Slide 1: 9M-2021 Results: Presentation to Financial Analysts
9M-2021 RESULTS PRESENTATION TO FINANCIAL ANALYSTS 28 OCTOBER 2021
Slide 2: 9M-2021 Results: Net income at €190.9m; RoATE at 13.9%
9M-2021 RESULTS: NET INCOME AT €190.9M; ROATE AT 13.9% 1 2 3 4 9M-2021 9M-2021 KEY TAKE-AWAYS & APPENDICES HIGHLIGHTS RESULTS OUTLOOK 2 9M-2021 RESULTS | PRESENTATION TO FINANCIAL ANALYSTS | 28 OCTOBER 2021
Slide 3: Part 1: 9M-2021 Highlights
coface PART 1 9M-2021 HIGHLIGHTS A
Slide 4: Coface reports €190.9m net profit in 9M-2021, of which €67.7m in Q3
COFACE REPORTS €190.9M NET PROFIT IN 9M-2021 OF WHICH €67.7M IN Q3 Turnover reached €1,158m y-t-d, up +7.9% at constant FX and perimeter, Q3-2021 up +8.9% y-o-y • Trade Credit Insurance premiums are up +9.3% with activity recovery reflecting economic rebound and past repricing • Pricing impact is st
Slide 5: Continued strengthening of management team
CONTINUED STRENGTHENING OF MANAGEMENT TEAM GROUP CENTRAL FUNCTIONS Xavier DURAND CEO • 30+ years of international experience in regulated financial services • Working for Coface since 2016 Pierre BEVIERRE Cyrille CHARBONNEL Declan DALY Nicolas GARCIA Human Resources Director Underwriting Director Gr
Slide 6: Part 2: 9M-2021 Results
coface PART 2 9M-2021 RESULTS A
Slide 7: Turnover growth at 7.9%, driven by TCI premiums up 9.3%
TURNOVER GROWTH AT 7.9%, DRIVEN BY TCI PREMIUMS UP 9.3% 7.0% 7.9% In €m 1,158 1,082 Total revenue up +7.9% vs 9M-2020 at constant FX • Trade Credit Insurance* increasing by +9.3% at constant FX and Gross Earned Premiums perimeter driven by past repricing and positive client activity (GEP) 897 969 •
Slide 8: Economic rebound driving revenue growth
ECONOMIC REBOUND DRIVING REVENUE GROWTH Western Europe Northern Europe Central Europe Mediterranean & Africa 6.3% 6.0% 13.3% 10.6% 7.8% 7.3% 7.5% 8.4% 314 250 292 220 234 221 107 115 9M-20 9M-21 9M-20 9M-21 9M-20 9M-21 9M-20 9M-21 Repricing impact and activity rebound Activity rebound and positive p
Slide 9: Strong activity and increasingly competitive market
STRONG ACTIVITY AND INCREASINGLY COMPETITIVE MARKET production* 114 96 102 90 New production at €102m after a record high level in New 9M-20 9M-18 9M-19 9M-20 9M-21 91.4% 92.2% 92.7% 92.1% Retention rate* Lower retention in a more competitive market 9M-18 9M-19 9M-20 9M-21 1.0% 1.6% Pricing is down
Slide 10: Gross loss ratio decreased to record low at 25.2%
GROSS LOSS RATIO DECREASED TO RECORD LOW AT 25.2% Loss ratio before reinsurance and including claims handling expenses, in % 62.8 57.6 55.2 54.8 ► 9M-21 gross loss ratio decreased by 32.4 points vs 9M-20 driven by: 34.9 29.5 29.6 Very limited large loss activity 25.2 16.9 Low claims experience a
Slide 11: Continuing record low loss ratio across all regions
CONTINUING RECORD LOW LOSS RATIO ACROSS ALL REGIONS Loss ratio before reinsurance, including claims handling expenses – in % 9%* 8%* 5%* Group North America Asia Pacific Latin America 72.3**** 63.7 57.9** 60.1*** 44.2** 43.4*** 51.8 45.8 48.6 39.1 35.9 25.2 19.0 23.6 11.5 8.9 FY-18 FY-19 FY-20 9M-21
Slide 12: Loss ratio for the quarter further down at 16.9%
LOSS RATIO FOR THE QUARTER FURTHER DOWN AT 16.9% 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 70.3 76.6 55.2 62.8 54.8 59.3 58.0 48.3 41.4 46.1 34.9 29.5 29.6 31.8 35.6 24.8 27.3 22.2
Slide 13: Investments and variable costs drive cost ratio evolution
INVESTMENTS AND VARIABLE COSTS DRIVE COST RATIO EVOLUTION 12.5% 12.1% In €m 184 184 185 176 174 166 165 External acquisition costs 40 42 42 38 39 (commissions) 40 36 Cost ratio before reinsurance, in % Internal costs 32.5 36.0 33.7 34.1 138 128 144 135 142 143 31.2 126 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21
Slide 14: Reinsurance reflects low loss activity and public schemes
REINSURANCE REFLECTS LOW LOSS ACTIVITY AND PUBLIC SCHEMES 9M-20 9M-21 Gross earned premiums 897.2 969.5 ► Premium cession rate is up by 0.7 ppt compared to 9M-20, while Net earned premiums 513.9 548.4 claims cession rate decrease by 2.1 ppts due to important reserve releases on underwriting year 202
Slide 15: Recognition of government schemes' impact is accelerating
RECOGNITION OF GOVERNMENT SCHEMES’ IMPACT IS ACCELERATING … ON COMBINED RATIO (%) 100% Published w/o schemes 90% 80% 70% 60% • Government schemes have lowered pretax profit by €63m 50% since the beginning of the crisis (€6m in 2020, €57m YTD in 40% 2021 and €32m in Q3-2021). Q1-20 Q2-20 Q3-20 Q4-20
Slide 16: Net combined ratio at 56.1% on record low loss ratio
NET COMBINED RATIO AT 56.1% ON RECORD LOW LOSS RATIO (29.2) ppts In % Net combined ratio 85.3 ► Net combined ratio improved to 56.1% (vs 85.3% in 9M-2020) due to improvement in claims ratio Net cost ratio 30.1 56.1 ► Cost ratio up 0.6 ppt but improved by 1.0 ppt vs 9M-19 30.7 Net loss ratio 55.2 ► 9
Slide 17: Financial portfolio: resilient investment income, some realized gains
FINANCIAL PORTFOLIO: RESILIENT INVESTMENT INCOME, SOME REALIZED GAINS €m 9M-20 9M-21 Investment Real Estate Income from investment portfolio without gains on sales** 25.8 25.2 7% Gains on sales and impairement, net of hedging*** 0.6 4.8 Equities FX effect (2.0) (0.7) 7% Other (0.9) 1.7 30.9 23.5 Loa
Slide 18: 9M-2021 net income at €190.9m of which €67.7m in Q3-2021
9M-2021 NET INCOME AT €190.9M OF WHICH €67.7M IN Q3-2021 Income statement items - in €m 9M-20 9M-21 Current operating income 98.1 266.1 ► Current operating income at €266.1m up mostly on lower loss ratio Other operating income and expenses (2.4) (0.8) Operating income 95.7 265.3 Finance costs (17.3)
Slide 19: RoATE stands at 13.9%, up 9.1 ppts
ROATE STANDS AT 13.9%, UP 9.1 PPTS Change in equity 190.9 In €m 1,998.3 (82.0) (28.8) (15.2) 2,063.2 IFRS Equity attributable Distribution to Net income impact Revaluatuion reserve Treasury shares, IFRS Equity attributable to owners of the parent shareholders (financial instruments currency translat
Slide 20: Part 3: Key Take-aways & Outlook
PART 3 KEY TAKE-AWAYS & OUTLOOK
Slide 21: Key take-aways & outlook
KEY TAKE-AWAYS & OUTLOOK Q3-2021 net profit reaches a new record, on the back of two key trends • Still low level of claims across all regions • Continued strong operational performances After a very strong rebound in the summer the world economy is facing some uncertainties • Many supply chains hav
Slide 22: Part 4: Appendices
coface PART 4 APPENDICES A
Slide 23: Key figures (1/2)
KEY FIGURES (1/2) Quarterly and cumulated figures Income statement items in €m - Quarterly figures Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 % % ex. FX* Gross earned premiums 301.2 297.9 298.1 307.2 312.1 326.7 330.7 +11.0% +11.0% Services revenue 69.3 56.3 59.7 61.3 65.9 63.4 59.6 (0.2)% (1.5)% REV
Slide 24: Key figures (2/2)
KEY FIGURES (2/2) Revenue by region: quarterly and cumulated figures Total revenue by % Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 quarter - in €m ex. FX* Northern Europe 81.5 65.5 74.1 76.5 82.2 84.7 83.5 +12.3% Western Europe 71.8 70.7 77.3 72.1 75.5 78.2 79.9 +2.5% Central Europe 37.6 35.9 33.5 36
Slide 25: Government scheme's impact on ratios
GOVERNMENT SCHEME’S IMPACT ON RATIOS GOVERNMENT SCHEMES’ IMPACT ON RATIOS (%) YEAR-TO-DATE BY QUARTER (2.7) ppts (6.8) ppts (11.1) ppts (8.3) ppts (10.8) ppts +9.0 ppts In % In % Net combined Net combined ratio ratio 84.2 77.4 58.8 Net cost Net cost 56.1 ratio 69.4 ratio 28.5 61.1 61.8 62.4 27.5 58.
Slide 26: Combined ratio calculation
COMBINED RATIO CALCULATION In €k 9M-2020 9M-2021 ► Combined ratio before reinsurance Earned Premiums (B) (C) Gross earned premiums [A] 897,180 969,451 loss ratio before reinsurance + cost ratio before reinsurance (A) (A) Ceded premiums (383,236) (421,088) Net earned premiums [D] 513,944 548,363 ► Co
Slide 27: Q3-21 results vs consensus
Q3-21 RESULTS VS CONSENSUS # of in M€ Consensus Q3-2021 Spread Comment replies Total revenue 5 387 390 +3 Continuing rebound in client activity Gross Earned Premiums 4 325 331 +6 Government schemes's start to unwid Net Earned Premiums 5 233 219 (14) NEP/GEP 4 70.7% 66.4% (4.3) ppts Government scheme
Slide 28: 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-2021 Results 15 February 2022 after market close Agreement (cancellation) (in shares) # Shares rights Q1-2022 Results 28 A
Slide 29: 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 2021. This presentation includes only summary information and does not purport to be comprehensive. The Coface