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

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.

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

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

Quarterly AUM and flows by capability

Average AUM

INVESTMENT PERFORMANCE

% of AUM outperforming benchmark (at 30 June 2021)

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)

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:

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)

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.

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)

Condensed consolidated statements of cash flows (unaudited)

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. Any forward-looking statements contained in this document are as at the date on which such statements were made. Janus Henderson Group undertakes no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise, except as required by law.

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 is a trademark of Janus Henderson Group plc or one of its subsidiaries. © Janus Henderson Group plc.

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