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Friday, 28 July 2017

Amundi: Activity and results for the first half of 2017

Amundi    

Published: 07:04 CEST 28-07-2017 /GlobeNewswire /Source: Amundi / : AMUN /ISIN: FR0004125920


Strong net inflows of +€29 billion

Substantial growth of net income at €308m[1] (+11%)

 

Activity

Assets under management of €1,121 billion[2] at 30 June 2017 (€1,342 billion[3] including Pioneer Investments)

Strong net inflows2 in H1 2017: +€28.8bn, driven by Retail

 In Q2 2017: sustained inflows in Retail (+€7.5bn), notably in medium/long term[4]  assets, and outflows (-€11.2bn) among Institutionals in treasury products (due to seasonality effects)

Results1

Net revenue of €910m, up 8.6% vs. H1 2016

 Q2: €478m (+7.9% vs. Q2 2016)

 A 2-pt improvement of cost/income ratio1: 49.9% in H1 2017 and 48.5% in Q2 2017

Net income Group share of €308m1, up 10.9% vs. H1 2016

 Q2: €162m1 (+9.0% vs. Q2 2016)

Financial structure

Net tangible assets[5]: €4.6bn and €1.5bn pro forma[6] reflecting the acquisition of Pioneer Investments

CET1 ratio >10% pro forma6

A+ rating by Fitch maintained

Pioneer Investments

Acquisition effective 3 July as scheduled

Organization  and management team for the new Group in place

Launch of the integration plan

 

Paris, 28 July 2017

 

Amundi's Board of Directors, chaired by Xavier Musca, convened on 27 July 2017 to review the financial statements for the first half of 2017.

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

"Amundi confirmed its profitable growth momentum in the first half of 2017. Its net inflows and results growth trends exceed the targets announced at the time of the IPO. The acquisition of Pioneer Investments has been finalized on 3 July as planned. Its integration is well on track. This acquisition is an important step in the implementation of Amundi's growth strategy and will be a strong source of value creation."

 

           

Activity: assets under management of €1,121 billion at 30 June 2017; net inflows of +€28.8bn in the first half of 2017, driven by Retail

Amundi's assets under management amounted to €1,121 billion at 30 June 2017, reflecting excellent business activity (net inflows of +€28.8bn in H1 2017) and a positive market effect (+€9.5bn) owing to favourable market conditions, especially in equities. These net inflows trends exceed the target announced at the IPO (+€40bn in average per year).

The Retail segment has seen substantial activity, with net inflows in H1 2017 of +€22.9bn, achieved across all distribution channels, compared to +€10.1bn in H1 2016. Inflows were sustained on the French networks, especially in medium/long-term assets (+€2.4bn), continuing the positive trend observed since the second half of 2016. Inflows were also most significant for third-party distributors (+€9.9bn vs +€3.7bn in H1 2016), with particularly positive momentum in Europe, and for joint ventures (+€7.3bn). The international networks (+€4.7bn, largely attributable to the Italian networks) saw significant inflows from the UniCredit networks (+€3.5bn), demonstrating a positive start to the distribution agreement.

The Institutionals segment recorded a good level of net inflows (+€5.9bn in H1 2017), comparable to the H1 2016 level, despite some exceptional negative developments, particularly the reinternalization of a mandate by the ECB in Q1 2017 (-€6.9bn) and seasonal effects in treasury products. Sovereigns and other Institutionals, as well as mandates from CA and SG insurance companies, contributed positively to net inflows. Net flows in Corporates were negative (-€4.9bn), as in H1 2016.

Net inflows were generated on all asset classes, with medium/long-term assets representing +€12.7bn. To be noticed, the continued strong inflows for ETFs (+€7.7bn), positioning Amundi as the n° 3 in Europe[7] and for real estate (+€2.2bn).

Finally, net inflows remained primarily driven by international sources (67% of total inflows), which totalled +€19.4bn, i.e. 67% of total inflows). Activity was dynamic in both Europe (Italy, Germany mostly) and Asia. Year-on-year, international assets under management increased by 25%, representing 29% of total assets under management and 44% of total assets excluding Group insurers.

 

In the second quarter of 2017

The €3.7bn outflow is attributable to contrasting trends:

Retail net inflows remained strong (+€7.5bn), driven in particular by momentum in third-party distributors and the international networks. Net inflows in medium/long-term assets on the French networks remained dynamic (+€1.4bn), while joint ventures saw moderate outflows over the quarter due to a negative result in China, partially offset by positive flows in India and South Korea.

The Institutionals segment recorded a net negative flow of -€11.2bn due to significant outflows in treasury products. This follows a very substantial inflow in the first quarter (+€17.1bn).

 

 


 

 

Results[8] for the first half of 2017: net income of €308m, a substantial increase (+10.9%); solid revenue growth and an improved cost/income ratio (-2 points)

 

Amundi's results in the first half of 2017 confirm a trend of steady growth, exceeding the targets announced at the IPO (+5% average annual growth of net earnings per share from 2016 to 2019).

Net income Group share was up 10.9%8 from the first half of 2016. This excellent result was driven by solid revenue growth (€910m) of +8.6% linked to the 12-month growth in assets under management. Performance fees totalled €64m (+20%). A notable result was obtained in financial income (€56m, +60% vs. H1 2016), attributable to the disposal of financial assets to finance the acquisition of Pioneer.

Operating expenses were under control at €454m8 (+4.4%), leading to a 2-point8 improvement in the cost/income ratio, which stood at 49.9%.

The share of net income of equity-accounted entities rose to €16m (+23%). Taking into account a tax expense of €159m, net income Group share amounted to €308m8. Published net income Group share (which includes the costs related to the integration of Pioneer, valued at €21m after tax) amounted to €288m, up 3.4% on H1 2016.

 

In the second quarter of 2017

Net income Group share was €162m[9], an increase of 9.0% compared to Q2 2016. Net revenue was up 7.9% to €478m. Operating expenses came to €232m9, leading to a 1.9-point improvement in the cost/income ratio, which stood at 48.5%.

Published net income (which includes the costs related to the integration of Pioneer) was €145m.

 

Acquisition of Pioneer Investments

 

On 3 July 2017, Amundi finalised the acquisition of Pioneer Investments from UniCredit for €3.5bn. The work carried out over the past six months has helped reaffirm the growth strategies of the new group, define priorities for its business lines and formulate an integration plan.

These preparatory efforts confirmed the strategic and industrial rationale of the merging Amundi and Pioneer Investments and the resulting potential for value creation. The organisation and governance of the new Group are in place, allowing the merger can be implemented.

The synergies will be in line with what was announced in December 2016: €150m in cost synergies and €30m in revenue synergies are expected in a full year (2020) upon completion of the integration process. €190m in costs associated with the integration will also be recognised in 2017 and 2018.

 

Amundi's capital increase initiated on 14 March 2017 was a considerable success. A total of €1.4bn was raised[10] and 33,585,093 new shares were issued on 10 April 2017. The free float now accounts for 29.8% of shares, and Crédit Agricole Group now only holds 70% of the share capital. After this capital increase, Amundi has the largest market capitalisation among asset managers in Europe and ranks number five worldwide at €13.1bn[11].

 

At 30 June 2017, assets managed by Pioneer Investments totalled €221bn, bringing total combined AuM[12] for the Group to €1,342 billion. The results[13] for Pioneer Investments are in line with expectations, with net revenues of €422m, and net income of €127, normalised to €120m[14].

 

Financial disclosure schedule

27 October 2017: publication of results for the first nine months of 2017

 

***

Income statement

 

(€m)

 

H1 2017

H1 2016

% chg.
vs.

H1 2016

 

Q2 2017

Q2 2016

% chg.
vs.

Q2 2016

Net revenue

 

910

838

+8.6%

 

478

443

+7.9%

Net asset management revenue

 

864

813

+6.2%

 

 

 

 

o/w net fee and commission income

 

799

760

+5.2%

 

 

 

 

o/w performance fees

 

64

53

+20.5%

 

41

35

+15.7%

Net financial income and other revenue[15]

 

46

25

+87.0%

 

 

 

 

Operating expenses

 

-454

-435

+4.4%

 

-232

-223

+3.9%

Gross operating income

 

456

403

+13.1%

 

246

220

+11.9%

Cost/income ratio (%)

 

49.9%

51.9%

-2.0 pts

 

48.5%

50.3%

-1.9 pts

Cost of risk

 

-3

0

NS

 

-2

0

NS

Net gains/losses on other assets

 

-1

0

NS

 

0

0

+31.1%

Share of net income of equity-accounted entities

 

16

13

+23.0%

 

8

6

+28.6%

Income before tax

 

467

416

+12.3%

 

252

226

+11.3%

Taxes

 

-159

-137

+15.7%

 

-90

-78

+16.0%

Net income Group share

 

308

278

+10.9%

 

162

148

+9.0%

Pioneer integration  costs after tax

 

-21

0

NS

 

-17

0

NS

Published net income - Group share

 

288

278

+3.4%

 

145

148

-2.6%

 

               

Change in assets under management from 31 December 2015 to 30 June 2017

 

Assets under

 

Market

Scope

 

(€bn)

management

Inflows

effect

effect

 

31/12/2015

985

 

 

 

 

Flows in Q1 2016

 

+13.8

-11.6

/

 

31/03/2016

987

 

 

 

 

Flows in Q2 2016

 

+3.0

+13.6

/

 

30/06/2016

1,004

 

 

 

 

Flows in Q3 2016

 

+22.3

+19.7

+8.6

KBI GI

30/09/2016

1,054

 

 

 

 

Flows in Q4 2016

 

+23.1

+0.1

+5.0

CAI Investors

31/12/2016

1,083

 

 

 

 

Flows in Q1 2017

 

+32.5

+12.5

/

 

31/03/2017

1,128

 

 

 

 

Flows in Q2 2017

 

-3.7

-3.1

/

 

30/06/2017

1,121

 

 

 

 

 

/

/

/

+221

Pioneer Investments

Combined AuM[16] of Amundi + Pioneer

1,342

 

 

 

 

 


 

Details of assets under management and net inflows by client segment

 

 

 

AUM

AUM

% chg. vs.

 

Inflows

Inflows

 

Inflows

Inflows

Inflows

(€bn)

 

30/06/2017

30/06/2016

 30/06/2016

 

H1 2017

H1 2016

 

Q2-17

Q1-17

Q2-16

French networks*

 

103

95

+7.9%

 

+1.0

-4.0

 

-0.3

+1.3

+0.6

International networks

 

29

22

+32.5%

 

+4.7

+0.2

 

+3.7**

+1.0

+0.0

JVs

 

105

82

+27.9%

 

+7.3

+10.2

 

-0.8

+8.1

+6.7

Third-party distributors

 

93

69

+35.6%

 

+9.9

+3.7

 

+4.9

+4.9

+1.0

Retail

 

330

268

+23.1%

 

+22.9

+10.1

 

+7.5

+15.3

+8.3

Institutionals **

 

277

243

+13.8%

 

+6.4

+4.6

 

-2.7

+9.1

-3.9

Corporates

 

101

84

+19.7%

 

-3.2

-1.3

 

-10.0

+6.8

+2.8

CA & SG insurers

 

414

409

+1.3%

 

+2.7

+3.4

 

+1.6

+1.1

-4.2

Institutionals

 

791

736

+7.5%

 

+5.9

+6.7

 

-11.2

+17.1

-5.3

            

TOTAL

 

1,121

1,004

+11.7%

 

+28.8

+16.8

 

-3.7

+32.5

+3.0

 

French networks:  net inflows on MLT assets +€2.4bn in H1 2017, of which +€1bn in Q1 and +€1.4bn in Q2

**  Net Inflows in International networks in Q2 2017 include the reclassification of €1.1bn of net inflows from UniCredit networks which were included in Q1 2017 in Third-party distributors

*** Including Sovereigns and  funds of funds

****  Including Employee savings


Details of assets under management and net inflows by asset class

 

 

 

AUM

AUM

% chg. vs.

 

Inflows

Inflows

 

Inflows

Inflows

Inflows

(€bn)

 

30/06/2017

30/06/2016

30/06/2016

 

H1 2017

H1 2016

 

Q2-17

Q1-17

Q2-16

Equities

 

165

125

+31.4%

 

+5.2

+5.7

 

+3.2

+2.0

+3.4

Diversified

 

135

118

+14.1%

 

+7.2

+2.7

 

+2.8

+4.4

+1.3

Bonds

 

547

526

+3.9%

 

+6.3

+6.3

 

-4.0

+10.3

+4.6

Real, alternative and structured assets

 

74

65

+14.0%

 

-6.0

+2.5

 

+0.2

-6.1*

+1.1

Medium/long-term assets

 

920

835

+10.1%

 

+12.7

+17.2

 

+2.1

+10.6

+10.3

Treasury products

 

201

168

+19.6%

 

+16.1

-0.4

 

-5.8

+21.9

-7.3

            

TOTAL

 

1,121

1,004

+11.7%

 

+28.8

+16.8

 

-3.7

+32.5

+3.0

 

* Impact of the reinternalization  of an ABS management mandate by the ECB (-€6.9bn)

 

Details of assets under management and net inflows by region

 

 

 

AUM

AUM

% chg. vs.

 

Inflows

Inflows

 

Inflows

Inflows

Inflows

(€bn)

 

30/06/2017

30/06/2016

30/06/2016

 

H1 2017

H1 2016

 

Q2-17

Q1-17

Q2-16

France

 

794*

743

+6.9%

 

+9.4

+1.6

 

-11.4

+20.8

-3.0

Europe excl. France

 

142

105

+35.0%

 

+10.7

+4.0

 

+8.2

+2.5

-0.0

Asia

 

155

130

+18.9%

 

+7.5

+12.0

 

-0.5

+8.0

+7.0

Rest of world

 

30

26

+18.6%

 

+1.3

-0.7

 

+0.1

+1.2

-1.0

            

TOTAL

 

1,121

1,004

+11.7%

 

+28.8

+16.8

 

-3.7

+32.5

+3.0

TOTAL excl. FRANCE

 

327

261

+25.4%

 

+19.4

+15.2

 

+7.7

+11.7

+5.9

* of which €400bn for Group insurers

 

 

 

About Amundi

 

Amundi is Europe's largest asset manager by assets under management and ranks in the top 10 globally[17]. With the acquisition of Pioneer Investments, the Group now manages over €1.3 billion[18] in assets and has six primary management platforms[19]. Amundi offers its clients in Europe, the Asia-Pacific region, the Middle East and the Americas a wealth of market expertise and a full range of investment solutions in passive and active management and real and alternative assets.  Headquartered in Paris and listed on the stock market since November 2015, Amundi is Europe's number one asset management company in terms of market capitalisation and fifth in the world[20].

With an expanded scope, Amundi can offer its clients an enhanced range of tools and services. Thanks to its unparalleled research capabilities and the talent of 5,000 employees and market experts based in 37 countries, Amundi can provide individual, institutional and corporate clients with innovative savings and investment solutions that meet their specific needs, financial goals and risk profiles.

 

Amundi. Confidence must be earned.

 

Visit www.amundi.com for more information or to find the Amundi team closest to you.

 

 

Press contact:

 

Natacha Andermahr

   

Tel. +33 1 76 37 86 05

         

natacha.andermahr-sharp@amundi.com

             

Investor contacts:
Anthony Mellor 
Tel. +33 1 76 32 17 16 
anthony.mellor@amundi.com 


Annabelle Wiriath
 
Tel. +33 1 76 32 59 84
annabelle.wiriath@amundi.com

 

DISCLAIMER:

This document may contain projections concerning the financial situation and results of the activities and business lines of Amundi. 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. Furthermore, the financial information given is based on estimates, particularly when measuring market value and asset depreciation. 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 and applicable as of this date. The financial information given does not constitute financial statements for an interim period as defined in IAS 34 ("Interim Financial Reporting"), and has not been audited.

The information contained in this presentation, 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 presentation or its contents, or anything related to them, or any document or information to which the presentation may refer.

 



[1] Excluding costs associated with the integration of Pioneer Investments amounting to €32m before tax and €21m after tax in H1 2017.

[2]Assets 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.

[3] Data combined prior to harmonisation of accounting methods for AuM

[4] Assets excluding treasury products: equities, bonds, multi-asset, real, alternative and structured assets.

[5] Net tangible assets: Equity Group share net of goodwill and intangible assets.

[6] Pro forma the acquisition of Pioneer Investments, which is not yet consolidated at 30 June 2017.

[7] In H1 2017; source: DB ETF Monthly Review & Outlook,  end-June 2017      

[8] Excluding costs associated with the integration of Pioneer Investments amounting to €32m before tax and €21m after tax in H1 2017.

[9] Excluding costs associated with the integration of Pioneer Investments amounting to €26m before tax and €17m after tax in Q2 2017.

[10] Gross amount, including additional paid-in capital

[11] At 25 July 2017

[12] Data combined prior to harmonisation of accounting methods for AuM

[13] Accounts reviewed by its Board

[14] Taking into account in particular a normalised tax rate

[15] Of which €56m in net financial income in H1 2017 vs. €35m in H1 2016

[16] Prior to the harmonisation of accounting methods for AuM

[17] Source: IPE, "Top 400 Asset Managers", published in June 2017 based on assets under management as of December 2016.

[18] Source: combined pro forma data for Amundi and Pioneer Investments at end-December 2016.

[19] Management platforms: Boston, Dublin, London, Milan, Paris and Tokyo

[20] Stock market capitalisation at 30 April 2017



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This announcement is distributed by Nasdaq Corporate Solutions (One Liberty Plaza, 165 Broadway, New York, NY 10006. Tel: +1 212 401 8700. www.nasdaqomx.com) on behalf of NASDAQ OMX Corporate Solutions clients. Source: Amundi, 91 boulevard Pasteur, 75015 Paris, FRANCE
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