Unaudited interim consolidated financial statements
(free translation)
Three months ending March 31, 2022
CONTENTS
Basis of preparation..................................................................................................................................................... 3
Significant events........................................................................................................................................................ 4
Consolidated balance sheet......................................................................................................................................... 5
Consolidated income statement ................................................................................................................................... 7
Consolidated statement of comprehensive income ...................................................................................................... 8
Statement of changes in equity .................................................................................................................................... 9
Consolidated statement of cash flows ........................................................................................................................ 10
Events after the reporting period ................................................................................................................................ 11
Basis of preparation
These IFRS condensed interim financial statements of the Coface Group as at March 31, 2022 include:
- the balance sheet;
- the income statement;
- the consolidated statement of comprehensive income;
- the statement of changes in equity;
- the statement of cash flows.
They are presented with comparative financial information at December 31, 2021 for balance sheet items and for the 3 months ended March 31, 2021 for income statement items.
The accounting principles and policies used for the interim financial statements as at March 31, 2022 are the same as the ones used for the year ended December 31, 2021. They are prepared in accordance with the International Financial Reporting Standards (IFRS) as published by IASB and adopted by the European Union1. They are detailed in the note "Applicable Accounting Standards" of consolidated financial statements for the year ended December 31, 2021.
These condensed consolidated financial statements were reviewed by Coface Group's Board of Directors on 28 Apil 2022.
They were also previously reviewed by the Audit Committee on 27 April 2022.
1 The standards adopted by the European Union can be consulted on the website of the European Commission at:http://ec.europa.eu/finance/ company-reporting/ifrs-financial-statements/index_fr.htm
Significant events
Natixis announces the sale of its residual stake in Coface SA
On January 6, 2022, Natixis announced the sale of its remaining interest in COFACE SA. This sale represented approximately 10.04% of COFACE SA's share capital, or 15,078,095 shares. It was carried out by way of an ABB (accelerated book-building) at an average price of €11.55. Following this transaction, Natixis no longer held any shares in COFACE SA.
Anticipated impacts of the Ukraine crisis
The invasion of Ukraine by Russia on February 24, 2022 has triggered a war in Europe for the first time since the Second World War. This armed conflict and the numerous economic sanctions taken against Russia will certainly have serious economic and financial consequences for the whole world, while the previous crisis linked to the Covid was not yet over. The inflationary consequences are significant: the hope of seeing the prices of energy, minerals and agricultural products fall in the second half of 2022 is gone, or at least remote.
The decline in freight costs has also been postponed (due to air travel bans and soaring fuel costs). As a result, the standardization of production lines has also been postponed. In addition, the Central European countries have to bear the burden of hundreds of thousands of Ukrainian refugees. These same countries, as Russia's trade corridors and outlets, are suffering from the reduction in trade between the two belligerents and Europe. Finally, energy and food price inflation is a potential source of social unrest, which could lead to political upheaval, especially in developing countries, where government intervention to mitigate its impact on households is made difficult by weak budgetary capacity and high debt levels increased by the pandemic. Faced with high inflation in property prices, real estate and financial assets, as well as a sharp economic slowdown, central banks find themselves in an uncomfortable situation. The extent and duration of the damage caused to the world economy by the conflict are still difficult to determine, as we do not know the duration and evolution of the intensity of the war.
In this context, Coface has adjusted its assessments of Russian, Belarusian and Ukrainian risks and reduced its exposure to these countries. The Group continues to monitor closely the situation on a daily basis and is constantly adjusting its underwriting policy to ensure compliance with international sanctions.
To date, and subject to any changes in the situation, this serious crisis has greatly increased uncertainty and volatility due to its multi-sector and multi-geographical impact.
Coface is not directly exposed to the countries in conflict through its investment portfolio and the impact of this conflict on its business remains very limited.
Coface Russia Insurance's earned premiums will amount to €12.46 million in 2021 (1% of the Group total) and the value of this subsidiary's shares is less than €7 million based on the net book value in the Group's financial statements at 31
December 2021.
The Group's exposure to risk in this region, which was insignificant in its factoring business and overall less than 1% of its global exposure before the start of the conflict, has since been adjusted downwards and monitored regularly.
While the loss experience reported to date in this region has not shown any significant deterioration, the impact of this crisis, whether direct or indirect, could result in a deterioration of its loss ratio.
Consolidated balance sheet
Asset
(in thousands of euros)
Intangible assets Goodwill
Other intangible assets
Insurance business investments Investment property Held-to-maturity securities Available-for-sale securities Trading securities Derivatives
March 31, 2022 236,048 155,780 80,269 3,175,567
Dec. 31, 2021 229,951 155,529 74,423 3,219,430
Loans and receivables
288
1,855
3,078,833
11
11,900
288
1,833
3,115,154
15
10,458
Receivables arising from banking activities Reinsurers' share of insurance liabilities Other assets
82,680 2,969,056 509,879 1,161,506
91,683 2,690,125 512,187 1,024,871
Buildings used for operations purposes and other property, plant and equipment
Deferred acquisition costs Deferred tax assets
Receivables arising from insurance and reinsurance operations Trade receivables arising from service activities
Current tax receivables
Other receivables
103,872
46,180
46,023
588,142
63,967
83,878
105,809
38,900
58,345
511,038
59,489
75,682
Cash and cash equivalents TOTAL ASSETS
229,443 389,248 8,441,343
175,609 362,441 8,039,005
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Disclaimer
Coface SA published this content on 27 April 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 April 2022 16:22:25 UTC.