Results for the first half of 2011

APRIL Group recorded consolidated sales of €377.77 million in the first half of 2011, corresponding to an increase of 1.3% on a reported basis and a decrease of 2.2% on a pro-forma basis (*). The Group is
continuing to refocus on its brokerage model, as a result of which commissions increased by 8.2% (and by 2.2% pro forma), while insurance premium declined by almost 10.0%.

Operating profit on ordinary activities amounted to €46.6 million in the first half, down 11.3%, reflecting contrasted performances for the different activities, a decline in net financial income because of the less favourable market conditions, and stepped up investments in human resources and information systems.

Health & Personal Protection recorded an operating margin on ordinary activities of 17.6%, in line with levels in 2009 but down more than 3 points compared with the first half of 2010. This performance was due mainly to the temporary difficulties experienced in the British market and to adverse regulatory developments in Switzerland, measures having been taken to adapt to these changes.

As for Property & Casualty, there was a sharp turnaround in its operating performances, with the operating margin on ordinary activities picking up by more than 4 points to almost 5% in the first half. The optimization of operations at the non-life insurance company, the excellent performances by the wholesale activities and the distribution network recovering to breakeven were the drivers behind this good performance.

Given that non-operating items were not material, whereas profits on disposal amounting to €7.7 million were recognised last year, consolidated operating profit came to €46.2 million, equivalent to 12.2% of sales. Bearing in mind the income tax charge came to €17.4 million, consolidated profit for the period came to €29.5 million, equivalent to a net margin of 7.8%.

APRIL Group’s balance sheet remains particularly solid, with €446.1 million of shareholders’ equity, borrowings of less than €6.0 million, and net cash of €178 million. Note that the Group’s exposure to the sovereign bonds of Eurozone peripheral countries remains extremely slight (2.1% of portfolio invested in Greek government bonds, 6.1% in Italian government bonds and 0.7% in Spanish and Portuguese government bonds, of which more than half of the total in short positions at less than one year).

In light of the first-half performances and the positive momentum enjoyed at business level, and bearing in mind the relative visibility given the current state of the financial markets, APRIL Group’s 2011 guidance is for sales of approximately €760.0 million and for the operating profit on ordinary activities to decline to the same extent as in the first half in percentage terms.
 

(Sales: inter-division eliminations: €4.7m)
* Pro forma consolidated sales represent sales at the same consolidation scope as for the period under review.