Slide 1: Q1-2016 results
Q1-2016 results A tough quarter in a polarized environment May 4th, 2016 (Limited examination by Statutory Auditors)
Slide 2: Important legal information
Important legal information IMPORTANT NOTICE: This presentation has been prepared exclusively for the purpose of the disclosure of Coface Group’s Q1-2016 results, released on May 4th, 2016. This presentation includes only summary information and does not purport to be comprehensive. The Coface Group
Slide 3: Agenda
Agenda 1. Key business highlights for Q1-2016 2. Q1-2016 Results 3. Key takeaways
Slide 4: Key business highlights for Q1-2016
1 Key business highlights for Q1-2016
Slide 5: Q1-2016 financial highlights
Q1-2016 financial highlights €22m net income (group share), €27m ex. one-offs1 €365m turnover: tough quarter with -6.3% (-3.8% on comparable basis2) vs. strong Q1-15; stable vs. Q4-15 Contrasted regional sales performances: - Lasting soft conditions in mature markets particularly in Europe - Act
Slide 6: Q1-2016 business highlights
Q1-2016 business highlights Continuing to improve risk exposure through more granular portfolio management initiatives Operations Changed European regional reporting to drive increased focus on growth and efficiency - Spain and Portugal moved to Mediterranean and Africa (vs. Western Europe) - Ru
Slide 7: Q1-2016 Results
2 Q1-2016 Results
Slide 8: Revenue: tough quarter with (3.8)% vs. Q1-2015, stable vs. Q4-2015
Revenue: tough quarter with (3.8)1% vs. Q1-2015 stable vs. Q4-2015 - Revenues impacted by lasting soft conditions in mature markets, especially Europe - In emerging markets, volatility and portfolio measures weigh on growth - (€2.7m) one-off 2015 Public guarantees revenues adjustment Total turnover
Slide 9: Contrasted regional performance
Contrasted regional performance Emerging markets growth impacted by Risk Action Plans Western Europe: (4.9)%1 ex. State guarantees & single risk (LatAm, Asia, South Africa, …) Northern Europe: defending portfolio in competitive environment Central Europe & Mediterranean and Africa continuing to grow
Slide 10: Western Europe Turnover: Quarter on quarter variation breakdown
Western Europe Turnover: Quarter on quarter variation breakdown Turnover composition (€m) Low risk environment (gross loss ratio inc. claims handling expenses) 95.7 (3.3)ppts. (3.1)ppts. (4.9)ppts. 23% of total turnover (0.5)ppts. 84.4 38.9% 31.9% 33.2% 11.3% Turnover Single Risk State guarantees 1
Slide 11: Improved retention and prices, new production flat
Improved retention and prices new production flat €m €m production1 55 45 47 46 • Overall new business production in line with New last year, supported by mid-size / local business growth Q1-2013 Q1-2014 Q1-2015 Q1-2016 90.5% 91.9% 89.3% 92.5% Retention • Record retention rate driven by targeted
Slide 12: Loss ratio impacted by emerging markets and commodities
Loss ratio impacted by emerging markets and commodities Gross loss ratio evolution1 • Increase in loss ratio driven by the Commodity 52.8% 54.0% Trading sector, Asia, and two claims in North 51.5% 51.1% 49.8% 50.2% 51.4% 47.6% America • Risk management measures undertaken in 2015 will gradually hav
Slide 13: Contrasted loss ratio by region
Contrasted loss ratio1 by region 8%* 23%* 23%* Mediterranean 23%* Western Europe Northern Europe Central Europe & Africa 38.9% 64.5% 60.5% 65.0% 31.9% 33.2% 57.4% 54.7% 54.5% 59.8% 49.7% 39.8% 31.2% 32.6% 32.2% 11.3% FY-2013 FY-2014 FY-2015 Q1-2016 FY-2013 FY-2014 FY-2015 Q1-2016 FY-2013 FY-2014 FY-
Slide 14: Emerging markets: some positive signs but still early days
Emerging markets: some positive signs but still early days Latin America Asia Pacific Evolution of the exposure1 Evolution of the exposure1 €bn €bn 73.7 69.7 69.1 67.7 39.4 37.8 32.7 58.5 59.4 29.3 27.9 26.2 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Loss rat
Slide 15: Disciplined cost execution
Disciplined cost execution Executing on internal expenses Stable net cost ratio (1.9)% (0.3)% €m 181 178 External acquisition costs (commissions) 39 39 (0.7)% (2.5)% Internal costs ex. one-off * * €3.1m one-offs: 30.5% CEO severance costs 32.0% (2.7)ppts. (4.8)% (3.2)% (€2.6m) + others (€0.5m) 29.5%
Slide 16: Decrease in reinsurance cost
Decrease in reinsurance cost Ceded premium / GEP Ceded claims / Total claims 22% 24% 23% 24% Q1-2015 Q1-2016 Q1-2015 Q1-2016 Increase in ceded premiums driven by Higher cession mirroring increase of claims additional non-proportional purchased Proportional reinsurance: cession maintained at 20%, wit
Slide 17: Net combined ratio stable vs. Q4-2015
Net combined ratio stable vs. Q4-2015 +9.4ppts. * 87.0% 87.0% 2.7ppts one-offs* 77.5% 34.4% 29.3%* Net cost ratio 27.7% Net loss ratio 49.8% 52.6% 55.0% Q1-2015 Q4-2015 Q1-2016 * Q1-2016 cost ratio excluding one-offs items : CEO severance costs (€2.6m) + State guarantees revenues adjustment for 2015
Slide 18: Maintaining prudent and proactive investment strategy
Maintaining prudent and proactive investment strategy Investment Real Equities Estate 8% 5% Loans, Deposit & - Portfolio risks reduction actions to address other financial Total market volatility 21% € 2.50bn1 - Stable accounting yield excluding capital gains/loss Bonds 66% €m Q1 2015 Q1 2016 2 In
Slide 19: Net income & RoATE
Net income & RoATE Q1-2016 net income (group share) (44.6)% (42.8)% (35.8)% (34.6)% 26.9 €m 4.6* (*) One-off items after tax at €4.6m : 22.3 - former CEO severance costs (€2.6m) - State guarantees revenues adjustment (€2.7m) - Contingent capital costs, audit & consultant fees (€0.5m) (amounts before
Slide 20: Key takeaways
3 Key takeaways
Slide 21: A tough quarter in a polarized environment
A tough quarter in a polarized environment Significant commercial pressure in mature markets: low growth and low risk environment Risk initiatives starting to pay off in emerging markets, but early days and continued volatility drives prudence Remaining cautious overall for 2016 Business ent
Slide 22: Annexes
Annexes
Slide 23: Key Figures (1/2)
Key Figures (1/2) Q1-2016 focus 2015 2016 % % Income statement items - in €m Q1-2016 vs. Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 like-for-like 1 Q1-2015* Consolidated revenues 389.6 370.7 366.0 363.2 365.0 (6.3)% (4.4)% of which gross earned premiums 306.9 296.1 291.1 291.8 288.5 (6.0)% (3.6)% Underwriting income a
Slide 24: Key Figures (2/2)
Key Figures (2/2) Q1-2016 focus 2015 2016 % % Income statement items - in €m Q1-2016 vs. Q1 H1 9M FY Q1 H1 9M FY like-for-like 1 Q1-2015* Consolidated revenues 389.6 760.3 1,126.3 1,489.5 365.0 (6.3)% (4.4)% of which gross earned premiums 306.9 603.0 894.1 1,185.9 288.5 (6.0)% (3.6)% Underwriting in
Slide 25: Q1-2016 key figures excluding State guarantees management activity
Q1-2016 key figures excluding State guarantees management activity Q1-2016 Income statement items - in €m Q1-2016 excl. DGP* Consolidated revenues 365.0 353.0 of which gross earned premiums 288.5 288.5 Total general expenses (177.9) (171.5) including ex penses from other activ ities Underwriting inc
Slide 26: Bridge table
Bridge table From Operating income to Operating income excluding restated items Q1-2013 Q1-2014 Q1-2015 Q1-2016 in thousand euros published published published published Operating income 47,144 52,601 60,508 36,261 Finance costs -861 -594 -4,664 -4,933 Operating income including finance costs 46,284
Slide 27: Overview of net combined ratio calculations
Overview of net combined ratio calculations Adjusted Net Earned Premiums Adjusted net operating expenses In €k Q1-2014 Q1-2015 Q1-2016 In €k Q1-2014 Q1-2015 Q1-2016 Gross Earned Premiums 287,518 306,935 288,540 Total operating expenses 172,257 181,391 177,948 A Ceded premiums -72,271 -68,082 -68,850
Slide 28: 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 29: A strengthened and experienced management team
A strengthened and experienced management team CEO Xavier Durand 25+ years of international experience in regulated financial services Working for Coface since 2016 Group central functions CFO & Risk Manager Corporate Secretary Carine Pichon Carole Lytton 15 years of experience 33 years of experienc
Slide 30: Corporate governance
Corporate governance Board of Directors Laurent MIGNON Chairman CEO of Natixis BPCE (Marguerite Non independent members Jean ARONDEL Jean-Paul DUMORTIER BERARD-ANDRIEU) ► BPCE ► BPCE ► BPCE Laurent ROUBIN Pascal MARCHETTI ► BPCE ► BPCE Sharon MACBEATH Olivier ZARROUATI Eric HÉMAR Independent members
Slide 31: Investor Relations
Investor Relations Shareholder composition Pay-out ratio Employees General 60.0% 0.24% Shareholder Meeting Dividend per share1 Natixis Ex-Date: May 25th 2016 41.24% € 0.48 Payment Date: May 27th 2016 Floating 6 58.52% Own shares transactions as at March 31st 2016 2-3 Liquidity Agreement 2 Own shares