Edenred Sa · EURONEXT:EDEN
Edenred Sa — Merger or Acquisition (January 2016)
18 slides from Edenred Sa's merger presentation, Jan 12, 2016
Slide 1: Edenred accelerates its development in Expense Management
Edenred accelerates its development in Expense Management Conference call 12 January 2016
Slide 2: A Unique Opportunity for Edenred
A UNIQUE OPPORTUNITY FOR EDENRED Acceleration of the Group’s development in Expense Management ▌ Creation of a major player, owned at 65% by Edenred, in the fast-growing and under-penetrated Expense Management market in Brazil ▌ Doubling the size of Edenred’s Expense Management business in Brazil ▌
Slide 3: Edenred Profile Post-Transaction
EDENRED PROFILE POST-TRANSACTION Higher contribution of Expense Management, moderate increase of exposure to Brazil EDENRED GROUP EDENRED GROUP EDENRED GROUP “AS IS” POST-EMBRATEC POST-EMBRATEC & UTA(2) Contribution of 12% 17% Expense 30% Management to Group IV(1) Contribution 28% 33% 28% of Brazil
Slide 4: Transaction Structure
1 Transaction Structure
Slide 5: Embratec Presentation
1 EMBRATEC PRESENTATION Key facts & figures A SUCESSFUL FAMILY-OWNED BUSINESS ▌ A group created and owned by 2 2014 Issue Volume of #2 R$4,470m(1) successful and well-established Brazilian player in the Fuel & Fleet families market in Brazil 2014 revenue of ▌ Strong financial track-record since 970
Slide 6: Embratec Business Profile
1 EMBRATEC BUSINESS PROFILE A strong player on the Expense Management market in Brazil Fuel & Fleet Salary Anticipation Employee Benefits 78% of IV 12% of IV 10% of IV Salary Heavy & Light Fleet Food & Meal Anticipation 2014 IV of R$522m(1) 2014 IV of R$455m(1) 2014 IV of R$3,492m(1) Partnership bet
Slide 7: Existing Structures for Edenred & Embratec
1 EXISTING STRUCTURES FOR EDENRED & EMBRATEC 2 groups with complementary business exposures in Brazil Employee Benefits IV Expense R$455m(2) Management IV R$3,616m(1) Salary Anticipation IV R$522m(2) 2014 2014 … Issue Volume Issue Volume Expense of R$17,535m(1) of R$4,470m(2) Management IV Employee
Slide 8: Transaction Structure
1 TRANSACTION STRUCTURE Creation of a Joint-Venture in Expense Management controlled by Edenred Expense Management Employee Benefits Creation of a Joint-Venture controlled by Edenred Acquisition by Edenred Joint-Venture Embratec Shareholders 100% 100% 100% 35% 100% 62%(1) 65% 100% Total transaction
Slide 9: Evolution of Edenred Brazil's Business Profile
EVOLUTION OF EDENRED BRAZIL’S BUSINESS PROFILE 1 Doubling the size of Edenred’s Expense Management business in Brazil Edenred Brazil Issue Volume (R$bn) for 2014 by business segment pre and post-transaction 22.0 (2) 17.5 (1) x2 7.6 35% Expense Management 21% 3.6 +3% 13.9 14.4 65% Employee Benefits 7
Slide 10: Strategic Rationale
2 Strategic Rationale
Slide 11: Expense Management: 2nd Pillar for Growth
EXPENSE MANAGEMENT: 2ND PILLAR FOR GROWTH 2 A major growth lever for the Group 2015 / 2016 achievements A fast-growing business ▌ Development in Europe, through our investment in UTA, to 14% take advantage of a strong market potential 12% 2,428 34% ownership, with a call option on 17% exercisable
Slide 12: Brazilian Fuel & Fleet Market
2 BRAZILIAN FUEL & FLEET MARKET An underpenetrated market with strong potential PENETRATION LEVELS MARKET GROWTH DRIVERS (Billion Liters) ▌ Strong growth potential thanks to: B2B Fuel • Brazilian transportation infrastructure highly Distribution Market relying on road ~55-60 BnL • Growing penetratio
Slide 13: Creation of a Major Player in Fuel & Fleet
2 CREATION OF A MAJOR PLAYER IN FUEL & FLEET Edenred gets key position to capture growth in Brazil Joint-Venture controlled by FOCUS ON FUEL & FLEET MARKET POSITION OF THE JOINT-VENTURE ON THE FUEL & FLEET MARKET IN BRAZIL (EXCL. FREIGHT) (Excl. Repom and other Freight players) R$7.6bn (1) >23.5k af
Slide 14: Financials
3 Financials
Slide 15: Synergies
3 SYNERGIES Sizeable synergies expected in Expense Management Business synergies Costs Improve sales efficiency Corporate and Support Densify geographical reach functions rationalization Leverage on best practices IT platform mutualization (loyalty, pricing, etc.) Economies of scale on variabl
Slide 16: Financials
3 FINANCIALS ▌ Closing of transaction is expected in H1 2016 (after review by competition authorities) ▌ A transaction adding a minimum R$90m(1) of additional EBITDA to Edenred (2014 basis, before synergies) ▌ A deal based on a ~14x EBITDA to value assets (including some synergies) ▌ An EPS accretiv
Slide 17: Conclusion
4 Conclusion
Slide 18: Conclusion
4 CONCLUSION A strategic opportunity to strengthen Edenred’s growth profile 1. Create and operate a major player on the Fuel & Fleet market in Brazil, which offers strong growth potential 2. Increase Group exposure to Expense Management, an expanding and underpenetrated market, which would represent