Slide 1: Q1-2018 Results: Presentation to Financial Analysts
Q1-2018 RESULTS PRESENTATION TO FINANCIAL ANALYSTS APRIL 24TH, 2018
Slide 2: Q1-2018 Results: Net income at €35.5m; RoATE stands at 8.8%
Q1-2018 Results: Net income at €35.5m; RoATE stands at 8.8% 1 2 3 4 Q1-2018 Q1-2018 KEY TAKE AWAYS APPENDICES HIGHLIGHTS RESULTS & OUTLOOK 2 Q1-2018 RESULTS | PRESENTATION TO FINANCIAL ANALYSTS | 24 APRIL 2018
Slide 3: Part 1: Q1-2018 Highlights
coface PART 1 Q1-2018 HIGHLIGHTS /
Slide 4: Fit to Win execution drives profitability in a supportive economic environment
Fit to Win execution drives profitability in a supportive economic environment Turnover reached €344m y-t-d, up 2.1% at constant FX and perimeter − Both mature and emerging markets growing driven by client activity − Client retention climbs further in competitive pricing environment Q1-2018 net loss
Slide 5: Part 2: Q1-2018 Results
coface PART 2 Q1-2018 RESULTS /
Slide 6: Turnover growth at 2.1% driven by client activity
Turnover growth at 2.1% driven by client activity (1.2)% 2.1% In €m 348 344 Total revenue up 2.1% vs. Q1 2017 at constant FX ► Growth mainly driven by client activity (better volume effect) Gross Earned Premiums and higher retention rate (GEP) 282 278 ► Improved economic environment continues to dri
Slide 7: Fit to Win growth strategies starting to deliver
Fit to Win growth strategies starting to deliver Western Europe Northern Europe Central Europe Mediterranean & Africa 2.2% 3.6% (1.1)% (1.1)% 5.3% 5.2% 5.8% 7.1% 87 92 80 79 73 75 32 34 Q1-17 Q1-18 Q1-17 Q1-18 Q1-17 Q1-18 Q1-17 Q1-18 Record retention and Lower factoring Positive net production and I
Slide 8: Supportive client activity and record retention
Supportive client activity and record retention New production1 45 49 43 33 Slow start in new production though noticeable improvement in Asia Q1-15 Q1-16 Q1-17 Q1-18 93.9% 91.3% Retention rate1 89.0% 90.9% Record/high level of retention across all regions Q1-15 Q1-16 Q1-17 Q1-18 Price effect 1 Cont
Slide 9: Gross Loss ratio at record low driven by underwriting focus and good economy
Gross Loss ratio at record low driven by underwriting focus and good economy Loss ratio before reinsurance and including claims handling expenses, in % ► Gross loss ratio at record low levels 57.8 in line with recent quarters 54.2 50,3 43.0 39.7 ► Strong momentum supported by positive economic 9.7 e
Slide 10: Continued improvement driven by Asia and North America
Continued improvement driven by Asia and North America Loss ratio before reinsurance, including claims handling expenses – in % 8%* 6%* 5%* Group North America Asia Pacific Latin America 146.8 100.6 113.4 85.0 63.3 56.3 49.0 53.8 51.0 51.4 60.2 39.7 35.9 31.1 -2.9 -6.4 FY-15 FY-16 FY-17 Q1-18 FY-15
Slide 11: Continued tight cost controls
Continued tight cost controls (0.8)% 2.8% Internal costs In €m In €m 172 176 168 171 167 External acquisition 37 131 131 41 39 40 40 (4) 4 costs (commissions) 6 (6) Internal costs 131 139 128 127 131 Q1-2017 FX Cost Investments Inflation Q1-2018 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 savings V% V% ex. FX ► A
Slide 12: Reinsurance result impacted by record low loss ratios and growing cession rate
Reinsurance result impacted by record low loss ratios and growing accounting cession rate Q1-17 Q1-18 Gross earned premiums 282.2 278.4 ► Higher premium cession rate (underwriting years 2017 and Net earned premiums 207.9 198.6 2018) materialising in accounting numbers 26.3% 28.7% Premium cession rat
Slide 13: Net combined ratio at 72.5% driven by lower loss ratio
Net combined ratio at 72.5% driven by lower loss ratio (19.5)ppts. In % ► Net combined ratio improved to 72.5% Net combined ratio 92.0 95.4 (vs. 76.4% in Q4-17) 81.7 76.4 Net cost ratio 72.5 ► Investments fully financed by cost savings 33.9 37.1 35.4 34.6 32.7 ► Full year net combined ratio down by
Slide 14: Financial portfolio: slight increase of investment income
Financial portfolio: slight increase of investment income Keeping a diversified investment strategy €m Q1-17 Q1-18 Investment Real Estate Income from investment portfolio 2 13.7 12.3 7% Equities Income from investment portfolio without gains on sales 9.8 10.0 8% Bonds o/w gains on sales 3.9 2.3 62%
Slide 15: Q1-2018 net income at €35.5m
Q1-2018 net income at €35.5m Income statement items - in €m Q1-17 Q1-18 Current operating income 20.1 60.7 Fit to Win investments & restructuring expenses (0.6) (2.2) Other operating income and expenses (0.4) (0.2) ► Operating income multiplied by 3 at €58.4m, Operating income 19.2 58.4 in line with
Slide 16: RoATE stands at 8.8% for Q1-2018
RoATE stands at 8.8% for Q1-2018 Change in equity (8.7) in €m 35.5 (11.5) 1,817.9 1,802.6 IFRS Equity attributable to Net income impact Revaluatuion reserve Treasury shares, currency IFRS Equity attributable to owners of the parent (financial instruments AFS) translation differences & others owners
Slide 17: Part 3: Key Take-aways & Outlook
PART 3 KEY TAKE-AWAYS & OUTLOOK
Slide 18: Key take-aways & outlook
Key take-aways & outlook Q1-2018 operating income multiplied by 3x at €58.4m − Global economic environment remains favourable − Net combined ratio at 72.5% driven by a record low loss ratio of 39.8% − RoATE stands high at 8.8% − Proposed DPS1 at 0.34€ ; share buyback program execution underway Fit t
Slide 19: Part 4: Appendices
coface PART 4 APPENDICES /
Slide 20: Key figures (1/2)
Key figures (1/2) Quarterly and cumulated figures Income statements items in €m - quarterly figures Q1-2017 Q2-2017 Q3-2017 Q4-2017 Q1-2018 % % ex. FX Gross earned premiums 282.2 283.4 271.6 272.5 278.4 (1.3)% +2.4% Services revenue 66.1 60.0 57.9 61.2 65.6 (0.8)% +0.6% REVENUE 348.3 343.4 329.4 333
Slide 21: Key figures (2/2)
Key figures (2/2) Revenue by region Total revenue - by quarter - in €m Q1-2017 Q2-2017 Q3-2017 Q4-2017 Q1-2018 V% ex. FX Northern Europe 79.8 75.1 74.7 74.2 79.0 (1.1)% Western Europe 73.1 69.3 68.5 69.8 74.8 +3.6% Central Europe 31.9 30.9 31.0 34.0 33.6 +5.2% Mediterranean & Africa 86.8 87.7 85.1 8
Slide 22: Overall improvement visible driven by North America and Asia Pacific
Overall improvement visible driven by North America and Asia Pacific Loss ratio before reinsurance, including claims handling expenses – in % 8%* 6%* 5%* Group North America Asia Pacific Latin America 128.5 60.7 63.5 61.5 57.8 54.2 54.3 38.7 54.5 47.5 43.0 50.3 39.7 39.0 31.1 15.9 -6.4 -20.4 -7.9 -2
Slide 23: Combined ratio calculation
Combined ratio calculation In €k Q1-2017 Q1-2018 ► Combined ratio before reinsurance Earned Premiums (B) (C) Gross earned premiums [A] 282,163 278,416 loss ratio before reinsurance + cost ratio before reinsurance (A) (A) Ceded premiums (74,271) (79,839) Net earned premiums [D] 207,892 198,577 ► Comb
Slide 24: Q1-18 results vs. consensus
Q1-18 results vs. consensus # of in M€ Consensus Actual Spread Comment responses Total turnover 6 348 344 (4) Adverse FX effect Gross Earned Premiums 6 284 278 (5) GEP up +2.4% l-f-l on good activity Net Earned Premiums 6 205 199 (7) NEP/GEP 6 72.4% 71.3% (1.1)pt Higher cession goes through the P&L
Slide 25: Financial Calendar & investor relations contacts
Financial Calendar & investor relations contacts Calendar Own shares transactions Own shares transactions Next Event Date Date Liquidity LTIP Buy-back TOTAL % Total of Voting Agreement (cancellation) (in shares) # Shares rights AGM May 16th, 2018 31/03/2018 125,349 406,166 554,564 1,086,079 0.69% 15
Slide 26: 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 31 March 2018. This presentation includes only summary information and does not purport to be comprehensive. The Coface Grou