Amundi’s Q3 and 9M 2021 Results
Thursday 04 November 2021
This Thursday November 4, Amundi publishes its results for the first 9 months and the 3rd quarter of 2021. Thanks in particular to high inflows1 in MLT assets2,3, driven by active management and all customer segments, its assets1 under management increased by + 8.9% over one year to reach € 1,811bn as of September 30, 2021.
Its results are maintained at a high level and were up sharply, driven by strong revenue growth and controlled operating expenses.
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 markets4, averaging +4% in Q3 compared to Q2 2021 and +28% compared to Q3 2020, notwithstanding a slight correction of the European indexes 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), drivenby 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 solid 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 OCIO5 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 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.
Overall, net flows for the quarter were +€0.2bn.
Amundi Technology is continuing its development (33 clients at the end of September 2021), illustrated 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 nine-month revenues were €27m, a 69% increase on the first nine months of 2020.
In the third quarter of 2021, Amundi’s results stayed high in a favourable overall market, and were up sharply once again. This increase reflects the good level of revenues, with performance fees remaining very high (€90m in Q3).
Net revenues8 (€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 quarters6.
Operating expenses were under control (€383m). As a result, the cost/income ratio came out to 48.4% (vs. 51.2% in Q3 2020). Excluding exceptional level of performance fees7, 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 share8, totalled €333m.
Excluding the exceptional level of performance fees7, 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), 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.
Earnings in third quarter of 2021 were up sharply in comparison with the third quarter of 2020, driven by fast-growing revenues and controlled costs. Net inflows on 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 expertise.
comments Valérie Baudson, Amundi’s CEO
1. 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.
2.Medium/Long-Term Assets: excluding treasury products
3. Excl. JVs
4. Eurostoxx 600 Index Average
5. OCIO: Outsourced Chief Investment Officer Solutions
6. 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.
7. Exceptional level of performance fees = higher than average performance fees per quarter in 2017-2020 (€42m)
8. Adjusted data: excluding amortisation of the distribution contracts and Affrancamento. See page 8 of the Press Release for definitions and methodology