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  • Turnover up 1.7% at constant exchange rates: €2.5 billion
  • Ordinary operating income, up 1.1%: €436.2 million
  • Net income +8.7% on a comparable basis: €302.1 million (-3.7% versus 2013 published result)
  • Proposed dividend up 4.8% versus previous year: €4.4 per share

“In 2014, Euler Hermes again demonstrated its leadership”, said Wilfried Verstraete, Chairman of the Euler Hermes Board of Management. “After an optimistic start, the economic environment was ultimately a disappointment this year, particularly in Europe. Euler Hermes’ answer was to focus on market expansion outside Europe, to innovate in both product and distribution, and to maintain vigilance on risk. In a challenging market, this strategy enabled us to both continue growing and deliver solid results once again.”

I.                    Results 2014

A.            Key figures

P&L information

€ million

12M201412M2013Variation vs. 2013
Earned premiums2,125.92,
Service revenues401.1407.2-6.1-1.5%
Net technical result351.1345.35.81.7%
Net investment income85.186.2-1.1-1.2%
Ordinary operating income436.2431.44.81.1%
Non-ordinary operating income & expenses-23.027.2-50.2-184.7%
Operating income413.1458.6-45.5-9.9%
Net income, Group share302.1313.7-11.7-3.7%
Net claims ratio48.8%50.5%-1.7pts
Net expense ratio26.6%24.8%1.8pts
Net combined ratio75.4%75.3%0.1pt
Balance sheet information

€ million

31 December 201431 December 2013Variation vs.

31 December 2013

Total assets6,359.76,062.7297.04.9%
Shareholders’ equity, Group share2,580.52,461.9118.74.8%
Total financial liabilities284.2261.722.48.6%

Shareholders’ equity increased by €118.7 million in 2014, driven essentially by the retained earnings.

B.            Turnover

At €2,527 million, total turnover grew by 1.6% over the previous year (1.7% adjusted from foreign exchange currency effects).


 € million

 12M2014 12M2013


Variation %12M2013


Variation %


Germany, Austria, Switzerland759.8793.2-4.2%793.5-4.2%
Northern Europe550.7551.3-0.1%554.7-0.7%
Mediterranean Countries, Middle East & Africa322.7308.84.5%306.25.4%
Non-consolidated OE’s and other (2)120.168.3N/A99.3N/A
Euler Hermes Group2,527.02,486.21.6%2,484.91.7%
Area contribution : After intra-region eliminations & before inter-region eliminations
(1) At constant exchange rates and pro forma (Mexico, Chile & Colombia in 2013 in EH Re.)
(2) Corporate entities + inter-region eliminations

Topline growth was driven by large credit insurance programs, solid growth in Bonding and an increasing contribution from new lines of business, namely Trade Finance Cover and Excess of Loss (XoL).

The Americas, Asia and the Middle East markets continued to be growth engines for the Group, up 9% versus last year at constant exchange rates, while mature markets were soft again, with lower prices and flat insured turnover volumes.

C.            Operating income

The ordinary operating income was up 1.1% driven by growth in topline as the combined ratio was stable year-on-year.

The net loss ratio stood at a healthy level of 48.8%, down 1.7 points compared to last year, with lower claims activity overall and in bonding specifically.

The net expense ratio was up 1.8 points compared to 2013 (26.6% versus 24.8%), due to a service margin squeeze linked to the low claims activity generating less collection revenues, and due to a growth in turnover mostly coming from higher cost ratio countries.

Net investment income was virtually stable at €85.1 million versus €86.2 million in 2013 despite decreasing investment yields, as a result of diversification efforts and higher realized gains.

Non-ordinary operating expenses included a €17.2 million impairment in 2014 related to the German branch headquarters in Hamburg, following the decision to dispose of the premises and move to a new building in 2018. Conversely, in 2013, the non-ordinary operating income included a €36.9 million gain linked to the contribution of Spanish and Latin American entities to the Solunion joint venture.

D.            Investment portfolio

At the end of 2014, the market value of the Group’s investment portfolio increased by €294.5 million to €4,457.9 million, versus €4,163.4 million at 2013 year-end, driven by positive cash flows from operations.

E.            Net income

At €302.1 million, net income decreased by 3.7% year-on-year. Net income in 2014 included the impairment of the Hamburg building, while 2013 benefitted from exceptional gains on the Solunion operation. Excluding these one-off impacts in their respective years, the net income is up +8.7%, driven by the good performance of entities consolidated at equity and by a lower average tax rate.

F.            Dividend

Based on a net result of €6.86 per share, Euler Hermes Management Board will propose to distribute a dividend of €4.40 per share, +4.8% versus last year, which corresponds to a payout ratio of 61.6% excluding the one-off impact related to the Hamburg building impairment.

G.            Outlook

In 2015, global growth should show a timid improvement. There are green shoots for companies as demand picks up, liquidity continues to flow and energy prices remain low. However, a full-fledged recovery requires sturdier foundations and non-payment risks are expected to only slightly decrease.

Euler Hermes’ strategy remains three-fold: non-mature market investment, distribution expansion and product innovation.

We are interweaving this strategy with our traditional values of sound underwriting, to ensure the enduring profitability of the business.

II.                  Results for the fourth quarter of 2014


€ million

Q4 2014Q3 2014Q2 2014Q1 2014Q4 2013Variation vs.

Q4 2013

Earned premiums537.3524.5529.3534.7525.611.82.2%
Service revenues96.1100.4101.8102.899.8-3.7-3.7%
Net technical result80.175.1101.993.9103.3-23.2-22.4%
Net investment income19.117.125.423.415.53.623.5%
Ordinary operating income99.292.3127.3117.3118.8-19.5-16.5%
Non-ordinary operating income & expenses-1.3-19.7-1.0-1.15.4-6.7-124.1%
Operating income97.972.6126.4116.3124.2-26.3-21.1%
Net income, Group share69.559.390.582.792.3-22.8-24.7%
Net claims ratio50.6%50.9%44.4%49.1%44.3%6.3pts
Net expense ratio26.9%27.1%27.0%25.5%26.6%0.3pt
Net combined ratio77.5%78.0%71.5%74.6%70.9%6.6pts