Slide 1: H1-2022 Results Presentation to Financial Analysts
H 1 - 2 0 2 2 R E S U LT S P R E S E N TAT I O N T O F I N A N C I A L A N A LY S T S 2 8 J U LY 2 0 2 2
Slide 2: H1-2022 Results: Net income at €144.4m, RoATE 15.4%
H1-2022 RESULTS: NET INCOME AT €144.4M – ROATE STANDS AT 15.4% 01 02 03 04 05 H1-2022 H1-2022 C A P I TA L K E Y TA K E - APPENDICES HIGHLIGHTS R E S U LT S MANAGEMENT A W AY S & OUTLOOK Regulated documents posted by COFACE SA have been secured and authenticated with the blockchain technology by Wiz
Slide 3: Part 1: H1-2022 Highlights
coface FOR TRADE PART 1 H1-2022 HIGHLIC
Slide 4: Coface reports €144.4m net profit in H1-2022; solvency at 192%
COFACE REPORTS €144.4M NET PROFIT IN H1-2022; SOLVENCY AT 192% Turnover reached €895m y-t-d, up 14.6% at constant FX and perimeter and up 16.5% on a reported basis › Trade Credit Insurance premiums growing by 16.1% driven by high client activity in inflationary environment › Client retention at reco
Slide 5: Deep transformation drives strong long term KPIs
DEEP TRANSFORMATION DRIVE STRONG LONG TERM KPIS H1-2016 H1-2022 Variation Gross Earned Premiums €566 million €754 million +33% ROATE Client retention 90.2% 93.9% +3.7 ppts 15.4% Solvency 155% 192% +37 ppts 12.2% Shareholders Equity €1,740 million €1,927 million +11% 8.9% 7.7% Net cost ratio
Slide 6: Underwriting discipline core to long term strategy
UNDERWRITING DISCIPLINE CORE TO ACTIVELY MITIGATING REMAINING OUR LONG TERM STRATEGY UKRAINE / RUSSIA RISKS T O TAL T C I E X P O S U R E (€bn) E X P O S U R E T O R U S S I A (€bn at current rate) 4.8 650 642 600 CAGR ‘17- H1-22 +9% +6.4% 550 Export 500 +21% - 71% Domestic* 1.4 1.0 450 400 FY-17 FY
Slide 7: CSR: Embedding strategy and setting targets
CSR: EMBEDDING STRATEGY AND SETTING TARGETS* RESPONSIBLE RESPONSIBLE RESPONSIBLE DRIVING THE INSURER EMPLOYER ENTERPRISE C U LT U R E › Improved ESG rating of › Diversity & Inclusion: › Completed Completed a full a full carbon carbon › Appointed Senior group CSR ACTIONS TAKEN investment portfolio fr
Slide 8: Corporate governance following the last AGM on 17 May 2022
CORPORATE GOVERNANCE FOLLOWING THE LAST AGM ON 17 MAY 2022 Board of directors AUDIT & ACOUNTS COMMITTEE Bernardo SANCHEZ INCERA Chairman Age: 62 › 3 members: 2 independents incl. the chairman (independent) › Laetitia Leonard-Reuter (Chm.) › Board member › Isabelle Laforgue › David Gansberg Isabelle
Slide 9: Part 2: H1-2022 Results
coface FOR TRADE PART 2 H1-2022 RESULT,
Slide 10: Turnover growth at 14.6% driven by TCI premiums up 16.1%
TURNOVER GROWTH AT 14.6% DRIVEN BY TCI PREMIUMS UP 16.1% 16.5% 14.6% Total revenue up 14.6% vs H1-2021 at constant FX and perimeter 895 In €m 768 › Trade credit insurance* premiums growing at 16.1% at constant Gross Earned Premiums FX due to strong client activity and record high retention and up (G
Slide 11: Strong client activity in inflationary context and high retention
STRONG CLIENT ACTIVITY IN INFLATIONARY CONTEXT AND HIGH RETENTION Western Europe Northern Europe Central Europe Mediterranean & Africa 13.3% 12.4% 10.8% 10.0% 17.7% 18.5% 13.2% 14.6% 240 212 174 167 185 154 75 89 H1-21 H1-22 H1-21 H1-22 H1-21 H1-22 H1-21 H1-22 High retention and positive activity. H
Slide 12: Very high activity and increasingly competitive market
VERY HIGH ACTIVITY AND INCREASINGLY COMPETITIVE MARKET production* 86 New production at €58m, as Coface remains New 72 65 58 committed to underwriting discipline despite market exuberance. H1-19 H1-20 H1-21 H1-22 93.0% 93.4% 92.4% 93.9% Retention Retention rate at record level in a more rate* compet
Slide 13: Gross loss ratio at 30.6% still below mid cycle
GROSS LOSS RATIO AT 30.6% STILL BELOW MID CYCLE Loss ratio before reinsurance and including claims handling expenses, in % › Normalization is under way: 30.6 32.2 ‒ Frequency increasing since mid-21 29.5 29.5 29.6 28.9 16.9 ‒ Large losses increasing while still below average 10.5 ‒ Contained amount
Slide 14: Low loss ratio across most regions, Ukraine impacting CER
LOW LOSS RATIO ACROSS MOST REGIONS, UKRAINE IMPACTING CER THE MOST Loss ratio before reinsurance, including claims handling expenses – in % 9%* 5%* 8%* Group North America Latin America Asia Pacific 63.7 72.3*** 60.1** 51.8 45.8 48.6 43.4** 30.6 30.2 35.9 21.4 22.2 14.4 6.9 10.9 8.8 FY-19 FY-20 FY-2
Slide 15: A few large cases on top of ongoing normalization
A FEW LARGE CASES ON TOP OF ONGOING NORMALIZATION Loss ratio before reinsurance (by quarter), including claims handling expenses – in % 9%* 5%* 8%* Group North America Latin America Asia Pacific 52.9 32.2 35.6 29.5 29.6 28.9 24.8 24.5 22.3 22.2 21.0 20.0 20.2 16.9 10.5 8.5 -0.3 2.6 4.8 1.3 0.9 1.3 1
Slide 16: Continued operating leverage driven by long term productivity programs
CONTINUED OPERATING LEVERAGE DRIVEN BY LONG TERM PRODUCTIVITY PROGRAMS 11.5% 8.7% 205 In €m 196 195 184 185 174 44 46 50 42 42 Cost ratio before reinsurance, in % External acquisition costs 39 (commissions) 33.7 34.1 33.2 31.6 30.7 142 143 153 149 155 135 Internal costs Q1-21 Q2-21 Q3-21 Q4-21 Q1-22
Slide 17: Record low past losses drive reinsurance result
RECORD LOW PAST LOSSES DRIVE REINSURANCE RESULT H1-21 H1-22 › Premium cession rate is down to 27.4% as public schemes have ended on June 30th 2021 Gross earned premiums 638.7 754.0 Net earned premiums 328.9 547.1 › Claims cession rate is down to 6.5% as positive development of 48.5% Premium cession
Slide 18: Net combined ratio at 66.0% on still low loss ratio
NET COMBINED RATIO AT 66.0% ON STILL LOW LOSS RATIO 14.1 ppts › Net combined ratio increased to 66.0% (vs 51.9% in H1-2021) as In % claims ratio has started to normalize which includes impact of 66.0 Russia / Ukraine crisis 61.5 60.0 Net combined ratio 51.9 30.4 26.3 26.6 › Excluding public schemes
Slide 19: Financial portfolio: resilient in turbulent markets and higher yields
FINANCIAL PORTFOLIO: RESILIENT IN TURBULENT MARKETS AND HIGHER YIELDS €m H1-21 H1-22 Investment Real Estate Income from investment portfolio without gains on sales** 18.8 19.2 8% Gains on sales and impairement, net of hedging*** (0.6) 4.0 Equities 6% FX effect 1.6 4.5 Other (3.9) (3.3) Loans, 24.4 D
Slide 20: H1-2022 net income at €144.4m of which €78.2m in Q2-2022
H1-2022 NET INCOME AT €144.4M OF WHICH €78.2M IN Q2-2022 Income statement items - in €m H1-21 H1-22 › Net earned premiums up by +66% at €547.1m on growing revenues and the end of public schemes Current operating income 171.6 207.3 › Operating income up +17.9% Other operating income and expenses 0.4
Slide 21: RoATE stands at 15.4%, up 3.2 ppts
ROATE STANDS AT 15.4%, UP 3.2 PPTS 2,141.0 (224.8) 144.4 (163.4) Change in equity 29.3 1,926.5 In €m IFRS Equi ty Distribu tio n to Net income impact Revaluatuion reserve Treasury shar es, IFRS Equi ty attri butable to owner s shareh olders (financial instr uments currency translation attri butable
Slide 22: Part 3: Capital Management
coface FOR TRADE PART 3 CAPITAL MANAG
Slide 23: Solid balance sheet
SOLID BALANCE SHEET H1-2022 simplified balance sheet In €m IFRS 17 “Insurance contracts” › Project progressing as planned 8,489 8,489 Goodw ill 235 & intangible assets Shareholders’ 1,927 equity Financial strength 2,979 Insurance investments Financing liabilities 383 (including hybrid debt) › Fitch:
Slide 24: Robust solvency over time
ROBUST SOLVENCY OVER TIME H1-2022 estimated Solvency ratio above target range Low sensitivity to market shocks market sensitivity tested through instantaneous shocks 205%* 8.9 ppts (4.6 ppts) 1.0 ppt (9.3 ppts) 196%* 196% 30/06/2022 SCR cover 191%* 192%* 192% 192% (PIM) 194% 191% 194% 185% +100 bps
Slide 25: Solvency required capital as at 30 June 2022
SOLVENCY REQUIRED CAPITAL AS AT 30 JUNE 2022 192%1 2,368 PARTIAL INTERNAL MODEL 34 386 €m 1,325 (160) Operational risk 43 236 1,236 167 (165) Counterparty risk 1,000 236 1,949 295 Tier 3 Market risk Tier 2 Tier 1 Non-life underwriting risk 1,000 1,000 821 SCR components Diversification Tax adjustmen
Slide 26: Part 4: Key Take-aways & Outlook
PART 4 KEY TAKE-AWAYS & OUTLOOK
Slide 27: Key take-aways & outlook
KEY TAKE-AWAYS & OUTLOOK Coface again delivered a strong operating performance › Continued strong revenue growth with double digit revenue growth in both TCI (activity and retention) and business information › Annualized RoATE (Return on Average Tangible Equity) at 15.4% › Solvency ratio at 192% rem
Slide 28: Part 5: Appendices
coface FOR TRADE PART 5 APPENDICES,»
Slide 29: Key figures (1/2)
KEY FIGURES (1/2) QUARTERLY AND CUMULATED FIGURES Income statements items in €m - Quarterly figures Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 % % ex. FX* Gross earned premiums 312.1 326.7 330.7 343.2 361.3 392.7 +20.2% +17.6% Services revenue 65.9 63.4 59.6 66.3 69.5 71.4 +12.6% +10.0% REVENUE 377.9 390.1
Slide 30: Key figures (2/2)
KEY FIGURES (2/2) REVENUE BY REGION: QUARTERLY AND CUMULATED FIGURES Total revenue by quarter - in €m Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 V% ex. FX* Northern Europe 82.2 84.7 83.5 81.1 93.0 91.9 +22.0% Western Europe 75.5 78.2 79.9 83.0 80.8 93.3 +29.2% Central Europe 36.6 38.8 39.9 41.0 44.6 44.1 +
Slide 31: Exposure in emerging markets maintained at a stable share
EXPOSURE IN EMERGING MARKETS MAINTAINED AT A STABLE SHARE Evolution of TCI exposure1 per H1-2022 total TCI exposure1 – Top 10 Advanced vs Emerging markets (in €bn) countries vs. others (in %) Germany 12.5% USA Dec-19 79% 21% 537 France 36.4% 10.6% Italy Dec-20 81% 19% 486 Spain UK Dec-21 80% 20% 588
Slide 32: Combined ratio calculation
COMBINED RATIO CALCULATION In €k H1-21 H1-22 › Combined ratio before reinsurance Earned Premiums (B) (C) Gross earned premiums [A] 638,715 754,014 loss ratio before reinsurance + cost ratio before reinsurance (A) (A) Ceded premiums (309,823) (206,866) Net earned premiums [D] 328,892 547,148 › Combin
Slide 33: Q2-22 results vs consensus
Q2-22 RESULTS VS CONSENSUS # of in M€ Consensus Q2-22 Spread Comment replies Total revenue 4 432 464 +32.3 Revenue growth driven by TCI premiums on high client Gross Earned Premiums 4 368 393 +24.9 retention and client activity in inflationary environment Net Earned Premiums 4 271 284 +13.3 NEP/GEP
Slide 34: Management team
MANAGEMENT TEAM GROUP MANAGEMENT COMMITTEE GROUP EXECUTIVE COMMITTEE Xavier DURAND Hugh BURKE Jaroslaw JAWORSKY Chief Executive Officer CEO Asia Pacific CEO Central & Eastern Europe › 30+ years of international experience in regulated financial services › +20 years of international › 25 years of exp
Slide 35: Financial calendar & investor relations contacts
FINANCIAL CALENDAR & INVESTOR RELATIONS CONTACTS Calendar Own shares transactions Own shares transactions Next Event Date Liquidity Buy-back Date LTIP TOTAL % Total of Voting Agreement (cancellation) 9M-2022 Results 27 October 2022 after market close (in shares) # Shares rights 30/06/2022 207,672 70
Slide 36: Important legal information
IMPORTANT LEGAL INFORMATION IMPORTANT NOTICE: Coface Group’s current beliefs, assumptions and expectations of its future performance, taking into account all information currently available. The Coface This presentation has been prepared exclusively for the purpose of the disclosure Group is under n