Janus Henderson Group Plc · NYSE:JHG
Janus Henderson — Q3 2021 Earnings Presentation
38 slides from Janus Henderson's earnings presentation, Oct 28, 2021
Slide 1: Third Quarter 2021 Results
Thursday 28 October 2021 THIRD QUARTER 2021 RESULTS Dick Weil Chief Executive Officer Roger Thompson Chief Financial Officer
Slide 2: Strategy Update
STRATEGY UPDATE Dick Weil Chief Executive Officer
Slide 3: Our Strategy: Simple Excellence
3 OUR STRATEGY: SIMPLE EXCELLENCE Strengthening our core foundation while maximising growth potential Delivering on our strategy of Simple Excellence Produce dependable investment outcomes Excel in distribution and client experience Develop new growth initiatives Focus and increase operational effic
Slide 4: Momentum in Results
4 33.5% 36.0% 43.8% 39.0% 44.6% 46.4% 20.6% 27.5% 34.5% 29.9% 30.5% 36.1% Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Adjusted operating margin Operating margin MOMENTUM IN RESULTS ✓ Solid investment performance forms the foundation for growing distribution momentum across our global footprint ✓
Slide 5: Well-Positioned for Growth
5 WELL-POSITIONED FOR GROWTH Building on Simple Excellence as a foundation for new growth initiatives Trends across our strategic focus areas We are well-positioned to execute on our growth strategy ▪ Global adoption of ESG and sustainable investing ▪ Accelerating growth, expanding distribution chan
Slide 6: Business and Financial Update
BUSINESS AND FINANCIAL UPDATE Roger Thompson Chief Financial Officer
Slide 7: Q3 2021 Results: Key Metrics
7 1 Represents percentage of AUM outperforming the relevant benchmark. Full performance disclosures detailed in the appendix on slide 25. 2 See adjusted financial measures reconciliation on slides 31 and 32 for additional information. Key metrics – Q3 2021 vs Q2 2021 Q3 2021 RESULTS ▪ Long-term inve
Slide 8: Investment Performance
8 INVESTMENT PERFORMANCE Note: Full performance disclosures detailed in the appendix on slides 25 and 26. The top two Morningstar quartiles represent funds in the top half of their category based on total return. The top quartile represents those in the top 25%. Refer to slide 26 for the percent of
Slide 9: Total Flows
9 15.3 18.7 21.4 17.9 15.8 23.2 20.7 18.4 16.0 (18.8) (25.4) (33.6) (26.1) (18.7) (24.3) (24.0) (20.9) (21.2) (3.5) (6.7) (12.2) (8.2) (2.9) (1.1) (3.3) (2.5) (5.2) Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q3 2019 to Q3 2021 total flows (US$bn) Redemptions Sales Net sa
Slide 10: Quarterly Flows by Client Type
10 3.7 8.8 3.3 4.2 2.5 (5.6) (10.0) (6.8) (6.0) (8.3) (1.9) (1.2) (3.5) (1.8) (5.8) Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 11.5 13.5 16.5 13.5 12.9 (11.6) (12.5) (15.4) (13.5) (11.7) (0.1) 1.0 1.1 - 1.2 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 0.6 0.9 0.9 0.7 0.6 (1.5) (1.8) (1.8) (1.4) (1.2) (0.9)
Slide 11: Q3 2021 Flows by Capability
11 1 Annualised gross sales and redemption rates calculated as a percentage of beginning period AUM. Q3 2021 FLOWS BY CAPABILITY Net flows reflect strength in Fixed Income, Multi-Asset and Alternatives 7.5 4.7 2.6 0.1 1.1 (10.1) (4.0) (1.8) (4.5) (0.8) (2.6) 0.7 0.8 (4.4) 0.3 Equities Fixed Income M
Slide 12: Statement of Income: US GAAP and Adjusted
12 US GAAP Adjustments Adjusted Revenue Management fees 564.5 (53.0) 511.5 Performance fees 0.6 – 0.6 Shareowner servicing fees 67.6 (55.4) 12.2 Other revenue 54.7 (33.7) 21.0 Total revenue 687.4 (142.1) 545.3 Operating expenses Employee compensation and benefits 166.2 – 166.2 Long-term incentive pl
Slide 13: Summary Financial Results
13 (US$, except margin data) Q3 2021 Q2 2021 Change Q3 2021 vs Q2 2021 Q3 2020 Change Q3 2021 vs Q3 2020 Average AUM 431.9bn 420.8bn 3% 356.0bn 21% Total revenue 687.4m 738.4m (7%) 568.5m 21% Operating income 248.3m 225.0m 10% 156.5m 59% Operating margin 36.1% 30.5% 5.6ppt 27.5% 8.6ppt US GAAP dilut
Slide 14: Revenue
14 REVENUE Q3 2021 adjusted revenue reflects higher average assets and seasonally lower performance fees Note: See adjusted financial measures reconciliation on slides 31 and 32 for additional information. 1 Net margin based on management fees net of distribution expenses. Adjusted revenue – Q2 2021
Slide 15: Operating Expenses
15 ▪ Decrease in compensation expense primarily due to variable compensation and long-term incentive compensation ▪ Full-year 2021 expense expectations ▪ Adjusted compensation ratio now at the low end of the 40-42% range ▪ Adjusted non-compensation annual growth at the high end of the mid-single dig
Slide 16: Capital Resources
16 CAPITAL RESOURCES Strong liquidity position ▪ Cash and investment securities1 totalled US$1,197m compared to outstanding debt of US$311m ▪ Board declared a dividend of US$0.38 per share to be paid on 24 November to shareholders on record at the close of business on 8 November ▪ Repurchased 1.8m s
Slide 17: Q&A
Q&A Janus Henderson
Slide 18: Appendix
APPENDIX Janus Henderson
Slide 19: Assets Under Management
19 ASSETS UNDER MANAGEMENT AUM as at 30 Sep 2021: US$419.3bn 56% 19% 13% 9% 3% Equities Fixed Income Multi-Asset Quantitative Equities Alternatives 49% 30% 21% Intermediary Institutional Self-Directed 56% 30% 14% North America EMEA & LatAm Asia Pacific By client type By capability By client location
Slide 20: Investment Management Capabilities
20 INVESTMENT MANAGEMENT CAPABILITIES Diversified product range Equities US$236.2bn AUM 30 Sep 21 US$419.3bn Fixed Income US$79.5bn Multi-Asset US$53.9bn Self-Directed Intermediary Institutional Institutional Institutional Quantitative Equities US$39.1bn Institutional Alternatives US$10.6bn Intermed
Slide 21: Largest Strategies by Capability
21 LARGEST STRATEGIES BY CAPABILITY Note: Numbers may not cast due to rounding. Capability Strategy AUM (US$bn) 30 Sep 21 US Concentrated Growth 29.9 US Mid Cap Growth 29.9 US Research Growth Equity 21.6 Global Life Sciences 14.7 US SMID Cap Growth 13.3 Absolute Return Income 11.2 Global Strategic F
Slide 22: Quarterly Flows by Capability: Equities and Fixed Income
22 5.8 10.3 10.5 8.6 7.5 (10.9) (10.4) (12.0) (10.5) (10.1) (5.1) (0.1) (1.5) (1.9) (2.6) Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Equities (US$bn) 1 Annualised gross sales and redemption rates calculated as a percentage of beginning period AUM. QUARTERLY FLOWS BY CAPABILITY Equities and Fixed Income
Slide 23: Quarterly Flows by Capability: Multi-Asset, Quant, Alternatives
23 1.3 0.3 0.2 0.2 0.1 (1.4) (3.7) (2.3) (1.5) (4.5) (0.1) (3.4) (2.1) (1.3) (4.4) Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 2.3 3.1 3.0 2.4 2.6 (1.7) (1.9) (2.2) (1.9) (1.8) 0.6 1.2 0.8 0.5 0.8 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 0.5 0.8 1.1 1.3 1.1 (0.6) (0.8) (2.0) (1.0) (0.8) (0.1) - (0.9) 0.3
Slide 24: Net Flows by Capability
24 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Equities Fixed Income Multi-Asset Quantitative Equities Alternatives Q3 2019 to Q3 2021 total net flows by capability (US$bn) NET FLOWS BY CAPABILITY (12.2) (3.5) (6.7) (8.2) (2.9) (1.1) (3.3) (2.5) (5.2)
Slide 25: Investment Performance
25 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 return strategies, (2) fun
Slide 26: Investment Performance
26 INVESTMENT PERFORMANCE 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 Australian Managed Investment Schemes. The top two Morningstar quarti
Slide 27: Investment Performance: Equities
27 INVESTMENT PERFORMANCE % of mutual fund AUM in top 2 Morningstar quartiles (continued) Group 17 10 21 17 44 44 42 47 40 42 41 45 43 57 57 48 41 27 12 29 22 24 26 13 31 26 14 14 36 24 18 25 57 37 33 47 66 67 67 59 71 68 55 60 79 81 75 73 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2020 Q1 2021 Q2 2021 Q3 2
Slide 28: Investment Performance: Fixed Income and Multi-Asset
28 INVESTMENT PERFORMANCE % of mutual fund AUM in top 2 Morningstar quartiles (continued) 2nd quartile 1st quartile Fixed Income Multi-Asset 54 27 30 25 71 69 71 70 49 38 40 56 30 31 33 48 16 43 27 59 8 11 9 7 24 35 35 17 40 39 38 21 70 69 57 84 79 79 80 77 73 73 75 73 70 70 71 69 Q4 2020 Q1 2021 Q2
Slide 29: Investment Performance: Quantitative Equities and Alternatives
29 4 7 11 4 4 7 11 4 4 7 11 32 34 29 28 40 2 4 32 41 11 33 32 47 11 4 4 7 11 2 0 0 0 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2020 Q1 2021 Q2 2021 Q3 2021 0 19 0 14 41 74 20 24 39 24 22 65 46 67 50 66 74 12 26 13 35 2 56 46 37 6 6 9 52 31 48
Slide 30: US GAAP: Statement of Income
30 US GAAP: STATEMENT OF INCOME (US$m, except per share data or as noted) 30 Sep 21 30 Jun 21 30 Sep 20 Revenue Management fees 564.5 544.1 457.7 Performance fees 0.6 77.4 7.0 Shareowner servicing fees 67.6 64.0 53.7 Other revenue 54.7 52.9 50.1 Total revenue 687.4 738.4 568.5 Operating expenses Emp
Slide 31: Alternative Performance Measures
31 ALTERNATIVE PERFORMANCE MEASURES Reconciliation of adjusted financial measures (US$m, except per share data) 30 Sep 21 30 Jun 21 31 Mar 21 31 Dec 20 30 Sep 20 30 Jun 20 Reconciliation of revenue to adjusted revenue Revenue 687.4 738.4 644.0 657.2 568.5 518.0 Management fees1 (53.0) (49.6) (46.8)
Slide 32: Alternative Performance Measures (continued)
32 ALTERNATIVE PERFORMANCE MEASURES Reconciliation of adjusted financial measures (continued) (US$m, except per share data) 30 Sep 21 30 Jun 21 30 Sep 20 Reconciliation of net income attributable to JHG to adjusted net income attributable to JHG Net income attributable to JHG 196.8 137.3 118.9 Emplo
Slide 33: Capital Management
33 CAPITAL MANAGEMENT Note: JHG purchases shares on market for the annual share grants associated with variable compensation, which is not included in the above share repurchases. Numbers may not cast due to rounding. 1 Total shares outstanding reflect amounts disclosed on Forms 10-Q or 10-K for eac
Slide 34: Performance Fees
34 PERFORMANCE FEES Note: Performance fees include prior quarter accrual true-ups. 1 AUM data present US mutual fund AUM subject to performance fees as at 30 September 2021. Janus Investment Funds and Janus Aspen Series Portfolios are counted as distinct and separate funds. Q3 2021 (US$m) Q2 2021 (U
Slide 35: US Mutual Funds with Performance Fees
35 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 benchmark over 36-month rolling periods. Please see the funds’ Statements of Additional
Slide 36: Long-Term Incentive Compensation
36 LONG-TERM INCENTIVE COMPENSATION Note: Annual grants generally vest over three and four years. Assumed no forfeitures in future periods. Assumed no change in future values related to market or currency, which would impact expense related to cash-based awards (MFSAs, DIP and DEP funds) and social
Slide 37: Contacts
37 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 enquiries Step
Slide 38: 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 fluctuation of value. Forward-looking information This presentation includes statements concernin
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