Janus Henderson Group Plc · NYSE:JHG
Janus Henderson — Q3 2019 Earnings Presentation
37 slides from Janus Henderson's earnings presentation, Oct 30, 2019
Slide 1: Janus Henderson Group 3Q19 results presentation
Dick Weil Chief Executive Officer Roger Thompson Chief Financial Officer Janus Henderson Group 3Q19 results presentation Wednesday 30 October 2019
Slide 2: 3Q19 results: key metrics 3Q19 vs 2Q19
1 3Q19 results 3Q19 2Q19 3 year investment outperformance¹ 74% 72% Net flows (US$3.5bn) (US$9.8bn) Total AUM US$356.1bn US$359.8bn US GAAP diluted EPS US$0.58 US$0.56 Adjusted diluted EPS² US$0.64 US$0.61 Dividend per share US$0.36 US$0.36 Key metrics – 3Q19 vs 2Q19 1 Represents percentage of AUM ou
Slide 3: Business and financial results
Roger Thompson Chief Financial Officer 3Q19 results presentation Business and financial results
Slide 4: Total company investment performance remains strong
3 Capability 1 year 3 years 5 years Equities Fixed Income Quantitative Equities Multi-Asset Alternatives Total Capability 1 year 3 years 5 years Equities Fixed Income Quantitative Equities Multi-Asset Alternatives Total Investment performance Total company investment performance remains strong % of
Slide 5: Lower redemptions drove quarter-over-quarter improvement in net flows
4 18.3 20.0 19.7 17.1 17.7 16.6 15.6 15.6 15.3 (17.6) (22.9) (22.4) (19.8) (22.0) (25.0) (23.0) (25.4) (18.8) 0.7 (2.9) (2.7) (2.7) (4.3) (8.4) (7.4) (9.8) (3.5) 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 Total flows Total flows 3Q17 to 3Q19 (US$bn) Redemptions Sales Net sales / (redemptions) 21%
Slide 6: Principal components of 3Q19 net flows
5 (3.5) (2.4) (0.2) (0.3) (0.5) (0.1) Total Company Net Flows Quantitative Equities Global Emerging Markets Core Plus Fixed Income European Equities Remaining Business Principal components of 3Q19 net flows 3Q19 flows (US$bn) 14.8 13.6 14.7 14.3 (20.3) (17.0) (16.1) (14.4) (5.5) (3.4) (1.4) (0.1) 4Q
Slide 7: Statement of income
6 Statement of income Note: See adjusted financial measures reconciliation on slides 29 and 30 for additional information. US GAAP and adjusted US GAAP Adjustments Adjusted Revenue Management fees 446.2 Performance fees 1.4 Shareowner servicing fees 39.3 Other revenue 49.1 Total revenue 536.0 (102.8
Slide 8: Summary financial results
7 US$, except margin data 3Q19 2Q19 Change 3Q19 vs 2Q19 3Q18 Change 3Q19 vs 3Q18 Average AUM 358.2bn 357.7bn 0% 376.8bn (5%) Total revenue 536.0m 535.9m 0% 581.2m (8%) Operating income 143.6m 118.5m 21% 148.3m (3%) Operating margin 26.8% 22.1% 4.7ppt 25.5% 1.3ppt US GAAP diluted EPS 0.58 0.56 4% 0.5
Slide 9: 3Q19 adjusted revenue drivers
8 3Q19 adjusted revenue drivers Revenue 3Q19 revenue reflects higher average AUM offset by lower fee margin Pro forma adjusted revenue – 2Q19 vs 3Q19 (US$m) Note: See adjusted financial measures reconciliation on slides 29 and 30 for additional information. 1 Net margin based on management fees net
Slide 10: Operating expenses
9 273.0 (0.9) (7.0) (2.6) (0.1) 282.4 0.1 1.1 2Q19 Compensation and benefits LT incentive plans Investment administration Marketing General, admin. and occupancy Depreciation and amortisation 3Q19 Adjusted operating expenses – 2Q19 vs 3Q19 (US$m) Operating expenses Note: See adjusted financial measu
Slide 11: Capital management
10 Capital management Continued commitment to return of capital – US$394m year to date Note: JHG purchases shares on market for the annual share grants associated with variable compensation, which is not included in the above share repurchases. Numbers may not cast due to rounding. 1 Total shares ou
Slide 12: Q&A
QsauVHS ‘ADGIIMONy Q&A Janus Henderson
Slide 13: Appendix
Appendix SHARED ll KNOWLEDGE.
Slide 14: Assets under management as at 30 Sep 2019
13 53% 21% 13% 10% 3% Equities Fixed Income Quantitative Equities Multi-Asset Alternatives Assets under management as at 30 Sep 2019 55% 30% 15% North America EMEA & LatAm Asia Pacific By client type By capability By client location US$188.2bn US$75.0bn US$45.6bn US$36.3bn US$11.0bn US$159.8bn US$13
Slide 15: Investment management capabilities
14 Investment management capabilities Diversified product range Equities US$188.2bn AUM 30 Sep 2019 US$356.1bn Fixed Income US$75.0bn Multi-Asset US$36.3bn Self-directed Intermediary Institutional Institutional Institutional Quantitative Equities US$45.6bn Equities • Wide range of equity strategies
Slide 16: Largest strategies by capability
15 Largest strategies by capability Note: Numbers may not cast due to rounding. Capability Strategy AUM (US$bn) 30 Sep 2019 US Mid Cap Growth 27.5 US Concentrated Growth 17.0 US Research Growth Equity 15.5 US SMID Cap Growth 12.6 Global Life Sciences 9.3 Core Plus Fixed Income 12.9 Buy & Maintain Cr
Slide 17: 3Q19 flows by capability
16 3Q19 flows by capability 6.0 6.1 0.3 2.4 0.5 (8.0) (4.7) (2.7) (2.0) (1.4) (2.0) 1.4 (2.4) 0.4 (0.9) Equities Fixed Income Quantitative Equities Multi-Asset Alternatives 3Q19 flows by capability (US$bn) Annualised gross sales¹ Redemptions Sales Net sales / (redemptions) 12% 33% 2% 27% 16% (17%) (
Slide 18: Flows: Equities and Fixed Income
17 Flows: Equities and Fixed Income 6.8 8.6 6.9 6.9 6.0 (9.9) (12.7) (9.8) (12.9) (8.0) (3.1) (4.1) (2.9) (6.0) (2.0) 3Q18 4Q18 1Q19 2Q19 3Q19 6.0 4.7 4.9 5.5 6.1 (7.6) (6.0) (7.7) (5.2) (4.7) (1.6) (1.3) (2.8) 0.3 1.4 3Q18 4Q18 1Q19 2Q19 3Q19 Equities (US$bn) Fixed Income (US$bn) Redemptions Sales
Slide 19: Flows: Quantitative Equities, Multi-Asset and Alternatives
18 2.2 2.3 2.2 2.1 2.4 (1.3) (2.0) (1.5) (1.5) (2.0) 0.9 0.3 0.7 0.6 0.4 3Q18 4Q18 1Q19 2Q19 3Q19 1.3 0.3 0.7 0.2 0.3 (1.3) (1.4) (1.7) (4.3) (2.7) (0.0) (1.1) (1.0) (4.1) (2.4) 3Q18 4Q18 1Q19 2Q19 3Q19 1.4 0.7 0.9 0.9 0.5 (1.9) (2.9) (2.3) (1.5) (1.4) (0.5) (2.2) (1.4) (0.6) (0.9) 3Q18 4Q18 1Q19 2Q
Slide 20: Total net flows by capability
19 Total net flows by capability 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 Equities Fixed Income Quantitative Equities Multi-Asset Alternatives Total net flows by capability 3Q17 to 3Q19 (US$bn) Note: Reflects operational reclassification of existing client’s funds in 4Q18 as detailed on slide 20
Slide 21: AUM and flows by capability
20 AUM and flows by capability All data in US$bn Equities Fixed Income Quantitative Equities Multi-Asset Alternatives Total AUM 30 Jun 2018 193.3 76.5 50.1 32.6 17.6 370.1 Sales 6.8 6.0 1.3 2.2 1.4 17.7 Redemptions (9.9) (7.6) (1.3) (1.3) (1.9) (22.0) Net sales / (redemptions) (3.1) (1.6) (0.0) 0.9
Slide 22: Investment performance
21 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 23: Mutual fund investment performance
22 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 24: Mutual fund investment performance (cont'd): Equities
23 Mutual fund investment performance (cont’d) Group 21 39 30 55 56 35 30 44 43 52 50 47 55 51 54 50 26 48 23 22 26 32 23 25 23 31 33 26 30 28 71 65 78 78 78 60 62 67 68 74 81 80 81 81 82 3Q18 4Q18 1Q19 2Q19 3Q19 3Q18 4Q18 1Q19 2Q19 3Q19 3Q18 4Q18 1Q19 2Q19 3Q19 % of mutual fund AUM in top 2 Morning
Slide 25: Mutual fund investment performance (cont'd): Fixed Income, Quantitative Equities
24 42 52 39 38 40 3 5 3 3 3 48 4 4 40 17 46 24 23 57 2 12 53 55 52 93 47 57 59 98 63 61 97 5 17 3 3 57 55 100 97 51 97 3Q18 4Q18 1Q19 2Q19 3Q19 3Q18 4Q18 1Q19 2Q19 3Q19 3Q18 4Q18 1Q19 2Q19 3Q19 Mutual fund investment performance (cont’d) Fixed Income 11 33 37 38 42 19 14 24 27 41 14 15 18 21 35 52 1
Slide 26: Mutual fund investment performance (cont'd): Multi-Asset, Alternatives
25 Mutual fund investment performance (cont’d) Multi-Asset 81 84 82 83 85 82 83 84 84 86 82 84 84 85 87 5 4 2 4 2 6 6 2 2 2 6 5 4 3 2 86 89 84 87 87 88 89 86 87 88 88 88 88 88 89 3Q18 4Q18 1Q19 2Q19 3Q19 3Q18 4Q18 1Q19 2Q19 3Q19 3Q18 4Q18 1Q19 2Q19 3Q19 % of mutual fund AUM in top 2 Morningstar quar
Slide 27: Balance sheet
26 731.0 773.7 557.9 584.2 1,288.9 1,357.9 317.7 316.9 Cash and investments Debt Cash and investments Debt 1 Includes seed investments of US$419.8m (including investment securities of consolidated variable interest entities of US$311.1m), investments related to deferred compensation plans of US$132.
Slide 28: US GAAP: statement of income
27 US GAAP: statement of income 3 months ended 30 Sep 2019 30 Jun 2019 30 Sep 2018 Revenue Management fees 446.2 446.4 498.7 Performance fees 1.4 3.5 (6.0) Shareowner servicing fees 39.3 38.3 40.2 Other revenue 49.1 47.7 48.3 Total revenue 536.0 535.9 581.2 Operating expenses Employee compensation a
Slide 29: Adjusted: statement of income
28 Adjusted: statement of income Note: See adjusted financial measures reconciliation on slides 29 and 30 for additional information. 3 months ended 30 Sep 2019 30 Jun 2019 30 Sep 2018 Revenue Management fees 446.2 446.4 498.7 Performance fees 1.4 3.5 (6.0) Shareowner servicing fees 39.3 38.3 40.2 O
Slide 30: Alternative performance measures
29 Alternative performance measures Reconciliation of adjusted financial measures 3 months ended 30 Sep 2019 30 Jun 2019 30 Sep 2018 Reconciliation of revenue to adjusted revenue Revenue 536.0 535.9 581.2 Distribution expenses1 (102.8) (101.5) (112.3) Adjusted revenue 433.2 434.4 468.9 Reconciliatio
Slide 31: Alternative performance measures (cont'd)
30 Alternative performance measures (cont’d) Reconciliation of adjusted financial measures 3 months ended 30 Sep 2019 30 Jun 2019 30 Sep 2018 Reconciliation of net income to adjusted net income, attributable to JHG Net income attributable to JHG 112.1 109.4 111.2 Employee compensation and benefits2
Slide 32: Footnotes to reconciliation of adjusted financial measures
31 Alternative performance measures (cont’d) Footnotes to reconciliation of adjusted financial measures 1 Substantially all distribution expenses are paid to financial intermediaries for the distribution of JHG’s investment products. JHG management believes that the deduction of third- party distrib
Slide 33: Performance fees
32 3Q19 (US$m) 2Q19 (US$m) 3Q18 (US$m) AUM generating 3Q19 pfees (US$bn) # of funds generating 3Q19 pfees Frequency Timing SICAVs – 1.5 – – – 23 annually; 2 quarterly 23 at June; 2 on quarters Offshore Absolute Return 0.2 – 1.2 0.1 1 Quarterly / Annually Various Segregated Mandates1 2.5 5.5 3.2 6.6
Slide 34: US mutual funds with performance fees
33 US mutual funds with performance fees Mutual funds with performance fees¹ AUM 30 Sep 2019 US$m Benchmark Base fee Performance fee2 Performance cap/(floor) vs benchmark 3Q19 P&L impact US$’000 Research Fund 14,281 Russell 1000® Growth Index 0.64% ± 15 bps ± 5.00% (4,344) Forty Fund and Portfolio 1
Slide 35: Long-term incentive compensation
34 Long-term incentive compensation Estimated future long-term incentive compensation amortisation US$m Amount remaining to expense 2019 2020 2021 2022 2023 2016 annual grant 6 6 – – – – 2017 annual grant 22 17 5 – – – 2018 annual grant 79 50 23 6 – – 2019 annual grant 149 75 47 21 4 2 Other¹ 112 32
Slide 36: Contacts
35 Contacts Investor enquiries John Groneman Global Head of Investor Relations +44 (0) 20 7818 2106 john.groneman@janushenderson.com Jim Kurtz Investor Relations Manager +1 (303) 336 4529 jim.kurtz@janushenderson.com Investor Relations investor.relations@janushenderson.com Media enquiries North Amer
Slide 37: Forward looking information
36 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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