COFACE (COFA) Q3 2024 earnings summary

Executive summary

• Net income for the first nine months reached EUR 207.7 million, up 9.5% year-over-year, with EUR 65.5 million in Q3 and annualized ROATE at 14.8%.

• Turnover was EUR 1,376.6 million, down 2.1% at constant FX and perimeter, mainly due to lower insurance revenue and subdued client activity.

• Services, including business information and debt collection, posted double-digit growth, offsetting insurance revenue declines.

• Combined ratio improved to 64.4%, reflecting strong risk management and lower loss ratio.

• Client retention remained high at 92.7%, with pricing trends in line with historical averages and improved new business demand.

Financial highlights

• Operating income rose 15.2% to EUR 315.1 million; net income up 9.5% to EUR 207.7 million.

• Net earned premiums fell 5.5% to EUR 816.3 million; total revenue down 2.1% year-over-year.

• Net investment income increased to EUR 59.8 million, driven by higher yields and realized gains.

• Book value per share at EUR 14.1; tangible book value at EUR 12.5 per share.

• Tax rate stable at 27%, up from 24% in 9M 2023.

Outlook and guidance

• Inflationary and disinflation headwinds have largely passed, with client activity stabilizing but not yet rebounding.

• Management refrains from providing forward-looking statements but continues investing in growth and technology.

• Market conditions remain uncertain, with focus on agile risk management and close monitoring of economic and geopolitical developments.