FIRST HALF 2018 RESULTS 6 SEPTEMBER 2018
1 OUR BUSINESS ACTIVITIES Emmanuel Morandini 2
1 H1 2018 OVERVIEW POSITIVE TRENDS IN LINE WITH EXPECTATIONS SALES GROSS MARGIN CURRENT EBIT NET INCOME (GROUP SHARE) +7.5% +4.0% +10.6% +15.4% 492.1m 221.6m 42.2m 27.5m Gross margin: increase resulting from organic growth in our two brokerage divisions, net growth in Health & Personal Protection and the consolidation of recent acquisitions (Pont Grup, Benecaid and Public Broker) Current EBIT: growth mainly driven by Health & Personal Protection 3
1 OUR GOALS REDEPLOYMENT UNDERWAY Refocusing Acceleration Transformation Profitable direct corporate brokerage activities Withdrawal from Lithuania, discussions underway regarding Turkey Closure of a loss-making portfolio in the United Kingdom and reflections on the continuation of the local health insurance business The streamlining of brokerage activities in Italy is bearing fruit Acquisition of Elitis in July, a specialised wholesale loan insurance broker based in Belgium Acquisition of Benecaid in April, a group health insurance managing general underwriter based in Canada Property & Casualty: wholesale brokers post strong growth in France Health: growth in individual, group and expatriate portfolios Acquisition of la Centrale de Financement in France New Key Accounts partnerships signed New digital application process in group health insurance Accelerating the transition towards a more open model 4
1 HEALTH & PERSONAL PROTECTION H1 2018 A SOLID FIRST HALF FRANCE Individual and group health Individual: strong performance in seniors, pros and SMEs Group health: add-ons and extensions up 23% during the first half, with a high sign-up rate for core contracts Personal protection Digitalisation: launch of Parcours Online Prévoyance (online personal protection), digitalising and simplifying personal protection applications for professionals OUTSIDE FRANCE Local PMI outside France Canada: April acquisition of Benecaid, an innovative player in group health insurance International health insurance (IPMI) Strong portfolio growth (up 14.5%) Very good renewal rate in Asia and Switzerland 5
1 HEALTH & PERSONAL PROTECTION H1 2018 A NUMBER OF LOAN INSURANCE INITIATIVES The Bourquin amendment Momentum that will develop over time A trend towards the development of individual insurance in favour of policyholders, backed by a regulatory environment that favours delegation Contract anniversary date still needs clarification Organic growth Stabilisation of portfolios following loan renegotiations Key accounts: Malakoff Médéric now provides an APRIL offering Development of partnerships to increase our visibility with the general public, e.g. with Logic-Immo Acquisitions Acquisition of Elitis Protection in Belgium, in order to continue to export our expertise abroad: Major similarities between the Belgian and French lending markets: High rate of ownership (72%, compared to 58% in France) Similar typical borrower profile Legislation favourable to delegation Significant delegation rate Wholesale broker specialising in loan insurance A significant brokerage network and business partners An efficient and 100% digital proprietary application and management solution 6
1 PROPERTY & CASUALTY H1 2018 SOLID MOMENTUM OVERALL Property & Casualty - France Strong performance in car, two-wheeled, sailing and property insurance Professional liability insurance continues to grow Property & Casualty outside France Spain: Confirmed performance by Pont Grup, acquired in 2017 Canada: portfolio down in certain niche markets (Bars and Restaurants in Québec), partly offset by the development of new niches (Rental, Contractors) Travel insurance France: call for tenders won with a major travel agency Brazil: strong sales performance United States: changes in risk carrier temporarily weighing on business APRIL Mon Assurance Net production flat over the first six months Continued success of turnaround plan driven by sales growth and a reduction in expenses 7
2 H1 2018 CONSOLIDATED EARNINGS Emmanuel Maillet 8
2 CONSOLIDATED SALES STRONG GROWTH IN PREMIUMS +7.5% H1 2018 sales ( m) +30.3 +2.0 492.1 457.7 +5.8 459.8-3.4-0.3 Reported H1 2017 sales Forex Acquis. Deconso. H1 2017 LFL sales Insurance premiums Brokerage comm. Reported H1 2018 sales Change 2018 vs. 2017 (like-for-like): +7.0% 9
2 SALES HEALTH & PERSONAL PROTECTION H1 2018 breakdown of sales ( m) Commissions +2.2% BROKERAGE PORTFOLIOS 282.5 117.9 302.3 134.0 Individual: +2.9% Employees: -10.0% Seniors and self-employed: +5.5% 164.6 168.3 Group insurance: +1.5% H1 2017 H1 2018 Insurance premiums Brokerage commissions Loan insurance: -1.9% 10
2 SALES PROPERTY & CASUALTY H1 2018 breakdown of sales ( m) 176.6 83.3 Commissions +0.3% 191.0 97.4 BROKERAGE PORTFOLIOS Wholesale brokers: +3.3% Substandard car: +8.8% Two-wheeled vehicle: +8.6% Professionals: +10.8% 93.3 93.6 APRIL Mon Assurance (P&C): +0.7% H1 2017 H1 2018 Travel and assistance: -0.9% Insurance premiums Brokerage commissions 11
2 CONSOLIDATED GROSS MARGIN GROWTH IN BOTH DIVISIONS +4.0% H1 2018 gross margin ( m) 213.1 +5.2-0.3 +3.4 +0.2 221.6 H1 2017 Gross margin Acquis. Deconso. H&PP P&C H1 2018 Gross margin 12
2 GROSS MARGIN CHANGE PER DIVISION H1 2018 breakdown of gross margin ( m) HEALTH & PERSONAL PROTECTION 131.8 Brokerage +2.5% 137.7 12.0 14.8 119.8 122.9 PROPERTY & CASUALTY Brokerage +4.2% 81.3 83.9 15.0 14.9 66.3 69.1 H1 2017 H1 2018 Brokerage Insurance H1 2017 H1 2018 Brokerage Premiums 13
2 FINANCIAL ASSETS STABLE AND PRUDENT PORTFOLIO Financial income excluding forex ( m) 0.9 0.1 6.4 5.6 2.2 3.4 One-offs Recurring S1 2016 S1 2017 S1 2018 7.3m 5.7m 5.6m Financial assets Other 11% Other 12% Equities 8% Equities 9% Cash 11% EQUITIES Money market Cash 6% EQUITIES Money market 41% 43% Bonds Bonds 14 29% 31/12/2017: 760m 31% 30/06/2018: 736m
2 CURRENT EBIT STRONG GROWTH IN HEALTH & PERSONAL PROTECTION +10.6% H1 2018 current EBIT ( m) +5.1 38.1 +2.2-1.4-2.0 42.2 H1 2017 Current EBIT Acquis. and deconso. H&PP P&C Other H1 2018 Current EBIT 15
2 INCOME STATEMENT BREAKDOWN BY DIVISION HEALTH & PERSONAL PROTECTION PROPERTY & CASUALTY OTHER m H1 2018 H1 2017 H1 2018 H1 2017 H1 2018 H1 2017 Sales 1 302.3 282.5 191.0 176.6 - - Gross margin 137.7 131.8 83.9 81.3 - - Financial income 5.4 2.8 0.9 1.3 (0.7) 0.4 Current EBIT 43.5 37.8 5.7 5.4 (7.1) (5.1) 1 Excluding inter-division eliminations (- 1.2m for H1 2018, - 1.5m for H1 2017) 16
2 INCOME STATEMENT GROUP TOTAL m H1 2018 H1 2017 Change (%) Change ( m) Sales 492.1 457.7 +7.5% +34.4 Gross margin 1 221.6 213.1 +4.0% +8.5 Net financial income 5.5 4.5 + 21.9% +1.0 Current EBIT 42.2 38.1 +10.6% +4.1 EBIT 42.3 37.7 +12.4% +4.7 Net income (group share) 27.5 23.9 +15.4% +3.7 1 The gross margin calculation is described in the notes to the interim financial statements published on www.april.com (in French only). 17
2 CONSOLIDATED BALANCE SHEET A SOLID GROUP 30/06/2018 31/12/2017 Change Shareholders equity, group share ( m) 642.4 632.3 +10.1 Debt-to-equity ratio (%) 5.7% 5.9 % -0.2 pp Net cash ( m) 57.5 93.1-35.7 Adjusted net cash 1 ( m) 160.4 195.1-34.8 ROE (%) 8.6% 6.3% +2.3 pp ROCE after tax (%) 8.2% 6.1% +2.1 pp Goodwill ( m) 246.2 224.8 +21.4 % of equity 38.3% 35.6% +2.7 pp 1 Net cash, adjusted for deposit accounts held as part of our cash management policy 18
2 ADJUSTED NET CASH BRIDGE +57.6-5.9 195.1-17.2-11.7-1.9-20.2-35.4 160.4 2017 Op. cash flow Change in brk. WCR Change in ins. WCR Financing Financial invest. Other invest. Other H1 2018 Net cash: 57.5m (down 35.7m versus 31/12/2017) Adjustment for deposit accounts (recorded under financial investments): + 0.9m Adjusted net cash: 160.4m (down 34.8m versus 31/12/2017) 19
3 CONCLUSION Emmanuel Morandini 20
3 2018 OUTLOOK ACQUISITION OF CENTRALE DE FINANCEMENT A major market player joins APRIL The No. 3 loan brokerage network in France 3.6bn in loans taken out in 2017 A network of 162 agencies A player focused on new loans, with limited sensitivity following renegotiations A profitable company offering growth potential Founding managers who remain invested in the capital and continue the story Integration within Health & Personal Protection Loan brokerage, a growing market undergoing concentration 32% of loans in 2017 were taken out via a broker (up 11 pp in 5 years) The new loan brokerage market represents 765m in commissions for 2017 The loan brokerage market is undergoing concentration Synergies between two businesses APRIL widens its presence throughout the mortgage value chain Capacity to bridge the gap between loan brokerage and insurance brokerage Complementary sales networks Potential extension towards professional and self-employed financing An opportunity to expand in Europe 21
3 2018 OUTLOOK MAINTAIN AND STEP UP GROWTH MOMENTUM Maintain organic growth Sustainable growth momentum in both of our divisions Continue to turn around loss-making operations Work continues in the second half Acquisitions in targeted business sectors Projects under consideration, in line with our priorities 2018 TARGET MAINTAINED Current EBIT up 6 to 10% compared to 2017 22
23 QUESTIONS
24 APPENDICES
DEFINITIONS SPECIFIC INDICATORS SALES Sales consist of insurance premiums and brokerage commissions. Insurance premiums comprise the specific remuneration generated from risk-carrying activities. Brokerage activities are remunerated in the form of commissions and services provided. Where the risk carrier and the broker belong to the same group, intra-group transactions are eliminated by reducing insurance premiums in favour of brokerage commissions, which remain the sole item under consolidated sales. FINANCIAL INCOME Financial income is an integral part of the risk-carrying cycle. It consist s of interest received and accrued as well as net capital gains on sale of financial assets. GROSS MARGIN With regard to our risk-carrying operations, gross margin is the sum of the underwriting result and the financial result. It covers the other items of current EBIT: other purchases and external expenses, personnel costs, tax, amortisation and provisions. With regard to our brokerage activities, gross margin is the difference between commissions and services provided recognised under sales and commissions paid to intermediaries recognised under purchases and external expenses. Gross margin also covers the other items of current EBIT: other purchases and external expenses, personnel costs, tax, amortisation and provisions. ADJUSTED NET CASH 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) 25
BREAKDOWN OF SALES AND GROSS MARGIN AT 30/06/2018 & CHANGE VERSUS 31/12/2017 Sales BY DIVISION BY TYPE 61.3% Health & Personal Protection +0.3 pp 38.7% Property & Casualty -0.3 pp 53.0% Brokerage -2.1 pp 47.0% Insurance +2.1 pp Gross margin BY DIVISION BY TYPE 62.1% Health & Personal Protection 0.0 pp 37.9 % Property & Casualty 0.0 pp 86.6% Brokerage -0.5 pp 13.4% Insurance +0.5 pp 26
BROKERAGE GROSS MARGIN SPLIT BY TYPE OF ACTIVITY AT 31/12/2017 (REMINDER) HEALTH & PERSONAL PROTECTION BROKERAGE GROSS MARGIN AT 31/12/2017 PROPERTY & CASUALTY BROKERAGE GROSS MARGIN AT 31/12/2017 Expat 13% Pro & indiv. personal protection France 15% Group private insurance France 18% Local H&PP outside France 7% Individual health France 24% Loan insurance France 23% Corporate P&C France 7% International P&C 11% Travel / Assistance 26% Legal protection 5% Individual P&C France 51% 27
28 THE APRIL GROUP
PROFILE THE APRIL GROUP Created in 1988, listed in 1997 2017 figures: > Sales of 928.4m > EBIT of 64.9m > Net assets (group share) of 632.3m OUR AMBITION: MAKE INSURANCE EASIER AND MORE ACCESSIBLE APRIL, an international insurance services group, has chosen innovation as the key to driving its development since it was established. Our ambition is to make insurance easier and more accessible. This commitment has enabled us to become the leading wholesale broker in France and an international authority in the sector. > Operations based in 31 countries > 26% of gross margin generated outside France > 3,842 employees > 2 divisions sales of: > Health & Personal Protection - 567.7m > Property & Casualty - 363.4m > 20,000 distributors, of which 11,300 active brokers > 154 agencies in France 29
PROFILE OUR POSITIONING AND MARKETS A PRESENCE THROUGHOUT THE INSURANCE VALUE CHAIN TO ADDRESS THE NEEDS OF ALL OUR CUSTOMERS WHOLESALE BROKER Long-standing position as a wholesale broker and leader in the French market 20,000 DISTRIBUTORS WORLDWIDE INSURE Bearing the financial risks with our insurance companies DESIGN Designing and building innovative, tailored and targeted products and services MANAGE AND ASSIST Managing policies in our own right, for the benefit of policyholders or Third Party Administration (TPA) DISTRIBUTE Running distribution networks brokers travel agencies car dealerships Key Account partners through white label products DIRECT DISTRIBUTION FOR POLICY- HOLDERS 154 APRIL Mon Assurance agencies e-commerce websites 8 policy-handling platforms and call centres 30
HISTORY THE HISTORY OF OUR DEVELOPMENT A STORY COMBINING ORGANIC GROWTH AND GROWTH THROUGH ACQUISITIONS CREATION OF APRIL Wholesale broker in specialist markets FIRST SUBSIDIARY OUTSIDE FRANCE Acquisition of AIPS (now APRIL International Expat) and expansion in Italy, Spain, Germany, the UK and Canada MULTICHANNEL DISTRIBUTION Start of direct distribution with takeover of first network of agencies (Mutant, which became APRIL Mon Assurance COMMON BRAND Streamlining and simplification of the organisation uniting all the entities under the same APRIL brand FIRST STEPS IN ASIA Acquisition of Asia Assistance Partners (Singapore) DEVELOPMENT OF ACTIVITIES IN ASIA Acquisition of GlobalHealth, a company specialised in the design, sale and administration of group and individual international health insurance 1988 1997 1999 2000 2005 2008 2010 2011 2012 2015 2016 2017 IPO AND BEGINNING OF RISK-CARRYING ACTIVITIES IPO for group (Second Marché of the Paris stock exchange) and acquisition of Axéria Prévoyance DIVERSIFICATION WITH P&C INSURANCE Motor and comprehensive home insurance DIVERSIFICATION WITH EXPAT & ASSISTANCE Acquisition of the Coris network with operations in Europe, Asia and North America START OF THE DIGITAL DRIVE Launch of april.fr allowing end customers to access the whole range of policies EXTERNAL GROWTH RESUMES Acquisition of Avilog, Third Party Administrator for group life and health insurance New impetus given to the partnerships and key accounts approach INTERNATIONAL EXPANSION OF OUR EXPERTISE Acquisitions of Public Broker, a broker in group health insurance in Brazil, and of Pont Grup, a Spanish wholesale broker in two-wheeled vehicules 31
DISCLAIMER This presentation contains forward-looking statements that are based on assessments or assumptions that were reasonable at the date of the presentation, 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 2017 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. 32