COFACE (COFA) Q1 2025 earnings summary

Executive summary

• Net income for Q1 2025 was €62.1 million, down 9.2% year-over-year, with ROATE at 12.7% and turnover up 2% at constant FX and perimeter.

• Client retention remained high at 95%, with strong growth in business information (+14.7% to +15%) and debt collection (+14.8% to +15%), while factoring declined slightly.

• The environment is highly uncertain due to global trade tensions and US policy shifts, but the company continues to invest in core business, risk monitoring, and service expansion.

• Pricing declined by 1.3%, but new production reached €37 million.

Financial highlights

• Net combined ratio stood at 68.7%, up 5.6 pts year-over-year but stable sequentially; loss ratio at 39.1% (up 3.3 pts), cost ratio at 29.5% (up 2.2 pts).

• Net income (group share) at €62.1m, operating income at €91.2m (down 14.5%), and net earned premiums at €279m (down 0.6%).

• Investment portfolio market value was €3.35 billion, with 17% in liquid assets; new investments yield 3.8%.

• Book value per share at €15.0; tangible book value at €13.4 per share.

• Tax rate decreased to 23% from 27% in Q1-2024.

Outlook and guidance

• The company expects continued economic slowdown, with global GDP growth revised down from 2.7% to 2.3% and Europe from 1.1% to 0.5%.

• High uncertainty persists due to US tariff announcements and policy shifts, delaying investments and impacting global trade.

• Anticipates further normalization and gradual increase in insolvencies due to ongoing uncertainty and trade disruptions.

• No change in reserving or underwriting stance; maintains a conservative approach.

• Strategy and data expertise seen as strengths in volatile environment.