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Introduction & Market Context
Coface (EPA:COFA) reported its H1 2025 financial results on July 31, showing a net income of €124.2 million and a return on average tangible equity (ROATE) of 12.6%. The credit insurer delivered these results against a backdrop of global insolvencies reaching 10-year highs and GDP growth at decade lows outside of the COVID period.
The company’s shares closed at €16.21 on the day of the announcement, up 0.68% according to market data, as investors assessed the mixed picture of solid financial metrics in an increasingly challenging economic environment.
As shown in the following key financial highlights, Coface maintained profitability while continuing to invest in its strategic initiatives:
Financial Performance Highlights
Coface reported a turnover of €937 million for H1 2025, up 2.3% at constant FX and perimeter compared to H1 2024. Insurance revenue grew by 1.7% at constant FX, while services showed stronger momentum with an 8.2% increase. Particularly notable was the performance of Business Information, up 14.7%, and Debt Collection, which surged 35.0%.
The company’s client retention rate rebounded to 94.0%, up from 92.8% in Q2 2024, while pricing decreased by 1.6%, in line with historical trends. Client activity remained slightly positive at 1.8%.
As illustrated in the following revenue breakdown, Coface’s service diversification strategy is yielding results:
The geographical distribution of revenue showed mixed performance across regions. As shown in the following regional breakdown, Asia Pacific and Latin America delivered the strongest growth, while Central Europe and North America saw slight declines:
The net combined ratio increased to 71.3%, with the net loss ratio rising by 5.1 percentage points to 40.1% compared to H1 2024. The cost ratio increased by 2.8 percentage points to 31.2%, reflecting past inflation and continued investments in line with the company’s strategy. The Q2 2025 net combined ratio reached 74.0%, which the company described as "close to mid-cycle levels."
Net income decreased by 12.7% compared to H1 2024, reaching €124.2 million, of which €62 million was generated in Q2 2025. This quarterly performance aligns with the Q1 2025 result of €62.1 million reported earlier this year.
Risk Management & Economic Environment
Coface emphasized its strong risk management in an increasingly challenging environment. Global insolvencies have returned to decade-high levels, while world GDP growth is at its lowest level in a decade, excluding the COVID period.
The company has increased its risk prevention actions by 16% compared to June 2024 and by 50% compared to June 2023, reflecting a more cautious approach as the trade credit insurance market enters what Coface describes as "a tougher part of the cycle" characterized by price competition, limited growth, and rising claims.
The following chart illustrates the challenging economic context Coface is navigating:
Strategic Initiatives
Despite the more difficult economic environment, Coface continues to invest in its strategic priorities. The company has strengthened its management team, created a new technological hub led by Thibault Surer, and established a Coface Lloyd’s Syndicate to offer AA-rated solutions to clients.
Coface has also expanded through acquisitions, purchasing Cedar Rose Group and Novertur International to enhance its data and business information capabilities. These moves align with the company’s "Power the Core" strategy, which focuses on strengthening its core expertise in credit insurance while expanding complementary services.
As shown in the following slide, Coface’s investment strategy is yielding positive outcomes:
The company’s financial strength remains solid, with a solvency ratio of 195%, well above its target range of 155-175%. This robust capital position provides flexibility for continued investments and potential market downturns.
As illustrated in the following solvency chart, Coface has maintained consistent capital strength over time:
Forward-Looking Statements
Coface maintains a cautious outlook, noting that the economic environment remains heavily dependent on tariffs negotiations, with the full impact of new US policies still to be seen. The company also indicated that European economic recovery remains uncertain.
Despite these challenges, Coface confirmed it will continue to execute its strategy, investing in services, data, technology, and sales capabilities. The company noted that tangible results from these investments are beginning to materialize, particularly in new business growth and service revenues.
As summarized in the following outlook slide, Coface is positioning itself for continued execution of its strategy while acknowledging the challenging economic context:
CEO Xavier Durand had previously emphasized the company’s cautious stance during the Q1 earnings call, stating, "We’re going to have to see where the dust settles." This cautious approach continues to guide the company’s strategy as it navigates the current economic uncertainties while maintaining solid financial performance.
Full presentation:
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