Coface records excellent income of €189.7m in the first nine months
amidst slowing inflation and claims normalisation. Annualised ROATE
at 14.1%
Coface records excellent income of
€189.7m in the first nine months amidst slowing inflation and
claims normalisation. Annualised ROATE at 14.1%
Paris, 14 November 2023 –
17.35
- Turnover of first nine
months: €1,418m, up 7.1% at constant FX and perimeter and up 5.3%
on a reported basis
- Trade credit insurance rose by
+6.6% at constant FX. In Q3-23, growth in client activity was
negative as a result of falling inflation and economic slowdown,
which both weighed on premiums. Commissions were up +10.2%
- Client retention stood at a record
high (93.9%); price effect was still negative (-2.0%) but
stabilised in Q3-23
- Double-digit growth in business
information (+14.7% at constant FX) and debt collection, which
proved to be less cyclical; factoring up by +3.8%
- 9M-23 net loss ratio at
40.2%, up by 1.3 ppt; net combined ratio at 66.0%, up by
0.3 ppt vs pro forma 9M-22
- Gross loss ratio at 38.8%, up
3.3 ppts in a risk environment now close to historical
averages
- Net cost ratio improved by
1.1 ppt at 25.7% reflecting high reinsurance commissions and
business mix while we continue to invest
- Net combined ratio for Q3-23 at
66.8% improving by 3.0 ppts on better loss ratio
- Risk exposure in Israel is limited
to €4.6bn. Israel is also a historical market for Coface's business
information division, representing close to ¼ of total BI with
slower growth
- Net income (group share) at
€189.7m, including €60.9m for Q3-23; annualised
RoATE1 at 14.1%
- Moody’s upgraded Coface’s
rating from A2 to A1 with a stable outlook
Unless otherwise indicated, change comparisons
refer to the pro forma IFRS 17 results as at 30 September 2022.
Xavier Durand, Coface’s Chief Executive
Officer, commented:“In the third quarter, both the global
economy and inflation, particularly for commodities, experienced a
net slowdown which led our clients’ turnover to contract over the
period.Coface's turnover has nevertheless risen +7.1% year to date
at constant FX due to an excellent performance at the start of the
year, client retention which remains at record highs and a
continued increase in service revenues. Business information
revenue in particular was up +14.7%, confirming it is less
cyclical.Coface has a significant historical presence in Israel,
particularly in business information. Despite its horrific human
cost, the current conflict does not yet appear to have had a major
economic impact. While there is a real risk that the conflict will
persist or expand, we continue to support our local teams and
clients in the region.In an environment of rising business
insolvencies, risk prevention measures from the beginning of the
year so far enabled us to limit claims, and our sound cost
management let to a net combined ratio of 66.0% for the first nine
months of the year.Over the last quarter, Coface's net income was
€61m with a year-to-date annualised RoATE of 14.1%, which is well
over our mid-cycle targets.Lastly, we welcome Moody’s decision to
raise Coface's credit rating from A2 to A1, associated with a
stable outlook. This recognizes our team's hard work and attests to
Coface's agility and resilience, as well as the quality of its risk
management, which are at the heart of our culture and
expertise.”
Key figures at 30 September
2023
The Board of Directors
of COFACE SA examined the consolidated financial statements at 30
September 2023 (non-audited figures) at its meeting of
14 November 2023. The Audit Committee at its meeting on
13 November 2023 also previously reviewed them.
Income
statements items in €m |
9M-22 |
9M-23 |
Variation |
% ex. FX* |
Insurance revenue |
1,136.6 |
1,187.8 |
+4.5% |
+6.6% |
Services
revenue |
210.4 |
230.0 |
+9.3% |
+10.0% |
REVENUE |
1,347.0 |
1,417.8 |
+5.3% |
+7.1% |
UNDERWRITING INCOME/LOSS AFTER REINSURANCE |
276.7 |
290.0 |
+4.8% |
+6.3% |
Investment income, net of management expenses |
36.3 |
14.5 |
(60.2)% |
(34.8)% |
Insurance Finance Expenses |
(32.4) |
(30.1) |
(7.3)% |
+24.0% |
CURRENT OPERATING INCOME |
280.5 |
274.4 |
(2.2)% |
(1.1)% |
Other
operating income / expenses |
(5.0) |
(0.9) |
(81.0)% |
(79.9)% |
OPERATING INCOME |
275.5 |
273.4 |
(0.8)% |
+0.3% |
NET INCOME |
185.8 |
189.7 |
+2.1% |
+3.0% |
|
|
|
|
|
Key
ratios |
9M-22 |
9M-23 |
Variation |
Loss ratio net of reinsurance |
38.9% |
40.2% |
+1.3 |
ppt |
Cost ratio net
of reinsurance |
26.8% |
25.7% |
(1.1) |
ppt |
COMBINED RATIO NET OF REINSURANCE |
65.7% |
66.0% |
+0.3 |
ppt |
|
|
|
|
|
Balance sheet items in €m |
2022 |
9M-23 |
Variation |
Total Equity (group share) |
2,018.6 |
1,983.7 |
(1.7)% |
* Also excludes scope impact
1. Turnover
Coface recorded a consolidated turnover of
€1,417.8m over the first nine months, up +7.1% at constant FX and
perimeter compared to 9M-22. As reported (at current FX and
perimeter), turnover rose +5.3%.
Revenues from insurance activities (including
surety bonds and single risk) increased by +6.6% at constant FX and
perimeter. Growth was bolstered by a rise in client activity at the
beginning of the year which fell into negative territory in Q3-23
following a decline in inflation and the economic slowdown. The
retention rate reached a record level of 93.9% (up +0.4% compared
to 9M-22). Buoyed by the mid-market segment, new business rose to
€89m, up €7m compared to 9M-22. This level is relatively close to
pre-COVID levels (€96m at 9M-19).
The growth in Coface’s client activity had a
positive impact of +2.4% as of 9M-23. However, this growth reflects
the slowdown of the economy and inflation (-8.7 ppts compared
to 9M-22). The price effect remained negative, coming in at -2.0%
for 9M-23 (compared to -3.0% for 9M-22) and stabilised in Q3-23.
This is largely due to very low past losses offset by the current
normalisation environment.
Turnover from non-insurance activities was up
+9.8% compared to 9M-22. All the business lines are experiencing
positive growth. Turnover from factoring rose +3.8%, mainly due to
the increase in volumes refinanced in Germany. Information services
turnover rose +14.7%. Fee and commission income (debt collection
commissions) increased +41.3% due to the increase in claims to be
collected. Commissions were up +10.2%.
Total revenue - in €m(by country of
invoicing) |
9M-22 |
9M-23 |
Variation |
% ex. FX2 |
Northern Europe |
280.1 |
291.3 |
+4.0% |
+4.3% |
Western Europe |
270.7 |
289.8 |
+7.0% |
+7.4% |
Central & Eastern Europe |
138.0 |
132.1 |
(4.3)% |
(5.6)% |
Mediterranean & Africa |
359.7 |
398.7 |
+10.9% |
+14.5% |
North America |
123.4 |
128.4 |
+4.0% |
+6.9% |
Latin America |
76.7 |
76.5 |
(0.2)% |
+6.3% |
Asia
Pacific |
98.4 |
101.0 |
+2.7% |
+6.5% |
Total Group |
1,347.0 |
1,417.8 |
+5.3% |
+7.1% |
In Northern Europe, turnover increased +4.3% at
constant FX and +4.0% at current FX. The region saw a slump in
client activity but adjacent activities were on the rise (+6.4% in
factoring revenue).
In Western Europe, turnover increased +7.4% at
constant FX (+7.0% at current FX). All the business lines
contributed to this growth.
In Central and Eastern Europe, turnover fell
-5.6% at constant FX (-4.3% at current FX) due to the decline in
business in Russia. Excluding Russia, growth would be +1.7%.
In the Mediterranean and Africa region, which is
driven by Italy and Spain, turnover rose +14.5% at constant FX and
+10.9% at current FX due to new business and resilient
activity.
In North America, turnover increased +6.9% at
constant FX and +4.0% as reported, driven by the return in client
activity and rising commissions.
In Latin America, turnover increased +6.3% at
constant FX and fell 0.2% at current FX. The region saw a slump in
client activity mainly in commodities and metals.
In Asia-Pacific, turnover increased +6.5% at
constant FX and +2.7% at current FX. The boost in revenue was
driven by past sales performances which sustained the growth of the
portfolio.
2. Result
The combined ratio net of reinsurance was 66.0%
in 9M-23, up +0.3 ppt year on year.
(i) Loss ratio
The gross loss ratio stood at 38.8%, up 3.3 ppts
compared to the previous year. This reflects an increased claims
frequency since H1-21, with the number of claims nearing pre-COVID
levels. The amount of claims recorded is now higher than in 2019.
Lastly, large losses have become relatively significant in size
again while remaining below the historical average.
The Group’s provisioning policy remained
unchanged. The amount of provisions related to the underwriting
year, although discounted, remained in line with the historical
average. Strict management of past claims enabled the Group to
record 36.8 ppts of recoveries.
The net loss ratio rose to 40.2%, up
1.3 ppt compared to 9M-22.
(ii) Cost ratio
Coface follows a strict cost management policy.
Coface remained disciplined over the first nine months of the year,
with costs rising 8.2% at constant FX and perimeter (+4.0% in
Q3-23). This increase was slightly more than growth in revenue over
the year (7.1%) due to ongoing investment. The cost ratio before
reinsurance stood at 30.5%, down 0.1 ppt despite slowed revenue
growth due to an improvement in the product mix.
The cost ratio net of reinsurance was 25.7% for
9M-23, an improvement of 1.1 ppt year on year as a result of
reinsurance commissions that remain high.
Net financial income was +€14.5m over the first
nine months. This amount includes market value adjustments for
-€19.6m (including -€25.8m for real estate funds), positive hedging
results and currency effect of -€17.8m due to the application of
IAS 29 (hyperinflation) in Argentina and in Turkey as well as the
rise of the euro against the other currencies in which the group
operates.
The portfolio’s current yield (i.e. excluding
capital gains, depreciation and FX) was €49.8m. The accounting
yield3, excluding capital gains and fair value effect, was 1.7% for
9M-23. The yield on new investments was 3.9%.
Insurance Finance Expenses (IFE) stood at €30.1m
for the first nine months of the year due to higher discount rates
and higher loss reserves.
- Operating income
and net income
Operating income amounted to €273.4m in 9M-23,
down -0.8%.
The effective tax rate was 24%, compared to 27%
for 9M-22.
In total, net income (group share) stood at
€189.7m, up +2.1% compared to 9M-22, of which €60.9m in Q3-23.
3. Shareholders’ equity
& solvency
At 30 September 2023, Group shareholders’ equity
stood at €1,983.7m, down €34.9m, or -1.7% (compared
to €2,018.6m at 31 December 2022).
This change is mainly due to positive net income
of €189.7m, the payment of the dividend (-€227.0m) and a rise in
unrealised capital gains (€12.4m).
The annualised return on average tangible equity
(RoATE) was 14.1% at 30 September 2023, mainly due to the
improvement in underwriting income.
4. Outlook
The global economy experienced a net slowdown
over the last quarter. Monetary tightening from central banks
affected multiple sectors of the economy, particularly real estate,
and ultimately also hampered consumption. The full impact of these
policies is yet to come. Meanwhile, price drops across most
commodities caused an accelerated dip in inflation which affected
Coface's clients growth, and therefore Coface’s premium
revenue.
Coface still expects modest growth for the
global economy both in 2023 (2.4%) and 2024 (2.2%), and a further
decline in inflation.
As expected at the start of the year, business
failures continued to rise, sometimes above pre-pandemic levels.
However, the many preventive measures taken by Coface so far
avoided a major spike in recorded claims. Year-to-date their number
is currently 8% lower than in 2019 for a total amount that is now
equivalent.
Geopolitical instability (Ukraine, Israel, etc.)
and the potential for enduring conflicts also translate to downside
risks weighing on the economy.
As such, the credit insurance sector is entering
a new phase in the cycle, characterised by weaker client activity
that may be negative in the short-term, an increase in business
insolvencies and reduced pressure on prices and an increase on
demand. Amidst this clearly less encouraging environment, Coface
remains dedicated to strict risks and costs management while
honouring its strategy of closely collaborating with its
clients.
One of Coface's strategic initiatives is focused
on expanding services, which have low capital requirements. This
strategy is now even more relevant as they tend to be less
sensitive to the economic environment.
Coface is actively devising its next strategic
plan, which will be presented to investors on 5 March 2024.
Conference call for financial
analysts
Coface’s results for 9M-2023 will be discussed
with financial analysts during the conference call on
14 November 2023 at 18.00 (Paris time). Dial one of the
following numbers:
- By webcast:
Coface 9M-23 results - Webcast
- By telephone
(for the sell-side analyst): Coface 9M-23 - conference call
The presentation will be available (in English
only) at the following address:
http://www.coface.com/Investors/financial-results-and-reports
Appendix
Quarterly results
Income
statements items in €mquarterly
figures |
Q1-22 |
Q2-22 |
Q3-22 |
Q4-22 |
Q1-23 |
Q2-23 |
Q3-23 |
|
% |
% ex. FX* |
Insurance revenue |
359.2 |
374.0 |
403.5 |
379.0 |
395.3 |
407.8 |
384.7 |
|
(4.7)% |
(1.7)% |
Other
revenues |
68.8 |
71.6 |
70.1 |
73.0 |
79.8 |
76.8 |
73.4 |
|
+4.8% |
+8.1% |
REVENUE |
428.0 |
445.6 |
473.5 |
452.0 |
475.1 |
484.5 |
458.1 |
|
(3.3)% |
(0.3)% |
UNDERWRITING INCOME (LOSS) AFTER
REINSURANCE |
82.3 |
109.5 |
84.9 |
72.0 |
95.3 |
103.5 |
91.2 |
|
+7.4% |
+11.7% |
Investment income, net of management expenses |
11.3 |
11.5 |
13.5 |
(0.6) |
(2.6) |
4.0 |
13.0 |
|
(3.7)% |
+40.8% |
Insurance Finance Expenses |
(11.5) |
(10.4) |
(10.5) |
14.9 |
(2.4) |
(12.3) |
(15.4) |
|
+46.2% |
+112.3% |
CURRENT OPERATING INCOME |
82.0 |
110.6 |
87.9 |
86.2 |
90.4 |
95.2 |
88.9 |
|
+1.1% |
+4.0% |
Other
operating income / expenses |
(1.2) |
(3.2) |
(0.7) |
(4.1) |
(0.3) |
(0.4) |
(0.2) |
|
(64.2)% |
(79.0)% |
OPERATING INCOME |
80.8 |
107.4 |
87.3 |
82.1 |
90.0 |
94.8 |
88.6 |
|
+1.6% |
+4.6% |
NET INCOME |
52.3 |
82.5 |
51.0 |
54.6 |
61.2 |
67.7 |
60.9 |
|
+19.4% |
+25.2% |
Income tax
rate |
31.0% |
19.3% |
32.8% |
25.5% |
25.5% |
21.9% |
24.2% |
|
(8.5) ppts. |
Cumulated results
Income
statements items in €mcumulated
figures |
Q1-22 |
H1-22 |
9M-22 |
2022 |
Q1-23 |
H1-23 |
9M-23 |
|
% |
%ex. FX* |
Insurance revenue |
359.2 |
733.2 |
1,136.6 |
1,515.7 |
395.3 |
803.1 |
1,187.8 |
|
+4.5% |
+6.6% |
Other
revenues |
68.8 |
140.4 |
210.4 |
283.4 |
79.8 |
156.6 |
230.0 |
|
+9.3% |
+10.0% |
REVENUE |
428.0 |
873.5 |
1,347.0 |
1,799.0 |
475.1 |
959.7 |
1,417.8 |
|
+5.3% |
+7.1% |
UNDERWRITING INCOME (LOSS) AFTER
REINSURANCE |
82.3 |
191.8 |
276.7 |
348.6 |
95.3 |
198.8 |
290.0 |
|
+4.8% |
+6.3% |
Investment income, net of management expenses |
11.3 |
22.8 |
36.3 |
35.7 |
(2.6) |
1.4 |
14.5 |
|
(60.2)% |
(34.8)% |
Insurance Finance Expenses |
(11.5) |
(21.9) |
(32.4) |
(17.6) |
(2.4) |
(14.7) |
(30.1) |
|
(7.3)% |
+24.0% |
CURRENT OPERATING INCOME |
82.0 |
192.6 |
280.5 |
366.8 |
90.4 |
185.5 |
274.4 |
|
(2.2)% |
(1.1)% |
Other
operating income / expenses |
(1.2) |
(4.3) |
(5.0) |
(9.1) |
(0.3) |
(0.7) |
(0.9) |
|
(81.0)% |
(79.9)% |
OPERATING INCOME |
80.8 |
188.3 |
275.5 |
357.7 |
90.0 |
184.8 |
273.4 |
|
(0.8)% |
+0.3% |
NET INCOME |
52.3 |
134.8 |
185.8 |
240.4 |
61.2 |
128.8 |
189.7 |
|
+2.1% |
+3.0% |
Income tax
rate |
31.0% |
24.3% |
26.8% |
26.5% |
25.5% |
23.7% |
23.8% |
|
(3.0) ppts. |
* Also excludes scope impact
CONTACTS
ANALYSTS / INVESTORSThomas
JACQUET: +33 1 49 02 12 58 – thomas.jacquet@coface.comBenoît
CHASTEL: +33 1 49 02 22 28 – benoit.chastel@coface.com
MEDIA RELATIONSSaphia GAOUAOUI:
+33 1 49 02 14 91 – saphia.gaouaoui@coface.comAdrien BILLET: +33 1
49 02 23 6394 – adrien.billet@coface.com
FINANCIAL CALENDAR
2023/2024(subject to change)FY-2023
results: 27 February 2024 (after market close)Capital market day: 5
March 2024 (Paris)Q1-2024 results: 6 May 2024 (after market
close)Annual General Shareholders’ Meeting 2023 : 16 May
2024H1-2024 results: 5 August 2024 (after market close)9M-2024
results: 5 November 2024 (after market close)
FINANCIAL INFORMATIONThis 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 H1-2023 and our 2022 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 TRADEWith over 75 years of
experience and the most extensive international network, Coface is
a leader in trade credit insurance & risk management, and a
recognized provider of Factoring, Debt Collection, Single Risk
insurance, Bonding, and Information Services. Coface’s experts work
to the beat of the global economy, helping ~50,000 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 2022, Coface employed ~4,720 people
and registered a turnover of €1.81
billion. www.coface.com COFACE SA is quoted in
Compartment A of Euronext ParisCode ISIN: FR0010667147 / Mnémonique
: 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 2022 Universal Registration Document filed with AMF on 6
April 2023 under the number D.23-0244 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 equity2 Hors effet périmètre3 Book
yield calculated on the average of the investment portfolio
excluding non-consolidated subsidiaries.
- 2023 11 14 PR results 9M 2023 - COFACE SA
Coface (EU:COFA)
과거 데이터 주식 차트
부터 4월(4) 2024 으로 5월(5) 2024
Coface (EU:COFA)
과거 데이터 주식 차트
부터 5월(5) 2023 으로 5월(5) 2024