I. Results for the first nine months of 2013
A. Key figures
Shareholders’ equity increased by € 9.1 million, with € 221.4 million of positive net income being offset by the €176.0 million dividend paid in May 2013 and a € 25.9 million negative revaluation of the bond portfolio following a recent rise in interest rates.
Turnover reached € 1,860.9 million at the end of September, up 3.8% compared to September 2012, but higher by 4.9% at constant exchange rates.
Foreign exchange headwinds again weighed negatively on the top line in Q3, but at constant exchange rates all regions except France are growing. Asia and the Middle East continue to be strong growth drivers, as is the dynamic World Agency multinationals segment.
New business and client retention remain solid and drive growth. However, the impact from policyholders’ insured turnover is globally negative for the Group – particularly for the top line in France.
C. Operating income
Operating income is down € 22 million versus last year but still solid at € 334.4 million.
The net claims ratio stands at a healthy level of 52.6%, up 2.9 points compared to last year, and in line with the net claims ratio at the end of June 2013.
The net expense ratio is up 1.5 points against 2012, when most remaining positive run-offs on reinsurance commissions linked to previous attachment years were booked. Before reinsurance, the expense ratio improved against last year.
As a result, the net combined ratio stands at 76.8%, vs. 72.4% at the end of September 2012.
Lower average bond yields, combined with reduced realized gains and negative foreign exchange, decreased net investment income by 17.5% to € 70.7 million.
However, an exceptional profit of € 32 million linked to the cession of Euler Hermes’ Spanish and Argentinean entities to Solunion, the joint venture with MAPFRE, partially offsets this lower ordinary operating income.
Operating income for the first nine months of 2013 therefore stands at € 334.4 million.
D. Investment portfolio
In the first nine months of 2013 the market value of the Group’s investment portfolio increased by € 8 million compared to end of year 2012 -- to € 4,243 million. This evolution is linked to positive operating cash flows, partially offset by the dividend payment and the lower bond portfolio value
E. Net income
Net income reached €221.4 million in the first nine months of 2013. The decrease vs. last year is linked to the lower operating income.
With the economic recovery still to materialize fully, Euler Hermes remains on course to deliver solid results in 2013 and is on track with previous guidance.
Business confidence is improving in the advanced economies, although downside risks remain. As in 2012 and 2013, Euler Hermes expects to drive its growth primarily from outside Europe. The Group will maintain its prudent approach to risk, while continuing its expansion strategy in growth markets to secure future profitability.
II. Results for the third quarter of 2013
The financial documentation section includes the press release, the consolidated financial statements and the presentation of the quarterly results to analysts.
On Tuesday, 5 November 2013, the Group Management Board of Euler Hermes (ELE.PA), a worldwide leader in credit insurance and in the areas of bonding, surety and collections, presented its consolidated results as of 30 September 2013 to the Euler Hermes Supervisory Board. The results have been reviewed by the auditors and the Audit Committee.