Janus Henderson Group Plc · NYSE:JHG
Janus Henderson — Q3 2017 Earnings Presentation
33 slides from Janus Henderson's earnings presentation, Nov 9, 2017
Slide 1: 3Q17 results: Business update
Dick Weil Co-Chief Executive Officer 3Q17 results Business update
Slide 2: Executive summary
Executive summary Strong investment performance across time periods Positive net flows of US$0.7bn Announced expansion of long-term strategic partnership with BNP Paribas, supporting global operating model Integration efforts ahead of expectations; increased cost synergy target to at least US$125m A
Slide 3: Investment performance strong across time periods and capabilities
Capability 1 year 3 years 5 years Equities Fixed Income Quantitative Equities Multi-Asset Alternatives Total Investment performance Investment performance strong across time periods and capabilities % of AUM outperforming benchmark (31 Dec 2016 to 30 Sep 2017) % of AUM outperforming benchmark (as at
Slide 4: Total flows
Total flows Total flows 1Q16 to 3Q17 (US$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 rates
Slide 5: 3Q17 flows by capability
3Q17 flows by capability 27% 6% 13% 38% 22% (25%) (10%) (16%) (29%) (21%) 3Q17 flows by capability (US$bn) Annualised gross sales¹ Annualised gross redemptions¹ 1 Annualised gross sales and redemption rates calculated as a percentage of beginning period AUM Redemptions Sales Net sales / (redemptions
Slide 6: 3Q17 results: Financial update
Roger Thompson Chief Financial Officer 3Q17 results Financial update
Slide 7: 3Q17 statement of income
US$m 3 months ended 30 Sep 2017 US GAAP Adjustments Adjusted Revenue Management fees 477.7 Performance fees (2.1) Shareowner servicing fees 30.2 Other revenue 31.6 Total revenue 537.4 (82.8) 454.6 Operating expenses Employee compensation and benefits 176.7 Long-term incentive plans 50.9 Distribution
Slide 8: Financial highlights
Financial highlights 3Q17 2Q17 Change 3Q17 vs 2Q17 3Q16 Change 3Q17 vs 3Q16 Average AUM 352.7bn 339.9bn 4% 326.1bn 8% Total revenue 537.4m 566.1m (5%) 503.9m 7% Operating income 138.2m 88.5m 56% 129.3m 7% Operating margin 25.7% 15.6% 10.1ppt 25.7% – US GAAP diluted EPS 0.49 0.29 69% 0.46 7% Adjusted
Slide 9: Revenue and operating expenses
Revenue and operating expenses 3Q17 adjusted operating results reflect seasonality of performance fees Adjusted revenue US$m 3Q17 2Q17 Change Total adjusted revenue 454.6 482.2 (6%) Management fees 477.7 454.3 5% Performance fees (2.1) 52.3 nm Shareowner servicing fees 30.2 29.5 2% Other revenue 31.
Slide 10: 3Q17 results: Merger update
Andrew Formica Co-Chief Executive Officer 3Q17 results Merger update
Slide 11: Integration progress
Integration progress Delivering synergies through partnership and ongoing integration efforts Integration efforts tracking ahead of expectations Continue to deliver on cost synergies US$72m of annual run rate pre-tax net cost synergies completed as at 30 Sep 2017 Expect to complete at least US$90m b
Slide 12: Revenue growth opportunities
Revenue growth opportunities Positive, early signs of revenue synergies Dai-ichi strategic relationship Dai-ichi has exceeded US$500m incremental commitment Recent investments by Dai-ichi in 3Q and 4Q: c.US$155m into European Secured Loans US$100m into Absolute Return Income Ongoing efforts to ident
Slide 13: 3Q17 summary
3Q17 summary Strong long-term investment performance is providing a solid foundation for future growth Client response to the merger is encouraging, underpinning deal rationale Positive organic growth in 3Q17 Integration efforts continue to track ahead of expectations Increased cost synergy target t
Slide 14: Q&A
Q&A Janus Henderson
Slide 15: Assets under management as at Sep 2017
Assets under management as at 30 Sep 2017 By client type By capability By client location US$182.3bn US$79.4bn US$49.0bn US$30.2bn US$19.6bn US$60.5bn US$156.7bn US$143.3bn US$186.6bn US$116.8bn US$57.1bn AUM: US$360.5bn 51% 22% 14% 8% 5% Equities Fixed Income Quantitative Equities Multi-Asset Alter
Slide 16: Flows: Equities and Fixed Income
Flows: Equities and Fixed Income Equities (US$bn) Fixed Income (US$bn) 22% 26% 22% 26% (25%) (26%) (28%) (23%) 26% 38% 31% 28% (24%) (36%) (30%) (33%) Redemptions Sales Net sales / (redemptions) Note: Data for periods prior to and including 2Q17 presents pro forma flows of JHG as if the merger had o
Slide 17: Flows: Quantitative Equities, Multi-Asset and Alternatives
Flows: Quantitative Equities, Multi-Asset and Alternatives Quantitative Equities (US$bn) Multi-Asset (US$bn) Alternatives (US$bn) 10% 15% 12% 5% 8% 26% 6% (45%) (45%) (35%) (21%) (22%) (20%) (21%) (19%) (22%) (58%) (22%) Note: Data for periods prior to and including 2Q17 presents pro forma flows of
Slide 18: 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 3Q17 (US$bn) (1.2) Note: Data for periods prior to and including 2Q17 presents pro forma flows of JHG as if the merger had occurred at the beginning of the period shown 0.7 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17
Slide 19: AUM and flows by capability
AUM and flows by capability Note: Data for periods prior to and including 2Q17 presents pro forma AUM and flows of JHG as if the merger had occurred at the beginning of the period shown. Updated AUM and flow data for periods prior to and including 2Q17 to ensure tables cast correctly. All data in US
Slide 20: Investment performance
Investment performance Capability 4Q16 1Q17 2Q17 3Q17 1yr 3yr 5 yr 1yr 3yr 5 yr 1yr 3yr 5 yr 1yr 3yr 5 yr Equities 30% 57% 74% 38% 64% 73% 68% 77% 84% 61% 73% 82% Fixed Income 90% 93% 96% 92% 90% 93% 93% 92% 91% 92% 91% 97% Quantitative Equities 7% 5% 40% 0% 12% 92% 6% 48% 91% 85% 61% 87% Multi-Asse
Slide 21: Mutual fund investment performance
Mutual fund investment performance Capability 4Q16 1Q17 2Q17 3Q17 1yr 3yr 5 yr 1yr 3yr 5 yr 1yr 3yr 5 yr 1yr 3yr 5 yr Equities 49% 80% 75% 46% 87% 71% 53% 87% 90% 56% 71% 88% Fixed Income 36% 42% 96% 38% 44% 98% 38% 41% 98% 81% 49% 98% Quantitative Equities 30% 79% 86% 3% 80% 100% 3% 58% 100% 7% 97%
Slide 22: US GAAP statement of income
US$m, except per share data or as noted 3 months ended 30 Sep 2017 30 Jun 2017 30 Sep 2016 Revenue Management fees 477.7 296.0 217.7 Performance fees (2.1) 57.7 9.3 Shareowner servicing fees 30.2 9.9 – Other revenue 31.6 21.2 18.0 Total revenue 537.4 384.8 245.0 Operating expenses Employee compensat
Slide 23: US GAAP statement of income comparison
US$m, except per share data 3 months ended 30 Sep 2017 30 Jun 2017 30 Sep 2016 Revenue Management fees 477.7 454.3 444.4 Performance fees (2.1) 52.3 (2.5) Shareowner servicing fees 30.2 29.5 29.1 Other revenue 31.6 30.0 32.9 Total revenue 537.4 566.1 503.9 Operating expenses Employee compensation an
Slide 24: Reconciliation of adjusted financial measures
3 months ended US$m, except per share data 30 Sep 2017 30 Jun 2017 30 Sep 2016 Reconciliation of revenue to adjusted revenue Revenue 537.4 566.1 503.9 Distribution expenses¹ (82.8) (83.9) (84.7) Adjusted revenue 454.6 482.2 419.2 Reconciliation of operating income to adjusted operating income Operat
Slide 25: Reconciliation of adjusted financial measures (cont'd)
3 months ended US$m, except per share data 30 Sep 2017 30 Jun 2017 30 Sep 2016 Reconciliation of net income to adjusted net income, attributable to JHG Net income attributable to JHG 99.5 59.0 92.4 Employee compensation and benefits² 15.3 25.4 0.8 Long-term incentive plans² 2.8 13.2 – Marketing² 0.7
Slide 26: Footnotes to reconciliation of adjusted financial measures
Alternative performance measures (cont’d) Footnotes to reconciliation of adjusted financial measures 1 Distribution expenses are paid to financial intermediaries for the distribution of JHG’s investment products. JHG management believes that the deduction of third-party distribution, service and adv
Slide 27: Performance fee seasonality
3.0 Performance fee seasonality Non-US mutual funds 1 Underlying provisions vary on an account by account basis and may impact measurement periods 2 Other includes Offshore Absolute Return, Investment Trusts and Managed CDOs Pay-out timing of AUM subject to performance fees (AUM in US$bn as at 30 Se
Slide 28: US mutual funds with performance fees
US mutual funds with performance fees 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 info
Slide 29: Adjusted operating expenses – 3Q17 versus 2Q17
Adjusted operating expenses – 3Q17 versus 2Q17 (US$m) Operating expenses US$m 3Q17 US GAAP Adj. 3Q17 adjusted 2Q17 adjusted Change 3Q17 adjusted vs 2Q17 adjusted Notes to adjustments Employee compensation and benefits 176.7 (15.3) 161.4 160.3 1% Primarily severance and contractor fees (integration);
Slide 30: Balance sheet
406 Balance sheet At 30 Sep 2017, cash and investment securities totalled US$1,414m compared to outstanding debt of US$406m Cash and investment securities increased 5% as strong cash flow generation was offset by dividend payment and convertible debt repayment Debt declined 8% due to US$33m early co
Slide 31: 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 32: Janus Henderson Investors; 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 33: Janus Henderson Investors; Forward looking information
Janus Henderson Investors 201 Bishopsgate, London EC2M 3AE Tol: 020 7818 1818 Fax: 020 7818 1819 Past performance is no guarantee of future results, Investing involves risk, including the possible oss of principal and fluctuation of valu. Forward looking information ‘This presentation includes state
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