Slide 1: FY-2022 Results Presentation to Financial Analysts
F Y- 2 0 2 2 R E S U LT S P R E S E N TAT I O N T O F I N A N C I A L A N A LY S T S 16 FEBRUARY 2023
Slide 2: FY-2022 Results: Net Income at €283.1M – 80% Proposed Pay-out
FY-2022 RESULTS: NET INCOME AT €283.1M – 80% PROPOSED PAY-OUT 01 02 03 04 05 06 FY- 2 0 2 2 FY- 2 0 2 2 C A P I TA L IFRS 17 & K E Y TA K E - APPENDICES HIGHLIGHTS R E S U LT S MANAGEMENT IFRS 9 A W AY S & OUTLOOK Regulated documents posted by COFACE SA have been secured and authenticated with the b
Slide 3: Part 1: FY-2022 Highlights
coface FOR TRADE PART 1 FY-2022 HIGHL
Slide 4: Coface Reports €283.1M Net Profit in 2022
COFACE REPORTS €283.1M NET PROFIT IN 2022 OF WHICH €54.7M IN Q4-22 Turnover reached €1,812m y-t-d, up 13.4% at constant FX and perimeter and up 15.6% on a reported basis › Trade Credit Insurance premiums growing by 14.4% driven by high client activity in still inflationary environment › Client reten
Slide 5: Solvency Ratio at 201%; 80% Proposed Pay-out
SOLVENCY RATIO AT 201%1 ; 80% PROPOSED PAY-OUT2 RoATE3 stands at 15.6% for the year Estimated solvency ratio at c. 201%1 › Solvency above target range set at 155-175% › Stable retention with reinsurance cession rate at 23% for 2022; private reinsurance renewed at stable conditions despite a generall
Slide 6: Record High Exposures, Russia Risks Mitigation Plan
RECORD HIGH EXPOSURES BUT WITH RUSSIA RISKS MITIGATION PLAN SOUND UNDERLYING QUALITY NOW ALMOST COMPLETED T O TAL T C I E X P O S U R E TCI EXPOSURE* TO RUSSIA (€bn) (€bn at current rate) 4.8 700 667 650 CAGR ’17 - ‘22 Export +14% +6.6% 600 Domestic** 2.6 550 +21% 500 1.4 1.2 450 0.6 400 FY-17 FY-18
Slide 7: Build to Lead – On Track with Targets
BUILD TO LEAD – ON TRACK WITH TARGETS COMBINED RATIO PAY-OUT RATIO <80% >80% Dividend 77.7% 79.8% 100% 100% SBB 64.6% 64.9% 80% 15% 2019 2020 2021 2022 2019* 2020 2021 2022** BUILD TO LEAD *In view of the scale of the health crisis and following the vote at the Combined General Shareholders’ Meeting
Slide 8: CSR: Embedding Strategy and Setting Targets
CSR: EMBEDDING STRATEGY AND SETTING TARGETS* RESPONSIBLE RESPONSIBLE RESPONSIBLE DRIVING THE INSURER EMPLOYER ENTERPRISE C U LT U R E › Decreased GH emissions of › Diversity & Inclusion: ›› Completed Completedaacarbon carbonfootprint footprint › Upgraded from AA to AAA by MSCI / investment portfolio
Slide 9: Part 2: FY-2022 Results
coface FOR TRADE PART 2 FY-2022 RESULT,
Slide 10: Turnover Growth at 13.4% Driven by TCI Premiums Up 14.4%
TURNOVER GROWTH AT 13.4% DRIVEN BY TCI PREMIUMS UP 14.4% 15.6% 13.4% Total revenue up 13.4% vs FY-2021 at constant FX and perimeter In €m 1,812 1,568 › Trade credit insurance* premiums growing at 14.4% at constant FX Gross Earned Premiums due to strong client activity and record high retention and u
Slide 11: Still Positive Client Activity and Record High Retention
STILL POSITIVE CLIENT ACTIVITY AND RECORD HIGH RETENTION Western Europe Northern Europe Central Europe Mediterranean & Africa 13.6% 12.7% 12.3% 11.3% 14.3% 13.4% 11.9% 13.8% 481 429 360 372 317 332 156 179 FY-21 FY-22 FY-21 FY-22 FY-21 FY-22 FY-21 FY-22 Good retention and activity. Better new High r
Slide 12: Record High Activity and Very Competitive Market
RECORD HIGH ACTIVITY AND A CONFIRMED VERY COMPETITIVE MARKET production* 133 138 129 New production at €110m, as Coface remains New 110 committed to underwriting discipline despite confirmed market exuberance. FY-19 FY-20 FY-21 FY-22 91.9% 92.9% 91.6% 91.7% Retention Retention rate at record level i
Slide 13: Annual Gross Loss Ratio at 31.2% Still Below Mid Cycle
ANNUAL GROSS LOSS RATIO AT 31.2% STILL BELOW MID CYCLE Loss ratio before reinsurance and including claims handling expenses, in % › Normalization is under way: ‒ Number of claims increasing since mid-21, now nearing pre-crisis 31.2 34.2 level 29.5 29.6 28.9 32.2 29.5 21.4 16.9 ‒ Large losses increas
Slide 14: Loss Ratio Up from Record Low Levels in Most Regions
LOSS RATIO UP FROM RECORD LOW LEVELS IN MOST REGIONS Loss ratio before reinsurance, including claims handling expenses – in % 9%* 6%* 8%* Group North America Latin America Asia Pacific 72.3*** 63.7 60.1** 51.8 45.8 48.6 43.4** 39.8 35.9 31.2 21.4 23.4 14.4 8.8 9.9 6.9 FY-19 FY-20 FY-21 FY-22 FY-19 F
Slide 15: Large Cases and Russian Reserves Reallocation During Q4-22
SOME LARGE CASES AND RUSSIAN RESERVES REALLOCATION DURING Q4-22 Loss ratio before reinsurance (by quarter), including claims handling expenses – in % 9%* 6%* 8%* Group North America Latin America Asia Pacific 133.5 52.9 28.9 32.2 29.5 34.2 21.7 20.0 24.5 20.2 10.5 2.6 4.8 12.0 7.6 1.3 0.9 2.2 1.6 -1
Slide 16: Continued Long Term Productivity Programs in Inflationary Context
CONTINUED LONG TERM PRODUCTIVITY PROGRAMS IN INFLATIONARY CONTEXT 15.0% 12.6% FY-22 vs FY-21 at 16.0% 14.7% constant FX & perimeter 851 228 In €m 223 740 +18.2% 205 Cost ratio before reinsurance, in % 201 incl. profit 196 195 54 51 167 sharing 44 50 46 External acquisition costs 37.4 33.2 31.6 34.2
Slide 17: Reinsurance Treaties Renewed at Stable Conditions
REINSURANCE TREATIES RENEWED AT STABLE CONDITIONS › Premium cession rate at 26.9% 12M-21 12M-22 › Claims cession rate at 15.5% as positive development of previous Gross earned premiums 1,312.6 1,527.5 years benefitted reinsurers, in particular public schemes in Q1-22 Net earned premiums 800.5 1,117.
Slide 18: Net Combined Ratio at 64.9% on Still Low Loss Ratio
NET COMBINED RATIO AT 64.9% ON STILL LOW LOSS RATIO +0.3 ppt › Net combined ratio up to 64.9% (vs 64.6% in 2021) and increases In % from combined ratio excluding public schemes (54.5% in 2021) 64.6 64.9 reflecting risk normalization and Russia related reserves. Net combined ratio 54.5 31.3 28.8 › Co
Slide 19: Financial Portfolio: Increasing Underlying Income with Higher Rates
FINANCIAL PORTFOLIO: INCREASING UNDERLYING INCOME WITH HIGHER RATES €m FY-21 FY-22 Investment Real Estate Income from investment portfolio without gains on sales** 33.1 44.6 Equities 7% Gains on sales and impairement, net of hedging*** 3.6 17.7 3% FX effect 7.0 (15.8) Other (1.6) (6.4) Loans, Deposi
Slide 20: FY-2022 Net Income at €283.1M of Which €54.7M in Q4-2022
FY-2022 NET INCOME AT €283.1M OF WHICH €54.7M IN Q4-2022 Income statement items - in €m 12M-21 12M-22 › Net earned premiums up by +40% at €1,117m on growing revenues Current operating income 316.0 422.6 and the end of public scheme Other operating income and expenses (3.2) (9.1) Operating income 312
Slide 21: RoATE Stands at 15.6%, Up 3.4 ppts
ROATE STANDS AT 15.6%, UP 3.4 PPTS Change in equity 283.1 (264.9) 2,141.0 (224.0) In €m 25.3 1,960.5 IFRS Equi ty a ttributable Distribu tio n to Net income impact Revaluatuion reserve Treasury shar es, IFRS Equi ty a ttributable to o wn ers of the par ent shareh olders (financial instr uments curre
Slide 22: Part 3: Capital Management
coface FOR TRADE PART 3 CAPITAL MANAG
Slide 23: Solid Balance Sheet
SOLID BALANCE SHEET FY-2022 simplified balance sheet In €m IFRS 17 “Insurance contracts” › See part 4 8,451 8,451 Goodw ill 239 & intangible assets 1,960 Shareholders’ 3,022 equity Financial strength Insurance investments 534 Financing liabilities (including hybrid debt) › Fitch: AA-, stable outlook
Slide 24: Robust Solvency Over Time
ROBUST SOLVENCY OVER TIME FY-2022 estimated Solvency ratio above target range 13.3 ppts (18.9 ppts) Low sensitivity to market shocks 13.1 ppts (2.5 ppts) market sensitivity tested through instantaneous shocks 205%* 201%* 196%* 192%* 31/12/2022 SCR cover 201% 194% 191% 191% +100 bps Interest rates (1
Slide 25: Solvency Required Capital as at 31 December 2022
SOLVENCY REQUIRED CAPITAL AS AT 31 DECEMBER 2022 201%1 PARTIAL INTERNAL MODEL 2,404 22 515 €m 1,270 (165) 1,199 46 223 Operational risk (129) Tier 3 168 976 223 1,867 Tier 2 Tier 1 Counterparty risk 328 Market risk Non-life underwriting risk 976 976 729 SCR components Diversification Tax adjustments
Slide 26: Part 4: IFRS 17 & IFRS 9
PART 4 IFRS 17 & IFRS 9
Slide 27: Coface's Strategy Remains Unaffected by IFRS 17
COFACE’S STRATEGY REMAINS UNAFFECTED BY IFRS 17 O U R S TAT E O F M I N D W H E N I M P L E M E N T I N G OUTCOME IFRS17 • Reserving philosophy remains broadly unchanged • Unchanged strategy: Build to Lead assumptions and through the cycle targets remain for the current business plan: • Apply simpli
Slide 28: Opening Balance Sheet Under IFRS 17 / 39 – December 2021
OPENING BALANCE SHEET UNDER IFRS 17 / 39 – DECEMBER 2021 2021 simplified balance sheet In €m I F R S 4 / I AS 3 9 I F R S 1 7 / I AS 3 9 8,039 8,039 Goodw ill 230 & intangible assets 7,271 7,271 Shareholders’ Goodw ill 230 2,141 & intangible assets equity Shareholders’ Insurance investments 3,213 2,
Slide 29: YE2022 Insurance Investment Portfolio Under an IFRS 9 View
OUR YE2022 INSURANCE INVESTMENT PORTFOLIO UNDER AN IFRS9 VIEW INVESTMENT PORTFOLIO – 2.9BN€ R E S H AP I N G T H E P O R T F O L I O T O T H E N E W ENVIRONMENT Investment Real Estate Loans, deposits 7% • IFRS 9 (excluding factoring) will be applied from 1st January 2023 & other financial without re
Slide 30: Part 5: Key Take-aways & Outlook
PART 5 KEY TAKE-AWAYS & OUTLOOK
Slide 31: Key Take-aways & Outlook
KEY TAKE-AWAYS & OUTLOOK Coface continued to deliver a strong operating performance in a challenging environment › Double digit revenue growth in both TCI (activity and retention) and business information › Annualized RoATE (Return on Average Tangible Equity) at 15.6% › Contained loss ratio despite
Slide 32: Part 6: Appendices
coface FOR TRADE PART 6 APPENDICES,»
Slide 33: Key Figures (1/2)
KEY FIGURES (1/2) QUARTERLY AND CUMULATED FIGURES Income statement items in €m / Quarterly figures Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 % % ex. FX* Gross earned premiums 312.1 326.7 330.7 343.2 361.3 392.7 398.1 375.3 +9.4% +7.9% Services revenue 65.9 63.4 59.6 66.3 69.5 71.4 70.1 73.5 +1
Slide 34: Key Figures (2/2)
KEY FIGURES (2/2) REVENUE BY REGION: QUARTERLY AND CUMULATED FIGURES Total revenue by quarter - in €m Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 V% ex. FX* Northern Europe 82.2 84.7 83.5 81.1 93.0 91.9 92.4 95.0 +16.5% Western Europe 75.5 78.2 79.9 83.0 80.8 93.3 96.8 88.7 +6.7% Central Europe
Slide 35: Exposure in Emerging Markets Maintained at a Stable Share
EXPOSURE IN EMERGING MARKETS MAINTAINED AT A STABLE SHARE Evolution of TCI exposure1 per FY-2022 total TCI exposure1 – Top 10 Advanced vs Emerging markets (in €bn) countries vs. others (in %) Germany 12.4% USA Dec-19 79% 21% 537 France 36.5% 10.8% Italy Dec-20 79% 21% 486 Spain Dec-21 United Kingdom
Slide 36: Combined Ratio Calculation
COMBINED RATIO CALCULATION In €k FY-2021 FY-2022 › Combined ratio before reinsurance Earned Premiums (B) (C) Gross earned premiums [A] 1,312,637 1,527,464 loss ratio before reinsurance + cost ratio before reinsurance (A) (A) Ceded premiums (512,098) (410,339) Net earned premiums [D] 800,539 1,117,12
Slide 37: Q4-22 Results vs Consensus
Q4-22 RESULTS VS CONSENSUS in M€ # of replies Consensus Q4-2022 Spread Comment Total revenue 5 466 449 (17) Still positive client activity (+8.3%) but momentum is slowing Gross Earned Premiums 5 394 375 (19) down with inflation decelerating Net Earned Premiums 5 294 277 (17) Stable reinsurance cessi
Slide 38: Management Team
MANAGEMENT TEAM GROUP MANAGEMENT COMMITTEE GROUP EXECUTIVE COMMITTEE Xavier DURAND Hugh BURKE Matthieu GARNIER Chief Executive Officer CEO Asia Pacific Information Services Director › 30+ years of international experience in › +20 years of international exp. › 20 years of exp. in financial regulated
Slide 39: Corporate Governance
CORPORATE GOVERNANCE Board of directors AUDIT & ACOUNTS COMMITTEE Bernardo SANCHEZ INCERA Chairman Age: 62 › 3 members: 2 independents incl. the chairman (independent) › Laetitia Leonard-Reuter (Chm.) › Board member › Isabelle Laforgue › David Gansberg Isabelle LAFORGUE Laetitia LEONARD-REUTER Indep
Slide 40: Financial Calendar & Investor Relations Contacts
FINANCIAL CALENDAR & INVESTOR RELATIONS CONTACTS Calendar Own shares transactions Next Event Date Own shares transactions 2022 Annual shareholders meeting 16 May 2023 Liquidity Buy-back Date LTIP TOTAL % Total of Voting Agreement (cancellation) Q1-2023 Results 25 May 2023 (in shares) # Shares rights
Slide 41: Important Legal Information
IMPORTANT LEGAL INFORMATION IMPORTANT NOTICE: Coface Group’s current beliefs, assumptions and expectations of its future performance, taking into account all information currently available. The Coface This presentation has been prepared exclusively for the purpose of the disclosure Group is under n