Edenred : First-quarter 2020 revenue - Edenred reports further
strong growth, partly offset by the initial lockdown measures
introduced in response to the Covid‑19 epidemic
Press releaseApril 23, 2020
First-quarter 2020 revenue
Edenred reports further strong growth,
partly offset by the initial lockdown measures introduced in
response to the Covid‑19 epidemic
Strong growth at the start of the year thanks to the
successful execution of the Next Frontier 2019-2022 strategic plan,
despite the initial effects of the crisis
- Double-digit operating revenue growth in the first two months
of the year
- In the new environment resulting from lockdown measures, which
has changed work practices and consumption patterns:
- 850,000 clients, 50 million employee users and 2 million
partner merchants can rely on Edenred’s digital platform and the
strong commitment of its teams to ensure excellent business
continuity and rapidly develop specific programs to distribute
earmarked funds to workers and society at large;
- Edenred responds swiftly by launching a €100 million
cost-saving plan in 2020 and revising intended capital expenditure
for the year downward.
Total revenue of €395 million in first-quarter 2020,
up 6.3% like-for-like and up 3.1% as reported
- Operating revenue up 6.6% like-for-like and up 3.5% as reported
to €383 million
- Other revenue down 3.4% like-for-like (-8.4% as reported)
- Contribution from acquisitions to total revenue of 0.5% and
negative currency effect of 3.7%
2020 outlook
- A marked decrease in business expected in the second quarter,
reflecting:
- in Employee Benefits, a lag effect as the portion of revenue
generated by volumes consumed in the network of partner merchants
is delayed;
- the extension of stay‑at‑home and short-time working measures
in most European countries and in the United States and their
introduction in Latin America.
- Strong fundamentals ensuring good resilience:
- a high-growth profile and robust financial position;
- offers covering essential needs (Eat, Move, Care, Pay);
- a leading position on vastly underpenetrated markets in 46
countries;
- an agile, multilocal organization;
- a highly digitalized model ensuring relentless innovation
around specific-purpose payment solutions.
*** Bertrand Dumazy, Chairman and
Chief Executive Officer of Edenred, said: “Amid the crisis
currently unfolding in the world economy, Edenred’s purpose, which
is to be the everyday companion for people at work, comes into its
full meaning. Working harder than ever to ensure business
continuity for our clients, partners and users, we can draw on our
digital services and payments platform. In these difficult times
for all economic players, Edenred is demonstrating agility and
community spirit. For example, our ability to rapidly develop
programs to distribute earmarked funds – that is, funds to be used
under set conditions – has made it possible to implement new
solutions responding to urgent needs arising from the crisis in
several countries. Lastly, I know that I can count on the
dedication of our teams, the responsiveness of our organization,
the resilience of our business model and our excellent financial
health to get us through this period as quickly and securely as
possible.” |
FIRST-QUARTER 2020 TOTAL
REVENUE
Due to the current situation in Venezuela, the
like-for-like performance and the currency effect are temporarily
calculated excluding the country. Changes are calculated based on
2019 pro forma figures, which reflect the change in the breakdown
between operating revenue and other revenue within total revenue in
Brazil, effective since fourth-quarter 2019 and with no impact on
full-year 2019 total revenue. See the appendix, page 11.
First-quarter 2020 key financial metrics:
|
(In € millions) |
First-quarter 2020 |
First-quarter 2019 |
% change (reported) |
% change (like-for-like) |
| Operating revenue |
383 |
370 |
+3.5% |
+6.6% |
| Other revenue |
12 |
13 |
-8.4% |
-3.4% |
|
Total revenue |
395 |
383 |
+3.1% |
+6.3% |
·Total revenue: up 6.3% like-for-like to
€395 million
Total revenue for first-quarter 2020 amounted to
€395 million, up 6.3% like-for-like. Reported
growth was 3.1% for the period, including a positive 0.5% scope
effect and an unfavorable 3.7% currency effect primarily linked to
the Brazilian and Argentine currencies.
·Operating revenue: up 6.6%
like-for-like to €383 million
Operating revenue for first-quarter 2020 came in
at €383 million, up 6.6% like-for-like. Reported growth was
3.5% for the period, including a slightly positive 0.6% scope
effect and a negative 3.7% currency effect.
The 6.6% like-for-like increase reflects
double‑digit growth until the introduction of stay-at-home measures
in March, first in most of the European countries where Edenred
operates and in the United States and then across Latin
America.
Thanks to its highly digitalized offering and
multilocal organization, the Group adapted rapidly to the
situation: with more than 95% of employees working from home and
digital solutions representing 83% of consolidated business volume,
the Group can continue to operate and provide high-quality
services.
Amid the crisis, Edenred is demonstrating the
usefulness of its purpose, which consists in organizing the
distribution of earmarked funds (i.e., funds dedicated to specific
purposes) to cover fundamental needs (Eat, Move, Care, Pay). In all
countries, teams are working hard to agilely implement new digital
solutions in record time and thereby meet the urgent needs of
certain governments and organizations, notably in Italy, Brazil and
France. These programs for earmarked funds make it possible to
provide targeted support to the communities hardest hit by the
crisis, while stimulating the local economy by restricting use of
the funds to the purchase of staples from a network of local
partner merchants, whether in store or online.
·Operating revenue by business
line
|
(In € millions) |
First-quarter 2020 |
First-quarter 2019 |
% change (reported) |
% change (like-for-like) |
| Employee Benefits |
238 |
236 |
+1.0% |
+3.2% |
| Fleet & Mobility Solutions |
99 |
92 |
+7.3% |
+12.8% |
|
Complementary Solutions |
46 |
42 |
+9.1% |
+12.1% |
|
Total |
383 |
370 |
+3.5% |
+6.6% |
Operating revenue for the Employee
Benefits business line was
€238 million, representing a like-for-like
increase of 3.2% (+1.0% as reported) and
62% of total consolidated operating revenue. This
family of solutions enjoyed robust growth until the implementation
of lockdown measures in Europe in March, illustrating the
successful execution of the business drivers of the
Next Frontier strategic plan.
With the introduction of these measures in
Europe and then Latin America, work practices and consumption
patterns have changed:
- In most countries, employees who are working from home continue
to receive their benefits, such as Ticket Restaurant. Although
usage rates for these benefits are decreasing (at varying speeds,
depending on the country), users in most countries have up to
12 months from the loading date to spend the funds.
Accordingly, the Group expects a time delay in the recognition of a
significant portion of revenue generated with partner
merchants.
- Employees subject to short-time working arrangements receive
their benefits pro rata to the days worked, leading – in the
current environment – to a decline in issue volume, which will
subsequently have an impact on the revenue generated with partner
merchants.
- Thanks to its digital expertise and technological leadership,
Edenred can meet the expectations of clients and users in the
current specific public health situation, notably via contactless
payment (online, by mobile or by NFC card) and app-to-app payment
(with 50 partnerships with meal delivery platforms in 11
countries).
In the Fleet & Mobility
Solutions business line, which accounts for
26% of the Group’s business, operating revenue
rose by 12.8% like-for-like in the first quarter
(+7.3% as reported) to €99 million. This
double-digit like-for-like growth reflects the good momentum
developed by sales teams, notably in Brazil, as well as the
successful integration of companies such as TRFC in Europe and the
ramp-up of value-added services (maintenance, toll payment).
The various public health measures implemented
in March have had consequences on Fleet & Mobility
Solutions activities in Europe, in particular solutions for light
vehicle fleets (short-time working, remote working, reduced
business travel). While the heavy vehicle business is more
resilient, it is, however, being impacted by the economic slowdown
and the drop in fuel prices.
The Complementary Solutions
business line, which includes Corporate Payment Services, Incentive
& Rewards Solutions and Public Social Programs, generated
operating revenue of €46 million for the period,
up 12.1% like-for-like (+9.1% as reported).
This double-digit growth reflects both the
commercial success of the payroll cards offering in the United Arab
Emirates and the sales momentum of CSI, a North American fintech
specialized in optimizing accounts payable processes. Like other
Corporate Payment Services offered by Edenred in Europe, CSI is
feeling the effects of the public health measures linked to the
epidemic, notably in the hotel, travel and media segments. In
contrast, some segments such as telecoms are more resilient.
·Operating revenue by
region
|
(In € millions) |
First-quarter 2020 |
First-quarter 2019 |
% change (reported) |
% change (like-for-like) |
| Europe |
228 |
213 |
+6.9% |
+5.9% |
| Latin America |
121 |
129 |
-5.6% |
+5.2% |
| Rest of the World |
34 |
28 |
+18.9% |
+18.4% |
|
Total |
383 |
370 |
+3.5% |
+6.6% |
In Europe, operating revenue
rose by 5.9% like-for-like (+6.9% as reported) to
€228 million. Europe represented
59% of total consolidated operating revenue in
first-quarter 2020.
In France, operating revenue
amounted to €70 million for the first
quarter, an increase of 2.0% like-for-like (+2.0%
as reported). Until March, Employee Benefits (Ticket Restaurant,
ProwebCE) and Fleet & Mobility Solutions dedicated to light
vehicle fleets enjoyed solid growth, linked to the successful
execution of the business drivers of the Next Frontier strategic
plan, such as increased penetration, a broader client base and
innovation.
Among the Group’s markets, France has been the
most affected by strict lockdown measures, in both Employee
Benefits (rate of employees subject to short-time working
arrangements above the European average, a particularly low usage
rate for preloaded funds and a resulting delay in the recognition
of “merchant” revenue) and Fleet & Mobility Solutions (high
exposure to the light vehicle segment).
Operating revenue in Europe excluding
France was up 7.8% like-for-like (+9.3%
as reported) to €158 million in the first
three months of 2020.
The Group’s two main business lines posted
double-digit growth in the region until March, notably thanks to
further new client wins. Employee Benefits reported an increase
during the period in the digital adoption rate and in certain face
values, notably in Italy. As from March, most countries in the
region have gradually introduced public health measures, of varying
strictness. For example, Northern Europe and Eastern Europe have so
far placed fewer restrictions on movement than Southern Europe.
Consequently, certain businesses, such as UTA, are demonstrating
resilience in the current circumstances.
Operating revenue amounted to €121
million in Latin America, up
5.2% like-for-like (-5.6% as reported). The region
accounted for 32% of the Group’s operating revenue
in the first quarter.
In Brazil, operating revenue
rose by 7.1% like-for-like during the first three months of the
year, reflecting double-digit organic growth until March, notably
thanks to the good sales performance of value-added services in
Fleet & Mobility Solutions. The first stay-at-home measures
were introduced in the country in the last few days of March, with
a negative impact visible in particular on Employee Benefits and to
a lesser extent on Fleet & Mobility Solutions.
In Hispanic Latin America,
operating revenue rose slightly by 0.6%
like-for-like in first-quarter 2020, due, as expected, to the
business slowdown in Mexico. In a challenging economic environment,
lower volumes are being spent in the country under the Navideños
program compared with the same period in 2019. Moreover, in Fleet
& Mobility Solutions, the fall in fuel prices had a negative
impact on operating revenue in several countries in the area. In
March, however, this region was still relatively unaffected by
stay-at-home measures.
Operating revenue in the Rest of the
World region rose by 18.4% like-for-like
(+18.9% as reported) to €34 million, representing
9% of the Group’s operating revenue in
first-quarter 2020. This growth was driven notably by the good
performance of the payroll cards business in the United Arab
Emirates, the strong sales momentum achieved by CSI and robust
business in Taiwan.
·Other revenue: €12 million
Other revenue for the first three months of the
year totaled €12 million, down
3.4% like-for-like due to the widespread drop in
interest rates, particularly outside Europe. On a reported basis,
other revenue declined by 8.4%, a performance compounded by the
negative currency effects in Latin America.
SIGNIFICANT EVENTS SINCE THE BEGINNING
OF THE YEAR
·Edenred ties social and environmental
criteria to one of its financing instruments for the first
time
In February 2020, Edenred renegotiated its
syndicated credit facility, increasing it to €750 million,
extending its maturity to February 2025 – with extension
options to February 2027 – and improving the financial conditions.
For the first time, Edenred introduced environmental and social
performance criteria into the calculation of the financing costs:
- promoting healthy and
sustainable eating habits – Edenred aims by 2030 to reach an 85%
nutrition awareness rate among merchants and employees using its
solutions (versus 30% in 2018);
- combating global warming –
Edenred is targeting a 52% cut in greenhouse gas emissions
intensity1 by 2030 compared with 2013 (26% reduction in 2018).
·Edenred expands its Fleet &
Mobility Solutions offering in Europe
In February 2020, Edenred finalized the
agreement signed in September 2019 to acquire EBV Finance, a
Lithuanian company specialized in tax refunds for European
transportation companies.
·Appointment to the Executive
Committee
In March 2020, Patrick Rouvillois was appointed
Executive Vice President, Marketing & Strategy of Edenred, and
became a member of the Group Executive Committee. Patrick will be
in charge of driving the Group’s strategy, transformation and
innovation in line with the roadmap set out under the Next Frontier
plan for 2019-2022.
·First measures taken by the Group in
response to the consequences of Covid-19 epidemic
On March 25, due to the uncertain environment
resulting from the Covid-19 epidemic, the Group suspended
its targets for full-year 2020 until it had better
visibility of the financial impacts of the epidemic.
On April 6, in response to the unprecedented
scale of the crisis, Edenred launched the “More than
Ever” relief plan, through which the Group pledged to
commit up to €15 million to mitigate the
consequences of the Covid-19 epidemic on its ecosystem, and in
particular to:
- protect Edenred employees, notably the most vulnerable, in
countries with little or no healthcare coverage or social safety
net;
- support partner restaurant owners, who have been severely
impacted by strict stay-at-home orders in the various countries
where the Group operates.
“More than Ever” will notably be financed
through:
- the 20% decrease in the dividend proposed2 for
2019, to €0.7 per share;
- the reduction in the Chairman and Chief Executive
Officer’s compensation in line with AFEP
recommendations;
- the reduction in the compensation of the members of the
Group’s Executive Committee and Board of
Directors.
2020 OUTLOOK
Edenred expects a marked decrease in
business in the second quarter, primarily due to a portion
of the revenue generated with partner merchants being delayed to
the second half of the year in Employee Benefits. In addition, the
Group’s business will be impacted by the extension of stay-at-home
measures in Europe and in the United States and their introduction
in Latin America, leading to an increase in short-time working and
a decline in business at some of the Group’s clients.
To mitigate the consequences of the epidemic on
its business and earnings, Edenred has launched a €100
million cost-saving plan in 2020 and revising intended
capital expenditure for the year.
Edenred can rely on strong fundamentals to
ensure good resilience and create new opportunities from the
crisis:
- a high-growth profile and robust financial position;
- offers covering essential needs (Eat, Move, Care, Pay);
- a leading position on vastly underpenetrated markets in 46
countries;
- an agile, multilocal organization;
- a highly digitalized model ensuring relentless innovation
around specific-purpose payment solutions.
UPCOMING EVENTS
May 7, 2020: General Meeting (behind closed
doors)July 27, 2020: First-half 2020 resultsOctober 22, 2020:
Third-quarter 2020 revenue
▬▬
Edenred is a leading services
and payments platform and the everyday companion for people at
work, connecting 50 million employees and 2 million partner
merchants in 46 countries via more than 850,000 corporate
clients.
Edenred offers specific-purpose payment
solutions for food (meal vouchers), fleet and mobility (fuel cards,
commuter vouchers), incentives (gift vouchers, employee engagement
platforms) and corporate payments (virtual cards). These solutions
enhance employee well-being and purchasing power, improve
companies’ attractiveness and efficiency, and vitalize the
employment market and the local economy.
Edenred’s 10,000 employees are committed to
making the world of work a connected ecosystem that is safer, more
efficient and more user-friendly every day.
In 2019, thanks to its global technology assets,
the Group managed €31 billion in business volume, primarily carried
out via mobile applications, online platforms and cards.
Edenred is listed on the Euronext Paris stock
exchange and included in the following indices: CAC Next 20,
FTSE4Good, DJSI Europe and MSCI Europe.
For more information: www.edenred.com
The logos and other trademarks mentioned and
featured in this press release are registered trademarks of
Edenred S.A., its subsidiaries or third parties. They may not
be used for commercial purposes without prior written consent from
their owners.
Edenred is celebrating its tenth anniversary in
2020.
▬▬
CONTACTS
|
Communications Department Marie-Laurence
Bouchon+33 (0)1 86 67 20 08marie-laurence.bouchon@edenred.com
Media Relations Matthieu
Santalucia+33 (0)1 86 67 22 63matthieu.santalucia@edenred.com |
Investor
Relations Solène Zammito+33 (0)1 86 67 23
13solene.zammito@edenred.com Loïc Da Silva+33 (0)1 86
67 20 67loic.dasilva@edenred.com
|
APPENDICES
Operating revenue
|
|
Q1 |
|
In € millions |
2020 |
2019 |
|
|
|
|
|
Europe |
228 |
213 |
|
France |
70 |
69 |
|
Rest of Europe |
158 |
144 |
|
Latin America |
121 |
129 |
|
Rest of the world |
34 |
28 |
|
|
|
|
|
Total |
383 |
370 |
| |
|
|
| |
|
|
|
|
Q1 |
|
In % |
Change reported |
Change L/L |
|
|
|
|
|
Europe |
+6.9% |
+5.9% |
|
France |
+2.0% |
+2.0% |
|
Rest of Europe |
+9.3% |
+7.8% |
|
Latin America |
-5.6% |
+5.2% |
|
Rest of the world |
+18.9% |
+18.4% |
|
|
|
|
|
Total |
+3.5% |
+6.6% |
Other revenue
|
|
Q1 |
|
In € millions |
2020 |
2019 |
|
|
|
|
|
Europe |
4 |
4 |
|
France |
2 |
2 |
|
Rest of Europe |
2 |
2 |
|
Latin America |
7 |
7 |
|
Rest of the world |
1 |
1 |
|
|
|
|
|
Total |
12 |
13 |
| |
|
|
| |
|
|
|
|
Q1 |
|
In % |
Change reported |
Change L/L |
|
|
|
|
|
Europe |
+2.7% |
+2.4% |
|
France |
-5.8% |
-5.8% |
|
Rest of Europe |
+9.0% |
+8.5% |
|
Latin America |
-11.3% |
-3.2% |
|
Rest of the world |
-24.0% |
-20.1% |
|
|
|
|
|
Total |
-8.4% |
-3.4% |
Pro forma 2019 operating revenue and other
revenue by quarter following the classification change for revenue
related to merchants’ fast reimbursement in Brazil
| Group
Operating Revenue |
Q1 2019 |
Q2 2019 |
Q3 2019 |
Q4 2019 |
|
FY 2019 |
|
Actual 2019 |
369 |
379 |
377 |
445 |
|
1 570 |
|
|
|
|
|
|
|
|
|
Pro forma 2019 |
370 |
380 |
379 |
440 |
|
1 570 |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| Group Other
Revenue |
Q1 2019 |
Q2 2019 |
Q3 2019 |
Q4 2019 |
|
FY 2019 |
|
Actual 2019 |
14 |
15 |
16 |
11 |
|
56 |
|
|
|
|
|
|
|
|
|
Pro forma 2019 |
13 |
14 |
14 |
16 |
|
56 |
|
|
|
|
|
|
|
|
| Latin America
Operating Revenue |
Q1 2019 |
Q2 2019 |
Q3 2019 |
Q4 2019 |
|
FY 2019 |
|
Actual 2019 |
128 |
138 |
137 |
156 |
|
559 |
|
|
|
|
|
|
|
|
|
Pro forma 2019 |
129 |
139 |
139 |
151 |
|
559 |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| Latin America
Other Revenue |
Q1 2019 |
Q2 2019 |
Q3 2019 |
Q4 2019 |
|
FY 2019 |
|
Actual 2019 |
9 |
9 |
10 |
4 |
|
32 |
|
|
|
|
|
|
|
|
|
Pro forma 2019 |
7 |
8 |
8 |
10 |
|
32 |
|
|
|
|
|
|
|
|
Total revenue
|
|
Q1 |
|
In € millions |
2020 |
2019 |
|
|
|
|
|
Europe |
232 |
217 |
|
France |
72 |
71 |
|
Rest of Europe |
160 |
146 |
|
Latin America |
128 |
137 |
|
Rest of the world |
35 |
29 |
|
|
|
|
|
Total |
395 |
383 |
| |
|
|
| |
|
|
|
|
Q1 |
|
In % |
Change reported |
Change L/L |
|
|
|
|
|
Europe |
+6.9% |
+5.9% |
|
France |
+1.8% |
+1.8% |
|
Rest of Europe |
+9.3% |
+7.8% |
|
Latin America |
-5.9% |
+4.7% |
|
Rest of the world |
+16.8% |
+16.5% |
|
|
|
|
|
Total |
+3.1% |
+6.3% |
1 Targets calculated using the Science Based Targets initiative
methodology in line with the goals of the Paris Agreement.
2 This decision will be submitted to shareholders for approval
at the Combined General Meeting on May 7, 2020, which will be held
behind closed doors. The dividend payment options remain
unchanged.
- 2020 04 23 - Edenred Q1 2020 Revenue
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