Q3 and 9M 2020 results
Inflows of €35bn in Q3 2020, and net income1 of €235m, i.e. +2.3% vs Q3 2019
Ambitious targets for
Business activity | AuM3 of €1,662bn at High inflows of +€34.7bn in Q3, fuelled by all segments: +€22.0bn4 in treasury products +€4.7bn in MLT assets3, 5 Sustained momentum in the JVs (+€8.1bn) |
Results | Solid results: In Q3: adjusted net income1 still high: €235m (+2.3% vs. Q3 2019 and +1.0% vs. Q2 2020) cost/income ratio of 51.2%1, stable Over the first nine months of the year, adjusted net income1 of €674m (-8.3% vs. 9M 2019), virtually stable excluding financial income (impacted by the market downturn) |
Positions that are already strong across the entire region (€303bn in AuM6), thanks to a pragmatic approach combining JVs and subsidiaries The new subsidiary with BoC WM has significantly enhanced the potential for growth in Ambitious targets for 2025: For Amundi BoC WM: more than €60bn in AuM and more than €50m in net income7 In |
Amundi’s Board of Directors, chaired by
Commenting on the figures,
“In the third quarter of 2020,
Thanks to its diversified business model and its operating efficiency,
I A high level of inflows: +€35bn in Q3, driven by all segments
Assets under management at €1,662bn, an increase of +6.4% year-on-year.
Amundi’s assets under management totalled €1,662bn at
A market environment that is still uncertain
Overall, the market environment remains lacklustre:
After the major shock in March due to the Covid-19 epidemic, the Equity markets still look weak to us (-2.7% between 30/06 and
Equity market averages in Q3 2020 (4,967 pts for the CAC 40) recovered but remain significantly lower compared to Q3 2019 (5,512 pts, i.e. down 10%).
Furthermore, against a backdrop of lingering risk aversion by savers and investors, the European asset management industry has staged a partial recovery. Although inflows returned to positive territory beginning in Q2 2020, year-to-date cumulated inflows have been due almost exclusively to treasury products8.
A high level of net inflows in Q3 2020
In Q3 2020,
Retail: recovery of inflows (+€5.2bn in Q3 2020 vs. -€4.5bn in Q2 2020)
Inflows in Medium/Long-Term Assets turned positive (+€2.4bn), driven by Third-party distributors (+€2.8bn). The French and International Networks are still feeling the effects of a widespread wait-and-see attitude by clients, with inflows concentrated in treasury products (+€2.8bn).
Institutionals: sharp rebound in activity (+€21.4bn in Q3 2020 vs. +€0.6bn in Q2 2020)
This quarter was marked by a significant turnaround in treasury product flows (+€19.2bn) especially in the Institutionals & Corporates segments. As for MLT assets, inflows of +€2.2bn were driven by all client segments.
JVs: continued growth trend with a high level of inflows (+€8.1bn), particularly in
Expertises: MLT flows driven by ETF/index and real assets9
The trend was driven by successful growth drivers and product innovation:
Passive management, ETFs10 and smart beta had a good third quarter with +€3.2bn in net inflows, bringing AuM to €138bn at
The trend in Real and Structured Assets continued, with +€1.0bn in net inflows in Q3 2020 (bringing AuM to more than €90bn at
Gradual recovery in business activity in the first nine months of 2020
Overall, in the first nine months of the year, the high level of inflows (+€30.7bn) was primarily driven by the continuing growth trend in the JVs (+€20.8bn), institutionals (+€6.7bn) and in Retail excluding JV (+€3.2bn). To be noted was the resilient activity in the French networks (+€3.8bn) and Third-party distributors (+€2.3bn).
The trend was positive for Medium/Long-Term assets (+€22.1bn) driven by Joint Ventures and Retail; inflows in treasury products (+€8.6bn) were mostly attributable to flows in the Institutional and Sovereign segments.
II Solid results
In Q3 2020, high level of adjusted net income12: €235m (+2.3% vs. Q3 2019 and +1.0% vs. Q2 2020)
Cost/income ratio11 of 51.2%, stable
A strengthened financial structure
Solid results in the 3rd quarter of 202012
Total net revenue (€630m) was down compared to Q3 2019 (-4.1%) but higher vs. Q2 2020 (+0.8%); these differences were attributable in large part to the market situation.
As such, net management fees were:
down compared to Q3 2019 in light of the decline in average market levels (CAC 40 down 10% Q3/Q3) and the pressure on margins (change in the product/client mix), in line with previous quarters;
up compared to Q2 2020 thanks to the integration of Sabadell AM and rising market averages (+7% for the CAC 40 Q3/Q2 average).
Performance fees were maintained at a good level (€30m vs. €25m in Q3 2019).
Operating expenses were down markedly (€323m or -3.8% vs Q3 2019), thanks to continuing cost-cutting efforts, lower travel and marketing expenses due to the pandemic and the adjustment of variable remuneration. The slight rise relative to Q2 2020 is due to the full consolidation of Sabadell AM.
The operating expenses to average AuM ratio (excl. JVs) remains one of the lowest in the industry at 9.2bp.
Consequently, the cost/income ratio stood at 51.2%, stable compared to Q3 2019.
Taking into consideration the improved contribution to €17m from equity-accounted entities (primarily the Asian joint ventures) and the tax charge, adjusted net income, Group share, totalled €235m (+2.3% vs. Q3 2019 and +1.0% vs. Q2 2020).
First nine months of 202012
Total revenues were €1,866m (-6.2%) primarily due to the market slump’s strong negative effect on financial earnings, which fell from €34m (9M 2019) to -€46m (9M 2020). The trend in net asset management fees stemmed from lower average equity market levels and a less-favourable client/product mix. Performance fees increased (€106m, +24% vs. 9M 2019).
With operating expenses down (-4.4%), the cost/income ratio came to 52.0%, and Gross Operating Income was €895m.
After the contribution from equity-accounted entities (primarily the Asian joint ventures), which increased sharply (+39.5% vs. 2019) and tax expenses, adjusted net income, Group share was maintained at a solid level at €674m (-8.3% vs.
A strengthened financial structure
At
As a reminder, in
III
In
As an example, SBI FM, the joint venture in partnership with the No. 1 Indian bank, has itself become No. 1 on the market (assets under management of €136bn13, up substantially since 2018) with successful growth in Retail and well-established franchise with institutionals.
With the creation of the new subsidiary in partnership with BoC Wealth Management,
The new subsidiary in which
The subsidiary, which should break even financially by the end of 2021, is aiming at €60bn in AuM and more than €50m in net income16 by 2025.
For
Change in Amundi’s assets under management in
Compounded annual growth rate from 2010 to September 2020 : 22%
AuM in €bn
2010 | 42 |
2014 | 76 |
2015 | 118 |
2016 | 153 |
2017 | 177 |
2018 | 200 |
2019 | 300 |
303 | |
2025e | 500 |
IV Responsible Investing
This trend is being fuelled by product innovation and ESG solutions:
Climate change: launch of a fixed incom fund dedicated to green projects in emerging countries and the Climate Change Investment Framework, the preferred tool for investors to help them assess the risks linked to climate change in line with the objectives of the Paris Agreement in partnership with AIIB17.
Launch of the “ESG Improvers” range, an approach that selects companies demonstrating long-term improvement in ESG criteria.
Amundi’s contribution to international initiatives continues, with the publication in
Furthermore, in connection with the annual PRI assessment18 in
V Other information
Capital increase reserved for employees
The issue of share capital reserved for employees is underway. It will be completed on
The impact of this operation on net earnings per share should be negligible. The maximum number of securities to be created will be 0.5 million (i.e. 0.2% of capital and voting rights).
Financial disclosure schedule
***
Income statements
(in €m) | Q3 2020 | Q2 2020 | Q3/Q2 chg. | Q3 2019 | Q3/Q3 chg. | 9M 2020 | 9M 2019 | Change | ||||||||
Adjusted net revenue | 630 | 625 | 0,8% | 657 | -4,1% | 1 866 | 1 989 | -6,2% | ||||||||
Net AM revenue | 631 | 608 | 3,8% | 656 | -3,9% | 1 912 | 1 955 | -2,2% | ||||||||
o/w net management fees | 601 | 573 | 4,8% | 631 | -4,8% | 1 806 | 1 870 | -3,4% | ||||||||
o/w performance fees | 30 | 34 | -13,7% | 25 | 18,7% | 106 | 85 | 24,4% | ||||||||
Net financial income and other net income | (1) | 17 | NS | 1 | NS | (46) | 34 | NS | ||||||||
Operating expenses | (323) | (318) | 1,5% | (335) | -3,8% | (971) | (1 016) | -4,4% | ||||||||
Adjusted gross operating income | 307 | 307 | 0,1% | 321 | -4,5% | 895 | 973 | -8,1% | ||||||||
Adjusted cost/income ratio | 51,2% | 50,9% | +0,3 pt | 51,1% | +0,2 pt | 52,0% | 51,1% | + 1 pt | ||||||||
Cost of risk & Other | (3) | (4) | NS | (9) | NS | (20) | (7) | NS | ||||||||
Equity-accounted entities | 17 | 15 | 10,9% | 8 | NS | 46 | 33 | 39,5% | ||||||||
Adjusted income before taxes | 321 | 318 | 1,1% | 320 | 0,4% | 921 | 999 | -7,8% | ||||||||
Taxes | (86) | (85) | 1,2% | (90) | -4,7% | (247) | (264) | -6,7% | ||||||||
Adjusted net income, Group share | 235 | 233 | 1,0% | 230 | 2,3% | 674 | 735 | -8,3% | ||||||||
Amortisation of distribution contracts after tax | (15) | (12) | 16,4% | (13) | 16,4% | (40) | (38) | 5,3% | ||||||||
Net income, Group share | 221 | 221 | 0,1% | 218 | 1,5% | 634 | 697 | -9,0% |
Adjusted data: excluding amortisation of distribution contracts.
Change in assets under management1 from
(€bn) | AuM | Net inflows | Market and foreign exchange effect | Scope effect | Change in AuM vs. previous quarter | ||||||||
At | 1,425 | / | -3.4% | ||||||||||
Q1 2019 | -6.9 | +58.3 | / | ||||||||||
At | 1,476 | +3.6% | |||||||||||
Q2 2019 | -4.8 | +15.1 | / | ||||||||||
At | 1,487 | +0.7% | |||||||||||
Q3 2019 | +42.7 | +33.5 | / | ||||||||||
At | 1,563 | +5.1% | |||||||||||
Q4 2019 | +76.8 | +13.7 | / | ||||||||||
At | 1,653 | +5.8% | |||||||||||
Q1 2020 | -3.2 | -122.7 | / | ||||||||||
At | 1,527 | -7.6% | |||||||||||
Q2 2020 | -0.8 | +64.9 | / | ||||||||||
At | 1,592 | +4.2% | |||||||||||
Q3 2020 | +34.7 | +15.2 | +20.7 | ||||||||||
At | 1,662 | +4.4% |
1. Assets under management and net inflows including Sabadell AM as of Q3 2020 and including assets under advisory and assets marketed and take into account 100% of the Asian JVs’ assets under management and net inflows. For Wafa in
Assets under management and net inflows by client segment1
AuM | AuM | % chg. vs. | Inflows | Inflows | Inflows | Inflows | |
(€bn) | Q3 2020 | Q3 2019 | 9M 2020 | 9M 2019 | |||
French networks | 109 | 110 | -0.9% | +2.52 | +0.4 | +3.8 | -2.3 |
International networks | 138 | 125 | +10.8% | -0.2 | -0.6 | -2.9 | +1.7 |
Third-party distributors | 180 | 189 | -5.0% | +2.9 | +4.0 | +2.3 | +2.6 |
Retail (excl. JVs) | 426 | 423 | +0.7% | +5.2 | +3.8 | +3.2 | +2.1 |
Institutionals2 and sovereigns | 389 | 376 | +3.4% | +9.3 | +4.0 | +7.8 | -4.4 |
Corporates | 79 | 79 | -1.0% | +10.2 | +11.2 | +1.7 | +3.0 |
Employee Savings | 62 | 62 | -1.0% | +0.5 | -0.2 | +3.4 | +2.0 |
CA & SG insurers | 458 | 459 | -0.3% | +1.4 | +9.9 | -6.2 | +16.2 |
Institutionals | 987 | 977 | +1.0% | +21.4 | +24.9 | +6.7 | +16.7 |
JVs | 249 | 163 | +53.1% | +8.1 | +14.0 | +20.8 | +12.2 |
TOTAL | 1,662 | 1,563 | +6.4% | +34.7 | +42.7 | +30.7 | +31.0 |
Average 9M AuM (excl. JVs) | 1,381 | 1,340 | +3.1% | / | / | / | / |
1. Assets under management and net inflows including Sabadell AM as of Q3 2020 and including assets under advisory and assets marketed and take into account 100% of the Asian JVs’ assets under management and net inflows. For Wafa in
Assets under management and net inflows by asset class1
AuM | AuM | % chg. vs. | Inflows | Inflows | Inflows | Inflows | |
(€bn) | Q3 2020 | Q3 2019 | 9M 2020 | 9M 2019 | |||
Equities | 243 | 234 | +3.9% | +3.3 | +0.7 | 9.9 | -2.3 |
Multi-asset | 251 | 245 | +2.1% | +1.3 | -1.1 | -4.0 | -8.7 |
Bonds | 625 | 633 | -1.3% | -0.9 | +7.5 | -10.2 | +14.9 |
Real, alternative and structured assets | 90 | 82 | +9.8% | +1.0 | +1.7 | +3.6 | +5.4 |
MLT ASSETS excl. JVs | 1,208 | 1,194 | +1.2% | +4.7 | +8.9 | -0.8 | +9.3 |
205 | 206 | -0.6% | +22.0 | +19.8 | +10.7 | +9.5 | |
ASSETS excl. JVs | 1,413 | 1,400 | +0.9% | +26.7 | +28.7 | +9.9 | +18.8 |
JVs | 249 | 163 | +53.1% | +8.1 | +14.0 | +20.8 | +12.2 |
TOTAL | 1,662 | 1,563 | +6.4% | +34.7 | +42.7 | +30.7 | +31.0 |
o/w MLT Assets | 1,429 | 1,330 | +7.5% | +15.9 | +25.3 | +22.1 | +27.0 |
o/w | 233 | 233 | +0.0% | +18.8 | +17.4 | +8.6 | +4.0 |
1. Assets under management and net inflows including Sabadell AM as of Q3 2020 and including assets under advisory and assets marketed and take into account 100% of the Asian JVs’ assets under management and net inflows. For Wafa in
Assets under management and net inflows by region1
AuM | AuM | % chg. vs. | Inflows | Inflows | Inflows | Inflows | |
(€bn) | Q3 2020 | Q3 2019 | 9M 2020 | 9M 2019 | |||
8922 | 886 | +0.7% | +17.3 | +20.8 | +13.2 | +17.3 | |
171 | 174 | -1.5% | -0.4 | -1.2 | -2.7 | -5.7 | |
201 | 176 | +14.2% | +10.6 | +6.1 | +12.1 | +5.6 | |
303 | 225 | +35.1% | +8.6 | +15.6 | +14.2 | +9.1 | |
Rest of world4 | 94 | 102 | -7.9% | -1.3 | +1.3 | -6.1 | +4.7 |
TOTAL | 1,662 | 1,563 | +6.4% | +34.7 | +42.7 | +30.7 | +31.0 |
TOTAL excl. | 770 | 677 | +13.7% | +17.4 | +21.9 | +17.6 | +13.7 |
1. Assets under management and net inflows including Sabadell AM as of Q3 2020 and including assets under advisory and assets marketed and take into account 100% of the Asian JVs’ assets under management and net inflows. For Wafa in
Methodological appendix
Income statements (9M and Q3 2020 & 2019)
Accounting data:
At 9M 2020 and 2019, information corresponds to data after amortisation of distribution contracts.
Adjusted data
To present an income statement that is closer to the economic reality, adjustments have been made: restatement of amortisation of distribution contracts (deducted from net revenues) with SG, Bawag, UniCredit and
Amortisation of distribution contracts:
Q3 2019: €18m before tax and €13m after tax Q3 2020: €21m before tax and €15m after tax
9M 2019: €53m before tax and €38m after tax 9M 2020: €56m before tax and €40m after tax
Reminder of amortisation of distribution contracts with
When Sabadell AM was acquired, a 10-year distribution contract was entered into with the Banco Sabadell networks in
with SG in the amount of €10m after tax over a full year (€14m before tax);
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 will no longer be amortised as of
Alternative Performance Indicators19
To present an income statement that is closer to the economic reality,
These combined and adjusted data are reconciled with accounting data as follows:
accounting data | ||
adjusted data |
€m | 9M 2020 | 9M 2019 | Q3 2020 | Q3 2019 | ||||
Net revenues (a) | 1810 | 1935 | 609 | 639 | ||||
+ Amortisation of distribution contracts before tax | 56 | 53 | 21 | 18 | ||||
Adjusted net revenues (b) | 1866 | 1989 | 630 | 657 | ||||
Operating expenses (c) | -971 | -1016 | -323 | -335 | ||||
Gross operating income (d) = (a)+(c) | 839 | 920 | 287 | 304 | ||||
Adjusted gross operating income (e) = (b)+(c) | 895 | 973 | 307 | 321 | ||||
Cost/income ratio (c)/(a) | 53.7% | 52.5% | 53.0% | 52.5% | ||||
Adjusted cost/income ratio (c)/(b) | 52.0% | 51.1% | 51.2% | 51.1% | ||||
Cost of risk & Other (f) | -20 | -7 | -3 | -9 | ||||
Equity-accounted entities (g) | 46 | 33 | 17 | 8 | ||||
Income before tax (h) = (d)+(f)+(g) | 865 | 946 | 301 | 302 | ||||
Adjusted income before tax (i) = (e)+(f)+(g) | 921 | 999 | 321 | 320 | ||||
Taxes (j) | -230 | -248 | -80 | -85 | ||||
Adjusted taxes (k) | -247 | -264 | -86 | -90 | ||||
Net income, Group share (h)+(j) | 634 | 697 | 221 | 218 | ||||
Adjusted net income, Group share (i)+(k) | 674 | 735 | 235 | 230 |
About
With its six international investment hubs21, financial and extra-financial research capabilities and long-standing commitment to responsible investment,
Press contact: | Investor contacts: |
Anthony Mellor | |
Tel. +33 1 76 37 86 05 | Tel. +33 1 76 32 17 16 Tel. +33 1 76 33 70 54 |
natacha.andermahr-sharp@amundi.com | anthony.mellor@amundi.com thomas.lapeyre@amundi.com |
DISCLAIMER:
This document may contain projections concerning
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
1 Adjusted data: excluding amortisation of distribution contracts; See page 8 for definitions and methods.
2 Bank of China
3 Assets under management and net inflows including Sabadell AM as of Q3 2020 and including assets under advisory and assets marketed and take into account 100% of the Asian JVs’ assets under management and net inflows. For Wafa in
4 Excl. JVs
5 Medium-Long-Term Assets: excluding treasury products
6 At
7 Net contribution at 100%
8 Sources: Broadridge FundFile, ETFGI. European open-ended & cross-border funds (excluding mandates and dedicated funds). Data at
9 Data excluding JVs
10 Data including all Exchange-traded products (ETF + ETC)
11 Source: Morningstar
12 Adjusted data: excluding amortisation of distribution contracts.
13 Equity excluding goodwill and other intangibles
14At
15 JVs with SBI in
16 Net contribution of 100%
* incl. Amundi BoC Wealth Management
17 AIIB:
18 PRI: Principles for
19 Please refer to section 4.3 of the 2019 Universal Registration Document filed with the French AMF on
20 Source: IPE “Top 500 Asset Managers” published in
21
22
Attachment
- Amundi PR Q3 2020 results
© OMX, source