Results for the first nine months of 2017 Results up sharply thanks to the integration of Pioneer and business momentum Net inflows1 of +€58bn over the first nine months o/w +€31bn in Q3 2017

Activity

  • Strong combined net inflows1: +€57.5bn over the first nine months of 2017 o/w +€31.2bn in Q3 2017, driven primarily by Retail and treasury products

  • €1,400bn in AuM1 at 30 September 2017, including Pioneer's AuM

Results

  • Combined income2 (Amundi + Pioneer) increased sharply:

    • Over the first nine months of 2017:

      • A cost/income ratio4 of 53.1%, an improvement of 2.2 pts over the first nine months of 2016

      • Current net income Group share4 of €650m, up +11.1% vs. 9M 2016

      • Net income Group share of €591m.

      • Net revenue3 of €632m, up +4.4% vs. Q3 2016

      • Costs controlled5 (+1.4%) with a cost/income ratio4 of 53.5%, a 1.6 pt improvement over Q3 2016

      • Current net income Group share4 of €217m, up +10.8% vs. Q3 2016

  • Accounting results

    • Over the first nine months of 2017: €472m in accounting net income Group share (compared to €415m in the first nine months of 2016)

    • in Q3 2017 : accounting net income Group share of €184m, up 34.3% vs. Q3 2016

- Net revenue3 of €1,971m, up +6.0% vs. 9M 2016

- At Q3 2017:

Paris, 27 October 2017

Amundi's Board of Directors, chaired by Xavier Musca, convened on 26 October 2017 to review the financial statements for the first nine months and third quarter of 2017.

Commenting on the figures, Yves Perrier, CEO, said:

"Amundi's results at the end of September are up significantly, thanks to the integration of Pioneer and to business momentum, which is staying high in all business lines. The integration of Pioneer (acquired on 3 July 2017) is well under way, so we can confirm the announced synergies and potential value creation."

1 Combined AuM and inflows: nine months Amundi and Pioneer, including assets under advisory and assets sold and taking into account 100% of assets under management from inflows on the Asian JVs. For Wafa in Morocco, assets are reported on a proportional consolidation basis.

2 Combined data in 2016 and 2017: First nine months Amundi + first nine months Pioneer and Q3 Amundi + Q3 Pioneer.

3 Excluding amortisation of distribution contracts (UniCredit, SG, and Bawag)

4 Excluding amortisation of distribution contracts (UniCredit, SG, and Bawag) and excluding Pioneer integration costs

5 Excluding Pioneer integration costs

  1. Business activity: combined net inflows of €57.5bn over the first nine months of 2017 and assets under management at €1.4 trillion at end September 2017 At 30 September 2017, combined AuM (Amundi + Pioneer) stood at €1,400bn thanks to the contribution of Pioneer's AuM at 3 July 2017 (scope effect of +€242.9bn), a strong level of activity (net inflows of +€31.2bn in Q3), and a favourable market environment.

    Note: all AuM and inflows below are presented as combined.

    First nine months of 2017

    Combined net inflows of +€57.5bn were driven by brisk sales in Retail; sales were diversified across all asset classes, with a significant component of medium/long-term products6 (45% of the total), and balanced between France and International.

    The Retail segment enjoyed a strong level of activity with net inflows of +€35.3bn for the first nine months of 2017, generated by all distribution channels:

    • networks in France (+€3bn)

    • international networks, specifically in Italy (+€4.4bn), which illustrates the good start to the distribution agreement with UniCredit,

    • third-party distributors (+€12.8bn) in all regions,

    • and the Joint Ventures (+€11.8bn), specifically in China and India.

    Net inflows from the Institutionals and Corporates segment remained brisk, at +€22.1bn over the first nine months of 2017. These inflows are primarily made up of treasury products. All asset classes contributed to net inflows over the first nine months. Medium/long-term assets made up +€25.9bn (+€32.8bn excluding the €6.9bn mandate reinternalised by the ECB in Q1 2017). The momentum in ETF (+€10bn) and real estate (+€2.5bn) was confirmed. From a geographic viewpoint, net inflows were balanced between France (48% of the total) and international (52% of the total); in Asia the Joint Ventures were maintaining strong momentum, while Europe excluding France was benefiting from inflows from third-party distributors and UniCredit networks.

    In the third quarter of 2017

    Combined net inflows amounted to +€31.2bn:
    • sustained net inflows from Retail (+€13.1bn), observed across all distribution channels: French networks, European networks (Italy especially), third-party distributors (+€4.3bn), and joint ventures (+€4.5bn). Net inflows from the French networks in medium/long-term assets continued (+€1.0bn) thanks to unit-linked life insurance policy subscriptions.
    • sustained net inflows from the Institutionals and Corporates segment (+€18bn) which were positive again, thanks to substantial inflows in treasury products, after net outflows at the end of the second quarter.

    Note that medium/long-term asset inflows amounted to +€14.7bn, higher than in previous quarters. Geographically speaking, France, Asia, and Italy were the most robust.

    6 Medium-long-term assets, excluding treasury products: equities; bonds; multi-assets; and real, alternative, and structured assets

  2. Results up sharply thanks to Pioneer's integration and to business momentum Accounting net income for Q3 2017: €184m up +34.3%;
Current combined7 net income8 for Q3 2017: €217m up +10.8%

Methodology

Pioneer, acquired on 3 July 2017, in consolidated for the first time in Q3 2017 in Amundi's financial statements. Accounts at 30 September 2017 take into account 9 months of Amundi and 3 months of Pioneer.

The income statement also includes :

  • in 2017 : Pioneer integration costs

  • in 2016 and in 2017 : amortisation of the distribution contracts (accounted for as a deduction from net revenue) with SG and Bawag and starting Q3 2017 with UniCredit networks.

    To allow for better comparison between periods, data is also presented combined7:

  • for the first 9 months 2017 et 2016 : addition of Amundi data (9 months of activity) and Pioneer data (9 months of activity).

  • for Q3 2017 et 2016 : addition of Amundi data (Q3) and Pioneer data (Q3).

  1. Accounting results

    Accounting results at the end of September 2017 were up significantly, due to the contribution from Pioneer (first consolidated starting in Q3 2017) and the new Group's financial performance:
    • over the first nine months of 2017

      Current net income Group share (excluding integration costs and amortisation of distribution contracts) of €531m, up +25.3% vs. 9M 2016. Net income Group share after integration costs and amortization of distribution contracts amounts to €472m, up +13.7% vs. 9M 2016.

      - Q3 2017

      Current net income Group share (excluding integration costs and amortisation of distribution contracts) of €217m, up +55% vs. Q3 2016. Net income Group share after integration costs and amortization of distribution contracts amounts to €184m, up +34.3% vs. Q3 2016.

  2. Combined results7 The combined results7, which are used to appraise the new Group's performance on a comparable basis, increased significantly (+11%8) thanks to solid gains in revenues and the improved cost/income ratio.
    • over the first nine months of 2017

Net revenues9 amounted to €1,971m, up +6% on the first nine months of 2016, in line with the growth of assets under management. Operating expenses10 were controlled, increasing only +1.8%; the result was a cost/income ratio8 of 53.1%, a 2.2-point improvement. The share of net income of equity-accounted entities (essentially Asian Joint Ventures) rose significantly (+18%), to €25m. Taking into account a tax charge8 of €291m, current net income Group share8 amounted to

€650m, an increase of +11.1% compared to the first nine months of 2016.

7 Combined data in 2016 and 2017: First nine months Amundi + first nine months Pioneer and Q3 Amundi + Q3 Pioneer.

8 Excluding amortisation of distribution contracts (UniCredit, SG, and Bawag) and Pioneer integration costs

9 Excluding amortisation of distribution contracts (UniCredit, SG, and Bawag)

10Excluding costs associated with the integration of Pioneer

- Q3 2017

Net revenues11 at €632m, were up +4.4%. Thanks to a moderate trend in operating expenses12 (+1.4%), the cost/income ratio13 was down by 1.6 point to stand at 53.5%. After tax13, current net income Group share13 was €217m (+10.8%). After accounting for the amortisation of distribution contracts and Pioneer's integration costs, net income Group share was €184m.

***

Outlook

The acquisition of Pioneer, effective on 3 July 2017, will accelerate the growth strategy for Amundi, whose growth prospects are promising for every one of its business lines.

The process of integrating Pioneer is going as planned, which made it possible to confirm the potential value creation and phasing of synergies, the amounts of which had been announced already (before tax:

€150m in cost synergies, €30m in revenue synergies): about 10% of synergies should be complete in 2017, about 35% in 2018, about 75% in 2019, and 100% in 2020.

At the same time, business momentum remained high for the new Group, driven by all the business lines (client segments, expertise, and regions).

***

Amundi's financial disclosures for the first nine months of 2017 consist of this press release and the attached presentation, available on http://about.amundi.com

11 Excluding amortisation of distribution contracts (UniCredit, SG, and Bawag)

12 Excluding costs associated with the integration of Pioneer

13 Excluding amortisation of distribution contracts (UniCredit, SG, and Bawag) and Pioneer integration costs

Amundi SA published this content on 27 October 2017 and is solely responsible for the information contained herein.
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