Slide 1: 9M-2020 Results: Presentation to Financial Analysts
9M-2020 RESULTS PRESENTATION TO FINANCIAL ANALYSTS 26 OCTOBER 2020
Slide 2: 9M-2020 Results: Net Income at €52.4M; RoATE at 4.1%
9M-2020 RESULTS: NET INCOME AT €52.4M; ROATE AT 4.1% 1 2 3 4 9M-2020 9M-2020 KEY TAKE-AWAYS APPENDICES HIGHLIGHTS RESULTS & OUTLOOK 2 9M-2020 RESULTS | PRESENTATION TO FINANCIAL ANALYSTS | 26 OCTOBER 2020
Slide 3: Part 1: 9M-2020 Highlights
coface PART 1 9M-2020 HIGHLIGHTS A
Slide 4: Coface reports €52.4M net profit in 9M-2020, activates €15M buyback
COFACE REPORTS €52.4M NET PROFIT IN 9M-2020 OF WHICH €28.5M IN Q3, ACTIVATES €15M BUYBACK* Turnover reached €1,082m y-t-d, down -0.9% at constant FX and perimeter following client activity, Q3-2020 down -2.2% y-o-y • Record new business and retention drive positive net production (€36.9m) • Confirme
Slide 5: Continuously acting to mitigate impact in a challenging environment
CONTINUOUSLY ACTING TO MITIGATE IMPACT IN A CHALLENGING ENVIRONMENT COFACE’S WORLD GDP GROWTH FORECAST (annual average, %) 4.3 4.4 TOTAL EXPOSURE* IS DOWN 3.2 2.7 3.0 3.0 3.3 3.2 (in € bn) 2.5 2.3 2.6 550 530 -1.7 510 -9.1% -4.8 490 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 470 INCREASED P
Slide 6: High external reinsurance protection, reinforced by government schemes
HIGH EXTERNAL REINSURANCE PROTECTION, REINFORCED BY GOVERNEMENT SCHEMES GOVERNMENT SCHEMES* (% of total exposure protected - policyholder view) Coface reinsurance program is made of: • 2 Quota-share (QS) with one up for renewal in 2021 Finalised • A per risk Excess of Loss (XS or XoL), 35.2% • A Sto
Slide 7: Part 2: 9M-2020 Results
coface PART 2 9M-2020 RESULTS A
Slide 8: Turnover decreasing slightly at -0.9%
TURNOVER DECREASING SLIGHTLY AT -0.9% (1.9)% (0.9)% 1,103 1,082 Total revenue down -0.9% vs 9M-2019 at constant FX In €m • Trade Credit Insurance1 decreasing by 1.1% at constant FX and Gross Earned Premiums perimeter driven by declining client activity (GEP) 918 897 • Positive net production reachin
Slide 9: Turnover mostly reflecting lower client activity
TURNOVER MOSTLY REFLECTING LOWER CLIENT ACTIVITY Western Europe Northern Europe Central Europe Mediterranean & Africa 0.2% (0.0)% (5.0)% (6.0)% (2.9)% (3.6)% 1.1% 2.1% 289 292 219 220 233 221 110 107 9M-19 9M-20 9M-19 9M-20 9M-19 9M-20 9M-19 9M-20 Lower activity (-5%), offset by lower Very low clien
Slide 10: Continued strong commercial metrics
CONTINUED STRONG COMMERCIAL METRICS 114 production* 102 96 90 Record high new business while keeping selective New growth strategy 9M-17 9M-18 9M-19 9M-20 91.4% 92.2% 92.7% 89.7% Retention rate* Record high retention 9M-17 9M-18 9M-19 9M-20 1.0% effect* Price (1.1)% Selective repricing under way (1.
Slide 11: YTD gross loss ratio at 57.6%, Q3-20 showing improvement
YTD GROSS LOSS RATIO AT 57.6%, Q3-20 SHOWING IMPROVEMENT Loss ratio before reinsurance and including claims handling expenses, in % ► 9M-20 gross loss ratio up by 15.0 points on crisis impact 57.6 62.8 55.2 54.8 ► Q3-20 gross loss ratio decreased by 8.0 points vs Q2-20 driven by: 42.6 41.9 45.9 45.8
Slide 12: Loss ratio increase contained in all regions
LOSS RATIO INCREASE CONTAINED IN ALL REGIONS Loss ratio before reinsurance, including claims handling expenses – in % 9%* 8%* 5%* Group North America Asia Pacific Latin America 87.0 74.6 57.6 53.8 57.9** 60.1*** 51.4 44.2** 43.5*** 49.0 45.8 51.1 39.1 35.9 35.9 23.6 FY-17 FY-18 FY-19 9M-20 FY-17 FY-
Slide 13: Loss ratio improved in all regions vs previous quarter
LOSS RATIO IMPROVED IN ALL REGIONS VS PREVIOUS QUARTER Loss ratio before reinsurance (by quarter), including claims handling expenses – in % 9%* 8%* 5%* Group North America Asia Pacific Latin America 112.5 93.4 70.5 72.4** 66.2*** 70.3 76.6 55.2 62.8 62.3 59.3 63.5 58.0 45.9 45.8 54.8 46.1 48.3 40.2
Slide 14: Strict cost control drives cost ratio improvement
STRICT COST CONTROL DRIVES COST RATIO IMPROVEMENT (5.4)% (2.9)% In €m 185 174 176 166 165 External acquisition 42 38 costs (commissions) 42 40 36 Cost ratio before reinsurance, in % 132 144 138 35.9 126 128 33.2 34.6 33.7 32.3 34.1 32.5 Internal costs Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q1-19 Q2-19 Q3-19
Slide 15: Reinsurance result reflects high loss ratio and government schemes
REINSURANCE RESULT REFLECTS HIGH LOSS RATIO AND GOVERNMENT SCHEMES 9M-19 9M-20 ► Government schemes are in force in several countries for an Gross earned premiums 917.9 897.2 estimated negative net impact of -€1m in Q3-20 (total of €7m YTD) Net earned premiums 652.8 513.9 ► Premium cession rate is u
Slide 16: Net combined ratio at 85.3%
NET COMBINED RATIO AT 85.3% +8.5 ppts In % Net combined ratio 85.3 ► Net combined ratio up to 85.3% (vs 76.8% in 9M-2019) 76.8 due to increase in claims ratio Net cost ratio 30.1 31.7 ► Cost ratio down 1.6 ppt showing good cost discipline Net loss ratio 55.2 ► 9M-2020 net loss ratio up by 10.1 ppts
Slide 17: Financial portfolio: resilient investment income, low rates
FINANCIAL PORTFOLIO: RESILIENT INVESTMENT INCOME, LOW RATES WILL CONTINUE TO MATERIALIZE €m 9M-19 9M-20 Investment Income from investment portfolio without gains on sales** 32.6 25.8 Real Estate Gains on sales and impairement, net of hedging*** 1.6 0.6 8% Equities FX effect 4.0 (2.0) 5% Other (9.8)
Slide 18: 9M-2020 net income at €52.4M of which €28.5M in Q3-2020
9M-2020 NET INCOME AT €52.4M OF WHICH €28.5M IN Q3-2020 Income statement items - in €m 9M-19 9M-20 Current operating income 174.1 98.1 ► Current operating income at €98.1m down mostly on higher loss ratio and lower financial income Other operating income and expenses 0.1 (2.4) Operating income 174.2
Slide 19: RoATE stands at 4.1%, down 4.8 ppts
ROATE STANDS AT 4.1%, DOWN 4.8 PPTS 52.4 (6.8) (24.2) 1,945.9 1,924.5 0.0 Change in equity In €m 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 20: Part 3: Key Take-aways & Outlook
PART 3 KEY TAKE-AWAYS & OUTLOOK
Slide 21: Key take-aways & outlook
KEY TAKE-AWAYS & OUTLOOK 9M-2020 demonstrates Coface’s resilience in unprecedented times • Coface has generated €52.4m net profit in 9M-20 in a disrupted economic environment while maintaining prudent reserving • Q3-20 shows a reduction in claims level Coface continues to deploy its Build to Lead st
Slide 22: Part 4: Appendices
coface PART 4 APPENDICES A
Slide 23: Key figures (1/3)
KEY FIGURES (1/3) Quarterly and cumulated figures Income statement items in €m - Quarterly figures Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 % % ex. FX* Gross earned premiums 299.0 306.3 312.6 317.7 301.2 297.9 298.1 (4.6)% (2.2)% Services revenue 66.4 60.8 58.3 59.9 69.3 56.3 59.7 +2.5% +3.4% REVEN
Slide 24: Key figures (2/3)
KEY FIGURES (2/3) Revenue by region: quarterly and cumulated figures Total revenue by % Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 quarter - in €m ex. FX* Northern Europe 80.2 75.9 76.7 74.7 81.5 65.5 74.1 (17.6)% Western Europe 74.9 72.6 71.9 75.3 71.8 70.7 77.3 (0.1)% Central Europe 33.7 37.9 38.6
Slide 25: Key figures (3/3)
KEY FIGURES (3/3) Financial portfolio: quarterly figures Financial portfolio Q1-18 H1-18 9M-18 FY-18 Q1-19 H1-19 9M-19 FY-19 Q1-20 H1-20 9M-20 Bonds 62% 64% 65% 66% 66% 67% 72% 74% 64% 64% 65% Loans, Deposit & other financial 22% 20% 20% 19% 20% 19% 13% 11% 23% 23% 23% Equities 8% 8% 7% 7% 6% 6% 6%
Slide 26: Government schemes finalised: main features
GOVERNMENT SCHEMES FINALISED: MAIN FEATURES % of Ceded Ceded GOVERNMENT SCHEMES’ IMPACT ON RATIO Country Type Eligible Policyholders Commissions exposure* premium claims (%) Top-up Domestic France 21.8% Quota share Domestic 75% 75% 35% 0 ppt (6.6) ppts (6.8) ppts Domestic & Germany 17.6% Guarantee 6
Slide 27: Combined ratio calculation
COMBINED RATIO CALCULATION In €k 9M-2019 9M-2020 ► Combined ratio before reinsurance Earned Premiums (B) (C) Gross earned premiums [A] 917,895 897,180 loss ratio before reinsurance + cost ratio before reinsurance (A) (A) Ceded premiums (265,069) (383,236) Net earned premiums [D] 652,825 513,944 ► Co
Slide 28: Q3-20 results vs consensus
Q3-20 RESULTS VS CONSENSUS # of in M€ Consensus Q3-2020 Spread Comment replies Total revenue 5 355 358 +3 Better new business and retention offset weak activity Gross Earned Premiums 5 297 298 +2 Government schemes in place Net Earned Premiums 5 130 153 +22 NEP/GEP 5 44.0% 51.3% +7.3 ppts Government
Slide 29: 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 FY-2020 Results 10 February 2021 after market close Agreement (cancellation) (in shares) # Shares rights Q1-2021 Results 27 A
Slide 30: 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 2020. This presentation includes only summary information and does not purport to be comprehensive. The Coface