Amundi Results

Amundi - 1st quarter 2018 results

United Kingdom, April 27, 2018 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)]

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

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

Combined assets under management and net inflows by client segment

^* 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

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

Combined assets under management and net inflows by region

^{* of which €40bnfor € CA et SG insurers}

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.