Janus Henderson(US:JHG)2023-02-28 22:10Financial Performance - For the year ended December 31, 2022, JHG reported revenue of $2,203.6 million, down 20.4% from $2,767.0 million in 2021[20]. - Operating income for 2022 was $489.8 million, resulting in an operating margin of 22.2%, compared to 29.7% in 2021[20]. - Net income attributable to JHG for 2022 was $372.4 million, a decline of 40% from $620.0 million in 2021[20]. - Revenue for the year ended December 31, 2022, was $2,203.6 million, a decrease of $563.4 million, or 20%, compared to 2021[193]. - Total operating expenses for 2022 were $1,713.8 million, a decline of $232.3 million, or 12%, compared to 2021[196]. - Operating income for 2022 was $489.8 million, a decrease of $331.1 million, or 40%, compared to 2021[196]. - Diluted earnings per share for 2022 was $2.23, or $2.60 on an adjusted basis[193]. Assets Under Management (AUM) - As of December 31, 2022, Janus Henderson Group plc (JHG) had assets under management (AUM) of $287.3 billion, a decrease from $2,767.0 million in 2021[14][20]. - Closing Assets Under Management (AUM) as of December 31, 2022, was $287.3 billion, down from $432.3 billion in 2021, representing a decrease of 33.5%[207]. - AUM in the self-directed channel totaled $64.3 billion, representing 22% of total AUM[24]. - Institutional channel AUM was $61.0 billion, making up 21% of total AUM[25]. - JHG's equity strategies had AUM of $171.3 billion, which is 59% of total AUM[26]. - Approximately 32% of AUM was non-USD-denominated, with a $11.9 billion decrease in AUM due to USD appreciation against GBP, EUR, and AUD[199]. - Average AUM for 2022 was $328.8 billion, a decrease of 22% compared to $422.0 billion in 2021[210]. - The Equities segment saw a decline in average AUM of 18% from $236.4 billion in 2021 to $193.2 billion in 2022[210]. - Fixed Income average AUM decreased by 17% from $80.6 billion in 2021 to $67.2 billion in 2022[210]. - Multi-Asset average AUM decreased by 8% from $53.2 billion in 2021 to $49.2 billion in 2022[210]. - Quantitative Equities experienced a significant decline of 81% in average AUM, dropping from $41.3 billion in 2021 to $7.7 billion in 2022[210]. - Institutional client type AUM decreased from $127.2 billion in 2021 to $61.0 billion in 2022, reflecting a significant drop[207]. - Intermediary client type AUM fell from $215.0 billion in 2021 to $162.0 billion in 2022, a decrease of 24.7%[207]. - Net outflows totaled $36.5 billion, reflecting market uncertainty and investment underperformance in key strategies[194]. Market and Operational Risks - The company’s revenue is primarily dependent on the value and performance of its Assets Under Management (AUM), which can fluctuate due to external factors[89]. - A decline in equity and fixed income markets could significantly reduce the company's AUM and revenue[90]. - Poor investment performance compared to benchmarks may lead to decreased sales and increased redemptions, adversely affecting revenue and net income[90]. - The company faces risks from market volatility, which can impact AUM, revenues, and overall financial results[92]. - Illiquidity in certain securities may impede the company's ability to effect redemptions, negatively impacting investment performance and AUM[95]. - The company is subject to foreign currency exchange risk, generating a substantial portion of revenue in GBP, EUR, and AUD, which may adversely affect financial results[104]. - The investment management business is highly competitive, with fee structures facing downward pressure due to the rise of lower-cost investment products[106]. - The company’s financial performance could be negatively affected by the loss of key personnel, impacting client retention and revenue generation[109]. - The company relies on third-party distribution channels, and any adverse changes in these relationships could affect AUM and financial condition[110]. - The company’s revenue is derived from investment management agreements that are subject to termination or non-renewal, which could materially impact AUM and results[122]. - The company faces risks from market-specific political, economic, and other factors that may adversely impact revenue generated overseas[111]. - The company’s operational results are dependent on expense levels, which can fluctuate significantly[123]. - The company’s reputation is critical to its success, and any harm could lead to reduced AUM and negatively impact revenue and net income[115]. - The company faces operational risks related to cybersecurity, including potential breaches that could lead to loss of confidential information and increased costs[129]. - Changes in operating expenses are influenced by market conditions, regulatory changes, and variations in total compensation expenses, which may affect profitability[126]. - The company is highly dependent on third-party vendors for critical services, and any failure in these services could adversely impact operations and financial results[137]. - Regulatory scrutiny has increased, with potential legal and compliance costs that could negatively affect the company's AUM and profitability[142]. - The company may face higher borrowing costs and difficulties accessing capital markets due to changes in credit ratings and global market volatility[140]. - Increased regulatory capital requirements could restrict the company's ability to return capital to shareholders or make acquisitions, impacting financial condition[151]. - The regulatory environment is evolving, with new laws potentially increasing compliance costs and impacting the way the company conducts business[145]. - Cybersecurity and data privacy are high priorities for regulators, and failure to comply could result in investigations and penalties[131]. - The company maintains insurance coverage for cyber risks, but there is no guarantee that all losses will be covered or that coverage will remain cost-effective[135]. Diversity, Equity, and Inclusion (DEI) - 38% of employees globally are women, and 24% are ethnically diverse, with an increase in ethnically diverse employees from 22% to 24%[44]. - The company achieved a DEI Employee Engagement score of 85%, which is 2% higher than the 75th percentile New Measures industry benchmark[44]. - The company has increased the number of employees identifying as having a disability from 5% to 7%[44]. - The company improved its gender pay gap over the past several years[44]. - The company has moved to a Disability Confident Level II employer status[44]. - The company has launched Global Diversity Awareness Month to promote inclusivity[44]. - The company has developed talent profiles and succession plans to manage turnover effectively[48]. - The company provides contributions toward retirement and pension schemes to support employees' financial goals[47]. Corporate Actions - On February 1, 2023, the Board declared a cash dividend of $0.39 per share, payable on February 28, 2023[177]. - The company approved a share buyback program of up to $200 million, which commenced in May 2022, but no shares were repurchased during the three months ended December 31, 2022[184]. - Share Plans Repurchases totaled 3,522,981 shares at an average price of $30.85 during the year ended December 31, 2022[185]. - The company acquired 3.3 million shares of its common stock for $98.9 million as part of the share buyback program[194]. Regulatory and Compliance Issues - The UK and EU's transition period ended on December 31, 2020, resulting in UK firms losing their passporting rights to provide services across the EEA[71]. - Janus Henderson Investors Europe S.A. operates six branches in Europe, focusing on distributing JHG Group products within the EU[73]. - Janus Henderson Investors (Singapore) Limited is licensed by the Monetary Authority of Singapore to conduct regulated activities in fund management and capital market products[75]. - The company has several subsidiaries in Australia operating under an Australian Financial Services License, governed by the Corporations Act 2001[76]. - The company manages two UCITS umbrella funds and one AIF incorporated under Luxembourg law, among other fund structures[77]. - The company may incur additional costs due to the UK's exit from the EU, affecting its operations and financial condition[156]. - The transition from LIBOR to alternative benchmark rates like SOFR and SONIA may introduce financial and operational risks[159]. - Changes in tax laws could materially impact the company's tax provision and effective tax rate[165]. - The company faces legal risks related to the suitability of its investment products, which could lead to regulatory investigations and reputational damage[162]. - The company has a diverse international customer base, but reduced UK economic growth could adversely affect its results[157]. - The company is subject to potential claims regarding the suitability of funds managed, which could impact its financial condition[162].