
9 months and third quarter of 2019 results
Increasing results with record net inflows in Q3 2019 and a strong business activity despite a volatile environment.
Wednesday 13 February 2019
Financial Communication
On Wednesday, 13 February, Amundi is releasing its annual and fourth-quarter 2018 results: high annual net inflows, a sharp improvement in results and a successful integration of Pioneer that led to a higher amount of synergies. The dividend submitted to the General Meeting also saw an increase.
Amundi’s results rose once again in 2018, despite a market environment that grew unfavourable starting from the second quarter.
Adjusted net income1, which measures the Group’s performance on a comparable basis, increased to €946m. This significant growth (up +9 %2 vs. 20173) can be attributed to strong growth momentum despite a more difficult economic environment, as well as to lower operating expenses stemming from the realisation of Pioneer synergies.
Inflows remained high in 2018 (+€42bn), driven mainly by medium/long-term assets6 (+€36.3bn) and Retail (+€30.7bn7). Given the negative market effect (-€43bn) concentrated at the end of the year, assets under management reached €1,425bn at 31 December 2018, stable over 12 months.
Given that the 2018 market environment was unfavourable (European asset management market down sharply8: +€62bn in 2018 compared with +€836bn in 2017), the quarterly inflow pattern was particularly unusual, as most of the flows were generated at the beginning of the year: Q1: +€39.8bn, Q2: +€+2.6bn, Q3: +€6.1bn and Q4: -€6.5bn.
Thus, in financial year 2018:
The acquisition of Pioneer strengthened Amundi’s business model and its European leadership position.
In addition, this acquisition, carried out in record time (18 months) generated value: total amount of synergies raised from €150m (originally anticipated) to €175m and adjusted net earnings per share1 grew by +36% in 2018 vs. 2016.
The Board of Directors has decided to propose a dividend of €2.90 per share in cash at the General Meeting to be held on 16 May 2019, i.e. an increase of +16% vs. 2017.
This dividend offer represents a payout ratio of 65% of the Group's share of net income excluding integration costs (based on the number of shares at end 2018) and a yield of 5.7% based on the share price on 7th February 2019 (at the close). Shares shall be designated ex-dividend on 24 May 2019 and paid out as from 28 May 2019.
Finally, Amundi's financial structure was solid once again; tangible equity9 amounted to €2.3bn, an increase of €0.4m from end 2017.
This solidity was once again recognized by the Fitch rating agency, which, in June 2018,
reiterated Amundi's A+ rating with a stable outlook
, the best in the sector.
Despite the negative effects of the market context that weighed on revenues, the quarterly adjusted net income remains high (€225m).
Net management revenues were down –11.2%. However, this decrease in revenues was offset by a sharp decline in operating expenses (-14.6%).
The sharp decline in expenses led to a cost/income ratio of 52.5%.
Yves Perrier, Chief Executive Officer, comments on the results:
Despite an unfavourable market environment, Amundi's results increased sharply once again in 2018. There are two factors behind this improvement. First, business momentum remained strong, despite the market context, and benefited from Amundi’s significant international presence, particularly in Asia. Second, the Pioneer integration has been a success, and the acquisition has significantly strengthened Amundi's business model. This integration was executed quickly and competently, leading us to reassess the total amount of synergies up to €175m.
These strong results demonstrate the soundness of Amundi's business model.
1. Excluding amortisation of distribution contracts and excluding costs associated with the integration of Pioneer
2. Growth rate calculated based on 2017 adjusted and combined net income excluding the exceptional level of financial income
3. Comparison with combined 2017 data: 12 months Amundi + 12 months Pioneer
4. Excluding amortisation of distribution contracts (UniCredit, SG, and Bawag)
5. Excluding costs associated with the integration of Pioneer
6. Excluding treasury products
7. Including the -€6.5bn in assets reinternalised by Fineco in Q3 2018
8. Source: Broadridge Financial Solutions - FundFile/Open funds (excluding discretionary mandates and special investor funds) at the end of December 2018
9. Equity excluding goodwill and intangible assets
Increasing results with record net inflows in Q3 2019 and a strong business activity despite a volatile environment.
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