Janus Henderson Group Plc · NYSE:JHG
Janus Henderson — Q2 2022 Earnings Presentation
40 slides from Janus Henderson's earnings presentation, Jul 28, 2022
Slide 1: Second Quarter 2022 Results
Thursday 28 July 2022 SECOND QUARTER 2022 RESULTS Ali Dibadj Chief Executive Officer Roger Thompson Chief Financial Officer
Slide 2: CEO First Impressions
2 CEO FIRST IMPRESSIONS ▪ Very talented people who want to win ▪ Research, security selection, portfolio management powerhouse ▪ Strong client focus and loyal clients ▪ Global, forward - thinking corporate functions and infrastructure ▪ Strong financial position Believe in Janus Henderson There is a
Slide 3: Key metrics – Q2 2022 vs Q1 2022
3 1 Represents percentage of AUM outperforming the relevant benchmark. Full performance disclosures detailed in the appendix on s li de 26. 2 Net flows across all time periods exclude Intech, the sale of which was completed 31 March 2022. 3 See adjusted financial measures reconciliation on slides 32
Slide 4: Investment Performance: Long-term performance remains solid
4 Note: Full performance disclosures detailed in the appendix on slides 26 and 27. The top two Morningstar quartiles represent funds in the top half of their category based on total return. The top quartile r ep resents those in the top 25%. Refer to slide 27 for the percent of funds in the top 2 qu
Slide 5: Quarterly Flows
5 17.5 14.5 22.9 20.5 18.2 15.9 19.2 17.7 16.4 (21.8) (17.3) (20.6) (21.7) (19.4) (16.7) (20.2) (23.9) (24.2) (4.3) (2.8) 2.3 (1.2) (1.2) (0.8) (1.0) (6.2) (7.8) Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q2 2020 to Q2 2022 total flows (US$bn) Redemptions Sales Net sales
Slide 6: Flows by Client Type
6 4.0 2.4 4.2 3.1 6.5 (4.7) (3.9) (4.3) (6.8) (7.7) (0.6) (1.5) (0.1) (3.6) (1.2) Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 13.5 12.8 14.0 14.0 9.5 (13.3) (11.6) (14.1) (15.6) (15.2) 0.1 1.2 (0.1) (1.7) (5.7) Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 0.7 0.7 1.0 0.6 0.4 (1.4) (1.2) (1.7) (1.5) (1.3) (0.
Slide 7: Flows by Capability
7 5.5 4.9 1.6 4.4 (11.3) (8.2) (2.5) (2.2) (5.8) (3.3) (0.9) 2.2 Equities Fixed Income Multi-Asset Alternatives Annualised gross sales¹ Redemptions Sales Net sales / (redemptions) 10% 26% 12% 169% Annualised gross redemptions¹ (20%) (44%) (18%) (85%) Q2 2022 flows by capability (US$bn) 1 Annualised
Slide 8: US GAAP Financial Results
8 US GAAP FINANCIAL RESULTS (US$m, except per share data or as noted) Q2 2022 Q1 2022 Change Q2 2022 vs Q1 2022 Q2 2021 Change Q2 2022 vs Q2 2021 Revenue Management fees 453.6 514.0 (12%) 544.1 (17%) Performance fees (3.4) (8.4) 60% 77.4 nm Shareowner servicing fees 56.3 62.4 (10%) 64.0 (12%) Other
Slide 9: Adjusted Financial Results
9 ADJUSTED FINANCIAL RESULTS (US$m, except per share data or as noted) Q2 2022 Q1 2022 Change Q2 2022 vs Q1 2022 Q2 2021 Change Q2 2022 vs Q2 2021 Revenue Management fees 402.7 457.0 (12%) 494.5 (19%) Performance fees (3.4) (8.4) 60% 77.4 nm Shareowner servicing fees 9.4 10.2 (8%) 10.9 (14%) Other r
Slide 10: Q2 2022 Adjusted Financial Highlights
10 Q2 2022 ADJUSTED FINANCIAL HIGHLIGHTS Adjusted Revenues ▪ Decline from Q1 2022 management fees driven primarily by lower average AUM ▪ At current investment performance, estimated aggregate performance fee range for full - year 2022 is US$(35)m to US$(45)m ▪ Decrease in average net management fee
Slide 11: Capital Resources
11 CAPITAL RESOURCES Strong liquidity position ▪ Cash and investment securities 1 totalled US$1,241m compared to outstanding debt of US$309m ▪ Decrease in investments primarily due to lower global markets ▪ Board declared a dividend of US$0.39 per share to be paid on 24 August to shareholders on rec
Slide 12: Initial Observations
12 INITIAL OBSERVATIONS ▪ Brand and investment performance remain good…both could be better, and we are not garnering our fair share of clients ▪ The merger created a global company…AUM and TSR levels are roughly back to 2017 levels, while peers have outpaced us ▪ Good culture/people foundation exis
Slide 13: Early Strategic Framework Is Emerging
13 EARLY STRATEGIC FRAMEWORK IS EMERGING Protect & Grow o ur core businesses Amplify strengths not fully leveraged Diversify where we have the right to win
Slide 14: Early Strategic Framework: Protect & Grow
14 EARLY STRATEGIC FRAMEWORK IS EMERGING ▪ Janus Henderson US mutual fund sales are <1% of industry gross sales… Estimated 2021 Active U S Mutual Fund Industry Gross Sales 2021e Total Gross Sales ~US $3.5tn US$25bn Largest Competitor US$3bn <1% Morningstar Percentile 3 - yr 5 - yr 67 59 Morningstar
Slide 15: Early Strategic Framework: Amplify Strengths
15 EARLY STRATEGIC FRAMEWORK IS EMERGING ▪ Select examples include: ▪ AAA and BBB CLO ETFs ▪ Biotech hedge fund ▪ Portfolio Construction Strategy ▪ Extended Multi - Strategy hedge fund and Global Sustainable Equity globally Our research, portfolio management, and client service strengths can be ampl
Slide 16: Early Strategic Framework: Diversify
16 EARLY STRATEGIC FRAMEWORK IS EMERGING We have significant white spaces in asset management where we can have the right to win Investment Teams / Capabilities Equities Fixed Income Alternatives Allocation Distribution Channels, Regions, and Products Retail Product Vehicle (Wrapper) Institutional R
Slide 17: Wrap Up
17 WRAP UP ▪ We are starting from a good foundation, but we expect to enter a transition period ▪ We are in the process of selectively upgrading our leadership team ▪ Strategic investment will be made in the business ▪ We will improve how we work and collaboration across the Company ▪ We are develop
Slide 18: Q&A
Q&A Janus Henderson
Slide 19: Appendix
APPENDIX
Slide 20: Assets Under Management
20 ASSETS UNDER MANAGEMENT AUM as at 30 Jun 2022: US$299.7bn 59% 22% 15% 4% Equities Fixed Income Multi-Asset Alternatives 55% 23% 22% Intermediary Institutional Self-Directed 57% 32% 11% North America EMEA & LatAm Asia Pacific By client type By capability By client location US$177.0bn US$64.5bn US$
Slide 21: Investment Management Capabilities
21 INVESTMENT MANAGEMENT CAPABILITIES Diversified product range Equities US$177.0bn AUM 30 Jun 22 US$299.7bn Fixed Income US$64.5bn Multi - Asset US$46.5bn Self - Directed Intermediary Intermediary Institutional Institutional Alternatives US$11.7bn Intermediary Equities ▪ Wide range of equity strate
Slide 22: Largest Strategies by Capability
22 Capability Strategy AUM (US$bn) 30 Jun 22 US Mid Cap Growth 22.5 US Concentrated Growth 20.9 US Research Growth Equity 15.5 Global Life Sciences 11.7 US SMID Cap Growth 8.1 Absolute Return Income 8.8 Global Strategic Fixed Income 8.2 Australian Fixed Income 6.3 Sterling Buy & Maintain Credit 5.3
Slide 23: Quarterly Flows by Capability: Equities and Fixed Income
23 8.6 7.5 8.1 8.5 5.5 (10.5) (10.1) (11.3) (12.3) (11.3) (1.9) (2.6) (3.2) (3.8) (5.8) Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Equities (US$bn) 1 Annualised gross sales and redemption rates calculated as a percentage of beginning period AUM. QUARTERLY FLOWS BY CAPABILITY Equities and Fixed Income 5
Slide 24: Quarterly Flows by Capability: Multi-Asset and Alternatives
24 2.4 2.6 4.3 2.3 1.6 (1.9) (1.8) (2.2) (4.5) (2.5) 0.5 0.8 2.1 (2.2) (0.9) Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Multi - Asset (US$bn) 1 Annualised gross sales and redemption rates calculated as a percentage of beginning period AUM. QUARTERLY FLOWS BY CAPABILITY Multi - Asset and Alternatives 1.
Slide 25: Net Flows by Capability
25 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Equities Fixed Income Multi-Asset Alternatives Q2 2020 to Q2 2022 total net flows by capability (US$bn) NET FLOWS BY CAPABILITY ¹ (4.3) (2.8) 2.3 (1.2) (1.2) (0.8) (1.0) (6.2) (7.8) 1 Net flows across all time periods exclude
Slide 26: Investment Performance: Outperformance vs Benchmark
26 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 retu rn strategies, (2) fu
Slide 27: Investment Performance: Morningstar Quartiles
27 INVESTMENT PERFORMANCE Note: Includes Janus Investment Fund, Janus Aspen Series and Clayton Street Trust (US Trusts), Janus Henderson Capital Funds (Du blin based), Dublin and UK OEIC and Investment Trusts, Luxembourg SICAVs and Australian Managed Investment Schemes. The top two Morningstar quart
Slide 28: Investment Performance: Top Morningstar Quartiles (continued)
28 INVESTMENT PERFORMANCE % of mutual fund AUM in top 2 Morningstar quartiles (continued) Group 17 24 38 22 47 44 45 37 46 45 46 51 49 60 56 60 30 38 23 41 13 17 19 27 14 19 29 26 25 26 33 30 47 63 61 63 60 61 63 64 60 64 75 76 73 86 89 90 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2021 Q4 2021 Q1 2022 Q2 2
Slide 29: Investment Performance: Fixed Income and Equities
29 INVESTMENT PERFORMANCE % of mutual fund AUM in top 2 Morningstar quartiles (continued) 2 nd quartile 1 st quartile 25 21 21 14 70 61 40 35 56 55 60 57 48 46 29 42 59 43 25 32 7 19 45 34 17 21 24 24 21 23 54 42 84 64 47 45 77 81 85 68 73 75 83 81 69 70 83 84 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2021
Slide 30: Investment Performance: Alternatives and Multi-Asset
30 14 2 6 16 24 8 25 7 65 64 61 56 66 71 71 89 13 48 56 46 46 26 4 88 9 36 15 15 32 29 29 11 27 50 62 62 70 34 30 95 74 100 75 70 98 100 100 100 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2021 Q4 2021 Q1 2022 Q2 2022 INVESTMENT PERFORMANCE % of
Slide 31: US GAAP: Statement of Income
31 US GAAP: STATEMENT OF INCOME (US$m, except per share data or as noted) 30 Jun 22 31 Mar 22 30 Jun 21 Revenue Management fees 453.6 514.0 544.1 Performance fees (3.4) (8.4) 77.4 Shareowner servicing fees 56.3 62.4 64.0 Other revenue 49.0 52.0 52.9 Total revenue 555.5 620.0 738.4 Operating expenses
Slide 32: Alternative Performance Measures: Reconciliation
32 ALTERNATIVE PERFORMANCE MEASURES Reconciliation of adjusted financial measures Note: Reconciliation to be used in conjunction with slide 33. Footnotes included on slide 34. (US$m, except per share data) 30 Jun 22 31 Mar 22 30 Jun 21 Reconciliation of revenue to adjusted revenue Revenue 555.5 620.
Slide 33: Alternative Performance Measures: Reconciliation (continued)
33 ALTERNATIVE PERFORMANCE MEASURES Reconciliation of adjusted financial measures (continued) (US$m, except per share data) 30 Jun 22 31 Mar 22 30 Jun 21 Reconciliation of net income attributable to JHG to adjusted net income attributable to JHG Net income attributable to JHG 93.9 78.7 137.3 Long-te
Slide 34: Alternative Performance Measures: Footnotes
34 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 i
Slide 35: Capital Management
35 CAPITAL MANAGEMENT Note: JHG purchases shares on market for the annual share grants associated with variable compensation, which is not included i n 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 fo
Slide 36: Performance Fees
36 PERFORMANCE FEES Note: Performance fees include prior quarter accrual true - ups. 1 AUM data present US mutual fund AUM subject to performance fees as at 30 June 2022. Janus Investment Funds and Janus Aspen Se rie s Portfolios are counted as distinct and separate funds. Q2 2022 (US$m) Q1 2022 (US
Slide 37: US Mutual Funds with Performance Fees
37 US MUTUAL FUNDS WITH PERFORMANCE FEES Note: 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 the funds’ Statements of Additi
Slide 38: Long-Term Incentive Compensation
38 LONG - TERM INCENTIVE COMPENSATION Note: Annual grants generally vest over three and four years. Assumed no forfeitures in future periods. Assumed no change in fut ure values related to market or currency, which would impact expense related to cash - based awards (MFSAs, DIP and DEP funds) and so
Slide 39: Contacts
39 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 enquirie
Slide 40: Contact us / 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 flu ctu ation of value. Forward - looking information This presentation includes statements conce
Janus Henderson Group — Q2 2022 Earnings Presentation on 6ix