Edenred Sa · EURONEXT:EDEN
Edenred Sa — FY2014 Earnings Presentation
42 slides from Edenred Sa's earnings presentation, Feb 12, 2015
Slide 1: 2014 Annual Results
2014 Annual Results February 12, 2015
Slide 2: 2014 Key Business Achievements
1 2014 Key Business Achievements
Slide 3: 2014 Key Figures
2014 KEY FIGURES Stable results as reported, despite negative currency effects In € millions FY 2014 L/L growth L/L targets Issue volume 17,713 +12.0% 8%-14%(1) L/L flow-through ratio 57% N/A >50% EBIT 343 +14.4% €335-350m(2) Funds from operations 261 +15.1% >10%(1) (1) Normalized organic growth tar
Slide 4: Penetration Increase in Employee Benefits
PENETRATION INCREASE IN EMPLOYEE BENEFITS Through the gain of new clients and the ramp up of new solutions 2014 key figures New clients New solutions Ticket Plus® Card: 81% ~125k new beneficiaries in of total 2014 issue volume Ticket Cultura®: ~80k new beneficiaries in +10.6% L/L 2014 growth in issu
Slide 5: Regulatory Developments in Employee Benefits
REGULATORY DEVELOPMENTS IN EMPLOYEE BENEFITS Contributing to the increase in penetration and the shift to digital 2014 developments Change in the tax break Promotion of the shift to digital ++ Portugal: strong contribution of 0.7pt to total issue volume ++ Mexico: mandatory shift to digital from Jul
Slide 6: Acceleration in Expense Management
ACCELERATION IN EXPENSE MANAGEMENT New objective to reach >30% of issue volume by 2017 2014 key figures Acquisitions in F&F(1) Partnerships in F&F New T&E(2) solutions Acquisition of 34% Ticket Travel Pro® 14% of a leading in France of total European player in the Heavy Fleet issue volume segment Fo
Slide 7: UTA Acquisition
UTA ACQUISITION A unique opportunity to enter the European Fuel & Fleet market UTA key figures A 3-step strategy A value creative transaction >60,000 clients >500,000 active 2014- Acquisition of a 34% stake Acquisition price: cards 2015 owned by BP ~€150m(2) for the 34% stake at a ~14x PE(3) m
Slide 8: Digital Shift
DIGITAL SHIFT On track to reach >75% of digital issue volume by 2016 2014 key figure 2014 launches 2014 digital issue volume by region Rest of Latin Europe the (end-2013) America 23% world Ticket Restaurant® in France: 87% 64% 80,000 beneficiaries at end-2014 of which 40% from new clients 62% digita
Slide 9: 2014 Results
2 2014 RESULTS
Slide 10: Income Statement
INCOME STATEMENT Key figures Change Change In € millions 2013 2014 reported L/L(1) Issue volume 17,119 17,713 +3.5% +12.0% Operating revenue with issue volume 830 843 +1.7% +10.8% Operating revenue without issue volume 120 115 -4.8% -6.1% Financial revenue 80 76 -4.7% +3.2% Total revenue 1,030 1,034
Slide 11: 2014 Issue Volume: €17,713M
2014 ISSUE VOLUME: €17,713M Strong organic growth but negative currency effects Like-for-like Issue volume (L/L) +12.0% €2,058m 15,2% 13,7% 12,2% 11,8% 11,3% 12,1% 12,0% 10,4% 11,0% 9,8% Scope (1) +2.1% €355m Q1 13 Q2 13 Q3 13 Q4 13 FY 13 Q1 14 Q2 14 Q3 14 Q4 14 FY 14 Currency 2014 currency impact d
Slide 12: Issue Volume L/L Growth by Region
ISSUE VOLUME L/L GROWTH BY REGION Up +17.1% L/L in emerging countries and +4.5% L/L in developed countries(1) Q4 2014 Brazil +13.4% +14.1% Latin America Hispanic Latin America +29.0% +23.8% Total Latin America +20.2% +18.0% Q4 2014 France +5.6% +4.5% Rest of Europe +1.8% +5.0% Europe Total Europe +3
Slide 13: 2014 Issue Volume by Type of Solution
2014 ISSUE VOLUME BY TYPE OF SOLUTION Solid growth in Employee benefits and strong growth in Expense management EMPLOYEE BENEFITS PUBLIC EXPENSE INCENTIVE & SOCIAL TOTAL MEAL AND QUALITY OF MANAGEMENT REWARDS PROGRAMS FOOD LIFE Issue volume 12,828 1,603 2,428 680 174 17,713 (in € millions) As a % of
Slide 14: Contribution of Growth Drivers to 2014 Issue Volume
CONTRIBUTION OF GROWTH DRIVERS TO 2014 ISSUE VOLUME In line with annual medium term targets 2014 organic issue Medium-term targets volume growth (1) New geographies +0.2% +0%- 1% New solutions +2.6% +2%- 4% Face value +3.9% +3%- 4% New clients +5.3% +3%- 5% Total +12.0% +8%- 14% (1) Including the co
Slide 15: 2014 Total Revenue: €1,034M
2014 TOTAL REVENUE: €1,034M Good operating performance but negative currency effects Like-for-like L/L growth details by type of revenue +8.3% Q4 2014 €85m L/L growth Operating revenue with IV(2) +10.7% +10.8% Operating revenue without IV(3) -3.4% -6.1% Scope (1) Financial revenue +6.4% +3.2% +2.2%
Slide 16: 2014 Operating Revenue with Issue Volume
2014 OPERATING REVENUE WITH ISSUE VOLUME Good performance, up +10.8% L/L to €843m Operating revenue with IV L/L growth by quarter Operating revenue with IV L/L growth by region 11,0% 11,0% 10,9% 10,6% 10,8% 9,8% 9,2% 10,7% L/L growth Q4 2014 8,0% 8,1% Latin America +16.5% +16.7% Europe +4.9% +4.0% R
Slide 17: 2014 Financial Revenue: €76M
2014 FINANCIAL REVENUE: €76M Up +3.2% L/L, reflecting mixed interest rate trends by region Financial revenue L/L growth by quarter Financial revenue L/L growth by region 6,4% L/L growth Q4 2014 3,5% 3,2% 2,2% 1,0% Latin America +19.7% +16.1% Europe -8.3% -9.8% -0,6% -2,8% Rest of the world +25.1% +2
Slide 18: 2014 EBIT: €343M
2014 EBIT: €343M Increase of +14.4% L/L, reflecting strong operating performance Change Change In € millions 2013 2014 reported L/L Total revenue 1,030 1,034 +0.5% +8.3% Operating EBIT 263 267 +1.3% +17.8% Financial EBIT 80 76 -4.7% +3.2% Total EBIT 343 343 0.0% +14.4% Operating EBIT Latin America
Slide 19: Flow-Through Ratio
FLOW-THROUGH RATIO Operating flow-through ratio of 57%, in line with objective of >50% Operating revenue Financial revenue Changes Currency effect(2) L/L∆: €83m L/L∆: €3m in scope(1) 2013 EBIT 2014 EBIT (reported) €7m (reported) €3m €343m €47m €(57)m €343m of which: Flow-through €(36)m from VEF
Slide 20: Operating EBIT Margin
OPERATING EBIT MARGIN(1) A 2.3pt L/L improvement in 2014 Operating flow-through Currency effect and ratio(2) of 57% changes in scope Operating EBIT/ Operating EBIT/ operating revenue operating revenue (reported) +2.3pts -2.1pts (reported) 27.7% 27.9% 2013 2014 (1) As a percentage of operating revenu
Slide 21: 2014 Net Profit
2014 NET PROFIT Recurring earnings per share of €0.86 In € millions 2013 2014 EBIT 343 343 Net financial expense (41) (46) Operating profit before tax and non-recurring items 302 297 Non-recurring income and expenses, net (28) (30) Income tax expense (97) (95) Tax on dividends (6) (4) Minority inter
Slide 22: Cash Flows
CASH FLOWS Free Cash Flow of €335m in 2014 In € millions 2013 2014 Funds From Operations 262 261 (Increase)/decrease in float(1) 156 159 (Increase)/decrease in restricted cash (63) (36) (Increase)/decrease in working capital (excl. float) 27 1 Recurring capex (47) (50) Free Cash Flow 335 335 Externa
Slide 23: Net Debt Bridge
NET DEBT BRIDGE End of period position Strong generation of Free Cash Flow Change Net debt position Currency effects(2) and 2013 (before currency 2014 Net debt effects other Net debt position Free Cash External Shareholders’ and other non- non-recurring position (reported) Flow acquisitions(1) retur
Slide 24: Investment and Debt Maturities
INVESTMENT AND DEBT MATURITIES Net debt position of €(268)m at end-2014 Current financial assets: €1,141m Gross debt: €(1,409)m In % of total €2.5bn float at the end of 2014 €800m 62% 30% €250m €225m 20% 18% 70% 2014 operations • Repayment of €200m of gross debt(1) <1 year >1 year • €700m syndicated
Slide 25: 2014 Dividend: A 97% Payout Ratio
2014 DIVIDEND: A 97% PAYOUT RATIO IN 2014 A financial policy consistent with a Strong Investment Grade rating(1) High return Targeted to shareholders acquisitions 2014 recommended 2014 total invested in dividend(2) acquisitions €84cts €72m (1) The ratio of adjusted funds from operations to adjusted
Slide 26: 2014 Financial Performance
2014 FINANCIAL PERFORMANCE Strong organic performance, with financial targets met Strong operating performance Sound financial position Issue Volume €2.5bn negative working capital +12.0% L/L at 2014 year-end in line with Group target of 8% to 14% EBIT Net debt position of €(268)m €343m at 2014 year
Slide 27: Conclusion
3 Conclusion
Slide 28: 2015 Outlook
2015 OUTLOOK Issue volume: Organic Similar trends to 2014 in terms of volume (new clients, solutions and countries) topline Lower contribution from the increase in face value, linked to a global slowdown in inflation trends Operating revenue with IV(1) growth: a structural ~150 basis point d
Slide 29: Two Pillars to Generate Strong and Sustainable Growth
TWO PILLARS TO GENERATE STRONG AND SUSTAINABLE GROWTH Pursue strong growth through: ▌ Formalization of the emerging markets’ economies EMPLOYEE ▌ Penetration rate increase BENEFITS ▌ New solutions and new countries development Accelerate growth through: Long-term organic targets EXPENSE ▌ Roll out a
Slide 30: Appendices
4 Appendices
Slide 31: Issue Volume
ISSUE VOLUME Q1 Q2 Q3 Q4 FY 2014 In € millions 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 France 665 713 661 662 566 592 865 913 2,757 2,880 Rest of Europe 1,124 1,302 1,203 1,318 1,204 1,275 1,373 1,447 4,904 5,342 Latin America* 2,025 1,902 2,199 2,122 2,193 2,289 2,407 2,538 8,824 8,851 Re
Slide 32: Focus on Issue Volume by Region
FOCUS ON ISSUE VOLUME BY REGION Issue volume L/L growth Q1 Q2 Q3 Q4 FY 2014 Brazil 14.4% 13.9% 14.8% 13.4% 14.1% Hispanic Latin America 21.6% 21.5% 21.9% 29.0% 23.8% Total Latin America 17.0% 16.8% 17.7% 20.2% 18.0% Issue volume L/L growth Q1 Q2 Q3 Q4 FY 2014 France 7.2% 0.2% 4.5% 5.6% 4.5% Rest of
Slide 33: Operating Revenue with Issue Volume
OPERATING REVENUE WITH ISSUE VOLUME Q1 Q2 Q3 Q4 FY 2014 In € millions 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 France 29 30 28 28 24 27 40 42 121 127 Rest of Europe 61 66 62 67 60 63 70 74 253 270 Latin America* 101 91 106 100 105 109 113 113 425 413 Rest of the world 7 7 8 8 8 9 8 9 31 33
Slide 34: Operating Revenue without Issue Volume
OPERATING REVENUE WITHOUT ISSUE VOLUME Q1 Q2 Q3 Q4 FY 2014 In € millions 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 France 5 5 5 6 6 5 5 5 21 21 Rest of Europe 13 11 11 9 10 8 18 17 52 45 Latin America* 7 5 8 7 5 6 5 6 25 24 Rest of the world 6 5 5 5 5 7 6 8 22 25 Operating revenue without IV
Slide 35: Financial Revenue
FINANCIAL REVENUE Q1 Q2 Q3 Q4 FY 2014 In € millions 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 France 5 5 6 4 5 4 5 4 21 17 Rest of Europe 6 4 5 5 5 6 5 5 21 20 Latin America* 8 8 8 8 9 10 8 9 34 35 Rest of the world 1 1 1 1 1 0 1 2 4 4 Financial revenue 20 18 21 18 20 20 20 20 80 76 Q1 Q2 Q3
Slide 36: Total Revenue
TOTAL REVENUE Q1 Q2 Q3 Q4 FY 2014 In € millions 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 France 40 40 38 38 35 36 50 51 163 165 Rest of Europe 80 81 78 81 75 77 93 96 326 335 Latin America* 117 104 122 115 120 125 125 128 484 472 Rest of the world 13 13 15 14 14 16 15 19 57 62 Total revenue
Slide 37: Operating EBIT & Total EBIT
OPERATING EBIT & TOTAL EBIT Change In € millions 2013 2014 Change L/L reported France 22 23 0.8% -1.0% Rest of Europe 76 80 6.0% 6.0% Latin America 184 178 -2.9% 22.0% Rest of the world (1) 5 n/a n/a Worldwide structures (18) (19) 6.4% 1.0% Operating EBIT 263 267 1.3% 17.8% Change In € millions 2013
Slide 38: Balance Sheet
BALANCE SHEET In € millions 2013 2014 In € millions 2013 2014 Goodwill 574 570 Total equity (1,290) (1,320) Intangible assets 132 160 Property, plant & equipment 58 44 Gross debt 1,605 1,409 Other non-current assets 80 91 Provisions and deferred tax 163 168 Working capital assets Restricted cash 1,1
Slide 39: Exchange Rates
EXCHANGE RATES Average exchange rates for 2013 and 2014 2014 2014 2014 2014 2014 vs. vs. vs. vs. vs. €1 = X foreign FY FY Q1 2013 Q1 2014 2013 Q2 2013 Q2 2014 2013 Q3 2013 Q3 2014 2013 Q4 2013 Q4 2014 2013 2013 currency 2013 2014 Change Change Change Change Change (in % ) (in % ) (in % ) (in % ) (in
Slide 40: Scope Effects
SCOPE EFFECTS Acquisitions Consolidation date Big Pass, Colombia February 2013 Repom, Brazil March 2013 Opam, Mexico June 2013 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, Germa
Slide 41: 2015 Expected Calendar Effects
2015 EXPECTED CALENDAR EFFECTS Q1 Q2 Q3 Q4 2015 Nb of Nb of Nb of Nb of Nb of Working days % change % change % change % change % change days days days days days Europe 0 0.0% 0 0.4% 0 0.6% 1 1.0% 1 0.5% Latin America 1 1.4% 0 0.5% -1 -0.9% 0 -0.5% 0 0.1% Rest of the world 0 0.4% 0 -0.1% -1 -2.3% 2 2
Slide 42: EBIT Bridge
EBIT BRIDGE Methodology and 2015 guidance EBIT >50% 100% EBIT (reported) Scope and (reported) of operating revenue of financial revenue L/L change L/L change currency effects YEAR N-1 YEAR N 2015 Operating revenue with IV growth: a Financial revenue expected • Scope effects (1): from the Guidance st