Coface Sa · EURONEXT:COFA
Coface Sa — Q1 2019 Earnings Presentation
26 slides from Coface Sa's earnings presentation, Apr 24, 2019
Slide 1: Q1-2019 Results: Presentation to Financial Analysts
Q1-2019 RESULTS PRESENTATION TO FINANCIAL ANALYSTS APRIL 24TH, 2019
Slide 2: Q1-2019 Results: Net income at €36.4m; RoATE stands at 9.0%
Q1-2019 Results: Net income at €36.4m; RoATE* stands at 9.0% 1 2 3 4 Q1-2019 Q1-2019 KEY TAKE AWAYS APPENDICES HIGHLIGHTS RESULTS & OUTLOOK * RoATE = Average return on tangible equity 2 Q1-2019 RESULTS | PRESENTATION TO FINANCIAL ANALYSTS | 24 APRIL 2019
Slide 3: Part 1: Q1-2019 Highlights
coface PART 1 Q1-2019 HIGHLIGHTS /
Slide 4: Coface reports €36.4m net profit; Fit to Win actions now fully effective
Coface reports €36.4m net profit Fit to Win actions now fully effective Turnover reached €365m y-t-d, up 6.7% at constant FX and perimeter − Most regions are contributing positively to growth − New production improving in mature markets; revenues supported by past client activity growth Q1-2019 net
Slide 5: Part 2: Q1-2019 Results
coface PART 2 Q1-2019 RESULTS /
Slide 6: Turnover growth at 6.7% driven by credit insurance premiums
Turnover growth at 6.7% driven by credit insurance premiums 6.2% 6.7% 344 365 Total revenue up 6.7% vs. Q1 2018 at constant FX In €m ► Trade credit insurance1 premiums growing organically at 8.0% at Gross Earned Premiums constant FX. (GEP) 278 299 ► Growth driven by client activity, higher new busin
Slide 7: Most regions are contributing positively to growth
Most regions are contributing positively to growth Western Europe Northern Europe Central Europe Mediterranean & Africa 0.1% (0.3)% 1.5% 1.7% 0.2% 2.1% 5.4% 6.8% 92 97 79 80 75 75 34 34 Q1-18 Q1-19 Q1-18 Q1-19 Q1-18 Q1-19 Q1-18 Q1-19 Growing new business in trade credit Insurance revenues growing at
Slide 8: Growing new production, record high retention and supportive client activity
Growing new production, record high retention and supportive client activity New production1 49 43 34 35 Growing new production in mature markets (WER, NER) confirms end of 2018 improvement Q1-16 Q1-17 Q1-18 Q1-19 93.1% 94.0% Retention rate1 90.9% 91.3% Record/high retention in most regions Q1-16 Q1
Slide 9: Gross loss ratio at 39.8% in a more complex environment
Gross loss ratio at 39.8% in a more complex environment Loss ratio before reinsurance and including claims handling expenses, in % ► Gross loss ratio at low levels, 39.7 45.0 46.5 45.3 39.8 improving versus recent quarters 43.6* 46.3* 42.2** ► Favourable prior periods underwriting development ► Posi
Slide 10: Improving mature Europe performance with stabilizing emerging markets
Improving mature Europe performance with stabilizing emerging markets Loss ratio before reinsurance, including claims handling expenses – in % 9%* 7%* 6%* Group North America Asia Pacific Latin America 146.8 85.0 63.3 51.4 60.2 57.9 ** 44.2** 39.8 49.0 44.6 53.8 51.3 39.1 35.9 23.6 28.6 FY-16 FY-17
Slide 11: Positive operating leverage drives cost ratio down
Positive operating leverage drives cost ratio down 3.0% 2.7% In €m 175 175 176 171 169 External acquisition 40 38 44 41 41 costs (commissions) Cost ratio before reinsurance, in % 34.8 35.7 37.0 36.0 33.2 Internal costs 131 131 131 134 134 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 V
Slide 12: Reinsurance result impacted by low loss ratios
Reinsurance result impacted by low loss ratios Q1-18 Q1-19 Gross earned premiums 278.4 299.0 Net earned premiums 198.6 212.3 ► Premium cession rate stabilized 29.0% 28.7% Premium cession rate ► Lower claims cession rate due to recoveries on highly reinsured facultatives Gross claims expenses (110.4)
Slide 13: Net combined ratio at 74.5% well below through the cycle average
Net combined ratio at 74.5% well below through the cycle average 2.0 ppts. In % 81.5 82.8 81.4 ► Net cost ratio improved to 31.9% (vs. 32.7% in 72.5 74.5 Net combined ratio Q1-18) 35.0 34.4 35.9 Net cost ratio 32.71 31.9 ► Investments fully financed by cost savings Net loss ratio 39.8 46.6 48.5 45.5
Slide 14: Financial portfolio: stabilised yield and lower hedging contribution
Financial portfolio: stabilised yield and lower hedging contribution Keeping a diversified investment strategy Investment Real Estate €m Q1-18 Q1-19 8% Equities Income from investment portfolio without gains on sales 2 10.0 10.6 6% Gains on sales and impairment / impairment's release 2.3 3.4 Bonds F
Slide 15: Q1-2019 net income at €36.4m
Q1-2019 net income at €36.4m Income statement items - in €m Q1-18 Q1-19 Current operating income 60.7 57.2 Fit to Win investments & restructuring expenses (2.2) (0.3) Other operating income and expenses (0.2) 0.1 Operating income 58.4 56.9 ► Robust operating income in a more complex environment Fina
Slide 16: RoATE stands at 9.0% for Q1-2019
RoATE stands at 9.0% for Q1-2019 Change in equity 8.5 in €m 1,881.8 30.6 36.4 1,806.2 IFRS Equity attributable Net income impact Revaluatuion reserve Treasury shares, IFRS Equity attributable to owners of the parent (financial instruments currency translation to owners of the parent Dec 31, 2018 AFS
Slide 17: Part 3: Key Take-aways & Outlook
PART 3 KEY TAKE-AWAYS & OUTLOOK
Slide 18: Key take-aways & outlook
Key take-aways & outlook Q1-2019 net income at €36.4m − Global economic environment remains difficult to read. Brexit is postponed − Net combined ratio at 74.5% driven by a loss ratio of 42.6% − RoATE stands high at 9.0% − Proposed DPS1 at 0.79€ for a 100% pay-out Fit to Win impacts now paying off i
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 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 % % ex. FX Gross earned premiums 278.4 282.3 292.2 289.7 299.0 +7.4% +8.0% Services revenue 65.6 58.7 58.5 59.3 66.4 +1.3% +1.0% REVENUE 344.0 340.9 350.7 349.1 365.5 +6.
Slide 21: Key figures (2/2)
Key figures (2/2) Revenue by region Total revenue - by quarter - in €m Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 V% ex. FX Northern Europe 79.0 73.2 76.2 74.7 80.2 +1.7% Western Europe 74.8 68.4 69.6 71.2 74.9 (0.3)% Central Europe 33.6 33.5 33.7 33.0 33.7 +2.1% Mediterranean & Africa 91.8 92.7 92.2 93.6 96.8 +
Slide 22: Claims ratio under control
Claims ratio under control Loss ratio before reinsurance, including claims handling expenses – in % 9%* 7%* 6%* Group North America Asia Pacific Latin America 94.1 65.8 59.5 79.4 37.8 50.9 51.3 39.7 45.0 46.5 45.3 39.8 44.6 28.6 31.1 28.9 26.6 9.8 -2.9 -6.4 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q1-18 Q2-18
Slide 23: Combined ratio calculation
Combined ratio calculation In €k Q1-2018 Q1-2019 ► Combined ratio before reinsurance Earned Premiums (B) (C) loss ratio before reinsurance + cost ratio before reinsurance Gross earned premiums [A] 278,416 299,029 (A) (A) Ceded premiums (79,839) (86,688) Net earned premiums [D] 198,577 212,341 ► Comb
Slide 24: Q1-19 results vs. consensus
Q1-19 results vs. consensus # of in M€ Consensus Q1-2019 Spread Comment replies Total revenue 6 355 365 +10.3 High retention in most countries, new production Gross Earned Premiums 6 292 299 +7.2 up in mature markets & higher client activity Net Earned Premiums 4 208 212 +4.4 NEP/GEP 4 71.3% 71.0% (
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 Annual shareholders meeting May 16th, 2019 31/03/2019 169,948 764,868 1,
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 2019. This presentation includes only summary information and does not purport to be comprehensive. The Coface Grou