A good financial performance for the first quarter
On Friday 28th of April, Amundi publishes its results for the first quarter 2023, with an adjusted net income of €300 M€1,2, down -7.5% compared to the 1st quarter 2022, in line with the decline over one year in the equity and bond markets but almost stable compared to the fourth quarter 2022. This result is explained by the maintenance of its revenues at the same level as in the previous quarter and by the good control of its expenses.
Net revenue2 amounted to €794 million, down -4.9% from Q1 2022 but essentially stable (+0.4%) relative to Q4 2022.
- Net management fees sustained at a high level;
- Robust revenue growth for Amundi Technology confirming its development;
- Performance fees down significantly compared to the high comparison base in Q1 and Q4 2022;
- Finally, positive net financial and other income, thanks to both the return to positive yields on the net cash and positive mark-to-market for the investment portfolio over the quarter.
Operating costs2 were well under control at €425 million, an increase of only +0.6% compared to Q1 2022, in a context of high inflation.
The gains and the pursuit of synergies generated by the integration of Lyxor made it possible to absorb this inflation as well as the unfavorable exchange rate effect, and to continue to invest for development.
In this context, the very moderate increase in costs over one year, well below the inflation rate seen in most of the countries where Amundi operates, reflects the agility with which Amundi adjusts its cost base. As a result, once again Amundi delivered one of the best cost/income ratios in the sector again this quarter: 53.6%2.
Net accounting income (group share) comes to €285 million and includes the amortisation of the intangible assets (customer contracts related to the acquisition of Lyxor and the distribution contracts related to previous transactions), ie -€15m after tax in Q1 2023.
Accounting earnings per share hit €1.40.
Healthy retail inflows and a favourable business mix
Retail recorded satisfactory inflows: +€4.3 billion excluding the Chinese subsidiary Amundi BOC WM. As in 2022, inflows mainly came from MLT Assets, +€4.2 billion, driven by all segments:
- The French networks took in +€2.7 billion, of which +€0.8 billion in MLT Assets were driven, as in H2 2022, by structured products, at +€1.5 billion;
- Inflows from the International networks (excluding Amundi BOC WM in China) reached +€1.2 billion, entirely in MLT Assets; like for the French networks, both structured products and bond strategies continued their success from end-of-2022; the performance was well-diversified by country and network, with healthy inflows particularly in Italy with UniCredit, in the Czech Republic with the Société Générale and UniCredit subsidiaries, and in Spain with Sabadell.
- Third-Party Distribution experienced a reversal of the trend observed in Q4 2022: in the first quarter, total inflows of +€0.4 billion break down into a strong performance of +€2.2 billion in MLT Assets, notably in ETFs, and conversely in treasury product outflows; by geographic region, the good performance of Asia should be noted for the quarter.
The strong performance for Retail is more than offset, however, by MLT Asset outflows in very low margin segments or products, as well as outflows in China, where the asset management market still shows net redemptions in MLT assets, this last factor also explains the net outflows at our JVs:
- Outflows for the Institutional segment (-€11.7 billion, of which -€13.7 billion in MLT Assets) were largely limited to a few very-low-margin insurance and institutional mandates, in particular in the CA & SG Insurers segment, which experienced redemptions in the traditional life (“euro”) contracts, and a large sovereign client in index management;
- In China, Amundi BOC WM recorded -€2.8 billion in outflows, still related to maturing term funds, and the ABC-CA JV was impacted by redemptions from large institutions (-€5.0 billion).
Excluding the Chinese JV, inflows in the other JVs were very satisfactory, particularly in India (+€2.8 billion) and Korea (+€1.6 billion), which continue to benefit from strong activity, particularly in MLT assets.
Total net inflows for the quarter were negative at -€11.1 billion.
Assets under management reached €1,934 billion at 31/03/2023 and were up compared to the end of December 2022 thanks to the market effect.
Continuing development initiatives
Several of the significant Ambitions 2025 development plan milestones were reached during the first quarter:
- Amundi Technology saw its earnings increase by +35% compared to Q1 2022 and added 4 new customers, including 3 in Asia. Amundi Technology and HSBC Securities Services have signed an agreement for the use of the ALTO platform. This is a major new client for the ALTO offering to asset servicers, which already counts CACEIS, Société Générale Securities Services and Bank of NY Mellon among its clients. BNY Mellon has successfully deployed ALTO across 7 of its entities in EMEA;
- Amundi's fund distribution platform Fund Channel is announcing today the closing of its transaction with CACEIS, the securities services platform of Crédit Agricole and Santander. CACEIS is acquiring 33.33% of the capital of Fund Channel to develop fund execution and offer integrated services to distributors.
- Assets under management in Responsible Investment reached €822 billion, compared to €800 billion at end-2022, thanks to a positive market effect.
As part of its Net Zero commitment, Amundi announced on 17 April the launch of a full range of funds across a wide range of asset classes aligned to a Net Zero trajectory3, targeting a reduction in carbon intensity compared to 2019 by 30% in 2025 and 60% in 2030,.
Valérie Baudson, CEO stated:
Amundi delivered a good performance in the first quarter of 2023, in an uncertain market environment.
Our adjusted net income remained stable at €300 million compared to the fourth quarter of 2022, thanks to our sustained revenue and good cost control. The productivity gains and continued synergies generated by the integration of Lyxor have enabled us to absorb the effects of inflation while continuing to invest.
I would also like to underline the healthy inflows of our Retail activities over the quarter, for our partner networks in France and abroad as well as our third-party distributors.
1. Attributable net income
2. Adjusted data: excludes amortisation of intangible assets, and in 2022 Lyxor integration costs (see note p. 8)
3. All Net Zero Ambition passive management funds comply with the EU’s CTB/PAB criteria