Release Date: February 04, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Amundi SA (AMDUF) achieved record inflows of 55 billion in 2024, more than doubling the inflows from 2023.
• The company's assets under management exceeded 2.2 trillion, marking a 10% increase over the year.
• Amundi SA (AMDUF) reported an annual adjusted net profit of 1.4 billion, a 13% increase, with a quarterly profit of 377 million.
• The company improved its operational efficiency, achieving a cost-income ratio of 52.5%, better than the target of 53%.
• Amundi SA (AMDUF) proposed an increased dividend of 4.25 per share, representing a yield of more than 6%.

Negative Points

• The company anticipates large outflows from its Indian joint venture due to a request for proposal from a major client, although it will have a negligible impact on net income.
• Amundi SA (AMDUF) faces challenges in the real estate market, which is still slightly decreasing.
• The company's growth in partner networks is limited due to already high market share, affecting the capacity for further expansion.
• There is a potential risk of pricing compression in the ETF market due to competitive pressures from players like Vanguard.
• The company is cautious about the impact of regulatory changes in Europe, which could affect business models in asset management.

Q & A Highlights

• Warning! GuruFocus has detected 10 Warning Signs with AMDUF.

Q: Can you provide context on the momentum of signing 12 new digital partnerships in one year and the pipeline for further partnerships? Also, what are the main drivers of the other 80% of third-party flows? A: The digital partnerships have accelerated, especially in 2024, with significant growth in Europe and Asia. We have a dedicated team focusing on these clients, who require different services compared to traditional banks. The growth is driven by our ability to provide tailored solutions and services, leveraging our technology and digital platforms. The other 80% of flows are well-diversified across geographies and client segments, including Europe, Asia, and the US. (Valerie Bodson, CEO)

Q: Given your strategic investment spend and profitability targets, do you plan to invest more than originally planned? A: Our investments are aligned with strategic priorities, focusing on technology, Asia, third-party distribution, and passive management. We adapt our investment pace based on the global context, ensuring we maintain high efficiency and capacity for long-term investment. (Nicola KKN, Deputy CEO)

Q: What opportunities do you see in the market today for M&A, and what probability would you assign to deploying the 1 billion plus of surplus capital before the 2026 AGM? A: We focus on strategic, client-centric M&A that accelerates growth. Our recent acquisitions in private assets, technology, and the US demonstrate our strategic approach. We are open to opportunities that align with our guidelines of strategic fit, client benefit, financial return, and execution capability. (Valerie Bodson, CEO)

Q: Can you discuss the outlook for private assets, particularly in light of challenges in real estate and opportunities with LTIFs and Alpha Associates? A: The real estate market is stabilizing, and we see significant growth potential in private assets, especially in retirement and wealth solutions. Alpha Associates enhances our capabilities in providing diversified solutions for these markets. We are well-positioned to capture growth in private assets as they become more integrated into retirement and wealth portfolios. (Valerie Bodson, CEO)

Q: Regarding the institutional business, what is driving the increase in fee margin, and is there anything notable about the tax rate this quarter? A: The increase in fee margin is due to the exit of a low-margin insurance mandate and higher margins on treasury products due to increased interest rates. The lower tax rate this quarter is due to positive exceptional items and is not related to recent government proposals. (Nicola KKN, Deputy CEO)

For the complete transcript of the earnings call, please refer to the full earnings call transcript.