Edenred Sa · EURONEXT:EDEN
Edenred Sa — Investor Presentation (September 2023)
67 slides from Edenred Sa's investor presentation, September 2023
Slide 1: Presentation for Investors September 2023
PRESENTATION FOR INVESTORS SEPTEMBER 2023
Slide 2: Contents
CONTENTS 1. Edenred, the everyday platform for people at work 2. Edenred’s vision 3. Beyond22-25: the new strategic plan driving this vision forward 4. A strengthened sustainable development policy 5. H1 2023 highlights 6. 2023 outlook 2
Slide 3: Edenred, the everyday platform for people at work in…
Edenred, the everyday platform for people at work in… 3
Slide 4: An intermediation and orchestration platform…
AN INTERMEDIATION AND ORCHESTRATION PLATFORM… >60m €38bn1 Users Business volume >2m Merchants c.1m Companies Everyday platform for people at work Eat Care Move Pay 1. In 2022 4
Slide 5: Driving positive impacts on essential needs, for all stakeholders
…DRIVING POSITIVE IMPACTS ON ESSENTIAL NEEDS, FOR ALL STAKEHOLDERS For employees For corporate clients ▪ Purchasing power and well-being ▪ Employee engagement and payroll efficiency ▪ Simplified mobility experience ▪ Fleet total cost of ownership ▪ Smoother corporate expense efficiency ENRICH CONNEC
Slide 6: A portfolio of 250+ programs
A PORTFOLIO OF 250+ PROGRAMS 61%1 26%1 13%1 Benefits & Engagement Mobility Complementary Solutions Fleet Virtual Accounts VCN2 API Meal and food Gifts Mobility Fuel / Ethanol EV charging maintenance Payable & portal Payroll NEW NEW Employee Rewards & Wellbeing Toll Freight payment VAT refund Acquiri
Slide 7: A global platform, operating in 45 countries
A GLOBAL PLATFORM, OPERATING IN 45 COUNTRIES H1 2023 operating revenue contribution Latin America Europe 29% 63% Rest of the World 8% 7
Slide 8: Contents
CONTENTS 1. Edenred, the everyday platform for people at work 2. Edenred’s vision 3. Beyond22-25: the new strategic plan driving this vision forward 4. A strengthened sustainable development policy 5. H1 2023 highlights 6. 2023 outlook 8
Slide 9: Edenred's vision
Edenred's vision New market Edenred platform paradigm advantage
Slide 10: A deep working world transformation
A DEEP WORKING WORLD TRANSFORMATION Surging demand for differentiated and customized employee benefits solutions % of HR managers planning to introduce a differentiated and personalized employee benefits strategy 72% 22% 2021 2023 increase in cross-selling rate1 in Employee +4 pts Benefits in 2022 S
Slide 11: A new era of mobility
A NEW ERA OF MOBILITY Soaring fleet manager demand for solutions to manage energy mix & automation Pain-point intensity for fleet managers [1-low; 5-high] Energy mix 2.8 & carbon emissions 4.2 Automation 3.1 (software & telematics) 3.4 2.5 Ownership strategy 2019 3.1 2021 in # of vehicles managed wi
Slide 12: New payment experiences
NEW PAYMENT EXPERIENCES A $25tn US B2B Payment market... …but still inefficient GRADUALLY SHIFTING TO DIGITAL of businesses pay other firms 81% via paper checks Cost to issue and deposit ~$9tn CHECKS $26bn checks for US businesses Annual losses from check $18bn fraud in the US ~$15tn ACH1 likely to
Slide 13: Edenred's vision: A unique platform
Edenred’s vision A unique platform
Slide 14: An efficient business model by design
AN EFFICIENT BUSINESS MODEL BY DESIGN 14
Slide 15: A 4-layer platform: experiences layer
A 4-LAYER PLATFORM Experiences layer for stakeholders: users, corporate clients and merchants 15
Slide 16: A 4-layer platform: business applications layer
A 4-LAYER PLATFORM Business applications layer to aggregate, orchestrate and distribute services for stakeholders 16
Slide 17: A 4-layer platform: digital services layer
A 4-LAYER PLATFORM Digital services layer to connect with the ecosystem through API libraries (expose and consume) 17
Slide 18: A 4-layer platform: infrastructure layer
A 4-LAYER PLATFORM Infrastructure layer at scale to leverage the power of cloud computing, data, AI1 and specific-purpose payment capabilities 1. Artificial intelligence 18
Slide 19: A platform combining local relevance & global scale
A PLATFORM COMBINING LOCAL RELEVANCE & GLOBAL SCALE Digital experiences Local Relevance Business applications Accelerated Time-to-Market Digital services Global Scale Infrastructure 19
Slide 20: A platform creating a competitive advantage for Edenred…
A PLATFORM CREATING A COMPETITIVE ADVANTAGE FOR EDENRED… Edenred platform advantage = New Beyond services More revenue ▪ Acquisition New client segments ▪ Engagement (e.g., B2B2C) ▪ Monetization Decreased cost to serve 20
Slide 21: …and increasing barriers to entry
…AND INCREASING BARRIERS TO ENTRY Dealing Investing Managing Managing with: in innovation: a multi-solution c. €38bn of c.1m corporate €1.9bn invested and multi-local business volume clients, 60m+ users since 2016 in portfolio: on behalf of and 2m+ partner technologies; 250+ programs employees, merc
Slide 22: Contents
CONTENTS 1. Edenred, the everyday platform for people at work 2. Edenred’s vision 3. Beyond22-25: the new strategic plan driving this vision forward 4. A strengthened sustainable development policy 5. H1 2023 highlights 6. 2023 outlook 22
Slide 23: Edenred has a strategic plan: 22-25
To materialize this vision and leverage its platform, Edenred has a strategic plan: 22-25 23
Slide 24: A target of €5bn in total revenue by 2030
BEYOND22-25 A TARGET OF €5BN IN TOTAL REVENUE BY 2030 Edenred total revenue (€bn) 5 M&A opportunity 2.0 1.1 Like-for-like growth on current 1.0 scope 2010 2015 2022 2030E1 1. At current exchange rates 24
Slide 25: Leading to bigger ambitions for Edenred
BEYOND22-25 LEADING TO BIGGER AMBITIONS FOR EDENRED Global Performance Ambition MEDIUM-TERM ANNUAL TARGETS (2022-2025) vs. >+10% in L/L EBITDA growth >+12% Next Frontier19-22 Annual FCF1 / EBITDA vs. >65% in conversion rate2 >70% Next Frontier19-22 SBTi3 Net Zero Carbon by 2050 Scopes 1, 2, 3A (1.5°
Slide 26: Operating on vastly underpenetrated markets
BEYOND22-25 OPERATING ON VASTLY UNDERPENETRATED MARKETS Benefits & Engagement Mobility Corporate Payment Addressable market1, business volume Addressable market2, business volume Addressable market3, business volume c. 35% c. 10% c. 30% €300bn €1,700bn ~€10,000bn c. 70% c. 65% c. 90% 1. Meal & Food
Slide 27: A strategy based on three major levers
BEYOND22-25 A STRATEGY BASED ON THREE MAJOR LEVERS … #3. Expand in New Businesses Seize new business opportunities Enriched business model 10% #2. Extend Beyond Accelerate Beyond Food, Fuel and Payment #1. Scale the 30% Core Grow further in underpenetrated core markets 60% Increased Total Addressabl
Slide 28: …cascading across business lines…
BEYOND22-25 …CASCADING ACROSS BUSINESS LINES… Benefits & Engagement Mobility Complementary Solutions Expand Expand in New Businesses, e.g., Expand in New Businesses, e.g., Expand in New Businesses, e.g., Rewards and recognition B2B2C mobility Ticket Xpress Asia expansion US employee benefits & engag
Slide 29: …and extending Edenred total addressable market up to x3
… AND EXTENDING EDENRED TOTAL ADDRESSABLE MARKET UP TO X3 Benefits & Engagement Mobility Complementary Solutions TAM: €1,000bn volume TAM: €4,000bn volume TAM: €25,000bn volume +Other (wellbeing, health, +Fleet mobility benefits) management +US ACH2,3 €700bn €2,300bn €15,000bn +On- road +B2E gifting
Slide 30: Scale the core - examples
BEYOND22-25 – Scale the Core SCALE THE CORE - EXAMPLES Benefits & Engagement Mobility Corporate Payment Further increase in take-up rate in Increase penetration of the SME Developing CSI platform ecosystem 2022 segment • Building new verticals (Property • Penetration of SME segment • Leverage
Slide 31: Focus on face-value increases in employee benefits
BEYOND22-25 – Scale the Core FOCUS ON FACE-VALUE INCREASES IN EMPLOYEE BENEFITS Actively harnessing the potential for face-value increases Usage of face-value increase is progressive Historical Average 2-year time horizon for face-value usage to 43% observation reach 85% of the new maximum legal fac
Slide 32: Example of GoHub, a data-driven platform for fleet management
BEYOND22-25 – Extend Beyond EXAMPLE OF GOHUB, A DATA-DRIVEN PLATFORM FOR THE MANAGEMENT OF PROFESSIONAL FLEETS A single platform to manage all fleet activities and processes Native integration with Fuel/Ethanol Maintenance Toll ~41,000 F&M solutions’ data Vehicles managed via GoHub, 9 months after i
Slide 33: Accelerating Beyond Food, Fuel and Payment through targeted acquisitions
BEYOND22-25 – Extend Beyond ACCELERATING BEYOND FOOD, FUEL AND PAYMENT STRATEGIES THROUGH TARGETED ACQUISITIONS Beyond Food Beyond Fuel Beyond Payment Extend Edenred’s compelling Accelerate in toll Expand Edenred CSI's Employee Benefits offer with payment solutions with the offering with the the acq
Slide 34: Acquisition of Reward Gateway in May 2023
Acquisition of Reward Gateway in May 2023 : a strategic operation to go Beyond 34
Slide 35: Reward Gateway, a leading and fast-growing employee engagement platform
BEYOND22-25 – Extend Beyond REWARD GATEWAY, A LEADING AND FAST-GROWING EMPLOYEE ENGAGEMENT PLATFORM Key facts & figures A fast-growing platform Revenue CAGR15/16-19/20 Revenue CAGR19/20-22/23e Founded in 2006 and currently held by private equity funds +31% In £m +18% 95 4,000+ customers 4,000+ 8
Slide 36: A holistic value proposition
BEYOND22-25 – Extend Beyond A HOLISTIC VALUE PROPOSITION Benefits Employee Rewards & Well-being Social Management Savings Recognition animation 1 Employee Benefits: Suite of 2 Employee Discounts: 3 Employee Recognition: 5 Employee Well-being: 6 Employee Platform modules salary sacrifice benefit
Slide 37: Operating on large addressable employee engagement markets
BEYOND22-25 – Extend Beyond OPERATING ON LARGE ADDRESSABLE EMPLOYEE ENGAGEMENT MARKETS1 United Kingdom Australia United States Leading positions in the UK and Australian employee engagement markets totaling TAM: £1.3bn1 TAM: £0.6bn1 TAM: £4.5bn1 £1.9bn c.27% c.26% c.33% c.73% c.74% c.67% Nascent but
Slide 38: Creating a unique platform providing a comprehensive employee benefits and engagement offer
BEYOND22-25 – Extend Beyond CREATING A UNIQUE PLATFORM PROVIDING A COMPREHENSIVE EMPLOYEE BENEFITS AND ENGAGEMENT OFFER Employee Benefits Employee Engagement Benefits management Employee Rewards & Well- Social platform Savings Recognition being animation Flexible benefits allocation engine Non-Edenr
Slide 39: A strongly performing business
BEYOND22-25 – Extend Beyond A STRONGLY PERFORMING BUSINESS Strong double-digit A high level of A high level of FCF Recurring revenue like-for-like growth EBITDA margin generation thanks to generation strong EBITDA and negative working capital model >30% CAGR EBITDA margin >45% CAGR c.80% of revenue
Slide 40: A deal with sizeable expected synergies
BEYOND22-25 – Extend Beyond A DEAL WITH SIZEABLE EXPECTED SYNERGIES Extended value proposition and business UK integration synergies synergies Combining the existing businesses of Edenred International roll-out with expansion to 6 countries and Reward Gateway already planned (Belgium, France, Ge
Slide 41: A strategic acquisition fully aligned with Edenred's Beyond strategy
BEYOND22-25 – Extend Beyond A STRATEGIC ACQUISITION FULLY ALIGNED WITH EDENRED’S BEYOND STRATEGY Edenred acquires a leading Employee Engagement platform with market leading A critical milestone in accelerating the 1 positions in the UK and in Australia and Beyond vision to extend Edenred Employee bu
Slide 42: Extending successful models to new geographies
BEYOND22-25 – Expand in New Businesses EXTENDING SUCCESSFUL MODELS TO NEW GEOGRAPHIES Expansion in Taiwan and the rest of Asia Launch of a gift card solution in Taiwan Disruption of the €1 billion gift card market in Taiwan Innovative and fully digital solution Benefit XPress Ambition to expand
Slide 43: Capitalizing on key assets
BEYOND22-25 CAPITALIZING ON KEY ASSETS +90% Brand equity ~10,000 60m+ €1.9bn A- of a market leader EBITDA growth highly engaged users invested since 2016 S&P Global Ratings over 2016-2022 people grade¹ 2m+ +25% +125 merchants +70% €385m increase in total years of cumulative revenue between industry
Slide 44: Contents
CONTENTS 1. Edenred, the everyday platform for people at work 2. Edenred’s vision 3. Beyond22-25: the new strategic plan driving this vision forward 4. A strengthened sustainable development policy 5. H1 2023 highlights 6. 2023 outlook 44
Slide 45: ESG has been embedded in Edenred's DNA for more than 10 years
ESG HAS BEEN EMBEDDED IN EDENRED’S DNA FOR MORE THAN 10 YEARS ENRICH CONNECTIONS. FOR GOOD. Edenred solutions Improve quality of life positively impacting user behaviors Preserve the environment Create value responsibly Responsible commitments at company level and through the solutions we offer 45
Slide 46: 2022 rounded out a successful ESG cycle…
2022 ROUNDED OUT A SUCCESSFUL ESG CYCLE… 12 out of the 17 UN4 sustainable develop- ment goals covered Key indicators 2017 2022 DIVERSITY1 % women among executive positions 21% 33% % employees who received at least 1 training session/year, TRAINING with 100% of employees to have received CSR training
Slide 47: …rewarded with inclusion in the CAC 40 ESG
…REWARDED WITH INCLUSION IN THE CAC 40 ESG joined the CAC 40 ESG index in September 2022 47
Slide 48: ESG commitments for the 2023-2030 cycle
BEYOND22-25 IN 2022, EDENRED SET OUT ITS ESG COMMITMENTS FOR THE UPCOMING 2023-2030 CYCLE Science Based Targets initiative EMPLOYER NET ZERO CARBON TRUSTWORTHY OF CHOICE BY 2050 TECH FOR GOOD 40% OF WOMEN AMONG EXECUTIVE SBTi1 TARGETS IN LINE WITH 1.5°C SUSTAINABLE FOOD & MOBILITY POSITIONS BY 2030
Slide 49: Contents
CONTENTS 1. Edenred, the everyday platform for people at work 2. Edenred’s vision 3. Beyond22-25: the new strategic plan driving this vision forward 4. A strengthened sustainable development policy 5. H1 2023 highlights 6. 2023 outlook 49
Slide 50: Scaling the Edenred platform to extend the value proposition
Scaling the Edenred platform to extend the value proposition 50
Slide 51: A platform combining local relevance & global scale
A PLATFORM COMBINING LOCAL RELEVANCE & GLOBAL SCALE Digital experiences Local Relevance Business applications Accelerated Time-to-Market Digital services Global Scale Infrastructure 51
Slide 52: Driving up user experience with mobile payment
Digital 1 experiences DRIVING UP USER EXPERIENCE WITH MOBILE PAYMENT Offering mobile payment at scale 46 mobile payment programs in 26 countries Edenred provides the most versatile offer allowing mobile payment with the 3 WSPs1 +50% mobile payment transactions in H1 2023 vs. H1 2022 1. Wallet Serv
Slide 53: Beyond payment: further enriching C3Pay super-app in the UAE
Business 2 applications BEYOND PAYMENT: FURTHER ENRICHING C3PAY SUPER-APP IN THE UAE Unemployment insurance New regulation introduced by the UAE government requiring employees to have insurance in case of involuntary job loss Positioning Edenred as an integrated payroll partner for HR Simple digit
Slide 54: Beyond fuel: best-in-class tax refund services in Europe
Business 2 applications BEYOND FUEL: ENHANCING THE VALUE PROPOSITION IN EUROPE WITH BEST-IN-CLASS TAX REFUND SERVICES Delivering outstanding operational and EBV Finance acquired in 2019 by Edenred financial results Top 3 biggest tax refund service provider in Best-in-class customer satisfaction Euro
Slide 55: Scale the Edenred platform by distributing third-party benefits
3 Digital services SCALE THE EDENRED PLATFORM BY DISTRIBUTING THIRD-PARTY BENEFITS , telemedicine services Mexico Stairwage, , salary payment on demand France Virtual healthcare & online licensed Digitalization, security and payment of doctors available 24/7 salary advances Easy-to-use solutio
Slide 56: Strengthening tech infrastructure by accelerating investments
4 Infrastructure STRENGTHENING TECH INFRASTRUCTURE BY ACCELERATING INVESTMENTS IN: API1@Scale Cloud Platform Data & AI2@Scale Payments@Scale Scaling our API engine to A comprehensive cloud State-of-the-art global data Edenred PayTech, the connect to customer strategy to scale the Edenred platform, w
Slide 57: Another record performance in H1 2023
Another buoyant quarter leading to another record performance in H1 2023 57
Slide 58: H1 2023: strong performance across the board
H1 2023: STRONG PERFORMANCE ACROSS THE BOARD €1,163m €483m €338m €202m +25.5% +35.2% + 12.9% +18.8% like-for-like vs. H1 2022 like-for-like vs. H1 2022 reported vs. H1 2022 reported vs. H1 2022 58
Slide 59: Further strong operating revenue growth in Q2 2023
FURTHER STRONG OPERATING REVENUE GROWTH IN Q2 2023 Like-for-like operating revenue growth vs. 2022 +20.4% +20.0% +19.6% Strong business momentum fueled by continued attractiveness of both core and Beyond solutions Q1 23 Q2 23 H1 23 59
Slide 60: Robust double-digit like-for-like growth in all business lines
ROBUST DOUBLE-DIGIT LIKE-FOR-LIKE GROWTH IN H1 2023 IN ALL BUSINESS LINES … Benefits & Engagement Mobility Complementary Solutions ▪ Corporate Payment % OF H1 2023 GROUP Services OPERATING REVENUE 61% 26% 13% ▪ Incentive & Rewards ▪ Public Social Programs €662m €282m €137m H1 2023 LIKE-FOR-LIKE OPER
Slide 61: …and in all geographies
…AND IN ALL GEOGRAPHIES Europe 63% +21.2% like-for-like Latin America 29% +14.7% like-for-like Rest of the World 8% +30.5% like-for-like 61
Slide 62: Top-line growth drove further increase in profitability
TOP-LINE GROWTH DROVE FURTHER INCREASE IN PROFITABILITY EBITDA up +35.2% L/L vs. H1 2022 EBITDA in €m €483m €365m EBITDA margin up 3.1pts like-for-like, driven by operating leverage and strong 41.5% contribution from other revenue margin 39.6% margin H1 2022 H1 2023 62
Slide 63: A robust financial position
A ROBUST FINANCIAL POSITION Rating improved to A-, stable outlook Financial interest up in 2023 A- rating confirmed by S&P after €1.2bn dual- Increased cost of debt due to higher interest tranche bond issuance in May 2023 following rates Reward Gateway acquisition ▪ Sensitivity: a 100bp increase
Slide 64: Capital allocation
CAPITAL ALLOCATION 2022 dividend Balanced capital deployment 1 Consistent capex policy to further drive innovation and €1.00 sales +11% vs. 2021 ▪ Capex = 7-8% of total revenue 2 Acquisitive in all 3 business lines in line with the Group’s progressive ▪ Stringent financial and strategic discipline g
Slide 65: Contents
CONTENTS 1. Edenred, the everyday platform for people at work 2. Edenred’s vision 3. Beyond22-25: the new strategic plan driving this vision forward 4. A strengthened sustainable development policy 5. H1 2023 highlights 6. 2023 outlook 65
Slide 66: Edenred to achieve new records in 2023, with EBITDA above €1bn
EDENRED TO ACHIEVE NEW RECORDS IN 2023, WITH FULL-YEAR EBITDA ESTIMATED ABOVE €1BN Generating sustainable and Further deploying the Beyond22-25 strategy profitable growth 1 Strong business momentum to be maintained: ▪ Vastly underpenetrated markets (SMEs) ▪ Attractiveness of Edenred solutions still
Slide 67: Enrich connections. For good.
Enrich connections. FOr QOOd