Slide 1: FY-2023 Results Presentation to Financial Analysts
F Y- 2 0 2 3 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 27 FEBRUARY 2024
Slide 2: FY-2023 Results: Net Income at €240.5M – €1.30 Proposed Dividend
FY-2023 RESULTS: NET INCOME AT €240.5M – €1.30 PROPOSED DIVIDEND 01 02 03 04 05 FY- 2 0 2 3 FY- 2 0 2 3 C A P I TA L K E Y TA K E - APPENDICES HIGHLIGHTS R E S U LT S MANAGEMENT A W AY S & OUTLOOK Regulated documents posted by COFACE SA have been secured and authenticated with the blockchain technol
Slide 3: Part 1: FY-2023 Highlights
coface FOR TRADE PART 1 FY-2023 HIGHL
Slide 4: Coface Reports €240.5M Net Profit in 2023, of Which €50.8M in Q4-2023
COFACE REPORTS €240.5M NET PROFIT IN 2023 OF WHICH €50.8M IN Q4-2023 Turnover reached €1,868m y-t-d, up +6.0% at constant FX and perimeter › Trade Credit Insurance premiums growing by +5.4%. Negative client activity in H2-23 with lower inflation and economic slowdown › Client retention at record hig
Slide 5: Solvency Ratio at 199%; €1.30 Proposed Dividend per Share
SOLVENCY RATIO AT 199%1 ; €1.30 PROPOSED DIVIDEND PER SHARE2 RoATE3 stands at 13.4% for the year Estimated solvency ratio at c. 199%1 › Solvency above target range set at 155-175% › Stable retention with reinsurance cession rate at 23% for 2023; reinsurance renewed at stable conditions despite a sti
Slide 6: Clearly Met or Exceeded Build to Lead Through the Cycle Objectives
CLEARLY MET OR EXCEEDED BUILD TO LEAD THROUGH THE CYCLE OBJECTIVES COMBINED RATIO PAY-OUT RATIO <80% >80% 77.7% 79.8% Dividend 64.6% 67.6% 64.3% 100% 100% SBB 80% 81% 15% 2019 2020 2021 2022 2023 2019* 2020 2021 2022 2023** IFRS 4 IFRS 17 BUILD TO LEAD *In view of the scale of the health crisis and
Slide 7: Argentinian Peso Divided by Four in a Year
ARGENTINIAN PESO DIVIDED BY FOUR IN A YEAR ARGENTINA PESO PER U.S DOLLARS (in 2023) NEGATIVE FX IMPACT IN 2023 (€M) 16 4 1 1 Q1-23 Q2-23 Q3-23 Q4-23 KEY HIGHLIGHTS • Coface changed its functional currency from ARS to USD for the insurance company • Foreign exchange restrictions are still in place •
Slide 8: CSR: Strategy and Targets – Actions Taken
CSR: STRATEGY AND TARGETS* RESPONSIBLE RESPONSIBLE RESPONSIBLE DRIVING THE INSURER EMPLOYER ENTERPRISE C U LT U R E › Decreased GHG emissions of › Diversity & Inclusion: › Completed a carbon footprint › Upgraded from AA to AAA by MSCI / investment portfolio and joined NZAOA ✓ 80/100 in the Group Gen
Slide 9: Part 2: FY-2023 Results
coface FOR TRADE PART 2 FY-2023 RESULT,
Slide 10: Turnover Growth at 6.0% with Activity Continued Slowdown
TURNOVER GROWTH AT 6.0% WITH ACTIVITY CONTINUED SLOWDOWN 3.8% 6.0% Total revenue up +6.0% vs. FY-22 at constant FX and perimeter (applying IFRS17 methodology) In €m 1,799 1,868 › Trade credit insurance* premiums growing at +5.4% at constant FX Insurance Revenue due to record high retention. Client a
Slide 11: High Retention Across Regions, Activities Reflecting Local Economies
HIGH RETENTION ACROSS REGIONS, ACTIVITIES REFLECTING LOCAL ECONOMIES Western Europe Northern Europe Central Europe Mediterranean & Africa 5.7% 5.9% 1.7% 2.0% (2.7)% (4.5)% 8.6% 12.4% 485 526 360 380 373 380 182 177 FY-22 FY-23 FY-22 FY-23 FY-22 FY-23 FY-22 FY-23 Activity slowing down. Adjacencies Im
Slide 12: Reduced Activity, Record High Retention & Rebounding New Sales
REDUCED ACTIVITY, RECORD HIGH RETENTION & REBOUNDING NEW SALES production* 138 129 117 New production rebounding at €117m driven by New 110 increased demand FY-20 FY-21 FY-22 FY-23 92.9% 93.1% 91.9% 91.7% Retention Retention rate at record level in a still rate* competitive market FY-20 FY-21 FY-22
Slide 13: Gross Loss Ratio at 35.8%, with High Reserves Bookings and Releases
GROSS LOSS RATIO AT 35.8%, WITH HIGH RESERVES BOOKINGS AND RELEASES Loss ratio before reinsurance and including claims handling expenses, in % › Slow normalization continues: 35.8 32.4 41.8 35.5 40.7 38.1 37.5 ‒ Number of claims increasing since mid-21, FY-2023 now 8% 35.5 31.5 26.2 lower than in 20
Slide 14: Loss Ratios Remain Under Control in Most Regions
LOSS RATIOS REMAIN UNDER CONTROL IN MOST REGIONS Loss ratio before reinsurance, including claims handling expenses – in % 9%* 5%* 7%* Group North America Latin America Asia Pacific 82.6 72.3** 63.7 51.8 50.5 48.6 35.5 35.8 21.4 27.5 14.4 19.0 19.9 6.9 8.8 8.2 FY-20 FY-21 FY-22 FY-23 FY-20 FY-21 FY-2
Slide 15: Risks Well Under Control Excluding LatAm Large Case
RISKS WELL UNDER CONTROL EXCLUDING LATAM LARGE CASE Loss ratio before reinsurance (by quarter), including claims handling expenses – in % 9%* 5%* 7%* Group North America Latin America Asia Pacific 165.8 180.7 82.6 35.5 40.7 38.1 37.5 48.1 49.7 26.2 31.8 27.7 28.3 22.3 29.2 25.5 0.0 13.5 -31.6 -52.3
Slide 16: Cost Ratio Improving Despite Revenue Slowdown and Investments
COST RATIO IMPROVING DESPITE REVENUE SLOWDOWN AND INVESTMENTS 4.8% 7.0% 1.5% 4.0% 859 819 220 223 209 211 216 In €m 197 196 50 45 50 52 50 Cost ratio before reinsurance, in % External costs (commissions) 35.1 32.4 34.8 623 662 29.4 29.8 170 159 159 166 178 Internal costs FY-22 FY-23 Q4-22 Q1-23 Q2-2
Slide 17: Reinsurance Treaties Again Renewed at Stable Conditions
REINSURANCE TREATIES AGAIN RENEWED AT STABLE CONDITIONS 12M-22 12M-23 › Premium cession rate at 27.2% Insurance revenue 1,515.7 1,559.1 › Claims cession rate at 23.3% with limited impact from Net earned premiums 1,106.9 1,135.0 non-proportional treaty on large loss 27.0% 27.2% Premium cession rate ›
Slide 18: Net Combined Ratio Improved at 64.3%
NET COMBINED RATIO IMPROVED AT 64.3% (3.3) ppts In % 67.6 Net combined ratio 64.3 › Net combined ratio improved to 64.3% (vs. 67.6% at IFRS17 Net cost ratio 28.0 methodology in 2022) reflecting improving cost ratio, slightly better 26.6 loss ratio in a more difficult economic environment and no furt
Slide 19: Financial Portfolio: Increased Underlying Income with Higher Rates
FINANCIAL PORTFOLIO: INCREASED UNDERLYING INCOME WITH HIGHER RATES €m FY-23 Investment Real Estate Income from investment portfolio without gains on sales** 64.9 Equities 6% FVPL and gains on sales and impairement, net of hedging*** (3.7) 2% FX effect (38.7) Other (10.1) Loans, 12.4 Deposit & Net in
Slide 20: 2023 Net Income at €240.5M of Which €50.8M in Q4-2023
2023 NET INCOME AT €240.5M OF WHICH €50.8M IN Q4-2023 Income statement items - in €m 12M-22 12M-23 Current operating income 366.8 367.9 › Net earned premiums up by 2.5% at €1,135m Other operating income and expenses (9.5) (5.0) Operating income 357.2 362.9 › Operating income up 1.6% Finance costs (2
Slide 21: RoATE Stands at 13.4%, Up 0.7 ppt
ROATE STANDS AT 13.4%, UP 0.7 PPT Change in equity 25.0 (6.4) 2,050.8 In €m 2,018.6 (227.0) 240.5 IFRS Equi ty a ttributable to Distribu tio n to Net income impact Revaluation reserve Treasury shar es, cur rency IFRS Equi ty a ttributable to owners of the paren t shareh olders (financial instr ument
Slide 22: Part 3: Capital Management
coface FOR TRADE PART 3 CAPITAL MANAG
Slide 23: Solid Balance Sheet
SOLID BALANCE SHEET FY-2023 simplified balance sheet In €m Financial strength 7,898 7,898 Goodw ill & intangible assets 240 › Fitch: AA-, stable outlook 2,053 Shareholders’ equity rating affirmed on 9 November 2023 Insurance investments 3,341 Financing liabilities › Moody’s: A1, stable outlook 832 (
Slide 24: Robust Solvency Over Time
ROBUST SOLVENCY OVER TIME FY-2023 estimated Solvency ratio above target range 28.7 ppts (14.8 ppts) Low sensitivity to market shocks market sensitivity tested through instantaneous shocks 201%* 199%* (13.6 ppts) 196%* 31/12/2023 SCR cover 199% 194% (2.3 ppts) +100 bps Interest rates (1) 193% 175% +1
Slide 25: Solvency Required Capital as at 31 December 2023
SOLVENCY REQUIRED CAPITAL AS AT 31 DECEMBER 2023 199%1 PARTIAL INTERNAL MODEL 2,586 25 626 €m 1,349 (156) 1,302 Operational risk 48 239 (130) Tier 3 158 1,063 Tier 2 Counterparty risk 239 Tier 1 1,935 Market risk 297 Non-life underwriting risk 1,063 1,063 846 SCR components Diversification Tax adjus
Slide 26: Part 4: Key Take-Aways & Outlook
PART 4 KEY TAKE-AWAYS & OUTLOOK
Slide 27: Key Take-Aways & Outlook
KEY TAKE-AWAYS & OUTLOOK Coface delivers stable net income under IFRS17 methodology in a slowing economy › Net combined ratio under IFRS 17 further improved at 64.3% › Annualized RoATE (Return on Average Tangible Equity) at 13.4% in challenging financial markets (Real estate, Argentina, hyperinflati
Slide 28: Part 5: Appendices
coface FOR TRADE PART 5 APPENDICES.»
Slide 29: Key Figures (1/2)
KEY FIGURES (1/2) QUARTERLY AND CUMULATED FIGURES Income statement items in €m / Quarterly figures Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 % % ex. FX* Insurance revenue 359.2 374.0 403.5 379.0 395.3 407.8 384.7 371.3 (2.1)% +1.6% Services revenue 68.8 71.6 70.1 73.0 79.8 76.8 73.4 79.2 +8.6%
Slide 30: Key Figures (2/2)
KEY FIGURES (2/2) REVENUE BY REGION: QUARTERLY AND CUMULATED FIGURES Total revenue by quarter - in €m Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 V% ex. FX* Northern Europe 94.7 92.8 92.7 92.9 102.2 97.9 91.2 88.2 (4.8)% Western Europe 79.8 87.0 103.9 88.9 96.6 97.7 95.4 90.3 +1.4% Central Europ
Slide 31: Exposure in Emerging Markets Maintained at a Stable Share
EXPOSURE IN EMERGING MARKETS MAINTAINED AT A STABLE SHARE Evolution of TCI exposure1 per FY-2023 total TCI exposure1 – Top 10 Advanced vs. Emerging markets (in €bn) countries vs. others (in %) Germany 12.2% USA Dec-20 83% 17% 486 France 36.5% 10.4% Italy Dec-21 82% 18% 588 Spain United Kingdom Dec-2
Slide 32: Combined Ratio Calculation
COMBINED RATIO CALCULATION In €k FY-2022 FY-2023 › Combined ratio before reinsurance Earned Premiums (B) (C) Insurance revenue [A] 1,515,663 1,559,063 loss ratio before reinsurance + cost ratio before reinsurance (A) (A) Ceded premiums (408,812) (424,015) Net earned premiums [D] 1,106,850 1,135,048
Slide 33: Q4-23 Results vs. Consensus
Q4-23 RESULTS VS. CONSENSUS in M€ # of replies Consensus Q4-2023 Spread Comment Total revenue 5 449 450 +1 Still positive client activity (+2.3%) but H2-23 is negative with Gross Earned Premiums 5 372 371 (1) inflation decelerating Net Earned Premiums 5 272 271 (1) Stable reinsurance cession NEP/GEP
Slide 34: 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 regulate
Slide 35: Corporate Governance as of 31 December 2023
CORPORATE GOVERNANCE AS OF 31 DECEMBER 2023 Board of directors AUDIT & ACOUNTS COMMITTEE Chairman Bernardo SANCHEZ INCERA Age: 63 › 3 members: 2 independents incl. the chairman (independent) › Laetitia Leonard-Reuter (Chm.) › Board member › Isabelle Laforgue › David Gansberg Isabelle LAFORGUE Laetit
Slide 36: Financial Calendar & Investor Relations Contacts
FINANCIAL CALENDAR & INVESTOR RELATIONS CONTACTS Calendar Own shares transactions Next Event Date Own shares transactions Capital Market Day 5 March 2024 – Paris Liquidity Buy-back Date LTIP TOTAL % Total of Voting Agreement (cancellation) Q1-2024 Results 6 May 2024 (after market close) (in shares)
Slide 37: 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