Janus Henderson Group plc Reports Second Quarter 2021 Diluted EPS of US$0.79, or US$1.16 on an Adjusted Basis

• Solid long-term investment performance, with 66% and 63% of assets under management (�AUM’) outperforming relevant benchmarks on a three- and five-year basis, respectively, as at 30 June 2021
• Second quarter 2021 operating income was US$225.0 million; second quarter 2021 adjusted operating income of US$269.3 million increased 95% compared to the same period a year ago
• AUM of US$427.6 billion increased 6% compared to the prior quarter, reflecting positive markets partially offset by net outflows of US$(2.5) billion
• Board declared quarterly dividend of US$0.38 per share and approved authorisation of US$200 million of buybacks through April 2022

LONDON–(BUSINESS WIRE)–Janus Henderson Group plc (NYSE/ASX: JHG; ‘JHG’, ‘the Group’) published its second quarter 2021 results for the period ended 30 June 2021.

Second quarter 2021 operating income was US$225.0 million compared to US$192.5 million in the first quarter 2021 and US$106.7 million in the second quarter 2020. Adjusted operating income, adjusted for one-time, acquisition and transaction related costs, was US$269.3 million in the second quarter 2021 compared to US$201.5 million in the first quarter 2021 and US$138.4 million in the second quarter 2020.

Second quarter 2021 diluted earnings per share of US$0.79 decreased 10% compared to US$0.88 in the first quarter 2021 and increased 44% compared to US$0.55 in the second quarter 2020. Adjusted diluted earnings per share of US$1.16 in the second quarter 2021 increased 27% compared to US$0.91 in the first quarter 2021 and increased 73% versus US$0.67 in the second quarter 2020.

Dick Weil, Chief Executive Officer of Janus Henderson Group plc, stated:

“Second quarter financial results were extremely strong, reflecting growth in assets due to positive markets and good investment performance which translated into significant performance fees, adjusted operating income and EPS. Our strong balance sheet, cash flow generation and financial discipline allow us to increase the return of excess cash to shareholders with the US$200 million accretive buyback announced today.

“While we continue to make progress towards sustained organic growth, we are winning high-quality new business which is driving our net management fee rate higher during a period of fee compression in the industry. I am confident that our strategy of Simple Excellence has us on the right path to a stronger, more profitable and resilient company positioned well for long-term growth and value creation.”

RESULTS FOR ANNOUNCEMENT TO THE MARKET

These results for announcement to the market include the interim information required to be provided to the Australian Securities Exchange (ASX) under Listing Rule 4.2A and Appendix 4D.

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, JHG management evaluates the profitability of the Group and its ongoing operations using additional non-GAAP financial measures. Management uses these performance measures to evaluate the business, and adjusted values are consistent with internal management reporting. See ‘Reconciliation of non-GAAP financial information’ below for additional information.

		Six months ended
		30 Jun		30 Jun
		2021		2020		% change
GAAP basis:
Revenue		1,382.4		1,072.9		29	%
Operating expenses		964.9		1,298.6		(26)	%
Operating income (loss)		417.5		(225.7)		nm
Operating margin		30.2	%	(21.0)	%	nm
Net income (loss) attributable to JHG		292.8		(144.1)		nm
Diluted earnings (loss) per share		1.67		(0.79)		nm
Adjusted basis:
Revenue		1,120.2		856.0		31	%
Operating expenses		649.4		553.1		17	%
Operating income		470.8		302.9		55	%
Operating margin		42.0	%	35.4	%	6.6	ppt
Net income attributable to JHG		362.0		239.3		51	%
Diluted earnings per share		2.07		1.28		61	%

		Three months ended
		30 Jun		31 Mar		30 Jun
		2021		2021		2020
GAAP basis:
Revenue		738.4		644.0		518.0
Operating expenses		513.4		451.5		411.3
Operating income		225.0		192.5		106.7
Operating margin		30.5	%	29.9	%	20.6	%
Net income attributable to JHG		137.3		155.5		102.9
Diluted earnings per share		0.79		0.88		0.55
Adjusted basis:
Revenue		603.6		516.6		413.3
Operating expenses		334.3		315.1		274.9
Operating income		269.3		201.5		138.4
Operating margin		44.6	%	39.0	%	33.5	%
Net income attributable to JHG		200.5		161.5		126.6
Diluted earnings per share		1.16		0.91		0.67

DIVIDEND AND SHARE BUYBACK

On 28 July 2021, the Board declared a second quarter dividend in respect of the three months ended 30 June 2021 of US$0.38 per share. Shareholders on the register on the record date of 9 August 2021 will be paid the dividend on 25 August 2021. Janus Henderson does not offer a dividend reinvestment plan.

Additionally, on 28 July 2021, and subject to formally appointing a corporate broker, the Board authorised JHG commencing a new on-market buyback programme in 2021, 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 CHESS Depositary Interests (CDIs) on the ASX through April 2022. Further information regarding the proposed on-market buyback programme will be announced immediately prior to its finalisation and formal launch.

Net tangible assets per share

US$		30 Jun 2021		30 Jun 2020
Net tangible assets / (liabilities) per ordinary share		3.56		2.61

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-US$ denominated AUM is translated into US$. Redemptions include impact of client switches.

Total Group comparative AUM and flows

		Three months ended
		30 Jun			31 Mar			30 Jun
		2021			2021			2020
Opening AUM		405.1			401.6			294.4
Sales		18.4			20.7			17.9
Redemptions		(20.9	)		(24.0	)		(26.1	)
Net sales / (redemptions)		(2.5	)		(3.3	)		(8.2	)
Market / FX		25.0			6.8			50.5
Closing AUM		427.6			405.1			336.7

Quarterly AUM and flows by capability

					Fixed						Quantitative
		Equities			Income			Multi-Asset			Equities			Alternatives			Total
AUM 30 Jun 2020		179.1			70.2			40.3			37.5			9.6			336.7
Sales		5.8			5.9			2.3			1.3			0.5			15.8
Redemptions		(10.9	)		(4.1	)		(1.7	)		(1.4	)		(0.6	)		(18.7	)
Net sales / (redemptions)		(5.1	)		1.8			0.6			(0.1	)		(0.1	)		(2.9	)
Market / FX		14.9			3.1			2.7			3.3			0.5			24.5
AUM 30 Sep 2020		188.9			75.1			43.6			40.7			10.0			358.3
Sales		10.3			8.7			3.1			0.3			0.8			23.2
Redemptions		(10.4	)		(7.5	)		(1.9	)		(3.7	)		(0.8	)		(24.3	)
Net sales / (redemptions)		(0.1	)		1.2			1.2			(3.4	)		—			(1.1	)
Market / FX		30.6			5.2			3.2			4.7			0.7			44.4
AUM 31 Dec 2020		219.4			81.5			48.0			42.0			10.7			401.6
Sales		10.5			5.9			3.0			0.2			1.1			20.7
Redemptions		(12.0	)		(5.5	)		(2.2	)		(2.3	)		(2.0	)		(24.0	)
Net sales / (redemptions)		(1.5	)		0.4			0.8			(2.1	)		(0.9	)		(3.3	)
Market / FX		7.0			(2.4	)		0.7			1.4			0.1			6.8
AUM 31 Mar 2021		224.9			79.5			49.5			41.3			9.9			405.1
Sales		8.6			5.9			2.4			0.2			1.3			18.4
Redemptions		(10.5	)		(6.0	)		(1.9	)		(1.5	)		(1.0	)		(20.9	)
Net sales / (redemptions)		(1.9	)		(0.1	)		0.5			(1.3	)		0.3			(2.5	)
Market / FX		17.1			1.1			3.2			3.4			0.2			25.0
AUM 30 Jun 2021		240.1			80.5			53.2			43.4			10.4			427.6

Average AUM

		Three months ended
		30 Jun		31 Mar		30 Jun
		2021		2021		2020
Equities		235.3		223.6		168.7
Fixed Income		80.7		80.9		68.7
Multi-Asset		51.8		48.7		38.3
Quantitative Equities		42.9		41.5		38.0
Alternatives		10.1		10.6		9.3
Total		420.8		405.3		323.0

INVESTMENT PERFORMANCE

% of AUM outperforming benchmark (at 30 June 2021)

Capability		1-year		3-year		5-year
Equities		56	%	56	%	55	%
Fixed Income		98	%	96	%	97	%
Multi-Asset		98	%	97	%	97	%
Quantitative Equities		23	%	23	%	2	%
Alternatives		98	%	97	%	100	%
Total		66	%	66	%	63	%

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 June 2021. Capabilities defined by Janus Henderson.

% of mutual fund AUM in top 2 Morningstar quartiles (at 30 June 2021)

Capability		1-year		3-year		5-year
Equities		32	%	59	%	44	%
Fixed Income		57	%	80	%	75	%
Multi-Asset		19	%	92	%	91	%
Quantitative Equities		41	%	47	%	7	%
Alternatives		27	%	76	%	27	%
Total		33	%	67	%	55	%

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, 75% of total mutual fund AUM was in the top 2 Morningstar quartiles for the 10-year period ending 30 June 2021. For the 1-, 3-, 5- and 10-year periods ending 30 June 2021, 42%, 56%, 51% and 60% of the 196, 185, 182 and 148 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 Janus Henderson. © 2021 Morningstar, Inc. All Rights Reserved.

THIRD QUARTER 2021 RESULTS

Janus Henderson intends to publish its third quarter 2021 results on 28 October 2021.

SECOND QUARTER 2021 RESULTS BRIEFING INFORMATION

Chief Executive Officer Dick Weil and Chief Financial Officer Roger Thompson will present these results on 29 July 2021 on a conference call and webcast to be held at 8am EDT, 1pm BST, 10pm AEST.

Those wishing to participate should call:

United Kingdom		0800 279 9489 (toll free)
United States		866 270 1533 (toll free)
Australia		1 800 121 301 (toll free)
All other countries		+1 412 317 0797 (this is not toll free)
Conference ID		10157508

Access to the webcast and accompanying slides will be available via the investor relations section of Janus Henderson’s website (ir.janushenderson.com).

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.

At 30 June 2021, Janus Henderson had approximately US$428 billion in assets under management, more than 2,000 employees, and offices in 25 cities worldwide. Headquartered in London, the company is listed on the New York Stock Exchange (NYSE) and the Australian Securities Exchange (ASX).

FINANCIAL DISCLOSURES

Condensed consolidated statements of comprehensive income (unaudited)

		Three months ended
		30 Jun			31 Mar			30 Jun
(in US$ millions, except per share data or as noted)		2021			2021			2020
Revenue:
Management fees		544.1			514.9			407.7
Performance fees		77.4			17.0			17.2
Shareowner servicing fees		64.0			60.8			47.3
Other revenue		52.9			51.3			45.8
Total revenue		738.4			644.0			518.0
Operating expenses:
Employee compensation and benefits		192.4			174.6			145.8
Long-term incentive plans		49.8			53.5			49.1
Distribution expenses		134.8			127.4			104.7
Investment administration		13.1			12.6			12.6
Marketing		6.7			6.2			3.7
General, administrative and occupancy		65.7			63.0			58.0
Impairment of goodwill and intangible assets		40.8			3.6			26.4
Depreciation and amortisation		10.1			10.6			11.0
Total operating expenses		513.4			451.5			411.3
Operating income		225.0			192.5			106.7
Interest expense		(3.2	)		(3.2	)		(3.2	)
Investment gains, net		1.8			1.6			50.3
Other non-operating income (expense), net		(2.7	)		(0.1	)		8.6
Income before taxes		220.9			190.8			162.4
Income tax provision		(79.7	)		(43.1	)		(30.1	)
Net income		141.2			147.7			132.3
Net loss (income) attributable to noncontrolling interests		(3.9	)		7.8			(29.4	)
Net income attributable to JHG		137.3			155.5			102.9
Less: allocation of earnings to participating stock-based awards		(3.9	)		(4.8	)		(3.0	)
Net income attributable to JHG common shareholders		133.4			150.7			99.9
Basic weighted-average shares outstanding (in millions)		167.6			171.0			181.8
Diluted weighted-average shares outstanding (in millions)		168.1			171.8			182.1
Diluted earnings per share (in US$)		0.79			0.88			0.55

Reconciliation of non-GAAP financial information

In addition to financial results reported in accordance with GAAP, we compute certain financial measures using non-GAAP components, as defined by the SEC. These measures are not in accordance with, or a substitute for, GAAP, and our financial measures may be different from non-GAAP financial measures used by other companies. We have provided a reconciliation of our non-GAAP components to the most directly comparable GAAP components. The following are reconciliations of US GAAP revenue, operating expenses, operating income, net income attributable to JHG and diluted earnings per share to adjusted revenue, adjusted operating expenses, adjusted operating income, adjusted net income attributable to JHG and adjusted diluted earnings per share.

		Three months ended
		30 Jun			31 Mar			30 Jun
(in US$ millions, except per share data or as noted)		2021			2021			2020
Reconciliation of revenue to adjusted revenue
Revenue		738.4			644.0			518.0
Management fees1		(49.6	)		(46.8	)		(40.2	)
Shareowner servicing fees1		(53.1	)		(50.0	)		(39.0	)
Other revenue1		(32.1	)		(30.6	)		(25.5	)
Adjusted revenue		603.6			516.6			413.3
Reconciliation of operating expenses to adjusted operating expenses
Operating expenses		513.4			451.5			411.3
Employee compensation and benefits2		—			—			(0.5	)
Long-term incentive plans2		0.1			0.1			0.2
Distribution expenses1		(134.8	)		(127.4	)		(104.7	)
General, administration and occupancy2		(1.7	)		(3.6	)		(2.8	)
Impairment of goodwill and intangible assets3		(40.8	)		(3.6	)		(26.4	)
Depreciation and amortisation3		(1.9	)		(1.9	)		(2.2	)
Adjusted operating expenses		334.3			315.1			274.9
Adjusted operating income		269.3			201.5			138.4
Operating margin		30.5		%	29.9		%	20.6		%
Adjusted operating margin		44.6		%	39.0		%	33.5		%
Reconciliation of net income attributable to JHG to adjusted net income attributable to JHG
Net income attributable to JHG		137.3			155.5			102.9
Employee compensation and benefits2		—			—			0.5
Long-term incentive plans2		(0.1	)		(0.1	)		(0.2	)
General, administration and occupancy2		1.7			3.6			2.8
Impairment of goodwill and intangible assets3		40.8			3.6			26.4
Depreciation and amortisation3		1.9			1.9			2.2
Investment gains, net4		—			0.2			—
Other non-operating income (expense), net4		(1.7	)		(1.8	)		(0.6	)
Income tax benefit (provision)5		20.6			(1.4	)		(7.4	)
Adjusted net income attributable to JHG		200.5			161.5			126.6
Less: allocation of earnings to participating stock-based awards		(5.7	)		(5.0	)		(3.7	)
Adjusted net income attributable to JHG common shareholders		194.8			156.5			122.9
Weighted-average diluted common shares outstanding – diluted (two class) (in millions)		168.1			171.8			182.1
Diluted earnings per share (two class) (in US$)		0.79			0.88			0.55
Adjusted diluted earnings per share (two class) (in US$)		1.16			0.91			0.67

---

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 separately in an investment product’s prospectus or are part of the management fee. Under both arrangements, the fees are collected by JHG and passed through to third-party intermediaries who are responsible for performing the applicable services. The majority of distribution and servicing fees collected by JHG are passed through to third-party intermediaries. JHG management believes that the deduction of distribution and service fees from revenue in the computation of adjusted revenue reflects the pass-through nature of these revenues. In certain arrangements, JHG performs the distribution and servicing activities and retains the applicable fees. Revenues for distribution and servicing activities performed by JHG are not deducted from GAAP revenue.
2. Adjustments primarily represent rent expense for subleased office space as well as administrative costs related to Dai-ichi Life’s secondary offering. JHG management believes these costs are not representative of 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. Adjustments also include impairment charges of our goodwill and certain mutual fund investment management agreements, client relationships and trademarks. JHG management believes these non-cash and acquisition-related costs are not representative of the ongoing operations of the Group.
4. Adjustments primarily relate to contingent consideration adjustments associated with prior acquisitions. JHG management believes these costs are not representative of the ongoing operations of the Group.
5. The tax impact of the adjustments is calculated based on the applicable US or foreign statutory tax rate as it relates to each adjustment. Certain adjustments are either not taxable or not tax-deductible. Adjustments for the three months ended 30 June 2021 include a non-cash deferred tax expense of US$31.0 million due to the enactment of Finance Act 2021 during the second quarter 2021.

Condensed consolidated balance sheets (unaudited)

		30 Jun		31 Dec
(in US$ millions)		2021		2020
Assets:
Cash and cash equivalents		966.9		1,099.7
Investment securities		270.2		268.1
Property, equipment and software, net		66.4		77.9
Intangible assets and goodwill, net		4,027.2		4,070.2
Assets of consolidated variable interest entities		228.9		226.5
Other assets		1,070.9		948.4
Total assets		6,630.5		6,690.8
Liabilities, redeemable noncontrolling interests and equity:
Long-term debt		311.9		313.3
Deferred tax liabilities, net		648.2		627.4
Liabilities of consolidated variable interest entities		4.2		3.2
Other liabilities		899.7		927.3
Redeemable noncontrolling interests		124.9		85.8
Total equity		4,641.6		4,733.8
Total liabilities, redeemable noncontrolling interests and equity		6,630.5		6,690.8

Condensed consolidated statements of cash flows (unaudited)

		Three months ended
		30 Jun			31 Mar			30 Jun
(in US$ millions)		2021			2021			2020
Cash provided by (used for):
Operating activities		269.0			25.8			204.6
Investing activities		(66.3	)		23.4			(166.8	)
Financing activities		(62.0	)		(322.5	)		37.4
Effect of exchange rate changes		—			1.8			3.0
Net change during period		140.7			(271.5	)		78.2

STATUTORY DISCLOSURES

Associates and joint ventures

At 30 June 2021, 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:

• LongTail 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 2020, 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 2020 and in other filings or furnishings made by the Company with the Securities and Exchange Commission from time to time (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.

Contacts

Investor enquiries:
Jim Kurtz
Co-Head Investor Relations (US)

+1 303 336 4529

jim.kurtz@janushenderson.com

Melanie Horton

Co-Head Investor Relations (Non-US)

+44 (0)20 7818 2905

melanie.horton@janushenderson.com

Or

Investor Relations

investor.relations@janushenderson.com

Media enquiries:
Stephen Sobey

Head of Media Relations

+44 (0)20 7818 2523

stephen.sobey@janushenderson.com

Sarah Johnson

Director, Media Relations & Corporate Comms

+1 720 364 0708

sarah.johnson@janushenderson.com

United Kingdom: Edelman Smithfield
Latika Shah

+44 (0)7950 671 948

latika.shah@edelmansmithfield.com

Andrew Wilde

+44 (0)7786 022 022

andrew.wilde@edelmansmithfield.com

Asia Pacific: Honner
Craig Morris

+61 2 8248 3757

craig@honner.com.au

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