COFACE SA (COFA) Earnings Call Transcript & Summary

Good day, and thank you for standing by. Welcome to Coface's First Quarter Results Presentation. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Xavier Durand. Please go ahead.

Thank you very much, and good evening. Thanks to all of you for joining. Happy to report today our first quarter 2025 numbers. You all have seen from the headline and it continues to be a good story for Coface. We're reporting net income at $62.1 million. The turnover is up 2% at constant FX and perimeter with trade credit insurance growing actually 1.2%. That's an inversion of the trend that we had last year as we've had, I think, a negative or 0 activity through most of the year. Client activity is up 1.2% for this quarter. Client retention near our record at 95%. Pricing still down, but pretty much in line with the prior year and with historical trends. Strong growth continues with business information growing almost 15%, same as debt collection. Factoring is slightly down. That's really the reflection of the Industrial Germany and Central Europe business. I -- as you can see, the loss ratio came in at 39.1%, which is up 3.3 points. That brings the net combined ratio at 68.7%, which is in line with Q4. Slightly higher gross loss ratio at 38.7%, higher opening year reserving and pretty stable reserve releases from the prior vintages. The costs are up 2.2 points at 29.5%. We continue to invest deliberately according to our Power the Core business plan. So no change in strategy, deliberate investments because we think it is actually the right strategy in what is a pretty volatile and uncertain environment. And I think the company is well positioned. So total $62.1 million, slightly down from last year and RoATE at 12.7%. We've added a page on Page 5 about the environment. I mean it's pretty obvious that the environment is as uncertain as it's ever been. On the left-hand side of the page, you can see a chart that represents the global economic policy uncertainty. We are at this stage at a very high level, driven by the U.S. move away from free trade, which sent this index to record highs. It's very hard to see where this all settles, obviously. There's been a lot of announcements, changes and new turns. But I think whether or not it ends up at a very high or medium or lower level, for now, we are very likely to see a negative impact on world economy and trade just because people are uncertain and that slows down investments and spending. But it also means for us as a business that we see more demand for our business proposition, whether it is insurance or short-term information. We think that our positioning basically on monitoring accurately or as accurately as possible short-term risk, looking into details by industry, by trade corridor, by business, the expertise we have, the network we have are all extremely relevant in this environment. And so we think we've got the right strategy. We continue to invest deliberately to make our Power the Core plan a reality. If you go to Page 7, just a little bit more detail on turnover. So turnover is up 2% this quarter. As I said, trade credit insurance premiums are up 1.2% at all things equal. The other revenues are up 7.5%. I've mentioned business information at close to 15%, same for debt collection close to 15%, factoring slightly down. Insurance fees that we collect on our insurance contract continue to perform well at 4%, bringing the total insurance-related fees to premiums ratio at 13.3%, which is a nice number. When you go to the next page, on Page 8, by geography, I think what you see here is really the description of the world economy with Northern Europe, Germany, mainly down from last year. A strong growth though in services close to 18%. Central Europe has had a bit of a one-off with a large contract that's been reduced and transferred to an Asian region, but still negative. Western Europe doing a little bit better with France, the U.K. and Switzerland growing at about 1.9%. Med and Africa actually continues to drive growth at 5.1%, continued Southern Europe and dynamism in the Middle East. North America, chugging along at 1.5%. Asia at 3%. And Latin America having a nice surge. Actually, we're coming out of a period where we have been working on the risk quite a bit, and there's obviously inflation underlying those numbers in Latin America. If you go to Page 9, the usual breakdown of our business. You see that it continues to be a strong new business year for us. Actually, at the level of last year, I think there's good momentum. We are seeing a nice demand and nice continued growth in our direct business. We see retention at this stage at 95%, very close to our record 95.7%. Market is competitive. People are aggressive. But at this stage, I think we are performing pretty well. The price effect is still negative. That's -- as you know, the long-term trend in this business is something like negative 1.5%. So it's pretty much in line with the first quarter of 2024. And then on the volume side, as I said, 1.2% is a nice change from the -- I would say, the negative or slightly positive we had last year. So it's a good start of the year. It's hard to say where this is going to go, obviously, as there's lots of uncertainty on the trade as we've mentioned before. Going to then Page 10. You see the loss history by quarter on the top left. As we discussed priorly, insolvencies around the world continue to normalize or actually creep up slowly. The current environment is actually not helping. The -- I would say the frequency that we are seeing is now back to normal conditions. We are seeing the same number of claims that we have seen in 2019 prior to the COVID crisis and then the subsequent events. We see claims amount higher, though, because there's been inflation since and that's reflected in the amount of claims that we're receiving. The severity is growing, but it is still below, I would say, the historic average of the business. So nothing really surprising here. You can see on the bottom right-hand corner that we still are cautious in underwriting the new vintage at 82% pre-discount. And we are still getting very nice throwbacks from the prior vintages at minus 43.6%. So no change in our reserving policy, no change in our stance in the market. We are very conscious of the environment, and we are actually being very close to our clients in managing the risk, knowing that the full effects of the tariff situation will probably develop over the next part of the year. On the next Page 11, we see the Q1 compared to the prior years. I don't think it's very relevant during the first quarter to look at this because we're comparing 1 quarter with full years. So I'd rather turn to Page 12, where we are seeing the sequence of the last 5 quarters that the business has gone through. And pretty much, I think what we see here is there's not much to talk about. I mean on Western Europe, Northern Europe, Central Europe, Med and Africa, which are the largest and historically more stable markets that we operate in. You can see that the risk is really contained. It operates at the levels anywhere from, say, 25% to 50%, but very, very stable. On the 3 smaller and traditionally more volatile markets that we're in, North America, Latin America, again, some claims here and there, but no real trend. And as you see, for example, in Asia Pacific, we had a low Q3, higher Q4 and lower Q5 -- Q1, sorry. So not much to report in terms of the risk side. On the cost side, on Page 13, as I mentioned, we are continuing to invest deliberately in our direct origination capabilities in our technology, in our data and in our business services. So the cost in total from Q1 '24 are up 5.7%. That brings the cost ratio before reinsurance on the bottom right from 31.7% to 33.1%. That's an increase of 1.4 points. And that's driven by a number of things. Investments, as I mentioned, are up -- increased the ratio by 2.9 points. Cost inflation that's been embarked from the past is still there and creates 1.4 points of drag. It's offset by the revenues that we get from the new business services by 2.6 points and then some growth that we had in the premiums, which are lower the ratio by 0.4. So the net cost ratio is up 2.2, very slightly lower reinsurance commissions. Phalla is going to take us through this. But pretty much for us, a continued investment in our expertise and our people and our capabilities, which makes a ton of sense in this current market. And with that, I'm actually going to turn it over to Phalla to take us through the rest of the pages.

Yes. Thank you, Xavier. So premium cession rate was very, very close to where we were last year. What is changing is, of course, the claims cession rate, you can see the increase from 21% to 26.4%, reflecting the increase in the loss ratio that we are seeing. As a result, we're passing on less result to the reinsurer, moving from minus EUR 30 million to minus EUR 20 million pretax, lead us to a net combined ratio of 68.7%, very similar to what we've seen in Q4 '24, with an increase in net cost ratio and an increase in the net loss ratio, but still below 70%. If we move to the next page, we're now on Page 16, financial portfolio. The mark-to-market of our investment portfolio stands at EUR 3.35 billion with a high level in terms of liquid assets, cash, which is 17% of the total portfolio. Of course, we are holding cash as we're going to pay our dividend at the end of this month for about EUR 200 million. In terms of investment income, if we look at the first 2 lines of investment material income and realized gain and loss, you can see that this translates in the fact that we are increasing slightly the accounting yield with and without gain and loss. I think it's moving up. And the new money is now invested at 3.8%, which is slightly below the level of investment that we had last year, but still above 3%. If we move to the FX line, I think we have -- you can see the minus EUR 12.4 million. This includes EUR 4.5 million related to hyperinflation mainly in Turkey, which means that the remaining part is the FX negative impact. You can see the offset actually of this FX negative impact in the IFE line. You can see that the IFE is moving from minus EUR 11 million to minus EUR 4 million. And out of the minus EUR 4 million, you have EUR 6 million or EUR 7 million related to realized positive P&L impact on FX. So it's an offset in 2 geographies of booking between financial results and technical results. IFE, as I said, if you exclude the FX impact, it will be pretty similar at the similar level than what we had in Q1 of '24, which is more or less EUR 10 million, EUR 11 million. This leads us to a net income at EUR 62 million, still a very strong net income despite, I think, the decrease versus last year, but this is driven by the fact that our net combined ratio has increased. Return on average tangible equity, we're now on Page 18. Total IFRS is moving from EUR 2.194 billion to EUR 2.234 billion. This is mainly driven by the net income of the period. And then we have, I think, some CTA or translation -- currency translation impact on our equity. Return on average tangible equity from 13.9% to 12.7%. Of course, we're comparing the year-end return on average tangible equity to annualized Q1. So I think the impact would probably be much more meaningful, I would say, throughout the year than what we'll see in Q1. You know that we don't disclose any solvency in Q1. What we can say that it will be any way above the upper range of our comfort zone. Xavier, back to you.

Yes. So a relatively short presentation today. I mean, clearly, we think this is another good quarter for Coface. Combined ratio is at 68.7%. It's stable versus the Q4 of 2024. We're getting nice income from our investment portfolio. The RoATE is above our targets, as you know, through the cycle. Clearly, this is a complicated environment, I mean, not just for Coface, but for every one of our clients and every industry participants. There's been lots of announcements made. Some hikes have actually taken place and are starting to weigh. There's, clearly, a lot of discussions, a lot of U-turns. It's very unclear as to where exactly this settles in the end, negotiations that need to take place, et cetera, et cetera. I think when we see this, our impetus is on, one, staying very close to the action. So we've really broken down the world in different segments, and we're talking -- sorry, 600 different segments that we look at and looking at each individual industries and each individual sector's impact. It's -- I think this environment justifies what we do. I mean we have experts all over the world. We have data that we've been investing on. We have technology. We have processes. We're very close to our clients. And we're making sure that we stay current with everything that's happening in the macroeconomic environment as well as with the individual situations of our clients. So I think our strategy, which is to be really the best at doing this, investing in risk-free services, investing in our technology, in our people, in our processes. I think that makes a ton of sense, and we feel we're as well positioned as possible in this environment. So that's pretty much what we have for you today. A bit shorter than usual. We are going to turn it over for questions for all of those on the call.

[Operator Instructions]. Now we're going to take our first question. And it comes from the line of Michael Huttner from Berenberg.

Fantastic. I have 3. Could you give us a feel for how conservative the loss pick, the 82.2% is? It's just to get a feel, if I look at the slide, Slide 10, the little blue band, which I kind of think of the conservatism. Maybe I'm wrong, is a little bit narrower than in previous year, but maybe I'm wrong. And any commentary would be useful. The second is you said your number of claims is similar now to 2019. Your combined ratio is about quite 10 points better. I don't have the quarter, but I think in the year, you were at 77% back then. You're now, first quarter, 68.7%, so 9 points or better. And I just wondered if you can get a feel -- my feeling is what's changed is that just like you said, you focus more on clients, et cetera. But the -- your balance sheet is immensely stronger than it was back then, both in terms of the mix of assets, so more fixed income, less real estate maybe, but probably also more reserving. I don't know. Any comment here would be helpful. And then I know you said that it's similar, but I always think as the CEO as a kind of magic region, and it does stand out at 51.8%. And I know you might say, well, 51.8% given where we've been, isn't a big variation. But the previous numbers have only ever -- well, in the past few quarters, only above 41%. So I just wondered if there's something there, which is unusual.

Just on that one. One quarter ago, we were at 13%, right?

Exactly. And it's something -- you can see that sales, [ in general, ] is only 10% of the total premium. So it's still a little bit volatile, and we have 1 or 2 claims that we had actually drives the peak. But other than this, there's nothing unusual to be reported.

There's couple of claims that could tell the balance. But I mean, it's -- the large number only starts to work for large places. On your -- Michael, I wouldn't try to read into the -- I guess you're referring to the dotted blue.

Which is the discounted effect.

That's the discount effect. So I wouldn't try to read in that number. Anything else than the interest rate discount, the interest, the rate that we're using for the discounting, right? So my comment to you on this one is, we haven't changed our underwriting stance. We haven't changed our reserving methodology. There's really nothing new in these numbers as far as this quarter versus the year before or the 2 years before. In terms of your comparison with 2019, yes, we had the same number of claims, but the business was smaller at the time because we also have had more premiums, right? So the claims are larger in amounts, but so are the premiums. So I think you also have to factor that part of the equation in.

And -- but if I may say, but it's not a nice word, but anyway, you did highlight the reserving point. So I feel still hungry for an answer. If you highlighted it, I thought it was fair to ask the 82.2%. You actually said it's higher. That's why...

I mean, I think we -- as I said, we haven't changed our stance, right? So we are -- we have been -- I think I've mentioned over this call, I don't know, time and time and time again that we've taken a relatively conservative stance when it comes to looking at the market, knowing that a slow but steady normalization was underway for something like 4 years now and that hasn't changed. So we continue to see normalization. I don't know if that's the right word, but we continue to see slow and progressive increase in the insolvencies around the world. We continue to be careful about what we underwrite. We continue to reserve appropriately for whatever might lie ahead. And that's it. That's all we're saying here in these numbers.

And the next question comes from the line of Amalie Zdravkovic from Deutsche Bank.

This is Amalie from Deutsche Bank. I just have 2, if I may. And it's mainly just, I mean, on the sort of the commentary around the impact of global trade and business failures. I was just wondering if you sort of have any more color to add on sort of how this impacts your outlook for '25. And I mean are you building any new assumptions? Are you building any potential recessions? How are you sort of -- how are you thinking about the outlook more generally? And then, I mean, you touched a bit -- sorry.

Go ahead. Go ahead.

No. And then my second question is just -- I was just curious a bit on the demand side. I mean you've touched a bit on demand for trade credit. But I was just wondering if you could add a bit more color on sort of where in particular you're seeing demand coming from, yes, that would be great.

Okay. So on the economic outlook, I think, frankly, no one was last year expecting the barrage of tariffs and all the activity that took place in the first 100 days of the U.S. administration. And so this has been -- I mean, I'm not -- there's no news for anyone here on the call, but this has been a bit of a shock to a lot of people. And clearly, there are 2 effects or there's a multiplicity of effects that we think are going on. First, people in the short term probably stocked goods. So that probably increased the level of trade short term. Second, nobody knows where the tariffs really end. But I think we'll have to wait for actuals before we can form a view on how much impact there is today. If you think of 145% tariff between China and the U.S., it pretty much means trade will be very, very, very difficult. So it's anticipated this would not be the case. But is it -- let's say, from 20% to 145%, there's a whole big world out there. So it's very hard to predict. The one thing though is everybody understands that it's uncertain. Everybody understands it's volatile. And so I think after trying to protect the very short term by stocking up and making sure you did what you can for the next few months, people are probably being cautious in how they invest, how they spend. It's very hard to make an investment decision today on a factory on anything. So our assumption is it's going to slow down the economy. I think our outlook for the world economy was something like 2.7% growth this year, and we've brought that down at this stage by 0.4% or something like this to 2.3%. Same for Europe, we're going from 1.1% to 0.5% growth outlook. I mean it is what it is. It's worth what it's worth for now until things change. But it's clearly, I think, in our view, in anticipation that the economy is going to be slower. Probably inflation will be higher and heavily hit sectors of the U.S. economy. And it's very likely -- most likely that insolvencies will keep going up in that environment because the adjustment to that new world is going to take some time and not everybody is going to do perfect. On the demand for trade credit, I think it's just the uncertainty. I mean it's a natural phenomenon. When you start to see that the world is riskier, you start to think about how do I protect my business and you start to look for people who might have answers. We don't have an answer on where this all lands, but we do have means to look at your short-term counterparties and figure out how well they're doing, at least as good as anybody can. So I think that's where the demand comes. It comes from, I would say, almost all segments in the market. There is, obviously, interest in looking at what we have to offer and seeing if that's -- that can be put to use -- to good use in the different segments that we operate in.

And the question comes from the line of Benoit Valleaux from ODDO BHF.

Three questions on my side, if I may. Sorry to come back on current economic environment. But can you maybe give us more color on the risk management action you've taken over the last, let's say, weeks and months and year-to-date in terms of number of action, in terms of how your total credit exposure has evolved or maybe, for example, some figures regarding the potential reduction on your exposure to low-quality business. Second question, and I know it's a quarterly only figure. And -- but when I look -- sorry to come back also on your loss ratio geographies. Is there anything specific to mention for Lat Am? And regarding North America, it's only a quarter, but it seems that there is an increasing trend in terms of loss ratios. I just would like to have your view on that. And maybe the third question is regarding cost. When you look at your internal cost, in absolute terms, it has increased by broadly 8% or EUR 14 million versus Q1 last year. So this is a significant increase. You mentioned, of course, you've made some investment. What has been the increase which is related to BI in absolute term within this EUR 14 million, just to look at the, I would say, underlying trend?

Yes. So let me start with the risk question. So on risk management, as I said, we've kind of broken down the world in, let's say, 600 different segments that our economists look at. We track the effect of the measures that are actually being put in place because all the other ones can change so fast on each one of these sectors. And then we drill down within those sectors and into the companies that are most likely affected and those where we have the biggest exposures or those where we have the weakest participants. And so there's a whole amount of work going on. By the way, this is no different than anything that we've done in the past. It's just more intensity because there's more action and there's more news coming. The news flow is actually stronger. So we stay very close to our clients. I mean, I think our teams are busy. We're not sitting idle. We've been working on some of these sectors or industries for quite some time. I mean we all know that the automobile industry is right in the bull's eye, the steel industry, the aluminum industry. So these are all areas that our analysts are reviewing very, very diligently. In terms of the quarterly figures, you mentioned the U.S., I think we had a couple of claims -- larger claims, I would say. First -- at the beginning of the year, but that number has been coming down. I mean I -- it's -- again, it's 9% on 1 quarter. So we're talking about something that -- if you look at it small enough, it's going to be volatile.

Exactly. I think, Benoit, for North America and Lat Am, if you exclude, I think 1 or 2 claims, large claims that we have, I think the loss ratio is really benign.

Yes. The other question was what was Latin America? Yes. But look at Latin America. I mean if you look back in the history of our business, it keeps oscillating from 0 to 100%. This is 4% on 1 quarter. So this is really 1% of our yearly turnover. It's going to be volatile. Then in terms of our investment. So I mean, we are really to the letter sticking to our Power the Core playbook, right? I mean we're managing the cost very tightly and we are deliberately investing in those things that we said we would. So those things that we said we would invest in have to do, of course, with BI, which has been a significant investment. I didn't mention that, I think, on the call, but we probably have between BI and debt collections, 700 people at the end of the quarter. I mean that's a very significant increase from, I would say, the 50 people or so we had 4, 5 years ago. We're investing in the technology that relates to this area. We're investing in the data. We're investing in sales origination for the insurance business and in the technology in general because that's where I think the game is moving slowly, but surely. Actually not so slowly. So we're really completely aligned with our plan. There is no surprise in these numbers. I just think there's not going to be a better time to invest. I mean the environment is what it is. There's no reason to slow down the investment because I think we are also delivering on growth in these areas. And we're creating something that has value for the future and which is differentiating in the market. And the more we invest in data and technology, the more we learn about what this -- the power that it has and the value that it can have, both in terms of new revenues, risk-free revenues, but also in making our insurance business better. That's pretty much what I would have to say.

[Operator Instructions] Now we'll go and take our next question. And it comes from the line of Michael Huttner from Berenberg.

Fantastic. I had 3. One is Q2. What we've seen most recently, has there been any -- because the tariffs came in after the end of Q1? The second is on tax. I think in tax, from memory, Q4, you put a big amount aside kind of thinking about what might happen going forward. And now the tax seems to normalize again. Is there anything to say here? Have you been too prudent? Or has the tax issue now settled? And the last one is on the -- I've forgotten. It will come back to me in a second. Sorry about that.

Maybe we start with the tax while you find the -- you try to...

Now that in Q4, tax rate was -- and it used to be usually in Q4, we have a -- we had a higher tax rate. But last year, if you recollect, we booked some impact related to the worldwide 15% tax of Pillar 2. I think it has an impact of EUR 2 million, was booked in Q4. I think this year and Q1, we're just going through the normal computation. What needs to be highlighted to do is the fact that, of course, our tax computation is depending on the results and the level of income tax of all our geographies. As we have passing on less results to a reinsurer. I think, of course, the reinsurance company they were having in Switzerland, tax at 50% has driven now our average tax rate down compared to last year. So it's really a matter of geography of results that drives the tax impact.

Yes. And as pertains to your first question on Q2, I mean, there's really nothing to add here. All the comments I made pertain to where we are today, right?

Excellent. Yes, the question was exactly on what Phalla said, the reduction in the cost of reinsurance from EUR 30 million to EUR 20 million. Is there anything particular here?

Well, no, because it's just -- as you can see, it's just the fact that we are passing on the more claims to our reinsurers as it's reflecting the increase on our loss ratio. Nothing unusual, I would say, and this is where our tax treaty is playing its way.

And would that be -- does it depend on the pattern of claims? In other words, would reinsurance cover you better if you had more smaller claims or fewer big claims? Is there some kind of difference here?

No. Remember, our reinsurance schemes, we have 3 level where you have the proportion of the quota share at 23%. That has not changed for years now. And then you have, of course, stop loss in excess of loss. As far as I know, there's no stop loss that has been -- has occurred for years now. So it's really the quota share that's playing its role.

And the last, if I may, the number which -- I mean, all your numbers are actually, given the environment, very strong. The number which appears particularly strong, given the current environment, is the, what I call, reserve release, the EUR40-odd million. Is there anything here to say? Is that more related to past students? Or is it just the quality of your reserving reflects it's unchanged, I don't know.

The prior development is just -- again, I think the -- our reserving policy has not changed. So of course, just reflecting what we used to do and what we're doing. Nothing in particular to be highlighted, Michael.

It remain very consistent. And actually, that number hasn't moved now. You can see it on the page, right, for literally years, right?

Now we're going to take our next question. And it comes from the line of Pierre Chedeville from CIC.

Apparently, I was not in the line of question. So I don't have a lot of questions left. Maybe a general comment because you said a lot of things regarding the evolution of the economic climate, et cetera. But I am a little bit surprised by your churn, if I may say. You seem a little bit more I wouldn't say optimistic, but positive compared to your traditional stance on outlook, which is quite conservative, and we can see this conservatism in your targets, notably your targets on cost/income ratio -- so combined ratio, sorry. So what would you say regarding your outlook? You're quite optimistic or pessimistic? And my second question is a follow-up on reinsurance. Do you see any increase in premiums of reinsurance due to the current environment and what you said? And could it change a little bit or marginally your policy in this area?

Well, I think that, frankly, the 2 questions kind of participate in the same underlying question, which is what's going to happen. And I think nobody knows. I mean, frankly, if you have a clue, let us know because as I said before, with such high numbers being mentioned of where the tariffs are going to land, it could be anything. So I don't know if it's -- I don't know if I can be positive or negative. I think we just don't know. And we're going to have to see where the dust settles and then we're going to have to do the work of going line by line and figuring out who's impacted and who's not. I mean, for me, it's not about being optimistic or pessimistic. It's about taking whatever the world is going to decide for us and dealing with it. And the only thing I can tell you is this business has been over the years investing in its people, in its process and its technology and this and this and that. I think we're in as good a shape as we've been, but the environment is what it's going to be, and there's not much I can do about it. So I tend to try to worry about things I control and less about things I don't control, I think is probably the way to think about it. And as far as the reinsurance, I think it's the same thing. The question is, where is that going to be? I think in the end of the year is when we renegotiate our insurance contracts. And I think in the next 9 months or 8 months, we're going to learn a lot more about what's going on in the world. So that will, again, not be for me to decide, but we'll have to take whatever the market is going to give us.

Now we'll go and take another question. And it comes from the line of Michael Huttner from Berenberg.

The last one, sorry. Demand versus volume, which way do you think the coin settles? Is it up or down?

Demand versus volume. What do you mean?

So you've got your clients asking for more cover or being more worried, but the underlying world trade environment being more challenging and which way...

It's hard to say because I think on one hand, it can be very different by sector, by area. I mean increased inflation in the U.S. will drive activity in the U.S., but that's not our biggest region. I would say, a slowdown in the economy drives lower activity. I would say, in general, the commodities going lower is not helping our activity. So that's never been a great thing for us. So it's -- general uncertainty drives demand for smaller clients who start to struggle. Sometimes it also means they can't pay their premiums or they don't want to pay their premiums or whatever. So I mean it's a mixed set of things.

And even on volume, Michael, I think the volume is driven by, first, of course, the volume of activity of our customers that might decrease if the GDP -- worldwide GDP is going down, but inflation is pushing up the volume. So at the end of the day, I don't even know where it's going. It's really the $1 million question.

A lot of unknowns here.

All I can say is in light of unknowns, the numbers look really good.

At least you know what the consequences are, but we don't know what the cause is going to be here.

[Operator Instructions] Dear speakers, there are no further questions. I would now like to hand the conference over to Xavier Durand for any closing remarks.

Well, thank you very much, I mean, for all of you who have been listening in and have been asking questions. I mean we didn't mean to close this early, but I mean, I guess, it's a good thing. Let's see. We will be speaking again, I think, on the 31st of July for the Q2 first half results. The general -- I'd just remind everybody, the general assembly of Coface takes place on the 14th of May. And so I guess, to all of those questions about what the environment holds, I think we'll probably know a little bit more. But who knows, we'll see. Thank you for calling in and looking forward to speaking with you soon.

This concludes today's conference call. Thank you for participating. You may now all disconnect. Have a nice day.

Thank you.