Earnings call transcript: Amundi Q1 2025 shows profit rise, stock dips

Amundi SA reported a strong financial performance for Q1 2025, with profit before tax rising by 11% year-on-year. The company’s earnings per share (EPS) of €1.48 fell short of analyst expectations of €1.64, leading to a slight dip in the stock price by 1.15% to €68.70. Despite the earnings miss, revenues exceeded forecasts, reaching €912 million against the expected €869.94 million. According to InvestingPro data, Amundi trades at an attractive P/E ratio of 10.8x, suggesting potential value for investors. The stock currently trades near its Fair Value, based on comprehensive analysis available through InvestingPro’s exclusive valuation models.

Key Takeaways

• Profit before tax increased by 11% year-on-year to €458 million.
• Total revenues rose by 11% year-on-year to €1.2 billion.
• EPS missed forecasts, coming in at €1.48 versus the expected €1.64.
• Stock price declined by 1.15% following the earnings report.
• Continued strong performance in ETFs and Amundi Technology.

Company Performance

Amundi demonstrated robust growth in Q1 2025, with total revenues climbing to €1.2 billion, an 11% increase from the previous year. The company’s profit before tax also saw an 11% rise, reflecting strong operational performance. InvestingPro analysis reveals the company maintains excellent financial health with a score of 2.81 (GOOD) and impressive liquidity metrics, including a current ratio of 5.39. Amundi’s strategic focus on technology and ETFs contributed to this growth, with the Amundi Technology division experiencing a remarkable 46% year-on-year increase.

Financial Highlights

• Revenue: €1.2 billion, up 11% year-on-year.
• Profit before tax: €458 million, up 11% year-on-year.
• Net management fees: Increased by 8%.
• Cost-income ratio: Improved to 52.4%.

Earnings vs. Forecast

Amundi’s EPS of €1.48 fell short of the forecasted €1.64, marking a miss of approximately 9.8%. However, the company’s revenue of €912 million surpassed expectations of €869.94 million, reflecting a positive revenue surprise.

Market Reaction

Following the earnings announcement, Amundi’s stock price declined by 1.15%, closing at €68.70. This movement reflects investor concerns over the EPS miss, despite the positive revenue performance. The stock remains within its 52-week range of €55.20 to €76.00, suggesting that the market’s reaction was moderate.

Outlook & Guidance

Amundi is focused on strategic growth areas, including technology, Asia, and passive management. The company plans to unveil a new medium-term strategic plan in Q4 2025. Additionally, Amundi is maintaining €1.2 billion in surplus capital for potential mergers and acquisitions.

Executive Commentary

Nicolas Calcoun, Deputy CEO, emphasized the strength of Amundi’s diversified business model, stating, "Our sales and marketing drive confirms the value of our diversified business model and our long-term growth drivers." He also highlighted the increasing importance of ESG in Europe, noting, "In Europe, probably more than 90% of RFPs include an ESG dimension."

Risks and Challenges

• Exceptional corporate tax of €155 million due to a French tax surcharge.
• Potential volatility in global markets affecting asset management.
• Increased competition in the ETF and technology sectors.
• Macroeconomic pressures, including interest rate changes and currency fluctuations.

Amundi’s Q1 2025 results showcase a company in growth mode, with significant achievements in revenue and strategic initiatives. However, the EPS miss and subsequent stock dip underline the challenges of meeting market expectations. As Amundi looks forward to executing its strategic plans, investors will be watching closely for further developments.

Full transcript - Amundi SA (AMUN) Q1 2025:

Cyril Mayon, Head of Investor Relations, Amundi: Good morning to you. I’m Cyril Mayon, Head of Investor Relations of Amundi, and we’re here to present you the results of our first quarter twenty twenty five 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 we I’m here, as usual, with Nicolas Calcoun, our Deputy CEO as well as Aurelia Lecourtier, our CFO. And as a brief reminder, we obviously start the presentation with 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 off your 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.

Nicolas Calcoun, Deputy CEO, Amundi: 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 U. K, 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, M and D 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 €458,000,000 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, which increased almost by 8%. And last year’s acquisition of Alpha Associate on Exigo gave us an extra boost, adding around one percentage point to our revenue growth.

Our costs remain under control with a positive jaws effect on a further improvement in our costincome 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 charge 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, excluding 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 €31,000,000,000 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- long term assets, excluding the joint venture, was even higher at 37,000,000,000 a 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 U. S.

And Canada. This illustrates all the breadth of our expertise and our agility to ensure our various client needs are key assets in any market environment. Finally, we saw further success in our strategic pillars. Third party distribution first gathered €8,000,000,000 in this quarter in both ETF and active management, with most countries collecting net new money. In Asia, net inflows were also at €8,000,000,000 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 €10,000,000 in net new money, driven by commercial successes and innovations that broadens our range. To give you two illustration, our ETF stocks Europe six hundred gathered €1,300,000,000 in one month and passed 10,000,000,000 in asset under management. Another example, we have launched a new multi asset ETF range called Life Cycle 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 as a 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 our win of a major €21,000,000,000 mandate with the Peoples Pension, which is one of the largest pension funds in The U. K. This is an equity index mandate, integrating strict criteria strict climate criteria set by the pension fund.

It is the largest mandate ever won in The UK by Amundi. The U. K. 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 size in The UK in the past years.

The UK is one of 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 €49,000,000,000 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 and able to address a wide range of needs for institutional clients and third party distributors like wealth platform, 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 HGB.

These capabilities are helping us develop a strong client base, including many household names. We have gathered more than €30,000,000,000 in net new money from UK clients over the last twelve months. And assets managed on their behalf have almost doubled in three years. They represent now €66,000,000,000 well balanced between interior clients and third party distributors. Back to the mandate with the people expansion.

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 U. K, Nest and People’s Pension, and we can cover a large range of needs for these clients. So we are very confident that The U.

K. Market will continue to be a growth 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.

Aurelia Lecourtier, CFO, Amundi: Thank you, Nicolas, and good morning, everyone. I will now comment our Q1 activity and our financial results. So starting with our AUM. They reached 2,250,000,000,000 at the March. This was up 6% year on year, thanks to a positive market and currency effect of 53,000,000,000 driven by rally in Equity Markets, but more importantly, dynamic net new flows at $70,000,000,000 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 Forex effect was very negative at minus $26,000,000,000 because both the Indian rupee and the U. S. Dollar were down 4%. And second, our net inflows were at a very good level with 31,000,000,000 more than offsetting the ForEx effect.

Turning back to the first quarter and the European open ended fund market, it posted net inflows of CHF $221,000,000,000 in Q1. Passive management contributed $91,000,000,000 and active accelerated to $70,000,000,000 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 $37,000,000,000 and we can now move to our slide eight. So as Nicolas said, Amundi’s net inflows amounted €31,000,000,000 overall in Q1, which is the strongest quarter since 2021, with, as I said, an all time high medium to long term assets of €37,000,000,000 more than the whole of 2024.

The MLT net inflows were positive in Active Management at €6,000,000,000 driven mainly by bonds, which gathered €11,000,000,000 over the quarter 33,000,000,000 for passive management, thanks to the gain, as Nicolas said, of the Peoples pension mandate, but also to positive net inflows in ETFs for €10,000,000,000 Treasury Products recorded outflows of €8,700,000,000 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 second quartile with remarkable stability over time. Two forty four 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 on year as we strive to maintain a sustainably high level of investment performance to keep our client trusts, 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 6,000,000,000 in the quarter and they remain driven by third party distributors, as in previous quarters, where net inflows were very dynamic with 8,300,000,000.0, of which five in passive and two in active management. In Asia, our fully owned entities, which mean excluding JVs, we posted also record net inflows of $1,700,000,000 mainly in Hong Kong and Singapore. Partner networks continue to suffer from risk aversion.

First, the French networks recorded slight positive net flows at €200,000,000 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 $3,000,000,000 mainly coming from Multi Assets. And finally, positive at $300,000,000 thanks to the good momentum in new bond fund ranges, which raised $1,200,000,000 Moving now to Institutional segments. So, net inflows in these segments were high at €22,000,000,000 in Q1, with a sharp contrast between MLT assets and Treasury products. In MLT assets, net inflows amounted $33,000,000,000 Institutional and Sovereign investors contributed for $27,000,000,000 of which 21 related to the people’s pension mandate we already mentioned.

Group insurers were positive also at 5,000,000,000. And on the other side, treasury products posted outflows of 10,000,000,000, mainly due to a $12,000,000,000 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 $3,000,000,000 driven by South Korea at $3,000,000,000 mostly in MLT assets and China reaching $1,000,000,000 inflow, mainly in Treasury Products and MLT Assets, excluding the discontinued channel business. Our Asian JV, SBIMF, posted $1,000,000,000 of net outflows due to two elements: first, the seasonal redemption in treasury products 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.

So our total revenues amounted to $12,000,000 up 11% year on year. The integration of Alpha and Exigo contributed to this year on year growth. At constant scope, actually, our revenues were up 9%, and all sources of revenue grew in Q1. First, net management fees were up 8%. Then performance fees reached $23,000,000 up over 30% compared to Q1 twenty twenty four, and with $2,000,000 coming from Alpha Associates.

Technology revenues also continued their strong momentum, up 46% to $26,000,000 Half of this increase is from Exigo, which was, as you know, successfully integrated last November. And finally, our net financial income reached $40,000,000 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 jaws effect. Costs increased by 9% year on year versus our revenue growth of 11%, a two point difference.

And at constant scope, which means excluding Alpha and Exigo, 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 excluding the scope effect from our acquisitions, the cost 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 costincome ratio reached 52.4%, below our 2025 target, which is an improvement of 1% compared to Q1 twenty twenty four. 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 $28,000,000 compared to 29,000,000 in Q1 twenty twenty four. 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 58,000,000 And as mentioned by Nicolas earlier, the quarter is characterized by an exceptionally high level of corporate tax, CHF155 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 twenty five.

For Amundi, it is estimated at roughly a bit more than EUR70 million for the full year, but it will not be booked in a leaner way. That is why we had to book EUR 46,000,000 in Q1. And the rest of the surcharge will be spread over the year with approximately EUR 9,000,000,000 of surcharge per quarter. Excluding this surcharge, the effective tax rate would have been similar to that in Q1 twenty twenty four and our net income would have been close to $350,000,000 up 10% versus Q1 twenty twenty four. So to conclude, let me summarize the key takeaways for the quarter.

So first, our business activity was very strong, with net inflows of EUR 31,000,000,000 and record net inflows in medium to long term assets that reached EUR 37,000,000,000, 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 costincome 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 $4,800,000,000 And second, our surplus capital reached now $1,200,000,000 at the March. I will now hand back to Nicolas for concluding remarks before we take your questions.

And I thank you very much for your attention.

Nicolas Calcoun, Deputy CEO, Amundi: Thank you very much, Aurelia. As you can see, Amundi continued its strong momentum during the first quarter. Our sales and marketing drive confirms the value of our diversified business model and our long term growth drivers. And our agility allows us to accompany our clients in any market environment, thanks to our capability to innovate and create high performing solutions as well as to provide services covering an ever larger share of the savings value chain. In particular, at the win of the People’s Pension use rate, we offer a full range of responsible investment solutions in order to adapt to all our client requests.

In the months to come, we shall keep investing in our strategic growth and optimizing our cost base to adapt our platforms to the evolution of our client needs. That’s why we set ourselves the target of a customer optimization program by 30,000,000 to €40,000,000 to be achieved in 2026 in order to continue to finance future investments and to accelerate the reallocation of our resources towards our growth drivers. Looking in advance, we look forward to sharing a deeper deep dive on our high performing third party distribution business at an investor workshop, which is planned on the June 19 in London. I hope you all have it in your agenda. And looking further ahead, as we reach the end of the Strategic Emissions 2025 plan cycle, We plan to share with you our new medium term plan in the fourth quarter with further details to follow when it’s confirmed.

We are now at your disposal to answer any questions you might have. Thank you very much.

Cyril Mayon, Head of Investor Relations, Amundi: Thank you, Nicolas. Thank you, Aurelia. So it’s now we turn to the Q and A session. As usual, we will ask you to raise your hand, as some of you already have. And I will ask you to we’ll prompt you to open your mic so that you can ask your question and get the answer.

We start with Nick, Nicolas Herman from Citi.

Nick Herman, Analyst, Citi: Good morning. Thanks for the presentation and for taking my questions. Three questions from me, please. Firstly, on the interest from Europe, we’ve had a few managers now mention a structural shift in interest in into European assets. Presumably, you you’ve seen this too.

So just curious which products in particular do yourself do

Nicolas Calcoun, Deputy CEO, Amundi: you see

Nick Herman, Analyst, Citi: yourself winning assets from other managers in response to this kind of pickup in interest? Secondly, somewhat a similar ish question on but on ESG, so the the people’s pension mandate win was great to see. There have also been recent reports that New York pension funds could also drop managers without strong net zero commitments. And I guess it’s conceivable that there could be further funds that can make similar moves as well. So I guess, give given your very strong climate and ESG credentials, could this be the start of a few potential wins for you?

And the final question on on profitability efficiency, the 30 to 40,000,000 is about one percentage point of cost income. Is there any reason why we should not expect you to target less than 52% going for cost income going forward, please?

Nicolas Calcoun, Deputy CEO, Amundi: You very much for your questions. So your first question was around the potential shift of interest from U. S. To Europe. Indeed, that’s something we are seeing starting, by the way, in March mainly and continuing April, in particular, the ETF space, in particular, equity ETF.

Some outflows in ETF invested in U. S. Equities and more inflows going to European equities in ETF and, by the way, a little bit as well in active management. On your second question, which was on the on ESG and potential renewed interest, Ydin, I think the fact that some of our competitors, in particular, our U. S.

Competitors are going backwards in term of dedication to responsible investment solution, I clearly think that for a player, as I’m indeed, can be an opportunity. So TPP is a perfect example of that. But indeed, there could could be other opportunities. The most important reason is the fact that, at least in Europe, I’m not talking about The U. S, but in Europe and to a growing extent in Asia, the interest for, I would say, ESG solutions that can take different forms and different kind of involvement.

But globally, the interest from clients is still there, in particular, in the digital space. To give an illustration, when we look at the RFPs we receive from insured clients, I would say in Europe, probably more than 90% of them do include an ESG dimension, either on climate or on other issues. The form can be different, but they do 90% or more than 90% of them do include ESG considerations. And in Asia, it’s not the same extent, but it’s probably around 30%, thirty five % of the RFPs that we received that do include ESG dimension. So it’s clearly an opportunity for a player like M and And your third question was on the optimization program and the efficiency.

Just to restate that what we are trying to do is to have the means to continue to invest and to accelerate on investment in our growth drivers. And so we are not targeting it shows at EUR30 million to EUR40 million. It does represent the equivalent on one percentage point of costincome ratio, but we are not targeting to decrease by one percentage point the costincome ratio.

Cyril Mayon, Head of Investor Relations, Amundi: Thank you, Nick. The next question will come from Hubert, Hubert from Bank of America.

Hubert, Analyst, Bank of America: Great. Thanks for taking my questions. I’ve got three of them. Firstly, on M and A, Can you talk about how the M and A environment is today from your perspective? You have $1,200,000,000 of surplus capital.

Do you see more opportunities now just given the stressed environment where maybe targets are more willing to sell? Second question is, have you seen any change in sentiment from investors since early April? Any worsening of trend? Or is it pretty much the same as the first quarter? And lastly, on Mundi Technology, you’re targeting €150,000,000 for this year.

So even if you annualize the quarter, you’re still below the target. How confident are you to still get to this target? Or would you require more M and A to kind of get there? Thanks.

Nicolas Calcoun, Deputy CEO, Amundi: Thank you. Thank you very much, Herbert. First question on M and A. Our approach hasn’t changed. We clearly are looking at any opportunities that could help us accelerate our growth trajectory, which remain organic.

So nothing specific to announce today. But I think there’s on the market, as you know, there’s a trend around consolidation, and we expect it to continue. And we’ll continue to look at any opportunities as long as it makes sense, as long as this help us to accelerate our growth trajectory, as long as it makes sense from a financial standpoint with a satisfactory return on investment, above 10%, and as long as we are confident that we can execute any deal. And indeed, the fact that we have 1,200,000,000 of excess capital at the March give us clearly some capabilities, not a limit, but it’s clearly a strength to considerate any operation. So your second question was, yes, if there is a change in sentiment since April.

No, we are not seeing that for the moment. In fact, the first weeks of the month of April, basically, in term of inflows, see the continuation of the trends that we have been seeing over the last quarter, so no alert at all. And in term of asset under management, you probably will have provided some indication in the press release at on the April 8. So it was the point of the month where the after the strongest decrease in equity markets, our assets under management were only down by a

Cyril Mayon, Head of Investor Relations, Amundi: bit

Nicolas Calcoun, Deputy CEO, Amundi: less than 3% compared to March. And since then, we recovered a large part of it. On the last week, we were, in term of total assets under management, at this length at 2% below the level of March. So no significant impact of the markets due to the diversity of the business model on our AUM so far and, again, continued inflows in the business coming both from retail and institutional clients. I’m sorry, that was the third question.

Regarding Amundane technology, that’s true that we are not completely in line with the objectives we that were set for 2025, euros ’1 hundred and ’50 million. But clearly, we are making good progress on 46% compared to last year, half of it being organic, half of it coming from Mexico. So clearly, we are still a little bit far for this year compared to the objective we set, but I think the direction of travel is clearly a continued growth trajectory.

Cyril Mayon, Head of Investor Relations, Amundi: You, Hubert. Next question will come from Arnaud, Arnaud Giblaff from BNP Paribas.

Arnaud Giblaff, Analyst, BNP Paribas: Yes. Good morning, everybody. I’ve got three questions, please. First, can I start with Societe Generale? If I remember back to 2025, I think you renegotiated that contract a quarter or two ahead of time.

So I suppose we’re getting there. Any visibility on the ongoing discussions and what outcomes we could expect? My second question is on our alternative the alternatives. Are there any could you talk a bit about the the product launches you have in the pipeline, specifically around our alpha associates? Anything on the LTIP side?

Yeah. If you could discuss what what’s happening there. And my my third question is on the investments you’re planning on making. So, yeah, I think you you got into $3,040,000,000 of incremental investments to come. In which areas are you planning to do that?

So

Nicolas Calcoun, Deputy CEO, Amundi: first of all, on Societe Generale, existing agreements that were renewed twice in 2015 and 2020. So the current one are going until the end of this year. We are not yet at a moment where we disclose anything around the renewal, but we remain very confident that we will do so in the coming months because, first of all, the relationship with Generale is really excellent, and the satisfaction from the network is very high. And also, considering the fact that we have a mutual relationship with we are also the client of some services from Societe Generale, and we always discuss all the dimensions of our relationship at the same time. Regarding alternative and private assets, one point to remind is that our business is our alternative and real asset business is diversifying, but real estate still represent around half of the business.

And as you know, as for all the industry, the real estate business is suffering, so continuing to see some outflows but at a slower pace. In the meantime, we are developing on the rest of the business. And with Alfa Associates, there’s a good, I would say, a good momentum. We are talking about real estate sorry, real assets or new expertise. It sometimes takes time to materialize, but there’s a good health on the very healthy pipeline with their existing client base and with our historic M and D client base.

And regarding your last question regarding investments, it will be an areas of investment. It will be in all areas development of growth. So clearly, a continuation of what we have been doing over the recent period, in particular, in technology, in Asia, in passive management, in real assets and maybe also new areas that will be identified in our medium term plan, but we’ll be in a position to tell you more by the end of the year.

Cyril Mayon, Head of Investor Relations, Amundi: Okay. Thank you, Arnaud. The next question comes from Michael Werner from UBS.

Michael Werner, Analyst, UBS: Thank you for the presentation. Just a couple of quick questions from me, please. When it comes to the savings or the cost optimization, the 30,000,000 to $40,000,000 are you providing any insight as that’s a gross number. Are you providing any insight as to what the net number should be, I. E, how much you plan to allocate to investments?

Number two, just kind of going back to The U. S. To Europe rotation. Can you give us an idea of what you’re seeing or hearing from investors, particularly institutional investors about how they’re thinking about this, the timing of potential reallocations? And whether you’re seeing any retail investors also reallocating out of The U.

S. And into Europe? Thank you.

Nicolas Calcoun, Deputy CEO, Amundi: So on the first question, I will reiterate what I said. We it’s a real number for optimization measures that we are working on and will be implemented mainly next year. But the purpose of it is to reinforce our capacity to reinvest in growth areas in priorities of development, priority in term of growth. Regarding the allocation decision from our clients, not again, sorry, not much I can say. We are definitely seeing some investors going from away from partially from U.

S. Assets to European assets, clearly visible from institutional clients. In retail, I would say it’s a movement which is not mainly driven by, I would say, individual decisions taken by the end customer and retail clients but mainly by those who manage their money on their behalf, allocators, fund managers, fund allocator that change their allocation. And we expect it to continue. But clearly, something that has been visible since basically since the month of March, mainly.

Michael Werner, Analyst, UBS: Thank you, Nicolas. And then just one maybe quick follow-up. How do you see pipeline today versus where it was maybe three months ago? Thank you. The institutional pipeline I’m referring to.

Thanks.

Nicolas Calcoun, Deputy CEO, Amundi: Overall, the level of pipeline is very healthy and with, in particular, strong opportunities coming from the space of retirement. TPP has been a recent example. And coming from what you can see also in terms of reallocation is, as mentioned earlier, European or even Asian investors, industrial investors committed to either climate or responsible as a whole and reconsidering their investment and their the managers of their investments to take into account the commitment of the asset managers to responsible investment, which is clearly an opportunity for us.

Michael Werner, Analyst, UBS: Thank you.

Cyril Mayon, Head of Investor Relations, Amundi: Thank you, Mike. Next question from Angeliki from JPMorgan.

Angeliki, Analyst, JPMorgan: Hi, good morning and thank you for taking my questions. Just three for me, please. So first of all, just to come back to the discussion about excess capital and M and A. As I think back in 2022 when you presented your business plan, you had indicated that by the end of twenty twenty five, if you had not done any material M and A or if there was any excess capital, you would actually consider distributing that back to shareholders. So I just wanted to get an update on that and whether you still intend to distribute something extra if there is no deal announced by the end of the year?

Second question with regards to the international network flows. This is we had once again a quite big outflow there net of the BOC joint venture. Can you let us know what are the drivers behind the weakness we have seen in recent quarters? And also, what is your outlook with regards to the international network flows excluding VOC for the rest of the year, please? And lastly, with regards to the very strong Asia flows that we saw this quarter, 7,800,000,000.0, are those reflecting domestic focused funds, I.

E, assets in Asia, or do they reflect clients who are investing a bit more globally, perhaps in Europe and in The US as well? So

Nicolas Calcoun, Deputy CEO, Amundi: on the use of the excess capital, no change in the intention. And we still continue to believe that there could be opportunities that would make a lot of sense and would be the most efficient ways to use our capital or excess capital. But it’s not the case. We would distribute the excess capital. Regarding the international networks outflows, I would say, which are, I would say, unfortunately, in the continuation of what we have been seeing over the recent quarters, I think the results remain the same.

Aversion, competition from other products. It’s in particular, in Italy, we are still seeing some issuance of BTP products. And we are seeing, I would say, retail networks being challenged in the same space. But we are also seeing emerging new distributors. And for example, in again, talking about Italy, we are we have positive flows in third party distribution.

And going forward, probably, I would say we would hope to have a recovery, a progressive recovery. But the impact of the market evolution that we have been seeing recently would lead us to remain a bit cautious. We will see. Regarding Asia and the type of your question was around the type of funds, whether domestic or international. I would say in the joint ventures, it’s mainly domestic assets.

And it is domestic funds or domestic mandates, mostly invested in domestic assets. When you are talking about our development in, for example, in Hong Kong and Singapore, which has been very strong, I would say it’s more geared towards international diversified kind of products, investing globally, including in U. S. Assets, in Europe and U. S.

Or global products.

Hubert, Analyst, Bank of America: You.

Cyril Mayon, Head of Investor Relations, Amundi: Thank you, Angeliki. Next question is coming from Bruce, Bruce Hamilton from Morgan Stanley. Oh, sorry.

Bruce Hamilton, Analyst, Morgan Stanley: Hi there. Can you hear me? Perfect. Cool. Thanks.

So just a couple of questions from me. Firstly, on the kind of cost efficiencies. Can you just talk a little bit about how important AI, Gen AI is to all of this and where you’re finding the most productive use cases in terms of driving improvements? And then secondly, your European peer we just heard from sounded pretty upbeat about opportunities in active ETFs. I just wanted to get a sense of if you could remind us how you’re thinking about that, the size you are currently and what maybe products in the pipeline you have.

I think defense ETF, whether that’s active or not, I don’t know, but that would be helpful. Thank you.

Nicolas Calcoun, Deputy CEO, Amundi: So regarding your first question regarding artificial intelligence, it is clearly one of the areas we are investigating, and we launched quite a comprehensive program to, first of all, to establish our own secured capabilities and second, to, I would say, mobilize all our business lines to identify use cases and, I would say, efficient cost efficient use case. We are seeing several initiatives launched in many business lines, a lot around, I would say, complementing human intervention to automate part of the value chain. So we are seeing opportunities in, I would say, not that much for the moment in the investment space, to be honest, but more on operations, document marketing, middle office, control functions where we have several initiatives and that are progressively coming to maturity, I would say, and being completely deployed. Your second question was on Active ETF, which is clearly something we are looking at, and we clearly have the capabilities to do so. We, by the way, started the last year with a range of active ETF products for the French market for with an ESG dimension.

And the ESG dimension was actively managed and has been quite successful to meet the criteria of the PEROA in France, the Plan de Parne action, sorry. And we are looking at very pragmatically at any when it makes sense to develop new offers. Not specifically in defense. We indeed, we are in the process of we are about to launch progressively this summer some funds, which will be both probably in passive ETF and active management.

Hubert, Analyst, Bank of America: Great. Thank you. Thank

Cyril Mayon, Head of Investor Relations, Amundi: you, Bruce. I don’t think we have any other question. So if you want to ask a question again, please raise your hands and I will open your mic. No? I think we’ve been very efficient then.

So back to you, Nicolas and Aurelia, for concluding remarks.

Nicolas Calcoun, Deputy CEO, Amundi: Well, I just have to thank you participation at this call. And again, on a quite busy day, I understand. And we hope to see you all on the June 19 for workshop on third party distribution. Thank you very much.

Aurelia Lecourtier, CFO, Amundi: Thank you.

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