-
Fourth quarter net income of US$106.8 million, and adjusted net income
of US$117.5 million, reflect a higher tax rate driven primarily by a
true-up in the quarter for mix shift in regional profitability
-
AUM of US$328.5 billion, down 13% compared to the prior quarter,
reflecting market conditions and net outflows of US$8.4 billion
-
Completed US$50 million of share buybacks during the quarter;
completed US$100 million of share buybacks during 2018
-
Board declared quarterly dividend of US$0.36 per share and approved
additional authorisation of US$200 million of buybacks in 2019
-
Achieved targeted cost synergies of US$125 million, well ahead of plan
LONDON--(BUSINESS WIRE)--
Janus Henderson Group plc (NYSE/ASX: JHG; ‘JHG’, ‘the Group’) published
its fourth quarter and full year 2018 results for the period ended 31
December 2018.
Fourth quarter 2018 net income attributable to JHG was US$106.8 million
compared to US$111.2 million in the third quarter 2018 and US$471.7
million in the fourth quarter 2017 (fourth quarter 2017 net income
included a one-time non-cash tax benefit of US$340.7 million related to
changes in US tax legislation). Adjusted net income attributable to JHG,
adjusted for one-time, acquisition and transaction related costs, of
US$117.5 million declined 15% compared to US$138.6 million in the third
quarter 2018 and declined 21% compared to US$147.9 million in the fourth
quarter 2017.
Fourth quarter 2018 diluted earnings per share was US$0.54 compared to
US$0.55 in the third quarter 2018 and US$2.32 in the fourth quarter 2017
(fourth quarter 2017 diluted earnings per share included US$1.67 per
diluted share related to changes in US tax legislation). Adjusted
diluted earnings per share of US$0.59 declined 14% compared to US$0.69
in the third quarter 2018 and declined 19% versus US$0.73 in the fourth
quarter 2017.
Fourth quarter 2018 financial results reflect a higher tax rate due
primarily to a true-up in the quarter for the mix shift in regional
profitability. Going forward, the firm’s statutory tax rate is expected
to be 23% to 25%; the effective rate will be impacted by various
differences which arise quarter to quarter.
Dick Weil, Chief Executive Officer of Janus Henderson Group plc,
stated:
“Against a backdrop of volatile markets and ongoing
change in the asset management sector, 2018 was a year of further
transformation for our firm. On the positive side, we made significant
progress driving towards merger completion, transforming from two
separate legacy companies into Janus Henderson. I am very pleased that
we were able to complete our integration efforts and realise our cost
synergies of US$125 million well ahead of plan in 2018. Additionally, in
2018 the business continued to generate strong cash flow - we returned a
majority of this cash flow to shareholders through dividends, repaying
our convertible notes and by completing our US$100 million share buyback.
“Despite this progress and our continued success taking market share in
our largest geography – US active equity mutual funds – we faced the
same global market challenges and headwinds as the wider industry,
combined with an aggregate US$18 billion outflow, which was
disappointing.
“As an active manager, the current volatile environment causes our
clients to look to us for help and support. It provides us with an
especially important opportunity to earn our clients’ loyalty and to
differentiate ourselves from our competition – both active and passive.
We enter 2019 confident in our ability to deliver for our clients and we
are committed to a continued focus on operational efficiency, while
developing initiatives for future growth.”
SUMMARY OF FINANCIAL RESULTS (unaudited) (in US$ 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.
Results for 2017 were recast to reflect the adoption of the new revenue
recognition standard to conform to the 2018 presentation; the change in
presentation does not affect the Group’s reporting on an adjusted basis,
as distribution expenses are netted against revenue. Pro forma results
are based on the combined results of JHG as if the merger took place at
the beginning of the period.
|
|
|
|
| Three months ended |
| Year ended |
| | | |
| |
| | | |
| |
| 31 Dec |
| | | 31 Dec | | 30 Sep | | 31 Dec | | 31 Dec | | 31 Dec | | 2017 |
|
| | | 2018 | | 2018 | | 2017 | | 2018 | | 2017 | | (pro forma) |
GAAP basis: | | | | | | | | | | | | | |
|
Revenue
| | |
545.1
| | |
581.2
| | |
621.8
| | |
2,306.4
| | |
1,818.3
| | |
2,295.9
| |
|
Operating expenses
| | |
395.1
| | |
432.9
| | |
425.2
| | |
1,656.6
| | |
1,376.0
| | |
1,766.7
| |
|
Operating income
| | |
150.0
| | |
148.3
| | |
196.6
| | |
649.8
| | |
442.3
| | |
529.2
| |
|
Operating margin
| | |
27.5
|
%
| |
25.5
|
%
| |
31.6
|
%
| |
28.2
|
%
| |
24.3
|
%
| |
23.0
|
%
|
|
Net income attributable to JHG
| | |
106.8
| | |
111.2
| | |
471.7
| | |
523.8
| | |
655.5
| | |
704.6
| |
|
Diluted earnings per share
| | |
0.54
| | |
0.55
| | |
2.32
| | |
2.61
| | |
3.93
| | |
3.46
| |
|
|
| Three months ended |
| Year ended |
| | | |
| |
| | | |
| 31 Dec |
| | | 31 Dec | | 30 Sep | | 31 Dec | | 31 Dec | | 2017 |
|
| | | 2018 | | 2018 | | 2017 | | 2018 | | (pro forma) |
Adjusted basis: | | | | | | | | | | | |
|
Revenue
| | |
442.7
| | |
468.9
| | |
505.3
| | |
1,859.7
| | |
1,848.1
| |
|
Operating expenses
| | |
277.4
| | |
288.4
| | |
284.9
| | |
1,133.7
| | |
1,116.2
| |
|
Operating income
| | |
165.3
| | |
180.5
| | |
220.4
| | |
726.0
| | |
731.9
| |
|
Operating margin
| | |
37.3
|
%
| |
38.5
|
%
| |
43.6
|
%
| |
39.0
|
%
| |
39.6
|
%
|
|
Net income attributable to JHG
| | |
117.5
| | |
138.6
| | |
147.9
| | |
549.6
| | |
504.4
| |
|
Diluted earnings per share
| | |
0.59
| | |
0.69
| | |
0.73
| | |
2.74
| | |
2.48
| |
| | | | | | | | | | | | | | | |
|
Fourth quarter 2018 adjusted revenue of US$442.7 million decreased from
the third quarter 2018 result of US$468.9 million as management fees
declined in line with an 8% decline in average AUM partially offset by a
seasonal increase in performance fees. Fourth quarter 2018 adjusted
operating income of US$165.3 million decreased from US$180.5 million in
the third quarter 2018, with lower adjusted revenue slightly offset by
lower operating expenses primarily due to long-term incentive
compensation mark to market.
BREXIT UPDATE
Janus Henderson has a long history in continental Europe and already has
fund ranges in the UK, Luxembourg and Ireland. We have completed our
contingency preparations, and we are in a strong position to continue to
serve investors in the UK and the EU irrespective of the outcome. The
announcements from ESMA last week on the subject of delegation are
welcomed, and support our current planning assumptions.
DIVIDEND AND SHARE BUYBACK
On 4 February 2019, the Board declared a fourth quarter dividend in
respect of the three months ended 31 December 2018 of US$0.36 per share.
Shareholders on the register on the record date of 15 February 2019 will
be paid the dividend on 26 February 2019. Janus Henderson does not offer
a dividend reinvestment plan.
During the fourth quarter, JHG purchased approximately 2.2 million in
aggregate of its ordinary shares on the NYSE and its CHESS Depositary
Interests (CDIs) on the ASX for a total outlay of US$50 million.
Additionally, on 4 February 2019, and subject to formally appointing a
corporate broker, the Board approved JHG commencing a new on-market
buyback programme in 2019, on a date to be determined and announced by
JHG. The Group intends to spend up to US$200 million to buy its ordinary
shares on the NYSE and its CDIs on the ASX over 12 months. Further
information regarding the proposed on-market buyback programme will be
announced immediately prior to its finalisation and formal launch.
During the first quarter 2019, the firm will purchase shares on market
for the annual share grants associated with 2018 variable compensation,
which is not connected with the above Board approval. As a firm policy,
Janus Henderson does not issue new shares to employees as part of its
annual compensation practices.
Net tangible assets per share
| US$ |
|
|
|
| 31 Dec 2018 |
|
| 31 Dec 2017 |
|
Net tangible assets per ordinary share
|
|
| | |
1.32
| | |
0.68
|
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)
Pro forma results are based on the combined results of JHG as if the
merger took place at the beginning of the period. 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 |
|
| Year ended |
| | | |
| |
| | | | |
| 31 Dec |
| | | 31 Dec | | 30 Sep | | 31 Dec | | | 31 Dec | | 2017 |
| | | 2018 | | 2018 | | 2017 | | | 2018 | | (pro forma) |
| Opening AUM | | | 378.1 | | | 370.1 | | | 360.5 | | | | 370.8 | | | 319.2 | |
|
Sales
| | |
16.6
| | |
17.7
| | |
20.0
| | | |
71.1
| | |
77.9
| |
|
Redemptions
| | |
(25.0
|
)
| |
(22.0
|
)
| |
(22.9
|
)
| | |
(89.2
|
)
| |
(88.1
|
)
|
|
Net sales / (redemptions)
| | |
(8.4
|
)
| |
(4.3
|
)
| |
(2.9
|
)
| | |
(18.1
|
)
| |
(10.2
|
)
|
|
Market / FX
| | |
(41.2
|
)
| |
12.3
| | |
13.2
| | | |
(24.2
|
)
| |
62.5
| |
|
Acquisitions / (disposals)
| | |
-
|
| |
-
|
| |
-
|
| | |
-
|
| |
(0.7
|
)
|
| Closing AUM | | | 328.5 | | | 378.1 | | | 370.8 | | | | 328.5 | | | 370.8 | |
| | | | | | | | | | | | | | | | |
|
Quarterly AUM and flows by capability |
|
|
|
|
| Equities |
| Fixed
Income |
| Quantitative
Equities |
| Multi-Asset |
| Alternatives |
| Total |
| AUM 31 Dec 2017 | | | 189.7 | | | 80.1 | | | | 49.9 | | | | 31.6 | | | 19.5 | | | | 370.8 | |
|
Sales
| | |
9.9
| | |
5.3
| | | |
1.7
| | | |
1.3
| | |
1.5
| | | |
19.7
| |
|
Redemptions
| | |
(11.7
|
)
| |
(5.6
|
)
| | |
(1.4
|
)
| | |
(1.2
|
)
| |
(2.5
|
)
| | |
(22.4
|
)
|
|
Net sales / (redemptions)
| | |
(1.8
|
)
| |
(0.3
|
)
| | |
0.3
| | | |
0.1
| | |
(1.0
|
)
| | |
(2.7
|
)
|
|
Market / FX
| | |
2.8
|
| |
0.2
|
| | |
0.2
|
| | |
0.1
|
| |
0.5
|
| | |
3.8
|
|
| AUM 31 Mar 2018 | | | 190.7 | | | 80.0 | | | | 50.4 | | | | 31.8 | | | 19.0 | | | | 371.9 | |
|
Sales
| | |
8.5
| | |
5.0
| | | |
0.4
| | | |
1.8
| | |
1.4
| | | |
17.1
| |
|
Redemptions
| | |
(9.6
|
)
| |
(5.6
|
)
| | |
(1.2
|
)
| | |
(1.3
|
)
| |
(2.1
|
)
| | |
(19.8
|
)
|
|
Net sales / (redemptions)
| | |
(1.1
|
)
| |
(0.6
|
)
| | |
(0.8
|
)
| | |
0.5
| | |
(0.7
|
)
| | |
(2.7
|
)
|
|
Market / FX
| | |
3.7
|
| |
(2.9
|
)
| | |
0.5
|
| | |
0.3
|
| |
(0.7
|
)
| | |
0.9
|
|
| AUM 30 Jun 2018 | | | 193.3 | | | 76.5 | | | | 50.1 | | | | 32.6 | | | 17.6 | | | | 370.1 | |
|
Sales
| | |
6.8
| | |
6.0
| | | |
1.3
| | | |
2.2
| | |
1.4
| | | |
17.7
| |
|
Redemptions
| | |
(9.9
|
)
| |
(7.6
|
)
| | |
(1.3
|
)
| | |
(1.3
|
)
| |
(1.9
|
)
| | |
(22.0
|
)
|
|
Net sales / (redemptions)
| | |
(3.1
|
)
| |
(1.6
|
)
| | |
(0.0
|
)
| | |
0.9
| | |
(0.5
|
)
| | |
(4.3
|
)
|
|
Market / FX
| | |
9.0
|
| |
(0.4
|
)
| | |
2.8
|
| | |
1.1
|
| |
(0.2
|
)
| | |
12.3
|
|
| 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 | |
| | | | | | | | | | | | | | | | | | | | | |
|
Annual AUM and flows by capability |
|
|
|
|
| Equities |
| Fixed
Income |
| Quantitative
Equities |
| Multi-Asset |
| Alternatives |
| Total |
| AUM 31 Dec 2017 | | | 189.7 | | | 80.1 | | | | 49.9 | | | 31.6 | | | 19.5 | | | 370.8 | |
|
Sales
| | |
33.8
| | |
21.0
| | | |
3.7
| | |
7.6
| | |
5.0
| | |
71.1
| |
|
Redemptions
| | |
(43.9
|
)
| |
(24.8
|
)
| | |
(5.3
|
)
| |
(5.8
|
)
| |
(9.4
|
)
| |
(89.2
|
)
|
|
Net sales / (redemptions)
| | |
(10.1
|
)
| |
(3.8
|
)
| | |
(1.6
|
)
| |
1.8
| | |
(4.4
|
)
| |
(18.1
|
)
|
|
Market / FX
| | |
(13.7
|
)
| |
(4.4
|
)
| | |
(4.0
|
)
| |
(1.0
|
)
| |
(1.1
|
)
| |
(24.2
|
)
|
|
Reclassification
| | |
1.7
|
| |
0.5
|
| | |
-
|
| |
(2.2
|
)
| |
-
|
| |
-
|
|
| AUM 31 Dec 2018 | | | 167.6 | | | 72.4 | | | | 44.3 | | | 30.2 | | | 14.0 | | | 328.5 | |
| | | | | | | | | | | | | | | | | | | |
|
Average AUM |
|
|
|
|
| Three months ended |
| Year ended |
| | | |
| |
| | | |
| 31 Dec |
| | | 31 Dec
2018 | | 30 Sep
2018 | | 31 Dec
2017 | | 31 Dec
2018 | | 2017
(pro forma) |
| Average AUM: | | | | | | | | | | | |
|
Equities
| | |
179.5
| |
197.8
| |
185.9
| |
190.7
| |
172.8
|
|
Fixed Income
| | |
73.0
| |
75.9
| |
80.2
| |
76.6
| |
77.6
|
| Quantitative Equities | | |
47.6
| |
52.1
| |
49.7
| |
50.3
| |
48.2
|
|
Multi-Asset
| | |
32.2
| |
33.7
| |
30.9
| |
32.5
| |
29.5
|
|
Alternatives
| | |
15.5
| |
17.3
| |
19.4
| |
17.6
| |
18.4
|
| Total | | | 347.8 | | 376.8 | | 366.1 | | 367.7 | | 346.5 |
| | | | | | | | | | |
|
INVESTMENT PERFORMANCE
% of AUM outperforming benchmark (at 31 Dec 2018) |
|
|
|
|
| |
| | | | Capability |
|
| 1 year |
|
| 3 years |
|
| 5 years |
| | | |
Equities
| | |
67
|
%
| | |
55
|
%
| | |
71
|
%
|
| | | |
Fixed Income
| | |
36
|
%
| | |
88
|
%
| | |
93
|
%
|
| | | | Quantitative Equities | | |
20
|
%
| | |
11
|
%
| | |
15
|
%
|
| | | |
Multi-Asset
| | |
81
|
%
| | |
90
|
%
| | |
91
|
%
|
| | | |
Alternatives
| | |
35
|
%
| | |
94
|
%
| | |
100
|
%
|
| | | | Total | | |
55
|
%
| | |
61
|
%
| | |
72
|
%
|
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 31
Dec 2018. Capabilities defined by Janus Henderson.
% of mutual fund AUM in top 2 Morningstar quartiles (at 31 Dec
2018) |
|
|
|
|
| |
| | | | Capability |
|
| 1 year |
|
| 3 years |
|
| 5 years |
| | | |
Equities
| | |
67
|
%
| | |
63
|
%
| | |
85
|
%
|
| | | |
Fixed Income
| | |
46
|
%
| | |
28
|
%
| | |
57
|
%
|
| | | | Quantitative Equities | | |
98
|
%
| | |
17
|
%
| | |
100
|
%
|
| | | |
Multi-Asset
| | |
89
|
%
| | |
89
|
%
| | |
88
|
%
|
| | | |
Alternatives
| | |
26
|
%
| | |
93
|
%
| | |
59
|
%
|
| | | | Total | | |
65
|
%
| | |
62
|
%
| | |
80
|
%
|
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 31 Dec 2018. For
the 1-, 3-, 5- and 10-year periods ending 31 Dec 2018, 57%, 48%, 61% and
64% of the 211, 200, 181 and 146 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. © 2018 Morningstar, Inc. All Rights
Reserved.
FIRST QUARTER 2019 RESULTS
Janus Henderson intends to publish its first quarter 2019 results on 2
May 2019.
FOURTH QUARTER AND FULL YEAR 2018 EARNINGS CALL INFORMATION
Chief Executive Officer, Dick Weil, and Chief Financial Officer, Roger
Thompson, will present these results on 5 February 2019 on a conference
call and webcast to be held at 8am EST, 1pm GMT, 12am AEDT (6 February).
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: | | | 9437527 |
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 (JHG) 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.
Janus Henderson has approximately US$329 billion in assets under
management (at 31 December 2018), more than 2,000 employees, and offices
in 28 cities worldwide. Headquartered in London, the company is listed
on the New York Stock Exchange (NYSE) and the Australian Securities
Exchange (ASX).
FINANCIAL DISCLOSURES
Results for 2017 were recast to reflect the adoption of the new revenue
recognition standard to conform to the 2018 presentation; the change in
presentation does not affect the Group’s reporting on an adjusted basis,
as distribution expenses are netted against revenue. In addition, all
prior periods reflect the reclassification of certain revenue amounts
from ‘Other revenue’ to ‘Shareowner servicing fees’. Pro forma results
are based on the combined results of JHG as if the merger took place at
the beginning of the period.
Condensed consolidated statements of comprehensive income
(unaudited) |
|
|
|
|
| Three months ended |
| Year ended |
| | | |
| |
| | | |
| |
| 31 Dec |
| | | 31 Dec | | 30 Sep | | 31 Dec | | 31 Dec | | 31 Dec | | 2017 |
| (in US$ millions, except per share data or as noted) | | | 2018 | | 2018 | | 2017 | | 2018 | | 2017 | | (pro forma) |
| Revenue: | | | | | | | | | | | | | |
|
Management fees
| | |
452.3
| | |
498.7
| | |
498.1
| | |
1,947.4
| | |
1,480.9
| | |
1,869.3
| |
|
Performance fees
| | |
3.5
| | |
(6.0
|
)
| |
33.5
| | |
7.1
| | |
103.9
| | |
84.7
| |
|
Shareowner servicing fees
| | |
37.0
| | |
40.2
| | |
38.3
| | |
154.2
| | |
87.3
| | |
144.5
| |
|
Other revenue
| | |
52.3
|
| |
48.3
|
| |
51.9
|
| |
197.7
|
| |
146.2
|
| |
197.4
|
|
| Total revenue | | | 545.1 |
| | 581.2 |
| | 621.8 |
| | 2,306.4 |
| | 1,818.3 |
| | 2,295.9 |
|
| | | | | | | | | | | | |
|
| Operating expenses: | | | | | | | | | | | | | |
|
Employee compensation and benefits
| | |
155.8
| | |
159.5
| | |
172.6
| | |
613.0
| | |
543.3
| | |
698.3
| |
|
Long-term incentive plans
| | |
32.3
| | |
61.1
| | |
36.2
| | |
188.6
| | |
150.8
| | |
182.8
| |
|
Distribution expenses
| | |
102.4
| | |
112.3
| | |
116.5
| | |
446.7
| | |
351.9
| | |
447.8
| |
|
Investment administration
| | |
11.6
| | |
12.2
| | |
12.2
| | |
46.9
| | |
43.8
| | |
43.8
| |
|
Marketing
| | |
12.8
| | |
7.1
| | |
9.8
| | |
37.9
| | |
31.2
| | |
62.8
| |
|
General, administrative and occupancy
| | |
62.4
| | |
59.9
| | |
55.6
| | |
253.7
| | |
202.2
| | |
264.5
| |
|
Depreciation and amortisation
| | |
17.8
|
| |
20.8
|
| |
22.3
|
| |
69.8
|
| |
52.8
|
| |
66.7
|
|
| Total operating expenses | | | 395.1 |
| | 432.9 |
| | 425.2 |
| | 1,656.6 |
| | 1,376.0 |
| | 1,766.7 |
|
| | | | | | | | | | | | |
|
| Operating income | | | 150.0 | | | 148.3 | | | 196.6 | | | 649.8 | | | 442.3 | | | 529.2 | |
| | | | | | | | | | | | |
|
|
Interest expense
| | |
(4.0
|
)
| |
(4.0
|
)
| |
(4.1
|
)
| |
(15.7
|
)
| |
(11.9
|
)
| |
(18.7
|
)
|
|
Investment gains (losses), net
| | |
(15.3
|
)
| |
(8.3
|
)
| |
3.0
| | |
(40.9
|
)
| |
18.0
| | |
19.5
| |
|
Other non-operating income (expenses), net
| | |
13.5
|
| |
2.3
|
| |
(9.0
|
)
| |
68.6
|
| |
(1.0
|
)
| |
0.5
|
|
|
Income before taxes
| | |
144.2
| | |
138.3
| | |
186.5
| | |
661.8
| | |
447.4
| | |
530.5
| |
|
Income tax provision
| | |
(43.4
|
)
| |
(33.2
|
)
| |
285.6
|
| |
(162.2
|
)
| |
211.0
|
| |
179.6
|
|
|
Net income
| | |
100.8
| | |
105.1
| | |
472.1
| | |
499.6
| | |
658.4
| | |
710.1
| |
|
Net loss (income) attributable to noncontrolling interests
| | |
6.0
|
| |
6.1
|
| |
(0.4
|
)
| |
24.2
|
| |
(2.9
|
)
| |
(5.5
|
)
|
| Net income attributable to JHG | | | 106.8 | | | 111.2 | | | 471.7 | | | 523.8 | | | 655.5 | | | 704.6 | |
|
Less: allocation of earnings to participating stock-based awards
| | |
(2.8
|
)
| |
(3.0
|
)
| |
(12.9
|
)
| |
(12.7
|
)
| |
(17.3
|
)
| |
(19.9
|
)
|
| Net income attributable to JHG common shareholders | | | 104.0 |
| | 108.2 |
| | 458.8 |
| | 511.1 |
| | 638.2 |
| | 684.7 |
|
| | | | | | | | | | | | |
|
|
Basic weighted-average shares outstanding (in millions) | | |
193.3
| | |
195.2
| | |
196.3
| | |
195.0
| | |
160.7
| | |
196.3
| |
|
Diluted weighted-average shares outstanding (in millions) | | |
194.1
| | |
195.9
| | |
197.7
| | |
195.9
| | |
162.3
| | |
197.9
| |
| | | | | | | | | | | | |
|
| Diluted earnings per share (in US$) | | | 0.54 | | | 0.55 | | | 2.32 | | | 2.61 | | | 3.93 | | | 3.46 | |
| | | | | | | | | | | | | | | | | | |
|
Adjusted statements of income (unaudited)
The following are reconciliations of US GAAP basis revenues, operating
income, net income attributable to JHG and diluted earnings per share to
adjusted revenues, adjusted operating income, adjusted net income
attributable to JHG and adjusted diluted earnings per share.
|
|
| Three months ended |
| Year ended |
| | | |
| |
| | | |
| 31 Dec |
| | | 31 Dec | | 30 Sep | | 31 Dec | | 31 Dec | | 2017 |
| (in US$ millions, except per share data or as noted) | | | 2018 | | 2018 | | 2017 | | 2018 | | (pro forma) |
| Reconciliation of revenue to adjusted revenue | | | | | | | | | | | |
|
Revenue
| | |
545.1
| | |
581.2
| | |
621.8
| | |
2,306.4
| | |
2,295.9
| |
|
Distribution expenses1 | | |
(102.4
|
)
| |
(112.3
|
)
| |
(116.5
|
)
| |
(446.7
|
)
| |
(447.8
|
)
|
|
Adjusted revenue
| | |
442.7
|
| |
468.9
|
| |
505.3
|
| |
1,859.7
|
| |
1,848.1
|
|
| | | | | | | | | | |
|
| Reconciliation of operating income to adjusted operating income | | | | | | | | | |
|
Operating income
| | |
150.0
| | |
148.3
| | |
196.6
| | |
649.8
| | |
529.2
| |
|
Employee compensation and benefits2 | | |
4.4
| | |
8.1
| | |
9.6
| | |
21.4
| | |
54.1
| |
|
Long-term incentive plans2 | | |
(0.2
|
)
| |
10.0
| | |
1.5
| | |
10.6
| | |
17.6
| |
|
Investment administration2 | | |
-
| | |
-
| | |
-
| | |
0.7
| | |
-
| |
|
Marketing2 | | |
0.1
| | |
-
| | |
(0.7
|
)
| |
-
| | |
28.9
| |
|
General, administration and occupancy2 | | |
1.9
| | |
1.3
| | |
(0.7
|
)
| |
6.8
| | |
65.8
| |
|
Depreciation and amortisation2,3 | | |
9.1
|
| |
12.8
|
| |
14.1
|
| |
36.7
|
| |
36.3
|
|
|
Adjusted operating income
| | |
165.3
|
| |
180.5
|
| |
220.4
|
| |
726.0
|
| |
731.9
|
|
| | | | | | | | | | |
|
|
Operating margin
| | |
27.5
|
%
| |
25.5
|
%
| |
31.6
|
%
| |
28.2
|
%
| |
23.0
|
%
|
|
Adjusted operating margin
| | |
37.3
|
%
| |
38.5
|
%
| |
43.6
|
%
| |
39.0
|
%
| |
39.6
|
%
|
| | | | | | | | | | |
|
| Reconciliation of net income attributable to JHG to adjusted net
income attributable to JHG | | | | | |
|
Net income attributable to JHG
| | |
106.8
| | |
111.2
| | |
471.7
| | |
523.8
| | |
704.6
| |
|
Employee compensation and benefits2 | | |
4.4
| | |
8.1
| | |
9.6
| | |
21.4
| | |
54.1
| |
|
Long-term incentive plans2 | | |
(0.2
|
)
| |
10.0
| | |
1.5
| | |
10.6
| | |
17.6
| |
|
Investment administration2 | | |
-
| | |
-
| | |
-
| | |
0.7
| | |
-
| |
|
Marketing2 | | |
0.1
| | |
-
| | |
(0.7
|
)
| |
-
| | |
28.9
| |
|
General, administration and occupancy2 | | |
1.9
| | |
1.3
| | |
(0.7
|
)
| |
6.8
| | |
65.8
| |
|
Depreciation and amortisation2,3 | | |
9.1
| | |
12.8
| | |
14.1
| | |
36.7
| | |
36.3
| |
|
Interest expense4 | | |
0.9
| | |
0.8
| | |
0.7
| | |
3.1
| | |
2.7
| |
|
Investment gains (losses), net5 | | |
-
| | |
-
| | |
(3.1
|
)
| |
-
| | |
(13.2
|
)
|
|
Other non-operating income (expenses), net4 | | |
0.3
| | |
2.5
| | |
11.0
| | |
(46.0
|
)
| |
1.7
| |
|
Income tax provision6 | | |
(5.8
|
)
| |
(8.1
|
)
| |
(356.2
|
)
| |
(7.5
|
)
| |
(394.1
|
)
|
|
Adjusted net income attributable to JHG
| | | 117.5 | | | 138.6 | | | 147.9 | | | 549.6 | | | 504.4 | |
|
Less: allocation of earnings to participating stock-based awards
| | |
(3.2
|
)
| |
(3.7
|
)
| |
(4.0
|
)
| |
(13.4
|
)
| |
(14.2
|
)
|
|
Adjusted net income attributable to JHG common shareholders
| | | 114.3 |
| | 134.9 |
| | 143.9 |
| | 536.2 |
| | 490.2 |
|
| | | | | | | | | | |
|
|
Weighted average diluted common shares outstanding – diluted (two
class) (in millions)
| | |
194.1
| | |
195.9
| | |
197.7
| | |
195.9
| | |
197.9
| |
|
Diluted earnings per share (two class) (in US$)
| | | 0.54 | | | 0.55 | | | 2.32 | | | 2.61 | | | 3.46 | |
| Adjusted diluted earnings per share (two class) (in US$) | | | 0.59 | | | 0.69 | | | 0.73 | | | 2.74 | | | 2.48 | |
____________________
|
| 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 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.
|
| 2 | |
Adjustments primarily represent deal and integration costs in
relation to the Merger. The costs primarily represent severance
costs, legal costs and consulting fees. JHG management believes
these costs do not represent the ongoing operations of the Group.
|
| 3 | |
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. JHG management
believes these non-cash and acquisition-related costs do not
represent the ongoing operations of the Group.
|
| 4 | |
Adjustments primarily represent fair value movements on options
issued to Dai-ichi, deferred consideration costs associated with
acquisitions and increased debt expense as a consequence of the fair
value uplift on the debt due to acquisition accounting. JHG
management believes these costs do not represent the ongoing
operations of the Group. The options issued to Dai-ichi expired on 3
October 2018.
|
| 5 | |
Adjustments primarily relate to the gain recognised on disposal of
the alternative UK small cap team (‘Volantis team’) on 1 April 2017
and adjustments related to deferred consideration costs for prior
acquisitions. JHG management believes these costs do not represent
the ongoing operations of the Group.
|
| 6 | |
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. In
addition, fourth quarter 2017 includes the impact of US tax
legislation passed in December 2017.
|
| |
|
Condensed consolidated balance sheets (unaudited) |
|
|
|
|
| 31 Dec |
|
| 30 Sep |
|
| 31 Dec |
| (in US$ millions) | | | 2018 | | | 2018 | | | 2017 |
| Assets | | | | | | | | | |
|
Cash and cash equivalents
| | |
880.4
| | |
754.8
| | |
760.1
|
|
Investment securities
| | |
291.8
| | |
310.3
| | |
280.4
|
|
Property, equipment and software, net
| | |
69.5
| | |
65.0
| | |
70.6
|
|
Intangible assets and goodwill, net
| | |
4,601.3
| | |
4,641.3
| | |
4,738.7
|
|
Assets of consolidated variable interest entities
| | |
323.9
| | |
355.2
| | |
466.7
|
|
Other assets
| | |
745.0
| | |
796.9
| | |
956.2
|
| Total assets | | | 6,911.9 | | | 6,923.5 | | | 7,272.7 |
| | | | | | | | |
|
| Liabilities, redeemable noncontrolling interests and equity | | | | | | | | | |
|
Debt
| | |
319.1
| | |
319.8
| | |
379.2
|
|
Deferred tax liabilities, net
| | |
729.9
| | |
744.8
| | |
752.6
|
|
Liabilities of consolidated variable interest entities
| | |
6.5
| | |
15.0
| | |
21.5
|
|
Other liabilities
| | |
859.5
| | |
806.2
| | |
1,053.6
|
|
Redeemable noncontrolling interests
| | |
136.1
| | |
139.2
| | |
190.3
|
|
Total equity
| | |
4,860.8
| | |
4,898.5
| | |
4,875.5
|
| Total liabilities, redeemable noncontrolling interests and equity | | | 6,911.9 | | | 6,923.5 | | | 7,272.7 |
| | | | | | | | |
|
Condensed consolidated statements of cash flows (unaudited) |
|
|
|
|
| Three months ended |
| (in US$ millions) | | | 31 Dec
2018 |
|
| 30 Sep
2018 |
|
| 31 Dec
2017 |
| Cash provided by (used for) | | | | | | | | | |
|
Operating activities
| | |
243.3
| | | |
246.6
| | | |
225.9
| |
|
Investing activities
| | |
(0.4
|
)
| | |
31.9
| | | |
0.5
| |
|
Financing activities
| | |
(114.4
|
)
| | |
(182.4
|
)
| | |
(133.6
|
)
|
|
Effect of foreign exchange rate changes
| | |
(8.0
|
)
| | |
(3.8
|
)
| | |
1.7
|
|
| Net change during period | | | 120.5 |
| | | 92.3 |
| | | 94.5 |
|
STATUTORY DISCLOSURES
Associates and joint ventures
At 31 December 2018, 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 2017,
on file with the SEC (Commission file no. 001-3810). 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
2017, 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/20190205005260/en/
Janus Henderson Group plc
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.horton@janushenderson.com
Investor
Relations
investor.relations@janushenderson.com
Media
enquiries:
North America:
Taylor Smith
+1 303
336 5031
taylor.smith@janushenderson.com
EMEA:
Natasha
Moore
+44 (0) 20 7818 3521
natasha.moore@janushenderson.com
United
Kingdom: FTI Consulting
Tom Blackwell
+ 44 (0) 20 3727 1051
tom.blackwell@FTIConsulting.com
Asia
Pacific: Honner
Michael Mullane
+ 61 28248 3740
michaelmullane@honner.com.au
Source: Janus Henderson Group plc