Slide 1: H1-2017 Results
H1-2017 RESULTS PRESENTATION TO FINANCIAL ANALYSTS JULY 28TH, 2017
Slide 2: Coface H1-Results: Operating income up 17.5%, net income €20.2m
Coface H1-Results: Operating income up 17.5% and net income at €20.2m Improving guidance for 2017: net loss ratio 3pts better, at below 58% 1 2 3 4 5 H1-2017 H1-2017 CAPITAL KEY TAKE AWAYS APPENDICES HIGHLIGHTS RESULTS MANAGEMENT & OUTLOOK 2 H1-2017 RESULTS | PRESENTATION TO FINANCIAL ANALYSTS
Slide 3: Part 1: H1-2017 Highlights
coface PART 1 H1-2017 HIGHLIGHTS /
Slide 4: €20.2m net profit driven by continued improvement in loss ratio
€20.2m net profit driven by continued improvement in loss ratio H1-2017 highlights Turnover reaches €691.7m, down (0.5)% at constant FX and perimeter; Q2-2017 up 1.2% y-o-y − Mature markets growing by 2.1% and lower decline in emerging markets − Insured turnover growing in all regions in Q2 Net loss
Slide 5: Fit to Win progressing well
Fit to Win progressing well Updates STRENGTHEN RISK MANAGEMENT IMPROVE OPERATIONAL EFFICIENCY IMPLEMENT DIFFERENTIATED & INFORMATION & CLIENT SERVICE GROWTH STRATEGIES Invested in information quality Streamlining organizations Driving sales efficiency in mature markets and data tools − implemented e
Slide 6: Part 2: H1-2017 Results
coface PART 2 H1-2017 RESULTS /
Slide 7: Revenue growing in Q2-2017, driven by client activity
Revenue growing in Q2-2017, driven by client activity (3.5)% (4.1)% In €m 0.1% (0.5)% 717 691 692 ► Total revenue down (0.5)% vs. H1-2016*, including a slightly positive FX impact Gross Earned Premiums (GEP) 566 566 566 Q2-2017 revenue up by +1.2% vs Q2-2016* ► Pricing remains negative but is offset
Slide 8: Growth in mature markets, lower decline in emerging markets
Growth in mature markets, lower decline in emerging markets Western Europe Northern Europe Central Europe Mediterranean & Africa (14.7)% (13.4)% (2.0)% (2.0)% 2.4% 0.0% 4.9% 5.0% 0.8% 2.3% 167 158 175 142 155 166 141 63 61 H1-16 H1-16 H1-17 H1-16 H1-17 H1-16 H1-17 H1-16 H1-17 ex. SEGM* Accelerating
Slide 9: High retention rate and strong volume effect but new business still slow
High retention rate and strong volume effect but new business still slow New production1 88 83 82 New business progressing in all mature markets 71 except for Germany Driving selective underwriting in emerging markets (Mexico, Turkey…) H1-2014 H1-2015 H1-2016 H1-2017 Retention rate1 91.0% 90.5% 88.2
Slide 10: Risk action plans clearly paying off on backdrop of improving economy
Risk action plans clearly paying off on backdrop of improving economy Loss ratio before reinsurance and including claims handling expenses, in % 70.1 67.6 61.8 57.8 ► Loss ratio improvement mainly driven by 61.9 54.2 56.0 Asia and North America ► Other regions performance stable H1-2016 H1-2017 Q2-2
Slide 11: Loss ratio improvement mainly driven by Asia and North America
Loss ratio improvement mainly driven by Asia and North America, other regions continue to perform Loss ratio before reinsurance, including claims handling expenses – in % 9%* 7%* 6%* Group North America Asia Pacific Latin America 146.8 100.6 113.4 85.0 91.6 63.3 56.0 56.3 57.6 51.4 59.9 60.2 47.6 51
Slide 12: Continuing to drive tight cost controls
Continuing to drive tight cost controls Quarter impacted by Italy tax one-off 3.5% 2.9% 1ex. one-off in Italy: 3.3% 1 2.9% 1 In €m 6.9% 6.6% 336 348 External acquisition 176 costs (commissions) 75 78 165 166 169 172 €6.0m Italy 6 one-off 39 41 37 36 39 €6.0m Italy 6 one-off Internal costs 261 264 12
Slide 13: Reinsurance result driven by lower claims and higher cession rates
Reinsurance result driven by lower claims and higher cession rates H1-2016 H1-2017 ► Higher premium cession rate (underwriting year 2017) will progressively materialize in accounting numbers Gross earned premiums 565.7 565.6 (+3.0ppts in H1-17) Net earned premiums 432.8 415.5 ► Reserves relating to
Slide 14: Net combined ratio down -1.5ppt vs H1-2016
Net combined ratio down -1.5ppt vs H1-2016 In % (1.5)ppts Year-to-date net combined ratio -1.5 ppts mainly driven by lower losses Net combined ratio 95.2 93.7 ► In the light of H1-2017 net loss ratio improvement, Net cost ratio Ex. SEGM 34.4 35.5 guidance is now set at below 58% for the full year ►
Slide 15: Financial portfolio: slight increase of investment income
Financial portfolio: slight increase of investment income Keeping a diversified and proactive investment strategy Investment €m H1-2016 H1-2017 Real Estate 7% Income from investment portfolio 2 20.2 29.3 Equities 3 21.5 20.7 7% Income from investment portfolio without gains on sales Investment manag
Slide 16: H1-2017 net income at €20.2m
H1-2017 net income at €20.2m H1-2016 Income statement items - in €m H1-2016 H1-2017 ex. SEGM* Current operating income 53.5 41.3 47.4 ► Improving operating performance vs. recent quarters (+17.5% y-o-y*) Fit to Win investments & restructuring expenses - - (0.8) Other operating income and expenses (1
Slide 17: RoATE stands at 2.6% for H1-2017
RoATE stands at 2.6% for H1-2017 Change in equity in €m (5.8) 1,749.3 1,755.2 (20.4) 20.2 0.1 IFRS Equity Distribution to Net income Revaluation reserve Treasury shares, IFRS Equity attributable shareholders impact (financial instruments currency translation attributable to owners of the AFS) differ
Slide 18: Part 3: Capital Management
coface PART 3 CAPITAL MANAGEMENT /
Slide 19: Solid balance sheet
Solid balance sheet H1-2017 simplified balance sheet €m ► Coface meets the criteria to apply temporary 7,217 7,217 Goodwill 213 exemption of IFRS 9 application1 & intangible assets 1,749 Shareholders’ − the deferral applies to Coface’s insurance equity business Insurance investments 2,821 381 Financ
Slide 20: Robust solvency over time
Robust solvency over time H1-2017 estimated Solvency ratio in target range Low sensitivity to market shocks market sensitivity tested through instantenous shocks 150% (0.2) ppt (3.1) ppt 160% 30/06/17 SCR cover (Std) 148% +1.6 ppt 148% H1-2017 148% +100 bps Interest rates 143% 140% 120% 1 +100 bps S
Slide 21: Solvency required capital at 30 June 2017
Solvency required capital at 30 June 2017 Standard model 148% 2,016 Operational risk 21 €m - Client, product and business practices - Employment practices and workplace safety, etc. 410 1,415 (233) 1,364 Counterparty risk 34 222 - Fixed income default risk 130 (41) 222 - Reinsurance default risk, et
Slide 22: Part 4: Key Take-aways & Outlook
PART 4 KEY TAKE-AWAYS & OUTLOOK
Slide 23: Key take-aways & outlook
Key take-aways & outlook H1-2017 operating profit up 17.5% y-o-y − Net combined ratio down 1.5ppts vs. H1-2016 − Improvement driven by loss ratio, especially in Asia and North America − Economic environment provides tailwind − Fit to Win progressing well Solvency − Estimated solvency ratio1 at 148%,
Slide 24: Part 5: Appendices
coface PART 5 APPENDICES /
Slide 25: Key figures (1/3)
Key figures (1/3) Quarterly figures Income statements items in €m - 2016 figures ex. SEGM* Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 % % ex. FX Gross earned premiums 288.5 277.2 275.8 273.6 282.2 283.4 +2.2% +1.9% Services revenue 64.5 60.8 58.5 59.0 66.1 60.0 (1.2)% (1.8)% REVENUE 353.0 338.0
Slide 26: Key figures (2/3)
Key figures (2/3) Cumulated figures Income statements items in €m - 2016 figures ex. SEGM* Q1 2016 H1 2016 9M 2016 FY 2016 Q1 2017 H1 2017 % % ex. FX Gross earned premiums 288.5 565.7 841.5 1,115.1 282.2 565.6 (0.0)% (0.7)% Services revenue 64.5 125.2 183.8 242.8 66.1 126.2 +0.7% +0.2% REVENUE 353.0
Slide 27: Key figures (3/3)
Key figures (3/3) Revenue by region Total revenue - by quarter - in €m Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 V% ex. FX Northern Europe 83.4 74.7 76.8 72.4 79.8 75.1 +0.6% Western Europe - ex. SEGM* 72.4 68.9 66.0 66.5 73.1 69.3 +2.1% Central Europe 30.9 30.4 30.0 30.0 31.9 30.9 (0.9)% Medi
Slide 28: Sharp improvement in Asia, partially offset by Western Europe normalization
Sharp improvement in Asia, partially offset by Western Europe normalization Loss ratio before reinsurance, including claims handling expenses – in % 9%* 7%* 6%* Group North America Asia Pacific Latin America 169.7 164.5 128.5 98.4 83.6 84.0 83.2 84.5 70.1 67.6 61.8 60.7 61.5 57.8 54.2 54.3 54.5 47.5
Slide 29: Combined ratio calculation
Combined ratio calculation Net Earned Premiums Operating expenses H1-2016 H1-2016 In €k Notes H1-2016 H1-2017 In €k Notes H1-2016 H1-2017 ex. SEGM* ex. SEGM* Gross earned premiums A 12 565,740 565,740 565,582 Commissions - General external expenses 14 -75,188 -75,188 -78,248 Ceded premiums 15 -132,9
Slide 30: Management team
Management team GROUP CENTRAL FUNCTIONS CEO Xavier Durand — 30+ years of international experience in regulated financial services Working for Coface since 2016 CFO & Risk Director General Secretary Chief Operating Officer Strategy & Business Carine Pichon Carole Lytton Valérie Brami Development Dire
Slide 31: Corporate governance
Corporate governance Board of Directors Laurent MIGNON Chairman CEO of Natixis Non independent members Daniel KARYOTIS Jean ARONDEL Jean-Paul DUMORTIER ► BPCE ► BPCE ► BPCE Anne SALLE MONGAUZE Isabelle RODNEY ► BPCE ► BPCE Sharon MACBEATH Olivier ZARROUATI Eric HÉMAR Independent members ► Tarkett ►
Slide 32: Financial Calendar & investor relations contacts
Financial Calendar & investor relations contacts Calendar IR Contacts: investors@coface.com Next Event Date Thomas JACQUET Head of Investor Relations & Rating Agencies Q3-2017 Results October 25th, 2017 thomas.jacquet@coface.com after market close +33 (0)1 49 02 12 58 Cécile COMBEAU Investor Relatio
Slide 33: Important legal information
Important legal information IMPORTANT NOTICE: This presentation has been prepared exclusively for the purpose of the disclosure of Coface Group’s H1-2017 results, released on July 28, 2017. This presentation includes only summary information and does not purport to be comprehensive. The Coface Group