expertise small & mid caps europe
TRANSCRIPT
European Small & Mid Caps Expertise
« Think big, buy small » London Investment Day
June 2017
Caroline Gauthier Co-Head Small & Mid Cap Europe
Senior Portfolio Manager
Reserved to institutional investors
Why European Equities now?
Small & Mid Cap 2
Supportive economic environment : Positive economic surprises, in contrast to the US.
Strong EPS momentum : Very good Q1 earnings season (best in 10 years) and ongoing earnings upgrades.
Political risks are falling in Europe, while rising in the US/EM
Inflows into European equities could surprise on the upside despite recent surge in volumes. International
investors are still under exposed to Europe.
Source: Citigroup, Amundi Research
Economic surprise indices Active investors are not yet back on European Equities
Oil price
collapse
Brexit
Trump
France
1st round
ECB Q1
announced
Why Small Cap now ?
Small & Mid Cap 3
Macro correlation : Smid well positioned to benefit from the upturn in the economic recovery
Stronger EPS momentum
Valuations relative to large caps still attractive compared to long-term average
Supportive political environment with election of pro-business president in France. Planned cut in corporate tax rate more
favourable for small caps because of higher domestic exposure
Macro-sector distribution: MSCI EMU vs
MSCI EMU Small Cap Higher European Exposure
49% 61%
51% 39%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Large SMID
International
Europe
56%
20%
23%
48%
30%
22%
Cyclicals
Defensive
Financials
MSCI EMU LARGECAP
MSCI EMU SMALLCAP
Source: Amundi, Exane
Global recovery is supportive for SMID
Source: Amundi, Factset May 2017 4
Improving macro sentiment drives Small Cap
performance … …and Outperformance vs Large cap
Small & Mid Cap
65
75
85
95
105
115
125
80
100
120
140
160
180
200
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17
MSCI EMU Small Cap - Price TR Relative to Euro STOXX 50 (LRebased)
65
75
85
95
105
115
125
135
-60%
-40%
-20%
0%
20%
40%
60%
80%
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17
MSCI EMU Small Cap - % Change 1 Year (L)
EPS momentum strong enough to support the rerating
5
US profits 53% of Europe’s since 2007
Source: UBS, Amundi, Factset
EMU Small EPS vs US Small EPS and Returns
0
20
40
60
80
100
120
140
160
180
200
220
240
260
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
EPS MSCI EMU Small CAP EPS Russell 2000
MSCI EMU Small Cap Russell 2000
Small & Mid Cap
50
100
150
200
250
05 06 07 08 09 10 11 12 13 14 15 16
STOXX Europe Small 200 - Price TR (Rebased)STOXX Europe Large 200 - Price TR (Rebased)STOXX Europe Small 200 - NTMA Median EPS (Rebased)STOXX Europe Large 200 - NTMA Median EPS (Rebased)
Ann. Perf SC: 6,4%
Ann. Perf LC: 3,8%
EPS CAGR SC: 3,3%
EPS CAGR LC: -1,2%
+200%
+150%
5%
6%
7%
8%
9%
10%
15,00% 16,00% 17,00% 18,00% 19,00% 20,00% 21,00%
An
nu
alized
Retu
rns
Annualized Risk
Small caps
Mid caps
Large caps
Source: Amundi, Factset. Data based on MSCI europe daily.
Small Cap : An attractive risk/return profile
Source: Amundi, Factset
* There is no guarantee on capital or performance. Given for indicative purposes only and may change without prior notice, within the
limits stated in the prospectus Past market behaviours do not prejudge future behaviours.
Views of investment team are subject to change.
6
EPS growth and performance Annualized risk/return profile over 20 yrs - Europe
Higher performance, lower volatility
Small & Mid Cap
Small Cap: a structural opportunity for diversification
Small & Mid Cap 7
A broad and deep investment universe
A dynamic and changing universe (IPO, M&A …)
A universe full of unique opportunities
• Niche players with strong leadership
• « Pure players » not represented in the large cap segment
• Domestic players as well as Global players
• Lower coverage by brokers, meaning investment opportunities
• M&A targets
M&A, still a strong performance driver for SMIDs
Source: Amundi, JPM May 2017. 8
12 Takeover Bids in
our funds in 2015..
…6 in 2016
…5 in 2017
Target Bidder Date Premium
DMG Mori (All.) DMG Mori Seiki (Jap.) feb-15 19%
Audika William Demant feb-15 39%
Sorin Cyberonics feb-15 14%
Ansaldo Hitachi feb-15 9%
NextRadio TV Altice Jul-15 31%
Italcementi Heidelbergcement Jul-15 60%
Hellermann Tyton Delphi Automotive Jul-15 44%
DelClima Mitsubishi Electric Aug-15 85%
LEG Immobilien Deutsche Wohnen Sept-15 13%
Montupet Linamar Sept-15 15%
Valtech Siegca Dec – 15 39%
USG people Recruit Dec – 15 31%
Bolzoni Hyster-Yale April-16 16%
Saft Total May-16 38%
Kuka Midea May-16 36%
FMC Technip May-16 Merger of equals (~18% impact)
Ausy Randstad June-16 28%
BP Norway Det Norske June-16 Exchange offer +11% to NAV
SLM solutions GE Aviation Sept-16 38%
Zetes Panasonic Dec - 16 17%
Zodiac Safran Jan-17 26%
Pfeiffer Vaccum Busch Jan- 17 4%
Stada Bain & Cinven Avril-17 49%
Epigenomics Blitz (CFIC) April -17 44%
Drillisch United Internet May-17 Merger of Telecom operations
Small & Mid Cap
Our Key Success Factors
9
Access
Convictions
Experience
• Amundi, 1st Asset Manager in Europe :
• Close and regular access to companies ( ~800 visits p.a.)
• Large network of research and liquidity providers
• Alpha generation through Stock Picking
• Unconstrained process focused on quality
• High level of Active Share
• 5 Analysts/Portfolio Managers
• 21 years experience on average, from microcap to midcap
• 2.5 bn€ under management including 40% of institutional mandates.
Patrice Piadé
Amundi Fds Equity
Euroland Small Cap
Amundi Actions PME
Caroline Gauthier
Equity - EuroZone Small &
Medium Companies
Small & Mid Cap
Best Woman European Equity
Portfolio Manager
Top 20 Female Portfolio Manager
worldwide by CNBC
Amundi Fds Eq Euroland Small Cap – strong 10 years outperformance
Source: Amundi. Past performance is no guarantee of future returns. Gross performance in EUR to 28/04/2017 of the
IEC Share class. Morningstar rating overall, Lipper ranking as of 30/12/2016.. Reference index: MSCI EMU Small Cap
since Oct 2010 (before that date FTSE Eurobloc 04/2009-10/2010, HSBC Smaller Euro Block 09/2004-04-2009). Sub-
fund launched 24/06/2011 (share class IEC). Please refer to the Prospectus and KIID.
10
Caroline Gauthier
Emmanuel Robinet
Patrice Piadé
PMs :
Lipper Ranking:
2nd quartile
over 5 years
AUM in Fund (€m): 311
Small & Mid Cap
26.7%
-19.2%
33.5% 31.3%
4.8%
28.7%
-1.0%
14.3%20.8%
-23.3%
23.9%
33.9%
3.8%
24.3%
3.3%
13.4%
2010 2011 2012 2013 2014 2015 2016 2017 YTD
AFE Euroland SC MSCI EMU SC
0
20
40
60
80
100
120
140
50
100
150
200
250
300
350
400
450
Sep-04 Nov-07 Jan-11 Feb-14 Apr-17
Gross Excess Return Benchmark Gross Performance
Gross performance in EUR as
of 28/04/2017YTD 1 year 3 years 5 years
Annualised since
inception
(24/09/2004)
Portfolio 14.3% 21.0% 45.7% 133.2% 12.5%
Benchmark 13.4% 22.0% 39.9% 123.1% 9.6%
Excess Return 1.0% -1.0% 5.8% 10.1% 2.9%
Risk Indicators YTD 1 year 3 years 5 years Since inception
Portfolio Volatility - 15.0% 17.0% 16.0% 20.0%
Benchmark Volatility - 14.0% 17.0% 16.0% 20.0%
Ex-post Tracking Error - 3.0% 3.0% 4.0% 5.0%
Portfolio Information Ratio - -0.3 0.5 0.2 0.6
Our Structural Growth Thematics
11
Structural Growth
Thematics
Ageing Population
Automa-
tion
Internet /
Digitaliza-
tion
Environ-
mental regulation/
Energy Efficiency
Outsour-cing
EM consump-
tion
Small & Mid Cap
Company Profile:
Growth Catalysts:
Conviction – Mega Trend – NEMETSCHEK
Source: Factset, May 2016. Views of the investment team may change. All trademarks
and logos used for illustrative purposes in this document are the property of their
respective owners.
NEMETSCHEK GROUP is a leading global provider of BIM
(Building Information Modelling) software for the AEC (Architecture,
Engineering and Construction) sector with a mainstay of revenues in
Europe. NEMETSCHEK's business model generates a solid
operating cash flow.
Sustainable growth rate supported by the increasing BIM penetration (even
though BIM is only used on around 20% of projects, 80% of construction
companies intend to implement BIM processes in the next 3 years) >>
support from regulation.
EPS CAGR 2016-2018: 21% - PE 17 : 39x
Stock price performance since 2011
EPS Trend – Historical & Estimated
Software - Market cap: 2.3 BEUR
New 3D and 4D solutions to drive the adoption.
M&A strategy to develop the product portfolio and geographical mix.
i
12 Small & Mid Cap
-10
10
30
50
70
-0,20
0,30
0,80
1,30
1,80
2011 2012 2013 2014 2015 2016 2017 2018EPS Price
Biographies (1/2)
Source: Amundi
Florence Bannelier
Caroline Gauthier
Co-Head of Small & Mid Caps, Senior Portfolio Manager (32 years of experience)
Co-Head of Small & Mid Caps, Senior Portfolio Manager (20 years of experience)
Florence Bannelier is the PM Amundi Funds Equity Europe Small Cap. She joined Amundi in August 2015. She was previously a European Small and Mid Cap
PM at HSBC Global Asset management (2001-2015) and before that she was the European Investments Manager (Small and Large Caps) for Neuflize
Gestion (ABN AMRO group), (1989-2001). She also worked for Axa Investment Managers (1988-1989), and CCF Gestion (1985-1987). She holds a Master’s
degree in Economics and Finance (Institut d’Etudes Politiques de Paris), a Master’s degree in business law (University Paris 2 Assas) and is a Certified
European Financial Analyst and member of SFAF (French Society of Financial Analysts).
Patrice Piadé
Portfolio Manager (20 years of experience) Patrice Piadé is the co-PM of Amundi Funds Equity Euroland Small Cap, of Amundi Actions PME and Amundi Microcaps Europe. He joined Amundi in 2007 as
a Small & Mid cap Portfolio Manager. Prior to this he was a sell-side analyst on Mid cap equities at Exane BNP Paribas (2000-2007) and Detroyat Associés
(1997-2000). He holds an Engineering degree from ESIM, a Masters in Technology and Innovation Management from Paris Dauphine University and is a
member of SFAF.
Caroline Gauthier is the co-PM of Amundi Funds Equity Euroland Small cap (since 2008) and PM of institutional mandate on Europe Small cap. She is also
the co-PM of Amundi Actions PME and Amundi Microcaps Europe (since 2011). She has been a Small & Mid caps PM since 2007. She joined Amundi in 2000
as a Buy-side analyst on Small & Mid Caps. She was formerly a Sell-side analyst on Mid cap equities for ING (1997-2000). She holds a Masters of Finance
from Paris Dauphine University and is a graduate and member of SFAF. Caroline received the title of the “Best Woman European Equity Portfolio Manager”
and won the European Funds Trophy 2016. She was also ranked 13th best female portfolio manager worldwide by CNBC in October 2016.
14 Small & Mid Cap
Biographies (2/2)
Source: Amundi
Pauline Abadie-Toffier
Emmanuel Robinet
Portfolio Manager (19 years of experience)
Portfolio Manager (14 years of experience)
Pauline Abadie-Toffier is the co-PM of SG Actions Europe Midcap (since January 2015) and PM of institutional mandates (since 2013). She
joined the team in October 2013 after 7 years as a Buy-side analyst (Commodities). Before this, she was a sell-side analyst on Energy for Ixis
Securities (1999-2007), and a Small & Mid Cap analyst for Bankers Trust (1998-1999). She is a graduate in Business Administration from
EBS (Paris), holds a Masters in Finance from University of Wollongong (Australia) and is a graduate and member of SFAF.
Emmanuel Robinet joined the Small & Mid Cap PM team in May 2015 and is the Co-PM of AF Equities Euroland Small Cap and SG Actions
Europe Midcap. Before joining the team, he was a European Equities PM in Etoile Gestion, Amundi Group (2013-2015), a balanced PM for
institutional clients for Amundi (2008-2013), responsible for managing Eurozone Equities within mandates. He started his career as a
European Equities and Derivatives Dealer for SG Asset Management (2003-2008). He is a graduate in Finance from Audencia (French
Business School) and a graduate and member of SFAF.
15 Small & Mid Cap
Amundi Funds Equity Euroland Small Cap: Key information
16
Amundi Funds Equity Euroland Small Cap
Management company Amundi Luxembourg S.A.
Investment manager Amundi
Custodian CACEIS Bank Luxembourg
Min. recommended period 5 years
All Investors Institutional Distributors Italian GPF, UCITS, UCIs or mandates
authorised by the Board
All investors through networks in the
UK & Netherlands
AED AEC AU C IEC IED SEC FEC MEC REC
Reference currency EUR EUR USD EUR EUR EUR EUR EUR EUR
ISIN Code LU0568607385 LU0568607203 LU1049754705 LU0568606817 LU0568606908 LU0568607468 LU0568607542 LU0568607039 LU0945156379
BLOOMBERG Ticker EESCAED LX SOGESCA LX AMEEAUC LX SOGESCB LX AMESIED LX EESCSEC LX SOGESCF LX SOGESCJ LX AEELREC:LX
Share categories Distribution Accumulation Accumulation Distribution Accumulation
Minimum initial subscription 1 thousandth of share USD 500 000** 1 thousandth of share -
Frequency of NAV calculation Daily
Cut off for dealing times Luxembourg Dealing days before 2pm***
Max. initial charge 4.50% 2.50% 3.00% - 2.50% 4.50%
Max. annual management fee 1.70% 0.80% 2.10% 0.70% 0.80%
Annual administration fee 0.40% 0.25% 0.40% 0.35% 0.40%
Performance fee 20% max of the cumulative performance above that of reference indicator (MSCI EMU Small Cap NR)
Max. conversion fee 1.00%
Max. redemption fee None
* Only for distributors authorized by Board of Directors
** Or equivalent in another currency
*** Or, as the case may be, an earlier cut off time applicable by the relevant distributor
For more detailed information, please refer to the Prospectus
Small & Mid Cap
Disclaimers (1/2)
17
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Consideration should be given to whether the risks attached to an investment in the Sub-Funds are suitable for prospective investors who should ensure that they fully understand the
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This document does not constitute an offer to buy nor a solicitation to sell in any country where it might be considered as unlawful, nor does it constitute public advertising or
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Small & Mid Cap
Disclaimers (2/2)
18
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Small & Mid Cap