Coface releases its FY-2023 financial results. Net income at €240.5m and proposed dividend at €1.30 per share
Turnover
€1,868m, up +6.0% at constant FX and perimeter and up +3.8% on a reported basis
- Trade credit insurance premiums increased by +5.4%; growth in client activities was negative in the second half of the year as a result of falling inflation and economic slowdown
- Client retention stood at a record high (93.1%); price effect was still negative (-1.9%) but stabilised in Q4-23
- Double digit growth in business information (+17.3% at constant FX and +23.4% in Q4 23) and debt collection, which is less cyclical. Factoring up by +2.6%
Net loss ratio
Net loss ratio at 37.7%, down by 2.0 ppts; net combined ratio at 64.3%, down by 3.3 ppts
- Gross loss ratio at 35.8%, up 0.3 ppt in a risk environment now close to historical averages
- Net cost ratio improved by 1.4 ppt at 26.6% reflecting high reinsurance commissions and business mix while we continue to invest
- Net combined ratio for Q4-23 at 59.0%, improving by 14.4 ppts on positive development in major claims
Net income (group share) of €240.5m, of which €50.8m in Q4-23. Annualised RoATE[1] at 13.4%
- Earnings per share reached €1.60
Coface continues to be backed by a solid balance sheet:
- Estimated solvency ratio at ~199%[2], above the upper end of target range (155% to 175%)
- Proposal to distribute a dividend[3] per share of €1.30 representing an 81% pay-out ratio
Renewal of the mandate of CEO, Xavier Durand, for 4 years and presentation of the next strategic plan “Power the Core” on 5 March 2024
Coface CEO's statement
Coface delivered another strong year in a volatile and relatively weak global economic environment in 2023. Our turnover rose +6.0% at constant FX over the year due to an excellent first half, client retention which remained at record highs and an increase of service revenues. Business information revenue was up +23.4% in the last quarter, with FY growth of +17.3%, confirming this activity’s growth potential.
Annual net income under IFRS 17 was stable at €240m thanks to an excellent underwriting margin, leading to an annualised RoATE of 13.4% despite the negative impact of the fall of certain foreign currencies (Argentina, Turkey) and a drop in real estate prices, which affected our net income.
In an increasingly uncertain environment, Coface’s teams confirmed their dedication to and their high level of expertise at the service of our clients.
We will propose a dividend of €1.30 per share at the Shareholders’ Meeting, representing a payout ratio of 81%3. This is in line with the ambitions of the Build to Lead strategic plan – the objectives of which have all been met or exceeded. We will present our new strategic plan 2024 - 2027, on 5 March.
- Xavier Durand, Coface’s Chief Executive Officer
Unless otherwise indicated, change comparisons refer to the results as at 31 December 2022 (applying IFRS 17 methodology)
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 2024.
