Amundi Sa

Good morning, all. I'm Cyril Meillon, the head of Investor Relations of Amundi, and we are here to present you our H1 first half and second quarter results for 2025. It's obviously a video conference, so we welcome you to this conference. We do hope that you are enjoying the same weather as we are in Paris. It's very sunny. It's not an anticipation of a presentation, but at least it's a gorgeous day. Today, the speakers will be, as is usual, for a second-quarter presentation, Valérie Bodson, our CEO, as well as Nicolas Calcoune, our deputy CEO. They will make a presentation that will last probably about 20 minutes, 30 minutes, followed by, as usual, a Q&A session. Before we start a few housekeeping topics, if you want to ask a question, please raise your hand virtually. We see that some of you have already done that. So we'll take the questions in order of appearance, so to speak. And please open your camera so that we can see you and have a face-to-face dialogue. Apologies in advance for this, but I need to go through a short disclaimer. Throughout the presentation, we will make a number of forward-looking statements and mention forecasts. We call your attention to the fact that Amundi's actual results may differ from these statements. Some of the factors that may cause the results to differ materially are listed on our universal registration document that we published last April. Amundi assumes no duty and does not undertake to update any forward-looking statements. And without further ado, I now leave the floor to Valérie for her introductory remarks.

Thank you very much, Cyril, and thank you all for your participation in this conference to present our H125 results. I will start this presentation with the main highlights. I will also focus on segments of operations that have experienced particular development in recent months. And finally, I will leave the floor, as usual, to Nicolas, who will comment on the financial part more thoroughly. So first of all, we'd like to highlight a few key points of these results. I will start with the excellent commercial momentum with net inflows recorded in the first half of the year that are already at the level of the whole of 2024. Since the beginning of the year, our clients have entrusted us with 52 billion in new money to manage, of which more than 20 billion in the second quarter. We are also well above the 2024 level in medium-long-term net inflows with 48 billion. These net inflows are very much diversified. It is positive in both active and passive management. It comes from Asia for 22 billion as well as from Europe, especially the UK, Germany, Spain and France. from retail as well as institutional investors and or JVs. I will come back to all this in a moment. I think this illustrates how the breadth of our expertise and our agility to answer various client needs are key assets in any market environment. So as of 30 June 2025, Amundi's assets under management reached a new all-time high of close to 2.3 trillion euros. They rose by over 5% over one year, despite the headwinds from a weaker US dollar and weaker Indian rupee, which together account for more than a third of our assets under management. The financial performance resulting from this business activity is solid. Our revenues increased by 5% over the first half, despite a slight decline, as you saw it in Q2, due mostly to the effect of the fall in the dollar I just mentioned. In addition, our costs remain under control. The cost-income ratio at 52.5% remained below our target of 53%. As you know, we are in a league of our own for this metric. Pre-tax income increased by over 4% in H1 compared to the same period last year. I would like to remind you that our result is impacted this year by the exceptional tax contribution to be paid by large companies in France. Excluding this tax surcharge, our net income would have grown at the same rate as pre-tax income. Finally, we saw further success in our strategic pillars in the first half of 2025. Third party distribution gathered 13 billion, mainly in medium to long term assets in both ETFs and active management. We sustained success with digital players. After the workshop we organized last month, you now know why this client segment is so successful at Amundi. Asia posted again strong flows at 22 billion coming both from direct distribution and JVs. Again, this was across many countries, including India, Hong Kong, Singapore, South Korea and mainland China. Our ETF expertise continues to enjoy a strong momentum, but I will say more about this in a moment. And finally, technology and services, a key growth driver for Amundi. We have good news to report here as well with first the continuation of a fast revenue pace for Amundi technology at plus 48% year on year. And second, Fun Channel which passed its medium-term plan target which had been set for the end of this year. Assets and a distribution reached 613 billion versus a target at 600. Now I would like to briefly come back to a key element of Amundi's differentiation. We are the European expert in asset management. In an environment where investors are looking for more diversification with a renewed interest in Europe, Amundi is taking full advantage of its number one position among European asset managers. Better than this, with 2.3 trillion in assets under management, we are the only European player among the 10 largest global asset managers. We are ideally positioned to support European investors. These clients represent a large part of our assets under management, approximately 1.7 trillion, and they entrusted us with an additional 29 billion to manage since the beginning of this year. Earlier this year, we welcomed the announcement of the Label Finance Europe, which should encourage long-term investment by European sellers in European companies. We will, of course, actively participate in its deployment and promotion in the coming months. We are also very well positioned to support international investors who want to invest on the European continent. More than 50% of our assets under management are invested in euro securities. Our comprehensive range of solutions provide capital to all European companies and economies. Maybe one of the best examples to give you is our Stock 600 ETF, which exceeded 12 billion in assets at end June. The largest ETF tracking this broad index with plus 3 billion in net new money in the first half of this year. All this gives us a leading position in Euromanagement, in addition to a unique setup with investment management teams across Europe and the core expertise of Amundi Institute in the regions, politics, economies and markets. We have all the capabilities and credentials to promote and manage these investment opportunities present in Europe. This was the case recently with the launch of thematic funds in the defense sector, Similarly, a SIMATIC fund was launched two years ago by our subsidiary CPR on European sovereignty. This shows that we know how to anticipate and innovate at the service of our clients in Europe. Now, as I said in the introduction, some areas of activities have recently accelerated and confirmed the growth potential that we had foreseen in our 2025 strategic plan. So let's start with institutional clients. The net inflows were high in this segment with more than 31 billion in the first half. It is diversified both in terms of products and geographies. So let me give you a few examples. For example, in France, we have seen a very strong business momentum in corporate employee savings schemes with positive cash flows of 4 billion, and also a renewed interest in life insurance contracts in euros with 9 billion in net inflows. In Germany, I could mention that Amundi Alpha Associates' private debt expertise has been retained by a major pension fund. In addition, in the area of responsible investment, we won a new low-carbon mandate for Chile's sovereign wealth fund. We see sustained and continued demand for responsible investment expertise from institutional clients. You should know that 90% of all RFPs in Europe include some shade of green and we are well positioned to respond as our recent win of the mandate with the People's Pension also indicates. I think this gives you a good overview of the different areas of expertise that meet the needs of this key client segment. Now let me switch to the ETFs. In the field of ETFs, we confirm quarter after quarter our position as the first European ETF provider with 19 billion in net inflows. We are the second largest collector in Europe and our assets under management reach close to 300 billion. We have doubled our net inflows of ETFs this half year compared to the same period in 2024. This high level of activity was achieved thanks to the diversification of the business line by client types, geographies and asset classes covered and also thanks to our constant capacity to innovate. To illustrate these points, note that Asian and Latin American clients contributed 4 billion in net inflows over the first half. Our range includes almost 350 ETFs with a wide variety of strategy and asset classes. And as you can see on the slide, we have continued to innovate in particular by launching ETFs that allow investors to fine tune their exposures according to their preferences and convictions. Let me highlight one example, which was presented at the third-party distribution workshop last month, our lifecycle multi-asset ETF range, which aims at addressing with a simple solution a core need of all our retail clients, retirement. It is a promising area for the ETF market, which shows that this expertise can provide innovative solutions for a never broader spectrum of needs. Now, before concluding, I would also like to focus on Fund Channel or Fund Distribution Platform. This platform, you remember, is a real asset in an environment where fund distributors are increasingly operating in open architecture. We had set ourselves the ambitious goal of doubling assets under distribution between 2021 and the end of 2025 to more than 600 billion. This objective was exceeded six months ahead of schedule. We reached 613 billion exactly at the end of June. We have achieved several commercial successes with the new integration of clients such as ING Germany or Swiss Life private bank. And finally, a few months ago, we launched Fund Channel Liquidity, an innovative and promising offer that aims to simplify and optimize cash management for corporate clients across Europe. As you can see, all these initiatives are creating a lot of value for our clients and our future. I thank you very much for your attention and I now leave the floor to Nicolas for the details of our financial results.

Thank you very much Valérie and good morning everyone. I will now comment on first half and second quarter activity and financial results. Starting as usual with our asset under management, they reached 2.27 trillion euros at the end of June. This was up by 5% on a year-on-year basis, thanks to first and mostly healthy net new flows at 75 billion over one year. and also on a positive market and currency effect of 46 billion. Indeed, over this period, the equity rally offset the negative impact from the depreciation of the US dollar and the Indian rupee. Indeed, both currencies together, as Valérie indicated, account for more than a third of the assets we manage, and they were both down when looking at end-of-period levels by around 10% versus the euro over the past 12 months, with an acceleration since the beginning of this year. Across the first half of this year, now we experienced the same trend, but with even more contrast. The growth in our AUM came entirely from our record net inflows at 52 billion euros over six months, while the net effect of market on Forex was negative at minus 50 billion. The Forex effect, in fact, was minus 73 billion because of the accelerated depreciation of the drop in the US dollar and Indian rupee I just mentioned. And these depreciations more than offset the toll win from equity markets, which resulted in a positive effect of 58 billion euros over the period. And we have to add that our AUM also recorded a negative scope effect of 10 billion from the closing of the transaction with Victory Capital. But I will come back to this very shortly. So as a result of these various trends, our AUM were up by more than 1% since the beginning of this year, and they were also up by close to 1% in the second quarter. As I mentioned, we finalized our partnership with Victory Capital on the 1st of April. So the second quarter is the first where we integrate our new setup in the US. This slide summarizes what happened during the quarter and the consequences of our reporting choices to better reflect the operation of this new setup. I will not comment in detail, but keep in mind that the more than $30 billion in assets managed by the new Victory Capital are split between first US distribution, of which we take 26% into account in our asset management, so 58 billion, and distribution to non-US clients by Amundi teams, which we take at 100%, and it represents 30 billion euros. And this, compared to the previous setup, explains the minus 10 billion euros scope. Moving now to our net inflows on the following slide. Amundi net inflows indeed amounted to 52 billion euros overall in the first half, so very close to the net new money collected in the full year 2024. which is important to notice, with a new all-time high in medium to long-term assets of 48 billion euros. The long-term net inflows are positive in active management, driven mainly by fixed income, and very positive in passive management, 44 billion, thanks to the gain of the index mandate with the people's mansion we already mentioned, and to the strong net inflows of 19 billion in ETFs. Treasury product recorded outflow of 10 billion, entirely due to redemption from corporate, while all other client segments were either flat or slightly positive on this expertise. And I'll comment about the performance of our JVs later, which is obviously, as you've seen, very positive. Before moving to the detail of the flows, a word about our performance in the second quarter. 20 billion, it remained at a high level. It's balanced between long-term assets and joint ventures with treasury products showing reduced withdrawals compared to the first quarter. Like in previous quarters, this good business level was supported by our sustained investment management performance. Approximately 70% of our open-ended fund asset under management were indeed in the first or second quarter with remarkable stability over time. It's true for one year, three years, five years of performance. In addition, more than 240 of our funds are rated four or five stars, while 82% of our AUM outperformed their benchmark over five years. I know you know this slide. Its main message is basically sustained consistency. What we try to do is to maintain a sustainable high level of investment performance to keep our clients trust, which is a true Amundi trademark. Looking now at our client segments, we will start with retail. Retail flow was positive at 7 billion in the first half of the year. They remained driven by third-party distributors, which posted again very healthy net inflows of 13 billion, to a large extent coming from ETF, but also positive in active management and treasury products. 40% of these flows came from digital players, and activity was strong all across Europe and Asia. In Asia in particular, in our fully-owned entity, excluding the joint ventures, we posted record net inflows of 3 billion, mainly in Hong Kong, Singapore, but also mainland China. In China, as we developed and announced our recent workshop on third-party distribution, we were allowed a new quota for QDLP business, in which we sell international strategies to the domestic clients of our local distributors. And our total quota is now 1.2 billion, which will continue to support our development there. Partnered networks, either French or international, continue to suffer from a risk aversion. But we need to mention that Amundibok was positive, 1 billion over the second half of the year, confirming the recovery of the market and the success of the new product range. Moving to our institutional segment, which was already partially covered by Valérie, as she indicated, net inflows were 31 billion in the first half, with again a sharp contrast between long-term assets and treasury products. In long-term assets, net inflows amounted to 44 billion euros, with institutions and sovereign investors contributed 30 billion, of which 22 related to people's pensions, but also coming from sustained flows in our active bond strategies. Credit Agricole and Soxgen insurers were positive at 9 billion, mainly due to the renewed interest of French savers in live Euro contracts, as the yields are more attractive again. And finally, the employing and savings retirement business in France posted record flows, in particular in the second quarter, more than 4 billion. Treasury products posted outflows of 20 billion, mainly related to corporates, as I already mentioned. And finally, our Asian joint ventures posted net inflows of 13 billion, thanks to a good performance in all countries. Our Indian JV, SBI-FM, recovered to a strong level of net new money after a fourth quarter hit by market volatility. It gathered 7 billion over the half year, of which 8 billion during the second quarter. South Korea ported 5 billion of inflows, mostly in long-term assets. And China, the JV with ABC, continued its recovery at 2 billion euros, excluding the discontinued channel business, in particular thanks to fixed income. You will notice that I have not commented on Victory Capital's performance. Flows to US clients were flat on a net basis in the second quarter, coming after several quarters of outflows reported by Victory with its former setup excluding Amundi US. Let's move now to our financial results, starting with the first half performance. And let me start with a brief word of methodology. As you know, a partnership with the Victory Capital results in the exchange of our 100% held US business, Amundi US, which was fully integrated, into a 26% stake in a much larger US asset manager, the new Victory Capital. This stake is consolidated using the equity method. It means that it appears in a single line in our P&L, representing our share in the net profit. This starts with our second quarter results as the closing took part in the first half of April. That's why to make comparisons easier, we will compare our first half and second quarter figures with pro forma figures as if Amundi US also been equity accounted in the second quarter of 24. This does not make obviously any difference at the net profit level, but it helps the comparison of revenues and costs using the same scope. And finally, sorry to be long about this methodology point, but as you know, Victory Capital is a listed company. Obviously, we cannot give a precise indication of their second quarter results before they publish themselves. Therefore, we shall use their prior quarter results, in that case, the first quarter, including 100% of the US in the first quarter, as a proxy for their contribution to our second quarter. With that in mind, let's now turn to the analysis of our results. As you can see, our total revenues in the first half amounted to 1.7 billion, which is up by 5% on a year-to-year basis. and the sources of revenue directly related to business activity grew nicely year on year. Net management fees were up by 4.6%, thanks to the rise in average assets under management and the good level of activity of inflows. And despite the negative effect of the products mix on margin, I will come back to that. And technology revenues continue their strong momentum at 52 million, up almost by half compared to last year. And this growth was more or less equally split between organic growth and the effect of the first integration of XeGo, which I remind you was successfully integrated last November. Our net financial income reached 52 million as well, up by 10% thanks to the exceptional revenues from our thin-money portfolio. And despite, the half-year remains characterised by the negative impact on voluntary investment on the fall in short-term rates in the Eurozone, which halved compared to last year. And finally, performance fees were down by 13% compared to last year, reflecting higher market volatility since the beginning of the year. Now let's look at the evolution of our margins. They are down compared to last year for two reasons. First, and for a bit more than half of this decrease, as we had already flagged this when we discussed the integration of Victory Capital, the deconsolidation of Amundi US will have a positive impact on our net profit, but it trims our revenue margins by approximately a little bit more than one basis point. And this is due to the combination of two effects. First, the fact that the margins on the AUM distributed to US clients were higher than in the rest of Amundi Group. because they were mostly retail and mostly active management. And second, the fact that on the IUM distributed to non-US clients, we keep 100% of the IUM in our asset base going forward, but we only keep the distribution fees and we disconsolidate the share of management fees that were attributed to the US management teams. So that's a more technical reason, but the first reason, the main one, has an explanation to the decrease in margin. The second reason for the decrease in revenue margins is the products and client mix in the past quarter. We indeed, as you have seen, have enjoyed a very healthy recovery in our activity in the institutional segment in the past two years. from medium to long-term flows barely at breakeven in 2023 to 44 billion in the first half of the year, including the recovery to positive flows of our business with CRE and SOG-Gen insurers. This translates into revenue and profit growth, but obviously dilutes the revenue margin. And the same is true on the product side, with faster growth in passive products and fixed income, and some outflows in active multi-assets and equities since 2022. Revenue growth was complemented by our operating efficiency, which allowed us to overcome the margin dilution with neutral Jaws effect. Cost increased by 5% on a year-on-year basis, in line with revenue. And if you look at it at constant scope, excluding alpha and ex-ego, the Joe's effect is even slightly positive, with a growth of 3.4% of cost and 4% on revenues. Beyond this scope effect, cost increase mainly relates to our investment in growth drivers, meaning technology, ASIA and ETF in particular. And you can see that our adjusted cost income ratio stood at 52.5%, which is clearly in line slightly above our ambitious 2025 target. This leads us to our adjusted profit before tax. Our gross operating income increased by 4.5% to more than 800 million, driven by the top line growth. The contribution for more Indian joint ventures was up by 7.1%, thanks in particular to the contribution for Indian joint ventures, which account for more than 80% of the GVs, and its contribution was up by 7.4%. On the contrary, the equity-accounted contribution from US operations reflects the result of only one quarter, meaning half of the first half of 2025, with 26% of victory capital, and half of the first half of 2024 pro forma, with 100% of Amundi US. It is done year on year, but does not reflect the true underlying evolution. It is first due to the lag by one quarter in the recognition of Victory's result. It does not include any synergies. And as I remind you, at the time of the closing, Victory announced that synergies would reach $110 million. And they also said that $50 million was already achieved at the beginning of April. And second, the base of comparison in the first half of 24 was abnormally high due to positive non-recurring items at Samundi US. All these elements, gross operating income, joint ventures, the US, all these translate into the growth of a bit more than 4% of our profit before tax, which is close to 900 million, 895 million to be very precise. Finally, for the first half, as you know, 25 is characterized by an exceptionally high level of corporate tax in France. In the half year, in total, 259 million of tax. This is due to an exceptional tax surcharge for large companies in France introduced by the 25 French budget law and payable in fiscal year 2025. It is estimated for Amundi at 72 million for the full year. but it was not booked in a linear way and 54 million euros were booked in the first half of the year. Excluding this surcharge, you can see that our effective tax rates would be in line with last year and our net income, excluding this effect, increased by around 4% compared to last year. and close to 700 million. One specific item for the half year, which is also worth mentioning, is the capital gain we booked related to the finalisation of our partnership with Victory Capital. At 402 million, it is a non-cash element and it's based on the exchange of shares whereby we substituted 100% of our money in the US for 26% in Victory. So this capital gain results from the fact that the market value of the 26% in Victory Capital is superior to the historic bull value of Amundi US in our accounts. This capital gain is part of the economics of the deal and explains why it has no impact on our surplus capital. And therefore, you should not assume that we will pay any dividend on it. But thanks to this capital gain, our stated net income reached almost 1 billion in the first half of the year. Let's move now to our second quarter. Our total revenues in the quarter amounted to €790 million. They were down by 1% due to the decline in performance fees compared to a high base in the second quarter of 2024 and to the drop in financial income in line with the decrease in Euro short-term rates. But business-related revenues continued their growth compared to last year, Net management fees first were up by 1.2% compared to the second quarter. They are down by 2.7% compared to the first quarter because of the decline in the US dollar, which was down by 7% on a quarter-to-quarter basis. And this explains two-thirds of the second-sold decline. As a reminder, approximately 25% of our invested assets are indeed in US dollars. And the rest is attributable to the negative effect of the products mentioned margin, Well, on the contrary, technology revenues at 26 million posted healthy organic growth of 30%, complemented by the impact on the integration of XeGo to reach close to 50% compared to last year. Turning to cost, they were flat on a year-on-year basis, if you exclude the integration of Exigo, and they are also flat compared to the first quarter. As a consequence, our adjusted cost-income ratio stood at 52.7%, again in line with our ambitious 2025 target. The optimization plan we announced in the first quarter has been launched. As a reminder, it's aimed at financing the acceleration of our investment by generating between 35 to 30 million euros in savings starting in 2026. As a first example of this optimization plan, the merger between our two French subsidiaries, CPR and BFT, is the first step of this plan. It will create a leader in asset management in France, along, of course, with our main operating entity, Amudi Asset Management. And the new merged entity will manage close to 100 billion euros. The restructuring costs of this plan will be booked for an amount of 70 to 80 million euros in the second half of the year. Finally, our adjusted profit before tax and our net income The contribution here again from our agent JVs was up sharply at 17% compared to the second quarter of last year, driven in particular by SBA, a growth of 19% compared to the year. And where the equity accounting contribution from the US operation, due to the lag by one quarter of the recognition of the result, does not, as I mentioned, include any synergies. So this is clearly a significant addition to their future contributions that you will see in the coming quarters. We also need to mention that this second quarter contribution from the US is also affected by the decline in the dollar, as I mentioned, as well as by the non-recurring items from Amundi US already mentioned for the first half of the year. As a result of all this, Amundi adjusted profit before tax was down by 1.8% to 477 million, while the adjusted net profit, which includes a tax surcharge of 9 million for this quarter, reached 334 million euros. But excluding this tax surcharge, it would have been 343 million euros, clearly more in line with previous cartels. Last, one word about the strength of our financial position. As you can see, our tangible net equity now stands at 4.3 billion euros. It is down versus the end of 2024, as usual, because of the payment of the 24 dividend in May, and also down due to negative currency effect, but which are largely offset by the large capital gain I mentioned. As a consequence, our surplus capital reached 1.3 billion at the end of June. And finally, to evidence the strength of our financial position, Fitch Ratings confirmed in May our best-in-class rating of A+, with a stable outlook. I will now hand back to Valérie for some concluding remarks before we take your questions. Thank you very much for your attention.