APRIL
2017 annual results
-

2017 current EBIT above expectations
Continued growth targeted for 2018

  • Health & Personal Protection sales up 7.6% and Property & Casualty up 8.2%
  • Current EBIT of €69.4m, up 6.2%
  • Net income (Group share) of €39.6m, up 97.0%
  • Proposed dividend of €0.27 per share, up 3.8%

 The APRIL group posted 2017 consolidated sales of €928.4m, up 7.8% compared with reported figures for the previous year, and current EBIT up 6.2% to €69.4m.
Following this announcement, APRIL CEO Emmanuel Morandini made the following comments:

"The results for 2017 confirm the appropriateness of the turnaround measures we have implemented: after the 2015 sales figures and 2016 gross margin, current EBIT and net income have returned to growth in 2017. Our key indicators are now all positive, backed by strong business momentum.

Over the coming years, we intend to continue the development and global expansion of our growth activities, such as local health insurance, loan insurance, international health insurance and niche P&C, while continuing to turn around our loss-making operations. We are therefore refocusing our efforts on the businesses, operations and markets that generate value-added.

Thanks to all of these factors, we are aiming at 2018 current EBIT growth of 6-10% compared to 2017." 



Group (IFRS - €m) 2017 2016 Change
Consolidated sales 928.4 861.2 +7.8%
Gross margin[1] 428.4 420.6 +1.8%
Financial income 11.0 16.4 -32.9%
Current EBIT 69.4 65.4 +6.2%
EBIT 64.9 42.1 +53.9%
Net income (Group share) 39.6 20.1 +97.0%
Dividend per share (€) 0.27 0.26 +3.8%

The Board of Directors met on 7 March 2018 to approve APRIL's company and consolidated financial statements. The audit procedures for the consolidated financial statements have been completed and the certification report is currently being prepared.

GROUP

APRIL reported consolidated sales of €928.4m for the year ending 31 December 2017, up 7.8% compared with the reported figures for 2016. Like-for-like[2] growth amounted to 7.1%, including the impact of a -€1.9m exchange rate fluctuation and a €7.8m consolidation gain. Insurance premiums increased 11.1% like-for-like to €416.9m. Brokerage commissions amounted to €511.5m, up 4.0% like-for-like, reflecting growth in both Property & Casualty (up 6.6%) and Health & Personal Protection (up 2.7%).

Health & Personal Protection posted sales up 7.6% as reported and up 6.2% like-for-like. Property & Casualty maintained growth, with sales up 8.2% as reported and up 8.4% like-for-like.

The gross margin increased 1.8% to €428.4m. Gross margin growth in brokerage activities (up 3.8% to €373.0m) was hampered by the decline in risk carrying businesses (gross margin down 9.6% to €55.3m), impacted by a drop in financial income due to consistently low interest rates and a decreased technical performance.

Net financial income amounted to €11.0m, down €5.4m. This figure includes €1.9m in capital gains on the sale of financial assets, compared with €3.3m in 2016. It also includes a €2.1m currency loss compared to a €0.1m currency gain in 2016.

Current EBIT amounted to €69.4m, up 6.2% compared to 2016, and higher than the targets announced, thanks to APRIL's strong performance and efficiency in turning around loss-making operations. Current EBIT was positively impacted by strong business momentum during the year, the turnaround initiatives implemented at certain subsidiaries and the impact of restructuring carried out in Switzerland and the United States in December 2016.

Over the year, non-recurring items amounted to €4.5m, mainly including the write-off of goodwill confirming the effective discontinuation of operations in Reunion. EBIT thus amounted to €64.9m, up €22.8m.

After a tax charge of €24.3m, net income (Group share) amounted to €39.6m, versus €20.1 in 2016, during which significant non-current items were recorded.

 

HEALTH & PERSONAL PROTECTION

Health & Personal Protection (IFRS - €m) 2017 2016 Change
Consolidated sales 567.7 527.7 +7.6%
+6.2% LFL
Gross margin 266.0 260.3 +2.2%
Financial income 7.0 11.5 -39.1%
Current EBIT 75.0 71.9 +4.3%

The Health & Personal Protection division reported a 7.6% increase in sales comprising a 4.9% increase in brokerage commissions as reported (up 2.7% like-for-like) and an 11.5% increase in premiums as reported and like-for-like.

The increase in insurance premiums was driven by strong growth in the individual (seniors and self-employed) Health & Personal Protection and group health insurance portfolios.

The increase in brokerage commissions is primarily due to strong performances in individual health (seniors and self-employed), loan insurance and expatriate health insurance.

The Health and Personal Protection gross margin increased 2.2% to €266.0m, mainly due to the strong performance posted by individual Health & Personal Protection and expatriate health insurance and despite lower financial income.

The division's current EBIT amounted to €75.0m, up 4.3% compared to the previous year. Recent acquisitions (Public Broker in Brazil and Bamado in Italy) contributed positively to this growth.

PROPERTY & CASUALTY

Property & Casualty (IFRS - €m) 2017 2016 Change
Consolidated sales 363.4 336.0 +8.2%
+8.4% LFL
Gross margin 162.4 160.3 +1.3%
Financial income 3.3 4.0 -16.8%
Current EBIT 5.9 4.6 +26.9%

The Property & Casualty division reported an 8.2% increase in sales comprising a 6.1% increase in brokerage commissions as reported (up 6.6% like-for-like) and a 10.5% increase in premiums as reported and like-for-like.

The strong growth in insurance premiums results from the expansion of corporate, affinity member, travel insurance and assistance operations in a highly-reinsured risk-carrying model.

Brokerage commissions continued to increase at constant consolidation scope and exchange rates, driven by the development of wholesale brokerage activities, particularly in car, two-wheeled vehicle and boat insurance. Thanks to the results of our action plans and a more favourable market environment, travel insurance recorded strong sales momentum mainly in France, the United States and Brazil.

The gross margin was mainly driven by the strong performances posted by travel insurance activities in Brazil and wholesale brokerage in France.

Property & Casualty posted current EBIT of €5.9m, up €1.3m compared to the previous year, positively impacted by the turnaround measures taken at certain subsidiaries, such as the United States, and optimised policy and claims handling.


FINANCIAL POSITION

Group (IFRS - €m) 2017 2016 Change
Shareholders' equity (Group share) 632.3 614.5 +2.9%
Provisions for contingencies and charges 30.0 29.9 +0.4%
Financial debt
% of shareholders' equity		 37.5
5.93%		 6.5
1.06%		 +473.1%
+4.87 pp
Adjusted net cash[3] 195.1 188.9 +5.9%

At 31 December 2017, APRIL continued to show a healthy financial structure:

  • Consolidated shareholders' equity (Group share) of €632.3m, up €17.8m compared to the previous year, and provisions for contingencies and charges[4] stable at €30.0m.
  • Financial debt of €37.5m, i.e. 5.9% of shareholders' equity (Group share), comprising a loan taken out under favourable market conditions and commitments made as part of the Group's acquisition policy (earnouts and commitments to buy out minority interests),
  • Group net cash, adjusted for deposit accounts, amounting to €195.1m, compared to €188.9m in 2016.

DIVIDEND

The Group will propose a 2017 dividend of €0.27 per share, entailing a total payout of €11.0m, up 3.8% compared to 2016, to the Annual General Meeting. This dividend represents 25% of current EBIT less corporate income tax and net income (minority interests). APRIL therefore comes back to a payout ratio that is slightly above 25% of net income (Group share), in line with its dividend policy.

The Group thus confirms its confidence in its short and medium-term outlook, as in 2016 when it decided to maintain a €0.26 dividend per share and neutralise the impact of non-current items recorded that year.

 


CHALLENGES AND OUTLOOK

The turnaround measures undertaken by the Group since 2015 are bearing fruit. In 2018, growth will be driven by three key priorities: maintaining organic growth in France and abroad, continuing to implement our targeted external growth policy and continuing to turn around our loss-making operations.

Thanks to these factors, the APRIL Group is targeting current EBIT growth of 6-10% versus 2017.

APPENDICES

  • Summary consolidated income statement
  • Summary consolidated balance sheet
  • Summary consolidated cash flow statement
  • Gross margin bridge
  • Adjusted net cash bridge

UPCOMING EVENTS

  • 2017 Annual results presentation: 8 March 2018 at 9.30 am in Paris
  • Q1 2018 sales: 24 April 2018 after market close
  • Shareholder Annual General Meeting: 26 April 2018, in Lyon

The 2017 results presentation will be audiocast live in French on Thursday 8 March at 9.30am on www.april.com and a replay will be available from 2pm on the same day. 

CONTACTS

Analysts and investors
Guillaume Cerezo: +33 (0)4 72 36 49 31 / +33 (0)6 20 26 06 24 - guillaume.cerezo@april.com

Press
Samantha Druon: +33 (0)7 64 01 74 35 - samantha.druon@insign.fr

This release contains forward-looking statements that are based on assessments or assumptions that were reasonable at the date of the release, and which may change or be altered due to, in particular, random events or uncertainties and risks relating to the economic, financial, regulatory and competitive environment, the risks set out in the 2016 Registration Document, and any risks that are unknown or non-material to date that may subsequently occur. The Company undertakes to publish or disclose any adjustments or updates to this information as part of the periodical and permanent information obligation to which all listed companies are subject.
            

     About APRIL

      

     In 2018, APRIL-the international insurance services group and leading wholesale broker in France-will be celebrating its 30th anniversary. And at 30 years young, APRIL still has many more years to offer to simplify the lives of its customers and partners-be they individuals, professionals and businesses-in the 31 countries where the group operates. On their behalf, APRIL's 3,800 employees design, manage and distribute specialist insurance solutions (health and personal protection, mortgage, property and casualty, mobility and legal protection) as well as insurance services, capitalising on its experience to make insurance easier and more accessible to as many customers as possible.

     Listed on Euronext Paris (Compartment B), the group recorded revenue of 928.4 million euros in 2017. 

      

     Full regulated information is available on our website at www.april.com (Investors section).


APPENDIX 1: SUMMARY CONSOLIDATED INCOME STATEMENT

(IFRS - €m) 2017 2016
Sales 928.4 861.2
Net financial income (excluding financing cost) 11.0 16.4
Total income from ordinary activities 939.5 877.6
Insurance underwriting expenses (365.9) (302.8)
Income or expenses net of ceded reinsurance (7.1) (24.9)
Other purchases and external expenses (114.8) (110.9)
Retrocession of commissions (137.6) (126.3)
Tax (23.7) (24.5)
Staff costs (196.2) (201.0)
Depreciation allowance (17.9) (17.3)
Provisions (net of reversals) (3.4) (2.8)
Other current operating income and expenses (3.3) (1.6)
Current EBIT 69.4 65.4
Changes in goodwill (4.5) (23.2)
EBIT 64.9 42.1
Financing cost (0.1) (0.0)
Share of companies integrated on an equity basis (0.2) (0.1)
Corporate income tax (24.3) (22.2)
Net income from continuing operations 40.3 19.8
Net income/(loss) from discontinued operations after tax (0.1) (0.0)
Consolidated net income 40.2 19.8
Minority interests 0.7 (0.3)
Net income (Group share) 39.6 20.1
Earnings per share (in €) 0.98 0.50

APPENDIX 2: SUMMARY CONSOLIDATED BALANCE SHEET

(IFRS - €m) 31 December 2017 31 December 2016
Intangible assets 292.0 281.6
  Goodwill224.8 217.0
Tangible assets 12.0 11.5
Financial investments 667.2 655.2
Reinsurers' share of underwriting provisions and financial liabilities 224.5 215.0
Other non-current assets 23.2 23.3
Total non-current assets 1,218.9 1,186.6
Receivables from insurance and accepted reinsurance operations 100.9 96.8
Receivables from ceded reinsurance operations 21.7 42.1
Trade receivables 247.3 226.7
Cash and cash equivalents 107.8 99.5
Other current assets 39.8 40.8
Total current assets 517.5 505.8
TOTAL ASSETS 1,736.3 1,692.5
Shareholders' equity (Group share) 632.3 614.5
Minority interests (0.2) 0.3
Total shareholders' equity 632.1 614.8
Underwriting provisions for insurance policies 499.4 478.3
Provisions for contingencies and charges 30.0 29.9
Deferred tax liabilities 7.4 7.0
Financial debt 37.5 6.5
Total non-current liabilities 574.3 521.7
Current bank loans and overdrafts 14.7 11.5
Payables from insurance and accepted reinsurance operations 39.1 46.7
Payables from ceded reinsurance operations 51.1 79.9
Operating liabilities 314.6 301.9
Other current liabilities 110.5 115.9
Total current liabilities 529.9 555.9
TOTAL EQUITY AND LIABILITIES 1,736.3 1,692.5

APPENDIX 3: SUMMARY CONSOLIDATED CASH FLOW STATEMENT

(IFRS - €m) 2017 2016
Net income (Group share) 39.6 20.1
Net income/(loss) from discontinued operations (0.1) (0.0)
Minority interest in consolidated companies' net income 0.7 (0.3)
Net income from continuing operations 40.3 19.8
Cash flow75.1 44.0
Change in operating working capital (26.9) (3.9)
Operating cash flow from discontinued operations (0.0) (0.0)
Net cash flow from operating activities 48.2 40.1
Net investment in tangible and intangible assets (19.9) (22.4)
Net investment in financial assets (11.6) 2.3
Net cash flow from acquisition/disposal of consolidated companies (16.3) (4.1)
Investment in equity-accounted companies - -
Investment cash flow from discontinued operations - -
Net cash flow from investing activities (47.8) (24.2)
Capital increase linked to exercise of stock options - -
Capital increase linked to minority interests in consolidated companies 0.0 0.1
Purchase and sale of own shares 0.1 0.0
Dividends paid out (11.8) (10.9)
Net change in borrowings 18.8 (0.3)
Financing cash flow from discontinued operations - -
Net cash flow from financing activities 7.2 (11.1)
Impact of foreign exchange rates changes (2.3) (0.3)
Change in net cash and cash equivalents 5.2 4.5


APPENDIX 4: GROSS MARGIN BRIDGE

(IFRS - €m) 31 December 2017 31 December 2016
Sales 928.4 861.2
Financial income of insurance companies 10.4 13.3
Brokerage commissions paid to intermediaries (137.6) (126.3)
Insurance underwriting expenses (365.9) (302.9)
Income or expenses net of ceded reinsurance (7.1) (24.9)
Other 0.2 0.2
Gross margin 428.4 420.6
Of which brokerage373.0 359.4
Of which risk-carrying55.3 61.2

APPENDIX 5: ADJUSTED NET CASH BRIDGE

(IFRS - en M€) 31 December 2017 31 December 2016
Cash and cash equivalents 107.8 99.5
Current bank loans and overdrafts (14.7) (11.5)
Net cash 93.1 88.0
Term deposits 102.0 100.9
Adjusted net cash 195.1 188.9

      


[1] Gross margin allows a comparison between the various brokerage business models and the insurance businesses and shows the contribution of each business to Group value-added:
-        With regard to brokerage, gross margin is the difference between (i) commissions recognised under sales and (ii) commissions paid to intermediaries recognised under purchases and external expenses.
-        With regard to risk carrying operations, gross margin is the sum of the underwriting result and the financial result.

[2] Proforma or like-for-like (LFL): sales at constant consolidation scope and exchange rates. This figure is adjusted for acquisitions, disposals and changes in consolidation method, as well as exchange rate fluctuations, calculated on the basis of the prior year financial statements converted using the exchange rate for the current year.

[3] Adjusted net cash = Cash and cash equivalents - current bank loans and overdrafts + deposit accounts registered in the name of APRIL (classified under "Financial investments" on the balance sheet)

[4] The company received a notice of audit initiated by the authorities on the Group's reinsurance operations. At this stage, and as stated in the notes to the annual financial statements, no provision has been recorded in the financial statements for the period ending 31 December 2017.

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Source: April via Globenewswire