Edenred SA · EURONEXT:EDEN
Edenred SA — FY2016 Earnings Presentation
61 slides from Edenred SA's earnings presentation, Feb 23, 2017
Slide 1: 2016 Annual Results
2016 Annual Results February 23, 2017
Slide 2: Agenda
Agenda 1. 2016 Key Figures & Highlights 2. 2016 Financial Results 3. 2017 Outlook & Perspectives
Slide 3: 2016 Key Figures & Highlights
I. 2016 Key Figures & Highlights Bertrand Dumazy, Chairman & CEO
Slide 4: Edenred in a nutshell
Edenred in a nutshell(1) A STRONG ECOSYSTEM A WORLD LEADER A DIGITAL COMPANY #1 worldwide 70% digital 43m in employee benefits issue volume Employee Beneficiaries 30% market share in employee benefits 42 countries 2bn Transactions A WIDE PORTFOLIO A UNIQUE CULTURE in 2016 OF SOLUTIONS ≈ 8,000 employ
Slide 5: A year of strong achievements paving the way for Fast Forward
A year of strong achievements paving the way for successful implementation of our Fast Forward strategic plan ▌ Significant progress achieved in our main business lines Good single-digit organic revenue growth in Employee Benefits, with further acceleration of digitalization in Europe, several inn
Slide 6: 2016 Key Figures & Highlights
2016 Key Figures 1. Key Figures & Highlights 2. Highlights by Geography & by Business Line
Slide 7: 2016 Key Financial Figures (1/3)
2016 KEY FINANCIAL FIGURES (1/3) Solid growth exceeding our historical medium-term targets… Historical FY 2016 medium-term targets L/L(1) growth Targets ISSUE VOLUME +10.0% +8-14%(2) FLOW-THROUGH RATIO(3) 56.5% >50% FFO(4) +15.4% >10% (1) Like-for-like: at comparable scope of consolidation and const
Slide 8: 2016 Key Financial Figures (2/3)
2016 KEY FINANCIAL FIGURES (2/3) …and also exceeding our new medium-term targets New Fast Forward FY 2016 medium-term targets L/L growth Targets OPERATING REVENUE(1) +8.3% > +7% OPERATING EBIT(2) +17.3% > +9% FFO +15.4% > +10% (1) Includes Operating revenue with issue volume (commissions paid by cli
Slide 9: A record high level of EBIT
2016 KEY FINANCIAL FIGURES (3/3) A record high level of EBIT In €m 367 370(1) 2016 target 355 €350-370m(2) 343 343 341 328 Reported growth L/L growth vs. 2015 vs. 2015 +8.4% +13.8% 2010 2011 2012 2013 2014 2015 2016 (1) Including a negative €32m currency effect and a positive €14m scope effect. (2)
Slide 10: 2016 Edenred Digitalization
2016 EDENRED DIGITALIZATION Acceleration from 65% to 70% with a 7pt improvement in Europe In 2016 DIGITAL Latin America % OF ISSUE VOLUME 96% +2pts vs 2015 Ambition Europe >85% 70% 43% +7pts vs 2015 Rest of the world by 2020 of Group IV vs. 65% in 2015 73% +3pts vs 2015 10
Slide 11: 2016 Key Figures & Highlights
2016 Key Figures 1. Key Figures & Highlights 2. Highlights by Geography & by Business Line
Slide 12: Sustained growth across all regions
A GLOBAL FOOTPRINT WITH A PRESENCE IN 42 COUNTRIES Sustained growth across all regions EUROPE 47% of 2016 IV +7.4% L/L IV growth ROW 4% of 2016 IV +10.3% L/L IV growth LATIN 49% AMERICA of 2016 IV +12.4% L/L IV growth 12
Slide 13: L/L issue volume growth by business line
L/L IV GROWTH BY BUSINESS LINE High single-digit growth in Employee Benefits and double-digit growth in Expense Management EMPLOYEE EXPENSE INCENTIVE & PUBLIC SOCIAL BENEFITS MANAGEMENT REWARDS PROGRAMS % OF 2016 GROUP IV 75% 19% 4% 2% 79% 16% 4% 1% in 2015 in 2015 in 2015 in 2015 TOTAL 2016 IV IN €
Slide 14: Employee Benefits
EMPLOYEE BENEFITS #1 worldwide 166 1 billion 850,000 programs meals served restaurants and paid for and food shops per year 2016 figures 14
Slide 15: Employee Benefits medium-term targets
EMPLOYEE BENEFITS Medium-term targets From 60% in 2015 to Mid-single-digit <70% >80% digital L/L operating revenue of Group operating issue volume by 2020 growth in the medium revenue by 2020 term In 2016 +8% 71% 65% 15
Slide 16: An exciting year for Employee Benefits
EMPLOYEE BENEFITS An exciting year for Employee Benefits Several new contracts, including… In details 2016 IV €14.7bn Frigorifico JBS 2016/2015 L/L IV growth •• First 15.128 time beneficiaries subscription • Online platform +8.5% • to a meal 19 M€ yearlyvouchers solution IV (access to Childcare Vouc
Slide 17: Speeding up mobile & online payment initiatives
EMPLOYEE BENEFITS Speeding up mobile & online payment initiatives across different regions 2016 January May June August December Mobile payment app Apple Pay Mobile e-voucher Online payment Ticket Restaurant® Ticket Restaurant® card Ticket Xpress Ticket Restaurant® & mobile app in Italy on Apple Pay
Slide 18: Several favorable regulatory developments in 2016
EMPLOYEE BENEFITS Several favorable regulatory developments in 2016 2001-2015 2016 ▌ 57% face value increase for Ticket Ticket Restaurant in Romania Commuter Ticket Ticket Ticket Ticket check Guarderia CESU Vacanţa Plus (Germany) Junior in December 2016 (USA) (Portugal) (France) (Romania) (Czech) Ti
Slide 19: Expense Management: Becoming a global player
EXPENSE MANAGEMENT Becoming a global player Gas stations & Fuel cards & Fuel liters workshops on-board units managed In 2015 32,000 0.9m 3.3bn In 2016 with Embratec for 8 months 36,000 1.6m 4.2bn 2016 pro-forma with Embratec & UTA for 12 months 70,000 2.6m 6.3bn 19
Slide 20: Expense Management medium-term targets
EXPENSE MANAGEMENT Medium-term targets From 14% in 2015 to Already Double-digit >25% ~100% digital L/L operating revenue of Group operating issue volume growth in the medium revenue by 2020 term In 2016 +13% 18% 20
Slide 21: An exciting year for Expense Management
EXPENSE MANAGEMENT An exciting year for Expense Management 2016 IV €3.8bn LATAM EUROPE ROW • Embratec integration • Launch of Spendeo in • Promising new into Ticket Log in Brazil Romania with UTA services launch with 2016/2015 Cardtrend in Asia L/L IV growth • Strong growth of • Continued success of
Slide 22: Acquisition of Embratec and launch of Ticket Log in Brazil
EXPENSE MANAGEMENT Acquisition of Embratec(1) and launch of Ticket Log in Brazil leading to #1 position in Latin America ▌ Creation of a major player 65% owned ▌ Creation of the #1 player in Brazil’s light fleet by Edenred market and #2 in the heavy fleet market: ~27k clients Embratec >1m active
Slide 23: A value-creating transaction with significant synergies
EXPENSE MANAGEMENT A value-creating transaction with significant synergies Business synergies Cost synergies Improve sales efficiency Corporate and Support function rationalization Densify geographical reach IT platform mutualization Leverage best practices (loyalty, pricing, etc.) Econo
Slide 24: Launch of new fuel cards and solutions in France and Mexico
EXPENSE MANAGEMENT Launch of new fuel cards and solutions in France and Mexico ▌ Ticket Fleet Pro, a new light fleet offer, launched by LCCC(1) and UTA and distributed by Edenred France ▌ Main advantages: UTA card with a specific design and network Offered with a tag for tolls and car parks, and
Slide 25: 2016 Financial Results
II. 2016 Financial Results Patrick Bataillard, Executive VP, Finance
Slide 26: Income statement
INCOME STATEMENT Strong L/L and reported operating revenue & operating EBIT growth Change Change In € millions 2016 2015 reported L/L Issue volume 19,814 18,273 +8.4% +10.0% Operating revenue 1,073 1,000 +7.3% +8.3% Financial revenue 66 69 -4.2% +0.2% Total revenue 1,139 1,069 +6.5% +7.8% Operating
Slide 27: 2016 Issue Volume
2016 ISSUE VOLUME Solid +10.0% like-for-like growth, of which +12.7% in Q4 FY 2015 IV €18,273m €1,820m L/L issue volume increase Like-for-like +10.0% 10.0% 10.2% 12.7% 10.0% 9.3% 8.4% 8.7% 9.3% 7.0% 7.4% Scope(1) +5.8% Q1 15 Q2 15 Q3 15 Q4 15 FY 15 Q1 16 Q2 16 Q3 16 Q4 16 FY 16 €(1,347)m currenc
Slide 28: 2016 Issue Volume – Latin America
2016 ISSUE VOLUME – LATIN AMERICA Stable performance in Brazil & acceleration in Mexico 2016 IV L/L growth Q1 Q2 Q3 Q4 FY €9.666m Brazil +5.3% +3.7% +4.5% +3.4% +4.2% 49% 2016/2015 of total L/L IV growth issue volume Hispanic +11.1% +16.5% +28.0% +37.1% +23.8% Latin America +12.4% Total Latin Americ
Slide 29: 2016 Issue Volume – Europe
2016 ISSUE VOLUME – EUROPE Continued positive momentum across the region 47% IV 2016 of total issue volume L/L growth Q1 Q2 Q3 Q4 FY €9.352m Europe excluding +8.4% +11.5% +7.7% +8.1% +8.9% France 2016/2015 L/L IV growth France +4.2% +6.2% +3.4% +4.5% +4.6% +7.4% Total Europe +6.9% +9.7% +6.4% +6.8%
Slide 30: 2016 Total Revenue
2016 TOTAL REVENUE Strong +9.9% L/L increase in Q4 FY 2015 €1,069m €83m L/L total revenue increase Revenue in €m % L/L growth % L/L growth in €m Like-for-like +7.8% FY 2015 First nine months Q4 FY 2016 FY 2016 Operating revenue 1,000 +7.8% +10.0% +8.3% 1,073 Financial revenue 69 -1.9% +6.8% +0.2%
Slide 31: 2016 Operating Revenue with & without Issue Volume
2016 OPERATING REVENUE WITH & WITHOUT ISSUE VOLUME High single-digit growth in operating revenue both with and without issue volume Operating revenue with issue volume Operating revenue without issue volume L/L growth by region in €m % L/L growth % L/L growth in €m in €m % L/L growth % L/L growth in
Slide 32: Employee Benefits take-up rate
FOCUS ON 2016 EMPLOYEE BENEFITS TAKE-UP RATE(1) Stable take-up rate in Employee Benefits (+2bp) 4.69% 4.67% A 2bp increase, thanks to improvements in Europe, which more than offset a decline in Brazil 2015 2016 (1) Ratio of operating revenue with issue volume to total issue volume. 32
Slide 33: 2016 Financial Revenue
2016 FINANCIAL REVENUE Financial revenue almost stable in 2016 reflecting a float increase in all geographies, offset by interest rate decreases in Europe Financial revenue in €m % L/L growth % L/L growth in €m FY 2015 First nine Q4 FY 2016 FY 2016 Float increase in all geographies, of €165m in 20
Slide 34: 2016 EBIT
2016 EBIT Strong operating EBIT growth of +17.3% L/L due to an improvement in Europe and stability in Latin America Change Change Operating revenue In € millions 2016 2015 reported L/L and operating EBIT performance by Operating revenue 1,073 1,000 +7.3% +8.3% region Financial revenue 66 69 -4.2% +0
Slide 35: Operating EBIT margin
OPERATING EBIT MARGIN(1) A +1.1pt improvement, despite negative currency geographical mix effect Operating Currency flow-through geographical mix ratio(2) of 56.5% effect and changes in scope Operating EBIT/ Operating EBIT/ operating revenue operating revenue (reported) (reported) +2.2pts -1.1pt 27.
Slide 36: 2016 EBIT bridge
2016 EBIT BRIDGE Strong performance despite negative currency impacts Operating revenue Financial revenue Changes Currency effect(1) L/L∆: €83m L/L∆: €0m in scope 2016 EBIT 2015 EBIT (reported) (reported) €47m €0m €14m €370m €341m €(32)m of which: €(6)m from BRL Flow-through €(12)m from VEF Operatin
Slide 37: 2016 Net Profit
2016 NET PROFIT A positive +1.9% increase in net profit Change In € millions 2016 2015 reported EBIT 370 341 +8.4% Non-recurring income and expenses, net (26) (23) Acquisition fees Share of associate net profit 8 9 & other fees (9) Net financial expense (58) (47) Impairment of assets / (15) assets w
Slide 38: Cash flow statement
CASH FLOW STATEMENT Strong and growing generation of Free Cash Flow In € millions 2016 2015 Change L/L Funds from operations 299 280 +15.4% Increase/(decrease) in cash linked to changes in float (1) 179 137 (Increase)/decrease in restricted cash (104) (41) (Increase)/decrease in working capital (exc
Slide 39: Net debt bridge
NET DEBT BRIDGE Net debt improved thanks to strong Free Cash Flow generation Net debt position Currency effects (2) and (before currency December 31, 2015 other effects Net debt December 31, 2016 Free Cash External Shareholders’ and other non- non-recurring position items Net debt position Flow acqu
Slide 40: Current financial assets
CURRENT FINANCIAL ASSETS Prudent, optimized cash management Average investment rate: 2.7% Optimized maturity management policy at December 31, 2016 (vs. 2.9% in 2015) ▌ Investment exclusively in money market In % of total cash & cash equivalents and marketable instruments in local currencies (bank t
Slide 41: Debt maturities
DEBT MATURITIES After 2017 bond refinancing, no major reimbursement due before 2020 Improved leverage ratio of 1.4x A well-balanced debt profile with an average vs. 1.6x in 2015 maturity of 4.4 years at December 31, 2016 Strong investment grade S&P rating BBB+ Bonds Gross debt: Average cost of debt:
Slide 42: Proposed 2016 dividend
PROPOSED 2016 DIVIDEND A dividend payout leaving flexibility to carry out growth investments An adjusted dividend distribution Reflecting the new capital allocation policy ▌ Maximize value creation for 2016 recommended dividend(1) shareholders through a balanced deployment of capital between: €0.62
Slide 43: Agenda
Agenda 1. 2016 Key Figures & Highlights 2. 2016 Financial Results 3. 2017 Outlook & Perspectives
Slide 44: 2017 Outlook & Perspectives
III. 2017 Outlook & Perspectives
Slide 45: Edenred ambition: Be the global leader
Edenred ambition Be the global leader of value- in selected to B2B added transactional customers solutions ecosystems 45
Slide 46: Edenred: a unique positioning
EDENRED: A UNIQUE POSITIONING Leverage highly specific expertise to drive future growth Financial Intermediation Selected ecosystems FinTech RegTech Issuer & Processor Compliance Big data & Analytics Data Intermediation 46
Slide 47: Fast Forward strategic plan
FAST FORWARD STRATEGIC PLAN With Fast Forward, Edenred will accelerate its transformation Harness the untapped potential of Employee Benefits Rebalance Edenred’s profile in terms of business models and geographies Become a global leader in the underpenetrated and fast-growing Expense Management mark
Slide 48: Early 2017 development in Expense Management: UTA
EARLY 2017 DEVELOPMENT IN EXPENSE MANAGEMENT Becoming #2 issuer of multi-brand Europe-wide solutions Edenred increases its stake Expense Management: from 34% to 51%(1) Edenred’s 2nd growth engine ▌ Acquisition of an additional 17% of UTA’s capital for ~€83m A world leader in Expense Management ▌ Acc
Slide 49: Accelerating profitable and sustainable growth at UTA
EARLY 2017 DEVELOPMENT IN EXPENSE MANAGEMENT To accelerate generation of profitable and sustainable growth Enhance UTA’s Expand Tackle new market core offering internationally segments Network optimization, Direct sales structures in Working jointly with procurement & pricing at Central & Eastern Ed
Slide 50: Outlook: 2017 guidance
OUTLOOK 2017 guidance in line with Fast Forward medium-term targets Fast Forward 2017 expected business trends medium-term targets based on current ▌ Europe: sustained growth business profile ▌ Latin America: same pattern as 2016 L/L operating Sustained growth in Mexico with some macroeconomic unc
Slide 51: Appendices
| Appendices Edenred
Slide 52: Issue volume
ISSUE VOLUME Q1 Q2 Q3 Q4 FY In € millions 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 France 767 735 806 696 676 614 1,054 965 3,303 3,010 Rest of Europe 1,452 1,346 1,536 1,395 1,399 1,353 1,662 1,559 6,049 5,653 Latin America 1,872 2,284 2,252 2,274 2,564 2,030 2,978 2,264 9,666 8,852 Rest o
Slide 53: Total operating revenue
TOTAL OPERATING REVENUE Q1 Q2 Q3 Q4 FY In € millions 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 France 45 37 47 50 40 37 63 58 195 182 Rest of Europe 83 79 86 80 79 75 100 95 348 328 Latin America 88 110 109 111 124 97 135 99 456 418 Rest of the world 17 18 19 18 18 18 20 18 74 72 Total opera
Slide 54: Operating revenue with issue volume
OPERATING REVENUE WITH ISSUE VOLUME Q1 Q2 Q3 Q4 FY In € millions 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 France 32 31 33 30 28 26 49 45 142 132 Rest of Europe 73 68 77 71 70 66 84 78 304 283 Latin America 83 104 104 105 118 91 129 95 434 395 Rest of the world 9 10 10 9 9 10 10 9 38 38 Oper
Slide 55: Operating revenue without issue volume
OPERATING REVENUE WITHOUT ISSUE VOLUME Q1 Q2 Q3 Q4 FY In € millions 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 France 13 6 14 20 12 11 14 13 53 50 Rest of Europe 10 11 9 8 9 9 16 17 44 45 Latin America 5 6 5 7 6 6 6 4 22 23 Rest of the world 8 8 9 9 9 8 10 9 36 34 Operating revenue without IV
Slide 56: Financial revenue
FINANCIAL REVENUE Q1 Q2 Q3 Q4 FY In € millions 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 France 3 4 3 3 2 3 2 3 10 13 Rest of Europe 4 4 4 5 5 6 4 4 17 19 Latin America 7 10 8 8 9 7 10 8 34 33 Rest of the world 2 1 1 1 1 0 1 2 5 4 Financial revenue 16 19 16 17 17 16 17 17 66 69 Q1 Q2 Q3 Q4 F
Slide 57: Total revenue
TOTAL REVENUE Q1 Q2 Q3 Q4 FY In € millions 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 France 48 41 50 53 42 40 65 61 205 195 Rest of Europe 87 83 90 84 84 81 104 99 365 347 Latin America 95 120 117 120 133 104 145 107 490 451 Rest of the world 19 19 20 19 19 18 21 20 79 76 Total revenue 249 2
Slide 58: Operating EBIT & Total EBIT
OPERATING EBIT & TOTAL EBIT Change Change In € millions 2016 2015 reported L/L France 34 29 18.0% 14.8% Rest of Europe 110 89 23.9% 26.5% Latin America 166 169 -1.8% 9.6% Rest of the world 8 8 -3.7% -3.4% Worldwide structures (14) (23) -37.9% -13.9% Total Operating EBIT 304 272 11.6% 17.3% Change Ch
Slide 59: Negative working capital requirement
NEGATIVE WORKING CAPITAL REQUIREMENT A key component of the Group’s business model In € millions 2016 2015 In € millions 2016 2015 Goodwill 904 575 Total equity (1,161) (1,442) Intangible assets 313 182 Property, plant & equipment 38 37 Gross debt 2,021 1,622 Investments in associates 151 150 Provis
Slide 60: Average exchange rates
AVERAGE EXCHANGE RATES 2016 vs. 2016 vs. 2016 vs. 2016 vs. 2016 vs. 2015 2015 2015 2015 2015 €1 = X foreign currency Q1 2016 Q1 2015 Q2 2016 Q2 2015 Q3 2016 Q3 2015 Q4 2016 Q4 2015 FY 2016 FY 2015 Change Change Change Change Change (in% ) (in% ) (in% ) (in% ) (in% ) Bolivar Fuerte (VEF) 232.99 134.4
Slide 61: 2017 expected calendar effects
2017 EXPECTED CALENDAR EFFECTS Q1 Q2 Q3 Q4 2017 Nb of Nb of Nb of Nb of Nb of Working days % change % change % change % change % change days days days days days Europe 2 3.3% -2 -3.9% -1 -1.1% 0 -0.3% -1 -0.5% Latin America 3 4.6% -2 -2.6% 0 -0.1% -2 -3.1% -1 -0.3% Rest of the world 0 0.1% -2 -2.9%