Slide 1: FY-2015 results
FY-2015 results €126m net profit allowing to propose a stable distribution of €0.48 per share February 9th, 2016 (Limited examination by Statutory Auditors)
Slide 2: Important legal information
Important legal information IMPORTANT NOTICE: This presentation has been prepared exclusively for the purpose of the disclosure of Coface Group’s FY-2015 results, released on February 9th, 2016. This presentation includes only summary information and does not purport to be comprehensive. The Coface
Slide 3: Agenda
Agenda 1. Introduction 2. FY-2015 Results 3. Capital Management 4. Annexes
Slide 4: Introduction
1 Introduction
Slide 5: Xavier Durand appointed CEO of Coface
Xavier Durand appointed CEO of Coface Coface’s Board of Directors appoints Xavier Durand as Coface’s new CEO 25+years of international experience Appointment Date: January 15th 2016 Effective Date: February 9th 2016 in regulated financial services • 1987: Insurance consulting -The Mac Group (Gemini
Slide 6: FY-2015 Results
2 FY-2015 Results
Slide 7: Business highlights for FY-2015 (1/2)
Business highlights for FY-2015 (1/2) 2014 comparative has been restated - IFRIC 21* Total turnover and premiums Net combined ratio Gradual development of consolidated total turnover Loss ratio in line with 9M-2015 results - Risk mitigating actions taken in loss making - Growth sustainably driven
Slide 8: Business highlights for FY-2015 (2/2)
Business highlights for FY-2015 (2/2) 2014 comparative has been restated - IFRIC 21* Operating income & net income (group share) Proposed distribution Stable net income (group share) despite a riskier and more Earnings per share volatile macro environment: 126 millions euros € 0.80 Growth vs. FY-20
Slide 9: Commercial performance
Commercial performance €m €m production1 149 136 133 New 115 • New production impacted by fewer large deals FY-2012 FY-2013 FY-2014 FY-2015 86.7% 87.8% 89.0% 88.2% Retention rate1 • Good retention rate FY-2012 FY-2013 FY-2014 FY-2015 0.2% Price effect 1 • Competition and continued contract pro
Slide 10: Turnover growth sustainably driven by emerging markets
Turnover growth sustainably driven by emerging markets Turnover by region Northern Europe Western Europe Central Europe Mediterranean and Africa Turnover Turnover Turnover (4.9)% (3.8)%* (1.0)% (2.5)%* +1.4% +1.4%* Turnover +8.8% +8.5%* €m €m €m €m 352 335 462 457 227 246 113 115 FY-2014 FY-2015 FY-
Slide 11: Exposure in EM reduced thanks to risk management and action plans undertaken in 2015
Exposure in EM reduced thanks to risk management and action plans undertaken in 2015 Total exposure2 reduced by 6.4% out of which 85% in Emerging Markets Evolution of total exposure2 by country of debtor (EM vs. Advanced) 2015 total exposure2 by debtors’ trade sector Minerals, chemistry, oil, plasti
Slide 12: Loss ratio evolution
Loss ratio evolution Gross loss ratio evolution1 52.8% • The measures undertaken over the 51.5% 51.1% 49.8% 50.2% 51.4% 47.4% 48.6% 48.9% past quarters are materializing 45.2% • 12M-2015 loss ratio at similar level FY-2012 FY-2013 Q1-2014 Q2-2014 Q3-2014 Q4-2014 Q1-2015 Q2-2015 Q3-2015 Q4-2015 as 9
Slide 13: Loss ratio by region
Loss ratio1 by region Group Western Europe North America Northern Europe 51.7% 51.5% 51.1% 51.0% 42.0% 55.1% 34.8% 56.3% 52.2% 47.6% 49.5% 23.4% 47.6% 18.7% 19.3% 24.1% FY-2012 FY-2013 FY-2014 FY-2015 FY-2012 FY-2013 FY-2014 FY-2015 FY-2012 FY-2013 FY-2014 FY-2015 FY-2012 FY-2013 FY-2014 FY-2015 Cen
Slide 14: Cost remain under control
Cost remain under control Some one-off taxes in Q4-2015** Stronger growth in intermediated countries leads to increased external acquisition costs €m Internal costs under control** Total expenses +3.0% +0.9%* 693 713 142 162 139 143 143 139 Total 135 134 135 132 internal costs +0.1% (1.2)%** 551 551
Slide 15: Improved reinsurance conditions
Improved reinsurance conditions Ceded premium / GEP Ceded claims / Total claims Reinsurance impact FY-2014 FY-2015 24% 22% 20% 21% (51) (69) FY-2014 FY-2015 FY-2014 FY-2015 €m Underwriting income before and after reinsurance €m Before reinsurance After reinsurance (-17.0%) (-13.7%) The improvement
Slide 16: Net combined ratio
Net combined ratio** Evolution in net combined ratio +2.4ppts. 83.1% 82.1% 79.7% Excluding one-off taxes 87.0% 29.3% 30.5% 29.5% 86.0% 86.4% 85.6% 77.7% 78.2% 77.5% 81.6% 76.4% 33.9% 32.1% 28.1% 34.4% 33.0% 25.4% 28.7% 29.0% 27.7% 50.4% 52.5% 52.5% 52.3% 49.5% 47.4% 52.1% 49.8% 54.3% 53.5% 52.6% 52.
Slide 17: Investment income
Investment income Progressive portfolio diversification 1 Investment Equities Real Estate 9% 4% - Given the increase of the market Loans, Deposit & volatility, actions to reduce portfolio other financial Total risks are being taken 20% € 2.53bn1 - Prudent but proactive investment Bonds 67% strateg
Slide 18: Operating income & net income
Operating income & net income Operating income & net income (group share) 126 millions euros of net income (group share) : - Net income (group share) for Q4 in line with average past results - €0.48 proposed distribution per share4 Growth vs. FY-2014* (5.8)% (6.1)%1-2 +1.0% +1.1%1 +0.7% +0.8%1-2 19
Slide 19: Shareholders’ equity
Shareholders’ equity Changes in equity €m 127 (14) 5 1,767 1,725 (76) Total IFRS Equity Distribution to Net income Revaluation reserve Treasury shares, Total IFRS Equity Dec 31, 2014 shareholders impact (financial instruments currency translation Dec 31, 2015 (IFRIC21 restated) AFS) differences & ot
Slide 20: Capital management
3 Capital management
Slide 21: Financial strength
Financial strength Reported FY 2015 simplified balance sheet FY 2015 capital structure €m 6,883 6,883 18% Goodwill & intangible assets 224 Shareholders’ 1,767 equity >10x Insurance investments 2,648 Financing liabilities 393 (including hybrid debt) 1,515 Gross insurance reserves Other assets 1,639 8
Slide 22: Coface uses multiple tools ensuring a dynamic capital management policy
Coface uses multiple tools ensuring a dynamic capital management policy Ranking of Coface’s capital management and protection tools Shareholder’s equity Tier 1 Hybrid debt Tier 2 Contingent Equity Line (new)1 Reinsurance policy Exposure management & other management actions Protection level Focus on
Slide 23: 2015 Solvency II Available Own Funds
2015 Solvency II Available Own Funds Solvency II Available Own Funds calculation €m 417 1,962 1,767 (201) 147 (76) (17) (75) Total IFRS Equity - Goodwill and other + Revaluation of - Revaluation of -/+ Other - Estimated + Hybrid debt Total SII Available as of 31/12/2015 intangibles reserves at "best
Slide 24: Own funds calculation in changing regulatory environment
Own funds calculation in changing regulatory environment From Economic capital adequacy… … to Solvency II ratio (Standard Formula) 20131 20141 2015 €m €m 145% 144% 147% 1,742 1,762 1,962 417 376 376 1,205 1,224 1,333 195 185 190 1,366 1,386 1,545 1,015 1,029 1,147 Totalrequired Total required capit
Slide 25: Solvency required capital at FY-2015
Solvency required capital at FY-2015 Standard model 147% Operational risk 1,961 €m - Client, product and business practices - Employment practices and workplace safety, etc. 417 1,461 (224) 36 Credit risk 125 185 1,333 (90) - Fixed income default risk 1,147 185 - Reinsurance default risk, etc. 265 1
Slide 26: Robust solvency over time proved by stress tests
Robust solvency over time proved by stress tests Sensitivity on Loss ratio : Low sensitivity on market shocks Solvency requirement respected in crisis scenarios 2015 SCR cover (Std) 147% +100 bps Interest rates 144% 2008/2009 crisis equivalent (1) 112% 118% Incl. Contingent Equity Line impact 1/20 c
Slide 27: Follow-up news
4 Follow-up news
Slide 28: Transfer of State guarantees management activity
Transfer of State guarantees management activity Coface has signed an agreement in principle with the French State on 29th July 2015 After the write-off, the total compensation agreed will absorb 2,2 years of shortfall 2015 Net Result2 P&L Impact (in €m) - FY basis Detailed shortfall (in €m) 126 d
Slide 29: Investor Relations
Investor Relations • COFACE SA is a société anonyme (joint-stock corporation), with a Board Shareholder composition Issuer of Directors (Conseil d’Administration) incorporated under French Law Registered • Registered No. 432 413 599 with the Nanterre Trade and Companies Employees Number & Register &
Slide 30: Annexes
Annexes
Slide 31: Key Figures (1/2)
Key Figures (1/2) FY-2015 focus 2014 - Restated IFRIC 21* 2015 % % Income statement items - in €m FY-2015 vs. Q1 H1 9M FY Q1 H1 9M FY like-for-like 1 FY-2014 * Consolidated revenues 370.0 723.6 1,072.0 1,440.5 389.6 760.3 1,126.3 1,489.5 +3.4% +1.2% of which gross earned premiums 287.5 564.8 836.7 1
Slide 32: Key Figures (2/2)
Key Figures (2/2) Q4-2015 focus 2014 - Restated IFRIC 21* 2015 % % Income statement items - in €m Q4-2015 vs. Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 like-for-like 1 Q4-2014* Consolidated revenues 370.0 353.6 348.4 368.6 389.6 370.7 366.0 363.2 (1.5)% (2.5)% of which gross earned premiums 287.5 277.3 271.9 296.1 30
Slide 33: FY-2015 key figures excluding State guarantees management activity
FY-2015 key figures excluding State guarantees management activity FY-2015 Income statement items - in €m FY-2015 excl. DGP* Consolidated revenues 1,489.5 1,429.6 of which gross earned premiums 1,185.9 1,185.9 Total general expenses (713.2) (687.2) including ex penses from other activ ities Underwri
Slide 34: Bridge table
Bridge table From Operating income to Operating income excluding restated items FY-2014 FY-2011 FY-2012 FY-2013 FY-2014 FY-2015 in thousand euros Restated published published published published published IFRIC 21 Operating income 140,176 196,747 196,931 199,122 199,023 192,297 Finance costs -5,393
Slide 35: Overview of net combined ratio calculations
Overview of net combined ratio calculations Adjusted Net Earned Premiums Adjusted net operating expenses FY-2014 FY-2014 In €k FY-2014 Restated FY-2015 In €k FY-2014 Restated FY-2015 IFRIC 21 IFRIC 21 A Gross Earned Premiums 1,132,727 1,132,727 1,185,935 Total operating expenses 692,596 692,694 713,
Slide 36: Financial strength acknowledged by rating agencies
Financial strength acknowledged by rating agencies Coface is rated ‘AA-’ by Fitch Ratings and ‘A2’ by Moody’s, both with a stable outlook The positive assessments by the two agencies is based on 3 key drivers: 1. Coface's strong competitive position in the global credit insurance market 2. Robus
Slide 37: A strengthened and experienced management team
A strengthened and experienced management team CEO Xavier Durand ** 25+ years of international experience in regulated financial services Working for Coface since 2016 Group central functions CFO & Risk Manager Corporate Secretary Human Resources Manager Carine Pichon Carole Lytton Cécile Fourmann 1
Slide 38: Corporate governance
Corporate governance Board of Directors Laurent MIGNON Chairman CEO of Natixis BPCE (Marguerite Non independent members Jean ARONDEL Jean-Paul DUMORTIER BERARD-ANDRIEU) ► BPCE ► BPCE ► BPCE Laurent ROUBIN Pascal MARCHETTI ► BPCE ► BPCE Sharon MACBEATH Olivier ZARROUATI Eric HÉMAR Independent members