Newsroom

Amundi - 1st quarter 2018 results

United Kingdom, 4/27/18,  by Amundi

A strong start to the year, confirming Amundi’s growth trend

Net inflows(1)of €40bn, bringing AuM to €1,452bn

Sharp improvement in results:

Accounting net income of €221m, up 54% (vs. Q1 2017 reported)
Adjusted net income(2) of €240m, up 15% (on a comparable basis(3)]

Business activity

  • Assets under management: €1,452bn at 31 March 2018, +5.8% vs. 31 March 2017(4)
  • Strong and diversified net inflows(1): +€39.8bn, driven by each client segment, region and investment expertise

Results

Sharp improvement in results:

  • Accounting net income of €221m, up by a strong 54.3% vs Q1 2017 reported
  • Adjusted net income(2) of €240m, up 15% vs. Q1 2017 on a comparable basis(3), with:
    • Net asset management revenue up 6.8%(3)
    • Operating expenses(5) down 5.2%(3) to €336m, reflecting the rapid implementation of Pioneer-related synergies
    • A cost/income ratio(2) of 50.7%, an improvement of 3.7 pts(3) over Q1 2017

Integration of Pioneer

and synergies

  • Rapid implementation of the Pioneer integration plan:
    • workforce reduction already achieved by more than 50%
    • legal merger achieved in eight countries
    • first IT migrations successfully completed, others expected to take place by first-half 2019
  •  In all, the €150m amount of synergies has been confirmed, and the phasing is set to be faster than announced, with 60% of synergies accounted for in 2018 (versus 40% projected)

 

 

Paris, 27 April 2018

 

Amundi’s Board of Directors, chaired by Xavier Musca, convened on 26 April 2018 to review the financial statements for the first quarter of 2018.

 

Commenting on the figures, Yves Perrier, CEO, said:

“Amundi’s very good performance in the first quarter of 2018, driven by all business lines and investment expertises, confirms the value of its business model, further strengthened by the acquisition of Pioneer, whose integration is on track with objectives but in advance with the announced timeline”.

 

I. High level of activity in Q1 2018
strong and diversified net inflows of +€40bn,
 
bringing assets under management to €1,452bn

 

Amundi's assets under management amounted to €1,452bn at 31 March 2018, reflecting excellent business activity (net inflows of +€39.8 billion in Q1 2018), partially offset by a negative market effect (-€13.5 billion).

These strong net inflows were driven by both client segments, Retail and Institutionals, by all regions, and by all investment expertises. This demonstrates the strength of Amundi's diversified business model.

Note: all variation figures below are computed vs a combined Q1 2017 (3 months Amundi + 3 months Pioneer).

 

The Retail segment enjoyed a high level of activity with net inflows of +€21.7bn in Q1 2018 (versus +€13.4bn in Q1 2017 combined), generated by all distribution channels. The French networks continued to ramp up (+€2.6bn), driven by the higher proportion of unit-linked life insurance policy subscriptions (confirming the recovery observed since mid-2016). Inflows in the international networks remained strong (particularly in Italy with +€2.7bn in Medium/Long Term(6) products), reflecting the success of the partnership with UniCredit. Inflows were very brisk for third-party distributors (+€4.1bn), with an excellent trend in Europe in particular (primarily in Italy and Germany) as well as in Asia. Inflows in the Asian joint ventures were particularly strong (+€12.1bn, with an especially high amount in China).

The Institutionals segment once again recorded significant net inflows, at +€18.1bn in Q1 2018 (versus +€15.8bn in Q1 2017 combined), balanced between treasury products and MLT products. Commercial activity during the quarter was robust, in particular for sovereign clients, with significant inflows in MLT assets, and for Corporate clients in treasury products.

 

Net inflows were also evenly split by asset class, driven by all investment expertises, and were of high quality, with a significant MLT asset component (+€28.1bn, or 71% of the total). This high level was above the average observed in previous quarters (average quarterly net inflows for MLT assets of +€9.1bn in 2017). These inflows, which include active products (+€9bn(7)) and passive products (+€7bn(7)), were boosted by particularly high net inflows in China. Inflows for treasury products were driven by the Institutionals and Corporates segment.

From a geographic viewpoint, net inflows were once again driven by the international segment (+€25.4bn), which accounted for 64% of the total. Business activity was strong in all regions, with a significant contribution from Asia and Italy. Over one year, international assets under management increased by 9.9%, and they now represent 41% of Amundi’s total AUM, and 57% of AUM excluding Crédit Agricole and Societe Generale insurance companies. 
In France, Amundi has further reinforced its leadership position by achieving in the first quarter 2018 more than two thirds of the net inflows in open-ended funds domiciled in France(8).

 

 

II. Q1 2018 results increased significantly

Solid gains in net asset management revenue and an improved cost/income ratio (-3.7 points(9))
Sharp growth in accounting net income (€221m, up 54.3%(10))
Adjusted net income of €240m9, up significantly (+15.0%(11))

 

Amundi’s Q1 2018 results reflect a very strong start to the year and confirm the Group’s ability to grow while keeping costs under control, thanks in particular to Pioneer-related synergies.

Accounting data
Accounting income in Q1 2018 (including integration costs and the amortisation of distribution contracts) amounted to €221m, up by a sharp 54.3% compared with Q1 2017 reported, benefiting from the contribution of Pioneer (consolidated as from 1 July 2017) and the Group’s strong financial performance.

Adjusted data
Net asset management revenue grew steadily (€667m, up 6.8%(11)), thanks to:

  • A 2.9%(11) increase in net management fees (€615m), in line with the growth in AUM over 12 months;
  • A very high level of performance fees (€52m, up 95.3%(11)), reflecting the funds’ strong performance(12) over the last 12 months.

The negative contribution of net financial income (-€5m) was linked to interest expense and to the mark-to-market effect on the investment portfolio. As a reminder, financial income in Q1 2017 included investment capital gains in view of the Pioneer acquisition.

Operating expenses fell significantly (€336m, down 5.2%(11)), reflecting the rapid implementation of the Pioneer integration plan and thus of the announced synergies (workforce reductions in particular). The cost/income ratio therefore stood at 50.7%, a 3.7 point decrease(11) from Q1 2017, and gross operating income reached €326m, up 9.9%(11) vs. Q1 2017.

Taking into consideration the contribution (up 54,3%(11)) from equity-accounted entities (primarily the Asian joint ventures) to income, and a tax charge of €95m, net income, Group share totalled €240m, up 15.0%(11) compared with Q1 2017 on a comparable basis.

 

 

III. Pioneer integration

 

The Pioneer integration plan is being implemented quickly: more than 50% of the workforce reductions had already been completed at end-March 2018, several major legal mergers have taken place (Germany, Italy, the United States, Switzerland, Luxembourg, Czech Republic, Japan and Taiwan) and the first IT migrations have been successfully completed in Germany and Czech Republic. The IT migration processes are underway for the other platforms and are expected to be completed in 2018 in Europe and in the first half of 2019 in the United States.
The good progress on the Pioneer integration suggests that the phasing of the synergies will be faster than announced, with 60% of synergies generated in 2018 (versus 40% projected).

 

 

***

 

 

Financial communication calendar

  • 15 May 2018:               General Shareholders’ Meeting
  • 22 May 2018:               Ex-dividend date
  • 24 May 2018:               Dividend payment date
  • 2 August 2018:             Publication of first-half 2018 results
  • 26 October 2018:         Publication of results for the first nine months of 2018

Amundi’s financial disclosures for the first quarter of 2018 consist of this press release and the attached presentation, which are available on http://legroupe.amundi.com.

 

***

 

Combined income statement1

 

€m

Q1 2018

Q1 2017

Change

Q1/Q1

Net revenue2

663

652

1.7%

o/w net management fees

615

598

2.9%

o/w performance fees

52

27

95.3%

o/w Financial income and other net income 2

-5

27

NS

Adjusted operating expenses 3

-336

-355

-5.2%

Adjusted gross operating income 2-3

326

297

9.9%

Adjusted cost/income ratio 2-3

50.7%

54.4%

-3.7 pts

Cost of risk & Other

-4

-3

=

Equity-accounted entities

12

8

54.3%

Income before tax 2-3

334

301

11.1%

Taxes 2-3

-95

-93

2.4%

Adjusted net income, Group share 2-3

240

208

15.0%

Amortisation of distribution contracts after tax

-12

-3

NS

Pioneer integration costs after tax

-6

-4

NS

Net income, Group share

221

202

9.3%

 

1- Combined data in Q1 2017 and Q1 2018: 3 months Amundi + Pioneer.

2- Excluding amortisation of UniCredit, SG, and Bawag distribution contracts.

3- Excluding costs associated with the integration of Pioneer.

 

 

 

Change in assets under management from end-December 2016 to end-March 2018

 

(€bn)

AuM

Net inflows

Market

effect

Scope effect

At 31/12/2016

1,083

 

 

 

Flows in Q1 2017

 

+32.5

+12.5

/

At 31/03/2017

1,128

 

 

 

Flows in Q2 2017

 

-3.7

-3.1

/

At 30/06/2017

1,121

 

 

 

Integration of

Pioneer Investments

/

/

/

+242.9

Flows in Q3 2017

 

+31.2

+5.3

/

At 30/09/2017

1,400

 

 

 

Flows in Q4 2017

 

          +13.1

                +12.7

/

At 31/12/2017

                1,426

 

 

 

Flows in Q1 2018

 

          +39.8

                -13.5

/

At 31/03/2018

                1,452

 

 

 

             

 

 

Combined assets under management and net inflows by client segment

 

 

AuM

AuM

% chg.

Inflows

Inflows

Inflows

(€bn)

31/03/2018

31/03/2017

vs. 31/03/2017

Q1 2018

Q1 2017

Q4 2017

French networks*

108

103

+5.2%

+2.6

+1.3

+1.0

International networks & JVs

250

220

+13.5%

+15.0

+9.2

+8.4

Third-party distributors

177

167

+5.6%

+4.1

+2.9

+4.8

Retail

534

490

+9.1%

+21.7

+13.4

+14.2

Institutionals** & sovereigns

366

349

+4.9%

+14.4

+7.8

-5.3

Corporates & employee savings

129

126

+2.3%

+2.1

+6.9

+5.0

CA & SG insurers

423

408

+3.6%

+1.5

+1.1

-0.8

Institutionals

918

883

+4.0%

+18.1

+15.8

-1.1

             

TOTAL

1,452

1,373

+5.8%

+39.8

+29.2

+13.1

o/w JVs

129

111

+16.2%

+12.1

+8.1

+6.0

 

* French networks: net inflows on medium/long-term assets +€1.7bn in Q1 2018 (+€1.1bn in Q1 2017).
** Including funds of funds

Combined assets under management and net inflows by asset class

 

 

AuM

AuM

% chg.

Inflows

Inflows

Inflows

(€bn)

31/03/2018

31/03/2017

vs. 31/03/2017

Q1 2018

Q1 2017

Q4 2017

Equities

234

212

+10.1%

+8.9

+1.3

+3.7

Diversified

256

240

+7.1%

+5.8

+5.3

+5.7

Bonds

658

644

+2.2%

+13.3

+0.7*

-0.2

Real, alternative and structured assets

70

66

+5.0%

+0.1

+0.9

+1.2

Medium/long-term assets

1,218

1,162

+4.8%

+28.1

+8.2

+10.4

Treasury products

235

211

+11.3%

+11.7

+21.0

+2.7

TOTAL

1,452

1,373

+5.8%

+39.8

+29.2

+13.1

* Impact of the ECB’s reinternalisation of a mandate for -€6.9bn in Q1 2017.

 

Combined assets under management and net inflows by region

 

 

AuM

AuM

% chg.

Inflows

Inflows

Inflows

(€bn)

31/03/2018

31/03/2017

vs. 31/03/2017

Q1 2018

Q1 2017

Q4 2017

France

851*

825

+3.1%

+14.3

+19.8

-8.3

Europe excl. France

327

297

+9.9%

+6.6

-0.1

+10.8

Asia

190

166

+14.4%

+14.8

+8.4

+8.3

Rest of world

85

84

+0.6%

+4.0

+1.1

+2.3

             

TOTAL

1,452

1,373

+5.8%

+39.8

+29.2

+13.1

TOTAL International

602

548

+9.9%

+25.4

+9.4

+21.4

* of which €40bnfor € CA et SG insurers

 

 

 

DISCLAIMER:

This document may contain projections concerning Amundi's financial situation and results. The figures given do not constitute a “forecast” as defined in Article 2.10 of Commission Regulation (EC) No. 809/2004 of 29 April 2004.

This information is based on scenarios that employ a number of economic assumptions in a given competitive and regulatory context. As such, the projections and results indicated may not necessarily come to pass due to unforeseeable circumstances. The reader should take all of these uncertainties and risks into consideration before forming their own opinion.

The figures presented were prepared in accordance with IFRS guidelines as adopted by the European Union.

The information contained in this document, to the extent that it relates to parties other than Amundi or comes from external sources, has not been independently verified, and no representation or warranty has been expressed as to, nor should any reliance be placed on, the fairness, accuracy, correctness or completeness of the information or opinions contained herein. Neither Amundi nor its representatives can be held liable for any negligence or loss that may result from the use of this document or its contents, or anything related to them, or any document or information to which the document may refer.

 

 

 


(1) Asset under management and inflows include assets under advisory and assets sold and take into account 100% of assets under management and inflows on the Asian JVs. For Wafa in Morocco, assets are reported on a proportional consolidation basis.

(2) Data adjusted in Q1 2018: before amortisation of distribution contracts (€12m after tax) and before costs associated with the integration of Pioneer (€6m after tax). Refer to methodology section on page 7 of this release.

(3) Change using combined and adjusted Q1 2017 data

(4) Change using combined Q1 2017 assets under management

(5) Excluding costs associated with the integration of Pioneer Investments

(6) Medium/Long term (MLT) assets excluding Tresaury products : equity, bonds, diversified, real, alternatives and structured assets

(7) Excluding Joint Ventures

(8) Source: Europerformance / open-ended funds domiciled in France at end March 2018.

(9) Data adjusted in Q1 2018: before amortisation of distribution contracts (€12m after tax) and before costs associated with the integration of Pioneer (€6m after tax)

(10) Change versus Q1 2017 reported

(11) Change using combined and adjusted Q1 2017 data

(12) Performance fees are recognised on the funds’ anniversary date, reflecting the performance over the previous 12 months.

Methodological appendix

 

 

 

I. Q1 2018 Income statement

 

 

  1. Accounting data

In Q1 2018, the data corresponds to three months of activity for Amundi and three months of Pioneer's activity. This Q1 2018 is compared with a reported Q1 2017 that included only Amundi for three months.

  1. Adjusted data

To present an income statement that is closer to the economic reality, the following adjustments have been made:

  • In Q1 2018: restatement of Pioneer-related integration costs and amortisation of distribution contracts (deducted from net revenues) with SG, BAWAG and UniCredit.
  • In Q1 2017: restatement of Pioneer-related integration costs and amortisation of distribution contracts (deducted from net revenues) with SG and BAWAG only (as the contract with UniCredit did not start until Q3 2017).

The combined data is different from the pro forma data (as presented in the 2017 Registration Document), which included restatements for the financing assumptions of the acquisition of Pioneer: additional financing costs, reduced financial income.

Costs associated with the integration of Pioneer Investments:

  • Q1 2018: €9m before tax and €6m after tax
  • Q1 2017: €5m before tax and €4m after tax

Amortisation of distribution contracts:

  • Q1 2018: €18m before tax and €12m after tax
  • Q1 2017: €4m before tax and €3m after tax 

 

 

II. Overview of amortisation of distribution contracts with UniCredit

 

When Pioneer was acquired, 10-year distribution contracts were entered into with UniCredit networks in Italy, Germany, Austria, and the Czech Republic; the gross valuation of these contracts came to €546m (posted to the balance sheet under Intangible Assets). At the same time, a Deferred Tax Liability of €161m was recognised. Thus the net amount is €385m which is amortised using the straight-line method over 10 years, as from 1 July 2017.

In the Group's income statement, the net of tax impact of this amortisation is €38m over a full year (or €55m before tax), posted under "Other revenues," and will be added to existing amortisations of the SG and Bawag distribution contracts of €11m after tax over a full year, or €17m before tax.

 

 

III. Alternative Performance Indicator(13)

 

To present an income statement that better reflects the economic reality, Amundi publishes adjusted data, defined as follows: excluding the Pioneer integration costs and the amortisation of the distribution agreements with SG, Bawag and UniCredit since 1 July 2017 (see above).
Moreover, to show the new Group’s performance on a like-for-like basis, Amundi also publishes combined data for Q1 2017, which includes 3 months of Amundi activity and 3 months of Pioneer activity in 2017
This adjusted and combined data is reconciled with the accounting data as follows:

 

 

Q1 2018

Q1 2017

Change

Q1 2017

Change

€M

Actual

Combined*

  Q1 2018/Q1 2017 combined*

Published

  Q1 2018/Q1 2017 published

Net revenue   (a)

645

647

-0.4%

432

49.3%

+ Amortisation of distribution contracts after tax

18

4

NA

4

NA

Adjusted net revenue (b)

663

652

1.7%

436

51.9%

Operating expenses   (c)

-345

-360

-4.1%

-228

51.4%

+ Pioneer integration costs before tax

9

5

NA

5

NA

Adjusted operating expenses   (d)

-336

-355

-5.2%

-223

51.0%

Gross operating income   (e) = (a)+(c)   

299

287

4.2%

204

46.8%

Adjusted gross operating income (f)=(b)+(d)

326

297

9.9%

214

52.8%

Cost/income ratio (c)/(a)

53.6%

55.6%

-2.0 pts

52.8%

+0.8 pt

Adjusted cost/income ratio (d)/(b)

50.7%

54.4%

-3.7 pts

51.0%

-0.3 pt

Cost of risk & Other  (g)

-4

-4

=

-2

NS

Equity-accounted entities (h)

12

8

54.3%

8

54.3%

Income before tax  (i) = (e)+(g) +(h)  

307

291

5.5%

209

46.7%

Adjusted income before tax (j) = (f)+(g) +(h)  

334

301

11.1%

219

52.6%

Taxes              (k)

-87

-89

-3.1%

-66

30.5%

Adjusted taxes (l)

-95

-93

2.4%

-70

36.0%

Net income, Group share  (i)+(k)

221

202

9.3%

143

54.3%

Adjusted net income, Group share  (j)+(l)

240

208

15.0%

149

60.4%

* Q1 2017 combined = 3 months Amundi + 3 months Pioneer

 

(13) Please refer to section 4.3 of the 2017 Registration Document filed to the French AMF on 10/04/2018 under number R. 18-011

 

 

 

 

 

 

Expert
Contact
Document
download.success
Unfortunately, it seems that we had a small technical problem. Can you try your luck again?
About Amundi

Amundi is the European largest asset manager by assets under management1 and ranks in the top 10 globally[1]. It manages 1,563 billion[2] euros of assets across six main investment hubs[3]. Amundi offers its clients in Europe, Asia-Pacific, the Middle East and the Americas a wealth of market expertise and a full range of capabilities across the active, passive and real assets investment universes. Clients also have access to a complete set of services and tools. Headquartered in Paris, Amundi was listed in November 2015.

Thanks to its unique research capabilities and the skills of close to 4,500 team members and market experts based in 37 countries, Amundi provides retail, institutional and corporate clients with innovative investment strategies and solutions tailored to their needs, targeted outcomes and risk profiles.

 

Amundi. Confidence must be earned.

Visit www.amundi.com for more information or to find an Amundi office near you.

 

Footnotes

 

  1. ^ Source IPE “Top 400 asset managers” published in June 2019 and based on AUM as of end December 2018
  2. ^ Amundi figures as of September 30, 2019
  3. ^ Investment hubs: Boston, Dublin, London, Milan, Paris and Tokyo

A question? A specific need? CONTACT US!

Sites internet Amundi