Report
Maria Paz Ojeda
EUR 100.00 For Business Accounts Only

MAPFRE: FY2020 RESULTS (ANÁLISIS BANCO SABADELL)

4Q'20 vs. 4Q'19 Results:
Premiums: € 4.933 Bn (-8% vs. -10.2% BS(e) and -8.4% consensus);
Operating Result: € 300.4 M (-17.8% vs. -11.7% BS(e) and +17% consensus);
EBT: € 257.8 M (-79.8%);
Net Profit: € 76.1 M (-48% vs. -72.2% BS(e) and -72.0% consensus);
FY2020 vs FY2019 Results
Premiums: € 20.482 Bn (-11.1% vs. -11.5% BS(e) and -10.9% consensus);
Operating Result: € 1.337 Bn (-12.8% vs. -8.6% BS(e) and -7.6% consensus);
EBT: € 1.118 Bn (-12.6%);
Net Profit: € 526.5 M (-13.6% vs. +1.8% BS(e) and +2.0% consensus);

The company obtained € 526.5 M of Net Profit’20 (-15% vs. expectations), meaning 4Q’20 Net Profit of € 76.1 M vs. €~170 M expected, due to € -132 M of goodwill impairments (vs. around €-50 M BS(e)) in the Turkey, Indonesia and Italy subsidiaries. We should point out that on the reported level, these impairments are included in the Financial Result of the Non-Life business, thus affecting the operating comparison (€~300 M in 4Q’20 vs. € 365 M BS(e) and consensus). Excluding this, adjusted Net Profit would have beaten expectations by around +22%.
The operating performance excluding these impairments has followed the same trend of recovery seen in 9M’20, with premiums falling -8% in 4Q’20, in line with expectations, and with better Combined Ratio (CR) performance (94.8% vs. 95.4% expected). By regions, Net Profit performance was in line with expectations in Spain (€ 119.6 M, -19% vs. 4Q’19 due to lower capital gains realised) and LatAm (€ 51 M of Net Profit, -10% vs. 4Q’19), with a slight rise in CR in Brazil (to around 90%). Meanwhile, performance was slightly better in the international business (US and Eurasia, +14% in Net Profit) and with better performance in the reinsurance business (€ 16.8 M of Net Profit vs. around € 3 M expected).
Solvency levels remain largely unchanged (180.2% as of 9M’20; ~190% including Mapfre Vida’s internal models). The company has announced a final dividend’20 of € 0.075/sh. (-11% vs. 2019; 4.5% yield), meaning a DPS’20 of € 0.125/sh. (-14% vs. 2019; 7.6% yield), in line with the consensus but above our estimate of € 0.107/sh. We expect a negative share price reaction initially (around -3% vs. Ibex) that would moderate throughout the session. Conference call at 12:00 (CET). BUY. T.P. € 2.17/sh. (+32.24% upside).
Underlying
Mapfre SA

Mapfre is an insurance company based in Spain. Co. is the parent company of a group engaged in the underwriting and provision of insurance in Spain and abroad. Insurance policies provided include: life, non-life, accident, home-owner, general and health. Through its subsidiaries, Co. is also engaged in the provision of reinsurance, the management of investment funds, pension funds and pension plans, real estate and related services. On the domestic market, Co.'s activities include managing investment funds, pension funds and pension plans, real estate and other service businesses.

Provider
Sabadell
Sabadell

Analysts
Maria Paz Ojeda

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