Janus Henderson Group Plc · NYSE:JHG
Janus Henderson — Q1 2018 Earnings Presentation
37 slides from Janus Henderson's earnings presentation, May 9, 2018
Slide 1: 1Q18 results presentation: Business and financial update
Roger Thompson Chief Financial Officer 1Q18 results presentation Business and financial update
Slide 2: 1Q18 highlights
1Q18 highlights Long-term investment performance remains strong AUM increased to US$371.9bn, supported by positive markets and FX Adjusted diluted EPS of US$0.71 reflecting strong financial discipline Declared US$0.36 per share dividend, an increase of 13% 1Q18 4Q17 3 year investment outperformance¹
Slide 3: Investment performance strong in the face of elevated market volatility
97% Capability 1 year 3 years 5 years Equities Fixed Income Quantitative Equities Multi-Asset Alternatives Total Investment performance Investment performance strong in the face of elevated market volatility % of AUM outperforming benchmark (31 Mar 2017 to 31 Mar 2018) % of AUM outperforming benchma
Slide 4: Total flows
Total flows Total flows 1Q16 to 1Q18 (US$bn) 23% 20% 26% 24% 24% (25%) (24%) (28%) (33%) (26%) 23% (24%) Note: Data for periods prior to and including 2Q17 presents pro forma flows of JHG as if the merger had occurred at the beginning of the period shown. 1 Annualised gross sales and redemption rate
Slide 5: 1Q18 flows by capability
1Q18 flows by capability 26% 13% 16% 31% 21% (28%) (11%) (15%) (51%) (25%) 1Q18 flows by capability (US$bn) Annualised gross sales¹ Annualised gross redemptions¹ 1 Annualised gross sales and redemption rates calculated as a percentage of beginning period AUM. Redemptions Sales Net sales / (redemptio
Slide 6: Statement of income
Statement of income Note: See adjusted financial measures reconciliation on slide 28 for additional information. US GAAP and adjusted US$m 3 months ended 31 Mar 2018 US GAAP Adjustments Adjusted Revenue Management fees 502.9 Performance fees (3.9) Shareowner servicing fees 31.5 Other revenue 57.2 To
Slide 7: Financial highlights: Summary of results
US$m unless otherwise stated 1Q18 4Q17 Change 1Q18 vs 4Q17 1Q17 Change 1Q18 vs 1Q17 Average AUM 377.4bn 366.1bn 3% 329.0bn 15% Total revenue 587.7m 621.8m (5%) 513.4m 14% Operating income 176.2m 196.6m (10%) 105.9m 66% Operating margin 30.0% 31.6% (1.6ppt) 20.6% 9.4ppt US GAAP diluted EPS 0.82 2.32
Slide 8: 1Q18 adjusted revenue drivers
1Q18 adjusted revenue drivers 1% increase in management fees driven by higher average AUM 1Q18 group average net¹ management fee margin of 44.9bps (4Q17: 44.9bps) Reduction in performance fees primarily due to lower performance fees from UK Absolute Return Revenue 1Q18 adjusted revenue impacted by l
Slide 9: Adjusted operating expenses – 1Q18 versus 4Q17
Adjusted operating expenses – 1Q18 versus 4Q17 (US$m) Operating expenses US$m 1Q18 US GAAP Adjustments 1Q18 adjusted 4Q17 adjusted Change 1Q18 adjusted vs 4Q17 adjusted Employee compensation and benefits 146.7 (2.9) 143.8 163.0 (12%) Long-term incentive plans 40.0 (0.1) 39.9 34.7 15% Distribution ex
Slide 10: Profitability
Profitability Financial discipline to support sustainable growth Pro forma adjusted operating income and margin (US$m unless otherwise stated) Pro forma adjusted net income and diluted EPS (US$m, except per share data) Note: Data for periods prior to and including 2Q17 presents the results of JHG as
Slide 11: Balance sheet
331 Balance sheet At 31 Mar 2018, cash and investment securities totalled US$1,385m compared to outstanding debt of US$331m Cash and investment securities decreased 7% driven by seasonal bonus payments, dividends and convertible debt repayment Total debt outstanding declined 13% due to US$48m early
Slide 12: Capital philosophy
Capital philosophy Balancing strategic investments with returning excess capital to shareholders Investing internally in the business Deploying seed capital investments to develop new products Inorganic opportunities Increasing the quarterly dividend Repurchasing shares Declaring a special dividend
Slide 13: Capital philosophy
Capital philosophy Balancing strategic investments with returning excess capital to shareholders Maintaining capital Investing in the Returning excess requirements business cash + Reserving capital for + Investing internally inthe + Increasing the quarterly working capital needs and business dividen
Slide 14: Q&A
QsuVHS ‘ADCIIMONy Q&A Janus Henderson
Slide 15: Assets under management as at Mar 2018
Assets under management as at 31 Mar 2018 By client type By capability By client location US$190.7bn US$80.0bn US$50.4bn US$31.8bn US$19.0bn US$62.2bn US$164.2bn US$145.5bn US$194.0bn US$119.2bn US$58.7bn AUM: US$371.9bn 51% 21% 14% 9% 5% Equities Fixed Income Quantitative Equities Multi-Asset Alter
Slide 16: Investment management capabilities: Diversified product range
Investment management capabilities Diversified product range Equities US$190.7bn AUM 31 Mar 2018 US$371.9bn Fixed Income US$80.0bn Multi-Asset US$31.8bn Self-directed Intermediary Intermediary Institutional Institutional Institutional Institutional Quantitative Equities US$50.4bn Self-directed Self-
Slide 17: Investment management capabilities: Balanced range of strategies
Investment management capabilities Balanced range of strategies AUM by investment capability as at 31 Mar 2018 US$19.0bn US$31.8bn US$190.7bn US$50.4bn US$80.0bn Specialist Global Equities US Equities European Equities Asia Pacific Equities Relative return Absolute risk Regional Enhanced index US Fi
Slide 18: Largest pooled funds by capability
Largest pooled funds by capability Capability Fund Product Strategy AUM 31 Mar 2018 Equity JnsHnd Enterprise US Mutual Fund Mid Cap Growth US$17.0bn JnsHnd Research US Mutual Fund US Research Growth Equity US$13.4bn JnsHnd Forty US Mutual Fund Concentrated Growth US$12.0bn JnsHnd Triton US Mutual Fu
Slide 19: Flows: Equities and Fixed Income
Flows: Equities and Fixed Income Equities (US$bn) Fixed Income (US$bn) 22% 26% (28%) (23%) 31% 28% (30%) (33%) Redemptions Sales Net sales / (redemptions) Note: Data for periods prior to and including 2Q17 presents pro forma flows of JHG as if the merger had occurred at the beginning of the period s
Slide 20: Flows: Quantitative Equities, Multi-Asset and Alternatives
Flows: Quantitative Equities, Multi-Asset and Alternatives Quantitative Equities (US$bn) Multi-Asset (US$bn) Alternatives (US$bn) 12% 26% 6% (45%) (35%) (20%) (21%) (58%) (22%) Note: Data for periods prior to and including 2Q17 presents pro forma flows of JHG as if the merger had occurred at the beg
Slide 21: Total net flows by capability
Total net flows by capability (1.9) (3.2) (2.1) (7.0) (1.0) Total net flows by capability 1Q16 to 1Q18 (US$bn) (1.2) Note: Data for periods prior to and including 2Q17 presents pro forma flows of JHG as if the merger had occurred at the beginning of the period shown. 0.7 (2.9) (2.7) 1Q16 2Q16 3Q16 4
Slide 22: AUM and flows by capability
AUM and flows by capability Note: Data for periods prior to and including 2Q17 presents pro forma AUM and flows of JHG as if the merger had occurred at the beginning of the period shown. All data in US$bn Equities Fixed Income Quantitative Equities Multi-Asset Alternatives Total AUM 31 Dec 2016 153.
Slide 23: Investment performance
Investment performance Capability 1Q17 2Q17 3Q17 4Q17 1Q18 1yr 3yr 5yr 1yr 3yr 5yr 1yr 3yr 5yr 1yr 3yr 5yr 1yr 3yr 5yr Equities 38% 64% 73% 68% 77% 84% 61% 73% 82% 64% 60% 67% 68% 59% 76% Fixed Income 92% 90% 93% 93% 92% 91% 92% 91% 97% 93% 95% 98% 96% 96% 97% Quantitative Equities 0% 12% 92% 6% 48%
Slide 24: Mutual fund investment performance
Mutual fund investment performance Capability 1Q17 2Q17 3Q17 4Q17 1Q18 1yr 3yr 5yr 1yr 3yr 5yr 1yr 3yr 5yr 1yr 3yr 5yr 1yr 3yr 5yr Equities 47% 88% 70% 53% 87% 90% 56% 71% 88% 63% 59% 87% 64% 62% 82% Fixed Income 37% 43% 98% 38% 41% 98% 81% 49% 98% 43% 36% 87% 48% 32% 62% Quantitative Equities 3% 80
Slide 25: US GAAP statement of income
US$m, except per share data or as noted 3 months ended 31 Mar 2018 31 Dec 2017 31 Mar 2017 Revenue Management fees 502.9 498.1 201.0 Performance fees (3.9) 33.5 14.8 Shareowner servicing fees 31.5 31.4 – Other revenue 57.2 58.8 17.2 Total revenue 587.7 621.8 233.0 Operating expenses Employee compens
Slide 26: Pro forma US GAAP statement of income
US$m, except per share data 3 months ended 31 Mar 2018 31 Dec 2017 31 Mar 2017 Revenue Management fees 502.9 498.1 431.1 Performance fees (3.9) 33.5 1.0 Shareowner servicing fees 31.5 31.4 28.6 Other revenue 57.2 58.8 52.7 Total revenue 587.7 621.8 513.4 Operating expenses Employee compensation and
Slide 27: Pro forma adjusted: statement of income
Pro forma adjusted: statement of income US$m, except per share data 3 months ended 31 Mar 2018 31 Dec 2017 31 Mar 2017 Revenue Management fees 502.9 498.1 431.1 Performance fees (3.9) 33.5 1.0 Shareowner servicing fees 31.5 31.4 28.6 Other revenue 57.2 58.8 52.7 Distribution expenses (117.3) (116.5)
Slide 28: Reconciliation of adjusted financial measures
3 months ended US$m, except per share data 31 Mar 2018 31 Dec 2017 31 Mar 2017 Reconciliation of revenue to adjusted revenue Revenue 587.7 621.8 513.4 Distribution expenses¹ (117.3) (116.5) (107.4) Adjusted revenue 470.4 505.3 406.0 Reconciliation of operating income to adjusted operating income Ope
Slide 29: Reconciliation of adjusted financial measures (cont'd)
3 months ended US$m, except per share data 31 Mar 2018 31 Dec 2017 31 Mar 2017 Reconciliation of net income to adjusted net income, attributable to JHG Net income attributable to JHG 165.2 471.7 74.4 Employee compensation and benefits² 2.9 9.6 3.6 Long-term incentive plans² 0.1 1.5 – Marketing² 0.1
Slide 30: Footnotes to reconciliation of adjusted financial measures
Alternative performance measures (cont’d) Footnotes to reconciliation of adjusted financial measures 1 Distribution expenses are paid to financial intermediaries for the distribution of JHG’s investment products. JHG management believes that the deduction of third-party distribution, service and adv
Slide 31: Reconciliation: revenue recognition standard
US$m 3 months ended 3 months ended 31 Dec 2017 Previously reported Adjustment 31 Dec 2017 Updated 31 Mar 2017 Previously reported Adjustment 31 Mar 2017 Updated Revenue Management fees 493.9 4.2 498.1 427.6 3.5 431.1 Performance fees 33.5 – 33.5 1.0 – 1.0 Shareowner servicing fees 31.4 – 31.4 28.6 –
Slide 32: Performance fees
1Q18 (US$m) 4Q17 (US$m) 1Q17 (US$m) AUM generating 1Q18 pfees (US$bn) # of funds generating 1Q18 pfees Frequency Timing SICAVs¹ 1.0 9.3 8.2 – – 23 annually; 2 quarterly 23 at June; 2 on quarters Offshore Absolute Return 0.4 3.0 1.0 0.1 2 Quarterly / Annually Various Segregated Mandates² 2.5 21.6 1.8
Slide 33: Performance fee notes
Note: AUM data shown on a managed view. 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 in
Slide 34: Long-term incentive compensation
Long-term incentive compensation Estimated future long-term incentive compensation amortisation US$m Amount remaining to expense 2018 2019 2020 2021 2015 annual grant 7 6 1 2016 annual grant 29 21 7 1 2017 annual grant 61 37 18 6 2018 annual grant¹ 164 80 53 24 6 Other² 111 40 32 23 16 Total long-te
Slide 35: 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 36: 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 37: 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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