Janus Henderson(US:JHG)2022-02-03 18:33Financial Data and Key Metrics Changes - The company reported a record adjusted diluted EPS of $4.28 for the full year 2021, representing a 42% increase over the previous year [6][34] - Assets Under Management (AUM) reached a record $432 billion, with a full year adjusted operating margin of 43.5%, an improvement of 5.5 percentage points over 2020 [6][34] - Cash flow from operations was nearly $900 million, allowing for significant reinvestment and capital return to shareholders, totaling approximately $630 million [6][34] Business Line Data and Key Metrics Changes - Excluding INTECH, net outflows were $4.3 billion in 2021, a significant improvement from $15 billion in 2020, with positive flows in fixed income and multi-asset capabilities [9][21] - In the fourth quarter, net outflows excluding INTECH were $1 billion, compared to $800 million in the previous quarter, indicating a negative trend but improved from prior years [25][21] - Equity net outflows in the fourth quarter were $3.2 billion, primarily driven by U.S. SMID and mid-cap growth strategies [29][21] Market Data and Key Metrics Changes - The Asia Pacific region saw a 19% organic growth rate in the intermediary business for 2021, marking the seventh consecutive quarter of positive intermediary flows [27][26] - The U.S. intermediary channel experienced outflows dominated by U.S. SMID and mid-cap growth strategies, although investment performance in these areas has improved significantly [26][30] Company Strategy and Development Direction - The company is focused on a strategy of "simple excellence," emphasizing dependable investment outcomes and operational efficiency [11][19] - A management buyout of INTECH was announced, allowing the company to concentrate on its core business of fundamental active investment while INTECH operates independently [10][19] - The company launched 24 new products globally in 2021, focusing on active ETFs, ESG, fixed income, and alternatives, indicating a commitment to innovation and growth [15][18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future organic growth opportunities, citing a solid foundation built over the past years [19][47] - The leadership transition is seen as an opportunity for new strategies and directions, with the outgoing CEO emphasizing the importance of a fresh perspective for future growth [56][47] Other Important Information - The company returned $256 million in dividends to shareholders and repurchased 11.4 million shares for a total of $372 million in 2021 [45][6] - The company expects adjusted compensation ratios to be in the low 40s for 2022, reflecting significant investments in talent and technology [43][44] Q&A Session Summary Question: What is Trian's plan as Board members to drive shareholder value for Janus? - The outgoing CEO noted that Trian's representatives were not present on the call, and he could not comment on their specific plans [51][52] Question: Can you disclose the margins on INTECH and its performance fees? - The CFO indicated that INTECH contributed around $5 million in operating income in the fourth quarter, with performance fees being less than $1 million [53][54] Question: What would the outgoing CEO have liked to do with Janus over the next 3 to 5 years? - The CEO emphasized the importance of building a solid foundation and developing the platform for future growth, indicating a need for a new leader to carry that vision forward [55][56] Question: Did you look externally to sell INTECH? - The CFO confirmed that they explored various options for INTECH and believed the management buyout was the best outcome for all parties involved [59][61] Question: Can you provide an update on the institutional channel? - The CFO expressed confidence in the potential for positive contributions from the institutional channel in 2022, citing significant investments in the team [85][86]