Edenred Sa · EURONEXT:EDEN
Edenred Sa — Investor Presentation (June 2019)
64 slides from Edenred Sa's investor presentation, June 2019
Slide 1: Investor presentation June 2019
Investor presentation June, 2019
Slide 2: Agenda
Agenda 1. Edenred In A Nutshell 2. Fast Forward Strategic Plan 3. FY 2018 & Q1 2018 Financial Performance 4. Corporate Social Responsibility & Governance Appendices: Deep Dive Into Business Lines 2
Slide 3: At the heart of a win-win ecosystem
AT THE HEART OF A WIN-WIN ECOSYSTEM 47 million Public institutions employee users + traceability and efficiency Distribution of the + Use of the service service purchasing power and simplicity + + performance and €28.1 billion revenue 830,000 attractiveness business volume and loyalty 1.7 million co
Slide 4: One leadership based on four know-how
ONE LEADERSHIP BASED ON FOUR KNOW-HOW Financial Intermediation Selected ecosystems Global leader in payment FinTech RegTech solutions for the Issuer & Processor Compliance working world Data Intermediation Big data & Analytics 4
Slide 5: 3 business lines
3 BUSINESS LINES 64%* 25%* 11%* EMPLOYEE BENEFITS FLEET & MOBILITY SOLUTIONS COMPLEMENTARY SOLUTIONS #1 worldwide #1 in Latin America Corporate Payment Services More than100 solutions for #2 in Europe** Incentive & Rewards Food and Meal A full range of solutions to manage Public Social Progr
Slide 6: An international leader with a multi-local presence
AN INTERNATIONAL LEADER WITH A MULTI-LOCAL PRESENCE 8,500 employees in 46 countries Employees by region (2017) Europe: 47% (of which 16% in France) Latin America: 40% Rest of the World: 13% 6
Slide 7: Key financial figures
KEY FINANCIAL FIGURES Another record year driven by double-digit organic growth in 2018 Net profit, Total revenue EBITDA EBIT Group share €1,378m €536m €461m €254m +11.9% L/L +16.2% L/L +17.5% L/L +4.4% as reported +6.7% as reported +7.3% as reported +5.2% as reported 7
Slide 8: Agenda
Agenda 1. Edenred In A Nutshell 2. Fast Forward Strategic Plan 3. FY 2018 & Q1 2018 Financial Performance 4. Corporate Social Responsibility & Governance Appendices: Deep Dive Into Business Lines 8
Slide 9: Fast Forward strategic plan
FAST FORWARD STRATEGIC PLAN Accelerate our development through the Set ambitious organic growth targets integration of our acquisitions Mid-term annual targets (Like-for-Like growth) Boost performance of our acquisitions & > +7% Operating generate synergies to Revenue … position ourselves as a glo
Slide 10: 2016-2018: Outperformance
2016-2018: OUTPERFORMANCE An organic growth higher than objectives Reported figures in € millions FY 2016 FY 2017 FY 2018 ANNUAL MEDIUM- Like-for-like growth figures (excluding Venezuela) TERM OBJECTIVES Operating revenue 1,253 1,327 +8% +9% +13% > +7% 2017 2018 Operating EBIT 362 410 +17% +16% +24%
Slide 11: Significant potential in core and adjacent markets
SIGNIFICANT POTENTIAL IN CORE AND ADJACENT MARKETS Long-term potential for sustainable and profitable growth Edenred’s markets (Employee Benefits, Fleet & Mobility Solutions, Corporate Payment Services) remain largely under-penetrated Markets Fast Forward Strong progress in go-to-market Further prog
Slide 12: Business excellence at the heart of Edenred's performance
1 BUSINESS EXCELLENCE AT THE HEART OF EDENRED’S PERFORMANCE 9 business excellence levers systematically optimized Key business excellence levers Field Sales Efficiency SME Targeting Indirect Sales Channels Illustration 1: Generation of new SME contracts Customer Retention Cross- & Up-Selling Illustr
Slide 13: Business excellence: new SME contracts
1 BUSINESS EXCELLENCE AT THE HEART OF EDENRED’S PERFORMANCE Illustration 1: Generation of new SME contracts Almost x2 new SME contracts in 2018 vs. 2017 SME Targeting Leverage digitization in product and sales channels to improve commercial reach: Organization Fast ramp-up of telesales teams Sim
Slide 14: Business excellence: light fleet solution in Italy
1 BUSINESS EXCELLENCE AT THE HEART OF EDENRED’S PERFORMANCE Illustration 2: Light fleet solution in Italy Fast ramp-up of light fleet solution in Italy (launched in January 2018) 2nd largest local acceptance network (>6,000 service stations, multibrand) 4,500+ clients signed in year 1 Business
Slide 15: Bring digital innovation to core products via a global platform
BRING DIGITAL INNOVATION TO CORE PRODUCTS VIA A GLOBAL PLATFORM 2 Why a global digital platform? (1/2) Strong competitive advantage to accelerate growth 80% GLOBAL REACH TIME TO MARKET COST EFFICIENCY VALUE-ADDED SERVICES digital business volume in 2018 TAILOR-MADE SOLUTIONS DIFFERENTIAT
Slide 16: Leveraging proprietary and partner capabilities
BRING DIGITAL INNOVATION TO CORE PRODUCTS VIA A GLOBAL PLATFORM 2 By leveraging proprietary and partner capabilities to fit customer needs (2/2) PROPRIETARY MULTI-TECHNOLOGY OMNICHANNEL Smart Automated Mobile Cards NFC tag transfers routing system - NFC - Plastic/virtual - QR code - Prepaid/postpaid
Slide 17: Illustration 1: Leader in mobile payment
2 ILLUSTRATION 1: LEADER IN MOBILE PAYMENT Enhance user experience to adapt to new payment trends in 12 countries on 3 continents 15m transactions Worldwide mobile payment market (in value) expected to almost double every two years in the coming years(1) Top adoption and user engagement rates
Slide 18: Illustration 2: Leader in direct payment services
2 ILLUSTRATION 2: LEADER IN DIRECT PAYMENT SERVICES (APP-TO-APP) The most advanced digital payment means empowering Edenred’s ecosystem Daily transactions x3 vs. July 2018 Enlarge the network to digital players: €23bn digital food delivery market, with 18% CAGR expected in 2018-2021(1) Top ado
Slide 19: Value-added services around the fuel card
LEVERAGING EDENRED’S GROWING ECOSYSTEM TO DEVELOP 2 ADDITIONAL SERVICES AND NEW SOLUTIONS Illustration 1: Value-added services around the fuel card EETS European Additional services interoperable on-board Fuel additive unit for toll collection New solutions Repairs National tags for toll collection
Slide 20: Scaling up promising adjacency initiatives
LEVERAGING EDENRED’S GROWING ECOSYSTEM TO DEVELOP 2 ADDITIONAL SERVICES AND NEW SOLUTIONS Illustration 2: Scaling-up most promising adjacency initiatives across the Group Additional services New solutions Rolling out a continental Building the leading corporate expense platform neobank in UAE A cust
Slide 21: Acquisitions fueling sustainable and profitable growth
3 ACQUISITIONS FUELING SUSTAINABLE AND PROFITABLE GROWTH Recent acquisitions have followed a consistent M&A strategy Employee Benefits Fleet & Mobility Corporate Payment Solutions Services Bolt-on acquisitions to consolidate Build-up acquisitions to become a Expand Edenred’s footprint in Edenred’s l
Slide 22: B2B payment: a large addressable North American market
B2B PAYMENT: A LARGE ADDRESSABLE NORTH AMERICAN MARKET 3 CSI: a leading, fast-growing and profitable fintech Global B2B payment volume(1): $120tn Card penetration: 2% B2B PAYMENT VOLUME IN One fast-growing and profitable fintech NORTH AMERICA $25tn 2018 figures Payment $11bn volume 4% 10% Operating
Slide 23: CSI helps improve the accounts payable process
3 CSI HELPS IMPROVE THE ACCOUNTS PAYABLE PROCESS More efficiency, new revenue streams From a traditional highly manual … to CSI’s comprehensive corporate corporate payment process… payment automation solution Check ACH Vendor A Mail Sign Print Approve Vendor B Single CSI Any Client payment workflow
Slide 24: Employee engagement platforms
EMPLOYEE ENGAGEMENT PLATFORMS 3 Continuous investment to reinforce our position since January 2019 e.g. NEW + Several use cases Value proposition Vastly under-penetrated The employer grants tax-free Employer market benefits, which the employee can use on a platform Foster employee engagement
Slide 25: Agenda
Agenda 1. Edenred In A Nutshell 2. Fast Forward Strategic Plan 3. FY 2018 & Q1 2018 Financial Performance 4. Corporate Social Responsibility & Governance Appendices: Deep Dive Into Business Lines 25
Slide 26: Financial Performance
Financial 1. FY 2018 Results Performance 2. Q1 2019 revenue 26
Slide 27: 2018 operating revenue
2018 OPERATING REVENUE Organic growth acceleration throughout 2018, major currency headwinds FY 2018 L/L operating growth €1,327m 15.3% 14.6% 13.4% 13.3% Reported +5.9% 9.3% 9.8% vs. restated 2017 Venezuela -0.2% FY 17 Q1 18 Q2 18 Q3 18 Q4 18 FY 18 2017 growth rates do not take into account IFRS 1
Slide 28: 2018 operating revenue breakdown by geography
2018 OPERATING REVENUE BREAKDOWN & GROWTH BY GEOGRAPHY Double-digit growth across all regions Europe 57% +14.6% L/L +15.7% as reported Rest of the World 6% +11.6% L/L Latin America -1.7% as reported +12.0% L/L 37% (excluding Venezuela) -5.2% as reported % of 2018 Group operating revenue 28
Slide 29: 2018 operating revenue breakdown by business line
2018 OPERATING REVENUE BREAKDOWN & GROWTH BY BUSINESS LINE Double-digit organic growth across all business lines EMPLOYEE BENEFITS FLEET & MOBILITY COMPLEMENTARY SOLUTIONS SOLUTIONS Corporate Payment Services % OF FY 2018 Incentive & Rewards GROUP OPERATING 65% 25% 10% Public Social Programs REVENUE
Slide 30: FY 2018 total EBIT: €461M
FY 2018 TOTAL EBIT: €461M 23.5% like-for-like operating EBIT growth Reported FY 2017 In € millions FY 2018 FY 2017 L/L change(1) change reported Operating revenue 1,327 1,253 +5.9% +13.3% 1,272 Other revenue (A) 51 67 -24.1% -14.7% 67 Total revenue 1,378 1,320 +4.4% +11.9% 1,339 EBITDA 536 502 +6.7%
Slide 31: FY 2018 net profit: €254M
FY 2018 NET PROFIT: €254M Increase in net profit, Group share Reported In € millions FY 2018 FY 2017 change EBITDA 536 502 +6.7% Depreciation and amortization (excluding PPA) (54) (51) Purchase price allocation (PPA) (21) (22) EBIT 461 429 +7.3% 2018 2017 Acquisition fees (16) (2) Share of net profi
Slide 32: FY 2018 funds from operations: €400M
FY 2018 FUNDS FROM OPERATIONS: €400M +17% like-for-like FFO growth Reported In € millions 2018 2017 change L/L change EBITDA 536 502 +6.7% +16.2% Funds from operations 400 379 +5.5% +17.0% Increase/(decrease) in cash linked to changes in float(1) 161 271 (Increase)/decrease in restricted cash (279)
Slide 33: FY 2018 net debt: €659M
FY 2018 NET DEBT: €659M Strong free cash flow generation fueling acquisitions and shareholder return Currency December 31, 2017 effects(1) and December 31, 2018 Net debt position Free cash Acquisitions Shareholder other non- Net debt position (IFRS 9 restated) flow (incl. put options) return recurri
Slide 34: Debt profile and capital allocation policy
DEBT PROFILE AND CAPITAL ALLOCATION POLICY Edenred’s capital allocation policy Gross debt Floating-rate Fixed-rate Cost of debt (in €m) 2,500 2.5% 3.0% Maximize value creation for shareholders through a 2.5% balanced deployment of capital between: 2,000 1.8% 2.0% Immediate return to shareholders
Slide 35: Financial Performance
Financial 1. FY 2018 Results Performance 2. Q1 2019 revenue 35
Slide 36: Q1 2019 operating revenue
Q1 2019 OPERATING REVENUE Strong start to the year in both organic and reported figures Q1 2019 L/L operating growth €369m 14.6% 15.3% 13.4% 13.3% 14.2% Reported +15.6% 9.8% Venezuela -0.1% Q1 18 Q2 18 Q3 18 Q4 18 FY 18 Q1 19 Scope +4.1% €13m from scope effects €(9m) from currency effects Curr
Slide 37: Q1 2019 revenue by business line
Q1 2019 OPERATING REVENUE BREAKDOWN & GROWTH BY BUSINESS LINE Double-digit organic growth across all business lines EMPLOYEE BENEFITS FLEET & MOBILITY COMPLEMENTARY SOLUTIONS SOLUTIONS Corporate Payment Services % OF Q1 2019 Incentive & Rewards GROUP OPERATING 64% 25% 11% Public Social Programs REVE
Slide 38: Q1 2019 revenue by geography
Q1 2019 OPERATING REVENUE BREAKDOWN & GROWTH BY GEOGRAPHY Double-digit organic growth across all regions Rest of the World Europe +20.9% L/L 58% +13.8% L/L 8% +64.1% as reported +16.4% as reported Latin America +13.9% L/L 34% (excluding Venezuela) % of Q1 2019 Group operating revenue +7.3% as report
Slide 39: Q1 2019 operating revenue by geography
Q1 2019 OPERATING REVENUE BY GEOGRAPHY Sustained organic growth across the board, ongoing integration of last acquisitions Q1 2019 operating revenue 2019 vs. 2018 L/L growth FY 18 Q1 19 of Group operating 58% €213m France +10.0% +9.0% +13.8% L/L Europe excl. France +16.8% +16.3% revenue +16.4% as re
Slide 40: Q1 2019 other revenue
Q1 2019 OTHER REVENUE Reported L/L change In €m Q1 18 Q1 19 change (excluding Venezuela) Other revenue boosted by: Latin America 8 9 +1.9% +5.4% Good business momentum Slightly higher interest rates in some Europe 4 4 +11.9% +12.0% European countries outside the eurozone Rest of the World 1 1 +4
Slide 41: 2019 outlook
2019 OUTLOOK Tackling 2019 with confidence Sustained growth in all regions and all business lines, driven by: Disciplined go-to-market approach and digital Integration and ramp-up of 2018 acquisitions and agility to further grow in under-penetrated markets partnerships Employee Benefits: Inn
Slide 42: Agenda
Agenda 1. Edenred In A Nutshell 2. Fast Forward Strategic Plan 3. H1 & Q3 2018 Financial Performance 4. Corporate Social Responsibility & Governance Appendices: Deep Dive Into Business Lines 42
Slide 43: Environment, Social & Governance (ESG)
ENVIRONMENT, SOCIAL & GOVERNANCE (ESG) A recognized commitment Since 2013, Edenred has been listed in the Dow Jones Sustainability Indices. Launched in 1999, the DJSI were the first global indices tracking the financial performance of leading sustainability-driven companies worldwide Edenred is pa
Slide 44: New ESG strategy in 2018
NEW ESG STRATEGY IN 2018 People, Planet, Progress Improve quality of life Preserve the environment Create value responsibly 44
Slide 45: Corporate Social Responsibility
CORPORATE SOCIAL RESPONSIBILITY 2022 and 2030 targets 2022 2030 TRAINING - % employees who received at least 1 training 80% 85% DIVERSITY - % women among executive positions 25% 40% SOLIDARITY - Number of days of volunteering 1,000 5,000 NUTRITION - % food users & merchants sensitized 50% 85% GAS EM
Slide 46: Focus on people, a key pillar of growth strategy
FOCUS ON PEOPLE, A KEY PILLAR OF EDENRED’S GROWTH STRATEGY Edenred accelerates its investment in people NURTURING OUR TALENTS IN 2018 8,500 employees HIRE: Edenstep Graduate Program +2,200 people in the Group since 2015 IDENTIFY: Talent Review ► 450+ profiles 49% under 35 TRAIN: Executive Academy &
Slide 47: Focus on diversity
FOCUS ON DIVERSITY A key topic for the Group OUR CONVICTIONS Diversity and inclusion enhance innovation and performance Meritocracy is our main principle to promote and recruit people A company commitment: gender diversity Key actions undertaken in 2019 Gender diversity globally well balanced
Slide 48: Governance principles
GOVERNANCE PRINCIPLES A governance fully complying with the AFEP-MEDEF Code Board of Directors (11 members) 90% independent directors* 40% women on the Edenred Board of Directors* How does the Management: Chairman and Chief Executive Officer and a Vice-Chairman of Board work? the Board and L
Slide 49: Agenda
Agenda 1. Edenred In A Nutshell 2. Fast Forward Strategic Plan 3. H1 & Q3 2018 Financial Performance 4. Corporate Social Responsibility & Governance Appendices: Deep Dive Into Business Lines 49
Slide 50: Edenred's value proposition
EDENRED’S VALUE PROPOSITION EMPLOYEE BENEFITS FLEET & MOBILITY COMPLEMENTARY SOLUTIONS SOLUTIONS Corp. Payment: Secure, instant, Managing ▌ ▌ Anti-fraud & cost-effective efficient and smart payment transactional flows ▌ Tax-effective employee solutions ▌ I&R: Convenient solutions for efficiently com
Slide 51: Employee Benefits
EMPLOYEE BENEFITS 51
Slide 52: Creator of the Ticket Restaurant concept in 1960s
CREATOR OF THE TICKET RESTAURANT CONCEPT IN 1960’s These solutions vitalize the economy and local employment through local spending e.g., in France 1 job is created for every 23 users of meal vouchers 1 million restaurants or food shops affiliated Edenred offers More than its solutions in more than
Slide 53: Employee Benefits: competitive landscape
EMPLOYEE BENEFITS Competitive landscape: Edenred is the industry leader on a large, global and growing market 3 global players Local players1 #1 or #2 #1 to #3 Challenger in all in most position countries countries A STILL UNDERPENETRATED INDUSTRY: 20% to 25% global penetration rate(3). Strong under
Slide 54: Digitization offers strong topline growth opportunities
DIGITIZATION OFFERS STRONG TOPLINE GROWTH OPPORTUNITIES Focus on Employee Benefits business opportunities Impact on business volume Impact on operating revenue More differentiation (e.g., mobile New revenues from merchants Shift to digital of payment) & corporates (e.g., fees per existing products +
Slide 55: Employee Benefits: business model
EMPLOYEE BENEFITS: BUSINESS MODEL A highly profitable model Edenred is at the heart of a network of corporate clients, employee users and partner merchants Main key indicator: Issue volume(1) Design/ Request Management reimbursement and sale Operating revenue with CLIENT business volume MERCHANT FEE
Slide 56: Fleet & Mobility Solutions
FLEET & MOBILITY SOLUTIONS 56
Slide 57: Fleet & Mobility Solutions
FLEET & MOBILITY SOLUTIONS Help companies to manage their corporate expenses, mainly linked to fleet Optimization of vehicle fleet servicing costs up to 20% (fuel, toll & maintenance cards, etc.) A single card to pay for tolls, fuel and vehicle maintenance without carrying large amounts of cash 2.8
Slide 58: Fuel & fleet market
FUEL & FLEET MARKET A large, multi-local and fast-growing market with a low penetration rate Competitive landscape Average annual Over €1,000bn 25% growth of US specialist players annual average 5-10% penetration for Fuel & Fleet spend solutions Large fuel card specialists NORTH LATIN AFRICA & AMERI
Slide 59: Edenred has become a global player on the fleet & mobility market
EDENRED HAS BECOME A GLOBAL PLAYER ON THE FLEET & MOBILITY MARKET A large footprint in Latin America & Europe #2 Europe-wide player in multi-brand fuel cards Edenred Fuel & Fleet solution Only Edenred Fuel & Fleet acceptance network Edenred Travel & Expense solutions #1 in Latin America #1 in Braz
Slide 60: Fleet & Mobility Solutions: business model
FLEET & MOBILITY SOLUTIONS: BUSINESS MODEL Fuel & Fleet and Travel & Expense solutions Edenred is at the heart of a network of corporate clients, Fleet & Mobility employee users and partner merchants solutions Main key indicator: Transaction volume Numerous additional merchant categories Edenred Cor
Slide 61: Complementary Solutions
COMPLEMENTARY SOLUTIONS 61
Slide 62: Complementary solutions
COMPLEMENTARY SOLUTIONS Several families of solutions CORPORATE INCENTIVE & PUBLIC SOCIAL PAYMENT REWARDS PROGRAMS Smarter & more efficiently Boost motivation of teams, Value- improve sale force performance Deliver specifically allocated manage financial flows between public funds to citizens propos
Slide 63: Strong growth prospects in Corporate Payment Services
STRONG GROWTH PROSPECTS IN CORPORATE PAYMENT SERVICES A full offer to make payment smarter and more efficient for corporates VIRTUAL CARDS CORPORATE IDENTIFIED BANK TAILOR-MADE ACCOUNTS PAYABLE TRAVEL TRANSFERS PROGRAMS NEW PAY-OUT CASH-IN MasterCard virtual Best-in-class cloud- Virtual card Ident
Slide 64: Contact
CONTACT Solène Zammito [email protected] Loïc Da Silva [email protected] 64