Accounting net income of €480m (up +5.6% vs. H1 2018)
Growth in-line with targets of 3-year plan
In an environment marked by persistent risk aversion, Amundi's results for the first half of 2019 improved once again, in line with targets, confirming the resiliency of its business model.
Sharp improvement in results
In the first half of 2019
Growth in adjusted net income 1(+2.7% to €505m) was the result of resiliency in revenues and margins, as well as strict control of costs, which benefited from the synergies related to the Pioneer integration.
Total net revenues were nearly stable at €1,332m (-0.6% vs. H1 2018):
Net management fees dropped slightly (€1,239m, -1.6%), with margins nearly stable.
Performance fees held at a good level (€60m, including €40m in Q2 2019). The comparison effect was unfavourable against an especially high H1 2018.
Financial income rose substantially to €33m, in connection with the recovery of equity markets.
Operating expenses were under control (€680m, +0.6% vs. H1 2018), with synergies related to the integration of Pioneer offsetting business development investments as well as unfavourable foreign exchange and price effects.
Consequently, the cost/income ratio1 stood at 51.1%, comparable to H1 2018. Gross operating income1 stood at €652m.
Adjusted net income1, Group share, totalled €505m, up +2.7% compared to the first half of 2018.
In the second quarter of 2019
Adjusted net income1, Group share totalled €258m, up 2.3% compared to Q2 2018.
Q2 2019 accounting net income2 was €245m, an increase of +4.9% compared to Q2 2018.
Brisk net inflows in MLT assets, despite a stalled European asset-management market
In the first half of 2019
In spite of the recovery of financial markets (after the sharp correction in the fourth quarter of 2018), the European asset-management sector posted virtually zero inflows in the first half of 20193, given the persistent wait-and-see approach from savers and investors resulting from strong risk aversion.
For Amundi, activity in the first half of 2019 was marked by:
brisk net inflows in MLT4 assets, at +€8.0bn excluding the reinternalisation of a specific mandate in Italy (-€6.3bn),
substantial seasonal outflows from treasury products (-€13.4bn),
and the reinternalisation of an Italian institutional mandate (in the first quarter 2019).
In light of these factors, total net flows for the first half were -€11.7bn of which -€3.5bn in Retail and -€8.2bn in Institutionals.
The Retail segment posted positive inflows in MLT assets (+€1.4bn), driven by International Networks (+€2.1bn) thanks to discretionary management in Italy, and by the Asian Joint Ventures (flows of +€1.3bn, which include both a very good level of inflows in India and South Korea, and outflows in China due to regulatory changes).
Among institutional clients, this first half of the year was characterised by robust net inflows in MLT assets, totalling +€6.6bn excluding the reinternalisation of an Italian mandate (-€6.3bn). Net inflows in CA & SG Insurance Mandates were brisk and driven by subscriptions to euro-denominated life insurance policies. Employee Savings confirmed its momentum (+€1.5bn).
By asset class, net MLT inflows were driven by solutions fitting well the market environment (risk aversion and low interest rates)
Amundi’s assets under management totaled €1,487 bn at 30 jun 2019, up +4.3% compared to the end of 2018, thanks to a positive market effect.
In the second quarter of 2019
The path of activity in the second quarter of 2019 was similar with the first quarter, with low risk appetite from clients.
Activity was marked by outflows from treasury products (-€4.4bn, mainly in the Institutionals and Corporates segment) and slightly negative flows of -€0.4bn in MLT assets. In total, net outflows in Q2 2019 reached -€4.8bn.
A solid financial structure
On 30 June 2019, Amundi's tangible equity totalled €2.1bn, compared to €2.3bn on 31 December 2018. Such change is attributed to the following reasons : capital generated from net income for the first half of the year 2019 (€480m) was more than offset by the 2018 dividend payment (-€579m), as well as an increase in the number of treasury shares held in order to cover the performance share plan (supplementary deduction of €67m). The number of treasury shares (which are deducted from shareholder’s equity) increased in the first half of 2019: 1.9 million shares at the end of June 2019 compared to 0.8 million at the end of December 2018.
Furthermore, in May 2019, rating agency Fitch confirmed Amundi’s A+ rating, the best in the sector.
“In the first half of 2019, Amundi confirmed the solidity of its business model. Results have increased again, in line with the targets of the three-year plan. This increase in profitability reflects both the resiliency of business and margins in a more difficult environment, and the full effect of the synergies from the Pioneer acquisition. Amundi has continued to strengthen its organization with targeted recruitment (mainly for passive management and real assets). In addition, Amundi has launched several Responsible Investing initiatives, in keeping with the plan announced in October 2018”.Yves Perrier, CEO of Amundi.
Adjusted data: excluding amortization of the distribution contracts and, in 2018, excluding costs associated with the integration of Pioneer
Including amortization of distribution contracts and, in 2018, integration costs
Source : Broadridge
Medium-Long-Term (MLT) Assets excluding treasury products : equity, fixed income, real alternative and structured assets
Amundi is Europe’s largest asset manager by assets under management and ranks in the top 10 globally. With the acquisition of Pioneer Investments, the Group now manages €1.487 trillion in assets and has six main investment hubs. 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. Amundi's clients also have access to a full range of tools and services. Headquartered in Paris, Amundi has been listed on the Paris Stock Exchange since 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.
Source: IPE “Top 400 Asset Managers”, published in June 2019, based on AuM at December 2018.
Amundi figures as of 30 June 2019
Investment hubs: Boston, Dublin, London, Milan, Paris and Tokyo