performance: % of AUM outperforming benchmark
32 Capability 1yr 3yr 5yr 10yr 1yr 3yr 5yr 10yr 1yr 3yr 5yr 10yr 1yr 3yr 5yr 10yr Equities 39% 37% 68% 81% 32% 44% 61% 76% 41% 43% 47% 63% 42% 50% 51% 64% Fixed Income 91% 96% 96% 98% 68% 97% 96% 99% 45% 79% 93% 99% 43% 76% 89% 90% Multi-Asset 99% 96% 96% 97% 95% 96% 96% 99% 93% 95% 95% 99% 94% 96%
Slide 33: Investment Performance
33 Capability 1yr 3yr 5yr 10yr 1yr 3yr 5yr 10yr 1yr 3yr 5yr 10yr 1yr 3yr 5yr 10yr Equities 54% 51% 52% 86% 53% 52% 68% 86% 56% 52% 71% 88% 61% 38% 71% 90% Fixed Income 64% 81% 75% 70% 47% 85% 83% 83% 45% 68% 81% 84% 36% 61% 76% 85% Multi-Asset 95% 93% 93% 94% 97% 92% 92% 99% 98% 95% 92% 96% 96% 92%
Slide 34: Investment Performance: top Morningstar quartiles (continued)
34 INVESTMENT PERFORMANCE % of mutual fund AUM in top 2 Morningstar quartiles (continued) Group 24 38 22 23 44 45 37 40 45 46 51 52 60 56 60 51 38 23 41 43 17 19 27 13 19 29 26 24 26 33 30 40 63 61 63 66 61 63 64 53 64 75 76 76 86 89 90 91 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2021 Q1 2022 Q2 2022 Q3 2
Slide 35: Investment Performance: Fixed Income and Equities
35 8 28 30 30 30 33 23 27 29 30 37 41 52 49 51 40 46 25 26 31 21 19 30 11 23 38 34 31 34 37 37 50 54 53 56 61 51 52 52 38 52 68 71 71 86 86 88 90 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2021 Q1 2022 Q2 2022 Q3 2022 INVESTMENT PERFORMANCE % o
Slide 36: Investment Performance: Multi-Asset and Alternatives
36 92 91 2 2 92 91 91 92 92 92 91 92 94 94 94 94 4 5 96 94 1 1 4 0 1 1 1 1 1 5 2 2 95 97 98 96 93 92 95 92 93 92 92 92 94 99 96 96 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2021 Q1 2022 Q2 2022 Q3 2022 2 6 16 44 8 25 7 12 64 61 56 52 71 71 89
Slide 37: US GAAP: Statement of Income
37 US GAAP: STATEMENT OF INCOME (US$m, except per share data or as noted) 30 Sep 22 30 Jun 22 30 Sep 21 Revenue Management fees 426.2 453.6 564.5 Performance fees (13.2) (3.4) 0.6 Shareowner servicing fees 54.0 56.3 67.6 Other revenue 45.9 49.0 54.7 Total revenue 512.9 555.5 687.4 Operating expenses
Slide 38: Alternative Performance Measures: Reconciliation
38 ALTERNATIVE PERFORMANCE MEASURES Reconciliation of adjusted financial measures Note: Reconciliation to be used in conjunction with slide 39. Footnotes included on slide 40. (US$m, except per share data) 30 Sep 22 30 Jun 22 30 Sep 21 Reconciliation of revenue to adjusted revenue Revenue 512.9 555.
Slide 39: Alternative Performance Measures: Reconciliation (continued)
39 ALTERNATIVE PERFORMANCE MEASURES Reconciliation of adjusted financial measures (continued) Note: Reconciliation to be used in conjunction with slide 38. Footnotes included on slide 40. (US$m, except per share data) 30 Sep 22 30 Jun 22 30 Sep 21 Reconciliation of net income attributable to JHG to
Slide 40: Alternative Performance Measures: Footnotes
40 ALTERNATIVE PERFORMANCE MEASURES Footnotes to reconciliation of adjusted financial measures 1 JHG contracts with third - party intermediaries to distribute and service certain of its investment products .. Fees for distribution and servicing related activities are either provided for separately i
Slide 41: Capital Management
41 CAPITAL MANAGEMENT Note: JHG purchases shares on market for the annual share grants associated with variable compensation, which is not included i n the above share repurchases. Numbers may not cast due to rounding. 1 Total shares outstanding reflect amounts disclosed on Forms 10 - Q or 10 - K fo
Slide 42: Performance Fees
42 PERFORMANCE FEES Note: Performance fees include prior quarter accrual true - ups. 1 AUM data present US mutual fund AUM subject to performance fees as at 30 September 2022. Janus Investment Funds and Janus Asp en Series Portfolios are counted as distinct and separate funds. Q3 2022 (US$m) Q2 2022
Slide 43: US Mutual Funds with Performance Fees
43 US MUTUAL FUNDS WITH PERFORMANCE FEES Note: Numbers may not cast due to rounding. 1 The funds listed have a performance - based investment advisory fee that adjusts up or down based on performance relative to a ben chmark over 36 - month rolling periods. Please see the funds’ Statements of Additi
Slide 44: Long-Term Incentive Compensation
44 LONG - TERM INCENTIVE COMPENSATION Note: Annual grants generally vest over three and four years. Assumed no forfeitures in future periods. Assumed no change in fut ure values related to market or currency, which would impact expense related to cash - based awards (MFSAs, DIP and DEP funds) and so
Slide 45: Contacts
45 CONTACTS Investor enquiries Jim Kurtz Head of Investor Relations +1 303 336 4529 jim.kurtz@janushenderson.com Investor Relations investor.relations@janushenderson.com Media enquiries Stephen Sobey +44 (0)20 7818 2523 stephen.sobey@janushenderson.com
Slide 46: Contact us / Forward-looking information
201 Bishopsgate London EC2M 3AE United Kingdom www.janushenderson.com Contact us Past performance is no guarantee of future results. Investing involves risk, including the possible loss of principal and flu ctu ation of value. Forward - looking information This presentation includes statements conce
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