Amundi: Third quarter and nine-month 2024 results
Net income1,2 up +16% Q3/Q3 and record assets under management at €2.2 trillion
Strong growth in earnings and revenues | Q3 - adjusted net income1,2 at €337m, fast-growing: +16.1% Q3/Q3
Earnings per share2: €1.65 for Q3, €4.91 for 9M | |
Record AuM
& dynamic MLT inflows5 |
Record assets under management3: €2,192bn at 30 September 2024, up +11% year-on-year
Q3 net inflows3 of +€2.9bn, or +€14.5bn excluding the exit from a large, low-income institutional mandate4
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Continued strategic progress | ETFs6: +€8bn in Q3 net inflows, now more than €250bn in assets under management
Third-party distribution: +€7bn Q3 net inflows, with contribution from all regions and asset classes Asia: +€7bn in Q3 net inflows, from JVs and direct distribution in Japan, Singapore, Hong Kong, Taiwan and China Technology: revenues +42% Q3/Q3 Victory Capital: approval7 of the partnership with Amundi secured at EGM, transaction expected to close in Q1 2025 |
Amundi's Board of Directors met on 29 October 2024 under the chairmanship of Philippe Brassac, and reviewed the financial statements for the third quarter and the first 9 months of 2024.
Valérie Baudson, Chief Executive Officer, said:
" Amundi's results in the third quarter of 2024 demonstrate our ongoing strategic progress and continued growth potential. Our Q3 net profit1,2 of €337m, increased by +16% compared to the same period in 2023 and exceeded one billion euros over 9 months. Assets under management reached a record level of €2.2 trillion.
We have been able to support our clients whatever their profile and needs, which has resulted in a high level of net inflows in our strategic development areas, namely Asia, Third-Party Distributors, and ETFs.
By putting clients at the heart of our strategy and by continuing to develop the areas of expertise that primarily seek to meet their needs, we are ideally positioned to seize growth opportunities in the savings industry. "
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Further progress in achieving our 2025 Ambitions plan
Q3 2024 saw key areas of focus under the "2025 Strategic Ambitions" plan contribute to activity and earnings growth.
- ETFs exceeded €250bn in assets under management at the end of September, up +31% year-on-year, thanks in particular to very dynamic net inflows reaching +€17bn over 9 months, including +€8bn in Q3. This places Amundi in second place in the European market in terms of net inflows this quarter8. these inflows are well diversified across equity and fixed income products, with a high share of products classified as responsible investment9 in net inflows (+€3bn, or 34% market share in flows in this market segment). Amundi has had many commercial successes this quarter: for example, the Amundi ETF Stoxx Europe 600 is the best-selling (+€0.85bn) European equity ETFs in Q3, the Amundi ETF Euro Government Tilted Green Bond, launched last year, saw its assets under management exceed €3bn after gathering +€1.1bn since the beginning of the year, and the Amundi ETF Prime ACWI exceeded €1bn in assets under management 8 months after its launch.
- Third-Party Distribution reached €377bn in assets under management at the end of September, up +24% year-on-year, with net inflows +€19bn for 9 months 2024, and +€7bn in Q3, thanks to contributions from all regions and asset classes, from ETFs, treasury products and active management;
- Asia assets under management increased by +17% year-on-year to €458bn; net inflows for 9 months 2024 stood at +€30bn with a significant contribution from Amundi's Indian JV SBI MF, which now has €278bn in assets, up +19% year-on-year (+€18bn in net inflows); €103bn of total Asian assets under management come from direct distribution excluding JVs (+20% year-on-year), with net inflows for 9 months 2024 standing at +€3bn in Japan, +€2.4bn Singapore, +€1.4bn Hong Kong and also +€1.7bn in China outside the two JVs, mainly with institutional clients;
- The Technology & Services offering is also experiencing strong growth, with technology revenues of €54m over 9 months, up +28% compared to the same period in 2023, and even +42% Q3/Q3; the Fund Channel fund distribution platform exceeded €490bn in assets at the end of September 2024; during the quarter it signed a distribution agreement with ING Germany and integrated the fintech AirFund into its ecosystem to digitise access to private markets; Fund Channel was also ranked "Best Distribution Platform" for the third consecutive year by the consulting and research firm Platforum;
- In fixed income expertise, Amundi now manages €1,160bn in assets10 across a wide range of solutions, from treasury products to target maturity funds, offering attractive returns and capital protection; fixed income net inflows stood at +€46bn10 over 9 months and +€14bn10 in Q3 thanks to sustained activity in active bond strategies (+€11bn excluding JV) and ETFs (+€2.5bn);
- The partnership project with Victory Capital reached an important milestone with shareholder approval of resolutions7 necessary to finalise the transactions, expected in Q1 2025. As a reminder, this partnership aims at creating a larger US investment platform, via the contribution of Amundi US to Victory Capital in return for Amundi taking a 26%-stake of the combined entity as well as 15-year distribution agreements, to serve the clients of both companies; Amundi would thus have a greater number of US and global management expertise to offer its clients. The transaction, which involves no disbursement of cash, is expected to bring a low single-digit accretion for Amundi shareholders, with an increase in the contribution of our US operations to the adjusted net income and EPS.
Market environment
In the third quarter of 2024, equity markets11 increased by +1.1% in average compared to the previous quarter and by +15.6% compared to Q3 2023. The European bond markets12 also rose, reflecting the shift in monetary policy and the ECB's decision to cut rates. Year-on-year, our benchmark index12 increased by +6.3% in Q3 2024 compared to Q3 2023 and by +2.1% compared to Q2 2024. The market effect is therefore positive on the evolution of Amundi's revenues and net income.
When compared to the 2021 averages used as a reference for the 2025 Ambitions plan, the market effect is only slightly positive.
The European asset management market continues its gradual recovery. Open-ended fund volumes13, at +€213bn in the third quarter, continued to be driven by treasury products (+€93bn) and passive management (+€75bn). Nevertheless, the third quarter recorded positive flows in medium- to long-term active management for the second quarter in a row (+€45bn), driven by fixed income strategies (+€69bn).
High level of activity over the quarter in MLT assets5, assets under management at a record level of €2.2tn
Activity this quarter continues to be marked, like the rest of the European market, by risk aversion among retail clients. However, Amundi performed well, driven in particular by ETFs, bond solutions, third-party distributors and Asia. Excluding the exceptional exit from a low-income insurance mandate4, net inflows were positive in all major medium- to long-term areas of expertise (passive, active, structured products and real assets), in all client segments (Retail, Institutional and JV), and in all major markets (France, Italy, Germany, Asia and the United States).
Amundi's assets under management at 30 September 2024 increased by +11.1% year-on-year (compared to the end of September 2023) and by +1.6% quarter-on-quarter (compared to the end of June 2024), to €2,192bn, an all-time high.
In the third quarter of 2024, the market and currency effect amounted to +€32.5bn (+€175.9bn over a year) and Amundi generated positive net inflows of +€2.9bn. As announced at the time of the second quarter results publication, this amount includes the exit of a low-income multi-asset mandate4 with a European insurer, of €11.6bn.
Adjusted for this exit4, net inflows for the quarter were +€14.4bn of which +€9.1bn in MLT Assets5. It was positive in active management (+€4.3bn) and ETFs (+€7.8bn), partially offset by outflows from index strategies. Structured products and real and alternative assets also recorded positive net inflows (+€0.8bn), while treasury products were flat (+€0.1bn).
Finally, the JVs14 continued their solid commercial momentum, with net inflows of +€5.3bn, reflecting a positive contribution from India (SBI MF, +€6.0bn) and South Korea (NH-Amundi, +€0.4bn), partially offset this quarter by slight net outflows in China (ABC-CA) despite continued open-ended net inflows.
By Client Segment, Retail recorded net inflows of +€6.3bn, of which +€1.3bn in MLT assets5, with contrasting developments according to the sub-segments:
- Third-Party Distributors had another very good quarter in terms of total net inflows (+€6.8bn); all regions contributed to these inflows, which were highly diversified across asset classes, with positive contributions from ETFs, treasury products but also active management (+€1.5bn);
- Risk aversion has a larger impact on the activity of partner network clients in France (+€1.1bn) and outside France excluding Amundi BOC WM (-€0.9bn), despite the good performance of structured and treasury products as well as bond strategies; Sabadell's network in Spain continues its sales momentum (+€0.4bn);
- In China, Amundi BOC WM posted net outflows this quarter (-€0.7bn), as the maturities of fixed-term funds were not offset by open-ended fund subscriptions.
Results
Sustained growth in net income, +16% Q3/Q3 to €337m, and more than €1bn in the 9 months of 2024
Adjusted data2
In the third quarter of 2024, adjusted net income2 reached €337m, up +16.1% compared to the third quarter of 2023. Since the second quarter, it includes Alpha Associates, whose acquisition was finalised in early April.
The growth in net income was mainly due to organic revenue growth, amplified by operating efficiency, which led to a positive jaws effect, and by the very strong momentum of Asian JVs. These results were achieved against the backdrop of continued client risk aversion, and inflation.
Adjusted net revenues2 reached €862m, up +10.5% compared to the third quarter of 2023.
- The sustained growth in net management fees, up +9.2% compared to the third quarter of 2023, to €805m, reflects the good level of activity and the increase in average assets under management excluding JVs (+8.6% over the same period);
- Performance fees (€20m) doubled compared to the third quarter of 2023 (€10m), a low basis of comparison; however, they were down compared to the second quarter of 2024 (€50m) due to the lower level of crystallisation15 in the third quarter than in the second and fourth quarters, as it does every year; however, the performance of Amundi's management is at a good level, with more than 71% of assets under management ranked in the first or second quartiles according to Morningstar16 over 1, 3 or 5 years and 257 Amundi funds rated 4 or 5 stars by Morningstar as of 30 September;
- Amundi Technology's revenues, at €20m, continued to grow steadily (+41.8% compared to the third quarter of 2023; +13.0% compared to the second quarter of 2024), confirming the development of this business;
- Finally, the Financial and other income2 amounted to €17m, down slightly compared to the third quarter of 2023 and previous quarters.
The increase is mainly due to:
- the first consolidation of Alpha Associates;
- the provision for individual variable remuneration in line with the increase in results;
- and finally the acceleration of investments in development initiatives according to the axes of the 2025 Ambitions Plan, particularly in technology.
The Adjusted gross operating income2 (EBIT) amounted to €406m, up +14.2% compared to the third quarter of 2023, reflecting double-digit revenue growth amplified by operational efficiency.
Income from equity-accounted companies, which reflects Amundi's share of the net income of minority JVs in India (SBI MF), China (ABC-CA), South Korea (NH-Amundi) and Morocco (Wafa Gestion), was up +36.5% compared to the third quarter of 2023, to €33m, representing 10% of adjusted net income, reflecting the good level of activity in India and Korea.
Adjusted earnings per share2 in the third quarter of 2024 reached €1.65, up +16.0%.
Accounting data in the third quarter of 2024
Accounting Net income Group share amounted to €320m and includes non-cash charges related to acquisitions, in particular the amortisation of intangible assets related to distribution and client contracts (-€24m before tax in the quarter including the corresponding new charges related to Alpha Associates, see details in p. 11), representing a total of -€17m after tax.
Accounting earnings per share in the third quarter of 2024 reached €1.56.
In the first 9 months of 2024, adjusted net income2 amounted to €1,005m, up +10.4%, reflecting the same trends as in the third quarter:
- Adjusted net revenues2 grew by +7.3% compared to the first 9 months of 2023, to €2,573m, reflecting as in the quarter the sustained growth in management fees (+6.6%) and the strong increase in Amundi Technology's revenues (€54m, +28.2%) and financial and other income2 (€67m, +38.2%); performance fees, on the other hand, were down by -2.0% to €88m;
- Adjusted operating expenses2 are well controlled with an increase of +5.9% compared to the first 9 months of 2023, at €1,356m, resulting in a positive jaws effect;
- Adjusted cost income ratio2 stands at 52.7%.
Income from equity-accounted companies increased by +28.6% compared to the first 9 months of 2023, to €94m.
Adjusted earnings per share2 for the first 9 months of 2024 reached €4.91, up +10.1% compared to the first 9 months of 2023.
Accounting data for the first 9 months of 2024
Accounting Net income Group share amounted to €956m and includes non-cash charges related to acquisitions, in particular the amortisation of intangible assets related to distribution and client contracts (-€68m before tax in the 9 months including the corresponding new charges related to Alpha Associates, see details on p. 11), representing a total of -€49m after tax in the first 9 months of 2024.
Accounting earnings per share for the first 9 months of 2024 reached €4.67.
To be noted for the fourth quarter and full-year 2024
Success of the capital increase reserved for employees - The capital increase reserved for employees "We Share Amundi", announced on 23 September 2024, is expected to be completed tomorrow, 31 October 2024. This operation offered for the seventh consecutive year a subscription of shares at a discount.
It was once again a great success this year: more than 2,000 employees in 15 countries subscribed to this capital increase, for a total amount of €36.3m. This represents nearly two out of three employees in France and more than two out of five worldwide.
This transaction, which is in line with the existing legal authorisations voted by the Shareholders' Meeting on 12 May 2023, reflects Amundi's desire to involve its employees not only in the development of the Company but also in the creation of economic value.
The impact of this transaction on earnings per share will be very limited: the number of shares to be created will be 771,628 (i.e. ~0.4% of the share capital before the transaction).
This issue will bring the number of shares making up Amundi's share capital to 205,419,262 as of 31 October 2024, i.e. a share capital increased to €513,548,155.
Employees will now hold around 1.7% of Amundi's capital, compared to 1.3% before the transaction. In the fourth quarter of 2024, the Amundi Group will record in its consolidated financial statements a charge relating to the subscription discount of €12.3m before tax.
On the basis of the Finance Bill presented by the French government, an exceptional tax contribution on the profits of large companies would apply to Amundi, whose turnover in France for tax purposes is more than €3bn.
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APPENDICES
Adjusted income statement2 of the first 9 months of 2024 and 2023
(€m) | 9M 2024 | 9M 2023 | % chg. 9M/9M | |
Net revenue - Adjusted | 2,573 | 2,397 | +7.3% | |
Management fees | 2,364 | 2,217 | +6.6% | |
Performance fees | 88 | 89 | -2.0% | |
Technology | 54 | 42 | +28.2% | |
Net financial & other net income | 67 | 49 | +38.2% | |
Operating expenses - Adjusted | (1,356) | (1,280) | +5.9% | |
Cost income ratio - Adjusted (%) | 52.7% | 53.4% | -0.7pp | |
Gross operating income - Adjusted | 1,217, | 1,117, | +8.9% | |
Cost of risk & other | (7) | (5) | +24.5% | |
Equity-accounted companies | 94 | 73 | +28.6% | |
Income before tax - Adjusted | 1,305 | 1,185 | +10.1% | |
Corporate tax | (302) | (277) | +8.8% | |
Non-controlling interests | 2 | 3 | -25.2% | |
Net income, Group share - Adjusted | 1,005 | 910 | +10.4% | |
Depreciation of intangible assets after tax | (49) | (44) | +11.6% | |
Integration costs net of tax | 0 | 0 | NS | |
Net income, Group share | 956 | 866 | +10.3% | |
Earnings per share (€) | 4.67 | 4.25 | +10.0% | |
Earnings per share - Adjusted (€) | 4.91 | 4.46 | +10.1% |
(€m) | Q3 2024 | Q3 2023 | % chg. Q3/Q3 | Q2 2024 | % chg. Q3/Q2 | ||
Net revenue - Adjusted | 862 | 780 | +10.5% | 887 | -2.9% | ||
Management fees | 805 | 737 | +9.2% | 794 | +1.3% | ||
Performance fees | 20 | 10 | +97.3% | 50 | -58.9% | ||
Technology | 20 | 14 | +41.8% | 17 | +13.0% | ||
Net financial & other net income | 17 | 19 | -10.6% | 26 | -34.0% | ||
Operating expenses - Adjusted | (456) | (424) | +7.4% | (461) | -1.1% | ||
Cost income ratio - Adjusted (%) | 52.9% | 54.4% | -1.5pp | 51.9% | +1.0pp | ||
Gross operating income - Adjusted | 406 | 356 | +14.2% | 426 | -4.8% | ||
Cost of risk & other | (2) | (3) | -36.0% | (5) | -63.4% | ||
Equity-accounted companies | 33 | 24 | +36.5% | 33 | -0.1% | ||
Income before tax - Adjusted | 437 | 377 | +15.9% | 454 | -3.9% | ||
Corporate tax | (101) | (88) | +14.9% | (105) | -3.8% | ||
Non-controlling interests | 1 | 1 | -23.5% | 0 | NS | ||
Net income, Group share - Adjusted | 337 | 290 | +16.1% | 350 | -3.7% | ||
Depreciation of intangible assets after tax | (17) | (15) | +17.9% | (17) | +1.2% | ||
Integration costs net of tax | 0 | 0 | NS | 0 | NS | ||
Net income, Group share | 320 | 276 | +16.0% | 333 | -4.0% | ||
Earnings per share (€) | 1.56 | 1.35 | +15.9% | 1.63 | ()[\]\\.,;:\s@\"]+)*)|(\".+\"))@((\[[0-9]{1,3}\.[0-9]{1,3}\.[0-9]{1,3}\.[0-9]{1,3}\])|(([a-zA-Z\-0-9]+\.)+[a-zA-Z]{2,}))$/;return b.test(a)}$(document).ready(function(){if(performance.navigation.type==2){location.reload(true)}$("iframe[data-lazy-src]").each(function(b){$(this).attr("src",$(this).attr("data-lazy-src"))});if($(".owl-article-body-images").length){$(".owl-article-body-images").owlCarousel({items:1,loop:true,center:false,dots:false,autoPlay:true,mouseDrag:false,touchDrag:false,pullDrag:false,nav:true})}var a=$("#display_full_text").val();if(a==0){$.ajax({url:"/ajax/set-article-cookie",type:"POST",data:{cmsArticleId:$("#cms_article_id").val()},dataType:"json",success:function(b){},error:function(b,d,c){}})}$(".read-full-article").on("click",function(d){d.preventDefault();var b=$(this).attr("data-cmsArticleId");var c=$(this).attr("data-productId");var f=$(this).attr("data-href");dataLayer.push({event:"paywall_click",paywall_name:"the_manila_times_premium",paywall_id:"paywall_article_"+b});$.ajax({url:"/ajax/set-article-cookie",type:"POST",data:{cmsArticleId:b,productId:c},dataType:"json",success:function(e){window.location.href=$("#BASE_URL").val()+f},error:function(e,h,g){}})});$(".article-embedded-newsletter-form .close-btn").on("click",function(){$(".article-embedded-newsletter-form").fadeOut(1000)})});$(document).on("click",".article-embedded-newsletter-form .newsletter-button",function(){var b=$(".article-embedded-newsletter-form .newsletter_email").val();var d=$("#ga_user_id").val();var c=$("#ga_user_yob").val();var a=$("#ga_user_gender").val();var e=$("#ga_user_country").val();if(validateEmail(b)){$.ajax({url:"/ajax/sendynewsletter",type:"POST",data:{email:b},success:function(f){$(".article-embedded-newsletter-form .nf-message").html(f);$(".article-embedded-newsletter-form .nf-message").addClass("show");setTimeout(function(){$(".article-embedded-newsletter-form .nf-message").removeClass("show");$(".article-embedded-newsletter-form .nf-message").html("")},6000);dataLayer.push({event:"newsletter_sub",user_id:d,product_name:"newsletter",gender:a,yob:c,country:e})},error:function(f,h,g){}})}else{$(".article-embedded-newsletter-form .nf-message").html("Please enter a valid email address.");$(".article-embedded-newsletter-form .nf-message").addClass("show");setTimeout(function(){$(".article-embedded-newsletter-form .nf-message").removeClass("show");$(".article-embedded-newsletter-form .nf-message").html("")},6000)}});$(document).on("click",".article-embedded-newsletter-form .nf-message",function(){$(this).removeClass("show");$(this).html("")});
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