Slide 1: Q1-2017 Results
Q1-2017 Results Net income at €7.3m driven by an improvement in net loss ratio Fit to Win progressing as planned Presentation to financial analysts April 26th, 2017
Slide 2: Today’s agenda
Today’s agenda 1 Highlights for the first quarter 2 Q1-2017 results 3 Key take-aways & outlook Financial analysts presentation Q1-2017 Results - April 26th 2017 / 2
Slide 3: Highlights for the first quarter
1 Highlights for the first quarter
Slide 4: €7.3m net profit, driven by better net combined ratio
€7.3m net profit, driven by better net combined ratio Q1-2017 highlights • Turnover reaches €348.3m down (2.2)% at constant FX and perimeter* - Mature markets stable - North America declining given the non-repeat of large deals signed in ‘16 - Emerging markets are still impacted by the effect of ris
Slide 5: Q1-2017 Results
2 Q1-2017 Results
Slide 6: Revenue decline slowing thanks to client activity
Revenue decline slowing thanks to client activity (4.6)% (5.4)% (1.3)% (2.2)% In €m 365 353 348 ► Total revenues down (1.3)% vs. Q1-2016*, including a slightly positive FX impact Gross Earned Premiums 289 289 282 (GEP) ► Pricing remains negative but is offset by better client activity ► Regions show
Slide 7: Revenue driven by shift in growth strategies and a rebound of client activity
Revenue driven by shift in growth strategies and a rebound of client activity Western Europe Northern Europe Central Europe Mediterranean & Africa (13.4)% (12.0)% (4.3)% (4.3)% 3.2% 0.9% 2.5% 2.6% 1.0% 2.6% 84 83 87 73 80 85 72 32 31 Q1-16 Q1-16 Q1-17 Q1-16 Q1-17 Q1-16 Q1-17 Q1-16 Q1-17 ex. SEGM* Im
Slide 8: Good retention, improved price and volumes but new business slow
Good retention, improved price and volumes but new business slow New production1 54 50 46 39 New production impacted by risk action plans in Emerging Markets ; flat in Mature Markets Q1-2014 Q1-2015 Q1-2016 Q1-2017 92.5% Retention rate1 91.9% 89.4% 90.7% Good overall retention rate vs. prior years Q
Slide 9: Risk actions plans impact materializing
Risk actions plans impact materializing Loss ratio before reinsurance and including claims handling expenses, in % Effects of risk reduction measures taken in 2015-2016 are appearing 70.1 67.6 61.8 54.0 57.8 ► Loss ratio improvement mainly due to Asia and North America ► In other regions, the perfor
Slide 10: Loss ratio: improvement driven by Asia and North America
Loss ratio: improvement driven by Asia and North America Loss ratio before reinsurance, including claims handling expenses – in % 9%* 7%* 6%* Group North America Asia Pacific Latin America 146.8 128.5 63.3 85.0 100.6 113.4 57.8 51.0 56.3 60.7 47.6 51.4 59.9 60.2 54.5 24.1 FY-2014 FY-2015 FY-2016 Q1-
Slide 11: Continuing to execute on costs
Continuing to execute on costs Cost ratio before reinsurance, in % 34.2 0.4 34.7 ► Cost ratio: negative comparison vs. Q1-2016 mainly 2.1 0.1 32.1 due to turnover reduction Q1-2016 Contribution Q1-2016 of SEGM ex. SEGM Expenses evolution Revenues decrease Q1-2017 ► Operational efficiency plan under
Slide 12: Reinsurance result benefits from higher cession rate
Reinsurance result benefits from higher cession rate ► Higher premium cession rate (underwriting year 2017) In €m Q1-2016 Q1-2017 will progressively materialize in accounting number Gross earned premiums 288.5 282.2 (+2.4ppts in Q1-17) Net earned premiums 219.7 207.9 ► Claims cession rate increased
Slide 13: Net combined ratio driven down by better loss ratio, increased reinsurance and a FX gain
Net combined ratio driven down by better loss ratio, increased reinsurance and a FX gain Q1-2017 net combined ratio improved by 10.3ppts vs. Q4-2016 * +3ppts. In % 107.2 109.4 102.3 ► Better net loss ratio thanks to risk action plans 89.7 92.0 materializing Net combined ratio 34.0 36.9 34.4 Net cost
Slide 14: Financial portfolio: stable performance in a low rate environment
Financial portfolio: stable performance in a low rate environment Financial result impacted by FX Keeping a diversified and proactive investment strategy €m Q1-2016 Q1-2017 Investment Income from investment portfolio 2 6.9 13.7 Equities Real Estate Income from investment portfolio without gains on s
Slide 15: Tax rate remains high and volatile
Tax rate remains high and volatile 2016 2017 €m Q1 H1 9M FY Q1 Operating income after finance cost 31.3 42.5 42.2 96.0 14.8 Tax rate 30.1% 41.8% 48.8% 50.1% 52.0% Corporate income tax 9.4 17.8 20.6 48.1 7.7 ► Tax rate remains high as profit and losses are unevenly distributed across countries ► Norm
Slide 16: Q1-17 net income at €7.3m
Q1-17 net income at €7.3m Q1-2016 Income statement items - in €m Q1-2016 Q1-2017 ex. SEGM* Current operating income 37.3 31.6 20.1 ► Improving operating performance Fit to Win investments & restructuring expenses - - (0.6) vs. recent quarters Other operating income and expenses (1.0) (1.0) (0.4) Ope
Slide 17: RoATE stands at 1.9% for Q1-17
RoATE stands at 1.9% for Q1-17 Change in equity 6.1 1,770.4 in €m 7.3 3.0 1,755.2 (1.2) IFRS Equity Distribution to Net income Revaluation reserve Treasury shares, IFRS Equity attributable shareholders impact (financial instruments currency translation attributable to owners of the AFS) differences
Slide 18: Key takeaways & outlook
3 Key takeaways & outlook
Slide 19: Key takeaways & outlook
Key takeaways & outlook • Fit to Win – Progressing as planned – Savings in line with expectations • Business volume trends improving, but Asia, North America and Northern Europe still declining • Costs under control • Better risk performance driven by – Sustained performance in Europe – Improvement
Slide 20: Annexes
Annexes
Slide 21: Key figures (1/3)
Key figures (1/3) Quarterly figures 2016 2017 % Q1-2017 vs. % Income statement items - in €m Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1-2016 ex. FX ex. SEGM* ex. SEGM* ex. SEGM* ex. SEGM* ex. SEGM Consolidated revenues 365.0 353.0 351.7 337.9 348.7 334.3 345.9 332.7 348.3 (1.3)% (2.2)% of which gross ea
Slide 22: Key figures (2/3)
Key figures (2/3) Cumulated figures 2016 2017 % % Income statement items - in €m Q1 H1 9M FY Q1-2017 vs. Q1 H1 9M FY Q1 H1 9M FY ex. FX ex. SEGM* ex. SEGM* ex. SEGM* ex. SEGM* Q1-2016 Consolidated revenues 365.0 353.0 716.7 691.0 1,065.4 1,025.3 1,411.3 1,357.9 348.3 (1.3)% (2.2)% of which gross ear
Slide 23: Key Figures (3/3)
Key Figures (3/3) Turnover by region 2016 2017 V% Turnover by region - by quarter - in €m Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1-2017 vs. Q1-2016 Northern Europe 83.4 74.7 76.8 72.4 79.8 (4.3)% Western Europe - ex. SEGM** 72.4 68.9 66.0 66.5 73.1 +1.0% Central Europe 30.9 30.4 30.0 30.0 31.9 +3.2% Mediterranean
Slide 24: Overview of net combined ratio calculations
Overview of net combined ratio calculations Adjusted Net Earned Premiums Adjusted net operating expenses Q1-2016 Q1-2016 In €k Q1-2016 Q1-2017 In €k Q1-2016 Q1-2017 ex. SEGM* ex. SEGM* Gross earned premiums A 288,540 288,540 282,163 Commissions - General external expenses 39,020 39,020 40,821 Ceded
Slide 25: Gross loss ratio per quarter
Gross loss ratio per quarter Loss ratio before reinsurance, including claims handling expenses – in % 9%* 7%* 6%* Group North America Asia Pacific Latin America 173.4 169.7 164.5 70.1 67.6 128.5 61.8 57.8 54.0 98.4 83.2 83.2 84.5 75.3 83.6 84.0 60.7 54.5 39.8 39.4 Q1-2016 Q2-2016 Q3-2016 Q4-2016 Q1-
Slide 26: Q1-17 results vs consensus
Q1-17 results vs consensus in M€ # of reply Mean Actual Spread Comment Total turnover 5 351 348 -3 Top line still declining Gross Earned Premiums 5 286 282 -4 Better performance in mature markets (client activity) Net Earned Premiums 4 210 208 -2 EM impacted by risk action plans NEP/GEP 4 72.6% 73.7
Slide 27: Financial strength acknowledged by rating agencies
Financial strength acknowledged by rating agencies Coface is rated ‘AA-’ by Fitch Ratings and ‘A2’ by Moody’s, both with a stable outlook The positive assessments by the two agencies is based on 3 key drivers: 1. Coface's strong competitive position in the global credit insurance market 2. Robus
Slide 28: Management team
Management team CEO Xavier Durand 25+ years of international experience in regulated financial services Working for Coface since 2016 Group central functions Strategy & Business Development CFO & Risk Director General Secretary Chief Operating Officer Director Carine Pichon Carole Lytton Valérie Bra
Slide 29: Corporate governance
Corporate governance Board of Directors Laurent MIGNON Chairman CEO of Natixis Non independent members Daniel KARYOTIS Jean ARONDEL Jean-Paul DUMORTIER ► BPCE ► BPCE ► BPCE Anne SALLE MONGAUZE Isabelle RODNEY ► BPCE ► BPCE Sharon MACBEATH Olivier ZARROUATI Eric HÉMAR Independent members ► Tarkett ►
Slide 30: Financial calendar & Investor Relations contacts
Financial calendar & Investor Relations contacts Calendar Next Event Date IR Contacts: investors@coface.com AGM 17 May 2017 Ex-dividend date 22 May 2017 Thomas JACQUET Dividend payment date 24 May 2017 Head of Investor Relations & Rating Agencies Q2-2017 Results 28 July 2017, before market opening t
Slide 31: Important legal information
Important legal information IMPORTANT NOTICE: This presentation has been prepared exclusively for the purpose of the disclosure of Coface Group’s Q1-2017 results, released on April 26, 2017. This presentation includes only summary information and does not purport to be comprehensive. The Coface Grou