Slide 1: 9M-2018 Results Presentation to Financial Analysts
9M-2018 RESULTS PRESENTATION TO FINANCIAL ANALYSTS OCTOBER 24TH, 2018
Slide 2: 9M-2018 Results: Net income at €98.2m; RoATE at 8.2%
9M-2018 Results: Net income at €98.2m; RoATE stands at 8.2% 1 2 3 4 9M-2018 9M-2018 KEY TAKE AWAYS APPENDICES HIGHLIGHTS RESULTS & OUTLOOK 2 9M-2018 RESULTS | PRESENTATION TO FINANCIAL ANALYSTS | 24 OCTOBER 2018
Slide 3: Part 1: 9M-2018 Highlights
coface PART 1 9M-2018 HIGHLIGHTS /
Slide 4: Coface reports a solid performance and launches additional €15m share buyback
Coface reports a solid performance confirming the relevance of its strategy and launches additional €15m share buyback programme Turnover reached €1,035.7m y-t-d, up 4.0% at constant FX and perimeter − Q3-2018 up 8.0% y-o-y and 4.7% excl. one-offs1 − Insured turnover and client retention at record l
Slide 5: Fit to Win execution: selective growth and efficiency initiatives
Fit to Win execution : continuing to drive selective growth and efficiency initiatives, while actively monitoring risks Actively monitoring portfolio risk Driving operational efficiency & service ► Continuing targeted underwriting actions: ► Launched Group sales force effectiveness program - Non-sto
Slide 6: Part 2: 9M-2018 Results
coface PART 2 9M-2018 RESULTS /
Slide 7: Turnover growth at 4.0% driven by credit insurance premiums
Turnover growth at 4.0% driven by credit insurance premiums 1.4% 4.0% Total revenue up 4.0% vs. 9M-2017 at constant FX and perimeter In €m 1,021 1,036 ► Trade credit insurance1 growing at 4.8% at constant FX in the first 9 months Gross Earned Premiums (GEP) 837 853 ► Growth driven by record client a
Slide 8: Growth acceleration in Q3-2018 driven by mature markets recovery
Growth acceleration in Q3-2018 driven by mature markets recovery and growth in client activity Western Europe Northern Europe Central Europe Mediterranean & Africa 0.8% 1.5% (0.6)% (0.6)% 7.5% 8.7% 6.6% 8.3% 230 277 213 228 260 211 94 101 9M-17 9M-18 9M-17 9M-18 9M-17 9M-18 9M-17 9M-18 Growth driven
Slide 9: Insured turnover and retention at record levels
Insured turnover and retention at record levels New production1 110 112 102 88 New business slowly recovering, reflecting selective growth strategy 9M-15 9M-16 9M-17 9M-18 Retention rate1 92.1% 89.7% 88.0% 88.6% Record/high retention in most regions 9M-15 9M-16 9M-17 9M-18 Price effect 1 (1.4)% Cont
Slide 10: Gross loss ratio at 46.5%, progressively normalising
Gross loss ratio at 46.5%, progressively normalising Loss ratio before reinsurance and including claims handling expenses, in % ► Gross loss ratio impacted by FX movements 51.8 57.8 54.2 50.3 46.5 (43.6% excl. FX impact) in Q3-2018 43.8 43.0 45.0 39.7 ► Good claims performance (past and new) in a mo
Slide 11: Improving mature market performance, controlling emerging markets volatility
Improving mature market performance, while controlling emerging markets volatility Loss ratio before reinsurance, including claims handling expenses – in % 9%* 7%* 5%* Group North America Asia Pacific Latin America 146.8 100.6 113.4 85.0 63.3 ** 51.4 56.3 49.0 53.8 69.2 51.0 43.8** ** 60.2 32.4 35.9
Slide 12: Internal costs remain flat, external costs growing with top line
Internal costs remain flat External costs growing with top line geography 5.1% 6.7% In €m Cost ratio before reinsurance, in % 171 175 167 168 169 External acquisition 39 40 40 38 44 costs (commissions) 34.7 35.9 37.4 * 35.7 34.8 35.7 37.0 35.6 * 128 127 131 131 131 Internal costs Q1-17 Q2-17* Q3-17
Slide 13: Reinsurance result reflecting low loss ratios and growing cession rate
Reinsurance result reflecting low loss ratios and growing accounting cession rate 9M-17 9M-18 Gross earned premiums 837.2 852.9 Net earned premiums 613.6 606.4 26.7% 28.9% ► Higher premium cession rate (underwriting years Premium cession rate 2017 and 2018) materialising in accounting numbers Gross
Slide 14: Net combined ratio at 79.0%
Net combined ratio at 79.0% (10.8) ppts. In % Net combined ratio 89.8 79.0 ► Net combined ratio improved to 79.0% 35.4 (vs. 89.8% in 9M-17) due to lower losses Net cost ratio 34.0 and improved reinsurance commissions ► Cost ratio down 1.4 ppt. as investments are Net loss ratio 54.4 fully financed by
Slide 15: Financial portfolio: stabilised yield despite low rates
Financial portfolio: stabilised yield despite low rates Investment €m 9M-2017 9M-2018 Real Estate 8% Income from investment portfolio without gains on sales 2 30.8 32.7 Equities Gains on sales 8.6 6.4 8% Investment management costs (2.4) (5.6) Bonds 64% FX effect 5.2 9.5 Loans, Other 2.5 (0.6) Depos
Slide 16: 9M-2018 net income at €98.2m, of which €35.4m in Q3-2018
9M-2018 net income at €98.2m, of which €35.4m in Q3-2018 Income statement items - in €m 9M-17 9M-18 ► Strong operating performance in 9M-2018 ► Restructuring charges lower than expected Current operating income 100.5 165.3 on good execution ► Operating income at 163.4m; of which €63.1m in Q3 Fit to
Slide 17: RoATE stands at 8.2% for 9M-2018
RoATE stands at 8.2% for 9M-2018 Change in equity In €m 98.2 (9.4) (34.0) 1 802.6 (52.9) 1 804.6 IFRS Equity Distribution to Net income impact Revaluatuion reserve Treasury shares, IFRS Equity attributable to owners shareholders (financial instruments currency translation attributable to owners of t
Slide 18: Part 3: Key Take-aways & Outlook
PART 3 KEY TAKE-AWAYS & OUTLOOK
Slide 19: Key take-aways & outlook
Key take-aways & outlook Solid results in Q3 and 9M-2018 demonstrate Coface’s ability to perform in a normalising risk environment − Economic environment is more volatile (protectionism, populism… still on the rise) − Trade credit insurance1 growing at 4.8% driven by client activity; new sales slowl
Slide 20: Part 4: Appendices
coface PART 4 APPENDICES /
Slide 21: Key figures (1/2)
Key figures (1/2) Quarterly and cumulated figures Income statement items in €m Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 % % ex. FX Quarterly figures Gross earned premiums 282.2 283.4 271.6 272.5 278.4 282.3 292.2 +7.6% +9.2% Services revenue 66.1 60.0 57.9 61.2 65.6 58.7 58.5 +1.2% +1.6% REVENUE 34
Slide 22: Key figures (2/2)
Key figures (2/2) Revenue by region: quarterly and cumulated figures Total revenue Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 V% ex. FX by quarter - in €m Northern Europe 79.8 75.1 74.7 74.2 79.0 73.2 76.2 +1.9% Western Europe 73.1 69.3 68.5 69.8 74.8 68.4 69.6 +1.5% Central Europe 31.9 30.9 31.0 34.
Slide 23: Loss ratio of the quarter at 46.5% (43.6% excl. FX impact)
Loss ratio of the quarter at 46.5% (43.6% excl. FX impact) Loss ratio before reinsurance, including claims handling expenses – in % 9%* 7%* 5%* Group North America Asia Pacific Latin America 94.1 ** ** 79.4 63.5 65.8 43.0 50.3 39.7 45.0 46.5** 38.7 37.8 39.0 26.6 9.8 31.1 15.9 -6.4 -2.9 -20.4 -7.9 Q
Slide 24: Combined ratio calculation
Combined ratio calculation In €k 9M-2017 9M-2018 ► Combined ratio before reinsurance Earned Premiums (B) (C) loss ratio before reinsurance + cost ratio before reinsurance Gross earned premiums [A] 837 182 852 876 (A) (A) Ceded premiums (223 616) (246 482) Net earned premiums [D] 613 566 606 394 ► Co
Slide 25: Q3-18 results vs. consensus
Q3-18 results vs. consensus # of in M€ Consensus Q3-2018 Spread Comment replies Total revenue 6 337 351 +14 Revenue increase driven by mature markets, Gross Earned Premiums 6 279 292 +13 high retention and higher client activity Net Earned Premiums 6 199 208 +9 NEP/GEP 6 71.6% 71.1% (0.5) ppt Higher
Slide 26: Financial Calendar & investor relations contacts
Financial Calendar & investor relations contacts Calendar Own shares transactions Own shares transactions Next Event Date Date Liquidity LTIP Buy-back Agreement (cancellation) TOTAL % Total of Voting (in shares) # Shares rights FY-2018 Results Feb. 11th, 2019 after market close 30/09/2018 90,534 764
Slide 27: Important legal information
Important legal information IMPORTANT NOTICE: This presentation has been prepared exclusively for the purpose of the disclosure of Coface Group’s results for the period ending 30 September 2018. This presentation includes only summary information and does not purport to be comprehensive. The Coface