First-half and second-quarter 2018 results

Thursday 02 August 2018

Financial Communication

On Thursday, 2^nd of August, Amundi is releasing its first-half and second-quarter 2018 results. Amundi’s results and business activity are both up sharply and ahead of targets. This high level of profitability has been achieved in particular thanks to the synergies generated by the successful integration of Pioneer. Business activity has been brisk (+€42.4bn) thanks to Retail, MLT assets, and International.

These results, which are ahead of Amundi’s targets, attest to the Group’s solid financial structure. This strength was particularly recognised by Fitch agency, which confirmed Amundi’s A+ rating in June 2018 -one of the best in the sector.

H1 2018

The first half of 2018 closed on a high level of business activity, bringing assets¹ under management to €1.466tn, with adjusted net income up sharply (+13.6%²), higher than the announced targets .

Net inflows of €42.4bn³

These high net inflows¹ are mainly driven by Retail, MLT (Medium-Long Term) assets, and International.

The Retail segment enjoyed strong momentum, with net inflows of +€34.6bn (versus +€22.2bn in H1 2017²), generated by all distribution channels:

Good commercial performance by the French networks (+€3.2bn²) continued.
In the international networks, flows remained brisk at +€5.0bn², illustrating the success of the partnership with UniCredit.
Inflows for third-party distributors were +€3.0 bn², driven by France and Asia.
Flows were strong once again in the Asian joint ventures (+€23.5bn²), primarily in China.

Business activity in the Institutional segment was strong at +€7.8bn in H1 2018 (compared with +€4.1bn in H1 2017²), with robust commercial activity for Sovereign and other Institutional clients. Conversely, the Corporates and Corporate Savings segment (-€10.7bn²) felt the seasonal effect of treasury products.

Net inflows by asset class consisted primarily of MLT assets (+€36.5bn or 86% of the total). In addition, the standouts among the commercial successes of this first half (excluding JVs) were:

Continued market share gains in ETFs bringing passive management and smart beta assets under management to €97bn at 30 June 2018, i.e. +21% over 12 months.
Steady growth in real assets with net inflows of +€1.3bn in H1 2018 for Amundi Real Estate and a ramping-up of Private Debt (+€1.1bn in net inflows in H1 2018).

From a geographic viewpoint, net inflows were once again driven by the international segment with a significant contribution from Asia (+€30.1bn) and Italy (+€6.7bn, an increase).

Results increased significantly and came in above targets

Adjusted net income, Group share³ was up significantly (+13.6%²) thanks to a solid increase in net asset management revenue and an improved cost/income ratio³ (-2.4 pts vs. H1 2017²). This performance confirms the Group’s ability to expand while keeping its costs under control.

Net revenue stood at €1,347m, up +4.8%⁴, thanks to net management fees that increased in line with the growth in AuM and performance fees reflecting a strong performance by the funds.
Operating expenses fell sharply (€677m or -4.6%⁴).
As a result, the cost/income ratio³of 50.5% (one of the lowest in the industry) improved by 2.4 points⁴.

Net income, Group share was €492m, up +13.6³ compared with H1 2017². This increase was greater than the stated target of +7% per year⁵.

Second quarter 2018, ahead of targets

Net inflows¹ in the second quarter (+€2.6bn) were higher than Q2 2017² (-€2.9bn in combined net inflows), driven mainly by Retail (+€12.9bn); Institutional (-€10.3bn) suffered from seasonal outflows on treasury products used by Corporates for paying dividends.

Q2 results up sharply

At €679m, net revenues rose by +€2.8%³, thanks to a marked increase of 4.1%⁴ in net management fees, among other factors.

With operating expenses down (-4.0%), the cost/income ratio improved by 1.3³ points (vs Q2 2017) to stand at 50.2%³.

Adjusted net income, Group share³ totalled €252m (+12.2% vs Q2 2017).

In the first half of 2018, Amundi came in ahead of its strategic roadmap for both business activity and profitability. The integration of Pioneer has been successfully developed and is bearing fruit. These excellent results, in a less favourable environment, confirm the strength and the resilience of the Group's business model, which relies on its diverse business lines (client segments, investment expertise and regions). Amundi has a significant growth potential, based on strengthened investment expertise and a powerful international network.

Yves Perrier, Amundi's CEO

1. 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.

2. Change using comparable (6 months Amundi + 6 months Pioneer, or 3 months Amundi + 3 months Pioneer) and adjusted data.

3. Adjusted data in H1 2018: before amortisation of distribution contracts (€25m after tax) and before costs associated with the integration of Pioneer (€12m after tax). In H1 2018: before amortisation of distribution contracts (€12m after tax) and before costs associated with the integration of Pioneer (€6m after tax). Refer to methodology section on page 7 of this release.

4. Target calculated based on 2017 adjusted and combined net income excluding the non-recurring level of financial income. Press release of 09/02/2018