2019 ANNUAL RESULTS
February 26, 2020
EXECUTIVE SUMMARY
Edenred, the everyday companion for people at work
- A unique platform of services and payment benefiting all stakeholders, to generate sustainable and profitable growth
2019: a successful start to Next Frontier strategic plan (2019-2022)
- Scale:Increased penetration, especially among SMEs, Employee Benefits take-up rate up 32 bps
- Innovation:App-to-app payment API available in 4 new countries, live with more than 40 partners
- M&A:Several acquisitions enhancing Scale and Innovation in all business lines (e.g. CSI, TRFC, Easy Welfare)
- Transformation:New action plan around Edenred's employee engagement, corporate and social responsibility and customer centricity
Next Frontier annual medium-term financial targets met in 2019
- 14% L/L operating revenue growth(vs an annual objective >8%) withdouble-digit growth in all business lines and all regions
- 14% L/L EBITDA growth(vs an annual objective >10%), leading to an EBITDAof €668m, up 25%as reported
- 65% FCF/EBITDA conversion rate1(vs an annual objective >65%)
2019, another record year
- Total revenue: €1,626m, up18%
- EBIT: €545m, up 18%,in line with 2019 EBIT guidance of between €520m and €550m
- Net profit, Group share: €312m, up 23%
- A record high proposed dividend: 0.87€2per share
- Funds from operations: €524m, up 31%
- Leverage ratio :1.9x (Strong Investment grade),leaving room for further acquisitions
Edenred expects sustained growth in all business lines and all geographies this year
and confirms annual medium-term targets for 2020
1. At constant regulations and methodologies | 2 |
2. To be proposed at the Shareholders Meeting of May 7, 2020
Agenda
- Entering a New Phase of Growth
- Q4 & FY 2019 Financial Results
- 2020 Outlook & Conclusion
3
Theeveryday companion for
people at work
8
EDENRED PLATFORM
Services and payment platform for people at work
9
A UNIQUE PLATFORM
B2B2C go-to-market model
10
A UNIQUE PLATFORM
Solving inefficiencies for people at work in 4 universes
11
A UNIQUE PLATFORM
Enabling both public and private regulations
GENERAL PURPOSE
UNIVERSAL PAYMENT
Regulation None
Where?Anywhere
When?Anytime
What?Anything
How much?No price cap
SPECIFIC-PURPOSE SOLUTIONS | ||||
DIGITAL MEAL VOUCHER | FUEL SOLUTION | ACCOUNTS PAYABLE | ||
Public | Private | Private | ||
Affiliated restaurants | Affiliated service | Corporate supplier | ||
only | stations only | only | ||
Working days only | Based on fleet | Customized validity | ||
manager decision | period | |||
Meal | Energy defined | Specific supplier | ||
by fleet manager2 | invoice | |||
Daily amount | Specific supplier | |||
Daily amount1 | defined by fleet | |||
invoice amount | ||||
manager | ||||
1. France example: €19 | 12 |
2. Diesel / gasoline / other |
A UNIQUE PLATFORM
Earmarking funds toward specific merchant verticals
For partner merchants
- A key traffic generator
Edenred Network |
Edenred Network |
Edenred Network |
Supplier Set |
For Edenred
- Monetization power
13
14
EDENRED'S PROFITABLE BUSINESS MODEL
Edenred business model
B2B2C | SPECIFIC-PURPOSE WALLET |
Acquisition
Profitable platform
ActivationMonetization
Retention
15
A SUSTAINABLE BUSINESS MODEL WITH HIGH BARRIERS TO ENTRY
Much more than a payment company
HIGHLY FRAGMENTED | HIGH LEVEL OF USE- | LARGE NETWORK | A TRUST |
B2B CUSTOMER BASE | CASE COMPLEXITY | EFFECT | BUSINESS |
Dealing
with:
>850,000 B2B
customers
and their 50m
employees
Managing | Orchestrating | Managing |
a multi-local portfolio: | a platform at scale: | for 50+ years: |
250+programs | 50musers | €31bnin 2019 |
on behalf of | ||
in 46+countries | and 2mmerchants | employees, |
companies and | ||
and 4product lines | partner merchants | |
2019 figures | 16 |
17
EDENRED: TECH FOR GOOD
FOR EMPLOYEE | FOR CORPORATE | FOR PARTNER | |||
USERS | CLIENTS | MERCHANTS | |||
• | Purchasing power & well- | • | Attractiveness & retention | • | Traffic generator |
being | |||||
• | Productivity | • | Easier payment | ||
• | Simplicity of usage | reconciliation | |||
• | No cash advances | • | Security & control | • | Increased visibility |
•Detailed reports & analytics | • | More stickiness | |||
• | Simple management process |
FOR PUBLIC
AUTHORITIES
- Formalization of the economy/local job creation
- Reduced administrative burden
- Encourage responsible
behavior(e.g. CO2emission reduction, paperless)
- Less fraud
IMPROVE EMPLOYEE | INCREASE COMPANIES' | VITALIZE THE ECONOMY | ENHANCE THE EFFECTIVENESS |
ATTRACTIVENESS AND | & TRACEABILITY OF PUBLIC | ||
WELL-BEING | AND LOCAL EMPLOYMENT | ||
EFFICIENCY | POLICIES | ||
18
EASE ACCESS TO HEALTHIER FOOD HABITS
Ticket Restaurant launched more than 50 years ago, now deployed in 35+countries
IMPROVEEMPLOYEES' HEALTH
AND WELL-BEING
bysecuring their food budget and reducing financial
barriers tohealthy diets
>1.5bn 64%
meals served
every year around
the world
ofFrench employees
indicate that Ticket
Restaurantenhances their
well-being at work
19
ENCOURAGE ENVIRONMENTALLY FRIENDLY CONSUMPTION
The 10-year anniversary of Ticket Ecochèque in Belgium
RECONCILEENVIRONMENTALLY
FRIENDLY CONSUMPTION AND
PURCHASING POWER
by distributing up to €250 to employees annually to purchase"green" goods and services in aspecific environmentally friendly merchant network
>800,000 | 1kg CO2 |
users | saved per 1€ |
spent(1) |
1. Source: CO2Logic | 20 |
HELP TRANSITION TOWARD SUSTAINABLE TRANSPORTATION (1/2)
Commuter Benefits in the USA
INCENTIVIZE EMPLOYEES TO
SHIFT TOWARD GREENER
COMMUTING
by helping American employees to switch from private to public transportation or ride sharing, for example in New-York City, Boston, San Francisco or Philadelphia
>330,000 | 500,000t |
users | CO2avoided in |
2019(1) |
1. Estimation based on US Department of Transportation and US Environmental Protection Agency (EPA) data | 21 |
HELP TRANSITION TOWARD SUSTAINABLE TRANSPORTATION (2/2)
Carbon neutrality by LCCC in France
SUPPORT FLEET MANAGERS IN
REDUCING THEIR CARBON
FOOTPRINT
by enabling companies to measure their fleet's
greenhouse gas emissions and offset them through the
acquisition of certified carbon credits andreforestation projects
>55,000 | >9million |
trees planted | kilometers |
since 2018 | offset in 2019 |
22
INCREASE THE EFFECTIVENESS OF PUBLIC SUBSIDIES
Edenred platform earmarks funds managed by Action Logement in France
Action Logementis in charge of managing the subsidies for access to housing in France, with positive impact on job creations
Intermediation platform between eligible | ||||||||
users and eligible merchants, ensuring | ||||||||
compliance with public regulation | ||||||||
Need traceability of | (who? what? when? where? how much?) | |||||||
+ | ||||||||
public subsidies | ||||||||
Payment processing | ||||||||
User-friendly interface to check the eligibility, go through KYC, follow the process
Manage earmarked funds related to3 specific-purpose subsidies
- €1.000to moveif you live more than 30km from your employer
- Up to €5.000 torefurbish your bathroomif you are retired
- Up to €20.000 toimprove the energy performance of your home
Create the network of eligible merchants Collect payment data (i.e. IBAN, Merchant ID)
23
SOLID DRIVERS TO BOOST GROWTH
ESTIMATED SHARE OF 2019-2022 OPERATING REVENUE L/L GROWTH
#1.SCALE
#2.INNOVATION
Business Excellence
M&A
Product
Technology Adjacencies
Penetration
- Field Sales Efficiency
- SMEs
Base Maximization
- Revenue retention
- Monetization
- Efficiency
45%
40%
15%
#3.TRANSFORMATION
Corporate & Social Responsibility
Customer Centricity
Employee Engagement
26
NEXT FRONTIER MEDIUM-TERM ANNUAL TARGETS (2019-2022)
Committing to higher targets
Sustainable top-line growth
+
Profitable growth
+
Highly cash-generative model
L/L ANNUAL OPERATING REVENUE GROWTH | >+8% |
L/L ANNUAL EBITDA GROWTH | >+10% |
ANNUAL FCF/EBITDA CONVERSION RATE* | >65% |
* At constant regulations and methodologies | 27 |
MEDIUM-TERM & LONG-TERM CSR TARGETS
A strong corporate commitment to social responsibility
2022 | 2030 | ||
TRAINING-% employees who took at least one course | 80% | 85% | |
DIVERSITY-% women among executive positions | 25% | 40% | |
OUTREACH-Number of days of volunteering | 1,000 | 5,000 | |
NUTRITION-% food users and merchants educated | 50% | 85% | |
EMISSIONS-% reduction intensity vs. 2013 (GHG1/m2) | 26%(SBTI2) | 52%(SBTI2) | |
SERVICES- Number of environmentally friendly services | 20 | 1 /country | |
SOLUTIONS- % eco-designed / recycled solutions | 35% | 70% | |
ETHICS- % employee endorsement of Ethics Charter | 100% | WMEC3 | |
DATA PROTECTION- % subsidiaries under common standard of compliance | 100% | Binding corporate | |
rules and | |||
and employees educated about personal data issues | Group | ||
certification | |||
QUALITY- % subsidiaries quality-management-certified | 50% | 85% | |
1. GHG: Green house gas | 28 | ||
2. SBTI: Science Based Targets Initiatives - based on COP21 targets |
3. WMEC: World's Most Ethical Company
2019: ANOTHER RECORD YEAR
NET PROFIT, | |||||||
TOTAL REVENUE | EBITDA | EBIT | GROUP SHARE | ||||
1,626 | 668 | 545 | 312 | ||||
1,320 | 1,378 | 536 | 429 | 461 | 241 | 254 | |
502 |
1,139 | 427 | 370 |
180 | ||
2016 | 2017 | 2018 | 2019 | 2016 | 2017 | 2018 | 2019 | 2016 | 2017 | 2018 | 2019 | 2016 | 2017 | 2018 | 2019 |
30
NEXT FRONTIER MEDIUM-TERM ANNUAL TARGETS IN 2019
FY 2019
L/L ANNUAL OPERATING REVENUE GROWTH >+8% | +14% |
L/L ANNUAL EBITDA GROWTH | >+10% | +14% |
ANNUAL FCF/EBITDA CONVERSION RATE* | >65% | 65% |
* At constant float classification and methodology | 31 |
2019 OPERATING REVENUE BREAKDOWN (1/2)
REST OF THE WORLDEUROPE
8% | +70.9% | 56% | +16.9% |
+19.3%L/L | +13.0%L/L | ||
LATIN AMERICA
36%+12.5%
+14.4%L/L1
1. Excluding Venezuela | % of FY 2019 Group operating revenue | 32 |
2019 OPERATING REVENUE BREAKDOWN (2/2)
EMPLOYEE | FLEET & MOBILITY | COMPLEMENTARY | ||||
BENEFITS | SOLUTIONS | SOLUTIONS | ||||
| Corporate | |||||
Payment Services | ||||||
% OF FY 2019 GROUP | 62% | 26% | 12% | | Incentive | |
OPERATING REVENUE | & Rewards | |||||
| Public Social | |||||
Programs | ||||||
vs. 65% | vs. 25% | vs. 10% | ||||
in 2018 | in 2018 | in 2018 | ||||
FY 2019 OPERATING REVENUE GROWTH | ||||||
REPORTED | +14.1% | +21.8% | +35.6% | |||
LIKE-FOR-LIKE1 | +13.0% | +15.8% | +14.9% | |||
2019 operating revenue: €1,570m, up 18.3% (+13.9% L/L)
1. Excluding Venezuela | 33 |
2019 KEY ACHIEVEMENTS
#1.SCALE
#2.INNOVATION
#3.TRANSFORMATION
Business Excellence
M&A
Product
Technology
Adjacencies
CSR
Employee Engagement
Customer Centricity
2019 KEY ACHIEVEMENTS
- ~+20% new SMEcontracts
- Employee Benefitstake-uprateup 32bps
- 9 acquisitionssigned or closed (o.w. CSI, TRFC)
- 25 millionmobile payment transactions
- Payment API live in 4 new countries
- App Container livein 4 countries
- 54 certifications & recognitionsrelated to our commitment to corporate social responsibility
- Global Employee Engagement surveyevery 2 years
- Set-upof aglobal Net Promoter Score program
34
Business Excellence
2019 UPDATE ON EMPLOYEE BENEFITS REGULATION
CONTINUED POSITIVE TREND LED BY NEW PRODUCTS
AND FACE-VALUE INCREASES
Effect on business volume
+
−
2019 key achievements
- Products
- Holiday voucher (Slovakia)
- Ticket Mobilité (France)
- Maximumface-value increase
- Spain
- Belgium
- Implemented in 2020:
- Italy
- Czech Republic
- Romania
35
Innovation - Product: PAYMENT APIs
LIVE WITH 40 PARTNERS, 4 NEW COUNTRIES OPENED IN 2019
Since April | Since March | Since April | Since Sept. | Since Nov. | +6 to 10 new | ||||||||||||
countries | |||||||||||||||||
- >30 partners including:
TO BE | ||||||
LIVE | 2018 | 2019 | DELIVERED | |||
IN 2020 |
36
Innovation - Technology
TECHNOLOGY TO ENABLE A BUSINESS WHERE RELIABILITY IS KEY
SERVICE LEVEL | DISASTER | ||||||
CLOUD | AGREEMENT | RECOVERY | SECURITY | ||||
| 100% cloud-based by | | 24/7 "Follow the Sun" | Next level protect | | Doubled security | |
2022 | monitoring | and restore operations | and compliance team | ||||
| Scalability | | Best-in-class tools: | | Security operations | ||
Redundancy | ▪ | SolarWind | center | ||||
| |||||||
▪ | AppDynamics | Security and privacy | |||||
| |||||||
by design |
37
M&A to fuel scale and innovation
2019 ACQUISITIONS IN EDENRED'S 3 BUSINESS LINES
BUILD A LEADING POSITION | BUILD UP OPERATIONS IN | EXPAND EDENRED'S |
IN EMPLOYEE ENGAGEMENT | FLEET & MOBILITY | FOOTPRINT IN CORPORATE |
PLATFORMS | SOLUTIONS | PAYMENT |
(1)
€782m>€60m
spent in 2019 additional EBITDA in 2020E
1. Signed in H2 2019, closed in February 2020 | 38 |
Innovation - Adjacencies
CSI: FRUITFUL INTEGRATION AND SUSTAINED RAMP-UP OF NEW CLIENTS AND INITIATIVES
A SUCCESSFUL YEAR
- Significant client winsinexisting (e.g media) andnew verticals (e.g. utilities), with goodramp-upin H2 2019
- Partnershipsandcollaborations with 10 banks, including newly signedtop US-wide institutions
- Promisingramp-up of CSI Travelsolution
•Successful integration in Edenred Group
•Sales team's reinforcement
FY 2019 figures
+34% card spend
+18%(1)revenue
1. CSI 2019 revenue, excluding the loss of one large account at the time of CSI acquisition | 39 |
Agenda
- Entering a New Phase of Growth
- Q4 & FY 2019 Financial Results
- 2020 Outlook & Conclusion
40
FY 2019 OPERATING REVENUE
Up 18.3% as reported and 13.9% L/L
2019 OPERATING REVENUE
Q4 2019 | FY 2019 | |
€445m | €1,570m | |
REPORTED | +19.0% | +18.3% |
Scope | +5.4% | +5.3% |
Currency(1) | -0.1% | -0.9% |
Venezuela | +0.1% | 0.0% |
LIKE-FOR-LIKE(1) | +13.6% | +13.9% |
€374m | €1,327m | |
Q4 2018 | FY 2018 |
L/L OPERATING REVENUE GROWTH
13.3% | 14.2% | 14.6% | 13.2% | 13.6% | 13.9% |
FY 18 Q1 19 Q2 19 Q3 19 Q4 19 FY 19
€70M FROM SCOPE | €(12)M FROM FOREX | |
EFFECTS IN FY 2019 | EFFECTS IN FY 2019 | |
Scope effects are mainly | Impact in €m | |
coming from: | BRL | (10) |
ARS | (7) | |
MXN | 6 | |
Other | (1) |
1. Excluding Venezuela | 41 |
FY 2019 OPERATING REVENUE - EUROPE
Sustained double-digit organic and reported growth
2019 OPERATING REVENUE IN EUROPE
€884m | +13.0% |
L/L | |
in FY19 | +16.9% |
as reported |
L/L GROWTH 2019 VS. 2018
Q1 | Q2 | Q3 | Q4 | FY | |
France | +9.0% | +8.2% | +9.2% | +13.6% | +10.2% |
Rest of Europe | +16.3% | +15.6% | +12.7% | +13.0% | +14.3% |
Total Europe | +13.8% | +13.4% | +11.7% | +13.2% | +13.0% |
MAIN EUROPEAN ACCOMPLISHMENTS
France
- Solid performance of Ticket Restaurant and ProwebCE
- Sustainedramp-up of Fleet & Mobility Solutions for light fleet, e.g. supermarkets' monobrand fuel cards via LCCC
Rest of Europe
- Solid growth in Employee Benefitsregion-wide
- Light fleet solutions andvalue-added services (e.g. toll, VAT refund) growing fast in Italy, Germany and Austria
- Good integration of acquired companies (e.g. Easy Welfare, TRFC)
42
FY 2019 OPERATING REVENUE - LATIN AMERICA
Sustained double-digit organic and reported growth
2019 OPERATING REVENUE IN LATIN AMERICA
€559m | +14.4% |
L/L | |
in FY19 | +12.5% |
as reported |
L/L GROWTH 2019 VS. 2018
Q1 | Q2 | Q3 | Q4 | FY | |
Brazil | +11.7% | +12.9% | +12.7% | +19.7%1 | +14.5% |
Hispanic Latin America | +19.7% | +21.1% | +20.7% | -1.8% | +14.4% |
Total Latin America | +13.9% | +15.1% | +15.1% | +13.7% | +14.4% |
MAIN ACCOMPLISHMENTS IN LATIN AMERICA
Brazil
- Strong organic growth in both Employee Benefits and Fleet & Mobility in 2019
Good ramp-up of toll & maintenance solutions
- Positiveeffect from a change in revenue classification in Q4, no impact on full-year growth
Hispanic Latin America
- Sustaineddouble-digit organic growth in 2019
- Mexico:
- As expected, Q4 negatively impacted by country recession(GDP -0.1% in 2019 vs. +2% in 2018)
- Tough comparison basis vs. Q4 2018:
−Fleet & Mobility: Q4 2019 average fuel price below Q4 2018
- Employee Benefits: decision to submit to less Navideños tenders than in 2018, following a change in the rules for awarding this benefits to issuers, leading to volume cutdown by 3x
1. Up 15.1% excluding a positive effect from a revenue classification change between | 43 |
operating revenue and other revenue in Q4. See 2019 pro-forma figures on slide 63. | |
2019 OTHER REVENUE
Mixed effects across regions
OTHER REVENUE
€56min FY19
vs. €51m in FY18
- €3bn float
- Positive effect from slightly higher interest rates outside the eurozone
- Decreasing interest rates in Latin America
Other revenue in €m | FY 2019 | FY 2018 | Reported | L/L change(1) |
change | ||||
Latin America | 32 | 32 | +0.9% | +0.4% |
Europe | 17 | 14 | +21.0% | +21.1% |
Rest of the World | 7 | 5 | +42.9% | +51.9% |
Total | 56 | 51 | +10.4% | +11.0% |
1. Excluding Venezuela | 44 |
FY 2019 TOTAL REVENUE
Up 18.0% as reported and 13.8% L/L
2019 TOTAL REVENUE
Q4 2019 | FY 2019 | |
€456m | €1,626m | |
REPORTED | +17.7% | +18.0% |
Scope | +5.2% | +5.1% |
Currency(1) | -0.1% | -0.9% |
Venezuela | +0.1% | 0.0% |
LIKE-FOR-LIKE(1) | +12.5% | +13.8% |
€388m | €1,378m | |
Q4 2018 | FY 2018 |
Q4 2019 TOTAL REVENUE
Q4 19 | Q4 18 | Reported | L/L | |
change | change | |||
Operating revenue | 445 | 374 | +19.0% | +13.6% |
Other revenue | 11 | 14 | -17.8% | -18.9% |
Total revenue | 456 | 388 | +17.7% | +12.5% |
FY 2019 TOTAL REVENUE
FY 19 | FY 18 | Reported | L/L | |
change | change | |||
Operating revenue | 1,570 | 1,327 | +18.3% | +13.9% |
Other revenue | 56 | 51 | +10.4% | +11.0% |
Total revenue | 1,626 | 1,378 | +18.0% | +13.8% |
1. Excluding Venezuela | 45 |
2019 EBIT: €545M
Strong double-digit growth in EBITDA, operating EBIT and EBIT
In € millions | 2019 | 2018 | Reported | L/L |
change | change(1) | |||
Operating revenue | 1,570 | 1,327 | +18.3% | +13.9% |
Other revenue (A) | 56 | 51 | +10.4% | +11.0% |
Total revenue | 1,626 | 1,378 | +18.0% | +13.8% |
EBITDA- restated for IFRS 16 impact | 639 | 536 | +19.3% | +13.8% |
EBITDA margin- restated for IFRS 16 impact | 39.3% | 38.8% | +0.4pt | 0.0pt |
EBITDA | 668 | 536 | +24.8% | +13.8% |
EBITDA margin | 41.1% | 38.8% | +2.2pts | 0.0pt |
Operating EBIT (B) | 489 | 410 | +19.3% | +15.3% |
Operating EBIT margin | 31.1% | 30.9% | +0.3pts | +0.4pts |
EBIT(C)=(A)+(B) | 545 | 461 | +18.3% | +14.8% |
EBIT margin | 33.5% | 33.4% | +0.1pt | +0.3pts |
1. Excluding Venezuela | 46 |
2019 EBIT: €545M, UP 18.3% AS REPORTED AND 14.8% L/L
Profitable growth in a context of technology investments
2018 EBIT | Operating revenue | Other revenue | Changes in | Currency | Venezuela | |||||||||
L/LΔ: €185m(1) | scope | effect(1) | ||||||||||||
€22m | €(6)m | €0m | ||||||||||||
€63m | €5m | |||||||||||||
2019 EBIT
€545m
€461m
1. Excluding Venezuela | 47 |
2019 NET PROFIT: €312M, UP 22.9%
Strong increase in net profit, Group share
2019 | 2018 | Reported | |
In € millions | change | ||
EBITDA- adjusted for IFRS 16 impact | 639 | 536 | +19.3% |
KEY COMMENTS
IFRS 16 impact (non-cash)
EBITDA | 668 | 536 | +24.8% | |
D&A excluding PPA | (85) | (54) | ||
PPA | (38) | (21) | ||
EBIT | 545 | 461 | +18.3% |
▪+€29m on EBITDA
- €(29) on D&A
Neutral on EBIT
Share of net profit from equity-accounted companies | 14 | 11 | |
Other income and expenses | (25) | (31) | |
Operating profit including share of net profit from equity | 534 | 441 | |
accounted companies | |||
Net financial expense | (35) | (37) | |
Income tax expense | (153) | (119) | |
Net profit attributable to non-controlling interests | (34) | (31) | |
Net profit, Group share (A) | 312 | 254 | +22.9% |
Weighted average number of shares outstanding (B) | 240,767 | 236,451 | |
(in thousands) | |||
EPS, Group share [(A)/(B)](in €) | 1.30 | 1.07 | +20.5% |
2019 | 2018 | |
Impairment of assets & goodwill | (17) | (6) |
Acquisition fees & other fees | (6) | (16) |
Restructuring | (4) | (5) |
Other | 2 | (4) |
48
EBITDA TO FCF
A business model ensuring profitable growth and cash generation
2019 | 2018 | |||
In € millions | ||||
EBITDA | 668 | 536 | ||
EBITDA- adjusted for IFRS 16 non-cash impact | 639 | 1 | 536 | |
Funds from operations (FFO) | 524 | 400 | ||
FCF/EBITDA | ||||
Increasein cash linked to changes in float | 20 | 161 | 65%conversion rate1 | |
Decreasein WCR, excl. float | 349 | 243 | ||
(Increase)in restricted cash | (395) | (279) | ||
Recurring capex | (98) | (90) | ||
Free cash flow (FCF) | 400 | 435 | ||
Free cash flow- at constant float classification | 412 | 1 | 435 | |
- 2019 free float increase partly offset by volume decline in Mexican Navideños campaign in Q4
- Strong working capital excluding float inflow, mainly due to highthird-party prepaid program volume growth, compensated in restricted cash (Neutral on FCF generation)
1. 2019 changes in regulations and methodologies: EBITDA: €29m IFRS 16 non-cash impact ; FCF: €12m change in float classification of some prepaid Fleet & Mobility Solutions
in Brazil | 49 |
2019 NET DEBT: €1,290M
Strong free cash flow generation fueling acquisitions and shareholder return
December 31, 2018 | Currency effects | December 31, 2019 | ||||
IFRS 16 | Free cash flow | Acquisitions | Shareholder return | and other non- | ||
Net debt position | Net debt position | |||||
recurring items | ||||||
€(659)m | €400m | €(782)m |
€(91)m | €(1,290)m | |
€(134)m | ||
€(24)m | ||
50 |
KEY ACHIEVEMENTS SINCE 2019
FINANCING INSTRUMENT TIED WITH SOCIAL AND ENVIRONMENTAL CRITERIA FOR THE FIRST TIME
€750m undrawn revolving credit facility maturity extended and tied
with social and environmental criteria for the first time
- Extended maturityfrom 2023 to 2025 - with two 1-year extension option
- Increased amountfrom €700m to€750m
- Improved financial conditions
- Introduction of environmental and social performanceinto the calculation of the financing costs
- KPI 1: Reach by 2030 an85% nutrition awareness rateamong merchants and employees using its solutions to promote healthy and sustainable eating habits
- KPI 2: Target a52% cut in greenhouse gas emissions intensity by 2030 compared with 2013to combat global warming
CONVERTIBLE BOND ISSUED AT MARKET
RECORD CONDITIONS
€500m convertible bond issued at market record conditions
- Zero-coupon
- -1.53%yield
- 40% premium
- 5 years maturity
NO MAJOR DEBT REPAYMENTS
BEFORE 2024
750 | ||||||||||||||||
125 | 121 | 500 | 500 | 500 | 500 | |||||||||||
250 | 233 | 37 | ||||||||||||||
2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | |||||||||
NEU CP and other | Bonds | Schuldschein loan | ||||||||||||||
Undrawn revolving | Convertible bonds | |||||||||||||||
credit facility |
51
A SOUND DEBT PROFILE
CONTINUED REDUCED AVERAGE COST OF DEBT
Gross debt | -36bps | ||||||||
€2.8bn | |||||||||
€2.5bn | |||||||||
€1.9bn | €1.9bn | ||||||||
2.5% | |||||||||
1.2% | 0.8% | ||||||||
1.8% | |||||||||
2016 | 2017 | 2018 | 2019 | ||||||
Cost of debt (%) | Floating-rates | Fixed-rates | |||||||
- AVERAGE DEBT MATURITY~5 YEARS
- COST OF DEBT AT0.8%
-
LEVERAGE RATIO OF1.9X, WITH ANET DEBT OF €1,290M
AS OF DEC. 31, 2019
52
NEXT FRONTIER STRATEGIC PLAN: PROGRESSIVE DIVIDEND POLICY
PROGRESSIVE DIVIDEND POLICY | RECORD HIGH PROPOSED1DIVIDEND |
ANNOUNCED IN OCTOBER 2019 | FOR 2019 |
Dividend growth | €0.87 per share |
in absolute terms2every year | +€0.01 vs. 2018 |
0.85 0.86 0.87
0.62
2016 | 2017 | 2018 | 2019 |
1. To be proposed at the Shareholders Meeting of May 7, 2020. Shareholders will be offered the option of payment in 100% cash or 100% shares with a 10% discount | 53 |
2. At least +€0.01 per annum | |
Agenda
- Entering a New Phase of Growth
- Q4 & FY 2019 Financial Results
- 2020 Outlook & Conclusion
54
2020 : EDENRED'S 10-YEAR ANNIVERSARY
55
OUTLOOK AND CONCLUSION
SUSTAINED GROWTH IN ALL REGIONS AND ALL BUSINESS LINES, DRIVEN BY:
- Scale:
- Further grow inunder-penetratedmarkets, especially among SMEs
- Maximize customer baseby increasing the level of up- and cross-selling
- Innovation:
- Digital innovation:App-to-app direct payment roll-out in new countries, split-payment development, roll-out of container app
- Continued investment intechnology: >€250m dedicated in 2020(capex + opex)
- Ramp-upof adjacenciessuch as Corporate Payment in North America and Employee Engagement Platforms in Europe
- M&A:
- Integrateand grow recently acquired companies (e.g. CSI, TRFC, Employee engagement platforms)
- Conducttargeted acquisitionsto accelerate growth and create additional value
- Transformation:
- Execute ourIdealstrategy for sustainable development
- Deploy Net Promoter Score program globally toimprove customer satisfaction
- Improve Employee Engagementvia a global survey and action plan
EDENRED CONFIRMS ANNUAL
MEDIUM-TERM TARGETS FOR 2020
>8%L/L OPERATING REVENUE GROWTH
>10%L/L EBITDA GROWTH
>65%ANNUAL FCF/EBITDA CONVERSION RATE1
1. At constant regulation on float's classification and methodology | 56 |
APPENDICES
EDENRED: TECH FOR GOOD
A recognized commitment
58
TECHNOLOGY INVESTMENTS
TECHNOLOGY INVESTMENTS
~€250m p.a.
% of technology costs
Security, | ||||
Applications | Infrastructure | Compliance | ||
(Front, Middle & Back) | & Network | & Support | ||
35% | 35% | 20% | 10% | |
Technology capex | Technology opex |
80-90% of Edenred's | 15-20% of Edenred's opex |
recurring capex1 | |
1. Excluding M&A | 59 |
EMPLOYEE BENEFITS AND FLEET & MOBILITY SOLUTIONS ORGANIC OPERATING REVENUE GROWTH
Employee Benefits
11.7% | 14.5% | 13.9% | 11.9% | 11.8% | 13.0% |
FY 18 | Q1 19 | Q2 19 | Q3 19 | Q4 19 | FY 19 |
Fleet & Mobility solutions
16.8% | 17.1% | 14.6% | 17.7% | 15.8% | |
13.7% | |||||
FY 18 | Q1 19 | Q2 19 | Q3 19 | Q4 19 | FY 19 |
L/L operating revenue growth (excluding Venezuela) | L/L operating revenue growth |
60
OPERATING REVENUE
Q1 | Q2 | Q3 | Q4 | |||||||||
In € millions | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||
Europe | 213 | 183 | 209 | 179 | 208 | 179 | 254 | 214 | ||||
France | 69 | 63 | 59 | 55 | 59 | 54 | 77 | 67 | ||||
Rest of Europe | 144 | 120 | 150 | 124 | 149 | 125 | 177 | 147 | ||||
Latin America | 128 | 119 | 138 | 124 | 137 | 116 | 156 | 138 | ||||
Rest of the world | 28 | 17 | 32 | 18 | 32 | 18 | 35 | 22 | ||||
Operating revenue | 369 | 319 | 379 | 321 | 377 | 313 | 445 | 374 | ||||
Q1 | Q2 | Q3 | Q4 | |||||||||
In % | Reported | L/L (excl. | Reported | L/L (excl. | Reported | L/L (excl. | Reported | L/L (excl. | ||||
Venezuela) | Venezuela) | Venezuela) | Venezuela) | |||||||||
Europe | +16.4% | +13.8% | +16.4% | +13.4% | +16.4% | +11.7% | +18.3% | +13.2% | ||||
France | +9.0% | +9.0% | +8.2% | +8.2% | +9.2% | +9.2% | +13.6% | +13.6% | ||||
Rest of Europe | +20.3% | +16.3% | +20.0% | +15.6% | +19.4% | +12.7% | +20.4% | +13.0% | ||||
Latin America | +7.3% | +13.9% | +12.5% | +15.1% | +17.3% | +15.1% | +12.9% | +13.7% | ||||
Rest of the world | +64.1% | +20.9% | +73.5% | +23.1% | +79.8% | +16.3% | +66.6% | +17.3% | ||||
Operating revenue | +15.6% | +14.2% | +18.1% | +14.6% | +20.3% | +13.2% | +19.0% | +13.6% |
FY | ||
2019 | 2018 | |
884 | 755 | |
264 | 239 | |
620 | 516 | |
559 | 497 | |
127 | 75 | |
1,570 | 1,327 | |
FY | ||
Reported | L/L (excl. | |
Venezuela) |
+16.9% +13.0%
+10.2% +10.2%
+20.0% +14.3%
+12.5% +14.4%
+70.9% +19.3%
+18.3% +13.9%
61
OTHER REVENUE
Q1 | Q2 | Q3 | Q4 | ||||||||||
In € millions | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | |||||
Europe | 4 | 4 | 4 | 3 | 4 | 3 | 5 | 4 | |||||
France | 2 | 2 | 1 | 1 | 1 | 1 | 2 | 2 | |||||
Rest of Europe | 2 | 2 | 3 | 2 | 3 | 2 | 3 | 2 | |||||
Latin America | 9 | 8 | 9 | 8 | 10 | 8 | 4 | 8 | |||||
Rest of the world | 1 | 1 | 2 | 1 | 2 | 1 | 2 | 2 | |||||
Other revenue | 14 | 13 | 15 | 12 | 16 | 12 | 11 | 14 | |||||
Q1 | Q2 | Q3 | Q4 | ||||||||||
In % | Reported | L/L (excl. | Reported | L/L (excl. | Reported | L/L (excl. | Reported | L/L (excl. | |||||
Venezuela) | Venezuela) | Venezuela) | Venezuela) | ||||||||||
Europe | +11.9% | +12.0% | +28.5% | +28.8% | +29.5% | +30.1% | +15.2% | +14.6% | |||||
France | -1.3% | -1.3% | -1.4% | -1.4% | +6.0% | +6.0% | -1.3% | -1.3% | |||||
Rest of Europe | +24.0% | +24.1% | +56.2% | +56.7% | +45.8% | +46.7% | +25.2% | * | +24.3% | * | |||
Latin America | +1.9% | +5.4% | +17.2% | +17.2% | +24.9% | +20.3% | -37.4% | -38.4% | |||||
Rest of the world | +42.5% | +66.0% | +59.3% | +90.0% | +88.4% | +77.3% | -1.1% | -4.1% | |||||
Other revenue | +7.9% | +12.0% | +23.9% | +26.7% | +31.7% | +28.1% | -17.8%* | -18.9%* |
FY
2019 2018
17 | 14 | |
6 | 6 | |
11 | 8 | |
32 | 32 | |
7 | 5 | |
56 | 51 | |
FY | ||
Reported | L/L (excl. | |
Venezuela) |
+21.0% +21.1%
+0.4% +0.4%
+36.7% +36.8%
+0.9% +0.4%
+42.9% +51.9%
+10.4% +11.0%
- Q4 2019 has been impacted by a retroactive effect related to a change in revenue classification in Brazil. Some revenues related to merchant fast reimbursement are now recognized as Operating revenue vs. Other revenue. Neutral effect on 2019full-year revenue.
On a pro-forma basis, other revenue in Q4 is up 17.4% like-for-like and 18.4% as reported in Latin America, and up14.3% like-for-like and 15.4% as reported | 62 |
for the Group. |
REVENUE CLASSIFICATION CHANGE IN BRAZIL - PRO FORMA FIGURES
Group Operating Revenue | Q1 | Q2 | Q3 | Q4 | FY | |
Actual 2019 | 369 | 379 | 377 | 445 | 1,570 | |
Pro forma 2019 | 371 | 380 | 379 | 440 | 1,570 | |
Group Other Revenue | Q1 | Q2 | Q3 | Q4 | FY | |
Actual 2019 | 14 | 15 | 16 | 11 | 56 | |
Pro forma 2019 | 12 | 14 | 14 | 16 | 56 | |
Latin America Operating Revenue | Q1 | Q2 | Q3 | Q4 | FY | |
Actual 2019 | 128 | 138 | 137 | 156 | 559 | |
Pro forma 2019 | 130 | 139 | 139 | 151 | 559 | |
Latin America Other Revenue | Q1 | Q2 | Q3 | Q4 | FY | |
Actual 2019 | 9 | 9 | 10 | 4 | 32 | |
Pro forma 2019 | 6 | 8 | 8 | 10 | 32 |
63
TOTAL REVENUE
Q1 | Q2 | Q3 | Q4 | |||||||||
In € millions | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||
Europe | 217 | 187 | 213 | 182 | 212 | 182 | 259 | 218 | ||||
France | 71 | 65 | 60 | 56 | 60 | 55 | 79 | 69 | ||||
Rest of Europe | 146 | 122 | 153 | 126 | 152 | 127 | 180 | 149 | ||||
Latin America | 137 | 127 | 147 | 132 | 147 | 124 | 160 | 146 | ||||
Rest of the world | 29 | 18 | 34 | 19 | 34 | 19 | 37 | 24 | ||||
Total revenue | 383 | 332 | 394 | 333 | 393 | 325 | 456 | 388 | ||||
Q1 | Q2 | Q3 | Q4 | |||||||||
In % | Reported | L/L (excl. | Reported | L/L (excl. | Reported | L/L (excl. | Reported | L/L (excl. | ||||
Venezuela) | Venezuela) | Venezuela) | Venezuela) | |||||||||
Europe | +16.3% | +13.7% | +16.6% | +13.6% | +16.6% | +12.0% | +18.2% | +13.2% | ||||
France | +8.7% | +8.7% | +7.9% | +7.9% | +9.2% | +9.2% | +13.3% | +13.3% | ||||
Rest of Europe | +20.3% | +16.4% | +20.5% | +16.2% | +19.8% | +13.3% | +20.5% | +13.2% | ||||
Latin America | +6.9% | +13.3% | +12.8% | +15.3% | +17.7% | +15.4% | +10.0% | +10.8% | ||||
Rest of the world | +62.9% | +23.5% | +72.8% | +26.8% | +80.2% | +19.7% | +62.3% | +16.0% | ||||
Total revenue | +15.3% | +14.1% | +18.3% | +15.0% | +20.7% | +13.8% | +17.7% | +12.5% |
FY | ||
2019 | 2018 | |
901 | 769 | |
270 | 245 | |
631 | 524 | |
591 | 529 | |
134 | 80 | |
1,626 | 1,378 | |
FY | ||
Reported | L/L (excl. | |
Venezuela) |
+17.0% +13.2%
+9.9% +9.9%
+20.3% +14.7%
+11.8% +13.6%
+69.3% +21.2%
+18.0% +13.8%
64
EBITDA, OPERATING EBIT & EBIT
In € millions | 2019 | 2018 |
Europe | 359 | 284 |
France | 86 | 66 |
Rest of Europe | 273 | 218 |
Latin America | 275 | 251 |
Rest of the world | 42 | 13 |
Holding and others | (8) | (12) |
Total EBITDA | 668 | 536 |
L/L (excl.
ReportedVenezuela)
+26.6% +14.1%
+30.1% +17.6%
+25.6% +13.0%
+9.6% +7.9%
+228.2% +60.1%
-29.9%-50.0%
+24.8% +13.8%
In € millions | 2019 | 2018 | |
Europe | 280 | 234 | |
France | 59 | 49 | |
Rest of Europe | 221 | 185 | |
Latin America | 204 | 188 | |
Rest of the world | 19 | 5 | |
Holding and others | (14) | (17) | |
Total Operating EBIT | 489 | 410 | |
In € millions | 2019 | 2018 | |
Europe | 297 | 248 | |
France | 65 | 55 | |
Rest of Europe | 232 | 193 | |
Latin America | 236 | 220 | |
Rest of the world | 26 | 10 | |
Holding and others | (14) | (17) | |
Total EBIT | 545 | 461 |
Reported | L/L (excl. |
Venezuela) | |
+20.0% +14.3%
+20.7% +20.5%
+19.8% +12.6%
+8.6% +9.9%
+269.1% +106.1%
-14.2%-31.6%
+19.3% +15.3%
L/L (excl.
ReportedVenezuela)
+20.0% +14.7%
+18.4% +18.2%
+20.5% +13.6%
+7.5% +8.6%
+163.7% +80.8%
-14.2%-31.6%
+18.3% +14.8%
65
FY 2019 CASH FLOW STATEMENT
(in € millions) | FY 2019 | FY 2018 | |
+ | Net profit attributable to owners of the parent | 312 | 254 |
+ | Non-controlling interests | 34 | 31 |
+ | Dividends received from equity-accounted companies | 9 | 12 |
- | Difference between income tax paid and income tax expense | -8 | -18 |
- | Non-cash income and expenses | 177 | 121 |
= | Funds from operations before other income and expenses (FFO) | 524 | 400 |
+ | Decrease (Increase) in working capital | 369 | 404 |
+ | Recurring decrease (Increase) in restricted cash | -395 | -279 |
= | Net cash from (used in) operating activities | 498 | 525 |
- | Recurring expenditure | -98 | -90 |
= | Free cash flows (FCF) | 400 | 435 |
66
SUMMARIZED BALANCE SHEET
As of December 31, 2019
In € millions | Dec 19 | Dec 18 | In € millions | Dec 19 | Dec 18 |
Goodw ill | 1,604 | 976 | Total equity | (1,043) | (1,451) |
Intangible assets | 706 | 432 | |||
Property, plant & equipment | 169 | 52 | |||
Investments in associates | 69 | 66 | Gross debt and other financial | 3,163 | 2,696 |
liabilities | |||||
Other non-current assets | 169 | 123 | Provisions and deferred tax | 239 | 215 |
Float (Trade Receivables, net) | 2,142 | 1,949 | Funds to be redeemed (float) | 5,161 | 4,959 |
Working capital excl. float (assets) | 290 | 233 | Working capital excl. float (liabilities) | 1,366 | 851 |
Restricted cash | 1,864 | 1,402 | |||
Cash and cash equivalents and other | 1,873 | 2,037 | |||
current financial assets | |||||
Total assets | 8,886 | 7,270 | Total equity and liabilities | 8,886 | 7,270 |
Net debt | 1,290 | 659 | Total working capital | 4,095 | 3,628 |
o/w float | 3,019 | 3,010 |
67
AVERAGE EXCHANGE RATE
Average rates | Spot rate | Spot rate | ||||||||||||||||
€1 = X foreign currency | Q1 2019 | Q1 2018 | 2019 vs. 2018 | Q2 2019 | Q2 2018 | 2019 vs. 2018 | Q3 2019 | Q3 2018 | 2019 vs. 2018 | Q4 2019 | Q4 2018 | 2019 vs. 2018 | FY 2019 | FY 2018 | 2019 vs. 2018 | as of | as of | |
Change (in %) | Change (in %) | Change (in %) | Change (in %) | Change (in %) | 31.12.2019 | 31.12.2018 | ||||||||||||
Brazilian real (BRL) | 4.28 | 3.99 | -6.7% | 4.41 | 4.29 | -2.6% | 4.41 | 4.60 | 4.4% | 4.56 | 4.35 | -4.6% | 4.41 | 4.31 | -2.4% | 4.52 | 4.44 | |
Mexican Peso (MXN) | 21.80 | 23.03 | 5.6% | 21.50 | 23.12 | 7.5% | 21.60 | 22.07 | 2.2% | 21.32 | 22.62 | 6.1% | 21.55 | 22.71 | 5.4% | 21.22 | 22.49 | |
Argentine Peso (ARS) | 44.33 | 24.23 | -45.3% | 49.34 | 28.02 | -43.2% | 56.12 | 37.38 | -33.4% | 65.73 | 42.37 | -35.5% | 53.88* | 33.00 | -38.8% | 67.26 | 43.13 | |
British Pound Sterling (GBP) | 0.87 | 0.88 | 1.3% | 0.87 | 0.88 | 0.1% | 0.90 | 0.89 | -1.1% | 0.86 | 0.89 | 3.1% | 0.88 | 0.88 | 0.8% | 0.85 | 0.89 | |
Turkish Lira (TRY) | 6.11 | 4.69 | -23.2% | 6.60 | 5.22 | -21.0% | 6.31 | 6.60 | 4.7% | 6.42 | 6.28 | -2.2% | 6.36 | 5.70 | -10.4% | 6.68 | 6.06 | |
US Dollar (USD) | 1.14 | 1.23 | 8.3% | 1.12 | 1.19 | 6.1% | 1.11 | 1.16 | 4.6% | 1.11 | 1.14 | 3.1% | 1.12 | 1.18 | 5.5% | 1.12 | 1.15 | |
Bolivar Sovereign (VES) | 2 992 | 0.28 | -99.99% | 5 793 | 0.85 | -99.99% | 15 917 | 34.07 | -99.8% | 34 335 | 182.87 | -99.5% | 14 759 | 54.52 | -99.6% | 51 471 | 644.95 | |
- In line with IAS 29 standard, a EUR/ARS exchange rate of 67.26 has been used.
2019 EBIT sensitivity to a +5% change
BRL MXN
~€8.5m ~€2m
68
2020 EXPECTED CALENDAR EFFECTS
Q1 | Q2 | Q3 | Q4 | 2020 | |||||||
Working days | Nb of | Nb of | Nb of | Nb of | Nb of | ||||||
days | days | days | days | days | |||||||
Europe | 1 | -1 | 0 | 0 | 0 | ||||||
Latin America | 1 | -1 | -1 | -1 | -2 | ||||||
Rest of the world | 1 | 0 | 1 | 1 | 3 | ||||||
TOTAL | 1 | -1 | 0 | 0 | 0 | ||||||
69
FAST FORWARD 2016-2018: A GAME CHANGER IN TERMS OF SIZE
BUSINESS VOLUME
In €bn, reported figures
+54% | |
28 | |
18 | |
2015 | 2018 |
TOTAL REVENUE
In €m, reported figures
+29% | |
1,378 | |
1,069 | |
2015 | 2018 |
EBITDA
In €m, reported figures
+38% | |
536 | |
388 | |
2015 | 2018 |
EBIT
In €m, reported figures
+35% | |
461 | |
341 | |
2015 | 2018 |
71
FAST FORWARD 2016-2018: A GAME CHANGER IN TERMS OF GROWTH PROFILE
FUNDS FROM | ||
OPERATING REVENUE | OPERATING EBIT | OPERATIONS (FFO) |
As a %, like-for-like growth1 | As a %, like-for-like growth1 | As a %, like-for-like growth |
+23.5% | +21.8% | |||
+17.3% | +16.0% | +15.4% | +17.0% | |
+13.3% | ||||
+8.3% +9.3%
2016 vs. | 2017 vs. | 2018 vs. | 2016 vs. | 2017 vs. | 2018 vs. | 2016 vs. | 2017 vs. | 2018 vs. |
2015 | 2016 | 2017 | 2015 | 2016 | 2017 | 2015 | 2016 | 2017 |
1. Excluding Venezuela. | 72 |
FAST FORWARD 2016-2018: A GAME CHANGER IN TERMS OF BUSINESS AND GEOGRAPHIC MIX
EDENRED OPERATING REVENUE
As a %, in €m, 2015 - 2018
1,327 | 1,327 | |||
10% | 6% | |||
COMPLEMENTARY | 999 | 25% | 999 | 37% |
7% | ||||
12% | ||||
SOLUTIONS | ||||
FLEET & MOBILITY | 14% | 42% | ||
EMPLOYEE | 74% | 65% | 57% | |
BENEFITS | ||||
51% | ||||
2015 | 2018 | |||
2015 | 2018 |
REST OF THE WORLD
LATIN AMERICA
EUROPE
73
Attachments
- Original document
- Permalink
Disclaimer
Edenred SA published this content on 26 February 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 February 2020 08:28:04 UTC