Coface SA : Coface records year-to-date net income of €207.7m, up
9.5%. Annualised ROATE at 14.8%
Coface records year-to-date net income of
€207.7m,
up 9.5%. Annualised ROATE at 14.8%
Paris, 5 November 2024 –
17.35
- Turnover: €1,376.6m, down
-2.1% at constant FX and perimeter
- Insurance revenue decreased by
-4.0% at constant FX with continued subdued client activity
contribution
- In Q3-24, total revenue stabilised
at -0.1% with other services up +6.0%
- Client retention is still high at
92.7% but down from 2023 records; pricing is down by -1.4%, in line
with historical trends
- Business Information once again
recorded double-digit growth (+17.2% at constant FX); factoring
down by -3.6% on the back of slow industrial activity in
Germany
- Net loss ratio at 35.5%,
improved by 4.8 ppts; net combined ratio at 64.4%, improved by
1.6 ppt
- Gross loss ratio at 32.9%, improved
by 5.9 ppts with high opening year reserving and high reserve
releases
- Net cost ratio increased by
3.2 ppts at 28.9%, reflecting lower revenues and continued
investments
- Net income (group share) at
€207.7m, of which €65.4m in Q3-24 and annualised
RoATE1 at
14.8%
Unless otherwise indicated, change comparisons
refer to the results as at 30 September 2023
Xavier Durand, Coface’s Chief Executive
Officer, commented:
“After several quarters of lower revenues due to lower
inflation and a slow economy, especially in Europe, the third
quarter turnover stabilized. Despite a moderate decline of -1.3%,
credit insurance recorded a positive net production.
Information services sales recorded another
quarter of double-digit growth and have increased +17.2%
year-to-date. Debt collection services rose +18.9% from a still low
base. These activities, which are structurally profitable, are
strategic for Coface and benefit from our continued
investments.
Our combined ratio remains excellent at
64.4% thanks to sound risk management, and despite a slow and
steady rise in the number of losses recorded by Coface in a context
of higher business failures. The period of high inflation has left
its mark on the weakest companies, and a number of cyclical sectors
– especially automotive – are continuing to suffer. This
deteriorated risk environment is expected to continue, despite the
recent rate cuts implemented by central banks.
Our financial income is improving and has
not been affected by negative mark to market movements.
Finally, our net income rose by 9% to €207.7m, which translates
into a return on average tangible equity of 14.8%, well above our
mid-cycle targets.”
Key figures at 30 September
2024
The Board of Directors
of COFACE SA examined the consolidated financial statements at 30
September 2024 at its meeting of 5 November 2024. The Audit
Committee at its meeting on 4 November 2024 also previously
reviewed them.
| Income
statement items in €m |
9M-23 |
9M-24 |
Variation |
% ex. FX* |
|
Insurance revenue |
1,187.8 |
1,130.2 |
(4.9)% |
(4.0)% |
| Other
revenues |
230.0 |
246.4 |
+7.1% |
+7.3% |
|
REVENUE |
1,417.8 |
1,376.6 |
(2.9)% |
(2.1)% |
|
UNDERWRITING INCOME/LOSS AFTER REINSURANCE |
290.0 |
283.8 |
(2.1)% |
(0.8)% |
| Investment
income, net of management expenses, excluding finance costs |
14.5 |
59.8 |
+313.3% |
+273.2% |
|
Insurance Finance Expenses |
(30.1) |
(25.4) |
(15.6)% |
(8.5)% |
|
CURRENT OPERATING INCOME |
274.4 |
318.2 |
+16.0% |
+14.5% |
| Other operating
income / expenses |
(0.9) |
(3.1) |
+227.0% |
+234.5% |
|
OPERATING INCOME |
273.4 |
315.1 |
+15.2% |
+13.7% |
|
NET INCOME (GROUP SHARE) |
189.7 |
207.7 |
+9.5% |
+6.7% |
| |
|
|
|
|
| Key
ratios |
9M-23 |
9M-24 |
Variation |
|
Loss ratio net of reinsurance |
40.2% |
35.5% |
(4.8) |
ppts |
|
Cost ratio net of reinsurance |
25.7% |
28.9% |
+3.2 |
ppt |
|
COMBINED RATIO NET OF REINSURANCE |
66.0% |
64.4% |
(1.6) |
ppts |
| |
|
|
|
|
| Balance
sheet items in €m |
FY-23 |
9M-24 |
Variation |
|
Total Equity (group share) |
2,050.8 |
2,106.0 |
+2.7% |
* Also excludes scope impact
1. Turnover
In the first nine months of the year, Coface
recorded a consolidated turnover of €1,376.6m, down -2.1% at
constant perimeter and FX compared to 9M-23. As reported (at
current FX and perimeter), turnover was
down -2.9%.
Revenues from insurance activities (including
bonding and Single Risk) were down by -4.0% at constant FX and
perimeter due to a decline in inflation and the absence of a
rebound in client activities, against a still fragile economic
backdrop. Client retention remains high at 92.7% (but down from the
record level of 9M-23), in a competitive market where Coface
implemented risk mitigation plans. Buoyed by an increase in demand
and the positive effects of investments for growth, new business
rose to €96m, up €7m compared to 9M-23.
Client activities have edged up 0.1%
year-to-date. The price effect remained negative at -1.4% in 9M-24,
in line with long-term trends.
Turnover from non-insurance activities was up
+7.3% compared to 9M-23. Factoring turnover fell -3.6% amid a weak
manufacturing sector, especially in Germany. Information services
turnover rose +17.2%. Fee and commission income (debt collection
commissions) increased by +18.9%, from a low base, due to the
increase in claims to be collected. Commissions were up +8.3%.
Total revenue - in €m
(by country of invoicing) |
9M-23 |
9M-24 |
Variation |
% ex. FX* |
|
Northern Europe |
291.3 |
271.8 |
(6.7)% |
(6.7)% |
|
Western Europe |
289.8 |
288.4 |
(0.5)% |
(3.1)% |
|
Central & Eastern Europe |
132.1 |
130.0 |
(1.6)% |
(3.5)% |
|
Mediterranean & Africa |
398.7 |
403.4 |
+1.2% |
+4.9% |
|
North America |
128.4 |
132.5 |
+3.2% |
(6.5)% |
|
Latin America |
76.5 |
58.1 |
(24.0)% |
+2.3% |
| Asia
Pacific |
101.0 |
92.3 |
(8.6)% |
(8.0)% |
|
Total Group |
1,417.8 |
1,376.6 |
(2.9)% |
(2.1)% |
In Northern Europe, turnover was down by -6.7%
at constant and current FX. The region was hit by a slowdown in
client activities and the selective non-renewal of some loss-making
policies. This decline was partially offset by the growth in
adjacent activities. Factoring turnover fell -3.6% amid a weak
manufacturing sector.
In Western Europe, turnover was down by -3.1% at
constant FX (-0.5% at current FX due to the integration of Maghreb,
West and Central Africa). The slowdown in client activities was
partially offset by the rise in information sales (services up
+24.8%).
In Central and Eastern Europe, turnover fell
-3.5% at constant FX (-1.6% at current FX) due to the decline in
client activities, which weighed on credit insurance. Factoring was
down -3.8% at constant exchange rates.
In the Mediterranean and Africa region, which is
driven by Italy and Spain, turnover rose +4.9% at constant FX and
+1.2% at current FX on the back of robust sales in credit insurance
and services as well as a stronger economic environment.
In North America, turnover was down -6.5% at
constant FX but increased by +3.2% at current FX due to the
integration of Mexico in this scope. The region saw a slowdown in
client activities despite higher retention.
In Latin America, turnover rose +2.3% at
constant FX but fell -24.0% at current FX. The region saw client
activity stabilise after several quarters of decline, mainly in
commodities and metals. However, the transfer of Mexico to the
North America region had a negative impact.
In Asia-Pacific, turnover decreased by -8.0% at
constant FX and -8.6% at current FX. This lower turnover was due to
a slowdown in client activities that robust sales were unable to
offset.
2. Result
The combined ratio net of reinsurance was 64.4%
in 9M-24, an improvement of 1.6 ppt year on year.
(i) Loss ratio
The gross loss ratio stood at 32.9%, a 5.9 ppts
improvement on the first half of the previous year. This
improvement reflects the gradual normalisation of the loss
experience, offset by high reserve releases. The number of
mid-sized claims increased.
The Group’s provisioning policy remained
unchanged. The amount of provisions related to the current
underwriting year, although discounted, remained in line with the
historical average. Strict management of past claims enabled the
Group to record 45.3 ppts of recoveries.
The net loss ratio improved by 4.8 ppts compared
to 9M-23, to 35.5%.
(ii) Cost ratio
Coface is pursuing a strict cost management
policy but is continuing to invest, in line with the Power the Core
strategic plan. Over the first nine months of 2024, costs rose by
+5.4% at constant FX and perimeter, and by +5.0% at current FX.
The cost ratio before reinsurance was 32.9%, up
2.4 ppts year on year. This rise was mainly due to the decline
in revenues (1.6 ppt), embedded cost inflation (2.2 ppts)
and ongoing investments (1.7 ppt). In contrast, the improved
product mix (information services, debt collection and fee and
commission income) had a positive effect. High reinsurance
commissions explain the remainder of the variation.
Net financial income was +€59.8m over the first
nine months of the year. This figure includes capital gains of
+€11.7m, which more than offset negative market value adjustments
on investments of -€3.4m. The FX effect remained negative at
-€10.0m and was primarily due to the euro’s rise against most of
the group’s other operating currencies.
The portfolio’s current yield (i.e. excluding
capital gains, depreciation and FX) was €70.9m. The accounting
yield2, excluding capital gains and fair value effect,
was 2.2% for 9M-24. The yield on new investments made year-to-date
was 4.3%.
Insurance Finance Expenses (IFE) stood at €25.4m
(€30.1m for 9M-23) due to lower discount rates and higher loss
reserves.
- Operating income
and net income
Operating income amounted to €315.1m in 9M-24,
up +15.2%.
The effective tax rate was 27% over the first
nine months of the year (vs. 24% for 9M-23). Coface does not
currently expect France’s draft budget to have a major impact.
In total, net income (group share) was €207.7m,
up +9.5% compared to 9M-23.
3. Shareholders’
equity
At 30 September 2024, Group shareholders’ equity
stood at €2,106.0m, up €52.2m or +2.7% (€2,050.8m at 31 December
2023).
These changes are mainly due to the positive net
income of €207.7m and the dividend payment of -€194.3m. Other items
such as changes in unrealised capital gains had only a minor
impact.
The annualised return on average tangible equity
(RoATE) was 14.8% at 30 September 2024, mainly due to the
improvement in financial income.
4. Outlook
The global economic recovery is a mixed picture.
Economic strength in the United States continues to surprise to the
upside and appears conducive to a soft landing. Meanwhile, Europe
is contending with much uncertainty, especially in the
manufacturing sector. Major investment efforts in the transition to
electric vehicles are coming up against modest demand and
competition from Chinese vehicles.
The Chinese authorities finally announced
stimulus measures, which efficiency remains to be proven. Other
emerging markets, led by the Gulf states and South America, are
expected to drive growth in 2025.
Central banks believe that inflation is now
under control and have started a cycle of rate cuts, albeit
somewhat belatedly for certain sectors that were hit hard by the
previous cycle of hikes. This more accommodative monetary policy
will run concurrently with fiscal policies that may have to be more
restrictive in certain cases.
Political risk remains higher than ever with
several armed conflicts that have potential to take a turn for the
worse. In France, the fragile balance of power and the need to
shore up public finances is creating an uncertain climate that is
hampering growth.
Finally, voting day in the US presidential
election (and the other ballots) is upon us.
Amid a tighter credit cycle, Coface remains
committed to its strategy of excellence in credit insurance,
drawing on its unique risk infrastructure, and growth in
information and debt collection. These services activities are
especially relevant for corporate clients amid such an unstable
economy. They are also structurally profitable (information gross
margin over 60%) and make up an increasing portion of Coface’s
portfolio of activities.
Conference call for financial
analysts
Coface’s results for the first nine months of
2024 will be discussed with financial analysts during the
conference call on Tuesday 5 November at 18.00 (Paris time). Dial
one of the following numbers:
- By webcast:
Coface 9M-2024 results - Webcast
- By telephone
(for sell-side analysts): Coface 9M-2024 - conference call
The presentation will be available (in English
only) at the following address:
http://www.coface.com/Investors/financial-results-and-reports
Appendices
Quarterly results
| Income
statement items in €m - Quarterly figures |
Q1-23 |
Q2-23 |
Q3-23 |
Q4-23 |
Q1-24 |
Q2-24 |
Q3-24 |
|
% |
% ex. FX* |
|
Insurance revenue |
395.3 |
407.8 |
384.7 |
371.3 |
378.6 |
375.6 |
375.9 |
|
(2.3)% |
(1.3)% |
|
Other revenue |
79.8 |
76.8 |
73.4 |
79.2 |
85.0 |
83.4 |
78.0 |
|
+6.2% |
+6.0% |
|
REVENUE |
475.1 |
484.5 |
458.1 |
450.4 |
463.7 |
459.1 |
453.8 |
|
(0.9)% |
(0.1)% |
|
UNDERWRITING INCOME (LOSS) AFTER REINSURANCE |
95.3 |
103.5 |
91.2 |
105.4 |
100.3 |
94.7 |
88.8 |
|
(2.6)% |
(1.5)% |
Investment income,
net of management expenses |
(2.6) |
4.0 |
13.0 |
(2.0) |
17.9 |
22.8 |
19.0 |
|
+45.7% |
+40.2% |
|
Insurance Finance Expenses |
(2.4) |
(12.3) |
(15.4) |
(9.9) |
(11.4) |
(6.7) |
(7.3) |
|
(52.2)% |
(48.2)% |
|
CURRENT OPERATING INCOME |
90.4 |
95.2 |
88.9 |
93.5 |
106.8 |
110.9 |
100.5 |
|
+13.0% |
+12.6% |
| Other
operating income / expenses |
(0.3) |
(0.4) |
(0.2) |
(4.0) |
(0.1) |
(0.5) |
(2.6) |
|
+1002.6% |
+1024.3% |
|
OPERATING INCOME |
90.0 |
94.8 |
88.6 |
89.5 |
106.8 |
110.4 |
97.9 |
|
+10.4% |
+10.0% |
|
NET INCOME (GROUP SHARE) |
61.2 |
67.7 |
60.9 |
50.8 |
68.4 |
73.8 |
65.4 |
|
+7.5% |
+5.2% |
| Income tax
rate |
25.5% |
21.9% |
24.2% |
36.0% |
27.2% |
26.8% |
25.5% |
|
+1,3 ppt |
|
Cumulated results*
| Income
statement items in €m - Cumulated figures |
Q1-23 |
H1-23 |
9M-23 |
FY-23 |
Q1-24 |
H1-24 |
9M-24 |
|
% |
% ex. FX* |
|
Insurance revenue |
395.3 |
803.1 |
1,187.8 |
1,559.1 |
378.6 |
754.3 |
1,130.2 |
|
(4.9)% |
(4.0)% |
|
Other revenue |
79.8 |
156.6 |
230.0 |
309.2 |
85.0 |
168.5 |
246.4 |
|
+7.1% |
+7.3% |
|
REVENUE |
475.1 |
959.7 |
1,417.8 |
1,868.2 |
463.7 |
922.7 |
1,376.6 |
|
(2.9)% |
(2.1)% |
|
UNDERWRITING INCOME (LOSS) AFTER REINSURANCE |
95.3 |
198.8 |
290.0 |
395.4 |
100.3 |
195.0 |
283.8 |
|
(2.1)% |
(0.8)% |
Investment income,
net of management expenses |
(2.6) |
1.4 |
14.5 |
12.4 |
17.9 |
40.8 |
59.8 |
|
+313.3% |
+273.2% |
|
Insurance Finance Expenses |
(2.4) |
(14.7) |
(30.1) |
(40.0) |
(11.4) |
(18.1) |
(25.4) |
|
(15.6)% |
(8.5)% |
|
CURRENT OPERATING INCOME |
90.4 |
185.5 |
274.4 |
367.9 |
106.8 |
217.7 |
318.2 |
|
+16.0% |
+14.5% |
| Other operating
income / expenses |
(0.3) |
(0.7) |
(0.9) |
(5.0) |
(0.1) |
(0.5) |
(3.1) |
|
+227.0% |
+234.5% |
|
OPERATING INCOME |
90.0 |
184.8 |
273.4 |
362.9 |
106.8 |
217.2 |
315.1 |
|
+15.2% |
+13.7% |
|
NET INCOME (GROUP SHARE) |
61.2 |
128.8 |
189.7 |
240.5 |
68.4 |
142.3 |
207.7 |
|
+9.5% |
+6.7% |
| Income tax
rate |
25.5% |
23.7% |
23.8% |
26.8% |
27.2% |
27.0% |
26.5% |
|
+ 2,7 ppts |
|
* Also excludes scope impact
CONTACTS
ANALYSTS / INVESTORS
Thomas JACQUET: +33 1 49 02 12 58 – thomas.jacquet@coface.com
Rina ANDRIAMIADANTSOA: +33 1 49 02 15 85 –
rina.andriamiadantsoa@coface.com
MEDIA RELATIONS
Saphia GAOUAOUI: +33 1 49 02 14 91 – saphia.gaouaoui@coface.com
Adrien BILLET: +33 1 49 02 23 63 – adrien.billet@coface.com
FINANCIAL CALENDAR 2025
(subject to change)
FY-2024 results: 20 February 2025 (after market
close)
Q1-2025 results: 5 May 2025 (after market close)
Annual General Shareholders’ Meeting: 14 May 2025
H1-2025 results: 31 July 2025 (after market close)
9M-2025 results: 3 November 2025 (after market close)
FINANCIAL INFORMATION
This press release, as well as COFACE SA’s integral regulatory
information, can be found on the Group’s website:
http://www.coface.com/Investors
For regulated information on Alternative
Performance Measures (APM), please refer to our Interim Financial
Report for H1-2024 and our 2023 Universal Registration Document
(see part 3.7 “Key financial performance indicators”).
|
|
Regulated
documents posted by COFACE SA have been secured and authenticated
with the blockchain technology by Wiztrust.
You can check the authenticity on the website
www.wiztrust.com. |
COFACE: FOR TRADE
With over 75 years of experience and the most extensive
international network, Coface is a leader in trade credit insurance
& risk management, and a recognised provider of Factoring, Debt
Collection, Single Risk insurance, Bonding, and Information
Services. Coface’s experts work to the beat of the global economy,
helping around 100,000 clients in 100 countries build successful,
growing, and dynamic businesses. With Coface’s insight and advice,
these companies can make informed decisions. The Group' solutions
strengthen their ability to sell by providing them with reliable
information on their commercial partners and protecting them
against non-payment risks, both domestically and for export. In
2023, Coface employed ~4,970 people and registered a turnover of
€1.87 billion.
www.coface.com
COFACE SA is listed in Compartment A of Euronext Paris
Code ISIN: FR0010667147 / Ticker: COFA
|
DISCLAIMER - Certain declarations featured
in this press release may contain forecasts that notably relate to
future events, trends, projects or targets. By nature, these
forecasts include identified or unidentified risks and
uncertainties, and may be affected by many factors likely to give
rise to a significant discrepancy between the real results and
those stated in these declarations. Please refer to chapter 5 “Main
risk factors and their management within the Group” of the Coface
Group's 2023 Universal Registration Document filed with AMF on 5
April 2024 under the number D.24-0242 in order to obtain a
description of certain major factors, risks and uncertainties
likely to influence the Coface Group's businesses. The Coface Group
disclaims any intention or obligation to publish an update of these
forecasts, or provide new information on future events or any other
circumstance.
1 Return on average tangible equity
2 Book yield calculated on the average of the investment
portfolio excluding non-consolidated subsidiaries.
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