Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition period from to Commission File Number 001-38103 JANUS HENDERSON GROUP PLC (Exact name of registrant as specified in its charter) Jersey, Channel Islands (State ...

Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 % of AUM outperforming benchmark Q3 2022 Q4 2022 Q1 2023 Q2 2023 | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |--------------|-------|-------|-------|-------|-------|-------|-------|-------|-------|-------|-------|-------|-------|-------|-------|-------| | Capability | 1yr | 3yr | 5yr | 10yr | 1yr | 3yr | 5yr | 10yr | 1yr | 3yr | 5yr | 10yr | 1yr | 3yr | 5yr | 10yr | | Equities ...

Financial Data and Key Metrics Changes - Assets under management increased by 4% to $322.1 billion, up 12% since the beginning of the year [32] - Adjusted operating income increased by 15% over the prior quarter to $121.5 million in Q2 [29] - Adjusted diluted EPS was $0.62 [29] Business Line Data and Key Metrics Changes - Institutional net inflows were $1.9 billion, down from $6.9 billion in the first quarter [24] - Fixed income net inflows were $1 billion compared to $3.6 billion in the prior quarter [39] - Alternatives capability experienced net outflows of $800 million, primarily from multi-strategy and absolute return strategies [27] Market Data and Key Metrics Changes - US intermediary flows were virtually flat, with significant improvements in net outflows compared to the same period last year [37] - Retail flows continued to be negative, especially in EMEA [33] - EMEA intermediary experienced challenges due to higher interest rates and recessionary fears [67] Company Strategy and Development Direction - The company is focused on three strategic pillars: Protect & Grow, Amplify, and Diversify [46] - A joint venture with Privacore was announced to tap into the democratization of private alternatives [49] - The company aims to deliver consistent organic growth over time, with expectations of one or two quarters of positive net flows over the next one to two years [20][89] Management's Comments on Operating Environment and Future Outlook - The management noted persistent macro headwinds, including an opaque economic outlook and higher interest rates [18] - There is optimism about rebuilding the pipeline and improving flows, despite acknowledging that progress will not be linear [19][89] - Management emphasized the importance of client service and the positive changes being made for clients [8] Other Important Information - The company expects net outflows in Q3 to be in the range of negative $3.5 billion to negative $5 billion [23] - Adjusted non-comp operating expenses increased by 13% compared to the prior quarter, primarily due to higher G&A and marketing expenses [29] - The company declared a quarterly dividend of $0.39 per share to be paid on August 30 [76] Q&A Session Summary Question: What factors contributed to the better-than-expected net flow quarter? - Management attributed the improvement to a culmination of efforts over the past year, including capturing market share in the US intermediary business [99] Question: How does the company view the potential for partnerships with insurance companies? - Management sees a real opportunity to provide skill sets to a broader insurance clientele and is increasing the number of insurance clients [122] Question: What is the outlook for flows in Q3? - Management expects challenges in the intermediary channel, particularly in EMEA, and anticipates negative flows in Q3 [121] Question: How is the company addressing internal transitions impacting flows? - Management acknowledged that transitions may increase short-term volatility but are necessary for long-term improvement [104]

Revenue and Income - Revenue for Q2 2023 was $516.5 million, a decrease of $39.0 million, or 7%, compared to Q2 2022[96] - Total revenue for the three months ended June 30, 2023, was $516.5 million, a decrease of 7% compared to $555.5 million for the same period in 2022[116] - Adjusted revenue for the same period was $401.9 million, down 6% from $427.7 million in 2022[143] - Operating income for Q2 2023 was $117.9 million, a decrease of $26.0 million, or 18%, compared to Q2 2022[97] - Adjusted operating income decreased to $121.5 million, representing a decline of 18.6% from $149.3 million in 2022[143] - Net income attributable to the company for Q2 2023 was $89.8 million, a decrease of $6.4 million, or 7%, compared to Q2 2022[98] - Net income attributable to the company was $89.8 million, a decrease of 6.7% compared to $96.2 million in the prior year[143] Assets Under Management (AUM) - Assets Under Management (AUM) increased to $322.1 billion, up 4% from March 31, 2023, primarily due to market performance and U.S. dollar depreciation[96] - Total Assets Under Management (AUM) as of June 30, 2023, reached $322.1 billion, an increase from $299.7 billion as of June 30, 2022, representing an 7.9% year-over-year growth[109] - AUM increased to $322.1 billion, up 4% from March 31, 2023, mainly due to market performance and U.S. dollar depreciation[96] - AUM as of June 30, 2023, increased by $34.8 billion, or 12%, from December 31, 2022, driven by positive market movements of $27.3 billion and net sales of $5.0 billion[100] - Average AUM for the three months ended June 30, 2023, was $315.8 billion, down 4% compared to $328.5 billion for the same period in 2022[108] - The AUM for Equities decreased from $244.3 billion in December 2021 to $177.0 billion by June 30, 2022, reflecting a decline of 27.5%[102] - Institutional client AUM increased to $73.9 billion as of June 30, 2023, up from $61.0 billion at the end of 2022, marking a 21.3% increase[104] - The AUM for Alternatives decreased significantly by 28% from $13.2 billion in the three months ended June 30, 2022, to $9.5 billion in the same period of 2023[108] - The AUM performance by capability showed that Equities had $199.5 billion, Fixed Income $65.9 billion, Multi-Asset $47.7 billion, and Alternatives $9.0 billion as of June 30, 2023[101] - Approximately 31% of the AUM was non-USD-denominated, with a $2.5 billion increase attributed to currency fluctuations during the period[101] Expenses - Total operating expenses for Q2 2023 were $398.6 million, a decrease of $13.0 million, or 3%, compared to Q2 2022[96] - Total operating expenses for the three months ended June 30, 2023, were $398.6 million, a decrease of 3% compared to $411.6 million for the same period in 2022[123] - Management fees decreased by $30.1 million during the three months ended June 30, 2023, primarily due to a decline in average AUM[117] - Performance fees decreased by $2.5 million during the three months ended June 30, 2023, primarily due to a decline in the performance of absolute return funds[120] - Shareowner servicing fees decreased by $3.0 million during the three months ended June 30, 2023, primarily due to a decline in average AUM[121] - Distribution expenses decreased by $13.2 million during the three months ended June 30, 2023, primarily due to a decline in average AUM[128] - Marketing expenses increased by $1.5 million during the three months ended June 30, 2023, primarily due to an increase in advertising campaigns[130] - Employee compensation and benefits increased by $2.7 million during the three months ended June 30, 2023, primarily driven by an increase in variable compensation[124] - General, administrative and occupancy expenses decreased by $12.1 million during the six months ended June 30, 2023, primarily due to a reduction in rent expense[131] Cash Flow and Dividends - Cash flows provided by operating activities for the six months ended June 30, 2023, were $63.2 million, compared to $105.4 million in 2022[161] - Cash balance at the end of the period on June 30, 2023, was $1,024.4 million, compared to $873.7 million at the end of the same period in 2022[161] - The company declared a $0.39 per share dividend for Q2 2023 on August 1, 2023[96] - The company declared a dividend of $0.39 per share for Q2 2023, totaling $64.7 million paid on February 28, 2023, and $64.6 million paid on May 31, 2023[153] - Dividends paid to shareholders decreased slightly to $129.3 million in the first half of 2023 from $129.8 million in 2022[166] Market Performance and Outlook - Net outflows for Q2 2023 were $0.5 billion, compared to net outflows of $7.8 billion in Q2 2022[96] - The company expects net outflows in Q3 2023 to be between $3.5 billion and $5 billion[141] - Full-year 2023 aggregate negative performance fees are anticipated to be at the lower end of the range of negative $35 million to negative $45 million[142] - The company plans to focus on expanding its market presence and enhancing its product offerings to drive future growth[104] - The company anticipates an increase in non-compensation expenses due to investments in marketing and advertising in the U.S. intermediary business[140] Tax and Non-Operating Income - The effective tax rate for the three months ended June 30, 2023, was 22.0%, a decrease from 115.4% in 2022, while the six-month rate was 21.6% compared to 46.1% in 2022[138] - Non-operating income improved significantly, with investment gains (losses), net increasing by $116.3 million for the three months and $166.1 million for the six months ended June 30, 2023, compared to the same periods in 2022[134] - Non-operating income improved by $6.4 million during the three months ended June 30, 2023, primarily due to higher interest rates on cash balances[136]

Financial Data and Key Metrics Changes - Assets under management increased by 8% to $310.5 billion, driven by positive market conditions, foreign exchange impacts, and $5.5 billion in net inflows [5][17] - Net inflows for the quarter were $5.5 billion, a significant improvement compared to $11 billion in net outflows from the previous quarter [37][41] - Adjusted revenue decreased by 5% compared to the prior quarter, primarily due to lower seasonal performance fees [41][43] - Adjusted operating income for the first quarter was $106 million, down 14% from the prior quarter, with an adjusted operating margin of 27.5% [45] Business Line Data and Key Metrics Changes - Institutional net inflows were $6.9 billion, with significant contributions from various strategies including $4.1 billion from enhanced index mandates [10][40] - Equity net inflows were $3.3 billion, a recovery from $7.5 billion in outflows in the previous quarter [11] - Fixed income net inflows were $3.6 billion, compared to $1.9 billion in outflows in the prior quarter, indicating a positive trend in this segment [40] Market Data and Key Metrics Changes - The U.S. intermediary channel showed improvement with net outflows reduced to $700 million from $3.4 billion in the previous quarter [9] - EMEA region experienced declines due to risk-off sentiment and higher interest rates, particularly affecting the UK market [38] - Fixed income ETFs had positive flows of $780 million, led by specific products like AAA CLO ETF and mortgage-backed securities ETF [12] Company Strategy and Development Direction - The company is focused on three strategic pillars: Protect & Grow core businesses, Amplify strengths not fully leveraged, and Diversify where clients give the right to win [19][21] - The firm aims to exit unprofitable assets under management (AUM) to improve overall profitability, which may negatively impact flows in the short term [6][61] - A national brand campaign was launched to enhance the Janus Henderson brand, reflecting a shift in marketing strategy [47] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the volatile market conditions, including recession fears and higher interest rates, but expressed optimism about the quarterly results [2][22] - The firm expects to see one to two quarters of positive flows over the next one to two years, indicating a cautious but hopeful outlook [6][22] - Management emphasized the importance of differentiating between strong and weak companies in the current investment climate to generate alpha [34] Other Important Information - The company maintains a strong liquidity position with cash and cash equivalents of $830 million, reflecting a conservative approach to capital management [17] - Performance fees for the second quarter are estimated to be negative, primarily due to U.S. mutual fund performance [42][46] - The adjusted compensation to revenue ratio was seasonally higher at 50.1%, influenced by payroll taxes and lower performance fees [15] Q&A Session All Questions and Answers Question: Can you contextualize the M&A activity and seller expectations? - The company is seeing a robust pipeline of M&A activity, with realistic seller expectations evolving, but emphasizes that M&A is not a primary growth strategy [50][76] Question: What drove the lower redemption rates this quarter? - The lower redemption rates were attributed to a solid quarter of flows and some clients waiting to see the effectiveness of the new strategy before committing [55][81] Question: Can you discuss the strategies or regions from which unprofitable AUM will be exited? - The company has a disciplined approach to reviewing mandates and will exit those that are not profitable, considering both fee rates and servicing costs [61][62] Question: How is the institutional pipeline being rebuilt? - The firm is reallocating resources and enhancing interactions with consultants to better position its products in the institutional market [69][90] Question: What is the outlook for performance fees for the full year? - The guidance for performance fees assumes relatively flat performance, with expectations for some funds at or around their high watermarks [66][98]

Change Q1 2023 vs Q4 2022 Q1 2022 | --- | --- | --- | --- | --- | --- | |----------------------------------------------|--------|-------|--------|-------|----------| | Revenue \nManagement fees | 414.6 | 405.6 | 2% | 514.0 | (19%) | | Performance fees | (14.9) | 14.3 | nm | (8.4) | (77%) | | Shareowner servicing fees | 51.5 | 51.3 | 0% | 62.4 | (17%) | | Other revenue | 44.6 | 44.0 | 1% | 52.0 | (14%) | | Total revenue | 495.8 | 515.2 | (4%) | 620.0 | (20%) | | Operating expenses | | | | | | | Employee comp ...

Revenue Performance - Revenue for Q1 2023 was $495.8 million, a decrease of $124.2 million, or 20%, compared to Q1 2022[87]. - Total revenue for Q1 2023 was $495.8 million, a decrease of 20% compared to $620.0 million in Q1 2022, primarily driven by a decline in management fees[108]. - Adjusted revenue for Q1 2023 was $383.8 million, compared to $478.2 million in Q1 2022, reflecting a decline of 19.8%[131]. Assets Under Management (AUM) - Average Assets Under Management (AUM) increased to $310.5 billion, up 8.1% from December 31, 2022, driven by market performance and net inflows[91]. - Total Assets Under Management (AUM) increased from $287.3 billion as of March 31, 2022, to $310.5 billion as of March 31, 2023, representing an increase of 8%[101]. - Average AUM decreased by 23% from $396.7 billion in Q1 2022 to $304.5 billion in Q1 2023, with equities down 17%, fixed income down 18%, and multi-asset down 15%[100]. - Approximately 31.4% of AUM was non-USD-denominated, with a $1.3 billion increase in AUM due to currency fluctuations during Q1 2023[92]. Net Inflows and Investment Performance - Net inflows for Q1 2023 were $5.5 billion, reflecting mandate wins from institutional clients across various investment strategies[87]. - The total percentage of AUM outperforming benchmarks over 1 year was 67%, with alternatives showing a 69% outperformance[90]. - AUM performance by capability showed 94% of Multi-Asset AUM outperformed benchmarks over three years[90]. - Investment performance showed that 94% of Multi-Asset AUM outperformed benchmarks over 3 years[90]. Operating Income and Expenses - Operating income for Q1 2023 was $100.4 million, a decrease of $57.0 million, or 36%, compared to Q1 2022, with an operating margin of 20.3%[89]. - Total operating expenses for Q1 2023 were $395.4 million, a decrease of $67.2 million, or 15%, compared to Q1 2022[87]. - Operating expenses decreased by 15% from $462.6 million in Q1 2022 to $395.4 million in Q1 2023, with significant reductions in employee compensation and distribution expenses[114]. - Employee compensation and benefits decreased by $24.3 million, primarily due to a reduction in variable compensation and lower headcount[115]. Earnings and Dividends - Diluted earnings per share for Q1 2023 were $0.53, or $0.55 on an adjusted basis[87]. - The Board of Directors declared a $0.39 per share dividend for Q1 2023, to be paid on May 31, 2023[141]. - Adjusted diluted earnings per share decreased from $0.75 in Q1 2022 to $0.55 in Q1 2023[131]. - Net income attributable to JHG for Q1 2023 was $87.4 million, a decrease of $16.2 million, or 16%, compared to Q1 2022[90]. Cash Flow and Financial Position - Cash and cash equivalents decreased from $1,156.5 million as of December 31, 2022, to $829.4 million as of March 31, 2023[135]. - Cash flows from operating activities for Q1 2023 were $(108.2) million, compared to $(57.5) million in Q1 2022[148]. - Cash used for investing activities in Q1 2023 was $(235.1) million, compared to $(16.9) million in Q1 2022[150]. - The company has a $200 million Credit Facility with an option to increase borrowing capacity by an additional $50 million, maturing on February 16, 2024[146]. Tax and Regulatory Compliance - The effective tax rate decreased from 26.8% in Q1 2022 to 21.3% in Q1 2023[125]. - The combined capital requirement for the FCA-supervised regulatory group is £204.2 million ($252.5 million), with £211.9 million ($262.0 million) of capital above the requirement as of March 31, 2023[138]. Other Financial Metrics - Performance fees fell from $8.4 million in Q1 2022 to a loss of $14.9 million in Q1 2023, a decrease of 77%[110]. - Shareowner servicing fees decreased by 17% to $51.5 million, driven by a decline in average AUM[112]. - Investment gains (losses), net improved by $49.8 million, moving from a loss of $32.2 million in Q1 2022 to a gain of $17.6 million in Q1 2023[122]. - The company anticipates achieving approximately $40 million to $45 million in gross-cost efficiencies while investing in business growth initiatives[128].

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-38103 JANUS HENDERSON GROUP PLC (Exact name of registrant as specified in its charter) Jersey, Channel Islands (State or other ...

Janus Henderson Group plc (NYSE:JHG) Q4 2022 Results Conference Call February 2, 2023 8:00 AM ET Company Participants Ali Dibadj - CEO Roger Thompson - CFO Conference Call Participants Craig Siegenthaler - Bank of America Patrick Davitt - Autonomous Research Ed Henning - CLSA Ken Worthington - JPMorgan Alex Blostein - Goldman Sachs Elizabeth Miliatis - Jarden Bill Katz - Credit Suisse Nigel Pittaway - Citi Operator Good morning. My name is Emily, and I will be your conference facilitator today. Thank you fo ...

Revenue and Income - Revenue for Q3 2022 was $512.9 million, a decrease of $174.5 million, or 25% compared to Q3 2021[104] - Net income attributable to the company in Q3 2022 was $107.6 million, a decrease of $89.2 million, or 45% compared to Q3 2021[106] - Total revenue for the nine months ended September 30, 2022, was $1,688.4 million, down 18% from $2,069.8 million in the same period of 2021[126] - Adjusted revenue for the three months ended September 30, 2022, was $394.2 million, down from $545.3 million in the same period of 2021[160] Assets Under Management (AUM) - Assets Under Management (AUM) decreased to $274.6 billion, down 8% from June 30, 2022, primarily due to market challenges and net outflows of $5.8 billion[104] - AUM as of September 30, 2022, decreased by $157.7 billion, or 36%, from December 31, 2021, due to negative market movements and net redemptions[108] - As of September 30, 2022, the total Closing Assets Under Management (AUM) decreased to $274.6 billion from $419.3 billion as of September 30, 2021, representing a decline of approximately 35%[118] - The company experienced net outflows of $71.2 billion in the nine months ended September 30, 2022, compared to net sales of $45.7 billion in the same period of 2021[113] Operating Expenses - Total operating expenses for Q3 2022 were $392.2 million, a decrease of $46.9 million, or 11% compared to Q3 2021[105] - Total operating expenses for the three months ended September 30, 2022, were $392.2 million, a decrease of 11% compared to the same period in 2021[134] - Employee compensation and benefits decreased by $23.7 million for the three months ended September 30, 2022, primarily due to a reduction in variable compensation[135] - Distribution expenses decreased by $23.4 million and $18.5 million for the three and nine months ended September 30, 2022, respectively, due to a decline in average AUM[139] Management and Performance Fees - Management fees for the three months ended September 30, 2022, were $426.2 million, a decrease of 24% from $564.5 million in the same period of 2021, primarily due to lower average AUM[126] - Performance fees for the nine months ended September 30, 2022, were negative $25.0 million, compared to positive $95.0 million in the same period of 2021, indicating a significant decline in performance-related income[126] - Performance fees for the three months ended September 30, 2022, decreased by $13.2 million, primarily due to negative performance fees from U.S. mutual funds[129] - For the nine months ended September 30, 2022, performance fees decreased by $120.0 million, mainly due to declines in SICAV and UK OEICs, as well as increased negative performance fees from U.S. mutual funds[130] Cash and Financing - The company had over $1.0 billion in cash and cash equivalents as of Q3 2022[104] - Cash provided by operating activities in Q3 2022 was $221.9 million, with a cash balance at the end of the period of $1,035.7 million[104] - Cash inflows from investing activities were $111.0 million during the nine months ended September 30, 2022, compared to cash outflows of $265.8 million in the same period of 2021[179] - The company has a new share buyback program authorized for up to $200 million, but no shares were repurchased during the three months ended September 30, 2022[167] Market Conditions and Outlook - Market impacts contributed to a decrease of $85.7 billion in AUM due to unfavorable market conditions[113] - Future outlook remains cautious due to market volatility, with strategic adjustments planned to mitigate risks and capitalize on growth opportunities[113] - The company is focusing on market expansion and new product development to enhance AUM recovery in the upcoming quarters[113] Tax and Impairment - The effective tax rate for the three months ended September 30, 2022, was 19.6%, compared to 21.0% for the same period in 2021[152] - Goodwill and intangible asset impairment charges decreased by $44.4 million during the nine months ended September 30, 2022, compared to the same period in 2021[144] - The effective tax rate for the nine months ended September 30, 2022, was impacted by a decrease in pre-tax book income and an increase in disallowed noncontrolling interest loss[153] Currency and Foreign Exchange - Approximately 31% of AUM was non-USD denominated as of September 30, 2022[109] - The foreign exchange impact on AUM was noted, reflecting changes in currency rates affecting non-USD-denominated AUM[114] - The impact of foreign exchange (FX) on AUM was noted, with non-USD-denominated AUM being translated into USD, affecting the overall figures[114]