Amundi Asset Management releases H1 2017 results
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.
“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 finalised 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,” Yves Perrier, CEO, Amundi said.
Amundi’s assets under management amounted to EUR 1,121 billion at 30 June 2017, reflecting excellent business activity (net inflows of +EUR 28.8 billion in H1 2017) and a positive market effect (+EUR 9.5 billion) owing to favourable market conditions, especially in equities. These net inflows trends exceed the target announced at the IPO (+EUR 40 billion in average per year).
The retail segment has seen substantial activity, with net inflows in H1 2017 of +EUR 22.9 billion, achieved across all distribution channels, compared to +EUR 10.1 billion in H1 2016. Inflows were sustained on the French networks, especially in medium/long-term assets (+EUR 2.4 billion), continuing the positive trend observed since the second half of 2016. Inflows were also most significant for third-party distributors (+EUR 9.9 billion vs +EUR 3.7 billion in H1 2016), with particularly positive momentum in Europe, and for joint ventures (+EUR 7.3 billion). The international networks (+EUR 4.7 billion, largely attributable to the Italian networks) saw significant inflows from the UniCredit networks (+EUR 3.5 billion), demonstrating a positive start to the distribution agreement.
The institutionals segment recorded a good level of net inflows (+EUR 5.9 billion 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 (‑EUR 6.9 billion) 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 (-EUR 4.9 billion), as in H1 2016.
Net inflows were generated on all asset classes, with medium/long-term assets representing +EUR 12.7 billion. To be noticed, the continued strong inflows for ETFs (+EUR 7.7 billion), positioning Amundi as the n° 3 in Europe and for real estate (+EUR 2.2 billion).
Finally, net inflows remained primarily driven by international sources (67 per cent of total inflows), which totalled +EUR 19.4 billion, i.e. 67 per cent of total inflows). Activity was dynamic in both Europe (Italy, Germany mostly) and Asia. Year-on-year, international assets under management increased by 25 per cent, representing 29 per cent of total assets under management and 44 per cent of total assets excluding Group insurers.
In the second quarter of 2017
The EUR 3.7 billion outflow is attributable to contrasting trends:
Retail net inflows remained strong (+EUR 7.5 billion), 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 (+EUR 1.4 billion), 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 -EUR 11.2 billion due to significant outflows in treasury products. This follows a very substantial inflow in the first quarter (+EUR 17.1 billion).
Results for the first half of 2017: net income of EUR 308 million, a substantial increase (+10.9 per cent); 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 (+five per cent average annual growth of net earnings per share from 2016 to 2019).
Net income Group share was up 10.9 per cent from the first half of 2016. This excellent result was driven by solid revenue growth (EUR 910 million) of +8.6 per cent linked to the 12-month growth in assets under management. Performance fees totalled EUR 64m (+20 per cent). A notable result was obtained in financial income (EUR 56 million, +60 per cent vs. H1 2016), attributable to the disposal of financial assets to finance the acquisition of Pioneer.
Operating expenses were under control at EUR 454 million (+4.4 per cent), leading to a 2-point improvement in the cost/income ratio, which stood at 49.9 per cent.
The share of net income of equity-accounted entities rose to EUR 16 million (+23 per cent). Taking into account a tax expense of EUR 159 million, net income Group share amounted to EUR 308 million. Published net income Group share (which includes the costs related to the integration of Pioneer, valued at EUR 21 million after tax) amounted to EUR 288 million, up 3.4 per cent on H1 2016.
In the second quarter of 2017
Net income Group share was EUR 162 million, an increase of 9.0 per cent compared to Q2 2016. Net revenue was up 7.9 per cent to EUR 478 million. Operating expenses came to EUR 232 million, leading to a 1.9-point improvement in the cost/income ratio, which stood at 48.5 per cent.
Published net income (which includes the costs related to the integration of Pioneer) was EUR 145 million.
Acquisition of Pioneer Investments
On 3 July 2017, Amundi finalised the acquisition of Pioneer Investments from UniCredit for EUR 3.5 billion. The work carried out over the past six months has helped reaffirm the growth strategies of 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: EUR 150 million in cost synergies and EUR 30 million in revenue synergies are expected in a full year (2020) upon completion of the integration process. EUR 190 million 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 EUR 1.4 billion was raised and 33,585,093 new shares were issued on 10 April 2017. The free float now accounts for 29.8 per cent of shares, and Crédit Agricole Group now only holds 70 per cent 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 EUR 13.1 billion.
At 30 June 2017, assets managed by Pioneer Investments totalled EUR 221 billion, bringing total combined AuM for the Group to EUR 1,342 billion. The results for Pioneer Investments are in line with expectations, with net revenues of EUR 422 million, and net income of EUR 127 million, normalised to EUR 120 million.