Amundi Sa

Good morning to you. I'm Cyril Maillon, the head of investor relations of Amundi, and we're here to present you the results of our first quarter 2025 in sunny Paris. I hope it's the same for you. I'm very sorry because you must have had a very busy morning with many publications, including DWS, you probably just got off their presentation call. So I'm here as usual with Nicolas Calcun, our deputy CEO, as well as Aurélia Le Courtier, our CFO. And as a brief reminder, we obviously start the presentation with a disclaimer, so please read it. Keep in mind that this is a legal obligation. And as for housekeeping, we make the effort of presenting you with a video. So please, whenever you ask your question, please turn on your camera so that we can see and have a direct dialogue. Thank you very much. And without further ado, Nicolas, the floor is yours.

Thank you Cyril and good morning to all. I am very pleased to be here to run you through our first quarter results. I will begin by commenting on the main highlights of the quarter and I will make a special focus on our business in the UK which won a major mandate and has developed well in recent years. And then, of course, I shall leave the floor for Aurelia before we take your questions. So after a record year in 2024, Amundi continued to enjoy a very positive momentum in this first quarter in terms of both financial results and business levels, as well as strategic progress. first on financial results profit before tax in the first quarter was 458 million euros up by 11 on a year-on-year basis we saw a double-digit revenue growth with a healthy contribution from all income sources led by net management fees with increase almost by eight percent And last year's acquisition of Alpha Associates on Exego gave us an extra boost, adding around 1% to our revenue growth. Our costs remain under control, with a positive Joe's effect on a further improvement in our cost-income ratio to 52.4%, in line with our strategic target. Finally, a brief word about the one-off items that hit our net income this quarter. As we indicated in the fourth quarter, the French government has imposed a tax surcharge on large French companies to be booked in 2025. The accounting of this chart is not linear and it affects in a disproportionate way our net income in the first quarter. Aurelia will tell you more about this in a moment, but keep in mind that net income, including this tax surcharge, would have been up by 10% in line with our profit before tax. And we think this is clearly a better reflection of our financial performance. Turning now to our business, in the first quarter, our clients entrusted us with more than 31 billion euros of net new money to manage. This is the highest quarterly net new money figure since 2021. And it's positive for all client segments, retail, institutional, and our joint ventures. In particular, net new money in medium to long-term assets, excluding the joint venture, was even higher at 37 billion, the quarterly record for long-term assets. In the institutional segment in particular, we won a major mandate. We won one of the largest pension funds in the UK. I'll say more on this shortly. Apart from this major deal, our net inflows are still very positive and well diversified. between passive and active management, between retail and institutions, and across European and Asian countries, as well as the US and Canada. This illustrates how the breadth of our expertise and our agility to answer various client needs are key assets in any market environment. Finally, we saw further success in our strategic pillars. Third party distributions first gathered 8 billion euros in this quarter in both ETF and active management, with most countries collecting net new money. In Asia, net inflows were also at 8 billion, balanced between direct distribution and joint ventures. Again, this was across many countries, in particular Hong Kong, South Korea, Singapore and China. Our ETF expertise continues to enjoy a strong momentum with 10 million in net new money, driven by commercial successes and innovations that broadens our range. To give you two illustrations, our ETF stocks Europe 600 gathered 1.3 billion in one month, and passed 10 billion in asset under management. Another example, we have launched a new multi-asset ETF range called LifeCycle in partnership with a large Spanish bank. It aims to meet investors' life goals, such as pension, adapting to their respective risk profile and gradually adjusting the asset allocation as they age. So it's a very good example, I think, of innovation at the service of our clients. And finally, Amundi Technology kept its fast revenue pace with 46% growth on a year-on-year basis, driven by both healthy organic growth and the integration of Exigu. I mentioned earlier a win of a major 21 billion mandate with a People's Pension, which is one of the largest pension funds in the UK. This is an equity index mandate integrating strict climate criteria set by the pension fund. It is the largest mandate ever won in the UK by Amundi. The UK is indeed a very important market for the group and this mandate reflects our strong platform for both investment management and distribution. Indeed, beyond the fact that Amundi is used to providing large institutions like TPP with advanced investment strategies and services across the world, we have also changed sides in the UK in the past years. First of all, the UK is one of Amundi's six investment management hubs, as you know. Our team of 85 investment professionals based in London manage 49 billion euros in assets, focusing on two types of expertise. Fixed income first, mainly global fixed income, and emerging markets. But our distribution platform in the UK is also now complete, unable to address a wide range of needs for in-situ clients and third-party distributors like wealth platforms, asset managers and private banks. And we also have a local Amundi technology team focused on selling our technology to local wealth and asset managers. In particular, very recently, we won an important new client, which is HGL. These capabilities are helping us develop a strong client base, including many household names. We have gathered more than 30 billion in net new money from UK clients over the last 12 months. Assets managed on their behalf have almost doubled in three years. They represent now 66 billion euros well balanced between insular clients and third party distributors. Back to the mandate with the people's pension, it's clearly a new evidence of the acceleration of our business in the defined contribution pension market. As you know, master trusts, which are multi-employer pension schemes, are the most dynamic part of this market, and they are expected to grow assets by 20% per year in the coming year. We have now at Amundi a strong relationship with the two largest master trusts in the UK, Nest and People's Pensions, and we can cover a large range of needs for these clients. So we are very confident that the UK market will continue to be a cross driver for Amundi in the coming years. In particular, thanks to the DC market and also our penetration with wealth platforms. I thank you for your attention and now I leave the floor to Aurelia.

Thank you, Nicolas, and good morning, everyone. I will now commence our Q1 activity and our financial results. So starting with our AUM, They reached 2.25 trillion at the end of March. This was up 6% year on year, thanks to a positive market and currency effect of 53 billion, driven by rally in equity markets. But more importantly, dynamic net new flows at 70 billion over one year. Across this first quarter, in a slightly positive market, positive for equities and neutral for bonds, our asset under management was stable. This is the result of two opposing trends. Firstly, the forest effect was very negative at minus 26 billion because both the Indian rupee and the US dollar were down 4%. And second, our net inflows were at a very good level with 31 billion, more than offsetting the Forex effect. Turning back to the first quarter and the European open-ended fund market, it posted net inflows of 221 billion in Q1. Passive management contributed 91 billion and active accelerated to 70 billion. However, this apparent acceleration is due to lower outflows in equities and multi-asset funds, while fixed income remained flattish. In summary, MLT flows are trending up, but risk aversion remains high. Q1 MLT inflows were at a record level of 37 billion, and we can now move to our slide eight. So, as Nicolas said, Amundi's net inflows amounted 31 billion overall in Q1, which is the strongest quarter since 21, with, as I said, an all-time high medium to long-term assets of 37 billion, more than the whole of 2024. The MLT net inflows were positive in active management at 6 billion euros, driven mainly by bonds which gathered 11 billion over the quarter, 33 for passive management thanks to the gain, as Nicolas said, of the people's pension mandate, but also to positive net inflows in ETFs for 10 billion. Treasury products recorded outflows of 8.7 billion with large seasonal redemptions from corporate and despite positive inflows in retail. The good performance for open-ended fund, like in previous quarter, this good business level was supported by our sustained investment management performance. As you can see in the slide, approximately 70% of our open-ended fund AUM were in the first and second quartile with remarkable stability over time. 244 Amundi funds are now rated four or five stars in Morningstar, while 82% of our AUM outperformed their benchmarks over five years. Again, I would like to highlight that these KPIs have been consistently strong quarter after quarter and year and year as we strive to maintain a sustainably high level of investment performance to keep our client trust, which is a true Amundi trademark. Looking now at our client segments and starting with retail, as you can see, retail flows are positive. They reached 6 billion in the quarter and they remained driven by third-party distributors, as in previous quarters, where net inflows were very dynamic with 8.3 billion, of which five in passive and two in active management. In Asia, our fully owned entities, which means excluding JVs, we posted also record net inflows of 1.7 billion, mainly in Hong Kong and Singapore. Partner networks continue to suffer from risk aversion. First, the French networks recorded slightly positive net flows at 0.2 billion, with on the one hand net inflows into active management, namely equity and multi-assets, and treasury products, and on the other hand, net outflows that continue in real estate funds and in structured products in the absence of new marketing campaigns. International networks, excluding Amundi BOC, posted outflows of 3 billion, mainly coming from multi-assets. And finally, Amundi BOC was positive at 0.3 billion, thanks to the good momentum in new bond fund ranges, which raised 1.2 billion. Moving now to institutional segments. So net inflows in these segments were high at 22 billion euros in Q1, with a sharp contrast between MLT assets and treasury products. In MLT assets, net inflows amounted 33 billion, Institutional and sovereign investors contributed for 27 billion, of which 21 related to the people's pension mandate we already mentioned. Group insurers were positive also at 5 billion. And on the other side, Treasury Product posted outflows of 10 billion, mainly due to a 12 billion seasonal redemption from our large corporates, and to a lesser extent to arbitrages away from Treasury Product into short-duration bond funds in search for better yields. Finally, looking at our Asian joint venture, they posted net inflows of 3 billion, driven by South Korea at 3 billion, mostly in MLT assets, and China, reaching 1 billion inflow, mainly in treasury products and MLT assets, excluding the discontinued channel business. Our Asian JV, SBIMF, posted one billion of net outflows due to two elements. First, the seasonal redemption in treasury product at fiscal year end in India and some outflows in the institutional segment in a context of market consolidation. Let's move now to our financial results, starting with revenues. Our total revenues amounted to 912 million, up 11% year-on-year. The integration of Alpha and Exigo contributed to this year-on-year growth. At Constant Scope, our revenues were up 9% and all sources of revenue grew in Q1. First, net management fees were up 8%. then performance fees reached 23 million, up over 30% compared to Q1 24, and with 2 million coming from Alpha Associates. Technology revenues also continued their strong momentum, up 46% to 26 million. Half of this increase is from Exego, which was, as you know, successfully integrated last November. And finally, our net financial income reached 40 million, of which nearly half are exceptional revenues from our seed money portfolios. Moving to the next slide, this revenue growth was complemented by our operating efficiency, resulting, as you can see, in a positive Joe's effect. Cost increased by 9% year-on-year versus a revenue growth of 11%, a two-point difference. And at constant scope, which means excluding alpha and ex-ego, this positive effect is even more substantial, close to three points, between 6% for our costs and 9% for our revenues. In line with the previous quarters and excluding the scope effect from our acquisitions, the costs increased mainly for two main reasons. First, our investment in the growth drivers, technology, Asia and ETFs. And second, the adjustment of our bonus accrual to our pre-bonus operating income growth. Finally, the adjusted cost income ratio reached 52.4% below our 2025 target, which is an improvement of 1% compared to Q1 2024. This leads us to our adjusted net income for Q1. So as you can see, our gross operating income increased by 13%, driven mainly by the top line growth. This contribution from our JVs was slightly down this quarter to 28 million compared to 29 in Q1 2024. This is due to a slower momentum in our Indian JV in the context of equity market consolidation in India. The JV's financial income was then hit by a negative mark-to-market effect, but management fees continued to grow at a very healthy pace with more than 20% increase year on year. Coming back to Amundi's result, the profit before tax was up 11% to 458 million. And as mentioned by Nicolas earlier, the quarter is characterized by an exceptionally high level of corporate tax. 155 million for the sole quarter due to an exceptional tax surcharge for large companies in France that was introduced by the 2025 French budget law. So this surcharge is calculated on the average taxable profit for 24 and 25 and is payable in fiscal year 25. For Amundi, it is estimated at roughly a bit more than 70 million euros for the full year, but it will not be booked in a linear way. That is why we had to book 46 million in Q1 and the rest of the surcharge will be spread over the year with approximately 9 billion of surcharge per quarter. Excluding this surcharge, the effective tax rate would have been similar to that in Q1 2024 and our net income would have been close to 350 million, up 10% versus Q1 2024. So to conclude, let me summarize the key takeaways for the quarter. So first, our business activity was very strong with net inflows of 31 billion and record net inflows in medium to long-term assets that reached 37 billion, thanks to the win of the People's Pension Mandate, but also strong ETF inflows and positive active management. Looking now at our financial results, we delivered a very healthy growth plus 11% of our top line, a cost income ratio of 52.4% and an 11% growth of our profit before tax. last i will add one word about our strength the strength of our balance sheet with two figures first our tangible net equity now stands at 4.8 billion and second our surplus capital reached now 1.2 billion at the end of march i will now hand back to nicola for concluding remarks before we take your questions and i thank you very much for your attention