Janus Henderson Group Plc · NYSE:JHG
Janus Henderson — Q3 2018 Earnings Presentation
39 slides from Janus Henderson's earnings presentation, Nov 1, 2018
Slide 1: 3Q18 results presentation: Business and financial update
Roger Thompson Chief Financial Officer 3Q18 results presentation Business and financial update
Slide 2: 3Q18 highlights
3Q18 highlights Solid investment performance AUM of US$378.1bn with positive markets partially offset by net outflows Adjusted diluted EPS of US$0.69 On track to achieve targeted cost synergies of US$125 million by end of 2018 – significantly ahead of schedule Declared US$0.36 per share dividend and
Slide 3: Investment performance
Capability 1 year 3 years 5 years Equities Fixed Income Quantitative Equities Multi-Asset Alternatives Total Investment performance Investment performance reflects ongoing weakness at Intech % of AUM outperforming benchmark (30 Sep 2017 to 30 Sep 2018) % of AUM outperforming benchmark (as at 30 Sep
Slide 4: Total flows
Total flows Total flows 3Q16 to 3Q18 (US$bn) 20% 26% 24% 24% (24%) (28%) (33%) (26%) Redemptions Sales Net sales / (redemptions) Annualised gross sales¹ Annualised gross redemptions¹ Net outflows continue 22% (25%) 21% (20%) 21% (24%) 18% (21%) 19% (24%) Note: Data for periods prior to and including
Slide 5: 3Q18 flows by capability
3Q18 flows by capability 31% 10% 27% 31% 14% (39%) (11%) (15%) (43%) (21%) 3Q18 flows by capability (US$bn) Annualised gross sales¹ Annualised gross redemptions¹ 1 Annualised gross sales and redemption rates calculated as a percentage of beginning period AUM. Redemptions Sales Net sales / (redemptio
Slide 6: Statement of income
Statement of income Note: See adjusted financial measures reconciliation on slide 30 for additional information. US GAAP and adjusted US GAAP Adjustments Adjusted Revenue Management fees 498.7 Performance fees (6.0) Shareowner servicing fees 33.1 Other revenue 55.4 Total revenue 581.2 (112.3) 468.9
Slide 7: Financial highlights
Financial highlights Summary of results Note: 3Q17 numbers updated to reflect the adoption of the new revenue recognition standard, with a reconciliation shown on slide 33. See adjusted financial measures reconciliation on slides 30 and 31 for additional information. US GAAP and adjusted US$, except
Slide 8: 3Q18 adjusted revenue drivers
3Q18 adjusted revenue drivers Slight increase in management fees driven by higher average AUM Performance fees declined from 2Q18 driven by seasonality and a decline in mutual fund performance fees Revenue 3Q18 adjusted revenue decreased driven by lower performance fees Adjusted revenue – 2Q18 vs 3Q
Slide 9: Operating expenses
Adjusted operating expenses – 2Q18 vs 3Q18 (US$m) Operating expenses Note: See adjusted financial measures reconciliation on slide 30 for additional information. 288.4 (3.4) (2.6) (0.4) 286.3 6.4 1.2 0.9 2Q18 Compensation and benefits LT incentive plans Investment administration Marketing General, a
Slide 10: Profitability
Profitability Committed to financial discipline to support sustainable growth Adjusted operating income and margin (US$m, except margin data) Adjusted net income and diluted EPS (US$m, except per share data) Note: See adjusted financial measures reconciliation on slides 30 and 31 for additional info
Slide 11: Returning capital to shareholders
Returning capital to shareholders Delivering on the capital return plan we previously articulated The results: What we previously told you: “As we close the merger there will be a period of elevated demand for cash in the near-term to cover deal and integration costs” “The 2018 Convertible Notes wer
Slide 12: Returning capital to shareholders
Returning capital to shareholders Delivering on the capital return plan we previously articulated What we previously told you: + “As we close the merger there will be a period of elevated demand for cash in the near-term to cover deal and integration costs” + “The 2018 Convertible Notes were availab
Slide 13: Q&A
QsuVHS ‘ADCIIMONY Q&A Janus Henderson
Slide 14: Assets under management as at Sep 2018
Assets under management as at 30 Sep 2018 By client type By capability By client location US$199.2bn US$74.5bn US$52.9bn US$34.6bn US$16.9bn US$66.1bn US$166.4bn US$145.6bn US$202.5bn US$115.8bn US$59.8bn AUM: US$378.1bn 53% 20% 14% 9% 4% Equities Fixed Income Quantitative Equities Multi-Asset Alter
Slide 15: Investment management capabilities
Investment management capabilities Diversified product range Equities US$199.2bn AUM 30 Sep 2018 US$378.1bn Fixed Income US$74.5bn Multi-Asset US$34.6bn Self-directed Intermediary Intermediary Institutional Institutional Institutional Institutional Quantitative Equities US$52.9bn Self-directed Self-
Slide 16: AUM by investment capability as at Sep 2018
AUM by investment capability as at 30 Sep 2018 US$16.9bn US$34.6bn US$199.2bn US$52.9bn US$74.5bn Specialist Global Equities US Equities European Equities Asia Pacific Equities Relative risk Absolute risk Regional Enhanced index US Fixed Income Australian Fixed Income Corporate credit Global bonds R
Slide 17: Largest pooled funds by capability
Largest pooled funds by capability Note: Numbers may not cast due to rounding. Capability Fund Product Strategy AUM (US$bn) 30 Sep 2018 JnsHnd Enterprise US Mutual Fund Mid Cap Growth 19.4 JnsHnd Research US Mutual Fund US Research Growth Equity 14.8 JnsHnd Forty US Mutual Fund Concentrated Growth 1
Slide 18: Flows: Equities and Fixed Income
Flows: Equities and Fixed Income Equities (US$bn) Fixed Income (US$bn) 22% (21%) 27% (25%) Redemptions Sales Net sales / (redemptions) 1 Annualised gross sales and redemption rates calculated as a percentage of beginning period AUM. Annualised gross sales¹ Annualised gross redemptions¹ 24% (25%) 26%
Slide 19: Flows: Quantitative Equities, Multi-Asset and Alternatives
Flows: Quantitative Equities, Multi-Asset and Alternatives Quantitative Equities (US$bn) Multi-Asset (US$bn) Alternatives (US$bn) 6% (29%) (16%) (10%) Annualised gross sales¹ Annualised gross redemptions¹ Redemptions Sales Net sales / (redemptions) 6% (19%) (17%) 13% 14% 38% (56%) 45% 13% (11%) (15%
Slide 20: Total net flows by capability
Total net flows by capability (3.2) (2.1) (7.0) (1.0) Total net flows by capability 3Q16 to 3Q18 (US$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) (4.3) 3Q16 4Q16 1Q17 2
Slide 21: 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 Jun 2017 173.4 77.2 46.5 29.4 18.4 344.9 Sales 9.6 5.3 0.7 0.9 1.8 18.3 Redemptions (9.0) (4.9) (1.2) (1.2) (1.3) (17.6) Net sales / (redemptions) 0.6 0.4 (0.5) (0.3) 0.5 0
Slide 22: 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 23: 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 24: 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 23. 2nd quartile 1st quartile 30 30 36 23 21 42 41 40 40 35 49 44 47 51 50 31 31 27 37 50 24 1
Slide 25: Mutual fund investment performance (cont'd): Fixed Income and 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 23. 3 57 38 42 9 38 3 5 4 4 24 20 17 88 64 55 16
Slide 26: Mutual fund investment performance (cont'd): Multi-Asset and 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 23. 76 76 78 90 81 76 76 77 80 82 77 78 79 79 82 7 6 6 2 5
Slide 27: Balance sheet
1 Includes seed investments of US$519.8m (including investment securities of consolidated variable interest entities of US$351.0m), investments related to deferred compensation plans of US$138.5m and other investments of US$6.1m as at 30 June 2018; includes seed investments of US$481.3m (including i
Slide 28: US GAAP: statement of income
US GAAP: statement of income Note: 3Q17 numbers updated to reflect the adoption of the new revenue recognition standard, with a reconciliation shown on slide 33. 30 Sep 2018 30 Jun 2018 30 Sep 2017 Revenue Management fees 498.7 493.5 481.8 Performance fees (6.0) 13.5 (2.1) Shareowner servicing fees
Slide 29: Adjusted: statement of income
Adjusted: statement of income Note: 3Q17 numbers updated to reflect the adoption of the new revenue recognition standard, with a reconciliation shown on slide 33. See adjusted financial measures reconciliation on slides 30 and 31 for additional information. 30 Sep 2018 30 Jun 2018 30 Sep 2017 Revenu
Slide 30: Alternative performance measures
Alternative performance measures Reconciliation of adjusted financial measures Note: 3Q17 numbers updated to reflect the adoption of the new revenue recognition standard, with a reconciliation shown on slide 33. Reconciliation to be used in conjunction with slide 31. Footnotes included on slide 32.
Slide 31: Alternative performance measures (cont'd)
Alternative performance measures (cont’d) Reconciliation of adjusted financial measures Note: 3Q17 numbers updated to reflect the adoption of the new revenue recognition standard, with a reconciliation shown on slide 33. Reconciliation to be used in conjunction with slide 30. Footnotes included on s
Slide 32: Footnotes to reconciliation of adjusted financial measures
Alternative performance measures (cont’d) Footnotes to reconciliation of adjusted financial measures 1 Distribution expenses are paid to financial intermediaries for the distribution of JHG’s investment products. JHG management believes that the deduction of third-party distribution, service and adv
Slide 33: Reconciliation: revenue recognition standard
US$m 3 months ended 30 Sep 2017 previously reported Adjustment 30 Sep 2017 updated Revenue Management fees 477.7 4.1 481.8 Performance fees (2.1) – (2.1) Shareowner servicing fees 30.2 – 30.2 Other revenue 31.6 25.4 57.0 Total revenue 537.4 29.5 566.9 Distribution expenses (82.8) (29.5) (112.3) Tota
Slide 34: Performance fees
3Q18 (US$m) 2Q18 (US$m) 3Q17 (US$m) AUM generating 3Q18 pfees (US$bn) # of funds generating 3Q18 pfees Frequency Timing SICAVs 0.0 4.2 1.8 5.2 2 23 annually; 2 quarterly 23 at June; 2 on quarters Offshore Absolute Return 1.2 1.5 1.2 0.1 1 Quarterly / Annually Various Segregated Mandates1 3.2 4.4 2.3
Slide 35: US mutual funds with performance fees
US mutual funds with performance fees Mutual funds with performance fees¹ AUM 30 Sep 2018 US$m Benchmark Base fee Performance fee2 Performance cap/(floor) vs benchmark 3Q18 P&L impact US$’000 Research Fund³ 14,821 Russell 1000® Growth Index 0.64% ± 15 bps ± 5.00% (3,840) Forty Fund³ and Portfolio 14
Slide 36: 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 6 6 – – – 2016 annual grant 28 21 7 – – 2017 annual grant 62 38 18 6 – 2018 annual grant 160 77 53 24 6 Other¹ 116 47 29 22 18 Total
Slide 37: 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 38: 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 39: Forward looking information
Janus Henderson Investors 201 Bishopsgate, London EC2M 3AE Tol: 020 7818 1818 Fax: 020 7818 1819 Past performance is no guarantee of future results, Investing involves risk, including the possible oss of principal and fluctuation of value. Forward looking information ‘This presentation includes stat
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