Janus Henderson Group Plc · NYSE:JHG
Janus Henderson — Q1 2020 Earnings Presentation
38 slides from Janus Henderson's earnings presentation, Apr 30, 2020
Slide 1: Janus Henderson Group 1Q20 results presentation
Dick Weil Chief Executive Officer Roger Thompson Chief Financial Officer Janus Henderson Group 1Q20 results presentation Thursday 30 April 2020
Slide 2: COVID-19 Update
Dick Weil Chief Executive Officer COVID-19 Update
Slide 3: COVID-19 Update: operating as close to business as usual
2 COVID-19 Update We are operating as close to business as usual as could be hoped • Our top priority is the health and well-being of our employees while protecting the interests of our clients and shareholders • 95% of our employees are working remotely • Technology capabilities fully support concu
Slide 4: Business and financial update
Roger Thompson Chief Financial Officer 1Q20 results presentation Business and financial update
Slide 5: 1Q20 results
4 1Q20 results • Long-term investment performance remains solid • AUM of US$294.4bn reflects impact of COVID-19 and net outflows • US GAAP EPS results include goodwill and intangible asset impairment charges of US$487.3m • Adjusted diluted EPS of US$0.60 • Declared US$0.36 per share dividend and com
Slide 6: Investment performance: long-term performance remains solid
5 Capability 1 year 3 years 5 years Equities Fixed Income Quantitative Equities Multi-Asset Alternatives Total Capability 1 year 3 years 5 years Equities Fixed Income Quantitative Equities Multi-Asset Alternatives Total Investment performance Long-term performance remains solid % of mutual fund AUM
Slide 7: Total flows 1Q18 to 1Q20
6 19.7 17.1 17.7 16.6 15.6 15.6 15.3 18.7 21.4 (22.4) (19.8) (22.0) (25.0) (23.0) (25.4) (18.8) (25.4) (33.6) (2.7) (2.7) (4.3) (8.4) (7.4) (9.8) (3.5) (6.7) (12.2) 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 Total flows Total flows 1Q18 to 1Q20 (US$bn) Redemptions Sales Net sales / (redemptions) 2
Slide 8: Principal components of 1Q20 net flows
7 (12.2) (6.0) (0.9) (5.3) Total Company Net Flows Previously Announced Redemptions Jan & Feb Mar Principal components of 1Q20 net flows 1Q20 flows (US$bn) Note: Numbers may not cast due to rounding. 1Q20 flows primarily reflect previously announced redemptions and market volatility Jan & Feb Mar 0.
Slide 9: 1Q20 flows by capability
8 8.8 8.0 0.4 3.5 0.7 (15.7) (11.4) (2.4) (2.5) (1.6) (6.9) (3.4) (2.0) 1.0 (0.9) Equities Fixed Income Quantitative Equities Multi-Asset Alternatives 1Q20 flows by capability 1Q20 flows by capability (US$bn) Annualised gross sales¹ Redemptions Sales Net sales / (redemptions) 17% 43% 4% 36% 25% (31%
Slide 10: Statement of income
9 Statement of income Note: See adjusted financial measures reconciliation on slides 30 and 31 for additional information. US GAAP and adjusted US GAAP Adjustments Adjusted Revenue Management fees 439.6 Performance fees 14.6 Shareowner servicing fees 50.3 Other revenue 50.4 Total revenue 554.9 (112.
Slide 11: Summary financial results
10 US$, except margin data 1Q20 4Q19 Change 1Q20 vs 4Q19 1Q19 Change 1Q20 vs 1Q19 Average AUM 352.7bn 362.4bn (3%) 350.0bn 1% Total revenue 554.9m 601.2m (8%) 519.3m 7% Operating income (loss) (332.4)m 154.3m nm 124.5m nm Operating margin (59.9%) 25.7% nm 24.0% nm US GAAP diluted EPS (1.35) 0.59 nm
Slide 12: 1Q20 adjusted revenue drivers
11 1Q20 adjusted revenue drivers Revenue 1Q20 adjusted revenue reflects lower average assets and performance fees Pro forma adjusted revenue – 4Q19 vs 1Q20 (US$m) Note: See adjusted financial measures reconciliation on slides 30 and 31 for additional information. 1 Net margin based on management fee
Slide 13: Adjusted operating expenses 4Q19 vs 1Q20
12 Adjusted operating expenses – 4Q19 vs 1Q20 (US$m) Operating expenses Note: See adjusted financial measures reconciliation on slides 30 and 31 for additional information. 1Q20 adjusted expenses reflect impact of COVID-19 and cost discipline 278.2 (2.6) (11.0) (2.1) (3.3) (1.1) 292.1 6.2 4Q19 Compe
Slide 14: Balance sheet
13 796.5 802.2 1,178.3 799.4 1,974.8 1,601.6 316.2 315.5 Cash and investments Debt Cash and investments Debt 1 Includes seed investments of US$1,047.0m (including investment securities of consolidated variable interest entities of US$924.8m), investments related to deferred compensation plans of US$
Slide 15: Change in cash and cash equivalents
14 Change in cash and cash equivalents– 31 Dec 2019 vs 31 Mar 2020 (US$m) 1Q20 Cash Activity Cash and cash equivalents remain strong at US$802m • 1Q20 cash flow from operations reflects seasonal compensation payments • Returned $97m to shareholders via $66m in dividends and $31m in share repurchases
Slide 16: Q&A
QsuVHS ‘ADGIIMONy Q&A Janus Henderson
Slide 17: Appendix
Appendix SHARED ll KNOWLEDGE.
Slide 18: Assets under management as at 31 Mar 2020
17 51% 22% 12% 12% 3% Equities Fixed Income Quantitative Equities Multi-Asset Alternatives Assets under management as at 31 Mar 2020 46% 35% 19% Intermediary Institutional Self-directed 55% 31% 14% North America EMEA & LatAm Asia Pacific By client type By capability By client location US$149.9bn US$
Slide 19: Investment management capabilities
18 Investment management capabilities Diversified product range Equities US$149.9bn AUM 31 Mar 2020 US$294.4bn Fixed Income US$65.3bn Multi-Asset US$35.3bn Self-directed Intermediary Institutional Institutional Institutional Quantitative Equities US$34.6bn Alternatives US$9.3bn Equities • Wide range
Slide 20: Largest strategies by capability
19 Largest strategies by capability Note: Numbers may not cast due to rounding. Capability Strategy AUM (US$bn) 31 Mar 2020 US Mid Cap Growth 21.3 US Concentrated Growth 15.7 US Research Growth Equity 13.8 US SMID Cap Growth 9.2 Global Life Sciences 8.9 Buy & Maintain Credit 9.4 Absolute Return Inco
Slide 21: Flows: Equities and Fixed Income
20 4.9 5.5 6.1 5.6 8.0 (7.7) (5.2) (4.7) (8.4) (11.4) (2.8) 0.3 1.4 (2.8) (3.4) 1Q19 2Q19 3Q19 4Q19 1Q20 6.9 6.9 6.0 9.4 8.8 (9.8) (12.9) (8.0) (10.7) (15.7) (2.9) (6.0) (2.0) (1.3) (6.9) 1Q19 2Q19 3Q19 4Q19 1Q20 (24%) (27%) (17%) (23%) (31%) Flows: Equities and Fixed Income Equities (US$bn) Fixed I
Slide 22: Flows: Quantitative Equities, Multi-Asset and Alternatives
21 2.2 2.1 2.4 2.7 3.5 (1.5) (1.5) (2.0) (1.3) (2.5) 0.7 0.6 0.4 1.4 1.0 1Q19 2Q19 3Q19 4Q19 1Q20 0.7 0.2 0.3 0.3 0.4 (1.7) (4.3) (2.7) (3.6) (2.4) (1.0) (4.1) (2.4) (3.3) (2.0) 1Q19 2Q19 3Q19 4Q19 1Q20 0.9 0.9 0.5 0.7 0.7 (2.3) (1.5) (1.4) (1.4) (1.6) (1.4) (0.6) (0.9) (0.7) (0.9) 1Q19 2Q19 3Q19 4Q
Slide 23: Total net flows by capability
22 Total net flows by capability 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 Equities Fixed Income Quantitative Equities Multi-Asset Alternatives Total net flows by capability 1Q18 to 1Q20 (US$bn) (12.2) (2.7) (2.7) (4.3) (7.4) (8.4) (9.8) (3.5) (6.7)
Slide 24: AUM and flows by capability
23 AUM and flows by capability All data in US$bn Equities Fixed Income Quantitative Equities Multi-Asset Alternatives Total AUM 31 Dec 2018 167.6 72.4 44.3 30.2 14.0 328.5 Sales 6.9 4.9 0.7 2.2 0.9 15.6 Redemptions (9.8) (7.7) (1.7) (1.5) (2.3) (23.0) Net sales / (redemptions) (2.9) (2.8) (1.0) 0.7
Slide 25: Investment performance
24 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 26: Mutual fund investment performance
25 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 27: Mutual fund investment performance (cont'd): Equities
26 Mutual fund investment performance (cont’d) Group 30 55 56 45 44 44 43 52 51 44 55 51 54 50 51 48 23 22 38 25 23 25 23 31 40 26 30 28 26 28 78 78 78 83 69 67 68 74 82 84 81 81 82 76 79 1Q19 2Q19 3Q19 4Q19 1Q20 1Q19 2Q19 3Q19 4Q19 1Q20 1Q19 2Q19 3Q19 4Q19 1Q20 % of mutual fund AUM in top 2 Morning
Slide 28: Mutual fund investment performance (cont'd): Fixed Income
27 39 38 40 29 3 3 3 3 3 4 4 40 4 4 24 23 57 22 7 53 19 54 93 47 57 15 42 63 61 97 22 37 3 3 57 22 57 97 51 97 19 46 1Q19 2Q19 3Q19 4Q19 1Q20 1Q19 2Q19 3Q19 4Q19 1Q20 1Q19 2Q19 3Q19 4Q19 1Q20 Mutual fund investment performance (cont’d) Fixed Income 37 38 42 19 37 24 27 41 29 52 18 21 35 28 44 31 12
Slide 29: Mutual fund investment performance (cont'd): Alternatives, Multi-Asset
28 Mutual fund investment performance (cont’d) % of mutual fund AUM in top 2 Morningstar quartiles Alternatives 33 31 5 29 31 31 31 56 57 31 24 25 61 2 38 31 69 33 27 6 43 5 37 27 32 95 73 93 32 38 36 98 33 58 37 74 60 94 58 56 95 98 1Q19 2Q19 3Q19 4Q19 1Q20 1Q19 2Q19 3Q19 4Q19 1Q20 1Q19 2Q19 3Q19 4
Slide 30: US GAAP: statement of income
29 US GAAP: statement of income 3 months ended 31 Mar 2020 31 Dec 2019 31 Mar 2019 Revenue Management fees 439.6 457.8 441.9 Performance fees 14.6 18.3 (5.6) Shareowner servicing fees 50.3 71.9 35.9 Other revenue 50.4 53.2 47.1 Total revenue 554.9 601.2 519.3 Operating expenses Employee compensation
Slide 31: Alternative performance measures
30 Alternative performance measures Reconciliation of adjusted financial measures Note: Reconciliation to be used in conjunction with slide 31. Footnotes included on slide 32. 3 months ended 31 Mar 2020 31 Dec 2019 31 Mar 2019 Reconciliation of revenue to adjusted revenue Revenue 554.9 601.2 519.3 M
Slide 32: Alternative performance measures (cont'd)
31 Alternative performance measures (cont’d) Reconciliation of adjusted financial measures Note: Reconciliation to be used in conjunction with slide 30. Footnotes included on slide 32. 3 months ended 31 Mar 2020 31 Dec 2019 31 Mar 2019 Reconciliation of net income (loss) attributable to JHG to adjus
Slide 33: Footnotes to reconciliation of adjusted financial measures
32 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 JHG contracts with third-party intermediaries to distribute
Slide 34: Performance fees
33 1Q20 (US$m) 4Q19 (US$m) 1Q19 (US$m) AUM generating 1Q20 pfees (US$bn) # of funds generating 1Q20 pfees Frequency Timing SICAVs 0.2 0.2 – 3.0 2 23 annually; 2 quarterly 23 at June; 2 on quarters Offshore Absolute Return 4.0 0.2 – 0.7 2 Quarterly / Annually Various Segregated Mandates1 11.0 19.3 3.
Slide 35: Mutual funds with performance fees
34 Mutual funds with performance fees¹ AUM 31 Mar 2020 US$m Benchmark Base fee Performance fee2 Performance cap/(floor) vs benchmark 1Q20 P&L impact US$’000 Forty Fund and Portfolio 13,128 Russell 1000® Growth Index 0.64% ± 15 bps ± 8.50% 1,205 Research Fund 12,690 Russell 1000® Growth Index 0.64% ±
Slide 36: Long-term incentive compensation
35 Long-term incentive compensation Estimated future long-term incentive compensation amortisation Note: 2017 and 2018 annual grants generally vest over three and four years. 2019 and 2020 annual grants generally vest over three years. Assumed no forfeitures in future periods. Assumed no change in f
Slide 37: Contacts
36 Contacts Investor enquiries Jim Kurtz Investor Relations Manager +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 United Kingdom: FTI Consulting Tom Blackwell
Slide 38: Forward looking information
37 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 concerning potential future events involving Janus Henderson Group plc that could diffe
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