Janus Henderson Group Plc · NYSE:JHG
Janus Henderson — FY2020 Earnings Presentation
46 slides from Janus Henderson's earnings presentation, Feb 4, 2021
Slide 1: Fourth Quarter and Full-Year 2020 Results
Thursday 4 February 2021 FOURTH QUARTER AND FULL-YEAR 2020 RESULTS Dick Weil Chief Executive Officer Roger Thompson Chief Financial Officer
Slide 2: 2020 Results and Strategy Update
2020 RESULTS AND STRATEGY UPDATE Dick Weil Chief Executive Officer
Slide 3: Full-Year 2020 Results
3 1 Represents percentage of AUM outperforming the relevant benchmark. Full performance disclosures detailed in the appendix on s lide 31. 2 See adjusted financial measures reconciliation on slides 38 and 39 for additional information. FULL-YEAR 2020 RESULTS Q1 2020 Q2 2020 Q3 2020 Q4 2020 Equities
Slide 4: Our Strategy: Simple Excellence
4 Delivering on our strategy of Simple Excellence... Produce dependable investment outcomes Excel in distribution and client experience Focus and increase operational efficiency Proactive risk and control environment Develop new growth initiatives OUR STRATEGY: SIMPLE EXCELLENCE Strengthening our co
Slide 5: Delivering on Simple Excellence
5 Continued investment strength ✓ Strong results across many capabilities through a challenging market environment ✓ Maintained process discipline and improved results in strategies impacted by Q1 2020 volatility ✓ Filled key investment roles, including in ESG ✓ Global system upgrades underway acros
Slide 6: Delivering on Simple Excellence: Significant progress across strategic initiatives
6 DELIVERING ON SIMPLE EXCELLENCE Significant progress across our strategic initiatives Developed new growth initiatives New products brought to market ✓ CLO ETF ✓ BioTech L/S ✓ Global Sustainability / ESG ✓ Multi-Strategy ✓ Multiple product extensions, globally Expanding our global presence ✓ Inter
Slide 7: Update on Dai-ichi Relationship
7 UPDATE ON DAI-ICHI RELATIONSHIP ▪ Dai-ichi has made the strategic decision to focus capital on their global insurance business ▪ As part of this decision, we have entered into a new strategic co-operation agreement, and Dai-ichi will sell its position in JHG and relinquish its Board seat ▪ While t
Slide 8: Business and Financial Update
BUSINESS AND FINANCIAL UPDATE Roger Thompson Chief Financial Officer
Slide 9: Key Metrics – Q4 2020 vs Q3 2020
9 1 Represents percentage of AUM outperforming the relevant benchmark. Full performance disclosures detailed in the appendix on s lide 31. 2 See adjusted financial measures reconciliation on slides 38 and 39 for additional information. Key metrics – Q4 2020 vs Q3 2020 Q4 2020 RESULTS ▪ Long-term inv
Slide 10: Investment Performance
10 INVESTMENT PERFORMANCE Firmwide investment performance remains solid Note: Full performance disclosures detailed in the appendix on slides 31 and 32. The top two Morningstar quartiles represent funds in the top half of their category based on total return. Refer to slide 32 for the 10-year period
Slide 11: Total Flows
11 16.6 15.6 15.6 15.3 18.7 21.4 17.9 15.8 23.2 (25.0) (23.0) (25.4) (18.8) (25.4) (33.6) (26.1) (18.7) (24.3) (8.4) (7.4) (9.8) (3.5) (6.7) (12.2) (8.2) (2.9) (1.1) Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q4 2018 to Q4 2020 total flows (US$bn) Redemptions Sales Net s
Slide 12: Quarterly Flows by Client Type
12 6.3 6.3 4.2 3.7 8.8 (13.8) (14.1) (12.7) (5.6) (10.0) (7.5) (7.8) (8.5) (1.9) (1.2) Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 11.7 14.1 13.0 11.5 13.5 (10.1) (17.2) (12.1) (11.6) (12.5) 1.6 (3.1) 0.9 (0.1) 1.0 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 0.7 1.0 0.7 0.6 0.9 (1.5) (2.3) (1.3) (1.5) (1.8)
Slide 13: Q4 2020 Flows by Capability
13 1 Annualised gross sales and redemption rates calculated as a percentage of beginning period AUM. Q4 2020 FLOWS BY CAPABILITY Net flows reflect strength in Fixed Income and Multi-Asset 10.3 8.7 3.1 0.3 0.8 (10.4) (7.5) (1.9) (3.7) (0.8) (0.1) 1.2 1.2 (3.4) 0.0 Equities Fixed Income Multi-Asset Qu
Slide 14: Statement of Income
14 STATEMENT OF INCOME US GAAP and adjusted Note: See adjusted financial measures reconciliation on slides 38 and 39 for additional information. US GAAP Adjustments Adjusted US GAAP Adjustments Adjusted Revenue Management fees 489.1 1,794.1 Performance fees 59.3 98.1 Shareowner servicing fees 57.9 2
Slide 15: Summary Financial Results
15 (US$, except margin data) Q4 2020 Q3 2020 Change Q4 2020 vs Q3 2020 2020 2019 Change 2020 vs 2019 Average AUM 379.0bn 356.0bn 6% 352.7bn 357.1bn (1%) Total revenue 657.2m 568.5m 16% 2,298.6m 2,192.4m 5% Operating income 227.0m 156.5m 45% 157.8m 540.9m (71%) Operating margin 34.5% 27.5% 7.0ppt 6.9
Slide 16: Revenue
16 REVENUE Q4 2020 adjusted revenue reflects higher performance fees and average assets Note: See adjusted financial measures reconciliation on slides 38 and 39 for additional information. 1 Net margin based on management fees net of distribution expenses. Adjusted revenue – Q3 2020 vs Q4 2020 (US$m
Slide 17: Performance Fees
17 PERFORMANCE FEES Performance in several strategies drove the year-over-year improvement Performance fees – 2019 vs 2020 (US$m) ▪ US$42m increase in 2020 performance fees for segregated mandates includes strategies in Equities, Fixed Income and Quantitative Equities ▪ SICAV performance fees increa
Slide 18: Operating Expenses
18 OPERATING EXPENSES Q4 2020 adjusted expenses reflect higher variable compensation on increased profits Note: See adjusted financial measures reconciliation on slides 38 and 39 for additional information. Adjusted operating expenses – Q3 2020 vs Q4 2020 (US$m) (US$m) Q4 2020 US GAAP Adjustments Q4
Slide 19: Expense Update
19 EXPENSE UPDATE Maintaining expense discipline whilst investing for growth Adjusted operating expense metrics1 2018 2019 2020 2021 Adjusted compensation as a % of adjusted net revenue 41.4% 44.0% 42.9% Low 40s Adjusted non-compensation annual growth2 15% 0% (1)% Mid-single digits3 1 See adjusted f
Slide 20: Balance Sheet
20 Note: At 31 December 2020, JHG had a US$200m, undrawn, unsecured, revolving credit facility. 1 Includes seed investments of US$354.9m (including investment securities of consolidated VIEs of US$158.4m), investments relat ed to deferred compensation plans of US$88.9m and other investments of US$5.
Slide 21: Conclusion
CONCLUSION Dick Weil Chief Executive Officer
Slide 22: Conclusion
22 CONCLUSION ▪ Solid investment performance ▪ Strengthened global distribution and product platform ▪ Improved flows demonstrate diversification of broad capabilities ▪ Maintaining focus and cost discipline whilst investing for growth ▪ Dai-ichi Life continues to be a valued long-term strategic par
Slide 23: Q&A
Q&A Janus Henderson
Slide 24: Appendix
APPENDIX Janus Henderson
Slide 25: Assets Under Management
25 ASSETS UNDER MANAGEMENT AUM at 31 December 2020: US$401.6bn 55% 20% 12% 10% 3% Equities Fixed Income Multi-Asset Quantitative Equities Alternatives 48% 32% 20% Intermediary Institutional Self-Directed 55% 31% 14% North America EMEA & LatAm Asia Pacific By client type By capability By client locat
Slide 26: Investment Management Capabilities
26 INVESTMENT MANAGEMENT CAPABILITIES Diversified product range Equities US$219.4bn AUM 31 Dec 20 US$401.6bn Fixed Income US$81.5bn Multi-Asset US$48.0bn Self-directed Intermediary Institutional Institutional Institutional Quantitative Equities US$42.0bn Institutional Alternatives US$10.7bn Intermed
Slide 27: Largest Strategies by Capability
27 LARGEST STRATEGIES BY CAPABILITY Note: Numbers may not cast due to rounding. Capability Strategy AUM (US$bn) 31 Dec 20 US Mid Cap Growth 29.6 US Concentrated Growth 25.1 US Research Growth Equity 20.2 US SMID Cap Growth 14.5 Global Life Sciences 14.1 Absolute Return Income 12.5 Sterling Buy & Mai
Slide 28: Quarterly Flows by Capability: Equities and Fixed Income
28 9.4 8.8 7.9 5.8 10.3 (10.7) (15.7) (12.1) (10.9) (10.4) (1.3) (6.9) (4.2) (5.1) (0.1) Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Equities (US$bn) 1 Annualised gross sales and redemption rates calculated as a percentage of beginning period AUM. QUARTERLY FLOWS BY CAPABILITY Equities and Fixed Income
Slide 29: Quarterly Flows by Capability: Multi-Asset, Quantitative Equities and Alternatives
29 0.3 0.4 0.4 1.3 0.3 (3.6) (2.4) (4.3) (1.4) (3.7) (3.3) (2.0) (3.9) (0.1) (3.4) Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 2.7 3.5 2.5 2.3 3.1 (1.3) (2.5) (1.8) (1.7) (1.9) 1.4 1.0 0.7 0.6 1.2 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 0.7 0.7 0.8 0.5 0.8 (1.4) (1.6) (0.9) (0.6) (0.8) (0.7) (0.9) (0.1)
Slide 30: Net Flows by Capability
30 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Equities Fixed Income Multi-Asset Quantitative Equities Alternatives Q4 2018 to Q4 2020 total net flows by capability (US$bn) NET FLOWS BY CAPABILITY (12.2) (7.4) (8.4) (9.8) (3.5) (6.7) (8.2) (2.9) (1.1)
Slide 31: Investment Performance
31 Note: Outperformance is measured based on composite performance gross of fees vs primary benchmark, except where a strategy has no benchmark index or corresponding composite in which case the most relevant metric is used: (1) composite gross of fees vs zero for absolute return strategies, (2) fun
Slide 32: Investment Performance
32 INVESTMENT PERFORMANCE Note: Includes Janus Investment Fund, Janus Aspen Series and Clayton Street Trust (US Trusts), Janus Henderson Capital Funds (Dublin based), Dublin and UK OEIC and Investment Trusts, Luxembourg SICAVs and Australian Managed Investment Schemes. The top two Morningstar quarti
Slide 33: Investment Performance
33 INVESTMENT PERFORMANCE Note: Full performance disclosures detailed on slide 32. Numbers may not cast due to rounding. % of mutual fund AUM in top 2 Morningstar quartiles (continued) Group 45 44 42 32 17 51 44 46 48 44 50 51 41 41 40 38 25 25 36 41 31 40 22 26 22 26 28 37 37 31 83 69 67 68 57 82 8
Slide 34: Investment Performance
34 INVESTMENT PERFORMANCE % of mutual fund AUM in top 2 Morningstar quartiles (continued) 2nd quartile 1st quartile Fixed Income Multi-Asset 19 37 41 56 54 29 52 64 67 71 28 44 41 49 49 51 38 36 19 16 26 30 23 11 8 28 27 33 24 24 70 75 77 76 70 55 82 86 78 79 56 70 74 72 73 Q4 2019 Q1 2020 Q2 2020 Q
Slide 35: Investment Performance
35 29 4 3 3 4 4 4 4 4 3 4 4 22 7 3 4 19 54 56 26 29 15 42 4 22 37 3 4 4 22 57 60 30 33 19 46 8 4 4 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 5 29 64 43 0 31 56 32 72 41 25 47 47 39 31 69 34 57 74 43 5 68 28 35 95 73 48 53
Slide 36: Capital Management
36 CAPITAL MANAGEMENT Note: JHG purchases shares on market for the annual share grants associated with variable compensation, which is not included in 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 for eac
Slide 37: US GAAP: Statement of Income
37 US GAAP: STATEMENT OF INCOME (US$m, except per share data or as noted) 31 Dec 20 30 Sep 20 31 Dec 19 31 Dec 20 31 Dec 19 Revenue Management fees 489.1 457.7 457.8 1,794.1 1,792.3 Performance fees 59.3 7.0 18.3 98.1 17.6 Shareowner servicing fees 57.9 53.7 71.9 209.2 185.4 Other revenue 50.9 50.1
Slide 38: Alternative Performance Measures
38 ALTERNATIVE PERFORMANCE MEASURES Note: Reconciliation to be used in conjunction with slide 39. Footnotes included on slide 40. Reconciliation of adjusted financial measures (US$m, except per share data) 31 Dec 20 30 Sep 20 31 Dec 19 31 Dec 20 31 Dec 19 Reconciliation of revenue to adjusted revenu
Slide 39: Alternative Performance Measures
39 ALTERNATIVE PERFORMANCE MEASURES Note: Reconciliation to be used in conjunction with slide 38. Footnotes included on slide 40. Reconciliation of adjusted financial measures (continued) (US$m, except per share data) 31 Dec 20 30 Sep 20 31 Dec 19 31 Dec 20 31 Dec 19 Reconciliation of net income att
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 in an
Slide 41: Performance Fees
41 PERFORMANCE FEES Note: Performance fees include prior quarter accrual true-ups. Numbers may not cast due to rounding. 1 AUM data present US mutual fund AUM subject to performance fees at 31 December 2020. Janus Investment Funds and Janus Aspen S eries Portfolios are counted as distinct and separa
Slide 42: US Mutual Funds with Performance Fees
42 US MUTUAL FUNDS WITH PERFORMANCE FEES Note: AUM data shown on a managed view. 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 t
Slide 43: Long-Term Incentive Compensation
43 LONG-TERM INCENTIVE COMPENSATION Note: Annual grants generally vest over three and four years. Assumed no forfeitures in future periods. Assumed no change in future values related to market or currency, which would impact expense related to cash-based awards (MFSAs, DIP and DEP funds) and social
Slide 44: Global Footprint
44 GLOBAL FOOTPRINT Global headquarters Regional head offices Other office locations North America AUM US$221bn Investment professionals 162 Distribution professionals 312 EMEA & Latin America AUM US$124bn Investment professionals 145 Distribution professionals 217 Asia Pacific AUM US$57bn Investmen
Slide 45: Contacts
45 CONTACTS Investor enquiries Melanie Horton Co-Head Investor Relations (Non-US) +44 (0)20 7818 2905 melanie.horton@janushenderson.com Jim Kurtz Co-Head Investor Relations (US) +1 303 336 4529 jim.kurtz@janushenderson.com Investor Relations investor.relations@janushenderson.com Media enquiries Step
Slide 46: Contact Us and 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 fluctuation of value. Forward looking information This presentation includes statements concernin