Janus Henderson Group Plc · NYSE:JHG
Janus Henderson — Q3 2020 Earnings Presentation
36 slides from Janus Henderson's earnings presentation, Oct 29, 2020
Slide 1: Janus Henderson Group 3Q20 results presentation
Dick Weil Chief Executive Officer Roger Thompson Chief Financial Officer Janus Henderson Group 3Q20 results presentation Thursday 29 October 2020
Slide 2: 3Q20 results
1 3Q20 results • Long-term investment performance remains solid • AUM increased 6.4% to US$358.3bn; strength in global markets was partially offset by net outflows of US$(2.9)bn • Adjusted diluted EPS of US$0.70 • Declared US$0.36 per share dividend and completed US$50m of share buybacks at an avera
Slide 3: Delivering on our strategy of Simple Excellence
2 Delivering on our strategy of Simple Excellence Produce dependable investment outcomes Excel in client experience Focus and increase operational efficiency Proactive risk and control environment Develop new growth initiatives Our strategy: Simple Excellence Strengthening our core foundation while
Slide 4: Business and financial update
Roger Thompson Chief Financial Officer 3Q20 results presentation Business and financial update
Slide 5: Firmwide investment performance remains solid
4 Capability 1 year 3 years 5 years Equities Fixed Income Quantitative Equities Multi-Asset Alternatives Total Capability 1 year 3 years 5 years Equities Fixed Income Quantitative Equities Multi-Asset Alternatives Total Investment performance Firmwide investment performance remains solid % of mutual
Slide 6: Net flows improved quarter over quarter and year over year
5 17.7 16.6 15.6 15.6 15.3 18.7 21.4 17.9 15.8 (22.0) (25.0) (23.0) (25.4) (18.8) (25.4) (33.6) (26.1) (18.7) (4.3) (8.4) (7.4) (9.8) (3.5) (6.7) (12.2) (8.2) (2.9) 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 Total flows Total flows 3Q18 to 3Q20 (US$bn) Redemptions Sales Net sales / (redemptions) 1
Slide 7: 3Q20 flows by capability
6 5.8 5.9 1.3 2.3 0.5 (10.9) (4.1) (1.4) (1.7) (0.6) (5.1) 1.8 (0.1) 0.6 (0.1) Equities Fixed Income Quantitative Equities Multi-Asset Alternatives 3Q20 flows by capability 3Q20 flows by capability (US$bn) Annualised gross sales¹ Redemptions Sales Net sales / (redemptions) 13% 34% 13% 22% 23% (24%)
Slide 8: Statement of income US GAAP and adjusted
7 Statement of income US GAAP and adjusted US GAAP Adjustments Adjusted Revenue Management fees 457.7 Performance fees 7.0 Shareowner servicing fees 53.7 Other revenue 50.1 Total revenue 568.5 (118.8) 449.7 Operating expenses Employee compensation and benefits 154.9 Long-term incentive plans 42.7 Di
Slide 9: Summary financial results
8 US$, except margin data 3Q20 2Q20 Change 3Q20 vs 2Q20 3Q19 Change 3Q20 vs 3Q19 Average AUM 356.0bn 323.0bn 10% 358.2bn (1%) Total revenue 568.5m 518.0m 10% 536.0m 6% Operating income 156.5m 106.7m 47% 143.6m 9% Operating margin 27.5% 20.6% 6.9ppt 26.8% 0.7ppt US GAAP diluted EPS 0.65 0.55 18% 0.58
Slide 10: 3Q20 adjusted revenue reflects higher average assets
9 409.8 367.5 7.0 17.2 10.9 8.3 22.0 20.3 449.7 413.3 3Q20 2Q20 Management fees Performance fees Shareowner servicing fees Other revenue 3Q20 adjusted revenue drivers Revenue 3Q20 adjusted revenue reflects higher average assets Adjusted revenue – 2Q20 vs 3Q20 (US$m) Note: See adjusted financial meas
Slide 11: 3Q20 adjusted expenses reflect higher average assets, FX and professional services
10 287.6 (6.5) 274.9 9.3 0.5 1.6 6.9 0.9 2Q20 Compensation and benefits LT incentive plans Investment administration Marketing General, admin. and occupancy Depreciation and amortisation 3Q20 Adjusted operating expenses – 2Q20 vs 3Q20 (US$m) Operating expenses Note: See adjusted financial measures r
Slide 12: Balance sheet
11 880.4 926.5 851.3 449.2 1,731.7 1,375.7 314.8 314.0 Cash and investments Debt Cash and investments Debt 1 Includes seed investments of US$763.2m (including investment securities of consolidated variable interest entities of US$632.2m), investments related to deferred compensation plans of US$82.8
Slide 13: Q&A
QSuVHS IDCIIMON A Q&A Janus Henderson
Slide 14: Appendix
Appendix KNOWLEDGE ll SHARED Janus Henderson
Slide 15: Assets under management as at 30 Sep 2020
14 53% 21% 12% 11% 3% Equities Fixed Income Multi-Asset Quantitative Equities Alternatives Assets under management as at 30 Sep 2020 48% 32% 20% Intermediary Institutional Self-directed 55% 30% 15% North America EMEA & LatAm Asia Pacific By client type By capability By client location US$188.9bn US$
Slide 16: Investment management capabilities
15 Investment management capabilities Diversified product range Equities US$188.9bn AUM 30 Sep 2020 US$358.3bn Fixed Income US$75.1bn Multi-Asset US$43.6bn Self-directed Intermediary Institutional Institutional Institutional Quantitative Equities US$40.7bn Institutional Alternatives US$10.0bn Equiti
Slide 17: Largest strategies by capability
16 Largest strategies by capability Note: Numbers may not cast due to rounding. Capability Strategy AUM (US$bn) 30 Sep 2020 US Mid Cap Growth 26.0 US Concentrated Growth 22.1 US Research Growth Equity 18.6 Global Life Sciences 11.8 US SMID Cap Growth 11.8 Absolute Return Income 11.3 Buy & Maintain C
Slide 18: Flows: Equities and Fixed Income
17 6.1 5.6 8.0 6.3 5.9 (4.7) (8.4) (11.4) (7.0) (4.1) 1.4 (2.8) (3.4) (0.7) 1.8 3Q19 4Q19 1Q20 2Q20 3Q20 6.0 9.4 8.8 7.9 5.8 (8.0) (10.7) (15.7) (12.1) (10.9) (2.0) (1.3) (6.9) (4.2) (5.1) 3Q19 4Q19 1Q20 2Q20 3Q20 (17%) (23%) (31%) (32%) (24%) Flows: Equities and Fixed Income Equities (US$bn) Fixed
Slide 19: Flows: Quantitative Equities, Multi-Asset and Alternatives
18 2.4 2.7 3.5 2.5 2.3 (2.0) (1.3) (2.5) (1.8) (1.7) 0.4 1.4 1.0 0.7 0.6 3Q19 4Q19 1Q20 2Q20 3Q20 0.3 0.3 0.4 0.4 1.3 (2.7) (3.6) (2.4) (4.3) (1.4) (2.4) (3.3) (2.0) (3.9) (0.1) 3Q19 4Q19 1Q20 2Q20 3Q20 0.5 0.7 0.7 0.8 0.5 (1.4) (1.4) (1.6) (0.9) (0.6) (0.9) (0.7) (0.9) (0.1) (0.1) 3Q19 4Q19 1Q20 2Q
Slide 20: Total net flows by capability
19 Total net flows by capability 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 Equities Fixed Income Quantitative Equities Multi-Asset Alternatives Total net flows by capability 3Q18 to 3Q20 (US$bn) (12.2) (4.3) (7.4) (8.4) (9.8) (3.5) (6.7) (8.2) (2.9)
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 2019 191.3 73.5 47.6 35.1 12.3 359.8 Sales 6.0 6.1 0.3 2.4 0.5 15.3 Redemptions (8.0) (4.7) (2.7) (2.0) (1.4) (18.8) Net sales / (redemptions) (2.0) 1.4 (2.4) 0.4 (0
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 (Du blin based), Dublin and UK OEIC and Investment Trusts, Luxembourg SICAVs and Aust
Slide 24: Mutual fund investment performance (cont'd)
23 Mutual fund investment performance (cont’d) Group 56 45 44 42 32 52 51 44 46 48 54 50 51 41 41 22 38 25 25 36 23 31 40 22 26 28 26 28 37 37 78 83 69 67 68 74 82 84 67 74 82 76 79 78 78 3Q19 4Q19 1Q20 2Q20 3Q20 3Q19 4Q19 1Q20 2Q20 3Q20 3Q19 4Q19 1Q20 2Q20 3Q20 % of mutual fund AUM in top 2 Morning
Slide 25: Mutual fund investment performance (cont'd)
24 40 29 3 3 3 4 4 40 4 4 3 4 57 22 7 3 4 53 19 54 56 26 57 15 42 4 97 22 37 3 4 57 22 57 60 30 97 19 46 8 4 3Q19 4Q19 1Q20 2Q20 3Q20 3Q19 4Q19 1Q20 2Q20 3Q20 3Q19 4Q19 1Q20 2Q20 3Q20 Mutual fund investment performance (cont’d) Fixed Income 42 19 37 41 56 41 29 52 64 67 35 28 44 41 49 11 51 38 36 19
Slide 26: Mutual fund investment performance (cont'd)
25 Mutual fund investment performance (cont’d) % of mutual fund AUM in top 2 Morningstar quartiles Alternatives 5 29 64 43 31 31 56 32 72 24 25 47 47 38 31 69 34 57 6 43 5 68 28 32 95 73 48 53 38 36 98 98 100 37 74 60 100100 56 95 98 96 100 3Q19 4Q19 1Q20 2Q20 3Q20 3Q19 4Q19 1Q20 2Q20 3Q20 3Q19 4Q19
Slide 27: Capital management
26 Capital management Continued commitment to return of capital – over US$300m year to date Note: JHG purchases shares on market for the annual share grants associated with variable compensation, which is not included in the above share repurchases. Numbers may not cast due to rounding. 1 Total shar
Slide 28: US GAAP: statement of income
27 US GAAP: statement of income 3 months ended 30 Sep 2020 30 Jun 2020 30 Sep 2019 Revenue Management fees 457.7 407.7 446.2 Performance fees 7.0 17.2 1.4 Shareowner servicing fees 53.7 47.3 39.3 Other revenue 50.1 45.8 49.1 Total revenue 568.5 518.0 536.0 Operating expenses Employee compensation an
Slide 29: Alternative performance measures
28 Alternative performance measures Reconciliation of adjusted financial measures Note: Reconciliation to be used in conjunction with slide 29. Footnotes included on slide 30. 3 months ended 30 Sep 2020 30 Jun 2020 30 Sep 2019 Reconciliation of revenue to adjusted revenue Revenue 568.5 518.0 536.0 M
Slide 30: Alternative performance measures (cont'd)
29 Alternative performance measures (cont’d) Reconciliation of adjusted financial measures Note: Reconciliation to be used in conjunction with slide 28. Footnotes included on slide 30. 3 months ended 30 Sep 2020 30 Jun 2020 30 Sep 2019 Reconciliation of net income attributable to JHG to adjusted net
Slide 31: Footnotes to reconciliation of adjusted financial measures
30 Alternative performance measures (cont’d) Footnotes to reconciliation of adjusted financial measures 1 JHG contracts with third-party intermediaries to distribute and service certain of its investment products. Fees for distribution and servicing related activities are either provided for separat
Slide 32: Performance fees
31 3Q20 (US$m) 2Q20 (US$m) 2Q19 (US$m) AUM generating 3Q20 pfees (US$bn) # of funds generating 3Q20 pfees Frequency Timing SICAVs 2.8 9.2 – 3.4 2 22 annually; 3 quarterly 22 at June; 3 on quarters Offshore Absolute Return 0.1 – 0.2 0.1 1 Quarterly / Annually Various Segregated Mandates1 3.2 9.3 2.5
Slide 33: Mutual funds with performance fees
32 Mutual funds with performance fees¹ AUM 30 Sep 2020 US$m Benchmark Base fee Performance fee2 Performance cap/(floor) v s benchmark 3Q20 P&L impact US$’000 Forty Fund and Portfolio 18,414 Russell 1000® Growth Index 0.64% ± 15 bps ± 8.50% (787) Research Fund and Portfolio 18,049 Russell 1000® Growt
Slide 34: Long-term incentive compensation
33 Long-term incentive compensation Estimated future long-term incentive compensation amortisation 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 rel
Slide 35: Contacts
34 Contacts Investor enquiries 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.horton@janushenderson.com Investor Relations investor.relations@janushenderson.com Media enquiries Steph
Slide 36: Forward looking information
35 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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