COFACE (COFA) Q4 2024 earnings summary

Executive summary

• Net income reached €261.1 million for FY 2024, up 8.6% year-over-year, with Q4 contributing €53.4 million, marking a record under IFRS 17.

• Total revenue was €1,845 million, down 0.6%, with insurance revenue decreasing 2.2% and business information growing 16.3%.

• High client retention at 92.3% and a proposed dividend of €1.40 per share, representing an 80% payout ratio.

• Annualized ROATE reached 13.9%, up 0.5 points, and solvency ratio estimated at 196%, above the target range.

• Acquisition of Cedar Rose in the Middle East to strengthen information services.

Financial highlights

• Operating income rose 12.8% to €409.2 million, driven by higher investment income.

• Net combined ratio at 65.5%, up 1.2 points year-over-year; Q4-24 combined ratio at 68.7%.

• Net loss ratio improved to 35.2%, down 2.5 points year-over-year; net cost ratio increased to 30.2%, up 3.6 points.

• Investment income reached €91.7 million, with recurring yield up from 2% to 3.1%.

• Book value per share at €14.7; tangible book value per share at €13.1.

Outlook and guidance

• Management remains cautious due to ongoing economic volatility, especially in Europe, and rising insolvencies globally.

• Q4-24 suggests a potential bottom in client activity, but no clear trend established for future growth.

• Inflation has stabilized at lower levels, but uncertainty persists regarding tariffs and trade wars.

• Ongoing investments in business information and debt collection are expected to drive future growth.

• Continued focus on selective client acquisition and long-term partnerships.