Edenred Sa · EURONEXT:EDEN
Edenred Sa — FY2013 Earnings Presentation
41 slides from Edenred Sa's earnings presentation, Feb 12, 2014
Slide 1: 2013 Annual Results
2013 Annual Results Press conference February 12, 2014
Slide 2: 2013 key figures
2013 key figures FY L/L Targets In € millions 2013 growth Issue volume 17,119 +11.8% 8%-14%(1) L/L flow-through ratio 57% N/A >50% EBIT 343 +10.9% €340-350m(2) Funds from 262 +11.5% >10%(1) operations Strong organic performance, impacted by currency depreciation in emerging countries, representing €
Slide 3: 2013 key achievements
2013 key achievements enablers 4 strategic focuses Key 2013 achievements 58 digital New modes Shift to digital % issue volume at end-2013 +1 Open new new New geographies country: countries Colombia contribution to New solutions Create & deploy new solutions + 2 L/L issue .1% volume growth contributi
Slide 4: 2013 acquisitions
2013 acquisitions Expense Geographic Benefits management coverage • Bonus • Repom(1) • Big Pass Brazil Brazil Colombia • Nets Prepaid Finland • OPAM Mexico ~€110m >€330m >€80m of issue volume in 2013 of issue volume in 2013 of issue volume in 2013 Acquisition strategy in support of organic growth co
Slide 5: Financial Policy and Dividend
Financial Policy and Dividend Maintain a Strong Investment Grade rating and a sound financial position Financial Free cash flow allocation between: Policy − Strong return to shareholders through a ~90% dividend payout ratio(1) − Reinforced strategy of targeted acquisitions Recommended dividend
Slide 6: 2013 Results
2013 Results Chapter 1 Titre du document - date - Arial regular 8pts 6
Slide 7: Income statement – key figures
Income statement – key figures Change Change In € millions 2012 2013 reported L/L(1) Issue volume 16,657 17,119 +2.8% +11.8% Operating revenue 976 950 -2.7% +7.7% Financial revenue 91 80 -12.0% -3.7% Total revenue 1,067 1,030 -3.5% +6.7% Operating EBIT(2) 276 263 -4.5% +15.7% Financial EBIT(3) 91 80
Slide 8: 2013 Issue volume: €17,119m
2013 Issue volume: €17,119m Issue Volume (L/L) 15,2% Like-for-like 12,2% +11.8% 10,5% 11,0% 11,8% €1,974m 10,4% 10,1% 9,8% 10,4% 8,5% Scope (1) +3.1% €514m Q1 12 Q2 12 Q3 12 Q4 12 FY 12 Q1 13 Q2 13 Q3 13 Q4 13 FY 13 Currency -12.1% €(2,026)m Currency impact details 2013 6% Reported Currency change i
Slide 9: Issue volume L/L growth by region
Issue volume L/L growth by region Q4 2013 Latin America Brazil +14.1% +13.3% Hispanic Latin America +9.7% +21.5% Total Latin America +12.0% +16.8% Total Latin America excl. Navideños(1) +18.3% +18.4% Q4 2013 Europe France +5.9% +5.2% Rest of Europe +9.8% +6.2% Total Europe +8.3% +5.9% Total Europe e
Slide 10: 2013 Issue volume by type of solution
2013 Issue volume by type of solution B2B B2G EMPLOYEE BENEFITS EXPENSE INCENTIVE & PUBLIC SOCIAL TOTAL MANAGEMENT REWARDS PROGRAMMES MEAL AND FOOD QUALITY OF LIFE Issue volume 12,775 1,446 2,078 599 221 17,119 (in € millions) As a % of IV 75% 8% 12% 4% 1% 100% L/L change +5.0% N/A +11.7% +9.2% +17.
Slide 11: Contribution of growth drivers to 2013 issue volume
Contribution of growth drivers to 2013 issue volume New geographies 2013 organic issue volume growth • Targeted contribution of up to 1% by 2016 • Contribution of Finland and Japan (6 months) New geographies +0.1% New solutions • Ramp up of Ticket Plus® Card in Germany: New solutions +2.1% +~90k new
Slide 12: 2013 Digital issue volume by region
2013 Digital issue volume by region Latin Rest of Europe Total (end-2012) America world 15% 51% 81% 62% (end-2013) 87% 23% 64% 58% Digital shift well on track with 58% of digital issue volume at end-2013 Digital issue volume as a % of total issue volume by geography. 12
Slide 13: 2013 Revenue: €1,030m
2013 Revenue: €1,030m In € millions Change Change 2012 2013 reported L/L Operating revenue with issue volume 838 830 -1.1% +9.2% Operating revenue without issue volume 138 120 -12.6% -1.9% Total operating revenue 976 950 -2.7% +7.7% Financial revenue 91 80 -12.0% -3.7% Total revenue 1,067 1,030 -3.5
Slide 14: Focus on operating revenue growth
Focus on operating revenue growth Operating revenue L/L growth Operating revenue with IV L/L by type of revenue growth by region Q4 2013 Q4 2013 With issue Latin America +14.5% +14.3% +9.8% +9.2% volume Europe +4.0% +2.9% Without issue -6.4% -1.9% volume(1) Rest of the world +14.3% +11.4% TOTAL +7.2
Slide 15: Focus on financial revenue growth
Focus on financial revenue growth Financial revenue L/L growth Financial revenue L/L growth by quarter by region 10,4% 4,5% Q4 2013 3,2% Latin America +13.9% +7.7% 0,9% Europe -14.4% -13.3% -0,6% Rest of the world +9.4% -1.4% -2,1% -2,8% -3,7% TOTAL -0.6% -3.7% -5,2% -6,3% Q1 12 Q2 12 Q3 12 Q4 12 FY
Slide 16: 2013 EBIT: €343m
2013 EBIT: €343m Change Change In € millions 2012 2013 reported L/L Total revenue 1,067 1,030 -3.5% +6.7% Operating EBIT 276 263 -4.6% +15.8% Financial EBIT 91 80 -12.0% -3.7% Total EBIT 367 344 343 -6.4% +10.9% EBIT Latin America, €218m: strong performance, with EBIT performance up +15.0% L/L by
Slide 17: Flow-through ratio
Flow-through ratio Operating revenue Non-recurring Financial Currency effect Digital with issue volume, items(1) revenue and changes in excl. Hungary extra costs L/L∆: €(4)m L/L∆: €(3)m scope L/L∆: €79m 2012 EBIT (reported) €2m €(4)m €(3)m 2013 EBIT €367m €45m (reported) €(64)m €343m Flow-through Fl
Slide 18: 2013 Net profit
2013 Net profit In € millions 2012 2013 EBIT 367 343 Net financial expense (36) (41) Operating profit before tax and non-recurring items 331 302 Non-recurring income and expenses, net (25) (28) Income tax expense (103) (97) Tax on dividends - (6) Minority interests (20) (11) Net profit, Group share
Slide 19: Financial policy and dividend
Financial policy and dividend Strong Investment Grade rating Sound financial position Recurring net profit after tax Additional Free cash flow ~90% Reinforced strategy of targeted returned in dividends acquisitions 2013 recommended dividend(1) 2013 total invested in acquisition €83cts €138m Signific
Slide 20: 2013 Financial performance
2013 Financial performance Strong operating performance Sound financial position Issue Volume €2.5bn negative working capital +11.8% L/L at 2013 year-end in line with Group target of 8% to 14% EBIT Net debt position of €(276)m €343m at 2013 year-end in line with the target of €340-350m(1) FFO Strong
Slide 21: 2014 Outlook
2014 Outlook ORGANIC Continuation of 2013 operating trends for benefits and expense TOPLINE management TRENDS Financial revenue expected to remain flat L/L FLOW-THROUGH Operating flow-through ratio > 50% RATIO EBIT sensitivity analysis for a variation of +/- 5% CURRENCY BRL(1) VEF MXN €8m €2m €1
Slide 22: A strategy for delivering strong and sustainable growth
A strategy for delivering strong and sustainable growth Chapter 2 Titre du document - date - Arial regular 8pts 22
Slide 23: The Group’s long-term strategic vision
The Group’s long-term strategic vision Short-term contribution Exploit growth potential Increase penetration in existing benefits markets rates and face value Develop new options for growth Launch new solutions based on our current know-how and new countries From a transaction Open new growth territ
Slide 24: Exploit growth potential in existing benefits markets (1/2)
Exploit growth potential in existing benefits markets (1/2) New clients in 2013 New contracts wins Partnerships Illustrations of main contracts Favorable changes in legislation that benefited the meal voucher market in Portugal(1) Strategic alliance with Banco Espirito Santo to capture growth opport
Slide 25: Exploit growth potential in existing benefits markets (2/2)
Exploit growth potential in existing benefits markets (2/2) Bolt-on acquisitions in 2013 Opam Bonus Consolidation of the Group’s position Reinforcement of the Group’s position in in the benefits market the region of Sao Paulo in Brazil in Mexico in the benefits market • >1,000 clients • ~3,000 clien
Slide 26: Develop new options for growth (1/2)
Develop new options for growth based on our current know-how (1/2) Create and deploy new solutions Ticket Cultura® Ticket Plus® Card Repom • Addressable market: • Addressable market: • Potential market: ~$47bn >40 million employees >29 million employees • Expected business • Estimated addressed • Es
Slide 27: Develop new options for growth (2/2)
Develop new options for growth based on our current know-how (2/2) Open new countries 2011: Entry in the 2013: Acquisition of Finnish market Nets prepaid Group’s entry though the organic Leader in the meal benefit market launch of a meal benefit in Finland • Favorable tax framework and potential • I
Slide 28: Conclusion
Conclusion Titre du document - date - Arial regular 8pts 28
Slide 29: Revised medium-term targets
Revised medium-term targets VOLUME DRIVERS Issue volume target(1) narrowed New geographies 0-1% +8% to +14% L/L growth per year New solutions 2-4% Flow-through ratio(2) >50% New clients 3-5% from 2014 FFO target (1) PRICE DRIVER confirmed > +10% Face value 3-4% L/L growth per year Contribution to is
Slide 30: Our goal: generate strong and sustainable growth
Our goal: generate strong and sustainable growth Where we are today…. Our 2016 ambition clients 640k (companies and public institutions) beneficiaries 40m of our four families of solutions affiliates 1.4m (restaurants, service stations, etc.) employees 6,000 of Edenred The Edenred team is committed
Slide 31: Appendices
Appendices Titre du document - date - Arial regular 8pts 31
Slide 32: Issue Volume
Issue Volume Q1 Q2 Q3 Q4 FY 2013 In € millions 2012 2013 2012 2013 2012 2013 2012 2013 2012 2013 France 666 665 613 661 524 566 817 865 2,620 2,757 Rest of Europe 1,127 1,124 1,157 1,203 1,103 1,204 1,259 1,373 4,646 4,904 Latin America (proforma) 1,987 2,025 2,054 2,199 2,209 2,193 2,554 2,407 8,80
Slide 33: Focus on Issue Volume by Region
Focus on Issue Volume by Region Issue volume L/L growth Q1 Q2 Q3 Q4 2013 Brazil 16.9% 11.0% 11.4% 14.1% 13.3% Hispanic Latin America 21.8% 27.8% 31.6% 9.7% 21.5% Total Latin America 18.8% 17.9% 19.6% 12.0% 16.8% Issue volume L/L growth Q1 Q2 Q3 Q4 2013 France -0.2% 7.9% 8.1% 5.9% 5.2% Rest of Europe
Slide 34: Operating Revenue
Operating Revenue Q1 Q2 Q3 Q4 FY 2013 In € millions 2012 2013 2012 2013 2012 2013 2012 2013 2012 2013 France 34 34 32 33 29 30 43 45 138 142 Rest of Europe 76 74 72 73 69 70 92 88 309 305 Latin America (pro forma) 113 108 115 114 122 110 129 118 479 450 Rest of the world 11 13 12 13 13 13 14 14 50 5
Slide 35: Focus on Operating Revenue by Region
Focus on Operating Revenue by Region L/L growth Q1 Q2 Q3 Q4 2013 Latin America 15.0% 11.8% 15.8% 14.5% 14.3% Europe -0.1% 3.4% 4.3% 4.0% 2.9% Rest of the world 7.4% 10.7% 12.3% 14.3% 11.4% Operating revenue with issue volume 8.0% 8.1% 11.0% 9.8% 9.2% Operating revenue without issue volume 4.8% 1.0%
Slide 36: Financial Revenue
Financial Revenue Q1 Q2 Q3 Q4 FY 2013 In € millions 2012 2013 2012 2013 2012 2013 2012 2013 2012 2013 France 5 5 5 6 5 5 5 5 20 21 Rest of Europe 8 6 7 5 7 5 6 5 28 21 Latin America (pro forma) 10 8 9 8 10 9 10 8 39 34 Rest of the world 1 1 1 1 1 1 1 1 4 4 Financial revenue (pro forma) 24 20 22 21 2
Slide 37: Total Revenue
Total Revenue Q1 Q2 Q3 Q4 FY 2013 In € millions 2012 2013 2012 2013 2012 2013 2012 2013 2012 2013 France 39 40 37 38 34 35 48 50 158 163 Rest of Europe 84 80 79 78 75 75 99 93 337 326 Latin America (pro forma) 123 117 124 122 133 120 138 125 518 484 Rest of the world 12 13 13 15 14 14 15 15 54 57 To
Slide 38: EBIT
EBIT H1 H2 YTD In € millions 2012 2013 2012 2013 2012 2013 France 24 22 21 21 45 43 Rest of Europe 43 42 52 55 95 97 Latin America (proforma) 112 101 131 117 243 218 Rest of the world 1 1 2 2 3 3 Worldwide structures -10 -7 -9 -11 -19 -18 Total Group (pro forma) 170 159 197 184 367 343 Venezuela cha
Slide 39: Exchange rates
Exchange rates Average exchange rates 2012 and 2013 2013 vs. 2013 vs. 2013 vs. 2013 vs. 2013 vs. 1€ = X Q1 Q1 2012 Q2 Q2 2012 Q3 Q3 2012 Q4 Q4 2012 FY FY 2012 foreign 2012 2013 Change 2012 2013 Change 2012 2013 Change 2012 2013 Change 2012 2013 Change currency (in %) (in %) (in %) (in %) (in %) Boli
Slide 40: Scope effects
Scope effects Acquisitions Consolidation date Comprocard, Brazil July 2012 Barclay Vouchers, Japan July 2012 Big Pass, Colombia February 2013 Repom, Brazil March 2013 Opam, Mexico June 2013 Bonus, Brazil January 2014 Nets Prepaid, Finland January 2014 Disposal Disposal date Tinteligen (business with
Slide 41: 2014 Expected Calendar Effects
2014 Expected Calendar Effects Q1 Q2 Q3 Q4 2014 Nb of % Nb of % Nb of % Nb of % Nb of % Working days days change days change days change days change days change Europe 0 0.0% (1) -1.2% 0 0.3% 1 0.9% 0 0.0% Latin America 2 2.6% (1) -1.9% (0) 0.0% 2 2.8% 2 0.8% Rest of the world 0 0.5% (0) -0.4% (1) -