Slide 1: 2Q18 results presentation: Business and financial update
Roger Thompson Chief Financial Officer 2Q18 results presentation Business and financial update
Slide 2: 2Q18 highlights
2Q18 highlights Integration continues to progress ahead of expectations Good investment performance AUM of US$370.1bn with positive markets offset by net outflows and FX losses Adjusted diluted EPS of US$0.74 Declared US$0.36 per share dividend and Board authorised on-market share buyback up to US$1
Slide 3: Investment performance
97% Capability 1 year 3 years 5 years Equities Fixed Income Quantitative Equities Multi-Asset Alternatives Total Investment performance Investment performance held up well against a volatile market backdrop % of AUM outperforming benchmark (30 Jun 2017 to 30 Jun 2018) % of AUM outperforming benchmar
Slide 4: Total flows
Total flows Total flows 2Q16 to 2Q18 (US$bn) 23% 20% 26% 24% 24% (25%) (24%) (28%) (33%) (26%) 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 calculat
Slide 5: 2Q18 flows by capability
2Q18 flows by capability 25% 3% 22% 30% 18% (28%) (10%) (16%) (44%) (20%) 2Q18 flows by capability (US$bn) Annualised gross sales¹ Annualised gross redemptions¹ 1 Annualised gross sales and redemption rates calculated as a percentage of beginning period AUM. Redemptions Sales Net sales / (redemption
Slide 6: Statement of income
Statement of income Note: See adjusted financial measures reconciliation on slide 32 for additional information. US GAAP and adjusted US$m 3 months ended 30 Jun 2018 US GAAP Adjustments Adjusted Revenue Management fees 493.5 Performance fees 13.5 Shareowner servicing fees 31.8 Other revenue 53.6 Tot
Slide 7: Financial highlights
US$m unless otherwise stated 2Q18 1Q18 Change 2Q18 vs 1Q18 2Q17 Change 2Q18 vs 2Q17 Average AUM 369.1 377.4bn (2%) 339.9bn 9% Total revenue 592.4m 587.7m 1% 593.8m – Operating income 175.3m 176.2m (1%) 88.5m 98% Operating margin 29.6% 30.0% (0.4ppt) 14.9% 15ppt US GAAP diluted EPS 0.70 0.82 (15%) 0.
Slide 8: 2Q18 adjusted revenue drivers
2Q18 adjusted revenue drivers 2% decrease in management fees driven by lower average AUM and FX Performance fees increased from 1Q18 driven by seasonality, though reduced from the strong level reported in 2Q17 Revenue 2Q18 adjusted revenue increased driven by performance fees US$m, except margin dat
Slide 9: Performance fees
2.3 Performance fees US$73bn non-US mutual fund AUM eligible to earn performance fees across all periods 1 Other includes Offshore Absolute Return, Investment Trusts and Managed CDOs. Pay-out timing of AUM subject to performance fees (Non-US mutual fund AUM in US$bn as at 30 Jun 2018) SICAVs Segrega
Slide 10: Adjusted operating expenses 2Q18 versus 1Q18
Adjusted operating expenses – 2Q18 versus 1Q18 (US$m) Operating expenses US$m 2Q18 US GAAP Adjustments 2Q18 adjusted 1Q18 adjusted Change 2Q18 adjusted vs 1Q18 adjusted Employee compensation and benefits 151.0 (6.0) 145.0 143.8 1% Long-term incentive plans 55.2 (0.7) 54.5 39.9 37% Total compensation
Slide 11: Adjusted non-staff operating expense drivers
Adjusted non-staff operating expense drivers Non-staff operating expenses expected to increase by 12% in 2018, excluding MiFID II and one-off legal settlement Anticipated increase in non-staff operating expense reflects Return to normalised level of spend post-merger Regulatory spend and investments
Slide 12: Compensation expense drivers
Compensation expense drivers Cost synergy realisation Adjusted total compensation expense and ratio¹ (US$m unless otherwise stated) Adjusted total compensation expense drivers US$107m run rate pre-tax net cost synergies realised, largely through compensation expenses Remain on track to realise at le
Slide 13: Profitability
Profitability Financial discipline to support sustainable growth Pro forma adjusted operating income and margin (US$m unless otherwise stated) Pro forma adjusted net income and diluted EPS (US$m, except per share data) Note: Data for 2Q17 presents the results of JHG as if the merger had occurred at
Slide 14: Balance sheet
1 Includes seed investments of US$600.5m (including investment securities of consolidated variable interest entities of US$432.2m), investments related to deferred compensation plans of US$106.0m and other investments of US$13.3m as at 31 March 2018; includes seed investments of US$519.8m (including
Slide 15: Balance sheet: strong liquidity position
Balance sheet Strong liquidity position + At30 Jun 2018, cash and investment securities totalled US$1,368m compared to outstanding debt of US$330m + Cash and cash equivalents increased 6%, with cash flow generation partially offset by dividend payments + 2018 Convertible Senior Notes, with a maturit
Slide 16: Q&A
QsuVHS ‘ADCIIMONy Q&A Janus Henderson
Slide 17: Assets under management as at Jun 2018
Assets under management as at 30 Jun 2018 By client type By capability By client location US$193.3bn US$76.5bn US$50.1bn US$32.6bn US$17.6bn US$63.2bn US$162.6bn US$144.3bn US$194.2bn US$116.6bn US$59.3bn AUM: US$370.1bn Note: Latin America AUM is classified under EMEA having previously been categor
Slide 18: Investment management capabilities: diversified product range
Investment management capabilities Diversified product range Equities US$193.3bn AUM 30 Jun 2018 US$370.1bn Fixed Income US$76.5bn Multi-Asset US$32.6bn Self-directed Intermediary Intermediary Institutional Institutional Institutional Institutional Quantitative Equities US$50.1bn Self-directed Self-
Slide 19: Investment management capabilities: balanced range of offerings
Investment management capabilities Balanced range of offerings AUM by investment capability as at 30 Jun 2018 US$193.3bn US$76.5bn US$50.1bn US$32.6bn US$17.6bn 100% Unconstrained 0% Equities Fixed Income Quantitative Equities Multi-Asset Alternatives 1 Other primarily includes Absolute Return Bond
Slide 20: Largest pooled funds by capability
Largest pooled funds by capability Capability Fund Product Strategy AUM 30 Jun 2018 Equity JnsHnd Enterprise US Mutual Fund Mid Cap Growth US$17.9bn JnsHnd Research US Mutual Fund US Research Growth Equity US$13.7bn JnsHnd Forty US Mutual Fund Concentrated Growth US$12.5bn JnsHnd Triton US Mutual Fu
Slide 21: Flows: Equities and Fixed Income
Flows: Equities and Fixed Income Equities (US$bn) Fixed Income (US$bn) 26% (23%) 28% (33%) Redemptions Sales Net sales / (redemptions) Note: Data for 2Q17 presents pro forma flows of JHG as if the merger had occurred at the beginning of the period shown. 1 Annualised gross sales and redemption rates
Slide 22: Flows: Quantitative Equities, Multi-Asset and Alternatives
Flows: Quantitative Equities, Multi-Asset and Alternatives Quantitative Equities (US$bn) Multi-Asset (US$bn) Alternatives (US$bn) 6% (35%) (21%) (22%) Note: Data for 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
Slide 23: 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 2Q16 to 2Q18 (US$bn) Note: Data for periods prior to and including 2Q17 presents pro forma flows of JHG as if the merger had occurred at the beginning of the period shown. 0.7 (2.9) (2.7) (2.7) 2Q16 3Q16 4Q16 1
Slide 24: AUM and flows by capability
AUM and flows by capability Note: Data for 2Q17 presents pro forma AUM and flows of JHG as if the merger had occurred at the beginning of the period shown. All data in US$bn Equities Fixed Income Quantitative Equities Multi-Asset Alternatives Total AUM 31 Mar 2017 162.3 76.3 46.2 28.6 17.4 330.8 Sal
Slide 25: Investment performance
Investment performance Capability 2Q17 3Q17 4Q17 1Q18 2Q18 1yr 3yr 5yr 1yr 3yr 5yr 1yr 3yr 5yr 1yr 3yr 5yr 1yr 3yr 5yr Equities 68% 77% 84% 61% 73% 82% 64% 60% 67% 68% 59% 76% 63% 58% 73% Fixed Income 93% 92% 91% 92% 91% 97% 93% 95% 98% 96% 96% 97% 87% 93% 98% Quantitative Equities 6% 48% 91% 85% 61
Slide 26: Mutual fund investment performance
Mutual fund investment performance Capability 2Q17 3Q17 4Q17 1Q18 2Q18 1yr 3yr 5yr 1yr 3yr 5yr 1yr 3yr 5yr 1yr 3yr 5yr 1yr 3yr 5yr Equities 53% 87% 90% 56% 71% 88% 63% 59% 87% 64% 62% 82% 56% 61% 75% Fixed Income 38% 41% 98% 81% 49% 98% 43% 36% 87% 48% 32% 62% 42% 38% 42% Quantitative Equities 3% 58
Slide 27: Mutual fund investment performance (cont'd)
Mutual fund investment performance (cont’d) Group % of mutual fund AUM in top 2 Morningstar quartiles Equities 2nd quartile 1st quartile 60 61 61 63 54 57 66 56 59 74 68 85 82 76 90 56 56 63 64 53 61 71 59 62 87 75 88 87 82 90 1 year 3 year 5 year 1 year 3 year 5 year Note: Full performance disclosu
Slide 28: Mutual fund investment performance (cont'd): Fixed Income, Quantitative Equities
Mutual fund investment performance (cont’d) Fixed Income % of mutual fund AUM in top 2 Morningstar quartiles Quantitative Equities 42 81 43 48 38 38 49 36 32 41 42 98 87 62 98 58 7 24 57 3 54 97 64 55 58 53 48 50 51 100 1 year 3 year 5 year 1 year 3 year 5 year Note: Full performance disclosures det
Slide 29: Mutual fund investment performance (cont'd): Multi-Asset, Alternatives
Mutual fund investment performance (cont’d) Multi-Asset % of mutual fund AUM in top 2 Morningstar quartiles Alternatives 2nd quartile 1st quartile 92 83 82 84 79 83 81 83 82 80 83 83 84 83 97 92 38 59 53 63 25 25 25 53 24 25 32 32 53 69 1 year 3 year 5 year 1 year 3 year 5 year Note: Full performanc
Slide 30: US GAAP statement of income
US$m, except per share data or as noted 3 months ended 30 Jun 2018 31 Mar 2018 30 Jun 2017 30 Jun 2017 Pro forma Revenue Management fees 493.5 502.9 300.0 458.3 Performance fees 13.5 (3.9) 57.7 52.3 Shareowner servicing fees 31.8 31.5 9.9 29.5 Other revenue 53.6 57.2 29.0 53.7 Total revenue 592.4 58
Slide 31: Pro forma adjusted: statement of income
Pro forma adjusted: statement of income US$m, except per share data 3 months ended 30 Jun 2018 31 Mar 2018 30 Jun 2017 Revenue Management fees 493.5 502.9 458.3 Performance fees 13.5 (3.9) 52.3 Shareowner servicing fees 31.8 31.5 29.5 Other revenue 53.6 57.2 53.7 Distribution expenses (114.7) (117.3
Slide 32: Reconciliation of adjusted financial measures
3 months ended US$m, except per share data 30 Jun 2018 31 Mar 2018 30 Jun 2017 Reconciliation of revenue to adjusted revenue Revenue 592.4 587.7 593.8 Distribution expenses¹ (114.7) (117.3) (111.6) Adjusted revenue 477.7 470.4 482.2 Reconciliation of operating income to adjusted operating income Ope
Slide 33: Reconciliation of adjusted financial measures (cont'd)
3 months ended US$m, except per share data 30 Jun 2018 31 Mar 2018 30 Jun 2017 Reconciliation of net income to adjusted net income, attributable to JHG Net income attributable to JHG 140.6 165.2 59.0 Employee compensation and benefits² 6.0 2.9 25.4 Long-term incentive plans² 0.7 0.1 13.2 Investment
Slide 34: 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 35: Reconciliation: revenue recognition standard
US$m 3 months ended 30 Jun 2017 previously reported Adjustment 30 Jun 2017 updated Revenue Management fees 454.3 4.0 458.3 Performance fees 52.3 – 52.3 Shareowner servicing fees 29.5 – 29.5 Other revenue 30.0 23.7 53.7 Total revenue 566.1 27.7 593.8 Distribution expenses (83.9) (27.7) (111.6) Total
Slide 36: Performance fees
2Q18 (US$m) 1Q18 (US$m) 2Q17 (US$m) AUM generating 2Q18 pfees (US$bn) # of funds generating 2Q18 pfees Frequency Timing SICAVs¹ 4.2 1.0 29.6 7.0 12 23 annually; 2 quarterly 23 at June; 2 on quarters Offshore Absolute Return 1.5 0.4 2.0 0.1 2 Quarterly / Annually Various Segregated Mandates² 4.4 2.5
Slide 37: US mutual funds with performance fees
US mutual funds with performance fees Mutual funds with performance fees¹ AUM 30 Jun 2018 US$m Benchmark Base fee Performance fee2 Performance cap/(floor) vs benchmark 2Q18 P&L impact US$’000 Research Fund³ 13,723 Russell 1000® Growth Index 0.64% ± 15 bps ± 5.00% (3,669) Forty Fund³ and Portfolio 13
Slide 38: Long-term incentive compensation
Long-term incentive compensation Estimated future long-term incentive compensation amortisation US$m Amount remaining to expense 2018 2019 2020 2021 2015 annual grant 5 5 – – – 2016 annual grant 28 20 7 1 – 2017 annual grant 58 36 17 5 – 2018 annual grant¹ 159 75 53 24 6 Other² 122 49 34 23 16 Total
Slide 39: 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 40: 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 41: Forward looking information
Janus Henderson Investors 201 Bishopsgate, London EC2M SAE Tet 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 state