Edenred Sa · EURONEXT:EDEN
Edenred Sa — FY2015 Earnings Presentation
48 slides from Edenred Sa's earnings presentation, Feb 11, 2016
Slide 1: 2015 Annual Results
2015 Annual Results February 11, 2016
Slide 2: 2015 Key Business Achievements
1 2015 Key Business Achievements Bertrand Dumazy, Chairman & CEO
Slide 3: 2015, A Year of Solid Performances
2015, A YEAR OF SOLID PERFORMANCES ▌ Issue volume L/L growth of +8.7% for 2015, reaching €18,273m with a robust performance in Latin America and acceleration of growth in Europe thanks to strong fundamentals ▌ A high level of profitability maintained with sustained +9.7% L/L EBIT growth and stable r
Slide 4: 2015 Key Financial Figures
2015 KEY FINANCIAL FIGURES A strong L/L performance, in line with Group targets Historical FY 2015 Targets medium-term targets ▌ Solid L/L(1) performance in +8.7% +8-14%(2) issue volume growth L/L growth in issue volume ▌ Further improvement in 50.3% >50% L/L operating profitability L/L flow-through
Slide 5: 2015 Key Operating Achievements
2015 KEY OPERATING ACHIEVEMENTS Digitalization & Expense Management at the heart of the Group’s transformation Historical FY 2015 medium-term targets 65.4%(1) >75% ▌ Further shift to digital of Group issue volume by end-2016 +3.4pts vs 2014 ▌ Further increase in share 16% 30% of Group issue volume b
Slide 6: 2015 Issue Volume L/L Growth in Latin America
2015 ISSUE VOLUME L/L GROWTH IN LATIN AMERICA Strong L/L performance in Latin America Latin America Brazil +12.4% Growth in L/L issue volume A good performance (+8.5% L/L) in a tough economic environment, reflecting +4.8% L/L growth in Employee Benefits and very dynamic growth in Expense Managemen
Slide 7: 2015 Issue Volume L/L Growth in Europe
2015 ISSUE VOLUME L/L GROWTH IN EUROPE Positive momentum in the region France Europe Ticket Restaurant® up 3.9% L/L +4.2% Shift to digital: leading position with Ticket Restaurant® meal card (65% of market share, Growth in L/L issue volume ~ 30% of card beneficiaries coming from new clients) 47%
Slide 8: 2015 Issue Volume by Type of Solution
2015 ISSUE VOLUME BY TYPE OF SOLUTION Solid growth across all families of solutions, leading to solid +8.7% L/L growth in issue volume EMPLOYEE EXPENSE BENEFITS MANAGEMENT INCENTIVE PUBLIC & REWARDS SOCIAL PROGRAMS +6.7% +21.5% +7.3% NM(1) Growth in L/L issue volume Growth in L/L issue volume Growth
Slide 9: Two Main Pillars of Growth
TWO MAIN PILLARS OF GROWTH Strong double-digit growth and increased contribution of Expense Management Employee Benefits Expense Management 79% 16% +6.7% of total issue volume +21.5% of total issue volume Growth in L/L issue volume Growth in L/L issue volume Continued success of Ticket Car® in C
Slide 10: A Record Year of Strategic Acquisitions
A RECORD YEAR OF STRATEGIC ACQUISITIONS Paving the way for future growth and margin improvement Employee Benefits Expense Management in 2016 ▌ Works council(1) market estimated ▌ A key asset for the development ▌ Creation of the #2 player in at more than €15 billion of Edenred in the European Fuel B
Slide 11: Early-2016 Development in Expense Management
EARLY-2016 DEVELOPMENT IN EXPENSE MANAGEMENT A strategic and value-creating transaction in Brazil to be closed in H1 2016 ▌ Creation of a 65/35 JV in Expense ▌ Key financial impacts Management, controlled by Edenred Embratec in 2014: €1,029m of issue volume, €63m of revenue, €21m of EBITDA(2) Embr
Slide 12: Edenred Profile Post Embratec
EDENRED PROFILE POST EMBRATEC A rebalancing transaction ▌ Increased contribution of Expense ▌ Moderate and temporary increase of Management at Group level & in Brazil (1) Group exposure to Brazil(1) Contribution of Expense Management to Group IV(2) Contribution of Brazil to Group IV 16% 20% 30% 28%
Slide 13: Further Shift to Digital
FURTHER SHIFT TO DIGITAL Digital issue volume of 65.4%(1) at end-2015 2015 digital issue volume by region Examples of new digital solutions in 2015 Ticket Restaurant® in Czech Republic and Romania Spendeo in Romania and Germany Latin Rest of the Europe America world 94% 36% 70% Ticket Compliments in
Slide 14: Ticket Restaurant Goes Digital
TICKET RESTAURANT® GOES DIGITAL 14
Slide 15: Edenred Goes Mobile: E-Pay
EDENRED GOES MOBILE: E-PAY 15
Slide 16: 2015 Results
2 2015 Results Patrick Bataillard, Chief Financial Officer
Slide 17: Income Statement
INCOME STATEMENT Like-for-like EBIT growth exceeding revenue growth Change Change In € millions 2015 2014 reported L/L Issue volume 18,273 17,713 +3.2% +8.7% Operating revenue with issue volume 848 843 +0.5% +7.4% Operating revenue without issue volume 152 115 +32.2% +4.3% Financial revenue 69 76 -9
Slide 18: 2015 Issue Volume: €18,273m
2015 ISSUE VOLUME: €18,273M Solid +8.7% L/L growth, of which +8.4% in Q4, and negative currency effects Like-for-like 10,0% +8.7% 9,3% 8,4% 8,7% Robust 2015 L/L growth for €1,533m 7,0% the Group Q4 L/L growth remains solid Scope(1) in spite of tough macro +0.9% environment in Brazil €164m Q1 Q2
Slide 19: Contribution of Growth Drivers to 2015 Issue Volume
CONTRIBUTION OF GROWTH DRIVERS TO 2015 ISSUE VOLUME A balanced growth thanks to three drivers 2015 organic issue volume growth(1) (2) New geographies +0.1% New solutions +2.2% Face value +2.5% Clients +3.9% Total +8.7% (1) Internal estimates. (2) Including the contributions of some countries entered
Slide 20: 2015 Total Revenue: €1,069m
2015 TOTAL REVENUE: €1,069M Up by a strong +6.4% L/L, and +3.3% as reported including currency impacts Like-for-like L/L growth details by type of revenue +6.4% €67m L/L growth H1 Q3 Q4 2015 Scope(1) +3.5% Operating revenue with IV +9.1% +5.3% +6.3% +7.4% €36m Operating revenue without +3.8% +6.9% +
Slide 21: 2015 Revenue Details
2015 REVENUE DETAILS Double-digit growth in Latin America and Rest of the World Operating revenue with IV: €848m Financial revenue: L/L growth €69m by region L/L growth H1 Q3 Q4 2015 L/L growth H1 Q3 Q4 2015 Latin America +14.6% +8.0% +10.9% +11.9% Latin America +13.7% +10.8% +12.6% +12.6% Europe +3
Slide 22: 2015 EBIT: €341m
2015 EBIT: €341M Reflecting good L/L performance of operating EBIT at +12.6% Change Change In € millions 2015 2014 reported L/L Total revenue 1,069 1,034 +3.3% +6.4% Strong L/L Operating EBIT 272 267 +1.8% +12.6% growth in operating EBIT Financial EBIT 69 76 -9.3% -0.5% Total EBIT 341 343 -0.6% +9.7
Slide 23: Steady 2015 Reported EBIT Despite Currency Effects
STEADY 2015 REPORTED EBIT DESPITE CURRENCY EFFECTS 50.3% flow-through ratio(1) in line with Group guidance Operating revenue Financial revenue Changes Currency effect(3) L/L∆: €67m L/L∆: €0m in scope(2) 2014 EBIT 2015 EBIT (reported) €6m (reported) €343m €33m €0m €(41)m €341m of which: Flow-through
Slide 24: Operating EBIT Margin
OPERATING EBIT MARGIN(1) Local margins not affected by currency impacts Operating Currency mix effect flow-through and changes in ratio(2) of 50.3% scope Operating EBIT/ Operating EBIT/ Operating EBIT/ operating revenue operating revenue operating revenue (reported) +1.4pts (L/L) -2.1pts (reported)
Slide 25: Increase in Net Profit
INCREASE IN NET PROFIT Reported net profit growth (+7.7%) despite stable EBIT In € millions 2015 2014 EBIT 341 -0.6% 343 Change Net financial expense (47) reported (46) Share of associate net profit 9 (0) Operating profit before tax and non-recurring items 303 +2.2% 297 Non-recurring income and expe
Slide 26: Cash Flow Statement
CASH FLOW STATEMENT High level of free cash flow generation In € millions 2015 2014 Funds from operations 280 261 Increase/(decrease) in cash linked to changes in float (1) 137 159 (Increase)/decrease in restricted cash (41) (36) (Increase)/decrease in working capital (excl. float) (8) 1 Recurring c
Slide 27: Net Debt Bridge
NET DEBT BRIDGE Net debt position reflecting strategic acquisitions and strong currency effects Net debt position Currency effects(2) and 2014 (before currency 2015 Net debt effects other Net debt position Free Cash External Shareholders’ and other non- non-recurring position (reported) Flow acquisi
Slide 28: Negative Working Capital Requirement
NEGATIVE WORKING CAPITAL REQUIREMENT A key component of the group business model In € millions 2015 2014 In € millions 2015 2014 Goodwill 575 570 Total equity (1,442) (1,320) Intangible assets 182 160 Property, plant & equipment Investments in associates 37 150 44 - Gross debt Provisions and deferre
Slide 29: Current Financial Assets and Debt Maturities
CURRENT FINANCIAL ASSETS AND DEBT MATURITIES An optimized cash and debt management Cautious approach to cash investments Positive impact of 2015 refinancing In % of total cash & cash equivalents Undrawn credit lines & restricted funds at end-2015 Current financial assets: Gross debt: €1,843m €700m €
Slide 30: Proposed Dividend: A 96% Payout Ratio in 2015
PROPOSED DIVIDEND: A 96% PAYOUT RATIO(1) IN 2015 High payout ratio maintained despite an active acquisition policy High payout ratio(1) maintained in 2015 An active acquisition policy throughout 2015 Dividend per share in € 89% 96% 97% 96% 2015 total invested 78% 0.84(2) in acquisitions 68% 0,83 0,8
Slide 31: Conclusion
3 Conclusion Bertrand Dumazy, Chairman & CEO
Slide 32: 2015: A Challenging but Successful Year
2015: A CHALLENGING BUT SUCCESSFUL YEAR KEY CHALLENGES KEY SUCCESSES ▌ Maintain growth momentum in a ▌ Strong growth in issue volume (+8.7% context of a rapid and deep L/L) and EBIT (+9.7% L/L) deterioration of macro environment in Brazil ▌ Continued innovation, paving the way for future growth (dig
Slide 33: 2016 Outlook
2016 OUTLOOK Historical medium-term targets based on current business profile 2016 Expectations L/L issue volume Growth expected to remain within medium-term target range, at the growth +8-14%(1) lower end due to expected deterioration of macro environment in Brazil Strong management focus in 20
Slide 34: Leading Position
LEADING POSITION Edenred can leverage strong assets to invent its future A STRONG POWERFUL A UNIQUE A WORLD LEADER ECOSYSTEM BRANDS CULTURE #1 660,000 worldwide in prepaid companies & public 6,300 corporate services employees sector clients 30% 41m 45 market share beneficiaries nationalities A uniqu
Slide 35: 2016 Key Priorities
2016 KEY PRIORITIES 1. Deploy sustainable and profitable growth platform in Employee Benefits 2. Accelerate development in Expense Management 3. Develop and monetize opportunities created by the shift to digital (from B2B to B2B2C/B2C2B) 4. Increase the pooling of IT resources 5. Define and start im
Slide 36: Fast Forward Project
FAST FORWARD PROJECT Prepare a strategic plan shaping Edenred for 2020 Determine our full Define a path Mobilize the Group potential at Business Unit to meet that full behind a new company and Group level potential project A collaborative and iterative approach to define the Group ambition and strat
Slide 37: Appendices
4 Appendices
Slide 38: Issue Volume
ISSUE VOLUME Q1 Q2 Q3 Q4 FY In € millions 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 France 735 713 696 662 614 592 965 913 3,010 2,880 Rest of Europe 1,346 1,302 1,395 1,318 1,353 1,275 1,559 1,447 5,653 5,342 Latin America 2,284 1,902 2,274 2,122 2,030 2,289 2,264 2,538 8,852 8,851 Rest of
Slide 39: 2015 Latin America Issue Volume: €8,852m
2015 LATIN AMERICA ISSUE VOLUME: €8,852M Up +12.4% L/L L/L growth Q1 Q2 Q3 Q4 YTD Brazil +12.8% +11.1% +5.7% +5.4% +8.5% Hispanic Latin +25.5% +17.6% +15.1% +19.0% +19.1% America Total Latin America +17.3% +13.4% +9.0% +10.9% +12.4% Brazil: Hispanic Latin America: A good performance in a tough eco
Slide 40: 2015 Europe Issue Volume: €8,663m
2015 EUROPE ISSUE VOLUME: €8,663M Up +4.2% L/L, confirming acceleration in the region L/L growth Q1 Q2 Q3 Q4 YTD France +3.1% +4.5% +3.3% +3.9% +3.7% Rest of Europe +2.4% +4.2% +4.5% +6.3% +4.4% Total Europe +2.7% +4.3% +4.1% +5.4% +4.2% France: Rest of Europe: Ticket Restaurant® up 3.9% L/L in 20
Slide 41: Operating Revenue with Issue Volume
OPERATING REVENUE WITH ISSUE VOLUME Q1 Q2 Q3 Q4 FY In € millions 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 France 31 30 30 28 26 27 45 42 132 127 Rest of Europe 68 66 71 67 66 63 78 74 283 270 Latin America 104 91 105 100 91 109 95 113 395 413 Rest of the world 10 7 9 8 10 9 9 9 38 33 Operat
Slide 42: Operating Revenue without Issue Volume
OPERATING REVENUE WITHOUT ISSUE VOLUME Q1 Q2 Q3 Q4 FY In € millions 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 France 6 5 20 6 11 5 13 5 50 21 Rest of Europe 11 11 8 9 9 8 17 17 45 45 Latin America 6 5 7 7 6 6 4 6 23 24 Rest of the world 8 5 9 5 8 7 9 8 34 25 Operating revenue without IV 31 2
Slide 43: Financial Revenue
FINANCIAL REVENUE Q1 Q2 Q3 Q4 FY In € millions 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 France 4 5 3 4 3 4 3 4 13 17 Rest of Europe 4 4 5 5 6 6 4 5 19 20 Latin America 10 8 8 8 7 10 8 9 33 35 Rest of the world 1 1 1 1 0 0 2 2 4 4 Financial revenue 19 18 17 18 16 20 17 20 69 76 Q1 Q2 Q3 Q4 F
Slide 44: Total Revenue
TOTAL REVENUE Q1 Q2 Q3 Q4 FY In € millions 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 France 41 40 53 38 40 36 61 51 195 165 Rest of Europe 83 81 84 81 81 77 99 96 347 335 Latin America 120 104 120 115 104 125 107 128 451 472 Rest of the world 19 13 19 14 18 16 20 19 76 62 Total revenue 263 2
Slide 45: Operating EBIT & Total EBIT
OPERATING EBIT & TOTAL EBIT Change Change In € millions 2015 2014 reported L/L France 29 23 24.0% -9.4% Rest of Europe 89 80 10.8% 10.4% Latin America 169 178 -4.7% 15.5% Rest of the world 8 5 n/a n/a Worldwide structures (23) (19) 16.7% 9.8% Operating EBIT 272 267 1.8% 12.6% Change Change In € mill
Slide 46: Average Exchange Rates
AVERAGE EXCHANGE RATES 2015 vs. 2015 vs. 2015 vs. 2015 vs. 2015 vs. 2014 2014 2014 2014 2014 €1 = X foreign currency Q1 2015 Q1 2014 Q2 2015 Q2 2014 Q3 2015 Q3 2014 Q4 2015 Q4 2014 FY 2015 FY 2014 Change Change Change Change Change (in % ) (in % ) (in % ) (in % ) (in % ) Bolivar Fuerte (VEF) 134.41
Slide 47: 2015 Scope Effects
2015 SCOPE EFFECTS Acquisitions Consolidation date Bonus, Brazil January 2014 Nets Prepaid, Finland January 2014 C3 CARD, United Arab Emirates July 2014 Cardtrend, Asia August 2014 Daripodarki, Russia October 2014 UTA, Germany* H1 2015 ProwebCE, France H1 2015 * Acquisition of a 34% stake, accounted
Slide 48: 2016 Expected Calendar Effects
2016 EXPECTED CALENDAR EFFECTS Q1 Q2 Q3 Q4 2016 Nb of Nb of Nb of Nb of Nb of Working days % change % change % change % change % change days days days days days Europe 0 -0.4% 2 3.1% -1 -1.8% -1 -2.2% -1 -0.4% Latin America 0 -0.1% 1 1.9% -1 -1.0% 0 -0.1% 0 0.2% Rest of the world 1 0.9% 1 1.7% 0 -0.