Amundi S.A. (AMUN) Earnings Call Transcript & Summary

Good morning, everyone, and welcome to Paris and the presentation of our Q3 and 9-month results for 2024. I'm joined by our 2 hosts, Deputy CEO, Nicolas Calcoen; and CFO, Aurelia Lecourtier. In a moment, they will present the highlights and the results for our Q3 results. But before we do this, unfortunately, I will have to do a bit of housekeeping. First, as you will notice in the documents, we have a disclaimer. So please read it. I won't go through it as now, but obviously, it's there. And as regards to logistics, this is a video call. So please open your camera. And you will be able to ask questions after the introduction and the presentation by Nicolas and Aurelia. Please raise your hand. I see that some of you already did. And we will open your mic, and then you will be able to ask your questions and do any follow-up that you wish. But without further ado, Nicolas, the floor is yours.

Thank you very much, Cyril, and good morning to all. It's a pleasure to see you today. Thank you for joining us as we present our third quarter and 9 months 2024 results. As usual, I will briefly comment on some of the highlights of the quarter and then leave the floor to Aurelia, who will detail our activity and results before we take your questions. So this last quarter allowed us once again to demonstrate Amundi's healthy growth potential. First, financial growth with a strong increase in both our revenues and results, reporting, in particular, a 9 months net income of over EUR 1 billion for the first time. Second, this is also reflected in the growth momentum of our inflows, which are again well diversified in terms of client segments, in terms of expertise, in terms of geography. And third, strategic development, in particular in ETFs, Third-party distribution, Asia or Technology & Services in line with the priority we defined in our medium-term plan. So let's start first with our assets under management. They reached EUR 2.2 trillion, an all-time high, and they are up by 11% over 1 year. While there's obviously a significant market effect, this figure also reflects more than EUR 55 billion of net inflows on 12 months. In terms of financial results, now our net profit in the third quarter was up 16% versus the third quarter of last year and reached EUR 337 million. This strong growth originated from the very top line of the P&L, the revenues, which also grew by double digit. And it was, as always at Amundi, amplified by our trademark: our operating efficiency. This positive jaw effect resulted in an improved cost/income ratio to 52.9%, in line with our strategic target for 2025. And of course, we also saw the positive effect of our fast-growing JVs on our net income. Regarding our business activity, as I said, our clients have entrusted us with an additional EUR 55 billion to manage in the past 12 months and EUR 35 billion since the beginning of the year. This demonstrates our capacity to innovate and to adapt our product offering to their needs and their approach to risk. Inflows were also positive for the third quarter with EUR 14 billion, excluding the exit of low-income insurance mandate that we, you remember, had announced in the third quarter. What is particularly encouraging is that these inflows continue to be driven by our strategic priorities. I will look more closely in a minute to our performance in ETFs, in Fixed Income and Technology & Services in this next slide. But first, I wanted to focus on 2 areas of strategic growth here that we already developed in the second quarter. First, third-party distribution with our clients, we saw EUR 7 billion of net inflows again with these clients. And these inflows came from all the regions that we cover where we are present and across all asset classes. We also continue to see strong inflows in Asia, driven by the success of our Indian JVs with SBI, but also and very significantly as well by our direct presence in Japan, in Singapore, in Hong Kong and also in China through our institutional business. And finally, as you know, we have been very active this year -- active this year in M&A. Alpha Associates was integrated in the second quarter, as you remember. And our partnership with the U.S. manager, Victory Capital is on track for closing towards the end of the first quarter of '25 with the process of regulatory approvals, gathering of client consents progressing well. Before I hand over to Aurelia, I just want to talk briefly about 3 growth drivers. First ETFs. First, fixed income, which is a business line we presented our dedicated workshop last year on technology and services. So first, ETF. As you can see, our ETF franchise exceeded EUR 250 billion in assets under management at the end of September. Net inflows have reached EUR 17 billion since the beginning of the year. And with EUR 8 billion in the third quarter alone, we were the second largest asset gatherer in the European ETF market this quarter. Inflows are very well diversified across equity and fixed income products with also a strong focus on responsible investments, Europe investments which represented more than 1/3 of our inflows during this quarter. We continue also to expand our range to offer investors, both institutional and retail, a highly diversified and competitive toolbox. This includes, for example, products like the Amundi ETF Stoxx Europe 600, which was the best-selling European equity ETF during this quarter. Now fixed income. We also continue to develop our fixed income platform where we are clearly the European leader. With close to EUR 1.2 trillion in assets, this platform has clearly the size, the teams, the tools and the innovation capability to meet our client needs. These solutions gathered overall EUR 14 billion of inflows in the third quarter and EUR 46 billion in the 9 months across both active and passive management, mainly active. And bond strategies, including in particular, target maturity funds were particularly successful. They benefit from client appetite for investment solutions that offer both attractive returns and security. And last element I wanted to point out, Technology & Services. Here as well, we are experiencing a strong growth. Technology revenues were up by 42% compared to the third quarter of last year and 28% for the 9 months of 2024. We have accelerated our investment, and we continue to expand our client base, which is progressively increasingly diversified across banks, pension funds, insurers and asset managers. It's also increasingly diversified by geography. And particularly, we recently announced our first client in the United Kingdom for our Alto technology platform, Thomas Miller Investment, a U.K. asset manager. Finally, on the Service side, our Fund Channel fund distribution platform has exceeded at the end of September, EUR 490 billion, which is a new milestone on the path to our '25 target of EUR 600 billion. In particular, during this last quarter, we signed a new large distribution contract with ING in Germany. So I now leave the floor to Aurelia, who will go into more details about this growth.

Thank you, Nicolas, and good morning, everyone. First, I will give a quick overview of our market conditions to set the context of the quarter. So as you can see, the overall market effect versus Q3 last year on our net management fees was positive, thanks to both an equity rally and supportive bond markets. However, when compared to 2021, the reference year of our medium-term plan, the effect is almost neutral with positive impact of equity markets offset by higher rates. Moving to the next slide. The market of open-ended funds and ETFs in Europe continued to recover with inflows of EUR 213 billion for the quarter. But European investors remain risk averse with first flows that are still far from the level of 2021, inflows still driven by passive and treasury products and active inflows that remain modest and mostly driven by fixed income. Moving to the next slide. We see that Amundi performed well in this context. Our assets under management reached an all-time high of EUR 2.2 trillion at the end of Q3, an increase of 2% over the quarter and 11% over 1 year. On a 12-month basis, the market effect totaled almost EUR 176 billion, while over the same period, we gathered positive flows totaling EUR 55 billion despite European market headwinds. Moving to the next slide. We can see now our Q3 inflows. So in Q2, we announced the exit from a large low-income European insurance multi-asset mandate, which represented EUR 12 billion to be recorded this quarter. So adjusting for this exit, Q3 net inflows reached more than EUR 14 billion, of which EUR 9 billion in MLT assets, EUR 5 billion from our JVs when treasury products were flat. MLT flows were positive across all areas of expertise, passive, active, structured product and real estate, all client segments and all major markets, France, Italy, Germany, Asia and the U.S. Bonds were the most successful expertise in active with EUR 11 billion inflows as in previous quarters. Moving to the next slide. The activity was underpinned by our investment management performance. As you can see, more than 70% of our open-ended fund AUM were in the first and second quartile. 257 of Amundi funds are rated 4 or 5 stars, following Morningstar and 81% outperformed their benchmark over 5 years. These KPIs have been consistently strong quarter-on-quarter. And it shows that we strive to maintain high levels of performance to earn our clients' trust. We can now move to our client segment, starting with retail on this slide. So you see in Q3, we posted net inflows of more than EUR 6 billion. This was the result of various trends. First, a strong performance in third-party distribution, as highlighted by Nicolas, with close to EUR 5 billion in net inflows, driven mostly by ETFs and treasury products. Partner networks activity was flat overall. French network continued to see risk aversion due to competition from other savings products and from a renewed interest for euro contracts. Treasury products recorded inflows in our French networks. When we look at our other networks, in Italy, the market still suffers from competition from sovereign bonds and outflows in multi-asset were partially offset by structured products in both UniCredit and Crédit Agricole Italy's networks. Sabadell in Spain continues to stand out with net inflows of EUR 0.4 billion on the quarter, thanks to the success of our structured and treasury products as well as of our target maturity funds. Moving now to Institutional segment. MLT assets, excluding the insurance mandate I was mentioning earlier, posted net inflows close to EUR 8 billion. They were positive across all subsegments with EUR 4 billion in institutional and sovereign, EUR 2 billion from insurers mandate, thanks to the continued recovery of euro contracts in France, I was mentioning, EUR 1 billion in corporate and employee savings, thanks to the success of our short-term bond strategies for corporate clients. Treasury products posted net outflows of EUR 5 billion due mainly to seasonal withdrawal from a large institution, which already partially came back in October. And finally, on the next slide, we can see our Asian joint venture that collected EUR 5 billion on the quarter with flows driven mainly by SBI MF in India that collected more than EUR 6 billion, mostly in MLT assets. Looking at China, ABC CA, like our majority JV with BOC, posted outflows and concerning ABC CA, mostly due to the Chinese business. It has to be noted that the JV recorded positive flows in open-ended mutual funds. Let's move now to our financial results for the quarter, starting with revenues. As you can see, revenues reached EUR 862 million this quarter, up by more than 10% compared to Q3 last year and driven by high level of activity and favorable markets. Net management fees were up by 9% year-on-year, in line with the increase of our average AUM. Performance fees almost doubled year-on-year at EUR 20 million and were down compared to Q2 due to expected seasonal effects. The slight -- and then sorry, Technology revenues grew by 42% year-on-year. Moving now to the cost side. So this revenue growth was, as Nicolas said, complemented by a good operating efficiency, resulting in a positive jaws effect with costs increasing by 7% and revenues growing by 10%. In Q3, our costs were mainly driven by 3 major elements: First, the consolidation of Alpha Associates since Q2. Second, the increase in bonuses related to the growth of our revenues and our operating profit. And third, the accelerated investment in our strategic priorities, namely additional resources to develop Alto to increase Amundi technology revenues and further expansion of our Asian commercial footprint. Our cost/income ratio at 52.9% is in line with our 2025 target and stays at the best level of industry. This leads us to our adjusted net income for Q3. The adjusted net income is, as you can see, up by more than 16% year-on-year at EUR 337 million. Our gross operating profit increased for close than -- close to 14%, thanks to healthy revenues and performance fees. And growth is also underpinned by the contribution of our JVs, up by 37% year-on-year and representing now close to 10% of our adjusted net income. Adjusted earnings per share was EUR 1.65, up 16% as well. And now we can have a look at our 9 months results. So on a year-to-date basis, adjusted net income grew double digits by 10% year-on-year. And moreover, it is the first time that our adjusted net income passes the EUR 1 billion mark in the second quarter of year. The trends are the same as for Q3, healthy growth -- healthy revenue growth, positive jaws effect, further income -- cost/income ratio improvement and strong contribution from our JVs. Adjusted earnings per share in 9 months was EUR 4.91, up 10% like our net income. Before I hand over to Nicolas, we wanted to highlight 2 topics. First, the annual Amundi employee capital increase, which was once again a success this year, showing a strong commitment from our staff. Indeed, more than 2,000 employees at Amundi have subscribed in more than 15 countries. The total amount raised is EUR 36 million, and we will book a charge of EUR 12 million before tax in our Q4 to reflect the discounted issue price of the shares. New shares created represent less than 0.4% of our capital. So the dilution effect of this operation on EPS will be very limited. Second, as you may know, the French government has submitted to parliament as part of the 2025 finance bill, an exceptional tax contribution on the profits of large companies in France for '24 and '25. Amundi is among the upper category of turnover for fiscal purposes and will therefore be affected. Based on the annualized 9 months results and if the bill is adopted, obviously, we would expect an additional tax charge of between EUR 60 million and EUR 70 million for the fiscal year 2024. That will be fully accounted in our fourth quarter this year. Based on the same net profit amount, the impact for '25, the second year of the exceptional contribution would be between EUR 40 million and EUR 50 million. To conclude, let me just maybe quickly come back on the results of the days. The key takeaway from the quarter and the 9 months is growth. Growth coming from a very healthy top line, amplified by our operating efficiency and also growth coming from our JVs that have increased by half over the past 2 years, showing strong evidence of the successful development of our partnerships, namely in Asia. And now I hand over to you, Nicolas, for a few concluding remarks before we take your questions.

Thank you. Thank you very much, Aurelia. Just a quick words to, I would say, reinforce again our key messages for this quarter. First, as you can see, Amundi enjoys once again a high level of business activity and profitability with AUM at record level, very strong growth in net income, improved cost/income ratio. Second, we made further progress towards our '25 strategic ambitions with a very strong growth in ETF, in third-party distribution in Asia, in Technology & Services. And third, probably most importantly, by always putting clients at the heart of our strategy and by continuing to develop the areas of expertise that primarily seek to meet their need, we are ideally positioned to seize growth opportunities in the saving industry. And so now, we are now at your disposal to answer any questions you might have.

Thank you, Nicolas. Thank you, Aurelia. So as Nicolas said, we are now ready for questions. We will start by Arnaud, who was, I think, first to raise his hand. Arnaud, you can reactivate your mic, I think. Yes.

Yes. Can I ask 3 questions, please. First, if you could start with the ETF flows. They seem to be concentrated in some of the core products. We estimate that it's roughly about half of the management fee versus your book -- the average book management fee. Is that something you could confirm for us? My second question is your partnership networks, particularly in Italy. I was wondering if you could confirm whether or not there are any penalty fees included in the revenues paid from some of your partners because they're not fulfilling the share of AUM flows that they're obliged to give as per the contract? Is that something you can confirm or not? And my third question is on Alpha Associates and private markets in general. Could you talk a bit more about the -- any product launches that might be coming up? Anything you might be excited about? Any momentum there? And in that light, given the activity we're seeing more broadly amongst your larger -- the very large traditional asset managers seeking to acquire more into the private market space. Is that something that you could consider as, I suppose, as a priority beefing up through M&A, your presence in private markets?

Thank you, Arnaud. I'm not sure to around this -- whether I understand your first question on ETF. I understand perfectly the 2 others. But the first one, I'm not sure we got it.

You said, well, I think your Stoxx 600 is amongst your highest inflows, and that's roughly a 10 basis point margin versus your back book of 20 basis points. I'm just wondering if I zoom out and look at all the flows that you -- yes.

Okay. Okay. So I understand the first question on the margin on the ETF business. It's slightly above 10 bps. Of course, from one product to another, whether we are talking about something very vanilla or something more niche. The difference can be significant, but let's say, it's a bit more than 10 bps. Regarding your second question was about partnerships in Italy and potential penalty, nothing significant in the numbers we are talking about. No penalties. And regarding private assets and in particular, Alpha, it's obviously a very important area of development. And as you know, the acquisition of Alpha in a few months ago was a significant reinforcement in that regard. We have been working over the last months very strongly to ensure that we have a good connection between the Alpha teams and our sales and marketing teams, designing, adapting the -- educating our sales force, adapting the marketing materials, thinking about new ideas and new development indeed. So for the moment, we -- it didn't materialize in new inflows yet, but I'm sure it will come very soon in the quarters to come. And yes, it does include innovation. They are launching regularly new products. And maybe one important aspect to point out something we have been working with our existing, I would say, Amundi teams and Alpha teams is to design retail product, leveraging on our global capabilities in multi-management across, I would say, the spectrum of private assets. And we're also taking advantage of the new opportunities coming in particular in France from the low industry there, green industry low, if I may translate that require for retirement product or for some portfolio management product to include a minimum proportion of private assets. And so we have been working to leverage on this new opportunity, I would say, to be in a position and we are in a position to propose both in retirement products, especially in savings products in France and in DPM portfolios, a significant proportion of assets in private assets through products that have been just recently approved by the authorities, both French AMF and the CSSF in Luxembourg.

Thank you, Arnaud. The next question will come from Hubert Lam from Bank of America.

I've got 3 of them. Firstly, on your third-party inflows of EUR 6.8 billion, can you give us the split between active and passive? Or is it just mainly on passive in that number? That's the first question. The second question is on -- can you discuss the implications of UniCredit distribution if they -- UniCredit ends up buying Commerz. Would this be positive as it expands the distribution to the Commerzbank network if it's done? Or does the agreement not extend to acquisitions? Just a little bit of clarity around that. And lastly, with rates coming down, are you expecting a shift from treasury assets and savings to more passive and active funds by retail investors? I know you don't see it yet in the Q3 numbers, but when do you think this could happen? Like what's the typical time lag? Or at what level of interest rates could we start to see a switch from savings to more actively managed products or managed products?

Thank you. I will take your question on UniCredit and Commerzbank and your last question and maybe Aurelia answer on third-party distribution. So on the potential -- on the bid for UniCredit and Commerzbank, obviously, not comment on that. But what I can say is that it has no impact on our distribution contract. They are designed to be protected. At the same time, there's no automatic expansion to potential new network to be acquired by UniCredit. So I would say it's neutral. And regarding flows and potential move to more riskier products, that's what I think was your question. Indeed, we don't see for the moment in the -- as I can see in the third quarter, it was not really visible except probably for third-party distribution, where already we have more flows and more flows in particular in active management. But yes, as the trend of the decrease in short-term interest rates is moving and probably at a faster pace than what we could have anticipated a few months ago, we are expecting to see progressively a return of appetite of retail clients to riskier product to equity and multi-asset products, were up until recently, it has been very much on treasury and fixed income.

So, yes, sorry, coming to your question on the third-party and the flows. So we have plus EUR 6 billion on the quarter. Inside, you have EUR 4.5 billion in MLT. So mostly driven by passive. As you said, passive is about half of the inflows -- the total inflows. But not only we see some positive flows in active for EUR 0.9 billion this quarter and also a bit of positive flows in structured products, EUR 0.6 billion in the third-party segment. So quite diversified and positive in many areas of expertise for the third-party distribution network.

The next question comes from the line of Bruce. Bruce, you can open your mic. Bruce Hamilton from Morgan Stanley.

Just on the flows into kind of retail, obviously, money markets dominated at about EUR 5 billion across French international networks and third party. Can you give us some indication? I assume that's going to be quite margin dilutive versus the 35, 40 bps that you're generally charging in retail, but it would be helpful to know, is that well below the, say, 10 bps you were getting through that new ETF contract, for example? Secondly, just to understand, I guess, your investment performance looks pretty good and yet your flow experience in retail looks worse than the industry. So I'm just trying to understand that. Is it largely a function of geographical and distribution? So UniCredit not really selling your products, France being very subdued versus the rest of Europe? I'm just trying to understand why you're having a worse experience in active than the rest of the industry. And then finally, just an ask, Cyril and Tom did a great job in being very transparent about the mix of retail flows when we speak to them. But in your disclosure, it would be helpful to highlight within retail, what is treasury and what is not treasury because obviously, the headline number of EUR 6 billion, whatever billion looks a good deal better than the reality in terms of the sort of active or long-term flows in my opinion.

I understand the first and the third question are a bit connected. Money market funds in retail have a lower margin than purely active product. But the difference is probably not what you have in mind. Treasury product in retail typically have higher margin that when they are sold to institutional clients, corporate clients that have access to shares, that have lower fees, institutional shares where people need to invest a very significant amount, but the fees are lower. And so to illustrate, we are talking about fees in retail that are around or above 20 bps. So it's not -- it's slightly dilutive, not that dilutive. That's why to connect to make the connection with your third question, we consider that and we have no problem to give more details. But making this -- especially in this space, making this distinction between long-term assets and treasury is not totally relevant in the new market context and new interest market context that we are seeing for the last 2 years. Your second question on our sales performance in retail compared to the industry. I'm not sure it's really worse with more than EUR 6 billion inflows on a single quarter. I think it's a good one. But obviously, from one geography to another, it's different. And indeed, I would say, the fact that we are more exposed in terms of stock to markets such as Italy, in particular, where there's always a strong competition from BTPs or to some extent, France as a consequence. But at the same time, as you can see, we are developing and growing very fast in other markets in the rest of Europe and in particular, in Asia. So this -- we are really, I'm convinced, compensating this by our development in new areas and new geographies of development.

And maybe to complement on the treasury product inside the retail segment. If Thomas and Cyril did the job, it's fine just to remind for everyone the figures, EUR 6.3 billion inflows on the retail side. And inside this, we have EUR 5 billion of treasury. In French networks, actually, the flows were mainly driven by treasury this quarter. And in third party, as I mentioned before, it's part of -- but not only -- it's less than half of the inflows coming from money markets and it's rather flattish for the international networks. So all in all, except for France, flows, especially in third party are also driven by active, passive and overall MLT assets, not only money markets.

And to just give a slight complement on French networks, we are talking about the third quarter where the launch of new structured product is generally a bit slower. So a lot of money is in, I would say, waiting for new launches parked, I don't know if that's’ the right expression in treasury products.

The next question comes from Deutsche Bank, Sharath, you can open your mic, I think.

I have 3 questions, please. First is on M&A. I just wanted to understand your willingness to do a larger deal than the bolt-ons that you have been associated with you in recent. I ask this in the context of your excess capital as well as recent news flow of one of the larger insurance companies possibly putting their third-party asset management business for sale. Of course, I do not expect an answer on this deal specifically, but generally wanted to understand your stance or willingness to do a bigger deal outside of what is possible through your excess capital. That is the first one. Second one is on India. Very encouraging to see the performance there. I wanted to understand the sustainability of the flow picture and maybe your confidence to maintain your market share around the 18% levels, a good gap versus the second player there. That's the second one. And the third one is on China. I was a bit surprised to see net outflows in ABC China in 3Q despite an improving market backdrop. Maybe if you could explain the reasons behind this and maybe outlook? And also a clarification on the channel business. So when do you see outflows completely coming to an halt.

Thank you. On M&A, our approach has not changed. We consider that we should and we are contemplating any opportunities that help us to accelerate our growth. And as long as it's in line with our strategic priorities and as long as this help us to reinforce our footprint both in terms of expertise, it was the example of Alpha Associates very recently or Lyxor 3 years ago for ETF in terms of geographies with a strong focus on international diversification. And so -- and of course, as long as it helps us to accelerate our strategy, -- and as long as from a financial point of view, it meets also our criteria. So it means that we can consider, as we have done recently, bolt-on acquisitions, but we also can consider larger deal as we also have done in the past a few years ago. So if there are opportunity of that type, we will contemplate them. Of course, our excess capital around EUR 1 billion clearly allow us to finance 100% through this excess capital bolt-on acquisition. For bigger deal, we would have, if there is an opportunity to look at other structure. But being a listed company, as again, illustrated by the acquisition of Pioneer a few years ago, we would be in a position to contemplate larger deal. Regarding India, the question related to confidence about maintaining our market share. Yes, definitely and hopefully to continue to increase the market share as the JV has been doing in the past because all the ingredients for it to be successful are there. Of course, the market has a very strong potential, but the JV through a very strong and good relationship between the 2 shareholders, a very strong teams, a very large set of expertise across all management styles, we are confident that -- and very efficient distribution capabilities through, of course, the networks of SBI, through other partnership with our distributors and more and more directly, including online, there's a very strong capacity to develop and to continue, again, to maintain or even to capture market share. Last question was about outflows in China with ABC. To be noted that on mutual funds, we had positive inflows. So it's more in the insurance space that we had some -- the JV had some outflows during this quarter in a market context, which I would not qualify as really positive. There's a lot of uncertainty in the past, in the last quarter, there was still a lot of uncertainties. There was a strong risk aversion from clients. So I wouldn't honestly qualify as a context as a favorable one over the last month. And regarding the channel business, maybe you have the number.

Yes. Nicolas, yes, we suffered from outflows on the channel business. The outflows were really low in Q1 and Q2, a bit more for Q3, EUR 0.9 billion outflows in Q3. We still have EUR 3.8 billion of channel business in the JV that should come out from now on until 2027. So this is to have in mind -- to keep in mind. And just one figure to complement what has been said on our activity in China, maybe a figure for ABC CA still, we collected year-to-date EUR 5 billion on mutual fund in this JV, showing that the activity is depending on the quarter, but is somehow positive when coming to mutual funds.

And channel business. And to remind, it's for regulatory reasons that it's in extinction and it has very, very, very low margin. So no significant impact on the P&L.

Thank you, Sharath. Next question from Angeliki from J.P. Morgan. Angeliki, you can open your mic.

Four questions from my side as well, please. So first of all, on the French retail network flows, thank you for the color on the treasury products there. It looks like the underlying sort of medium to long term is a negative number, is an outflow number. And if I also look at sort of the multi-asset, excluding the institutional mandate redemption, multi-asset outflows were quite strong at EUR 4.1 billion. So I was wondering where those French retail sort of outflows ex money market driven by multi-asset? And can you give us some color with regards to sort of the behavior behind those weak flows in France? Are they -- were they because of the French elections and uncertainty around sort of taxes and the budget or something else? Second question with regards to Italy and the Italian networks. Given that you said Sabadell has had inflows, I mean, I can only assume that the UniCredit network has been an outflow this quarter again, and we have seen outflows for the past few quarters. Are there any signs of improvement there as we move into 2025? And are the Italian retail outflows driven by risk aversion? Or is there anything specific there with regards to the UniCredit relationship that will be difficult to repair? Then third question on management fee rate. On a blended basis, we estimated at 17.7 bps, which is the same level as the previous quarter. There doesn't seem to be any impact from sort of lower margin inflows this quarter. Can I please check that there are no one-offs within the management fees this quarter or anything else that could inflate the margin? And last question on the French tax surcharge. Can I check -- what is your basic assumption there? Do we assume that it will fall out after the next couple of years? Or is there a risk that it actually becomes permanent?

Thank you. On French retail networks, as Aurelia explained, on this quarter, we had a very strong flows in money market funds and some outflows on long-term assets. Yes, there are still some outflows in multi-asset products, still also even if it's slowing down in real estate. Over the previous quarter, it was compensated by structured product. As I said on the third quarter, there was a more limited number of launch of structured product. Regarding Italy, yes, there are some outflows. As you can see on market data, it's not specific to our partner networks. I think it's something you see across the board from -- in the retail Italian market. So nothing specific to our retail partners. And it's in the context of risk aversion and competition from BTPs in particular. So on this quarter, not yet sign of a recovery, we'll see in the future. Regarding management fees margin, there's no one-off, absolutely no one-off in this third quarter. So margins are globally stable. As always, our margin -- the average blending margin is a consequence of the pace of evolution of our various businesses in terms of expertise, but also in terms of clientele. You can see that we had good flows in retail, where on the contrary, we lose this EUR 11.6 billion mandate -- insurance mandate, which had a low margin. And the last question -- on the tax surcharge, it's -- the project bill is based on exceptional contribution only for '24 and '25. That's the only thing I can say at this stage.

Thank you, Angeliki. Next question is coming from Mike from UBS.

Let me ask some questions here. Just 2, please. First, on financial income, we saw a decline from the run rate in recent quarters as well as year-on-year. I was just wondering what was happening there? I know you include NII in there, but rates seem to remain relatively elevated throughout the quarter. So I was just wondering about the decline. And then second, just a quick question. In the presentation, you highlight within Alto winning a U.K. mandate, Thomas Miller. And then I think that was on Page 5. On Page 16, you talked about one new international client being signed in Q3, which is based in Norway. So I was just wondering if Thomas Miller was signed previously or how that works?

Maybe a quick answer on financial income. The evolution are based -- first, we start to see the impact of rates coming down. And second, also impact of the dividend that explain the slight decrease from -- between Q2 and Q3 as coming to financial income.