Janus Henderson Group Plc · NYSE:JHG
Janus Henderson — FY2018 Earnings Presentation
43 slides from Janus Henderson's earnings presentation, Feb 5, 2019
Slide 1: 4Q18 and FY18 results presentation: 2018 achievements and future priorities
Dick Weil Chief Executive Officer 4Q18 and FY18 results presentation 2018 achievements and future priorities
Slide 2: 2018 achievements
2018 achievements Despite challenging conditions, much was achieved in 2018 Investment performance Client relationships Integration, capital & culture Majority of AUM outperforming benchmark over one, three and five year periods1 8 out of the 10 largest US managed equity and multi-asset portfolios (
Slide 3: Five strategic priorities
Five strategic priorities Our focus for 2019 1 4 2 5 3 Produce dependable investment outcomes Focus on quality and stability of investment performance Enhance our proactive risk and control environment Excel in client experience Develop new growth initiatives Increase focus and operational efficienc
Slide 4: Our vision
Our vision We will seek to achieve our vision by Delivering excellent, dependable investment results that outperform the competition Ensuring industry-leading client experience Enhancing our infrastructure to be built on a foundation of market leading technology and operational efficiency Janus Hend
Slide 5: Business and financial update
Roger Thompson Chief Financial Officer 4Q18 and FY18 results presentation Business and financial update
Slide 6: FY18 results
FY18 results Adjusted revenue was up year over year as higher management fees offset lower performance fees Adjusted operating margin of 39% was down slightly year over year End of period AUM was down 11% from the prior year, driven by US$41bn of negative market returns in 4Q18 FY18 dividends per sh
Slide 7: 4Q18 results
4Q18 results Achieved cost synergy target of US$125m, significantly ahead of schedule, and we continue to seek to unlock efficiencies in the business 3 year investment performance remained solid in 4Q18 AUM of US$328.5bn reflects impact of weak markets and elevated net outflows during the quarter Ad
Slide 8: Investment performance is mixed across capabilities
Capability 1 year 3 years 5 years Equities Fixed Income Quantitative Equities Multi-Asset Alternatives Total Investment performance Investment performance is mixed across capabilities % of AUM outperforming benchmark (31 Dec 2017 to 31 Dec 2018) % of AUM outperforming benchmark (as at 31 Dec 2018) N
Slide 9: Total flows
Total flows Total flows 4Q16 to 4Q18 (US$bn) Redemptions Sales Net sales / (redemptions) 26% 24% 24% 21% 22% 21% 18% 19% 17% Annualised gross sales¹ Annualised gross redemptions¹ Outflows driven by higher redemptions and industry wide slowdown in sales Note: Data for periods prior to and including 2
Slide 10: 4Q18 flows by capability
4Q18 flows by capability 4Q18 flows by capability (US$bn) Annualised gross sales¹ Redemptions Sales Net sales / (redemptions) 17% 25% 3% 27% 18% Outflows reflect challenging market conditions in the quarter (25%) (32%) (11%) (22%) (69%) Annualised gross redemptions¹ Note: Reflects operational reclas
Slide 11: Statement of income
Statement of income Note: See adjusted financial measures reconciliation on slide 34 for additional information. Prior periods reflect the reclassification of certain revenue amounts from Other revenue to Shareowner servicing fees. US GAAP and adjusted US GAAP Adjustments Adjusted US GAAP Adjustment
Slide 12: Financial highlights
Financial highlights Summary of results Note: FY17 data presents results of JHG as if the merger had occurred at the beginning of the period. FY17 results updated to reflect the adoption of the new revenue recognition standard, with a reconciliation shown on slide 37. See adjusted financial measures
Slide 13: 4Q18 adjusted revenue drivers
4Q18 adjusted revenue drivers Revenue 4Q18 adjusted revenue reflects the impact of market decline Pro forma adjusted revenue – FY17 vs FY18 (US$m) Note: See adjusted financial measures reconciliation on slide 34 for additional information. Prior periods reflect the reclassification of certain revenu
Slide 14: Performance fees
Performance fees Performance in several European strategies drove year-over-year decline Performance fees – FY17 vs FY18 (US$m) US$44m decline in 2018 SICAV performance fees US$25m decline attributable to UK Absolute Return US$19m decline due to three larger European Equity funds UK OEICs & UT perfo
Slide 15: Operating expenses
Adjusted operating expenses – 3Q18 vs 4Q18 (US$m) Operating expenses Note: See adjusted financial measures reconciliation on slide 35 for additional information. Decline due to mark to market 277.4 (18.6) (0.6) 288.4 0.0 5.6 1.9 0.7 3Q18 Compensation and benefits LT incentive plans Investment admini
Slide 16: Capital management
Capital management We remain committed to returning excess capital to shareholders Note: Dividend paid in 2Q17 reflects the hypothetical per share 1Q17 dividend for JHG derived by adding cash dividends each legacy firm paid to its respective shareholders (US$20.3m for legacy Janus and US$26.9m for l
Slide 17: Capital management
Capital management We remain committed to returning excess capital to shareholders On 4 February 2019, the Board authorised an addi nal on-market share buyback of up to US$200 mi Quarterly capital return since merger (US$m) 121.41 1192 "Dividends 1 Share repurchases 716 637 631 472 64 2017 1018 2018
Slide 18: Q&A
QsuVHS ‘ADCIIMONy Q&A Janus Henderson
Slide 19: Assets under management as at Dec 2018
Assets under management as at 31 Dec 2018 By client type By capability By client location US$167.6bn US$72.4bn US$44.3bn US$30.2bn US$14.0bn US$56.4bn US$143.1bn US$129.0bn US$172.4bn US$102.7bn US$53.4bn AUM: US$328.5bn 51% 22% 14% 9% 4% Equities Fixed Income Quantitative Equities Multi-Asset Alter
Slide 20: Investment management capabilities
Investment management capabilities Diversified product range Equities US$167.6bn AUM 31 Dec 2018 US$328.5bn Fixed Income US$72.4bn Multi-Asset US$30.2bn Self-directed Intermediary Intermediary Institutional Institutional Institutional Institutional Quantitative Equities US$44.3bn Self-directed Self-
Slide 21: Largest pooled funds by capability
Largest pooled funds by capability Note: Numbers may not cast due to rounding. Capability Fund Product Strategy AUM (US$bn) 31 Dec 2018 JnsHnd Enterprise US Mutual Fund Mid Cap Growth 16.4 JnsHnd Research US Mutual Fund US Research Growth Equity 12.1 JnsHnd Forty US Mutual Fund Concentrated Growth 1
Slide 22: Flows: Equities and Fixed Income
Flows: Equities and Fixed Income Equities (US$bn) Fixed Income (US$bn) Redemptions Sales Net sales / (redemptions) Annualised gross sales¹ Annualised gross redemptions¹ 24% 21% 18% 14% 17% 26% 26% 25% 31% 25% (25%) (25%) (20%) (21%) (25%) (25%) (28%) (28%) (39%) (32%) Note: Reflects operational recl
Slide 23: Flows: Quantitative Equities, Multi-Asset and Alternatives
Flows: Quantitative Equities, Multi-Asset and Alternatives Quantitative Equities (US$bn) Multi-Asset (US$bn) Alternatives (US$bn) 6% 13% 3% 10% 3% Annualised gross sales¹ Annualised gross redemptions¹ Redemptions Sales Net sales / (redemptions) 14% 16% 22% 27% 27% 45% 31% 30% 31% 18% (19%) (11%) (10
Slide 24: Total net flows by capability
Total net flows by capability (2.1) (7.0) (1.0) Total net flows by capability 4Q16 to 4Q18 (US$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. Reflects operational reclassification of existing
Slide 25: AUM and flows by capability
AUM and flows by capability All data in US$bn Equities Fixed Income Quantitative Equities Multi-Asset Alternatives Total AUM 30 Sep 2017 182.3 79.4 49.0 30.2 19.6 360.5 Sales 10.8 5.2 0.7 1.1 2.2 20.0 Redemptions (11.5) (5.0) (2.3) (1.3) (2.8) (22.9) Net sales / (redemptions) (0.7) 0.2 (1.6) (0.2) (
Slide 26: Investment performance
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 of
Slide 27: Mutual fund investment performance
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 Australi
Slide 28: Mutual fund investment performance (cont'd): Equities
Mutual fund investment performance (cont’d) Group % of mutual fund AUM in top 2 Morningstar quartiles Equities 1 year 3 year 5 year 1 year 3 year 5 year Note: Full performance disclosures detailed on slide 27. Numbers may not cast due to rounding. 2nd quartile 1st quartile 30 36 23 21 39 41 40 40 35
Slide 29: 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 1 year 3 year 5 year 1 year 3 year 5 year 2nd quartile 1st quartile Note: Full performance disclosures detailed on slide 27. Numbers may not cast due to rounding. 57 38
Slide 30: 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 1 year 3 year 5 year 1 year 3 year 5 year 2nd quartile 1st quartile Note: Full performance disclosures detailed on slide 27. Numbers may not cast due to rounding. 76 78 90 81 84 7
Slide 31: Balance sheet
1 Includes seed investments of US$481.3m (including investment securities of consolidated variable interest entities of US$303.9m), investments related to deferred compensation plans of US$128.9m and other investments of US$4.0m as at 30 September 2018; includes seed investments of US$447.5m (includ
Slide 32: US GAAP: statement of income
US GAAP: statement of income Note: Prior periods reflect the reclassification of certain revenue amounts from Other revenue to Shareowner servicing fees. Pro forma results are based on the combined results of JHG as if the merger took place at the beginning of the period. Pro forma FY17 numbers upda
Slide 33: Adjusted: statement of income
Adjusted: statement of income Note: Prior periods reflect the reclassification of certain revenue amounts from Other revenue to Shareowner servicing fees. FY17 pro forma data presents results of JHG as if the merger had occurred at the beginning of the period shown. See adjusted financial measures r
Slide 34: Alternative performance measures
Alternative performance measures Reconciliation of adjusted financial measures Note: FY17 pro forma data presents results of JHG as if the merger had occurred at the beginning of the period shown. Reconciliation to be used in conjunction with slide 35. Footnotes included on slide 36. FY17 numbers up
Slide 35: Alternative performance measures (cont'd)
Alternative performance measures (cont’d) Reconciliation of adjusted financial measures Note: FY17 pro forma data presents results of JHG as if the merger had occurred at the beginning of the period shown. Reconciliation to be used in conjunction with slide 34. Footnotes included on slide 36. FY17 n
Slide 36: 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 37: Reconciliation: revenue recognition standard
Note: FY17 pro forma data presents results of JHG as if the merger had occurred at the beginning of the period shown. 1 Reflects the reclassification of US$24.8m from Other revenue to Shareowner servicing fees. US$m 12 months ended 31 Dec 2017 previously reported, after revenue reclassification1 Adj
Slide 38: Performance fees
4Q18 (US$m) 3Q18 (US$m) 4Q17 (US$m) AUM generating 4Q18 pfees (US$bn) # of funds generating 4Q18 pfees Frequency Timing SICAVs 0.1 0.0 9.3 – – 23 annually; 2 quarterly 23 at June; 2 on quarters Offshore Absolute Return 0.3 1.2 3.0 0.4 3 Quarterly / Annually Various Segregated Mandates1 14.7 3.2 21.6
Slide 39: US mutual funds with performance fees
US mutual funds with performance fees Mutual funds with performance fees¹ AUM 31 Dec 2018 US$m Benchmark Base fee Performance fee2 Performance cap/(floor) vs benchmark 4Q18 P&L impact US$’000 Research Fund³ 12,149 Russell 1000® Growth Index 0.64% ± 15 bps ± 5.00% (4,014) Forty Fund³ and Portfolio 11
Slide 40: Long-term incentive compensation
Long-term incentive compensation Estimated future long-term incentive compensation amortisation US$m Amount remaining to expense 2019 2020 2021 2022 2016 annual grant 8 7 1 – – 2017 annual grant 22 17 5 – – 2018 annual grant 80 51 23 6 – Estimated 2019 annual grant¹ 140-150 74 48 20 3 Other² 100 32
Slide 41: Contacts
Contacts Investor enquiries John Groneman Global Head of Investor Relations +44 (0) 20 7818 2106 john.groneman@janushenderson.com Jim Kurtz US Investor Relations Manager +1 (303) 336 4529 jim.kurtz@janushenderson.com Melanie Horton Non-US Investor Relations Manager +44 (0) 20 7818 2905 melanie.horto
Slide 42: Performance disclosures
Past performance is no guarantee of future results. Investing involves risk, including the possible loss of principal and fluctuation of value. The Overall Morningstar RatingTM for a fund is derived from a weighted average of the performance figures associated with its three-, five- and ten-year (if
Slide 43: Janus Henderson Investors
Janus Henderson Investors 201 Bishopsgate, London EC2M 3AE Tol: 020 7818 1818 Fax: 020 7818 1819 Past performance i no guarantee of ure resus Investing noes risk including the posse loss of principal and fuctation of vale ‘The Overall Memingstar Rating™ fora fund is dtved from a weighted average oft