Janus Henderson Group Plc · NYSE:JHG
Janus Henderson — FY2019 Earnings Presentation
45 slides from Janus Henderson's earnings presentation, Feb 4, 2020
Slide 1: 4Q19 and FY19 results presentation
Dick Weil Chief Executive Officer Roger Thompson Chief Financial Officer Janus Henderson Group 4Q19 and FY19 results presentation Tuesday 4 February 2020
Slide 2: 2019 results and 2020 outlook
Dick Weil Chief Executive Officer 4Q19 and FY19 results presentation 2019 results and 2020 outlook
Slide 3: FY19 results: key metrics FY19 vs FY18
2 FY19 results FY19 FY18 3 year investment outperformance¹ 76% 61% Net flows (US$27.4bn) (US$18.1bn) Total AUM US$374.8bn US$328.5bn US GAAP diluted EPS US$2.21 US$2.61 Adjusted diluted EPS² US$2.47 US$2.74 Dividend per share US$1.44 US$1.40 Key metrics – FY19 vs FY18 1 Represents percentage of AUM
Slide 4: Principal components of 2019 net flows
3 Principal components of 2019 net flows 2019 flows (US$bn) 13.6 14.7 14.3 17.5 (17.0) (16.1) (14.4) (19.6) (3.4) (1.4) (0.1) (2.1) 1Q19 2Q19 3Q19 4Q19 Represents US$305bn in AUM as at 31 Dec 2019 Note: Numbers may not cast due to rounding. 2019 flows reflect outflows from four concentrated areas (2
Slide 5: 2019 flows by client type
4 8.5 10.5 21.4 22.1 1.3 1.3 (18.3) (21.5) (27.8) (19.9) (2.3) (2.7) (9.8) (11.0) (6.3) 2.1 (1.1) (1.4) (39%) (25%) Intermediary (46%)1 1H19 2H19 30% 28% 2019 flows by client type 2019 flows by client type (US$bn) Annualised gross sales2 Redemptions Sales Net sales / (redemptions) Annualised gross r
Slide 6: Our outlook is encouraging
5 Our outlook is encouraging Net outflows mask many encouraging results we see across our business Investment performance People and talent Winning new business • 69%, 76% and 77% of AUM beating benchmarks over the 1, 3 and 5 year time periods, respectively1 • 83%, 82% and 76% of mutual fund AUM in
Slide 7: 4Q19 business and financial results
Roger Thompson Chief Financial Officer 4Q19 and FY19 results presentation 4Q19 business and financial results
Slide 8: 4Q19 results: key metrics 4Q19 vs 3Q19
7 4Q19 results 4Q19 3Q19 3 year investment outperformance¹ 76% 74% Net flows (US$6.7bn) (US$3.5bn) Total AUM US$374.8bn US$356.1bn US GAAP diluted EPS US$0.59 US$0.58 Adjusted diluted EPS² US$0.65 US$0.64 Dividend per share US$0.36 US$0.36 Key metrics – 4Q19 vs 3Q19 1 Represents percentage of AUM ou
Slide 9: Total company investment performance remains strong
8 Capability 1 year 3 years 5 years Equities Fixed Income Quantitative Equities Multi-Asset Alternatives Total Capability 1 year 3 years 5 years Equities Fixed Income Quantitative Equities Multi-Asset Alternatives Total Investment performance Total company investment performance remains strong % of
Slide 10: Total flows 4Q17 to 4Q19
9 20.0 19.7 17.1 17.7 16.6 15.6 15.6 15.3 18.7 (22.9) (22.4) (19.8) (22.0) (25.0) (23.0) (25.4) (18.8) (25.4) (2.9) (2.7) (2.7) (4.3) (8.4) (7.4) (9.8) (3.5) (6.7) 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 Total flows Total flows 4Q17 to 4Q19 (US$bn) Redemptions Sales Net sales / (redemptions) 22
Slide 11: Principal components of 4Q19 net flows
10 Principal components of 4Q19 net flows 4Q19 flows (US$bn) 14.8 13.6 14.7 14.3 17.5 (20.3) (17.0) (16.1) (14.4) (19.6) (5.5) (3.4) (1.4) (0.1) (2.1) 4Q18 1Q19 2Q19 3Q19 4Q19 Represents US$305bn in AUM as at 31 Dec 2019 4Q19 flows driven by Institutional outflows (6.7) (3.3) (0.8) (0.3) (0.2) (2.1)
Slide 12: Statement of income
11 Statement of income Note: See adjusted financial measures reconciliation on slides 36 and 37 for additional information. US GAAP and adjusted US GAAP Adjustments Adjusted US GAAP Adjustments Adjusted Revenue Management fees 457.8 1,792.3 Performance fees 18.3 17.6 Shareowner servicing fees 71.9 1
Slide 13: Summary financial results
12 US$, except margin data 4Q19 3Q19 Change 4Q19 vs 3Q19 FY19 FY18 Change FY19 vs FY18 Average AUM 362.4bn 358.2bn 1% 357.1bn 367.7bn (3%) Total revenue 601.2m 536.0m 12% 2,192.4m 2,306.4m (5%) Operating income 154.3m 143.6m 7% 540.9m 649.8m (17%) Operating margin 25.7% 26.8% (1.1ppt) 24.7% 28.2% (3
Slide 14: 4Q19 adjusted revenue drivers
13 4Q19 adjusted revenue drivers Revenue 4Q19 revenue reflects higher performance fees, average AUM and fee margin Adjusted revenue – FY18 vs FY19 (US$m) Note: See adjusted financial measures reconciliation on slides 36 and 37 for additional information. 1 Net margin based on management fees net of
Slide 15: Operating expenses
14 Adjusted operating expenses – 3Q19 vs 4Q19 (US$m) Operating expenses Note: See adjusted financial measures reconciliation on slides 36 and 37 for additional information. Increase in compensation drove higher expenses US$m 4Q19 US GAAP Adjustments 4Q19 adjusted 3Q19 adjusted Change 4Q19 adjusted v
Slide 16: Balance sheet
15 1 Includes seed investments of US$461.8m (including investment securities of consolidated variable interest entities of US$359.9m), investments related to deferred compensation plans of US$117.0m and other investments of US$5.4m as at 30 September 2019; includes seed investments of US$1,047.0m (i
Slide 17: Capital management
16 Capital management On 3 February 2020, the Board authorised an additional on-market share buyback of up to US$200 million 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 c
Slide 18: Conclusion
Conclusion Dick Weil Chief Executive Officer
Slide 19: Our strategy: Simple Excellence
18 Our strategy: Simple Excellence Produce dependable investment outcomes Focus on quality and stability of investment performance Excel in client experience Deliver industry- leading client experiences that drive client loyalty and increase duration Develop new growth initiatives Build the business
Slide 20: Conclusion: Business fundamentals are improving
19 Conclusion Business fundamentals are improving • Investment performance is strong and remains the best leading indicator of future success • Improving flow trends are beginning to reflect the great investment performance • Intermediary flows turned positive in 2H 2019 across several regions with
Slide 21: Q&A
QsuVHS ‘ADGIIMONy Q&A Janus Henderson
Slide 22: Appendix
Appendix SHARED ll KNOWLEDGE.
Slide 23: Assets under management as at 31 Dec 2019
22 46% 35% 19% Intermediary Institutional Self-directed 54% 20% 12% 11% 3% Equities Fixed Income Quantitative Equities Multi-Asset Alternatives Assets under management as at 31 Dec 2019 56% 30% 14% North America EMEA & LatAm Asia Pacific By client type By capability By client location US$204.0bn US$
Slide 24: Investment management capabilities
23 Investment management capabilities Diversified product range Equities US$204.0bn AUM 31 Dec 2019 US$374.8bn Fixed Income US$74.8bn Multi-Asset US$39.8bn Self-directed Intermediary Intermediary Institutional Institutional Institutional Quantitative Equities US$45.2bn Equities (56bps1) • Wide range
Slide 25: Largest strategies by capability
24 Largest strategies by capability Note: Numbers may not cast due to rounding. Capability Strategy AUM (US$bn) 31 Dec 2019 US Mid Cap Growth 29.3 US Concentrated Growth 18.2 US Research Growth Equity 16.7 US SMID Cap Growth 13.2 Global Life Sciences 10.6 Core Plus Fixed Income 12.7 Buy & Maintain C
Slide 26: 4Q19 flows by capability
25 4Q19 flows by capability 9.4 5.6 0.3 2.7 0.7 (10.7) (8.4) (3.6) (1.3) (1.4) (1.3) (2.8) (3.3) 1.4 (0.7) Equities Fixed Income Quantitative Equities Multi-Asset Alternatives 4Q19 flows by capability (US$bn) Annualised gross sales¹ Redemptions Sales Net sales / (redemptions) 20% 30% 3% 29% 24% (23%
Slide 27: Flows: Equities and Fixed Income
26 Flows: Equities and Fixed Income 8.6 6.9 6.9 6.0 9.4 (12.7) (9.8) (12.9) (8.0) (10.7) (4.1) (2.9) (6.0) (2.0) (1.3) 4Q18 1Q19 2Q19 3Q19 4Q19 4.7 4.9 5.5 6.1 5.6 (6.0) (7.7) (5.2) (4.7) (8.4) (1.3) (2.8) 0.3 1.4 (2.8) 4Q18 1Q19 2Q19 3Q19 4Q19 Equities (US$bn) Fixed Income (US$bn) Redemptions Sales
Slide 28: Flows: Quantitative Equities, Multi-Asset and Alternatives
27 2.3 2.2 2.1 2.4 2.7 (2.0) (1.5) (1.5) (2.0) (1.3) 0.3 0.7 0.6 0.4 1.4 4Q18 1Q19 2Q19 3Q19 4Q19 0.3 0.7 0.2 0.3 0.3 (1.4) (1.7) (4.3) (2.7) (3.6) (1.1) (1.0) (4.1) (2.4) (3.3) 4Q18 1Q19 2Q19 3Q19 4Q19 0.7 0.9 0.9 0.5 0.7 (2.9) (2.3) (1.5) (1.4) (1.4) (2.2) (1.4) (0.6) (0.9) (0.7) 4Q18 1Q19 2Q19 3Q
Slide 29: Total net flows by capability
28 Total net flows by capability 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 Equities Fixed Income Quantitative Equities Multi-Asset Alternatives Total net flows by capability 4Q17 to 4Q19 (US$bn) Note: Reflects operational reclassification of existing client’s funds in 4Q18 as detailed on slide 29
Slide 30: AUM and flows by capability
29 AUM and flows by capability All data in US$bn Equities Fixed Income Quantitative Equities Multi-Asset Alternatives Total AUM 30 Sep 2018 199.2 74.5 52.9 34.6 16.9 378.1 Sales 8.6 4.7 0.3 2.3 0.7 16.6 Redemptions (12.7) (6.0) (1.4) (2.0) (2.9) (25.0) Net sales / (redemptions) (4.1) (1.3) (1.1) 0.3
Slide 31: Investment performance
30 Investment performance % of AUM outperforming benchmark 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
Slide 32: Mutual fund investment performance
31 Mutual fund investment performance % of mutual fund AUM in top 2 Morningstar quartiles 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 Austr
Slide 33: Mutual fund investment performance (cont'd): Equities
32 Mutual fund investment performance (cont’d) Group 39 30 55 56 45 30 44 43 52 51 47 55 51 54 50 26 48 23 22 38 32 23 25 23 31 33 26 30 28 26 65 78 78 78 83 62 67 68 74 82 80 81 81 82 76 4Q18 1Q19 2Q19 3Q19 4Q19 4Q18 1Q19 2Q19 3Q19 4Q19 4Q18 1Q19 2Q19 3Q19 4Q19 % of mutual fund AUM in top 2 Morning
Slide 34: Mutual fund investment performance (cont'd): Fixed Income
33 52 39 38 40 5 3 3 3 3 48 4 4 40 4 46 24 23 57 22 12 53 19 52 93 47 57 15 98 63 61 97 22 17 3 3 57 22 100 97 51 97 19 4Q18 1Q19 2Q19 3Q19 4Q19 4Q18 1Q19 2Q19 3Q19 4Q19 4Q18 1Q19 2Q19 3Q19 4Q19 Mutual fund investment performance (cont’d) Fixed Income 33 37 38 42 19 14 24 27 41 29 15 18 21 35 28 13
Slide 35: Mutual fund investment performance (cont'd): Multi-Asset
34 Mutual fund investment performance (cont’d) Multi-Asset 84 82 83 85 86 83 84 84 86 86 84 84 85 87 87 4 2 4 2 6 6 2 2 2 3 5 4 3 2 3 89 84 87 87 93 89 86 87 88 89 88 88 88 89 90 4Q18 1Q19 2Q19 3Q19 4Q19 4Q18 1Q19 2Q19 3Q19 4Q19 4Q18 1Q19 2Q19 3Q19 4Q19 % of mutual fund AUM in top 2 Morningstar quar
Slide 36: US GAAP: statement of income
35 US GAAP: statement of income 3 months ended Year ended 31 Dec 2019 30 Sep 2019 31 Dec 2018 31 Dec 2019 31 Dec 2018 Revenue Management fees 457.8 446.2 452.3 1,792.3 1,947.4 Performance fees 18.3 1.4 3.5 17.6 7.1 Shareowner servicing fees 71.9 39.3 37.0 185.4 154.2 Other revenue 53.2 49.1 52.3 197
Slide 37: Reconciliation of adjusted financial measures
36 Note: Reconciliation to be used in conjunction with slide 37. Footnotes included on slide 38. Alternative performance measures Reconciliation of adjusted financial measures 3 months ended Year ended 31 Dec 2019 30 Sep 2019 31 Dec 2018 31 Dec 2019 31 Dec 2018 Reconciliation of revenue to adjusted
Slide 38: Alternative performance measures (cont'd)
37 Alternative performance measures (cont’d) Reconciliation of adjusted financial measures Note: Reconciliation to be used in conjunction with slide 36. Footnotes included on slide 38. 3 months ended Year ended 31 Dec 2019 30 Sep 2019 31 Dec 2018 31 Dec 2019 31 Dec 2018 Reconciliation of net income
Slide 39: Footnotes to reconciliation of adjusted financial measures
38 Alternative performance measures (cont’d) 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 separat
Slide 40: Performance fees
39 4Q19 (US$m) 3Q19 (US$m) 4Q18 (US$m) AUM generating 4Q19 pfees (US$bn) # of funds generating 4Q19 pfees Frequency Timing SICAVs 0.2 0.0 0.1 0.2 2 23 Annually; 2 Quarterly 23 at June; 2 on quarter Offshore Absolute Return 0.2 0.2 0.3 0.7 5 Annually Various Segregated Mandates1 19.3 2.5 14.7 13.7 26
Slide 41: Pay-out timing of AUM subject to performance fees
40 1Q 2Q 3Q 4Q 12.4 Performance fees US$63bn non-US mutual fund AUM eligible to earn performance fees across all periods 1 Other includes Offshore Absolute Return, Investment Trusts and Managed CDOs. Pay-out timing of AUM subject to performance fees (Non-US mutual fund AUM in US$bn as at 31 Dec 2019
Slide 42: US mutual funds with performance fees
41 US mutual funds with performance fees Mutual funds with performance fees¹ AUM 31 Dec 2019 US$m Benchmark Base fee Performance fee2 Performance cap/(floor) vs benchmark 4Q19 P&L impact US$’000 Research Fund 15,355 Russell 1000® Growth Index 0.64% ± 15 bps ± 5.00% (4,659) Forty Fund and Portfolio 1
Slide 43: Long-term incentive compensation
42 Long-term incentive compensation Estimated future long-term incentive compensation amortisation US$m Amount remaining to expense 2020 2021 2022 2023 2024 2017 annual grant 6 6 –––– 2018 annual grant 30 24 6 ––– 2019 annual grant 74 48 21 4 1 – 2020 annual grant1 130 66 43 18 2 – Other2 86 13 23 1
Slide 44: Contacts
43 Contacts Investor enquiries Jim Kurtz Investor Relations Manager +1 (303) 336 4529 jim.kurtz@janushenderson.com Investor Relations investor.relations@janushenderson.com Media enquiries Sarah de Lagarde +44 (0) 20 7818 2626 sarah.delagarde@janushenderson.com United Kingdom: FTI Consulting Tom Blac
Slide 45: Important information and performance disclosures
44 Past performance is no guarantee of future results. Investing involves risk, including the possible loss of principal and fluctuation of value. The Overall Morningstar RatingTM for a fund is derived from a weighted average of the performance figures associated with its three-, five- and ten-year