Slide 1: H1-2021 Results: Presentation to Financial Analysts
H1-2021 RESULTS PRESENTATION TO FINANCIAL ANALYSTS 28 JULY 2021
Slide 2: H1-2021 Results: Net income at €123.2m; RoATE at 13.5%
H1-2021 RESULTS: NET INCOME AT €123.2M; ROATE AT 13.5% 1 2 3 4 5 H1-2021 H1-2021 CAPITAL KEY TAKE-AWAYS APPENDICES HIGHLIGHTS RESULTS MANAGEMENT & OUTLOOK 2 H1-2021 RESULTS | PRESENTATION TO FINANCIAL ANALYSTS | 28 JULY 2021
Slide 3: Part 1: H1-2021 Highlights
coface PART 1 H1-2021 HIGHLIGHTS A
Slide 4: Coface reports €123.2m net profit in H1-2021; solvency at 191%
COFACE REPORTS €123.2M NET PROFIT IN H1-2021; SOLVENCY AT 191% Turnover reached €768m y-t-d, up 7.4% at constant FX and perimeter; Q2-2021 increased by 10.8% • Trade Credit Insurance premiums up 8.5% as activity recovery reflects economic rebound • Client retention at 92.4%; pricing impact is positi
Slide 5: Coface is fully supporting its clients as the economy recovers
COFACE IS FULLY SUPPORTING ITS CLIENTS AS THE ECONOMY RECOVERS COFACE’S WORLD GDP GROWTH FORECAST TOTAL TCI EXPOSURE (annual average, %) (in € bn) 5.6 4.3 4.3 550 3.2 3.0 3.0 3.3 3.2 2.5 2.7 2.5 500 +9.8% 2.3 450 400 -1.7 350 -3.5 300 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 FY-17 FY-
Slide 6: Build to Lead: continuing to invest for future growth
BUILD TO LEAD: CONTINUING TO INVEST FOR FUTURE GROWTH BUILD TO LEAD ACHIEVEMENT YEAR TO DATE TRADE CREDIT INSURANCE GROW SELECT SPECIALTIES • Continued to demonstrate increasing agility • Making significant investments in Information and resilience in the face of constantly business line: changing e
Slide 7: Build to Lead: embedding ESG in our strategy
BUILD TO LEAD: EMBEDDING ESG IN OUR STRATEGY OUR MAIN ACTIONS A RESPONSIBLE PLAYER A RESPONSIBLE EMPLOYER SUSTAINABILITY • Set a precise target for the improvement of • Rolled out the French gender pay equality • In France, set a reduction target of 3 grams the ESG rating of our investment portfolio
Slide 8: Part 2: H1-2021 Results
coface PART 2 H1-2021 RESULTS A
Slide 9: Turnover growth at 7.4%, driven by TCI premiums up 8.5%
TURNOVER GROWTH AT 7.4%, DRIVEN BY TCI PREMIUMS UP 8.5% 6.0% 7.4% In €m 768 Total revenue up 7.4% vs H1-2020 at constant FX 725 • Trade Credit Insurance1 increasing by 8.5% at constant FX and perimeter driven by past repricing and positive activity Gross Earned Premiums 639 (GEP) 599 • Services reve
Slide 10: Growing client activity and robust retention drive revenue growth
GROWING CLIENT ACTIVITY AND ROBUST RETENTION DRIVE REVENUE GROWTH Western Europe Northern Europe Central Europe Mediterranean & Africa 7.8% 7.9% 13.6% 9.8% 2.6% 2.4% 5.7% 7.0% 201 212 154 167 143 147 74 75 H1-20 H1-21 H1-20 H1-21 H1-20 H1-21 H1-20 H1-21 Growing new business, activity Repricing impac
Slide 11: Activity rebounds while new business and retention are resilient
ACTIVITY REBOUNDS WHILE NEW BUSINESS AND RETENTION ARE RESILIENT 86 production* 72 62 65 New production at €72m after a record high level in New H1-20 H1-18 H1-19 H1-20 H1-21 93.0% 93.0% 93.4% 92.4% Retention rate* Lower retention in a more competitive market H1-18 H1-19 H1-20 H1-21 2.3% effect* 0.2
Slide 12: Gross loss ratio decreased to record low at 29.5%
GROSS LOSS RATIO DECREASED TO RECORD LOW AT 29.5% Loss ratio before reinsurance and including claims handling expenses, in % 62.8 ► Gross loss ratio decreased by 29.4 points vs H1-20 driven by: 59.0 55.2 54.8 45.1* 44.4* 34.9 No large loss 29.5 42.2** 29.5 29.6 Low claims experience across regio
Slide 13: Continuing low loss ratio across all regions
CONTINUING LOW LOSS RATIO ACROSS ALL REGIONS Loss ratio before reinsurance, including claims handling expenses – in % 9%* 7%* 5%* Group North America Asia Pacific Latin America 63.7 72.3**** 51.8 57.9** 60.1*** 44.2** 43.4*** 45.8 48.6 29.5 39.1 28.8 35.9 23.6 21.8 13.2 FY-18 FY-19 FY-20 H1-21 FY-18
Slide 14: Loss ratio for the quarter stable at 29.6%
LOSS RATIO FOR THE QUARTER STABLE AT 29.6% Loss ratio before reinsurance (by quarter), including claims handling expenses – in % 9%* 7%* 5%* Group North America Asia Pacific Latin America 112.5 93.4 70.5 70.3 76.6 55.2 62.8 54.8 59.3 58.0 48.3 46.1 41.4 34.9 31.8 35.6 27.3 29.5 29.6 22.3 24.8 22.2 2
Slide 15: Growing revenues drive cost ratio down while investments continue
GROWING REVENUES DRIVE COST RATIO DOWN WHILE INVESTMENTS CONTINUE 10.9% 11.5% 176 184 184 In €m 166 174 165 38 40 42 External acquisition costs 36 39 Cost ratio before reinsurance, in % 40 (commissions) 34.1 32.5 36.0 33.7 31.2 138 128 144 135 142 126 Internal costs Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-
Slide 16: Reinsurance reflects low loss activity and public schemes
REINSURANCE REFLECTS LOW LOSS ACTIVITY AND PUBLIC SCHEMES ► Government schemes are in force in several countries for an estimated H1-20 H1-21 negative net impact of €24.9m in H1-21 Gross earned premiums 599.1 638.7 ► Premium cession rate is up by 8.8 ppts compared to H1-20, while Net earned premiums
Slide 17: Net combined ratio at 51.9% on record low loss ratio
NET COMBINED RATIO AT 51.9% ON RECORD LOW LOSS RATIO In % -36.8 ppts Net combined ratio 88.6 ► Net combined ratio improved to 51.9% (vs 88.6% in H1-2020) Net cost ratio 31.2 51.9 ► Cost ratio down 0.8 ppt showing good cost discipline 30.4 Net loss ratio 57.4 ► H1-2021 net loss ratio down by 36 ppts
Slide 18: Government scheme's impact on ratio
GOVERNMENT SCHEME’S IMPACT ON RATIO GOVERNMENT SCHEMES’ IMPACT ON RATIO (%) HALF-YEAR BY QUARTER (9.6) ppts (6.6) ppts (6.8) ppts (11.1) ppts (8.3) ppts (10.8) ppts In % In % 98.0 Net combined 91.4 Net combined ratio 84.2 ratio 31.7 77.4 61.5 Net cost 33.5 69.4 Net cost 51.9 ratio 28.5 61.8 ratio 27
Slide 19: Financial portfolio: stabilizing investment income
FINANCIAL PORTFOLIO: STABILIZING INVESTMENT INCOME €m H1-20 H1-21 Investment Real Estate Income from investment portfolio without gains on sales** 18.6 18.8 8% Gains on sales and impairement, net of hedging*** (0.9) (0.6) Equities 7% FX effect 1.3 1.6 Other (2.2) (3.9) Loans, 16.7 15.9 Deposit & oth
Slide 20: H1-2021 net income at €123.2m of which €66.9m in Q2-2021
H1-2021 NET INCOME AT €123.2M OF WHICH €66.9M IN Q2-2021 Income statement items - in €m H1-20 H1-21 Current operating income 57.1 171.6 ► Current operating income at €171.6m up mostly on lower loss ratio Other operating income and expenses (1.8) 0.4 Operating income 55.4 172.1 Finance costs (11.0) (
Slide 21: RoATE stands at 13.5%, up 8.7 ppts
ROATE STANDS AT 13.5%, UP 8.7 PPTS Change in equity 1,998.3 123.2 (23.4) (19.9) 1,996.2 (82.0) In €m IFRS Equity attributable Distribution to Net income impact Revaluatuion reserve Treasury shares, IFRS Equity attributable to owners of the parent shareholders (financial instruments currency translat
Slide 22: Part 3: Capital Management
coface PART 3 CAPITAL MANAGEMENT A
Slide 23: Solid balance sheet
SOLID BALANCE SHEET H1-2021 simplified balance sheet In €m 7,628 7,628 Goodw ill 233 & intangible assets 1,997 Shareholders’ ► IFRS 17 “Insurance contracts” equity Insurance inv estments 2,949 • Project progressing as planned 382 Financing liabilities (including hy brid debt) 1,881 Gross insurance ►
Slide 24: Robust solvency over time
ROBUST SOLVENCY OVER TIME H1-2021 estimated Solvency ratio above target range 203%* 205%** 205% (17.7 ppts ) Low sensitivity to market shocks market sensitivity tested through instantaneous shocks 191%** 191%** 5.1 ppts 191% (1.5 ppt ) 191% 175% 183% 186% 155% 30/06/2021 SCR cover (PIM) 191% 130% +1
Slide 25: Solvency required capital at 30 June 2021
SOLVENCY REQUIRED CAPITAL AT 30 JUNE 2021 Partial Internal Model 191%1 2,264 29 404 €m Operational risk 1,274 (149) 38 178 1,188 126 (115) Counterparty risk 926 178 1,830 339 Market risk 1,010 1,010 Tier 3 Non-life underwriting risk 771 Tier 2 Tier 1 SCR components Diversification Tax adjustments To
Slide 26: Part 4: Key Take-aways & Outlook
PART 4 KEY TAKE-AWAYS & OUTLOOK
Slide 27: Key take-aways & outlook
KEY TAKE-AWAYS & OUTLOOK Q2-2021 net profit reaches a new record, on the back of two key trends • Low level of bankruptcies across all regions • Continued strong operational performances Coface continues to support its clients in the economic rebound • Q2-2021 exposures are up 7.2%, close to pre Cov
Slide 28: Part 5: Appendices
coface PART 5 APPENDICES A
Slide 29: Key figures (1/2)
KEY FIGURES (1/2) Quarterly and cumulated figures Income statements items in €m - Quarterly figures Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 % % ex. FX* Gross earned premiums 301.2 297.9 298.1 307.2 312.1 326.7 +9.7% +10.9% Services revenue 69.3 56.3 59.7 61.3 65.9 63.4 +12.8% +10.3% REVENUE 370.5 354.2
Slide 30: Key figures (2/2)
KEY FIGURES (2/2) Revenue by region: quarterly and cumulated figures Total revenue by quarter - in €m Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 V% ex. FX* Northern Europe 81.5 65.5 74.1 76.5 82.2 84.7 +29.9% Western Europe 71.8 70.7 77.3 72.1 75.5 78.2 +16.5% Central Europe 37.6 35.9 33.5 36.1 36.6 38.8 +
Slide 31: Government schemes: main features as of 30 June 2021
GOVERNMENT SCHEMES: MAIN FEATURES AS OF 30 JUNE 2021 Ceded Ceded Renewed Country Type Eligible Policy holders Commissions Expired on premium claims until Top-up Domestic 31/12/2021 France Quota share Domestic 20% 20% 35% 30/06/2021 Domestic & Germany Guarantee 58.5% 90% 30/06/2021 co-Insured Italy Q
Slide 32: Total TCI exposure up 9.8%; emerging maintained at a stable share
TOTAL TCI EXPOSURE UP 9.8%; EMERGING MAINTAINED AT A STABLE SHARE Evolution of total TCI exposure1 by country of debtor H1-2021 total TCI exposure1 – Top 10 countries vs. others In €bn In % Germany 13.4% Dec-18 79% 21% 510 France Italy 36.1% Dec-19 79% 21% 537 10.4% USA Spain Dec-20 81% 19% 486 UK 9
Slide 33: Combined ratio calculation
COMBINED RATIO CALCULATION In €k H1-20 H1-21 ► Combined ratio before reinsurance Earned Premiums loss ratio before reinsurance (B) + cost ratio before reinsurance (C) Gross earned premiums [A] 599,087 638,715 (A) (A) Ceded premiums (237,957) (309,823) Net earned premiums [D] 361,129 328,892 ► Combin
Slide 34: Q2-21 results vs consensus
Q2-21 RESULTS VS CONSENSUS # of in M€ Consensus Q2-21 Spread Comment replies Total revenue 4 371 390 +19 Rebound in client activity Gross Earned Premiums 4 312 327 +15 Government schemes's full impact Net Earned Premiums 4 163 169 +6 NEP/GEP 4 52.4% 51.7% (0.7) ppt Government schemes full impact Net
Slide 35: Management team
MANAGEMENT TEAM GROUP CENTRAL FUNCTIONS Pierre BEVIERRE Nicolas de BUTTET Cyrille CHARBONNEL Human Resources Director Transformation Office Director Underwriting Director • 25+ years of experience in insurance & • 15+ years of experience in credit • 25+ years of experience in credit Xavier DURAND re
Slide 36: Corporate governance
CORPORATE GOVERNANCE Board of Directors Chairman Bernardo SANCHEZ INCERA Board member Age: 60 Independent directors Eric HÉMAR Isabelle LAFORGUE Nathalie LOMON Chairman & CEO Dir. Digital, Transformation Innovation Senior executive VP, CFO ID Logistics / Age: 57 AstraZeneca France / Age: 40 Groupe S
Slide 37: Financial calendar & investor relations contacts
FINANCIAL CALENDAR & INVESTOR RELATIONS CONTACTS Calendar Own shares transactions Next Event Date Own shares transactions Liquidity Buy-back Date LTIP TOTAL % Total of Voting Agreement (cancellation) 9M-2021 Results 28 October 2021 after market close (in shares) # Shares rights 30/06/2021 109,356 1,
Slide 38: 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 June 2021. This presentation includes only summary information and does not purport to be comprehensive. The Coface Group