Edenred Sa · EURONEXT:EDEN
Edenred Sa — Investor Day (December 2024)
64 slides from Edenred Sa's investor day presentation, Dec 3, 2024
Slide 1: Investor Update December 3, 2024
we INVESTOR UPDATE DECEMBER 3, 2024
Slide 2: Executive Summary (1/2)
EXECUTIVE SUMMARY (1/2) Edenred is a global digital B2B2C platform, enriching connections for good, serving essential needs and bringing value for employees, corporate clients, partner merchants and public authorities. Edenred is well on track to deliver its Beyond22-25 strategic plan, significa
Slide 3: Executive Summary (2/2)
EXECUTIVE SUMMARY (2/2) While navigating a different environment in 2025, Edenred commits to a minimum +10% LFL EBITDA growth in 2025, including the potential implementation of a fee cap in Italy With high customer loyalty and a net retention rate already above 104% in Benefits & Engagement, Edenr
Slide 4: Introduction
INTRODUCTION Bertrand Dumazy Chairman and CEO 4
Slide 5: A global digital B2B2C platform, enriching connections for good
A global digital B2B2C platform, enriching connections for good. Benefits and Engagement Mobility Complementary solutions 100+ programs 90+ programs 60+ programs across ~30 countries across ~35 countries across ~30 countries Mutualized specific-purpose payment factory 5
Slide 6: Edenred is over-delivering its Beyond22-25 strategic plan
EDENRED IS OVER-DELIVERING ITS BEYOND22-25 STRATEGIC PLAN 6
Slide 7: In 2022, Edenred presented its Beyond22-25 plan
IN 2022, EDENRED PRESENTED ITS BEYOND22-25 PLAN Expand in New Businesses Expand in new business opportunities Extend Beyond Enriched business Accelerate Beyond Food, Fuel and Payment model in fast-growing markets Scale the Core Grow further in underpenetrated core markets Increased total addressable
Slide 8: Since 2021, generating sustainable growth…
SINCE 2021, GENERATING SUSTAINABLE GROWTH… Edenred Total Revenue [€bn] x1.8 ~2.9 2.5 2.0 1.6 2021 2022 2023 2024C1 LFL growth +21% +23% ~+14% 1. 2024 Consensus - Based on Visible Alpha consensus as of November 29th, 2024 8
Slide 9: … and profitable growth, above Beyond22-25 target
… AND PROFITABLE GROWTH, ABOVE BEYOND22-25 TARGET Edenred EBITDA [€bn] x1.9 ~1.26 1.1 0.8 0.7 2021 2022 2023 2024C1 LFL growth +23% +34% ~+16% (vs Beyond22-25 mid-term target at >+12% p.a.) EBITDA margin 41% ~44% 1. 2024 Consensus - Based on Visible Alpha consensus as of November 29th, 2024 9
Slide 10: Normative double-digit topline growth boosted by acquisitions and macro factors
NORMATIVE DOUBLE-DIGIT TOPLINE GROWTH BOOSTED BY ACQUISITIONS AND MACRO FACTORS Edenred Total Revenue evolution split by main growth drivers [2021-2024E1 period] +20% +19% +3% -2% +2% +3.5% +2.5% +11% Edenred solutions covering essential needs, with attractivity notably driven by secular trends e.g.
Slide 11: €650m additional cumulative EBITDA generated vs. Beyond22-25 mid-term target
€650M ADDITIONAL CUMULATIVE EBITDA GENERATED VS. BEYOND22-25 MID-TERM TARGET Edenred EBITDA evolution [€bn] ~€1.26bn CAGR21-24C LFL Additional cumulative EBITDA generated +24% over 22-24C1: ~€650m ~€0.94bn >+12% Beyond22-25 ~€0.67bn mid-term target 2021 2022 2023 2024C1 1. 2024C / 24C = 2024 Consens
Slide 12: Leveraging high EBITDA to free cash flow conversion to increase shareholder returns
LEVERAGING HIGH EBITDA TO FREE CASH FLOW CONVERSION TO INCREASE SHAREHOLDER RETURNS ~€1.4bn 3 Increasing invested in M&A of EBITDA generated addressable markets ~€3.2bn Both strategic and bolt-on acquisitions and Beyond share from 2022 to 2024C1 3 ~€0.8bn paid in dividends Cumulative FCF / EBITDA
Slide 13: Accelerating diversification both globally…
ACCELERATING DIVERSIFICATION BOTH GLOBALLY… Edenred Operating Revenue split [%] Δ21-24E1 Beyond +5pts - Beyond Food benefits (e.g. Gift, Commuting) 37% - Employee Engagement (e.g. Rewards & Recognition) - Beyond Fuel (e.g. EV2 charging, toll, maintenance) 3% -1pt Core Payment 32% 17% -2pts Core Fuel
Slide 14: … and in key geographies
… AND IN KEY GEOGRAPHIES Operating Revenue split [%] 20% 18% 14% 28% 21% 42% 11% 26% 8% 68% 46% 50% 2024E1 2024E1 2024E xx Share of Edenred Operating Core Fuel Beyond Core Meal & Food Revenue in 2024E 1. Pro forma - including RB acquisition in Brazil and IP acquisition in Italy 14
Slide 15: Starting 2025 significantly stronger
STARTING 2025 SIGNIFICANTLY STRONGER 15
Slide 16: Extended addressable market thanks to Beyond strategy and acquisitions
EXTENDED ADDRESSABLE MARKET THANKS TO BEYOND STRATEGY AND ACQUISITIONS Total Addressable Market (TAM) TAM vs. Edenred core ~x3 addressed market Notably through acquisitions: ▪ Beyond Food Benefits Beyond ▪ Beyond Fuel solutions solutions ▪ Nascent fast-growing markets (e.g., Employee engagement, EV1
Slide 17: Larger customer base
LARGER CUSTOMER BASE 2016 2024 Users 43m 60m+ c. 90m1 Clients 750k 1m Merchants 1.4m 2m+ 1m+ Business Volume €20bn €45bn $68bn 1. Monthly active users | Sources: Statista, Uber Eats corporate website 17
Slide 18: Strengthened digital platform
STRENGTHENED DIGITAL PLATFORM Reinforced skills Boosted digital platform Drop in unit cost per transaction -22% in 2024 vs 2021 ~500 Product experts ~€1.4bn Tech cash-out €100bn+ Of annual processed volume ~250 Data experts over 2022-2024E1 Strengthened compliance and security Digitalization -80% 20
Slide 19: Stronger operating leverage thanks to larger scale
STRONGER OPERATING LEVERAGE THANKS TO LARGER SCALE Edenred Operating EBITDA margin reported [%] Edenred Operating Expenditures base split [%] €1.6bn 38.9% 38.6% ~40% Variable costs -1% 38.5% of costs 2022 2023 2024C1 = ~€16m Structural ~60% operating Fixed costs EBITDA increase Operating EBITDA +0.7
Slide 20: Commitments in GHG emissions reductions approved by SBTi in 2024
COMMITMENTS IN GHG EMISSIONS REDUCTIONS APPROVED BY SBTI1 IN 2024 By 20302 By 20502 by 51.4% by 90% Edenred commitments in GHG emissions for absolute scope 1 and 2 for absolute scope 1 and 2 reductions by 55% by 97% per million EUR value added for scope 3 per million EUR value added for scope 3 1. S
Slide 21: Edenred begins 2025 better positioned for growth
Increased TAM Enlarged Strengthened Reinforced Boosted digital Operating with accelerated customer compliance ESG platform leverage diversification base and security commitments Edenred begins 2025 better positioned for growth and significantly stronger than we could have envisioned at the start of
Slide 22: On a path to deliver €5bn+ total revenue ambition by 2030
ON A PATH TO DELIVER €5BN+ TOTAL REVENUE AMBITION BY 20301 5+ Edenred Total Revenue [€bn] CAGR21-24C ~2.9 +20% 2.5 2.5 2.0 1.6 2021 2022 2023 2024C2 2030 1. At current FX rate | 2. 2024 Consensus - Based on Visible Alpha consensus as of November 29th, 2024 22
Slide 23: With a transformed platform, Edenred reaffirms its double-digit EBITDA growth ambition in 2025
WITH A TRANSFORMED PLATFORM, EDENRED REAFFIRMS ITS DOUBLE-DIGIT EBITDA GROWTH AMBITION IN 2025 23
Slide 24: Strategy
STRATEGY Constance Le Bouar Executive Vice President, Strategy, Marketing & Transformation 24
Slide 25: Edenred is confident in delivering strong operating revenue growth in 2025 and beyond
EDENRED IS CONFIDENT IN DELIVERING STRONG OPERATING REVENUE GROWTH IN 2025 AND BEYOND 25
Slide 26: Enriched and diversified revenue model
ENRICHED AND DIVERSIFIED REVENUE MODEL Volume-based fees Float1 Per solution used on the platform, e.g.: Benefits & Engagement Meal & Food Business Volume Take-up rate + + + + Platform + + = + Client Gift Business Volume Take-up rate Other subscription Operating revenue set-up fees Revenue fees Comm
Slide 27: Operating revenue growth relying on client acquisition and portfolio expansion
OPERATING REVENUE GROWTH RELYING ON CLIENT ACQUISITION AND PORTFOLIO EXPANSION 1 Client acquisition ▪ Underpenetrated core markets ~65% Contribution to 2024E ▪ Broader addressable markets Operating Revenue growth ▪ Low cost of acquisition Per solution used on the platform Client set-up fees + Platfo
Slide 28: 1. Client acquisition of large accounts…
1. CLIENT ACQUISITION OF LARGE ACCOUNTS… 2024 Flagship wins Global Account Management Audi 8 Countries GoodYear >60k Employees covered 2 Countries >15k Vehicles covered 28
Slide 29: …and also SME clients in underpenetrated markets thanks to an efficient go-to-market
…AND ALSO SME CLIENTS IN UNDERPENETRATED MARKETS THANKS TO AN EFFICIENT GO-TO-MARKET Micro Small Complementary Enterprises Enterprises channels 2024E Operating Revenue generated in countries >80% with SME market penetration <10% Websales Indirect Sales Telesales ROI on SME acquisition (1,200 FTEs) x
Slide 30: Extended reach through complementary indirect sales channels
EXTENDED REACH THROUGH COMPLEMENTARY INDIRECT SALES CHANNELS Illustrations B2B Distribution HR consulting companies distributing Edenred solutions in Spain B2B clients >300 signed in 2024 B2C Distribution Largest Fintech in Latin America distributing Edenred mobility toll offer clients reachable >10
Slide 31: 2. Portfolio expansion with net retention rates above 104%...
2. PORTFOLIO EXPANSION WITH NET RETENTION RATES ABOVE 104%... <5% Attrition rate in Business Volume Business Volumen-1 – Attritionn + Portfolio Expansionn = Net Retention Raten Business Volumen-1 >104% 104% 106% Net Retention Rate1 (2024E weighted average) 107% 116% 1. Benefits & Engagement scope on
Slide 32: …and with significant upside potential for cross-selling and upselling
…AND WITH SIGNIFICANT UPSIDE POTENTIAL FOR CROSS-SELLING AND UPSELLING Edenred Business Volume expansion potential within existing customer base (Illustrative) 2024E Full-potential ~1.5 ~5 >+200% Cross-sell solutions solutions per client full potential (3 to 8 solutions per country) Remaining per cl
Slide 33: Enriching the value proposition with Edenred solutions and 3rd party services
ENRICHING THE VALUE PROPOSITION WITH EDENRED SOLUTIONS AND WITH 3RD PARTY SERVICES Benefits & Engagement Mobility Benefits & Engagement Platform Toll solutions UTA SmartConnect® (national and international) Edenred Edenred 3rd party Telematics solutions Benefits Engagement benefits VAT Refund servic
Slide 34: Regulation on Meal & Food Benefits
REGULATION ON MEAL & FOOD BENEFITS Bertrand Dumazy Chairman and CEO 34
Slide 35: Regulated core Meal & Food represents 43% of Edenred operating revenue
REGULATED CORE MEAL & FOOD REPRESENTS 43% OF EDENRED OPERATING REVENUE Edenred Operating Revenue split [%] 37% Beyond 3% Core Payment 17% Core Fuel Regulated • Tax exemptions for both 43% Core Meal & Food employers and employees • Funded by employer (partly or in total) 2024E1 1. 2024 Estimates | 2.
Slide 36: Meal & Food benefits highly praised, founded on a structurally favorable regulatory environment
MEAL & FOOD BENEFITS HIGHLY PRAISED, FOUNDED ON A STRUCTURALLY FAVORABLE REGULATORY ENVIRONMENT Cherished by employees Yearly additional targeted +1,500€ purchasing power for employees Advantageous Essential Workers consider meal benefits for partner merchants for corporate clients 70% plans as an i
Slide 37: More tailwinds than headwinds in regulation supporting continuous market expansion
MORE TAILWINDS THAN HEADWINDS IN REGULATION SUPPORTING CONTINUOUS MEAL & FOOD BENEFITS MARKET EXPANSION Global Meal & Food Benefits Business Volume [€bn] Illustrative regulatory changes over the past few years Market size x2 in 10 years Face value increase in 13 countries over 22-24 period, and more
Slide 38: Finance
FINANCE Julien Tanguy Executive Vice President, Finance 38
Slide 39: Delivering superior performance while navigating a different environment in 2025
DELIVERING SUPERIOR PERFORMANCE WHILE NAVIGATING A DIFFERENT ENVIRONMENT IN 2025 39
Slide 40: P&L
P&L 40
Slide 41: Edenred commits to a minimum +10% LFL EBITDA growth in 2025
EDENRED COMMITS TO A MINIMUM +10% LFL EBITDA GROWTH IN 2025, INCLUDING POTENTIAL IMPLEMENTATION OF A FEE CAP IN ITALY >+10% LFL growth1 >+12% LFL growth Up to €60m ~€1.26bn impact Core growth Beyond growth M&A integration 2024C 2 2024c Operating revenue Operating Other revenue 2025E Potential fee ca
Slide 42: Hyperinflation in Argentina set aside, Edenred on double-digit operating growth profile in 2024
HYPERINFLATION IN ARGENTINA SET ASIDE, EDENRED ON DOUBLE-DIGIT OPERATING GROWTH PROFILE IN 2024 A positive contribution of hyperinflation in … which is expected to turn negative in Q4 2024 Argentina in FY 2023 and first 9-months in 2024… due to ARS1 devaluation in Q4 2023 Quarterly operating revenue
Slide 43: Enriched, diversified and increasingly recurring revenue model
ENRICHED, DIVERSIFIED AND INCREASINGLY RECURRING REVENUE MODEL Float1 Engagement Benefits & Platform Client set-up fees + subscription fees + Business Volume Take-up rate = Operating revenue + Other Revenue Total Platform = Revenue Mobility Client set-up fees + subscription fees + Business Volume Ta
Slide 44: Increased share of platform-based revenue streams…
Float Client Platform Business Take-up Operating Other Total one-off fees + subscription + Volume rate = revenue + Revenue = Revenue INCREASED SHARE OF PLATFORM-BASED REVENUE STREAMS… Client set-up fees + Platform subscription fees ▪ Platform set-up fees ▪ Subscriptions per employee per month to acc
Slide 45: …and continuous growth of volume-based revenue
Float Client Platform Business Take-up Operating Other Total one-off fees + subscription + Volume rate = revenue + Revenue = Revenue …AND CONTINUOUS GROWTH OF VOLUME-BASED REVENUE Business volume Take-up rate Take-up rate positive drivers Value proposition: ▪ Meal & Food solutions Attractive HR po
Slide 46: Other revenue to remain a high contributor to total revenue
Float Client Platform Business Take-up Operating Other Total one-off fees + subscription + Volume rate = revenue + Revenue = Revenue OTHER REVENUE TO REMAIN A HIGH CONTRIBUTOR TO TOTAL REVENUE Contribution of Other Revenue into Total … and will remain high despite normalization Revenue has increased
Slide 47: Continuous increase in float value…
Float Client Platform Business Take-up Operating Other Total one-off fees + subscription + Volume rate = revenue + Revenue = Revenue CONTINUOUS INCREASE IN FLOAT VALUE… Issue volume1 growth Stabilizing retention time Float2 increase in value Issue volume [€bn] Weeks of issue volume [#] 9.9 8.7 8.2 2
Slide 48: …partially offset by interest rates expected stabilization
Float Client Platform Business Take-up Operating Other Total one-off fees + subscription + Volume rate = revenue + Revenue = Revenue …PARTIALLY OFFSET BY INTEREST RATES EXPECTED STABILIZATION Central Bank deposit rates evolution from A >€4bn float mainly generated in Europe 2021 to 2026 (%) Europe L
Slide 49: Multiple levers to further improve operating EBITDA margin
MULTIPLE LEVERS TO FURTHER IMPROVE OPERATING EBITDA MARGIN Edenred Operating Expenditures base split [%] €1.6bn Management actions to improve cost base: Enabling future ▪ Platform scale effect operating EBITDA margin ~40% Variable ▪ Global contracts renegociation improvement costs ▪ Go to market eff
Slide 50: EBITDA growth translating into strong adjusted EBIT generation
EBITDA GROWTH TRANSLATING INTO STRONG ADJUSTED1 EBIT GENERATION 450 Stable level of D&A1 as compared to Total 400 Revenue… …leading to improved adjusted1 EBIT margin 9.5% 350 D&A1 to Total Revenue; D&A1 [%, €m] Adjusted1 EBIT; Adjusted1 EBIT margin [€m, %] 7.5% 300 5.8% 1100 5.4% 1200 60.0% 250 5.3%
Slide 51: With below EBIT items positively impacted by interest rates decrease…
WITH BELOW EBIT ITEMS POSITIVELY IMPACTED BY INTEREST RATES DECREASE… Other income Net financial Effective tax rate Minority interests and expenses expenses €(195)m 2024E1 c.€(30)m 30% to 33% c.€(42)m to €(205)m 2025E 1. Guidance from Edenred Q3 Revenue publication 51
Slide 52: Delivering further adjusted EPS growth
DELIVERING FURTHER ADJUSTED EPS GROWTH Adjusted1 EPS [€] CAGR21-24E +16% 2.41 2.10 Drivers of 2025 adjusted EPS growth: 1.84 Adjusted EBIT increase 1.55 Below EBIT items optimization Potential share buyback 2021 2022 2023 2024C2 1. Excluding PPA and Other income & expenses | 2. 2024 Consensus
Slide 53: Balance Sheet
BALANCE SHEET 53
Slide 54: Business model generating structurally negative working capital
BUSINESS MODEL GENERATING STRUCTURALLY NEGATIVE WORKING CAPITAL Edenred client funds by typology Contribution to ...as an …as a liability to our negative working Trend Client funds Edenred asset clients capital Benefits & Cash non-regulated solutions Cash & equivalents Float +++ Engagement Cash regu
Slide 55: Sound balance sheet, with strong investment grade rating by Standard & Poor's
SOUND BALANCE SHEET, WITH ”STRONG INVESTMENT GRADE” RATING BY STANDARD & POOR’S Edenred Balance Sheet [€m] Dec. 2023 Dec. 2023 Goodwill 2,779 Total equity (569) Intangible assets 1,253 Property, plant & equipment 160 Investments in associates 18 Gross debt and other financial liabilities + 4,470 − N
Slide 56: Cash Flow
CASH FLOW 56
Slide 57: Funds from operations and sustained increase in negative WC drive strong cash flow generation
FUNDS FROM OPERATIONS AND SUSTAINED INCREASE IN NEGATIVE WC DRIVE STRONG CASH FLOW GENERATION 2021-2023 2021 2022 2023 ANNUAL TRACK RECORD EBITDA 670 836 1,094 Net financial expense (19) (54) (172) Income tax (151) (188) (226) Non-cash P&L items & others 56 79 34 Funds from operations (FFO) 556 673
Slide 58: Conclusion
CONCLUSION Bertrand Dumazy Chairman and CEO 58
Slide 59: Edenred adjusts its capital allocation policy to deliver stronger shareholder returns
EDENRED ADJUSTS ITS CAPITAL ALLOCATION POLICY TO DELIVER STRONGER SHAREHOLDER RETURNS Continue to fund organic growth initiatives, through investments in core capabilities Refocus M&A strategy on opportunistic bolt-on targets, while continuing post- merger integration and deployment of recent ac
Slide 60: Conclusion
CONCLUSION Edenred is a global digital B2B2C platform, enriching connections for good, serving essential needs and bringing value for employees, corporate clients, partner merchants and public authorities Edenred is well on track to deliver its Beyond22-25 strategic plan, markedly outperforming
Slide 61: Appendices
APPENDICES 61
Slide 62: The float relates to the time difference between funds preloading and merchant settlement
THE FLOAT RELATES TO THE TIME DIFFERENCE BETWEEN FUNDS PRELOADING AND MERCHANT SETTLEMENT Total float retention 1 2 3 ORDERING/ USER MERCHANT RETENTION PRELOADING RETENTION & SETTLEMENT >80% of the float retention time relates to the period during which the user keeps the funds before spending them
Slide 63: Other businesses also generate negative working capital requirement
OTHER BUSINESSES1 ALSO GENERATE NEGATIVE WORKING CAPITAL REQUIREMENT MOBILITY FOCUS ON POSTPAID MODEL ~90% Postpaid2: ~10% Preloaded2: Corporate client Negative WCR generation due to the Float generation as volumes management of the time between payment by are loaded by clients before corporate clie
Slide 64: Capex to remain in line with Beyond22-25 guidance
CAPEX TO REMAIN IN LINE WITH BEYOND22-25 GUIDANCE Capex to continue to stick to 7% to 8% Beyond22-25 …with a higher share of internally generated guidance… Capex, further to internalization of key skills 450 Capex, Capex to Total Revenue [€m,%] 400 9.5% 150% External Capex 350 7.4% 7.6% 7.5% 7.0% 7.