Henderson Group - Annual General Meeting

Annual General Meeting

4 May 2011

Henderson Group plc today holds its 2011 Annual General Meeting.

The scripts for the opening addresses by the Chairman and the Chief Executive are attached.

Part one: Henderson Group Chairman's address to Shareholders.

Part two: Henderson Group Chief Executive's address to Shareholders.

* * *

Henderson Group plc

47 Esplanade

St Helier

Jersey JE1 0BD

Registered in Jersey

No. 101484

ABN 67 133 992 766

Chairman's address

The global economic recovery that started in 2009 continued in 2010. However, most of this growth was accounted for by emerging markets, while in the developed world most markets remained sluggish and unemployment high. Investors were faced with the Eurozone sovereign debt crisis, which caused concern that it would result in new strains on the banking system. The turning point for markets came in September, when the US Federal Reserve announced a second round of quantitative easing. This, together with good corporate news, revived investors' risk appetite, and equities finished with solid gains for the year.

The overall rise in equity markets was good for Henderson's business. With the success of the New Star acquisition and higher transaction and performance fees, the Group's underlying profit rose by 37%.

On dividends, the Directors are confident about the outlook for the business and, as such, have adopted a progressive dividend policy. In keeping with this policy, we are recommending a final dividend for 2010 of 4.65 pence per share. This will bring the total dividend for 2010 to 6.5 pence per share, 7% higher than the total dividend paid for 2009. The proposed 2010 final dividend will be paid on 27 May 2011 to shareholders who are on the register on 6 May 2011. As previously announced, we intend the interim dividend to be 30% of the total dividend for the previous year.

There were no changes to your Board's composition last year. As you will have seen in the Notice of Meeting, in accordance with the new UK Corporate Governance Code, Directors will offer themselves for reappointment every year.

Turning now to developments in our industry, the most significant change is the UK Retail Distribution Review, which is due to come into effect at the end of 2012. The RDR aims to promote greater transparency for retail investors, and will probably produce some structural changes in the way investment advice is provided. Other regulatory developments such as the Alternative Investment Fund Managers Directive and the FSA's revised Remuneration Code are not expected to have a significant impact on our business.

I thank shareholders for your support in the past year, specifically for our acquisition of Gartmore which occurred a month ago today. We are making good progress in integrating this business and we expect the bulk of the work to be done by the end of the British summer. This acquisition reinforces our position as a diversified asset manager with much to offer in traditional long-only and absolute return funds; it will significantly strengthen our presence amongst UK retail investors; and it expands our investment capabilities, particularly in global equities and emerging markets. The combination of the two businesses has already created significant value for shareholders, and of course we aim to create more.

Looking ahead, although there are plenty of reasons for prudent people to worry about the health of the global economy, overall it looks set for reasonable growth. For our part, we are well placed to provide a good service for our clients and decent results for our shareholders.

Chief Executive's address

Whilst 2010 was characterised by a recovery of the global economy, the effects of the global financial crisis continued to be felt. Market conditions improved leading to equity markets being on average 20% higher than in 2009. However there were notable episodes of volatility and uncertainty. Throughout this we managed the business with a clear focus on our clients and, given the diversity of our business, (demonstrable across clients, geographies and products), we remained well placed to navigate our way through 2010.

Over the year we continued to make good progress on all fronts. Investment performance was solid with 70% of funds achieving or beating benchmark over one year. The total fee margin improved to 62bps from 54bps in the previous year and the management fee margin improved to 48bps from 43bps. We had net higher margin inflows of £2.0bn over the year, including good net inflows into retail products and property. The operating margin improved to 30% from 28% and basic EPS on underlying profit increased 36% to 10.2p.

Our clients are always at the centre of everything we do and the treating customers fairly initiative promoted by the Financial Services Authority is firmly embedded within the culture and procedures of the Group. As a Group we are always focused on finding solutions for clients. With this in mind we reviewed and enhanced our fund range during the year enabling us to extend our relationships with clients and consultants globally.

Our core markets remain the UK and Continental Europe, which are increasingly supported by a growing presence in both the US and Asia. In the UK, the successful integration of New Star and our improved brand awareness have contributed to the growth potential of our UK Retail business. As the Chairman also mentioned, we recently completed the acquisition of Gartmore which means that Henderson now ranks as one of the largest retail fund managers in the UK.

We undertook a company-wide rebranding project in the second quarter of 2010, the catalyst being the integration of the Henderson and New Star fund ranges. In tandem with the decision to remove the New Star brand, we also sought to invigorate our brand across the Group. The rebranding exercise has been a success where in the UK retail market awareness levels remain significantly above levels prior to the New Star acquisition. More recently, we ran an advertising campaign to promote the funds acquired as part of the Gartmore acquisition. The purpose was to further promote our brand and also to provide comfort to clients that there was continuity of fund managers and the way their money was being managed.

As regards our business performance so far this year, markets were volatile in the first quarter but have improved in the second quarter. Our investment performance remains good and we have seen good flows into UK retail and retail absolute return funds and I remain encouraged by the business performance. We have also completed the acquisition of Gartmore and the integration of this business is well advanced. I am pleased with the pace of the integration and the positive feedback from Gartmore clients.

Looking ahead, our top priority remains our clients and ensuring we deliver strong investment performance for them. We are also focused on successfully completing the integration of the Gartmore funds and demonstrating to you the value of this acquisition. As regards markets, we are optimistic about the outlook and well positioned to grow our business in all the geographies in which we operate.