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Amundi: Third-quarter 2021 results

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·17-min read
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Amundi: Third-quarter 2021 results

Solid results: €333m1 (+41.5% vs. Q3 2020)
Strong business momentum: net inflows of +€15bn in MLT assets2,3 in Q3 2021

Results



Business activity



Paris, 4 November 2021

Amundi’s Board of Directors, chaired by Yves Perrier, convened on 3 November 2021 to review the financial statements for the third quarter and first nine months of 2021.

Commenting on the figures, Valérie Baudson, CEO, said:

“Earnings in the third quarter of 2021 were up sharply compared with the third quarter of 2020, driven by fast-growing revenues and controlled costs. Net inflows in Medium/Long-Term assets remained high at €15bn, driven by all areas of expertise and both Retail and Institutional customer segments.

With more than €800bn in ESG assets, Amundi is confirming its global leadership and pursuing the implementation of its ESG action plan.

The acquisition of Lyxor, scheduled for end December 2021, will accelerate Amundi’s growth, particularly in ETFs and in alternative investment expertise.”

I. Business activity


High inflows in MLT assets (+€15bn) in Q3 2021

Amundi’s assets under management totalled €1,811bn at 30 September 2021, an increase of +8.9% year-on-year and +1.0% vs. the end of June 2021.

In market conditions that are still favourable overall (continued rise of the Equity markets6, averaging +4% in Q3 compared to Q2 2021 and +28% compared to Q3 2020, notwithstanding a slight correction of the European indices in September), the third quarter was marked by strong inflows in MLT assets (+€15bn excluding JVs), and moderate outflows in treasury products (-€2.2bn).

MLT inflows were balanced between Retail and Institutionals:

  • Retail clients’ appetite for risk held steady, resulting in the still brisk flows (+€7.5bn), driven by third-party distributors (+€2.8bn) as well as the international networks (+€5.3bn), particularly in Italy (UniCredit and CA Italy networks) and Spain (Banco Sabadell network). In China, the subsidiary Amundi-BOC WM continues to gain momentum, with vigorous business activity (+€3.3bn), bringing assets under management to €7bn at the end of September 2021. In the French networks, inflows were slightly negative (-€0.7bn) in view of early redemptions on structured products tied to favourable market conditions. However, activity remains solid on other MLT assets (+€0.8bn).

  • Business activity is also strong with institutional clients (+€7.5bn) in all client segments.

These MLT flows are driven by virtually all areas of expertise:

  • Active investment strategies posted high flows once again (+€11.1bn), driven by all asset classes and illustrated by the success of Amundi-BOC WM’s Multi-Asset Funds, launched since December 2020, multi-asset funds for Retail, and OCIO7 products for institutional clients.

  • Passive management, ETFs and smart beta had a good third quarter with +€3.9bn in net inflows, bringing AuM to €187bn at the end of September 2021. In ETP8, with €+1.8bn of inflows in Q3 2021, AuM stood at €78bn at the end of September 2021 (ranked #5 in Europe9).

  • In Real and Structured Assets, the quarter was mixed, with robust business activity in Real Assets (+€1.2bn) offset by -€1.2bn in structured product outflows (before maturity).

Business activity in the JVs (-€12.7bn) featured positive inflows in Mutual Funds (+€3bn) and an exceptional outflow in China:

  • The Indian JV SBI MF pursued its growth trajectory with +€4.5bn of inflows (including +€4.2bn in MLT assets), up from the second quarter, which was affected by the public health crisis. SBI MF maintained its leading position on the Indian market with a market share10 of 15.97% at the end of September 2021 vs. 15.36% at the end of 2020.

  • The JV with NH (South Korea) posted positive inflows in MLT assets (+€0.7bn) and outflows in treasury products (-€1.5bn).

  • Outflows from the JV with ABC in China (-€16.3bn) were due to two negative phenomena: -€11.6bn due to a one-off reinternalisation and -€4.1bn due to the expected continuation of outflows of low-margin products (Channel Business).

Overall, net flows for the quarter were +€0.2bn.

Amundi Technology

Amundi Technology continues its development (33 clients at the end of September 2021), demonstrated by Malakoff Humanis’ choice of Alto Investment for all its asset management IT (including the new Private Equity module), as well as a new offering for asset servicers based on Alto’s modular open architecture (three clients including Caceis).

Amundi Technology’s revenues for the nine months of 2021 were €27m, a 69% increase on the first nine months of 2020.

II. Solid results


Q3 2021: high adjusted net income11of €333m (+41.5 % vs. Q3 2020)

In the third quarter of 2021, Amundi’s results remained high in a favourable overall market, and were up sharply once again. This increase reflects the healthy level of revenues, with performance fees remaining very high (€90m in Q3).

Net revenues11 (€791m, up +25.7% vs. Q3 2020) benefited from good market conditions and strong momentum in business activity:

  • Net asset management fees were up significantly compared to both Q3 2020 (+17.6%) and Q2 2021 (+2.6%), partly due to the increase in the equity market average and partly to vigorous inflows, particularly on Retail and MLT assets, for several quarters.

  • Performance fees remained very high (€90m, compared to a quarterly average of €42m between 2017 and 2020). This exceptional level is largely a reflection of the 12-month increase in the Equity markets and should continue to normalise over the next few quarters.12

Operating expenses were under control (€383m). Their trend (+18.6% compared to Q3 2020 and -1.5% compared to Q2 2021) was driven by:

  • provisioning for variable compensation, in relation with growth in operating income;

  • the scope effect compared to Q3 2020 (+€10m) linked to the creation of Amundi BOC WM13 and the full consolidation of Fund Channel14;

  • continued investments in development, particularly at Amundi Technology and in other growth drivers

As a result, the cost/income ratio was 48.4% (vs. 51.2% in Q3 2020). Excluding exceptional level of performance fees15, the cost/income ratio was about 50%.

Taking into consideration the improved contribution to €25m (vs. €17m in Q3 2020) from equity-accounted entities (primarily the Asian joint ventures) and the tax charge, adjusted net income, Group share, totalled €333m.

Excluding the exceptional level of performance fees15, adjusted net income was up by +9.9% compared to Q2 2021.

Over nine months in 2021, adjusted net income stood at almost one billion euros (€987m), representing a sharp increase (+45.6% vs. 9M 2020), resulting from:

  • a high level of revenues (especially performance fees) and costs that are under control;

  • an increased contribution from the JVs (+38% vs. 9M 2020).

Excluding the exceptional level of performance fees in 2021, this adjusted net income increased substantially by +25.6% vs. 9M 2020.

III. Responsible Investment

Amundi continued to implement its ESG action plan, thus supporting its global leadership:

  • ESG assets under management stood at €802bn at 30 September 2021. The change from the end of 2020 (ESG AuM of €378bn at 31 December 2020) resulted from:

    • integration of ESG criteria into traditional investment management processes;

    • high nine-month inflows in MLT assets (+€25bn16), mostly in active management.

  • Under SFDR17 regulations, more than 770 open-end funds, dedicated funds, and mandates totalling more than €728bn in AuM are classified in Articles 8 and 918, making Amundi a leader in this area.

Moreover, in the lead-up to the Glasgow COP 26, Amundi has joined the “Net Zero Asset Managers” initiative (commitments in line with the Paris Agreement trajectory) for asset managers committed to the target of net zero emissions by 2050.

IV. Other information

Financial disclosure schedule

  • Publication of 2021 annual results: 9 February 2022

  • Publication of Q1 2022 results: 29 April 2022

  • AGM for the 2021 financial year: 18 May 2022

  • Publication of Q2 and H1 2022 results: 29 July 2022

  • Publication of Q3 and 9M 2022 results: 28 October 2022

***

Income Statements

€m

Q3 2021

Q2 2021

Chg. Q3/Q2

Q3 2020

Chg. T3/T3

9M 2021

9M 2020

Chg. 9M/9M

Adjusted net revenue1

791

849

-6.9%

630

25.7%

2,410

1,866

29.2%

Net asset management revenue

797

844

-5.6%

631

26.4%

2,416

1,912

26.4%

o/w net management fees

707

689

2.6%

601

17.6%

2,059

1,806

14.1%

o/w performance fees

90

155

-41.9%

30

x 3

356

106

x 3.6

Net financial income and other net income1

(6)

5

-

(1)

-

(5)

(46)

-

Operating expenses

(383)

(388)

-1.5%

(323)

18.6%

(1,147)

(971)

18.1%

Adjusted gross operating income 1

409

461

-11.4%

307

33.1%

1,264

895

41.2%

Adjusted cost/income ratio1

48.4%

45.7%

2.6 pts

51.2%

-2.9 pts

47.6%

52.0%

-4.5 pts

Cost of risk & Other

7

(18)

-

(3)

-

(13)

(20)

-

Equity-accounted entities

25

21

20.5%

17

47.7%

63

46

37.9%

Adjusted income before taxes1

440

464

-5.1%

321

37.0%

1,313

921

42.7%

Taxes

(108)

(120)

-9.6%

(86)

26.2%

(331)

(247)

34.2%

Minority interests

1

1

-

(0)

-

5

(0)

-

Adjusted net income, Group share1

333

345

-3.6%

235

41.5%

987

674

46.5%

Amortisation of distribution contracts after tax

(12)

(12)

=

(15)

-16.3%

(37)

(40)

-7.6%

Affrancamento impact²

0

114

-

0

-

114

-

-

Net income, Group share incl. Affrancamento

321

448

-28.4%

221

45.3%

1,065

634

67.9%

1. Adjusted data: excluding amortisation of the distribution contracts and, in Q2 and H1 2021, excluding Affrancamento. See slides 32-33 for definitions and methodology. 2. Net accounting income for Q3 and 9M 2021 includes a one-time tax gain (net of a substitution fee) of +€114m (no cash flow impact): “Affrancamento” mechanism under the 2021 Italian Budget Law (Law no. 178/2020), resulting in the recognition of Deferred Tax Assets on intangible assets (goodwill); this was excluded from Adjusted Net Income.

Change in assets under management1 from end-December 2019 to end-September 2021

(€bn)

AuM

Net inflows

Market and foreign exchange effect

Scope effect

Change in AuM vs. previous quarter

At 31/12/2019

1,653

+5.8%

Q1 2020

-3.2

-122.7

/

At 31/03/2020

1,527

-7.6%

Q2 2020

-0.8

+64.9

/

At 30/06/2020

1,592

+4.2%

Q3 2020

+34.7

+15.2

+20.7

At 30/09/2020

1,662

+4.4%

Q4 2020

+14.4

+52.1

/

At 31/12/2020

1,729

+4.0%

Q1 2021

-12.7

+39.3

/

At 31/03/2021

1,755

+1.5%

Q2 2021

+7.2

+31.4

/

At 30/06/2021

1,794

/

+2.2%

Q3 2021

+0.2

+17.0

/

At 30/09/2021

1,811

/

+1.0%

1. Assets under management and inflows including Sabadell AM as of Q3 2020 include assets under advisory and assets marketed and take into account 100% of the Asian JVs’ inflows and assets under management. For Wafa in Morocco, assets are reported on a proportional consolidation basis.

Assets under management and net inflows by client segment1

AuM

AuM

% chg.

Inflows

Inflows

Inflows

Inflows

(€bn)

30.09.2021

30.09.2020

/30.09.2020

Q3 2021

Q3 2020

9M 2021

9M 2020

French networks

121

109

11.5%

-1.3

2.5

-2.6

3.8

International networks

165

138

19.8%

5.4

-0.2

13.8

-2.9

o/w Amundi BOC WM

7

-

-

3.3

-

6.8

-

Third-party distributors

212

180

18.2%

4.4

2.9

12.3

2.3

Retail (excl. JVs)

499

426

17.0%

8.5

5.2

23.5

3.2

Institutionals2 and sovereigns

428

389

10.1%

5.2

9.3

-5.1

7.8

Corporates

85

79

7.6%

-1.0

10.2

-11.5

1.7

Employee Savings

76

62

23.5%

-0.5

0.5

2.3

3.4

CA & SG insurers

471

458

3.0%

0.6

1.4

-0.5

-6.2

Institutionals

1,060

987

7.4%

4.3

21.4

-14.8

6.7

JVs3

252

249

1.2%

-12.7

8.1

-14.1

20.8

TOTAL

1,811

1,662

8.9%

0.2

34.7

-5.4

30.7

Average 9M AuM (excl. JVs)

1,532

1,381

10.9%

/

/

/

/

1. Assets under management and inflows including Sabadell AM as of Q3 2020 include assets under advisory and assets marketed and take into account 100% of the Asian JVs’ inflows and assets under management. For Wafa in Morocco, assets are reported on a proportional consolidation basis. 2. Including funds of funds. 3. Including -€4.1bn in Q3 2021 in outflows from “channel business” products in China and -€11.6bn in an exceptional reinternalisation.

Assets under management and net inflows by asset class1

AuM

AuM

% chg.

Inflows

Inflows

Inflows

Inflows

(€bn)

30.09.2021

30.09.2020

/30.09.2020

Q3 2021

Q3 2020

9M 2021

9M 2020

Equities

334

243

37.4%

2.6

3.3

13.1

9.9

Multi-asset

298

251

19.0%

8.5

1.3

26.3

-4.0

Bonds

646

625

3.4%

3.9

-0.9

6.7

-10.2

Real, alternative and structured assets

95

90

5.7%

-0.1

1.0

0.4

3.6

MLT ASSETS excl. JVs

1,373

1,208

13.7%

15.0

4.7

46.5

-0.8

Treasury Products excl. JVs

186

205

-9.4%

-2.2

22.0

-37.7

10.7

ASSETS excl. JVs

1,559

1,413

10.3%

12.8

26.7

8.7

9.9

JVs

252

249

1.2%

-12.7

8.1

-14.1

20.8

TOTAL

1,811

1,662

8.9%

0.2

34.7

-5.4

30.7

o/w MLT Assets

1,595

1,429

11.7%

3.5

15.9

32.0

22.1

o/w Treasury products

216

233

-7.6%

-3.3

18.8

-37.3

8.6

1. Assets under management and inflows including Sabadell AM as of Q3 2020 include assets under advisory and assets marketed and take into account 100% of the Asian JVs’ inflows and assets under management. For Wafa in Morocco, assets are reported on a proportional consolidation basis.

Assets under management and net inflows by region1

AuM

AuM

% chg.

Inflows

Inflows

Inflows

Inflows

(€bn)

30.09.2021

30.09.2020

/30.09.2020

Q3 2021

Q3 2020

9M 2021

9M 2020

France2

935

892

4.8%

2.2

17.3

-26.1

13.2

Italy

192

171

12.0%

0.8

-0.4

6.8

-2.7

Europe excl. France and Italy

254

201

26.4%

4.7

10.6

16.7

12.1

Asia3

324

303

6.8%

-9.0

8.6

-3.3

14.2

Rest of world4

106

94

12.4%

1.4

-1.3

0.4

-6.1

TOTAL

1,811

1,429

26.7%

0.2

34.7

-5.4

30.7

TOTAL excl. France

876

537

63.3%

-2.0

17.4

20.7

17.6

1. Assets under management and inflows including Sabadell AM as of Q3 2020 include assets under advisory and assets marketed and take into account 100% of the Asian JVs’ inflows and assets under management. For Wafa in Morocco, assets are reported on a proportional consolidation basis. 2. Of which €451bn for CA & SG insurers. 3. Including -€4.1bn in Q3 2021 in outflows from “channel business” products in China and -€11.6bn in an exceptional reinternalisation. 5. Mostly the United States.

Methodological appendix

I. Accounting and adjusted data


Accounting data:
Information corresponds to data after amortisation of the distribution contracts and, in Q3 and 9M 2021, after the impact of Affrancamento (see below).

Adjusted data
To present an income statement that is closer to the economic reality, the following adjustments have been made:

  • Restatement of the amortisation of distribution contracts (deducted from net revenues) with SG until November 2020, Bawag, UniCredit and Banco Sabadell.

  • In Q3 and 9M 2021, non-recognition of a one-time tax gain (net of a substitution fee) of +€114m (no cash flow impact): “Affrancamento” mechanism under the 2021 Italian Budget Law (Law no. 178/2020), resulting in the recognition of Deferred Tax Assets on intangible assets (goodwill); this was excluded from Adjusted Net Income.

Amortisation of distribution contracts:

  • Q3 2020: €21m before tax and €15m after tax 9M 2020: €56m before tax and €40m after tax

  • Q3 2021: €17m before tax and €12m after tax 9M 2021: €51m before tax and €37m after tax

II. Reminder of amortisation of distribution contracts with Banco Sabadell

When Sabadell AM was acquired, a 10-year distribution contract was entered into with the Banco Sabadell networks in Spain; this contract's gross valuation is €108m (posted to the balance sheet under Intangible Assets). At the same time, a Deferred Tax Liability of €27m was recognised. Thus the net amount is €81m which is amortised using the straight-line method over 10 years, as from 1 July 2020. In the Group's income statement, the net tax impact of this amortisation is €8m over a full year (or €11m before tax), posted under “Other revenues”, and is added to existing amortisations of the distribution contracts:

  • with Bawag in the amount of €2m after tax over a full year (€3m before tax);

  • with UniCredit in the amount of €38m after tax over a full year (€55m before tax).

NB: the SG contract amortisation ceased since 1 November 2020

III. Alternative Performance Indicators19


To present an income statement that is closer to the economic reality, Amundi publishes adjusted data which excludes amortisation of the distribution contracts with SG, Bawag, UniCredit and Banco Sabadell since 1 July 2020. For more details on the methodology, we invite you to consult the attached PDF version of the press release.


About Amundi
Amundi, the leading European asset manager, ranking among the top 10 global players20, offers its 100 million clients - retail, institutional and corporate - a complete range of savings and investment solutions in active and passive management, in traditional or real assets.

With its six international investment hubs21, financial and extra-financial research capabilities and long-standing commitment to responsible investment, Amundi is a key player in the asset management landscape.

Amundi clients benefit from the expertise and advice of 4,800 employees in more than 35 countries. A subsidiary of the Crédit Agricole group and listed on the stock exchange, Amundi currently manages more than €1.8 trillion of assets22.

Amundi, a trusted partner, working every day in the interest of its clients and society.

www.amundi.com

Press contact:

Natacha Andermahr

Tel. +33 1 76 37 86 05

natacha.andermahr-sharp@amundi.com

Investor contacts:

Anthony Mellor

Tel. +33 1 76 32 17 16

anthony.mellor@amundi.com

Thomas Lapeyre

Tel. +33 1 76 33 70 54

thomas.lapeyre@amundi.com

DISCLAIMER:

This document may contain projections concerning Amundi's financial situation and results. The figures given do not constitute a “forecast” as defined in Delegated Regulation (EU) No. 2019/980 of 14 March 2019.

This information is based on scenarios that employ a number of economic assumptions in a given competitive and regulatory context. As such, the projections and results indicated may not necessarily come to pass due to unforeseeable circumstances. The reader should take all of these uncertainties and risks into consideration before forming their own opinion.

The figures presented were prepared in accordance with IFRS guidelines.

The information contained in this document, to the extent that it relates to parties other than Amundi or comes from external sources, has not been independently verified, and no representation or warranty has been expressed as to, nor should any reliance be placed on, the fairness, accuracy, correctness or completeness of the information or opinions contained herein. Neither Amundi nor its representatives can be held liable for any negligence or loss that may result from the use of this document or its contents, or anything related to them, or any document or information to which the document may refer.

1 Adjusted data: excluding amortisation of the distribution contracts and Affrancamento. See page 8 for definitions and methodology
2 Medium/Long-Term Assets: excluding treasury products
3 Excl. JVs
4 Exceptional level of performance fees = higher than average performance fees per quarter in 2017-2020
5 Assets under management and net inflows including Sabadell AM as of Q3 2020 and BOC WM as of Q1 2021 include assets under advisory and assets marketed and take into account 100% of the Asian JVs’ assets under management and net inflows. For Wafa in Morocco, assets are reported on a proportional consolidation basis.
6Eurostoxx 600 Index Average:
7OCIO: Outsourced Chief Investment Officer Solutions
8 Exchange Traded Products
9 Source: ETG GI September 2021
10 Source AMFI – Total Mutual funds AuM
11 Adjusted data: excluding amortisation of the distribution contracts and Affrancamento. See page 7 for definitions and methodology.
12 NB: Under the new ESMA regulations ("Guidelines on Performance Fees,” applicable mainly to UCITS funds) implemented in July 2021 for existing funds, the reference period will be five years if the funds underperform their benchmark. These new regulatory provisions should result in a partial and gradual decline in performance fees beginning in 2022.
13 Consolidated from Q4 2020
14 Consolidated from Q1 2021
15Exceptional level of performance fees = higher than average performance fees per quarter in 2017-2020 (€42m)
16 Total ESG inflows were -€6.3bn over nine months, due to high treasury product outflows, in line with Amundi’s total outflows over 9 months.
17The new European Sustainable Financial Disclosure Regulation (SFDR) requires fund managers to rank their European assets by degree of ESG integration
18Scope: European funds. Article 8: products that promote environmental and/or social characteristics; Article 9: products that have a sustainable investment objective.
19 Please refer to section 4.3 of the 2020 Universal Registration Document filed with the French AMF on 12/04/2021

20 Source: IPE “Top 500 Asset Managers” published in June 2021, based on assets under management as at 31/12/2020
21 Boston, Dublin, London, Milan, Paris and Tokyo
22 Amundi data as of 30/09/2021

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