2021 4th Quarter and Annual results

This Wednesday February 9^th Amundi publishes its 2021 annual and Q4 results.

Amundi’s assets under management, including the €148bn of assets managed by Lyxor at 12/31/2021, reach €2,064bn.

Thanks to a strong dynamic growth and a record inflow of €75 billion in medium long-term assets¹, in 2021 Amundi has passed the €2 trillion mark in assets under management.

These strong results, at €1,315 million (+37%)², and the very good business momentum were accompanied by several strategic achievements during the year:

• Strong growth in Retail business in Europe, notably driven by distributors: Retail business in Europe over the year underscored Amundi’s ability to expand in virtually all distribution channels:
  • Third-party distributor inflows were especially high at +€23.5bn in the company’s main markets (France, Italy, Germany, Benelux, Spain, etc.), fuelled by both passive and active management. Assets managed for third-party distributors (including Lyxor) totalled €326bn at end-2021, i.e. 52% of total Retail AuM (excl. JVs).
  • International partner networks also enjoyed strong momentum, particularly UniCredit (+€4.4bn in Italy, Germany and Austria) and Banco Sabadell (+€2.1bn in Spain).
• Robust development of activities in Asia and successful launch of the subsidiary Amundi-BOC:In line with its strategic roadmap, Amundi continued expanding its activities in Asia, especially in India (AuM of €189bn³ and inflows of €26.0bn) and China (AuM of €98bn⁴ and inflows of €25bn). Overall, AuM in Asia amounted to €369bn at end-2021, up by 24% year-on-year.
• 2018-2021 ESG targets exceeded and new 2025 ESG targets defined: In ESG, Amundi confirmed its leadership in Europe, with €847bn of AuM at end-2021, o/w more than €780bn classified under Articles 8 and 9 (SFDR⁵). Net inflows were +€36.5bn⁶. Amundi met all its commitments in terms of the 2018-2021 ESG plan. On 8 December 2021, Amundi presented its new “Ambition 2025” ESG Plan, aimed at ramping up its commitments, both in terms of savings and investment solutions offered to its clients, and engagement initiatives targeting corporate issuers. In the interest of alignment, Amundi also plans to index the compensation paid to its top executives to the achievement of ESG targets, and will present its overall climate strategy to its shareholders.

• Successful development of Amundi Technology: Amundi Technology stepped up its development (39 clients at end-2021, o/w 15 new clients), as illustrated by the selection of ALTO⁷ Investment by Malakoff Humanis (AuM of €54bn) and AG2R (AuM of €120bn). The ALTO range was expanded to include two new modules (ESG and Asset Servicing). Amundi Technology boasted strong growth in revenue, totalling €36m over 12 months.
• And finally, the Acquisition of Lyxor: On 31 December 2021, Amundi finalised the acquisition of Lyxor for €825m. The deal, expected to generate considerable value, makes Amundi the European leader in ETFs and completes its range of active management, particularly in liquid alternative investments.

Strong business activity

In a still supportive market environment⁸, net inflows were +€65.6bn in Q4 2021, driven by all client segments and asset classes, and including the positive contribution of treasury products (+11€bn).

Excluding JVs, MLT inflows⁹ (+€29.0bn) were balanced between Retail and Institutional clients:

• Retail clients held on to their risk appetite, once again driving strong inflows (+€16.3bn) thanks to third-party distributors (+€10.9bn) and international networks (+€5.2bn),
• Business with institutional clients was also solid (+€12.7bn) in all client segments.

These MLT flows were driven by virtually all areas of expertise and by ESG:

• Active management expertise once again posted high inflows (+€20bn), fuelled by all asset classes, including Real Assets (+€1.2bn).
• Passive management, ETFs and Smart Beta had a good fourth quarter with inflows of +€9.5bn, bringing AuM to €208bn at end-December 2021. In ETFs/ETPs, with inflows of +€4.6bn in Q4 2021, AuM were €88bn at year-end.
• ESG MLT inflows totalled +€23.7bn¹⁰.

Furthermore, JVs boasted very positive momentum (+€25.5bn), especially in India and China.

Significantly growing earnings in Q4 2021

Adjusted data¹¹

Amundi maintained a solid level of adjusted net income in Q4 2021 (€328m), improving sharply compared to Q4 2020 (+13.9%). 

Net revenues (€794m, up +8.8% vs. Q4 2020) were supported by good market conditions and strong inflows.

Adjusted operating expenses were under control (€388m). Their +4.8% rise year-on-year can be attributed to ongoing development investments, provisioning for variable remunerations (in line with the improvement in operating income) and the year-on-year scope effect (+€20m)¹².

As a result, the adjusted cost/income ratio for the quarter was 48.8%. Excluding the exceptional level of performance fees¹³, the cost/income ratio was around 50%.

Accounting data

Net accounting net income was €304m (+€10.6% vs. Q4 2020) and included the first costs associated with the integration of Lyxor (€12m after tax) and the usual amortisation of distribution agreements.

Robust activity in 2021

Business momentum was excellent in 2021, driven in large part by MLT assets (+€75.5bn excl. JVs), consisting predominantly of active management strategies (+€55.8bn) and MLT ESG assets (+€36.5bn¹⁴).

Overall 2021 inflows totalled +€60.2bn, also thanks to strong business momentum in JVs (+€29.7bn excluding Channel Business outflows¹⁵) and despite treasury product outflows (-€26.6bn).

Retail net inflows (excl. JV) did were strong at +€43.5bn, primarily in MLT assets (+€41.2bn).

Institutional client inflows amounted to +€5.4bn, with a high level of MLT inflows (+€34.4bn) spanning all client segments, and treasury product outflows (-€28.9bn).

JVs recorded robust inflows of +€29.7bn, excluding Channel Business outflows¹⁶ in China.

Active management posted record inflows in 2021, amounting to +€55.9bn, helped by the quality and solid positioning of our investment management, particularly in ESG.

All investment management platforms had very good performances: nearly 74% of AuM in open-ended funds are ranked in the first 2 quartiles over 5 years¹⁷ Furthermore, over 5 years, 86% of AuM have outperformed their benchmark¹⁸.

Passive management, ETFs and Smart Beta all had another very good year, with inflows of +€19.7bn, taking AuM to €208bn, higher than the objective set in 2019 (€200bn projected in 2023).

Amundi Real Assets benefited from its positioning and the rapid expansion of the real and private assets market. Inflows were +€4.6bn, evenly distributed among all areas of expertise (+€1.8bn in Private Equity, +€1.6bn in Real Estate, +€1.1bn in private debt). AuM totalled €62.1bn at end-2021, reflecting substantial growth over the last 5 years (+11.1% average annual growth).

Record net earning in 2021

Adjusted data¹⁹

This excellent profitability can be attributed to multiple factors:

• High net revenue, up by +23.5%
• Excellent operational efficiency maintained

The rise in operating expenses vs. 2020 (+14.4%) is attributable to:

• ongoing investments in development for €65m
• provisions for variable compensation, in line with the growth of operating income.
• the year-on-year scope effect²⁰

Thanks to such positive scissor effect, the cost/income ratio was 47.9% (roughly 50% excluding the exceptional level of performance fees²¹) and gross operating income climbed +33%.

The contribution from equity-accounted entities (mostly Asian joint ventures) rose significantly from 66m in 2020 to €84m in 2021, thanks to the contribution of JVs in China (€28m) and India (€47m) to our results.

Accounting data

Net accounting income was €1,369m (+€50.5% year-on-year) and included the initial costs associated with the integration of Lyxor (€12m after tax) coupled with a non-recurring tax gain (Affrancamento²²). Earnings per share reached €6.75, a significant increase compared to 2020 (+50%).

Valérie Baudson, Amundi’s CEO comments

Amundi topped the €2,000 billion level of assets under management in 2021 thanks to robust flows and to the acquisition of Lyxor. The sales momentum was fuelled by record medium-long term inflows of €75 billion, driven in particular by third-party distributors and joint ventures. 
   
With net income of €1.3bn, an increase of +37% over 2020, we have already surpassed the guidance of our 2018-2022 medium/long-term strategic plan: this net income represents an average 12% growth per year over the period versus a target of +5%. 
  
All targets in our 2018-2021 ESG plan were reached, confirming our leadership in this field. Responsible investment is a key focus of development for Amundi, in the interests of its clients and society as a whole. Drawing on its comprehensive range of investment solutions, technological tools, service offers and solutions, Amundi has everything to keep its development momentum going strong.

<sup>1. Excluding Joint Ventures. Lyxor data not included.
2. Net income, Group share. Adjusted data: excluding amortisation of distribution agreements and, in 2021, excluding costs associated with the integration of Lyxor (€12m in Q4 2021 after tax and €16m before tax) and excluding the impact of Affrancamento (€114m Q2 2021)
3. End 2021
4. End 2021. AuM generated by JVs with ABC and BOC, and AuM in Hong Kong and Taiwan.
5. The new European Sustainable Financial Disclosure Regulation (SFDR) requires fund managers to rank their European assets by degree of ESG integration.
6.  Net inflows excluding treasury products, CA Assurances and Sogecap.
7.  Amundi Leading Technologies & Operations
8.  Equity markets up +25% on average vs. Q4 2020 and +2% vs. Q3 2021
9.  Medium/Long-Term Assets; excluding Joint Ventures. Lyxor data not included
10.  Inflows excl. insurers CA Assurances and Sogecap
11. Adjusted data: excluding amortisation of distribution agreements and, in 2021, excluding costs associated with the integration of Lyxor (€12m in Q4 2021 after tax and €16m before tax) and excluding the impact of Affrancamento (€114m in Q2 2021)
12. Due to the creation of Amundi BOC WM, consolidated from Q4 2020, and the full consolidation of Fund Channel and Anatec starting in Q1 2021
13. Exceptional performance fees = higher-than-average performance fees per quarter in 2017-2020 (€42m)
14. Inflows excl. Group insurers
15. Low margin products outflows for -€18,4bn in 2021; outflows stemming from regulatory developments
16. Low-margin products (Channel Business for -€18,4bn in 2021); outflows stemming from regulatory developments
17. Gross performances. Source: Morningstar Direct, open-ended funds and ETFs, global scope, excluding feeder funds, end-December 2021. 621 funds, i.e. €478bn. A total of 183 Amundi funds have a 4- or 5-star Morningstar rating
18. At 31/12/2021, source: internal data, scope: €1,129bn (excl. JV and scope Lyxor), active management
19. Adjusted data: excluding amortisation of distribution agreements and, in 2021, excluding costs associated with the integration of Lyxor (€12m in Q4 2021 after tax and €16m before tax) and excluding the impact of Affrancamento (€114m in Q2 2021).
20. Scope effect of +€28m: acquisition of Sabadell AM, consolidated from Q3 2020, full consolidation of Fund Channel and Anatec starting in Q1 2021
21. Exceptional performance fees = higher-than-average performance fees per quarter in 2017-2020 (€42m)
22. Non-recurring tax gain (net of a substitution tax) of +€114m (with no cash impact): “Affrancamento” mechanism under the 2021 Italian Finance Act for 2021 (Act No. 178/2020), resulting in the recognition of Deferred Tax Assets on intangible assets (goodwill), which were excluded from Adjusted Net Income</sup>