Press Release |
Paris,
23 February 2017 |
|
2016: Solid results in line with expectations
Operating and financial performance
- Revenue for the year : 2,312 million euros
- Up 8% on a comparable basis[1]
- Up 16% on a comparable basis1 excluding the United States and
Brazil
- Highlights :
- Acceleration in growth of ePayments (+11%1 for the year and
+19%1 in Q4)
- Increase in contribution from Omnichannel solutions
- Excellent performance in 2016 in Europe (+14%1) and in
Asia-Pacific (+25%1)
- EBITDA[2]: 476 million euros representing 20.6% of
revenues
- Free cash-flow of 248 million euros, representing a
conversion rate FCF/EBITDA of 52%
- Group net profit of 244 million euros, up 6%
- Proposed dividend of 1.50 euros, up 15%
New
Organisational
Structure[3]
- New client-centred operational structure : in place at the
start of April 2017
- Organisation into two operating segments : Retail and
Banks & Acquirers
2017
Objectives
- 2017 Organic Growth of around 7%
- 2017 EBITDA margin slightly stronger than that of 2016
Ingenico Group (Euronext: FR0000125346 - ING) today
announced today its fourth quarter 2016 revenues and its audited
financial statements results for the year ended December 31,
2016.
Philippe Lazare, the Chairman and Chief
Executive Officer of Ingenico Group, commented: "The growth of
the ePayments division accelerated sharply at the end of the year,
illustrating the relevance of the investments we have made. All
regions recorded excellent performances, with the exception of the
Brazilian and US markets. Again this year, the Group demonstrated
its strong cash generation capability and strengthened its
excellent financial position. Our recent commercial successes
reflect our excellent innovation capabilities combined with the
quality of our products and services. The operational
reorganization designed around our clients, announced today, will
strengthen the implementation of the Group's omnichannel
strategy."
2016 Results
Key figures
(in millions of euros) |
2016 |
2015 |
Year-on-Year Difference |
Revenue |
2 312 |
2 197 |
+5% |
Adjusted Gross Profit |
987 |
972 |
+2% |
As a % of revenue |
42.7% |
44.3% |
-160bpts |
Adjusted Operating expenses |
(584) |
(536) |
9% |
As a % of revenue |
-25.3% |
-24.4% |
90bpts |
Profit from ordinary activities, adjusted (EBIT) |
403 |
437 |
-8% |
As a % of revenue |
17.5% |
19.9% |
-240bpts |
Operating margin |
357 |
381 |
-6% |
Net Profit |
251 |
235 |
7% |
Net Profit attributable to Group shareholders |
244 |
230 |
6% |
EBITDA |
476 |
508 |
-6% |
As a % of revenue |
20.6% |
23.1% |
-250bpts |
|
|
|
|
Free cash flow |
248 |
285 |
-13% |
Net Debt |
126 |
252 |
-50% |
Net Debt-to-EBITDA ratio |
0.3x |
0.5x |
|
Equity attributable to Group shareholders |
1 703 |
1 506 |
13% |
8% organic growth in revenue
|
FY 2016 |
Q4 2016 |
M€ |
% change |
M€ |
% change |
Comparable1 |
Reported |
Comparable1 |
Reported |
ePayments |
488 |
11% |
9% |
133 |
19% |
19% |
Europe-Africa |
846 |
14% |
11% |
215 |
7% |
3% |
APAC & Middle East |
530 |
25% |
21% |
153 |
23% |
26% |
Latin America |
172 |
-20% |
-25% |
42 |
-30% |
-22% |
North America |
276 |
-13% |
-13% |
66 |
-32% |
-32% |
Total |
2 312 |
8% |
5% |
609 |
3% |
3% |
Performance in the fourth quarter
In the fourth quarter of 2016, revenue totaled 609
million Euros, representing a 3% increase on a reported basis,
including a negative exchange rate impact of 8 million Euros and a
positive perimeter effect of 10 million Euros. Total revenue
included 412 million Euros generated by the Payment Terminals
business and 197 million Euros in Payment Services activities.
On a comparable basis1, revenue was up 3%
compared to the Q4 2015 figure in comparison to the fourth quarter
of 2015 with an increase of 16% for Payment Services and a decline
of 3% in Payment Terminals.
Compared to Q4 2015, performance for the fourth
quarter by division, on a like-for-like basis and at constant
exchange rates, was as follows:
- ePayments (+19%) : The ePayments
division recorded very strong growth, with strong transaction
volumes at the end of the year (Single Day, Thanksgiving, Cyber
Monday), thus beating its record for the number of transactions
processed in a single day.The division's new offer has encountered
tremendous commercial success notably thanks to the newly developed
features, allowing e-retailers to improve their conversion rates.
In 2016, the platform delivered a record availability rate,
reflecting the quality of the investments made. - Europe-Africa
(+7%): Activity in payment terminals in mature markets remained
steady. It continued to be driven by a dynamic market and by
the replacement cycle of PCI v1 terminals in the United Kingdom and
Nordic countries. In Russia, the excellent performance was
based on our success in executing the contract with Sberbank. In
Eastern Europe, the Group continues to expand its market share,
especially in Poland and Greece. Payment Services activity
was also dynamic, benefitting from the increase in retail
transaction volumes generated on different platforms. In France and
the United Kingdom, the Group continued to gain market share and
started to deploy omnichannel contracts. In Germany, the
level of momentum in the market was reflected in strongly raised
levels of transaction volumes in the large retailers' space and in
the Petrol vertical, where the Group pursued its expansion.
- Asia Pacific and the Middle East
(+23%): Thanks to its strong positions across the region,
Ingenico Group continued to register strong growth. In the
fourth quarter, performance was mainly driven by South East Asia
and India as a result of the demonetisation announced by the
government there. In China, as expected, growth slowed in
comparison to previous quarters as a result of an unfavourable base
effect.
- Latin America (-30%): Activity
continues to be obstructed by weak demand from the main acquirers
as a result of the unfavourable macro-economic environment in
Brazil. The Group has proceeded with the certifications and
deployment of Telium Tetra in the rest of the region where
performances remain solid.
- North America (-32%): As expected, recent
performance was strongly affected by the bottleneck amongst
distributors and the recent relaxation of EMV regulations combined
with high comparison basis in the American market. Meanwhile,
the Group pursued its expansion into new segments (healthcare,
hotels and restaurants, unattended, transports). In Canada,
the Group recorded a solid growth, characterised by higher delivery
volumes following market share gains.
Performance for the year
In 2016, revenue totaled 2,312 million euros,
representing a 5% increase on a reported basis, including a
negative exchange rate effect of 72 million euros and a positive
perimeter effect of 10 million euros. Total revenue included €1,584
million generated by the Payment Terminals business and €728
million generated by Payment Services activities.
In a comparable basis1, revenue growth
reached 8%, with an increase of 11% for Payment Services activity
and 7% for the Terminals activity.
As announced, the ePayments division
recovered to a double digit level of growth in the second half of
2016, allowing it to record for the whole year an
better-than-expected growth which approached 11%. This
performance is explained by a strong commercial dynamic, driven by
the quality of its platforms and its successes with large players
such as Alipay. In Latin America (-20%) sales declined
strongly due to the unfavourable economic situation in Brazil,
however Mexico recorded strong growth and the first Telium Tetra
terminals started to be delivered. In North America
(-13%), after an encouraging start to the year, the performance of
the Group was significantly impacted in the second half by a
relaxation of the EMV regulations in the United States. The other
regions recorded very good results and more than compensate the
negative trends observed in Brazil and the United States. The
excellent performance in Europe - Africa (+14%) reflects the
very strong position of the Group in this zone and its capacity to
benefit fully from the opportunities presented by technological
developments and changes in the regulations, while pursuing its
expansion into emerging markets and by developing its Services
activities. In Asia-Pacific and the Middle East (+25%)
China experienced strong growth. The other countries represented
half of the revenues of the region and also booked a robust
performance, demonstrating the solidity of the new growth drivers
in the zone.
Gross profit up 2%
In 2016, adjusted Gross profit reached 987 million
euros, or 42.7% of revenues.
Gross profit in the Terminals division rose to 733
million euros, a growth of 1% to 46.3% of revenues, due to a less
favourable geographical mix.
In parallel, the Gross profit on Payment Services
grew by 4% to 255 million euros, or 35% of revenue, despite accrued
expenses improving the performance of the ePayments platforms.
An EBITDA margin of 20.6% of revenue
In 2016, adjusted operating costs were 584 million
euros, representing 25.3% of revenue, compared to 24.4% in
2015. This increase reflected the increase in expenditure
relating to the launch of Telium Tetra, the development of the
features of online payments platforms, as well as the strengthening
of the commercial and product teams.
EBITDA was 476 million euros against 508 million
euros in 2015, representing an EBITDA margin of 20.6%.
EBIT margin represented 17.5% of turnover and
reached 403 million euros compared to 437 million euros in
2015.
A solid operating result
The other products and operational charges reached
-5 million euros. In 2015 they were -8 million euros.In 2016,
acquisition costs stood at 42 million euros against 48 million
euros in 2015.
After taking into account these charges and other
operating costs, profit from operations was 357 million euros
against 381 million euros in 2015. Operating margin
represented 15.4% of revenue against 17.3% in 2015.
Increasing net profit attributable to
shareholders
The financial outcome of -8 million euros, against
-19 million euros in 2015, takes into account the profit from the
sale of 12 million euros of Visa Europe equity securities.
Taxation costs were reduced by 22% to 97 million
euros against 125 million euros in 2015. This improvement can be
explained by a favourable geographic mix leading to an effective
tax rate for the Group of 27.9% against 34.5% in 2015.
In 2016, Group net profit attributable to
shareholders grew 6% to 244 million euros against 230 million euros
in 2015.
A sound financial position due to strong cash
generation
In 2016, the Group's operations generated free
cash-flow of 248 million euros, with a variation of the change in
working capital that was relatively stable. The FCF/EBITDA
conversion ratio reached 52%, overtaking the previously fixed
target of 45%, and despite a significant increase in investments to
77 million euros against 62 million in 2015.
The Group net debt reduced to 126 million euros
against 252 million euros at December 31 2015. The ratio of
net debt to equity was 7% and the ratio of net debt to EBITDA was
brought down to 0.3x from 0.5x at the end of 2015.
Proposed dividend of 1.50 euro per share, a rise
of 15%
In line with the Group's dividend policy, a
proposal to distribute a dividend of 1.50 euros per share will be
presented to the Annual General Meeting of shareholders on May 10,
2017, representing a distribution rate of 38%. This dividend
will be payable in cash or shares, according to the holder's
preference.
Post balance sheet events / Advancement of the
Omnichannel strategy
New Group Organisation3Ingenico Group
announced the adoption of a market and customer-centric
organization to support its global omnichannel acceptance
leadership. In this context, the two operating segments of the
Group will be called Banks & Acquirers and Retail. The detailed
operational structure of this new organization and the associated
financial indicators will be defined and communicated as part of
the publication of first quarter revenue.
Acquisition of TechProcess, leader in online
payment services in IndiaOn February 22nd 2017, the Group
announced that it had completed the acquisition of 100% of
TechProcess, leader in electronic payment services in India.
TechProcess has acquired significant positions in several segments
of the market, notably in online payment platforms, bill payments,
mobile payments and recurrent payments via the NACH system. This
acquisition reinforces the Group's strategy in India, where it is
already present in payment terminals with around 50% market share
and as a player in online payments with EBS, an entity of Ingenico
Payments.
Outlook
In 2017, the Group expects to achieve revenue
growth of around 7% (on a like-for-like basis and at constant
exchange rates) and to increase its EBITDA margin slightly than
that of 2016.
Given the 2016 growth achieved and the 2017
targets, the 2020 objective provided in March 2016 now looks
ambitious. Beyond 2017, the Group anticipates a gradual improvement
in the organic growth rate of its turnover as well as its EBITDA
margin. The Group also confirms the 45% floor for the EBITDA
conversion ratio to Free Cash Flow and maintains its minimum rate
of distribution of net income of 35%.
Conference call
The results for the 2016 period will be discussed during a Group
telephone conference call which will be held on the 23rd February
2017 at 6.00pm (Paris Time). The conference can be accessed
by dialling on of the following numbers: 01 70 99 32 08 (from
France), +1 646 851 2407 (from the US) and +44 207
1620 077 (for international participants) using the conference ID
of: 961202. The presentation will be available at
www.ingenico.com/finance.
This press release contains forward-looking
statements. The trends and objectives given in this release are
based on data, assumptions and estimates considered reasonable by
Ingenico Group. These data, assumptions and estimates may change or
be amended as a result of uncertainties connected in particular
with the performance of Ingenico Group and its subsidiaries. These
forward-looking statements in no case constitute a guarantee of
future performance, and involve risks and uncertainties. Actual
performance may differ materially from that expressed or suggested
in the forward-looking statements. Ingenico Group therefore makes
no firm commitment on the realization of the growth objectives
shown in this release. Ingenico Group and its subsidiaries, as well
as their executives, representatives, employees and respective
advisors, undertake no obligation to update or revise any
forward-looking statements contained in this release, whether as a
result of new information, future developments or otherwise. This
release shall not constitute an offer to sell or the solicitation
of an offer to buy or subscribe for securities or financial
instruments.
About Ingenico Group
Ingenico Group (Euronext: FR0000125346 - ING) is
the global leader in seamless payment, providing smart, trusted and
secure solutions to empower commerce across all channels, in-store,
online and mobile. With the world's largest payment acceptance
network, we deliver secure payment solutions with a local, national
and international scope. We are the trusted world-class partner for
financial institutions and retailers, from small merchants to
several of the world's best known global brands. Our solutions
enable merchants to simplify payment and deliver their brand
promise.Learn more at
www.ingenico.com
twitter.com/ingenico
Contacts / Ingenico Group
InvestorsCaroline AlamyInvestor Relations
Managercaroline.alamy@ingenico.com(T) / +33 1 58 01 85 09 |
CommunicationCoba TailleferExternal Communication Manager
coba.taillefer@ingenico.com(T) / +33 1 58 01 89 62 |
|
|
Upcoming eventsConference call on FY16
results: February 23 2017 at 6pm (Paris) Q1'17 revenue: April 26
2017Annual General Meeting: May 10 2017
EXHIBIT 1 :Basis for preparing the 2016
accounts
The consolidated financial data has been drawn up
in accordance with International Financial Reporting Standards. In
order to provide meaningful comparable information, that data has
been presented on an adjusted basis, i.e. restated to reflect the
depreciation and amortization expenses arising on the acquisition
of new entities. Pursuant to IFRS3R, the purchase price for new
entities is allocated to the identifiable assets acquired and
subsequently amortized over specified periods.
The main financial data for 2016 is discussed
on an adjusted basis, i.e., before Purchase Price Allocation (PPA);
see Exhibit 3.
EBITDA is not an accounting term; it is a financial
metric defined here as profit from ordinary activities before
depreciation, amortization and provisions, and before share-based
compensation. The reconciliation of adjusted profit from ordinary
operations to EBITDA is available in Exhibit 3.
EBIT (Earnings Before Interest and Taxes) is equal
to profit from ordinary activities, adjusted for amortization of
the purchase price for newly acquired entities allocated to the
identifiable assets acquired.
Free cash flow is equal to EBITDA less: cash and
other operating income and expenses, changes in working capital
requirements, investing activities net of disposals, financial
expenses net of financial income, and tax paid.
EXHIBIT 2 :Income statement,
balance sheet, cash flow statement
1.
CONSOLIDATED INCOME STATEMENT (AUDITED)
(in
millions of euros) |
2016 |
2015 |
|
|
|
REVENUE |
2
312 |
2
197 |
Cost of
sales |
(1
337) |
(1
237) |
|
|
|
GROSS PROFIT |
975 |
960 |
|
|
|
Distribution and marketing costs |
(204) |
(203) |
Research
and development expenses |
(178) |
(157) |
Administrative expenses |
(232) |
(212) |
|
|
|
PROFIT FROM ORDINARY ACTIVITIES |
361 |
389 |
|
|
|
Other
operating income |
4 |
1 |
Other
operating expenses |
(8) |
(9) |
|
|
|
PROFIT FROM OPERATING ACTIVITIES |
357 |
381 |
|
|
|
Finance
income |
77 |
84 |
Finance
costs |
(84) |
(103) |
|
|
|
NET FINANCE COSTS |
(8) |
(19) |
|
|
|
Share of
profits in equity-accounted investees |
(1) |
(3) |
|
|
|
PROFIT BEFORE INCOME TAX |
348 |
360 |
|
|
|
Income
tax expense |
(97) |
(125) |
|
|
|
NET PROFIT |
251 |
235 |
|
|
|
Attributable to: |
|
|
-
Ingenico Group SA shareholders |
244 |
230 |
-
non-controlling interests |
7 |
4 |
|
|
|
EARNINGS PER SHARE (in euros) |
|
|
Net
earnings: |
|
|
-
basic earnings per share |
4.00 |
3.81 |
-
diluted earnings per share |
3.91 |
3.76 |
2.
CONSOLIDATED BALANCE SHEETS (AUDITED)
ASSETS |
|
|
(in
millions of euros) |
2016 |
2015 |
|
|
|
Goodwill |
1
409 |
1
351 |
Other
intangible assets |
488 |
509 |
Property, plant and equipment |
75 |
56 |
Investments in equity-accounted investees |
9 |
12 |
Financial assets |
17 |
11 |
Deferred
tax assets |
58 |
49 |
Other
non-current assets |
27 |
31 |
TOTAL NON-CURRENT ASSETS |
2 083 |
2 019 |
Inventories |
172 |
144 |
Trade
and related receivables |
501 |
461 |
Receivables related to intermediation activities |
29 |
10 |
Other
current assets |
24 |
32 |
Current
tax assets |
27 |
7 |
Derivative financial instruments |
12 |
10 |
Funds
related to intermediation activities |
273 |
256 |
Cash and cash equivalents |
1 014 |
920 |
TOTAL
CURRENT ASSETS |
2
052 |
1
842 |
TOTAL ASSETS |
4 136 |
3 860 |
|
|
|
EQUITY AND LIABILITIES |
|
|
(in
millions of euros) |
2016 |
2015 |
|
|
|
Share
capital |
61 |
61 |
Share
premium account |
762 |
722 |
Other
reserves |
841 |
682 |
Translation differences |
38 |
41 |
Equity for the period attributable to Ingenico Group SA
shareholders |
1 703 |
1 506 |
Non-controlling interests |
4 |
5 |
TOTAL EQUITY |
1 707 |
1 511 |
Non-current borrowings and long-term debt |
896 |
885 |
Provisions for retirement and benefit obligations |
25 |
17 |
Other
long-term provisions |
24 |
21 |
Deferred
tax liabilities |
134 |
142 |
Other
non-current liabilities |
127 |
98 |
TOTAL NON-CURRENT LIABILITIES |
1 206 |
1 163 |
Short-term loans and borrowings |
244 |
287 |
Other
short-term provisions |
30 |
31 |
Trade
and related payables |
505 |
439 |
Payables
related to intermediation activities |
302 |
266 |
Other
current liabilities |
119 |
135 |
Current
tax liabilities |
20 |
28 |
Derivative financial instruments |
4 |
1 |
TOTAL CURRENT LIABILITIES |
1 223 |
1 187 |
TOTAL
LIABILITIES |
2
429 |
2
350 |
TOTAL EQUITY AND LIABILITIES |
4 136 |
3 860 |
3. CONSOLIDATED
CASH FLOW STATEMENTS (AUDITED)
(in
millions of euros) |
2016 |
2015 |
|
|
|
Profit
for the period |
251 |
235 |
Adjustments for: |
|
|
- Share
of profit of equity-accounted investees |
1 |
3 |
- Income
tax expense/(income) |
97 |
125 |
-
Depreciation, amortization and provisions |
93 |
106 |
- Change
in fair value |
(4) |
3 |
-
(Gains)/losses on disposal of assets |
0 |
2 |
- Net
interest costs/(revenue) |
3 |
13 |
-
Share-based payment expense(1) |
24 |
18 |
Interest
paid |
(12) |
(15) |
Income
tax paid |
(131) |
(137) |
Cash flows from operating activities before change in net
working capital |
322 |
351 |
Inventories |
(26) |
(24) |
Trade and other receivables |
(12) |
(33) |
Trade payables and other payables |
25 |
43 |
Change in net working capital |
(12) |
(14) |
NET CASH FLOWS FROM OPERATING ACTIVITIES |
310 |
337 |
|
|
|
Acquisition of fixed assets |
(77) |
(62) |
Proceeds
from sale of tangible and intangible fixed assets |
9 |
1 |
Acquisition of subsidiaries, net of cash acquired |
(53) |
(4) |
Disposal
of subsidiaries, net of cash disposed of |
3 |
- |
Loans
and advances granted and other financial assets |
(16) |
(5) |
Loan
repayments received |
1 |
1 |
Interest
received |
8 |
9 |
CASH FLOWS FROM INVESTING ACTIVITIES |
(125) |
(59) |
|
|
|
Proceeds
from share capital issues |
- |
2 |
Purchase/sale of treasury shares |
0 |
0 |
Proceeds
from loans and borrowings |
- |
756 |
Repayment of loans and borrowings |
(38) |
(601) |
Change
in the Group's ownership interests in controlled entities |
1 |
94 |
Changes
in other financial liabilities |
(0) |
(0) |
Effect
of financial derivative instruments |
(14) |
(0) |
Dividends paid to shareholders |
(36) |
(30) |
Taxes on
financing activities |
(1) |
(8) |
NET CASH FLOWS FROM FINANCING ACTIVITIES |
(88) |
212 |
Effect
of exchange rates fluctuations |
6 |
(2) |
CHANGE IN CASH AND CASH EQUIVALENTS |
103 |
488 |
|
|
|
Net cash
and cash equivalents at beginning of the year |
900 |
412 |
Net cash
and cash equivalents at year end |
1
003 |
900 |
|
|
|
|
|
|
|
2016 |
2015 |
CASH
AND CASH EQUIVALENT |
|
|
Short-term investments and short-term deposits (only for the
portion considered as cash equivalents) |
285 |
295 |
Cash |
729 |
625 |
Bank
overdrafts |
(11) |
(20) |
TOTAL NET CASH AND CASH EQUIVALENTS |
1 003 |
900 |
EXHIBIT 3
Impact of purchase price allocation
(« PPA »)
(in millions of euros) |
2016 excl.PPA |
PPA Impact |
2016 |
Gross profit |
987 |
(12) |
975 |
Operating expenses |
(584) |
(30) |
(614) |
Profit from ordinary activities |
403 |
(42) |
361 |
Reconciliation of profit from ordinary
activities to EBITDA
EBITDA represents profit from ordinary
activities, restated to include the following:
- Provisions for impairment of tangible and intangible assets,
net of reversals (including impairment of goodwill or other
intangible assets with indefinite lives, but not provisions for
impairment of inventories, trade and related receivables and other
current assets), and provisions for risks and charges (both current
and non-current) on the liability side of the balance sheet, net of
reversals.
- Expenses related to the restatement of finance lease
obligations on consolidation.
- Expenses recognized in connection with the award of stock
options, free shares or any other payments to be accounted for
using IFRS 2, Share-based compensation.
- Changes in the fair value of inventories in accordance with
IFRS 3, Business Combinations, i.e. determined by calculating the
selling price less costs to complete and sell.
Reconciliation :
(in millions of euros) |
2016 |
2015 |
Profit from ordinary activities |
361 |
389 |
Allocated assets amortization |
42 |
48 |
EBIT |
403 |
437 |
Other
D&A and changes in provisions |
49 |
55 |
Share-based compensation |
24 |
16 |
EBITDA |
476 |
508 |
[1] On a like-for-like basis at constant
exchange rates
[2]EBITDA is not an accounting term; it is a
financial metric defined here as profit from ordinary activities
before depreciation, amortization and provisions, and before
share-based compensations.
[3] Pending completion of regulatory process
with Works Council
Attachments:
http://www.globenewswire.com/NewsRoom/AttachmentNg/c5f36d25-29c0-47d9-909f-884c42d701e5