Edenred Sa · EURONEXT:EDEN
Edenred Sa — Q3 2024 Earnings Presentation
46 slides from Edenred Sa's earnings presentation, Oct 24, 2024
Slide 1: Q3 2024 Revenue
Q3 2024 REVENUE October 24, 2024
Slide 2: Executive Summary (1/3)
EXECUTIVE SUMMARY (1/3) With double-digit top line growth in Q3 2024, the diversified growth model of Edenred proves efficient, despite worsening of the macro-economic context across Europe Q3 2024 total revenue of €682m, up 11.5% like-for-like1 • Operating revenue of €619m, up 10.8% like-for-like
Slide 3: Executive Summary (2/3)
EXECUTIVE SUMMARY (2/3) ESG strategy New milestone, with the approval by SBTi1 of Edenred’s carbon reduction targets: to achieve its net-zero carbon ambition by 2050 2024 guidance EBITDA Cash conversion Guidance confirmed and range narrowed Guidance confirmed €1,245m – €1,285m2 >70% EBITDA to FCF
Slide 4: Executive Summary (3/3)
EXECUTIVE SUMMARY (3/3) Update on Italy and potential implications on 2025 outlook A preliminary amendment as part of the Competitiveness Bill presented to a parliamentary commission on October 23 rd, 2024, calls for the introduction of a 5% cap on merchants' fees for meal vouchers in the private
Slide 5: Agenda
AGENDA 1. Q3 2024 highlights 2. Q3 2024 revenue 3. 2024 outlook 4. Update on Italy and potential implications on 2025 outlook 5
Slide 6: Edenred delivers double-digit growth in Q3 2024
Edenred delivers double-digit growth in Q3 2024, despite worsening of the macro-economic context in Europe 6
Slide 7: Double-digit like-for-like operating revenue growth in Q3 and 9M 2024
DOUBLE-DIGIT LIKE-FOR-LIKE OPERATING REVENUE GROWTH IN Q3 2024 AND 9M 2024 Operating Revenue in €m Despite a macro-economic worsening across Europe and a soft performance in Complementary Solutions, ability to +10.8% LFL1 +13.8% LFL1 generate sustainable growth thanks to a 1,889 619 1,678 good com
Slide 8: Double-digit growth in Benefits & Engagement and Mobility
DOUBLE-DIGIT GROWTH IN BENEFITS & ENGAGEMENT AND MOBILITY IN Q3 2024 AND 9M 2024 Benefits & Engagement Mobility Complementary Solutions ▪ Corporate Payment Services % OF 9M 2024 GROUP OPERATING REVENUE 65% 24% 11% ▪ Incentive & Rewards ▪ Public Social Programs Q3 2024 OPERATING REVENUE €398m €152m €
Slide 9: Healthy growth across multiple geographies
HEALTHY GROWTH ACROSS MULTIPLE GEOGRAPHIES Europe +6.7% LFL vs. Q3 2023 60% +9.4% LFL vs. 9M 2023 Latin America +16.7% LFL vs. Q3 20231 30% +20.2% LFL vs. 9M 20231 Rest of the World +16.4% LFL vs. Q3 2023 % of 9M 2024 Group operating 10% +22.3% LFL vs. 9M 2023 revenue 1. Based on adjusted 2023 figur
Slide 10: A double-digit sustainable growth supported by new clients' acquisition
A double-digit sustainable growth supported by new clients’ acquisition, accelerated cross-selling and higher users’ engagement 10
Slide 11: Scaling the Edenred platform by growing the core
SCALING THE EDENRED PLATFORM BY GROWING THE CORE Growing the core Continued success in the SMEs acquisition >100k New SME contracts activated in 9M 2024 Increase in user engagement thanks to a stronger focus on customer centricity Monthly active users of Edenred ~+60% applications1 year-on-year
Slide 12: Scaling the Edenred platform by extending beyond
SCALING THE EDENRED PLATFORM BY EXTENDING BEYOND Extending Beyond An extended portfolio of Beyond Food and Beyond Fuel solutions to foster cross-selling Increase in the % of Meal & Food clients ~+15% having at least one extra solution1 Generating additional user-based revenue streams Number of a
Slide 13: External growth as an additional lever
EXTERNAL GROWTH AS AN ADDITIONAL LEVER TO STRENGTHEN EDENRED LEADING POSITIONS AND ENLARGE ITS TOTAL ADDRESSABLE MARKET Company Countries Market 2023 revenue Closing date Growth levers Beyond Synergies / Cross-selling / Non-regulated ~€110m Q2 2023 Country roll-out Engagement Benefits & Beyond Syner
Slide 14: Extending Beyond offer leads to decreasing weight of Meal & Food
EXTENDING EDENRED “BEYOND” OFFER LEADS TO A DECREASING WEIGHT OF MEAL & FOOD SOLUTIONS Benefits & Engagement Mobility Edenred Operating Revenue Operating Revenue Operating Revenue Beyond +8pts Food +5pts ~57% Other ~34% Beyond ~32% Fuel ~26% Meal & ~27% ~56% ~66% Food ~43% Meal & ~74% ~68% Fuel Food
Slide 15: Q3 2024 balance sheet and extra-financial highlights
Q3 2024 balance sheet and extra-financial highlights 15
Slide 16: Balance sheet highlights
BALANCE SHEET HIGHLIGHTS Successful issuance of an 8-year €500m bond Share buyback program A €500m bond issued on July 29, 2024, with an order book Cancellation of 5.6 million treasury shares more than 4x oversubscribed • Purchased for a total consideration of €224m • Bond maturing in 2032 • Can
Slide 17: Extra-financial highlights
EXTRA-FINANCIAL HIGHLIGHTS Edenred’s strong commitments to reducing its GHG emissions approved by SBTi: By 51.4% for absolute scope 1 and 2 By 20301 By 55% per million EUR value added2 for scope 3 By 90% for absolute scope 1 and 2 By 20501 By 97% per million EUR value added2 for scope 3 1.
Slide 18: Agenda
AGENDA 1. Q3 2024 highlights 2. Q3 2024 revenue 3. 2024 outlook 4. Update on Italy and potential implications on 2025 outlook 18
Slide 19: Double-digit LFL growth in operating revenue and other revenue in Q3 2024
DOUBLE-DIGIT LIKE-FOR-LIKE GROWTH IN OPERATING REVENUE AND OTHER REVENUE IN Q3 2024 … LFL Reported Q3 2024 Q3 20231 Scope FX growth1 growth1 Operating revenue €619 €583 562 +10.8% +6.0% +1% -5.9% Other revenue €63 €59 +18.0% +7.2% -0.7% -10.1% Total revenue €682 €642 +11.5% +6.1% +0.9% -6.2% 1. Base
Slide 20: Contributing to a strong 9-month performance
…CONTRIBUTING TO A STRONG 9-MONTH PERFORMANCE LFL Reported 9M 2024 9M 20231 Scope FX growth1 growth1 Operating revenue €1,889 €1,678 562 +13.8% +12.5% +2.9% -4.2% Other revenue €187 €141 +41.1% +33.0% +0.1% -8.3% Total revenue €2,076 €1,819 +15.9% +14.1% +2.7% -4.5% 1. Based on adjusted 2023 figures
Slide 21: Solid performance in Europe
Q3 & 9M 2024 operating revenue – Europe SOLID PERFORMANCE IN EUROPE Q3 comments OPERATING REVENUE vs. 9M 2023 Slowdown in some key countries such as France, Germany and Central Europe, partially offset by strong dynamics in Southern Europe €1,141m +9.4% 60% in 9M 24 LFL +12.0% France as reported H
Slide 22: Strong momentum in Latin America
Q3 & 9M 2024 operating revenue – Latin America STRONG MOMENTUM IN LATIN AMERICA Q3 comments OPERATING REVENUE vs. 9M 20231 Brazil €562m +20.2% Double-digit growth in Benefits & Engagement driven by good business momentum and the growing contribution of the Itau Unibanco 30% in 9M 24 LFL +10.3% par
Slide 23: Hyperinflation in Argentina
HYPERINFLATION IN ARGENTINA Argentina represents ~1% of Edenred FY 2024 operating revenue Argentina’s contribution to Edenred 2024 operating revenue LFL growth is expected at ~+1% This contribution will however not be equally spread over 2024: ▪ First 9M 2024: +2.4% contribution ▪ Q4 2024: con
Slide 24: Continued robust other revenue generation in Q3
Q3 other revenue CONTINUED ROBUST OTHER REVENUE GENERATION IN Q3 Strong like-for-like growth in Q3 2024 (+18.0%) thanks to a OTHER REVENUE healthy float increase in all geographies Level of other revenue is normalizing, however, due to lower €44m €63m in Q3 24 interest rates in Brazil (Selic dow
Slide 25: Agenda
AGENDA 1. Q3 2024 highlights 2. Q3 2024 revenue 3. 2024 outlook 4. Update on Italy and potential implications on 2025 outlook 25
Slide 26: 2024 Guidance Confirmed
2024 GUIDANCE CONFIRMED EBITDA Cash conversion Guidance confirmed and range narrowed Guidance confirmed €1,245m – €1,285m1 >70% EBITDA to FCF conversion rate3 (vs between €1,230m - €1,300m as announced on July 23rd, 2024) Slight increase in expected other revenue2 to be offset by negative FX impac
Slide 27: Agenda
AGENDA 1. Q3 2024 highlights 2. Q3 2024 revenue 3. 2024 outlook 4. Update on Italy and potential implications on 2025 outlook 27
Slide 28: Potential cap on merchants fees in Italy? (1/2)
POTENTIAL CAP ON MERCHANTS FEES IN ITALY? (1/2) What happened? ▪ On October 23rd, 2024, an amended Italian Competitiveness Bill has been presented to a parliamentary commission ▪ This amended Italian Competitiveness Bill embeds 400 amendments ▪ One amendment calls for the introduction of a 5% cap on
Slide 29: Potential cap on merchants fees in Italy? (2/2)
POTENTIAL CAP ON MERCHANTS FEES IN ITALY? (2/2) What is Edenred position? ▪ We (Edenred and ANSEB1) believe a cap on commissions on meal vouchers is legally not applicable, as: − It would run counter to the principle of freedom to set prices, a fundamental principle of European and Italian commercia
Slide 30: Edenred in Italy
EDENRED IN ITALY Edenred Italy’s business profile has been … and will further rebalance in the upcoming significantly rebalanced over the last years… years Split of Edenred Italy Operating Revenue ▪ Structural trends around working world transformations leading to recruitment, retention and engageme
Slide 31: How a potential fee cap in Italy translates into financial performance
HOW A POTENTIAL FEE CAP IN ITALY TRANSLATES INTO EDENRED FINANCIAL PERFORMANCE? Weight of Italian meal solutions has remained broadly stable since 2021 Potential impact of a 5% cap on merchant's fees Meal solutions in Italy as a % of Edenred ▪ No impact on float operating revenue (in €m) ▪ Maximum p
Slide 32: Meal vouchers market in Italy remains attractive for Edenred
DESPITE THIS RISK, THE MEAL VOUCHERS MARKET IN ITALY REMAINS ATTRACTIVE FOR EDENRED A vastly underpenetrated market, especially in the SME1 segment A market mainly digital with low face value SME Meal voucher market size SME market penetration ▪ A market that is >90% digital (# of SMEs) (% of SMEs e
Slide 33: Potential implication on Edenred EBITDA growth outlook
POTENTIAL IMPLICATION ON EDENRED EBITDA GROWTH OUTLOOK >+10% LFL growth1 >+12% LFL growth 1,285 1,245 Core growth Beyond growth M&A integration 2024e Operating revenue Operating Other revenue 2025e Potential fee cap in 2025e growth leverage and decline (before potential Italy (after potential effici
Slide 34: Potential implication on EBITDA growth outlook in 2025
POTENTIAL IMPLICATION ON EDENRED EBITDA GROWTH OUTLOOK IN 2025 Edenred is confident to deliver Minimum +10% LFL EBITDA growth in 20251 even in case of a 5% cap on merchants’ fee implemented in Italy, based on the assumption of an application date as of July 2025 If the Italian risk does not materi
Slide 35: Edenred is confident in its capacity to deliver sustainable and profitable growth
EDENRED IS CONFIDENT IN ITS CAPACITY TO DELIVER SUSTAINABLE AND PROFITABLE GROWTH IN 2025 AND BEYOND 1 Strongly recurring revenue and resilience of its platform model with a diversified portfolio of solutions and a well-balanced geographical exposure 2 Beyond strategy, unlocking new growth opportuni
Slide 36: Save the date: Investor Update
SAVE THE DATE Investor Update “How Beyond22-25 plan has shaped the future of Edenred and reinforced its sustainable and profitable growth profile” Virtual, December 3rd from 10.00 am to 12.00 pm (Paris time) 36
Slide 37: Enrich connections. For good.
Enrich connections. FOr QOOd
Slide 38: Appendices
APPENDICES
Slide 39: FY 2024 expectations for below-EBIT items
FY 2024 EXPECTATIONS FOR BELOW-EBIT ITEMS Other income Net financial Effective tax rate Minority interests and expenses expenses €(195)m c.€(30)m 30% to 33% c.€(42)m to €(205)m 1. x 39
Slide 40: Operating revenue by region
OPERATING REVENUE BY REGION Published Figures Adjusted Figures Q1 Q2 Q3 9M Q1 Q2 Q3 9M 1 1 1 1 In € millions 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 Europe 383 324 391 353 367 342 1,141 1,019 383 324 391 353 367 342 1,141 1,019 France 91 86 86 83 79 78 256 246
Slide 41: Other revenue by region
OTHER REVENUE BY REGION Q1 Q2 Q3 9M In € millions 2024 2023 2024 2023 2024 2023 2024 2023 Europe 32 22 33 27 33 32 97 81 France 8 4 8 5 8 6 24 14 Rest of Europe 25 19 24 21 24 26 74 66 Latin America 20 12 20 12 20 20 61 45 Rest of the world 8 4 11 5 10 7 29 15 Other revenue 60 38 64 44 63 59 187 141
Slide 42: Total revenue by region
TOTAL REVENUE BY REGION Published Figures Adjusted Figures Q1 Q2 Q3 9M Q1 Q2 Q3 9M 1 1 In € millions 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 1 Europe 415 346 424 380 400 374 1,238 1,100 415 346 424 380 400 374 1,238 1,100 France 98 90 95 88 88 83 280 261 98 90
Slide 43: Operating revenue by business line
OPERATING REVENUE BY BUSINESS LINE Published Figures Adjusted Figures Q1 Q2 Q3 9M Q1 Q2 Q3 9M 1 1 In € millions 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 1 Benefits & Engagement 408 317 413 345 398 358 1,219 1,020 408 325 413 352 398 366 1,219 1,043 Mobility 150
Slide 44: 2023 published and adjusted figures
2023 PUBLISHED AND ADJUSTED1 FIGURES (in € millions) Edenred - Operating Revenue Q1 Q2 Q3 Q4 FY Published 2023 519 562 575 655 2 311 Adjusted 2023 526 569 583 664 2 343 Edenred - EBITDA H1 H2 FY Published 2023 483 611 1 094 Adjusted 2023 483 611 1 094 Edenred - EBITDA margin H1 H2 FY 2023 reported 4
Slide 45: Average exchange rate
AVERAGE EXCHANGE RATE Average rates Average rates Spot rate as Spot rate as 2024 vs. 2023 2024 vs. 2023 2024 vs. 2023 of €1 = X foreign currency Q1 2024 Q1 2023 Q2 2024 Q2 2023 Q3 2024 Q3 2023 Q4 2023 YTD 2023 of 09.30.2023 Change (in %) Change (in %) Change (in %) 09.30.2024 Brazilian real (BRL) 5.
Slide 46: 2024 expected calendar effects
2024 EXPECTED CALENDAR EFFECTS Q1 Q2 Q3 Q4 2024 Nb of Nb of Nb of Nb of Nb of Working days days days days days days Europe (1) 1 1 1 2 Latin America (2) 2 1 2 4 Rest of the world (0) 0 1 1 1 TOTAL (1) 1 1 1 2 46