FY-2022 results: record net income at €283.1m and 80% pay-out ratio
Turnover: €1,812m, up +13.4% at constant FX and perimeter and +15.6% on a reported basis
- Trade Credit Insurance premiums grow by +14.4% driven by high client activity in still inflationary environment
- Client retention at record highs (92.9%); pricing down (-3.0%) in line with 9M-2022
- Business information revenues up by +11.6% at constant FX and +13.1% at the full scope; factoring up by +10.0%
Net loss ratio at 36.0%, up by 2.7 ppts; net combined ratio at 64.9%, +0.3 ppt vs. 2021 (up 10.4 ppts excluding 2021 government schemes impact)
- Gross loss ratio up by 9.8 ppts at 31.2%, as normalisation of risk environment continues
- Net cost ratio down by 2.5 ppts at 28.8% reflecting continued positive operating leverage and high reinsurance commissions
- Q4-22 net combined ratio at 68.2% on continued low loss ratio
Net income (group share) of €283.1m, of which €54.7m in Q4-22. Annualised RoATE1 of 15.6%
- Earnings per share reached €1.89
Coface continues to be backed by a solid balance sheet:
- Estimated solvency ratio at ~201%2, above the upper end of target range (155% to 175%)
- Proposal to distribute a dividend3 per share of €1.52 representing a 80% pay-out ratio
Acquisition of Rel8ed, a data analytics boutique in North America
*Unless otherwise indicated, change comparisons refer to the results as at 31 March 2021.
Xavier Durand, Coface’s Chief Executive Officer, commented:
"The global economy was exposed to many risks at the end of 2022, but it benefited from unexpected positive developments such as the reopening of the Chinese economy and exceptionally high temperatures at the start of the winter in Europe. This mild weather and curve in demand reduced natural gas consumption and lowered energy costs for businesses and households.
However, these good news did not stop the expected ongoing increase in the number of business failures.
In this complex environment, Coface achieved record results, with net income up 26% to €283m, corresponding to an annualised return on tangible equity of 15.6%.
Our retention rate and net promoter score also reached record levels. This performance would not have been possible without the commitment of all of Coface’s employees to serving our clients.
2023 is the last year of the Build to Lead strategic plan. We have either already achieved or are in the process of exceeding all the goals set in this plan. This new year will also see the application of new accounting standards, the application of which has required considerable efforts from our teams but will not change our strategy or performance measurement.
Thanks to our very solid balance sheet, we will propose the distribution of 80%3 of our net income to shareholders at the General Meeting, in line with the objectives of our strategic plan."
1 Return on average tangible equity.
2 This estimated solvency ratio is a preliminary calculation made according to Coface’s interpretation of Solvency II regulations and using the Partial Internal Model. The final calculation may differ from this preliminary calculation. The estimated solvency ratio is not audited.
3 The distribution proposal will be submitted to the Annual General Shareholders’ Meeting to be held on 16 May 2023.