In This Article:
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Net Profit: EUR 207.7 million for the first 9 months, EUR 65.5 million in Q3.
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Net Insurance Revenue: Decreased by about 4% at constant FX.
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Client Retention Rate: 92.7%.
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Business Information Growth: 17.2% in the first 9 months.
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Net Loss Ratio: 35.5%, improved by almost 5 points from last year.
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Net Combined Ratio: 64.4%.
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Net Cost Ratio: Increased by 3.2 points to 28.9%.
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Annualized ROATE: Almost 15%, highest in the last 9 years.
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Total Revenue: Down 2.1%, with Services up 6%.
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Trade Credit Insurance Revenue: Down 4%.
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Insurance Fees: Up 8.3% for the quarter.
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New Business Growth: Up 8% from last year, 17% from 2022.
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Gross Cost Ratio Before Reinsurance: 33.7%.
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Investment Portfolio: EUR 3.23 billion, with recurring income reaching almost EUR 71 million.
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Net Income Increase: Almost 10% compared to last year.
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Return on Average Tangible Equity (ROATE): Increased from 13.4% to 14.8%.
Release Date: November 05, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Coface SA (CFACY) reported a net profit of EUR 207.7 million for the first nine months of 2024, with EUR 65.5 million in the third quarter alone.
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The company achieved a high client retention rate of 92.7%, indicating strong customer loyalty.
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Business Information services experienced double-digit growth of 17.2% in the first nine months, showcasing successful expansion in this segment.
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The net combined ratio improved to 64.4%, reflecting strong operational efficiency.
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Coface SA (CFACY) achieved an annualized ROATE of almost 15%, the highest in the last nine years, demonstrating robust financial performance.
Negative Points
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Net insurance revenue decreased by about 4% at constant FX, indicating challenges in the core insurance business.
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The net cost ratio increased by 3.2 points to 28.9%, driven by lower revenues and continued investment in growth and technology.
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Trade credit insurance revenue declined by 4%, reflecting ongoing economic challenges.
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The company faces a hardening economic environment with increased insolvencies, posing potential risks to future performance.
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Cost inflation, particularly in wages and outside services, continues to impact the company's financials, with costs growing faster than revenues.
Q & A Highlights
Q: Despite higher insolvencies compared to 2019, Coface's loss ratio has improved. What is driving this performance? A: Xavier Durand, CEO: Coface has maintained a disciplined and value-oriented approach to underwriting, continuously improving tools and processes. The market is normalizing slowly, allowing effective risk management, contributing to strong performance despite a hardening market.