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FINANCIAL STATEMENTS

FINANCIAL STATEMENTS. facilitating business-to-business commerce worldwide. 2001 Financial Year. Change 01/00. Change 00/99. (millions of euros o r euros). 2000. 2001. Turnover. 845.8. +14.6%. 925.6. +9.4%. Underlying pre-tax profit. 112. +24.4%. 100.7. -10.1%.

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FINANCIAL STATEMENTS

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  1. FINANCIAL STATEMENTS facilitating business-to-business commerce worldwide

  2. 2001 Financial Year

  3. Change 01/00 Change 00/99 (millions of euros or euros) 2000 2001 Turnover 845.8 +14.6% 925.6 +9.4% Underlying pre-tax profit 112 +24.4% 100.7 -10.1% Net consolidated profit 57.6 +15% 48.3 -16.0% Net underlying profit per share (€) 4.51 +11.5% 3.91 -13.3% Coface in 2001 – Key figures

  4. A good year for turnover growth up 9% in 2001 up 8% per year from 1997 to 2000 1997 1998 1999 2000 2001

  5. Annual growth 2000 2001 2001 €m France 392 +17% +4% Germany 220 +9% +3% Austria 41 +3% +3% Traditional markets (71%) 653 +13% +4% Italy 109 +1% +18% United Kingdom 50 +23% +19% Other European countries 52 +29% +27% Other continents 62 +69% +51% New markets (29%) 273 +19% +26% WORLD TOTAL 926 +15% +9% Growth driven by countries with a recently established group presence

  6. 2001 €m Annual growth 2000 2001 +22% Credit 613 +9% -8% Guarantees and other 54 +15% +19% All insurance 667 +9% Credit management services 192 +11% +15% -6% Public procedures 67 -3% +15% Consolidated turnover 926 +9% Growth also driven by credit management services

  7. Highly contrasting half-years: up 15% in the first half, up 4% in the second • With the fourth cycle reversal in 30 years: • world growth slumped from 4.7% to 2% • European growth slumped from 3.4% to 1.7% • world trade growth slumped from 12% to a negative 1% • Compared to 1974, 1982, and 1992, the current cycle’s impact is: • less severe for economic growth • more severe for world trade

  8. Change 01/00 (€ millions) 1997 1998 1999 2000 2001 Underlying pre-tax profit 70 86 90 112.0 100.7 -10.1% Insurance 7 13 13 22.9 10.1 -56.0% Services 35 34 33 33.3 33.8 1.5% Net investment income 28 40 44 55.8 56.7 1.7% Underlying profit down 10%

  9. 1 – The insurance profit contribution affected by the credit cycle • The underwriting profit decline from 22.9 to 10.1 million euros (or two points of gross premiums) is attributable to: • a one point cost-ratio increase • a second-half business decline that outpaced cost adjustments • increased subscription-related information purchases • a one-point net loss ratio increase (after stabilizer impact: reinsurance and equalization provision)

  10. 1999 2000 2001 Claims (€ millions) 284 338 521 Overall loss ratio* 57% 57% 78% Export credit 52% 46% 63% Domestic credit 63% 72% 101% Guarantee 52% 38% 55% Loss ratio** on premiums and related fees 50 % 50% 69% Strong impact on the Coface gross loss ratio (*) on earned premiums, before reinsurance and excluding claims handling costs (**) as above but including fees for insurance-linked services

  11. A nonetheless limited impact of insurance on profitability Reinsurance (external) and the equalization provision (internal) smooth the loss ratio across the cycle • underwriting profit represents only 10% to 20% of group underlying profit • the loss ratio needs to be assessed over the entire cycle 1994-20002001 Gross combined ratio 84% 110% Net combined ratio(*) 96% 98% Equal. provision change + €171m - €68m (*) after reinsurance and equalization provision

  12. World GDP and credit risk growth 7.0 300 world cycle low point 6.0 250 lag between European & USA low points world cycle low point 5.0 world cycle low point 200 4.0 150 percentage 3.0 100 2.0 50 1.0 0.0 0 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 -1.0 -50 world growth with 80% EU weighting payment-default index (base 100 = 1995 world average) The 2001 risk profile resembles that of1974, 1982, or 1992

  13. 2 – A strong contribution from credit management services Underlying pre-tax profit Change 01/00 (€ millions) 1997 1998 1999 2000 2001 Public procedures 12 10 10 9.5 9.2 -3.1% Credit management services 24 26 27 24 25 +3.3% Credit management services excluding "development costs" 24.0 30.1 +26.1%

  14. 1999 2000 2001 (€ millions) 54.4 65.5 66.7 Realized financial income -9.5 -7.7 -7.3 Financial charges -1.3 -2.0 -2.7 Investment management costs 43.6 55.8 56.7 Net investment income 18.9 2.3 -77.7 Change in unrealised gains 3 - Contribution of net investment income

  15. End-2000 breakdown End-2001 breakdown Overall yield Equities(*) -21% 28% 17% Interest-rate products 5% 47% 58% Property 5% 21% 21% Other -4% 4% 4% TOTAL -1.1% 100% 100% The equitymarketdecline undermined portfolio yield (*) excluding share in affiliates

  16. Change 00/99 Change 01/00 2000 2001 Underlying pre-tax profit 112.0 24.4% 100.7 -10.1% Exceptional profit/loss 0.7 -3.4 Taxes and profit sharing -49.5 54.5% -40.5 -18.3% Minority shareholdings & other -5.6 -8.5 Net consolidated profit 57.6 15.0% 48.3 -16.0% Net profit trend

  17. Change 01/00 2000 2001 Shareholders’ funds 509 534 +4.9% -13% Revalued shareholders’ equity(*) 887 771 Fitch AA rating confirmed A sound 2001 balance sheet * Fitch methodology

  18. OUTLOOK

  19. Double-digit turnover growth during average periods • A turnover pattern opposite to that of 2001 with the precise timing of the upturn difficult to pinpoint. • In the medium term, substantial potential for credit-risk management outsourcing services. The group intends to exploit that potentialfully through: • improved geographic and product integration • good articulation with receivables financing tools • its enhancement via New Impulse, the group’s ambitious integration and cost reduction programme.

  20. The geographic integration dynamic • Taken together, countries recently penetrated by the group (which exclude France, Germany, and Austria) represent: • 92% of world GDP • 60% of the world credit insurance market • 50% of the group’s growth in 2001 • but still only 29% of group turnover

  21. 1 – The product and service integration dynamic • A complete and consistent range of credit management services and credit risk guarantees • A range that will be made progressively and fully available in all countries where the group operates • This worldwide product and service integration will draw on: • a new unified client terminal • Worldwide contracts (Globalliance and @rating Pack) that integrate credit insurance and credit management services • the group’s lead in insurable ratings with @rating, the link between insurance and information

  22. Cross-selling will drive the group’s growth 2 - The product and service integration dynamic • A single corporate image, logo, and name by end 2002 • A unified network in each country marketing the full range of group products and services • jointly implemented 1 January 2002 in France by Coface and Coface Scrl

  23. Coface: a single name . . . for a worldwide group

  24. Cross selling will drive the group’s growth 2 - The product and service integration dynamic • A single corporate image, logo, and name by end 2002 • A unified network in each country marketing the full range of group products and services • implemented 1 January 2002 in France between Coface and Coface Scrl

  25. Integration with financing tools • Solid integration of factoring services, in partnership with factors or developed in-house to complement the group’s product and service offer, as in Germany (AKF): • AKF, for example, has become number three in Germany in just three years and is profitable • Solid integration of receivables securitisation: • the group signed its first fourdeals in 2001, and several negotiations are under way

  26. Double-digit profit growth in average periods Thanks to: • drastic action on costs • three-fold restructuring of underlying profit contributions • insurance • credit management services • financial products.

  27. Drastic action on costs • Broad savings programme and hiring freeze • Corporate-structure simplification and balance sheet optimisation (progressive 100% takeover of subsidiaries) • Greater centralisation of some functions (reinsurance, asset management, risk management) The objective: a two-point improvement in the group cost ratio in 2002

  28. 1 – Outlook for the insurance profit contribution • The 2002 underwriting profit’s contours should be the reverse of last year • Previous cycles foreshadow a pronounced and speedy credit-risk recovery and even more pronounced recovery of underwriting profit, which will further benefit from measures taken in 2001: • tougher selection criteria for guarantee applications (the 2001 rejection rate rose from 29% to 40%) • accelerated cancellation of doubtful risks (the annual cancellation rate rose from 4.5% to 8% in 2001) • premium increases (systematic, modulated, and generally well received)

  29. 2 - Outlook for the insurance profit contribution • Coface is targeting net underwriting profit across the credit cycle of at least 4% of premiums (after reinsurance and equalization provision) That target is consistent with the group’s strategic goals: • enhance group excellence as"credit risk-taker"thereby lending credibility to its credit management services and constituting a guarantee for that high-potential business • while limiting the need to call for capital from shareholders • by sharing risk (and its remuneration) with other actors (reinsurers, market) interested in soundly subscribed credit risk.

  30. A larger contribution from credit management services • The group is targeting a 20% pre-tax margin on credit management services within three years • This target will be achieved through vigorous unit cost reduction via: • amortization of the worldwide network, now complete • exploitation of synergies within the group based on geography and complementarity between credit insurance and services • greatly increased automatization thanks to @rating.

  31. The group’s worldwide network is complete Czech Republic Bulgaria Germany Ireland Croatia Romania Austria Italy Estonia Russia Canada Netherlands Belgium Hungary Slovakia Portugal Denmark Latvia Slovenia United Kingdom Spain Atlanta Lithuania Turkey Sweden France Boston Poland Ukraine Switzerland Korea Los Angeles USA Japan Israel Miami China New York Dubai Hong Kong San Francisco Taiwan India Washington Mexico Benin Malaysia Burkina Faso Singapore Cameroon Thailand Ivory Coast Mali Argentina Senegal Brazil Togo Chile Colombia Costa Rica Ecuador Australia Peru Venezuela

  32. The contribution from financial income • Management centralisation and cost reduction • Implementation of a value-at-risk model for strategic asset allocation. The group has now decided to: • reduce: • the equity allocation • the sensitivity of the bond portfolio • undertake an analysis on real estate

  33. Conclusion • A group ready to reap the benefits of its investments and integration

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