Slide 1: 9M-2017 Results Presentation to Financial Analysts
9M-2017 RESULTS PRESENTATION TO FINANCIAL ANALYSTS OCTOBER 25TH, 2017
Slide 2: 9M-2017 Results: Net income at €55.0m
9M-2017 Results: Net income at €55.0m driven loss ratio improvement, in line with new guidance 1 2 3 4 9M-2017 9M-2017 KEY TAKE AWAYS APPENDICES HIGHLIGHTS RESULTS & OUTLOOK 2 9M-2017 RESULTS | PRESENTATION TO FINANCIAL ANALYSTS
Slide 3: Part 1: 9M-2017 Highlights
coface PART 1 9M-2017 HIGHLIGHTS /
Slide 4: €55.0m year-to-date net profit, driven by loss ratio improvement
€55.0m year-to-date net profit, driven by loss ratio improvement 9M-2017 highlights Turnover reaches €1,021.2m, down (0.3)% at constant FX and perimeter1; Q3-2017 up 0.2% y-o-y − Mature markets continue to grow at +2.2%; trends in emerging markets remain unchanged − Favorable economic environment dr
Slide 5: Part 2: 9M-2017 Results
coface PART 2 9M-2017 RESULTS /
Slide 6: Revenue growing in Q3-17, helped by client activity
Revenue growing in Q3-17, helped by client activity (4.1)% (4.1)% Total revenue down (0.3)% vs. 9M-2016*; Q3-2017 up 0.2% y-o-y* In €m (0.4)% (0.3)% 1,065 1,025 1,021 ► Growth trends consistent with H1-2017: Western Europe picking up and Med-Africa growing nicely Gross Earned Premiums Northern Europ
Slide 7: Western Europe picking up, overall growth still modest
Western Europe picking up, overall growth still modest Western Europe Northern Europe Central Europe Mediterranean & Africa (14.7)% (13.5)% (2.3)% (2.3)% 5.3% 5.6% 2.7% 0.8% 1.8% 3.2% 247 235 247 260 230 207 211 91 94 9M-16 9M-16 9M-17 9M-16 9M-17 9M-16 9M-17 9M-16 9M-17 ex. SEGM* Higher retention r
Slide 8: New business still affected by EM actions
New business still affected by EM actions Client activity remains supportive New production1 120 110 112 98 New production still impacted by risk action plans in Emerging Markets; flat in Mature Markets 9M-14 9M-15 9M-16 9M-17 Retention rate1 89.6% 90.3% 88.0% 88.6% Overall retention continuing to i
Slide 9: Risk action plans clearly paying off on the back of robust economy
Risk action plans clearly paying off on the back of robust economy Loss ratio before reinsurance and including claims handling expenses, in % ► Loss ratio improvement mainly driven by Asia and Americas 67.6 61.8 ► Recoveries relating to prior years improving 63.8 57.8 54.2 51.8 43.0 ► Both average c
Slide 10: Continued recovery in Asia and North America, other regions stabilized
Continued recovery in Asia and North America, other regions stabilized 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 75.3 59.9 60.2 63.3 56.3 51.4 47.6 51.0 51.8 44.5 47.5 24.1 FY-14 FY-15 FY
Slide 11: Continuing to drive tight cost controls
Continuing to drive tight cost controls 1ex. one-off in Italy: 1.3% 1 1.4% 1 0.4% 2.1% 2.5% 2.6% In €m 176 515 166 169 172 167 502 39 41 37 39 39 External acquisition 114 117 Italy costs (commissions) 6 one-off 6 €6.0m Italy one-off 133 127 130 131 128 Internal costs 388 392 Q3-16 Q4-16 Q1-17 Q2-17
Slide 12: Fit to Win progressing well
Fit to Win progressing well New schedule for investments What we said - €70m invested in the business, o/w €35m in technologies and process transformation, all financed by French state guarantees cession What we see - Restructuring costs coming lower than expected - New investment opportunities emer
Slide 13: Reinsurance result driven by lower claims and higher cession rates
Reinsurance result driven by lower claims and higher cession rates 9M-16 9M-17 ► Higher premium cession rate (underwriting year 2017) progressively materializing in accounting numbers Gross earned premiums 841.5 837.2 (+3.1ppts in 9M-17) Net earned premiums 643.3 613.6 26.7% 23.6% ► Reserves relatin
Slide 14: Net combined ratio at 89.8% mainly driven by lower loss ratio
Net combined ratio at 89.8% mainly driven by lower loss ratio (10.0)ppts In % Year-to-date net combined ratio -10.0 ppts 99.8 mainly driven by lower losses Net combined ratio 89.8 35.2 ► Net loss ratio guidance now set at below 54% Net cost ratio Ex. SEGM 35.4 for the full year 2017 ► Continuing to
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 9M-16 9M-17 Real Estate 7% Income from investment portfolio 2 31.7 39.5 Equities 3 31.9 30.8 Income from investment portfolio without gains on sales 7% Investment managemen
Slide 16: 9M-2017 net income at €55.0m
9M-2017 net income at €55.0m 9M-16 Income statement items - in €m 9M-16 9M-17 ex. SEGM* Current operating income 58.5 38.3 100.5 ► Sharp improvement in operating Fit to Win investments & restructuring expenses - - (1.7) performance at €98.2m Other operating income and expenses (2.2) (2.2) (0.5) Oper
Slide 17: RoATE stands at 4.7% for 9M-2017
RoATE stands at 4.7% for 9M-2017 Change in equity in €m 55.0 9.3 (14.7) 1,784.5 1,755.2 (20.4) IFRS equity Distribution to Net income Revaluation reserve Treasury shares, IFRS equity attributable to owners shareholders (AFS financial currency translation attributable to owners of the parent instrume
Slide 18: Part 3: Key take-aways & outlook
PART 3 KEY TAKE-AWAYS & OUTLOOK
Slide 19: Key take-aways & outlook
Key take-aways & outlook 9M-17 operating profit up €62.1m1 at €98.2m − Net combined ratio down -10 ppts vs. 9M-20161 at 89.8% − Improvement driven by loss ratio, especially in Asia and North America − Economic environment provides tailwind − Net loss ratio guidance: below 54% for 2017 Effects of Fit
Slide 20: Part 4: Appendices
coface PART 4 APPENDICES /
Slide 21: 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 Q3 2017 % % ex. FX Gross earned premiums 288.5 277.2 275.8 273.6 282.2 283.4 271.6 (1.5)% +0.3% Services revenue 64.5 60.8 58.5 59.0 66.1 60.0 57.9 (1.1)% (0.6)%
Slide 22: 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 9M 2017 % % ex. FX Gross earned premiums 288.5 565.7 841.5 1,115.1 282.2 565.6 837.2 (0.5)% (0.4)% Services revenue 64.5 125.2 183.8 242.8 66.1 126.2 184.0 +0.1%
Slide 23: 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 Q3 2017 V% ex. FX Northern Europe 83,4 74,7 76,8 72,4 79,8 75,1 74,7 (2,7)% Western Europe - ex. SEGM* 72,4 68,9 66,0 66,5 73,1 69,3 68,5 +5,0% Central Europe 30,9 30,4 30,0 30,0 31
Slide 24: Sharp improvement in Asia and North America, partially offset by Western Europe
Sharp improvement in Asia and North America, 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 83.6 84.0 84.5 67.6 61.8 57.8 60.7 61.5 54.2 43.0 54.3 5
Slide 25: Combined ratio calculation
Combined ratio calculation Net Earned Premiums Operating expenses 9M-2016 9M-2016 In €k 9M-2016 9M-2017 In €k 9M-2016 9M-2017 ex. SEGM* ex. SEGM* Gross earned premiums 841,506 841,506 837,182 A Commissions - General external expenses -114,092 -114,092 -117,053 Ceded premiums -198,238 -198,238 -223,6
Slide 26: Q3-17 results vs consensus
Q3-17 results vs consensus Q3-2017 est. in M€ # of reponses Consensus Actual Spread Comment Total turnover 5 340 329 -10 Mature markets up +2.2% Gross Earned Premiums 5 274 272 -2 Higher premium refunds Net Earned Premiums 5 200 198 -1 NEP/GEP 5 72,8% 72,9% 0,1% Higher cession goes through the P&L N
Slide 27: 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 28: 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 29: Financial Calendar & investor relations contacts
Financial Calendar & investor relations contacts Calendar Next Event Date IR Contacts: investors@coface.com FY-2017 Results Feb. 25th, 2018 after market close Q1-2018 Results Apr. 24th, 2018 after market close Thomas JACQUET AGM May 16th, 2018 Head of Investor Relations & Rating Agencies H1-2018 Res
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 September 30th 2017, This presentation includes only summary information and does not purport to be comprehensive. The Cofac