- Strong investment performance, with 74% and 78% of assets under
management (‘AUM’) outperforming relevant benchmarks on a 3 and 5
year basis, respectively, as at 30 September 2019
- Third quarter 2019 net income of US$112.1 million and adjusted
net income of US$124.7 million
- AUM of US$356.1 billion, down 1% compared to the prior quarter,
as a result of net outflows of US$3.5 billion
- Completed US$81 million of share buybacks during the third
quarter; US$13 million remains authorised for buybacks in 2019
- Board declared quarterly dividend of US$0.36 per share
Janus Henderson Group plc (NYSE/ASX: JHG; ‘JHG’, ‘the Group’)
published its third quarter 2019 results for the period ended 30
September 2019.
Third quarter 2019 net income attributable to JHG was US$112.1
million compared to US$109.4 million in the second quarter 2019 and
US$111.2 million in the third quarter 2018. Adjusted net income
attributable to JHG, adjusted for one-time, acquisition and
transaction related costs, of US$124.7 million increased 4%
compared to US$119.7 million in the second quarter 2019 and
declined 10% compared to US$138.6 million in the third quarter
2018.
Third quarter 2019 diluted earnings per share was US$0.58
compared to US$0.56 in the second quarter 2019 and US$0.55 in the
third quarter 2018. Adjusted diluted earnings per share of US$0.64
increased 5% compared to US$0.61 in the second quarter 2019 and
declined 7% versus US$0.69 in the third quarter 2018.
Dick Weil, Chief Executive
Officer of Janus Henderson Group plc, stated:
“Our third quarter results reflect a continuation of the
improving trends we have seen across the Group. Our strong
financial foundation is allowing us to continue to invest in our
business while balancing strict business discipline and returning
excess cash to shareholders.
“We are pleased that firm-wide investment performance continues
to be strong, and in areas that were previously experiencing weaker
performance we are seeing signs of improvement. This combination is
leading to new business and market share gains across a number of
regions and capabilities.
“That said, despite the improvement, we remain cautious about
the net flow outlook for the balance of 2019 as we continue to see
headwinds in several areas of our business.”
SUMMARY OF FINANCIAL RESULTS
(unaudited) (in US$ millions, except per share data or as
noted)
The Group presents its financial results in US$ and in
accordance with accounting principles generally accepted in the
United States of America (‘US GAAP’ or ‘GAAP’). However, in the
opinion of Management, the profitability of the Group and its
ongoing operations is best evaluated using additional non-GAAP
financial measures on an adjusted basis. See adjusted statements of
income reconciliation for additional information.
Three months ended
30 Sep
30 Jun
30 Sep
2019
2019
2018
GAAP
basis:
Revenue
536.0
535.9
581.2
Operating expenses
392.4
417.4
432.9
Operating income
143.6
118.5
148.3
Operating margin
26.8
%
22.1
%
25.5
%
Net income attributable to JHG
112.1
109.4
111.2
Diluted earnings per share
0.58
0.56
0.55
Adjusted
basis:
Revenue
433.2
434.4
468.9
Operating expenses
273.0
282.4
288.4
Operating income
160.2
152.0
180.5
Operating margin
37.0
%
35.0
%
38.5
%
Net income attributable to JHG
124.7
119.7
138.6
Diluted earnings per share
0.64
0.61
0.69
Third quarter 2019 adjusted revenue of US$433.2 million declined
from the second quarter 2019 result of US$434.4 million as slightly
higher average AUM and one additional calendar day were offset by a
lower net management fee margin. Third quarter 2019 adjusted
operating income of US$160.2 million improved from US$152.0 million
in the second quarter 2019, primarily driven by a decline in
long-term incentive plan expenses and lower seasonal marketing
expenses.
DIVIDEND AND SHARE
BUYBACK
On 29 October 2019, the Board declared a third quarter dividend
in respect of the three months ended 30 September 2019 of US$0.36
per share. Shareholders on the register on the record date of 11
November 2019 will be paid the dividend on 25 November 2019. Janus
Henderson does not offer a dividend reinvestment plan.
As part of the US$200 million on-market buyback programme
approved by the Board in February, JHG purchased approximately 4.2
million of its ordinary shares on the NYSE and its CHESS Depositary
Interests (CDIs) on the ASX in the third quarter, for a total
outlay of US$81 million.
Net tangible assets per
share
US$
30 Sep 2019
31 Dec 2018
Net tangible assets / (liabilities) per
ordinary share
1.21
1.32
Net tangible assets are defined by the ASX as being total assets
less intangible assets less total liabilities ranking ahead of, or
equally with, claims of ordinary shares.
AUM AND FLOWS (in US$
billions)
FX reflects movement in AUM resulting from changes in foreign
currency rates as non-USD denominated AUM is translated into USD.
Redemptions include impact of client switches. The reclassification
in the fourth quarter 2018 reflects an operational reclassification
of an existing client’s funds.
Total Group comparative AUM and
flows
Three months ended
30 Sep
30 Jun
30 Sep
2019
2019
2018
Opening AUM
359.8
357.3
370.1
Sales
15.3
15.6
17.7
Redemptions
(18.8
)
(25.4
)
(22.0
)
Net sales / (redemptions)
(3.5
)
(9.8
)
(4.3
)
Market / FX
(0.2
)
12.3
12.3
Closing AUM
356.1
359.8
378.1
Quarterly AUM and flows by
capability
Fixed Income
Quantitative
Equities
Equities
Multi-Asset
Alternatives
Total
AUM 30 Sep 2018
199.2
74.5
52.9
34.6
16.9
378.1
Sales
8.6
4.7
0.3
2.3
0.7
16.6
Redemptions
(12.7
)
(6.0
)
(1.4
)
(2.0
)
(2.9
)
(25.0
)
Net sales / (redemptions)
(4.1
)
(1.3
)
(1.1
)
0.3
(2.2
)
(8.4
)
Market / FX
(29.2
)
(1.3
)
(7.5
)
(2.5
)
(0.7
)
(41.2
)
Reclassification
1.7
0.5
—
(2.2
)
—
—
AUM 31 Dec 2018
167.6
72.4
44.3
30.2
14.0
328.5
Sales
6.9
4.9
0.7
2.2
0.9
15.6
Redemptions
(9.8
)
(7.7
)
(1.7
)
(1.5
)
(2.3
)
(23.0
)
Net sales / (redemptions)
(2.9
)
(2.8
)
(1.0
)
0.7
(1.4
)
(7.4
)
Market / FX
24.1
2.9
6.3
2.5
0.4
36.2
AUM 31 Mar 2019
188.8
72.5
49.6
33.4
13.0
357.3
Sales
6.9
5.5
0.2
2.1
0.9
15.6
Redemptions
(12.9
)
(5.2
)
(4.3
)
(1.5
)
(1.5
)
(25.4
)
Net sales / (redemptions)
(6.0
)
0.3
(4.1
)
0.6
(0.6
)
(9.8
)
Market / FX
8.5
0.7
2.1
1.1
(0.1
)
12.3
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
(0.9
)
(3.5
)
Market / FX
(1.1
)
0.1
0.4
0.8
(0.4
)
(0.2
)
AUM 30 Sep 2019
188.2
75.0
45.6
36.3
11.0
356.1
Average AUM
Three months ended
30 Sep
30 Jun
30 Sep
2019
2019
2018
Equities
189.5
190.5
197.8
Fixed Income
74.4
72.0
75.9
Quantitative Equities
47.0
48.4
52.1
Multi-Asset
35.8
34.2
33.7
Alternatives
11.5
12.6
17.3
Total
358.2
357.7
376.8
INVESTMENT PERFORMANCE
% of AUM outperforming benchmark
(at 30 September 2019)
Capability
1 year
3 years
5 years
Equities
75
%
74
%
80
%
Fixed Income
63
%
94
%
90
%
Quantitative Equities
39
%
26
%
25
%
Multi-Asset
90
%
91
%
93
%
Alternatives
96
%
99
%
100
%
Total
70
%
74
%
78
%
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) fund net of fees vs primary index
or (3) fund net of fees vs Morningstar peer group average or
median. Non-discretionary and separately managed account assets are
included with a corresponding composite where applicable.
Cash management vehicles, ETFs, Managed CDOs, Private Equity
funds and custom non-discretionary accounts with no corresponding
composite are excluded from the analysis. Excluded assets represent
5% of AUM as at 30 September 2019. Capabilities defined by Janus
Henderson.
% of mutual fund AUM in top 2
Morningstar quartiles (at 30 September 2019)
Capability
1 year
3 years
5 years
Equities
84
%
79
%
87
%
Fixed Income
53
%
53
%
55
%
Quantitative Equities
97
%
57
%
97
%
Multi-Asset
87
%
88
%
89
%
Alternatives
38
%
37
%
56
%
Total
78
%
74
%
82
%
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 quartiles represent funds in the top half of
their category based on total return. On an asset-weighted basis,
82% of total mutual fund AUM was in the top 2 Morningstar quartiles
for the 10‑year period ended 30 September 2019. For the 1‑, 3‑, 5‑
and 10‑year periods ending 30 September 2019, 64%, 58%, 63% and 62%
of the 204, 198, 182 and 147 total mutual funds, respectively, were
in the top 2 Morningstar quartiles.
Analysis based on ‘primary’ share class (Class I Shares,
Institutional Shares or share class with longest history for US
Trusts; Class A Shares or share class with longest history for
Dublin based; primary share class as defined by Morningstar for
other funds). Performance may vary by share class. Rankings may be
based, in part, on the performance of a predecessor fund or share
class and are calculated by Morningstar using a methodology that
differs from that used by Janus Henderson. Methodology differences
may have a material effect on the return and therefore the ranking.
When an expense waiver is in effect, it may have a material effect
on the total return, and therefore the ranking for the period.
ETFs and funds not ranked by Morningstar are excluded from the
analysis. Capabilities defined by JHG. © 2019 Morningstar, Inc. All
Rights Reserved.
FOURTH QUARTER AND FULL-YEAR 2019
RESULTS
Janus Henderson intends to publish its fourth quarter and
full-year 2019 results on 4 February 2020.
THIRD QUARTER 2019 RESULTS
BRIEFING INFORMATION
Chief Executive Officer Dick Weil and Chief Financial Officer
Roger Thompson will present these results on 30 October 2019 on a
conference call and webcast to be held at 8am EDT, 12pm GMT, 11pm
AEDT.
Those wishing to participate should call:
United Kingdom
0800 358 6377 (toll free)
US & Canada
800 239 9838 (toll free)
Australia
1 800 573 793 (toll free)
All other countries
+1 323 794 2551 (this is not a
toll free number)
Conference ID
8263607
Access to the webcast and accompanying slides will be available
via the investor relations section of Janus Henderson’s website
(www.janushenderson.com/IR).
About Janus Henderson
Janus Henderson Group is a leading global active asset manager
dedicated to helping investors achieve long-term financial goals
through a broad range of investment solutions, including equities,
fixed income, quantitative equities, multi-asset and alternative
asset class strategies.
The firm has approximately US$356 billion in assets under
management (at 30 September 2019), more than 2,000 employees, and
offices in 28 cities worldwide. Headquartered in London, the
company is listed on the New York Stock Exchange (NYSE) and the
Australian Securities Exchange (ASX).
Three months ended
30 Sep
30 Jun
30 Sep
(in US$ millions, except per share data
or as noted)
2019
2019
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 and benefits
147.9
146.5
159.5
Long-term incentive plans
42.2
49.2
61.1
Distribution expenses
102.8
101.5
112.3
Investment administration
11.2
11.1
12.2
Marketing
5.5
8.1
7.1
General, administrative and occupancy
67.6
67.7
59.9
Depreciation and amortisation
15.2
33.3
20.8
Total operating expenses
392.4
417.4
432.9
Operating income
143.6
118.5
148.3
Interest expense
(3.5
)
(4.2
)
(4.0
)
Investment gains (losses), net
4.0
4.8
(8.3
)
Other non-operating income, net
4.7
28.5
2.3
Income before taxes
148.8
147.6
138.3
Income tax provision
(35.7
)
(35.3
)
(33.2
)
Net income
113.1
112.3
105.1
Net loss (income) attributable to
noncontrolling interests
(1.0
)
(2.9
)
6.1
Net income attributable to JHG
112.1
109.4
111.2
Less: allocation of earnings to
participating stock-based awards
(3.1
)
(3.2
)
(3.0
)
Net income attributable to JHG common
shareholders
109.0
106.2
108.2
Basic weighted-average shares outstanding
(in millions)
187.9
190.2
195.2
Diluted weighted-average shares
outstanding (in millions)
188.3
190.7
195.9
Diluted earnings per share (in
US$)
0.58
0.56
0.55
Adjusted statements of income
(unaudited)
The following are reconciliations of US GAAP basis revenues,
operating income, net income attributable to JHG and diluted
earnings per share to adjusted revenues, adjusted operating income,
adjusted net income attributable to JHG and adjusted diluted
earnings per share.
Three months ended
30 Sep
30 Jun
30 Sep
(in US$ millions, except per share data
or as noted)
2019
2019
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
Reconciliation of operating income to
adjusted operating income
Operating income
143.6
118.5
148.3
Employee compensation and benefits2
5.4
3.1
8.1
Long-term incentive plans2
(0.2
)
(0.2
)
10.0
General, administration and occupancy2
4.1
5.3
1.3
Depreciation and amortisation3
7.3
25.3
12.8
Adjusted operating income
160.2
152.0
180.5
Operating margin
26.8
%
22.1
%
25.5
Adjusted operating margin
37.0
%
35.0
%
38.5
Reconciliation of net income
attributable to JHG to adjusted net income attributable to
JHG
Net income attributable to JHG
112.1
109.4
111.2
Employee compensation and benefits2
5.4
3.1
8.1
Long-term incentive plans2
(0.2
)
(0.2
)
10.0
General, administration and occupancy2
4.1
5.3
1.3
Depreciation and amortisation3
7.3
25.3
12.8
Interest expense4
0.4
1.0
0.8
Investment gains (losses), net
(1.0
)
1.0
—
Other non-operating income (expenses),
net4
(0.2
)
(22.6
)
2.5
Income tax provision5
(3.2
)
(2.6
)
(8.1
)
Adjusted net income attributable to
JHG
124.7
119.7
138.6
Less: allocation of earnings to
participating stock-based awards
(3.4
)
(3.5
)
(3.7
)
Adjusted net income attributable to JHG
common shareholders
121.3
116.2
134.9
Weighted-average diluted common shares
outstanding – diluted (two class) (in millions)
188.3
190.7
195.9
Diluted earnings per share (two class)
(in US$)
0.58
0.56
0.55
Adjusted diluted earnings per share
(two class) (in US$)
0.64
0.61
0.69
______________________________________________________
- 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
distribution, service and advisory expenses from revenue in the
computation of net revenue reflects the nature of these expenses,
as these costs are passed through to external parties that perform
functions on behalf of, and distribute, the Group’s managed
AUM.
- Adjustments primarily represent integration costs in relation
to the Merger, including severance costs, legal costs and
consulting fees. JHG management believes these costs do not
represent the ongoing operations of the Group.
- Investment management contracts have been identified as a
separately identifiable intangible asset arising on the acquisition
of subsidiaries and businesses. Such contracts are recognised at
the net present value of the expected future cash flows arising
from the contracts at the date of acquisition. For segregated
mandate contracts, the intangible asset is amortised on a
straight-line basis over the expected life of the contracts. The
three months ended 30 June 2019 also include a US$18 million
impairment of certain mutual fund contracts. JHG management
believes these non-cash and acquisition-related costs do not
represent the ongoing operations of the Group.
- 2019 adjustments primarily represent contingent consideration
adjustments associated with acquisitions prior to the Merger and
increased debt expense as a consequence of the fair value uplift on
debt due to acquisition accounting. Adjustments for the three
months ended 30 September 2018 primarily represent fair value
movements on options issued to Dai-ichi in addition to contingent
consideration costs associated with acquisitions prior to the
merger. JHG management believes these costs do not represent the
ongoing operations of the Group.
- The tax impact of the adjustments is calculated based on the US
or foreign statutory tax rate as they relate to each adjustment.
Certain adjustments are either not taxable or not
tax-deductible.
Condensed consolidated balance
sheets (unaudited)
30 Sep
31 Dec
(in US$ millions)
2019
2018
Assets:
Cash and cash equivalents
736.3
880.4
Investment securities
224.3
291.8
Property, equipment and software, net
74.4
69.5
Intangible assets and goodwill, net
4,518.4
4,601.3
Assets of consolidated variable interest
entities
404.3
323.9
Other assets
1,008.2
745.0
Total assets
6,965.9
6,911.9
Liabilities, redeemable noncontrolling
interests and equity:
Long-term debt
316.9
319.1
Deferred tax liabilities, net
717.7
729.9
Liabilities of consolidated variable
interest entities
7.0
6.5
Other liabilities
963.5
859.5
Redeemable noncontrolling interests
216.2
136.1
Total equity
4,744.6
4,860.8
Total liabilities, redeemable
noncontrolling interests and equity
6,965.9
6,911.9
Condensed consolidated statements
of cash flows (unaudited)
Three months ended
30 Sep
30 Jun
30 Sep
(in US$ millions)
2019
2019
2018
Cash provided by (used for):
Operating activities
173.2
117.7
246.6
Investing activities
(36.1
)
(39.8
)
31.9
Financing activities
(107.5
)
(77.2
)
(182.4
)
Effect of exchange rate changes
13.1
(9.6
)
(3.8
)
Net change during period
42.7
(8.9
)
92.3
STATUTORY DISCLOSURES
Associates and joint
ventures
At 30 September 2019, the Group holds interests in the following
associates and joint ventures managed through shareholder
agreements with third party investors, accounted for under the
equity method:
- Long Tail Alpha LLC. Ownership 20%
Basis of preparation
In the opinion of management of Janus Henderson Group plc, the
condensed consolidated financial statements contain all normal
recurring adjustments necessary to fairly present the financial
position, results of operations and cash flows of JHG in accordance
with US GAAP. Such financial statements have been prepared in
accordance with the instructions to Form 10‑Q pursuant to the rules
and regulations of the SEC. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with GAAP have been condensed or omitted pursuant to
such rules and regulations. The financial statements should be read
in conjunction with the annual consolidated financial statements
and notes presented in Janus Henderson Group’s Annual Report on
Form 10‑K for the year ended 31 December 2018, on file with the SEC
(Commission file no. 001‑38103). Events subsequent to the balance
sheet date have been evaluated for inclusion in the financial
statements through the issuance date and are included in the notes
to the condensed consolidated financial statements.
Corporate governance principles
and recommendations
In the opinion of the Directors, the financial records of the
Group have been properly maintained, and the Condensed Consolidated
Financial Statements comply with the appropriate accounting
standards and give a true and fair view of the financial position
and performance of the Group. This opinion has been formed on the
basis of a sound system of risk management and internal control
which is operating effectively.
FORWARD-LOOKING STATEMENTS
DISCLAIMER
Past performance is no guarantee of future results. Investing
involves risk, including the possible loss of principal and
fluctuation of value.
This document includes statements concerning potential future
events involving Janus Henderson Group plc that could differ
materially from the events that actually occur. The differences
could be caused by a number of factors including those factors
identified in Janus Henderson Group’s Annual Report on Form 10‑K
for the fiscal year ended 31 December 2018, on file with the
Securities and Exchange Commission (Commission file no. 001‑38103),
including those that appear under headings such as ‘Risk Factors’
and ‘Management’s Discussion and Analysis of Financial Condition
and Results of Operations’. Many of these factors are beyond the
control of JHG and its management. Any forward-looking statements
contained in this document are as at the date on which such
statements were made. Janus Henderson Group assumes no duty to
update them, even if experience, unexpected events, or future
changes make it clear that any projected results expressed or
implied therein will not be realised.
Annualised, pro forma, projected and estimated numbers are used
for illustrative purposes only, are not forecasts and may not
reflect actual results.
The information, statements and opinions contained in this
document do not constitute a public offer under any applicable
legislation or an offer to sell or solicitation of any offer to buy
any securities or financial instruments or any advice or
recommendation with respect to such securities or other financial
instruments.
Not all products or services are available in all
jurisdictions.
Mutual funds in the US are distributed by Janus Henderson
Distributors.
Please consider the charges, risks, expenses and investment
objectives carefully before investing. For a US fund prospectus or,
if available, a summary prospectus containing this and other
information, please contact your investment professional or call
800.668.0434. Read it carefully before you invest or send
money.
Janus Henderson, Janus, Henderson, Intech, Alphagen and
Knowledge. Shared are trademarks of Janus Henderson Group plc or
one of its subsidiaries. © Janus Henderson Group plc.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191030005077/en/
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 Or Investor Relations
investor.relations@janushenderson.com Media enquiries: North
America: Erin Passan +1 (949) 922 2112 epassan@gagnierfc.com EMEA:
Sarah de Lagarde +44 (0) 20 7818 2626
sarah.delagarde@janushenderson.com United Kingdom: FTI Consulting
Tom Blackwell + 44 (0) 20 3727 1051 tom.blackwell@FTIConsulting.com
Asia Pacific: Honner Jessica Effeney + 61 2 8248 3745
jessica@honner.com.au
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