EDENRED : First-half 2020 results - Edenred shows good resilience
in the first half and a strong capacity to rebound thanks to its
technological leadership
Press releaseJuly 27, 2020
First-half 2020 results
Edenred shows good resilience in the
first half and a strong capacity to rebound thanks to its
technological leadership
Good resilience shown by the Group in the first half and a
strong rebound in June, as lockdown measures were gradually lifted
in Europe
- Total revenue: €696 million, down 4.8% like-for-like and
10.4% as reported versus first‑half 2019
- Operating revenue down 4.6% like-for-like, reflecting a 6.6%
increase in the first quarter and a 15.4% decrease in the second
quarter
- Strong rebound in June: down 9% like-for-like after declines of
19% and 18% in April and May
- EBITDA of €255 million, down 12.8% on an organic basis and
17.8% as reported
- Free cash flow generation of €113 million versus a
negative €13 million in first‑half 2019, reflecting a
temporary extension of retention times for funds allocated to
users, a consequence of the health crisis
- Net profit, Group share of €100 million
2020 outlook
- Continued gradual recovery in Europe and a still uncertain
environment in the Americas region. The second half is expected to
bring a return to year-on-year organic growth in operating revenue,
on a monthly basis
- Confirmation of the €100 million cost savings plan for
2020 and the selective downward adjustment in intended capital
expenditure for the year
- 2020 EBITDA target of between €540 million and
€610 million1
- Net debt/EBITDA ratio target of under 2.8 at December 31,
2020
*** Bertrand Dumazy, Chairman and
Chief Executive Officer of Edenred, said: "Throughout the
first half of 2020, Edenred demonstrated its ability to generate
double-digit growth up to mid-March, then its resilience during the
toughest period of the health crisis and finally its strong
capacity to rebound following the gradual reopening of Europe’s
economies. In this respect, the crisis has highlighted the
robustness of our business model and the relevance of our
specific-purpose payment solutions. Our agility and digital
leadership have enabled us to develop new earmarked funds programs
within very short timeframes, thereby helping to provide targeted
stimulus to the economy. Edenred is better positioned than ever to
help companies, merchants and public authorities transition into
the world of tomorrow.” |
FIRST-HALF 2020 RESULTS
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 appendices, page 17.
At its meeting on July 24, 2020, the Board of
Directors reviewed the Group’s consolidated financial statements
for the six months ended June 30, 2020.
First-half 2020 key financial metrics:
(in € millions) |
First-half 2020 |
First-half 2019 |
% change (reported) |
% change (like-for-like) |
Operating revenue |
675 |
751 |
-10.2% |
-4.6% |
Other revenue (A) |
21 |
26 |
-18.4% |
-9.2% |
Total revenue |
696 |
777 |
-10.4% |
-4.8% |
EBITDA |
255 |
310 |
-17.8% |
-12.8% |
Operating EBIT (B) |
171 |
223 |
-23.4% |
-18.7% |
EBIT (A + B) |
192 |
249 |
-22.8% |
-17.7% |
Net profit, Group share |
100 |
146 |
-31.4% |
|
·Total revenue: €696 million
Total revenue for first-half 2020 amounted to
€696 million, down 4.8% like-for-like
compared with first-half 2019. The figure was down 10.4% on a
reported basis, reflecting unfavorable currency effects (-6.1%) and
a slightly positive scope effect (+0.4%) during the period.
Total revenue for the second quarter dropped by 15.5% like-for-like
and 23.6% as reported, and included a negative currency effect
(-8.3%) and a positive scope effect (+0.3%).
·Operating revenue: €675
million
Operating revenue for the first six months of 2020
came to €675 million, down 4.6% like‑for‑like. On a
reported basis, an unfavorable currency effect (-6.0%) and
a slightly positive scope effect (+0.4%) resulted in a
decrease of 10.2%. On a like-for-like basis, operating revenue rose
by 6.6% in the first quarter before retreating by 15.4% in the
second quarter.
This performance reflects double-digit growth in
the first two months of the year, prior to the implementation of
lockdown measures, which led to a steep decline in business
starting in mid‑March. June (down 9% like-for-like after declines
of 19% and 18% in April and May, respectively) saw a sharp upturn
in business as lockdown measures were gradually lifted in most
European countries, while the epidemic was yet to reach its peak in
Latin America and the United States.
Thanks to its highly digitalized offering and
multi-local organization, Edenred has demonstrated good resilience
in the face of this crisis. With digital solutions representing
more than 86% of business volume, the Group was able to take swift
action to continue serving its clients and meet the specific
challenges associated with the crisis. Widespread adoption of
homeworking arrangements and the implementation of public health
measures accelerated Edenred’s transition to digital solutions. The
crisis also led to the increased use of earmarked funds programs by
companies and governments alike.
·Operating revenue by business
line
(in € millions) |
First-half 2020 |
First-half 2019 |
% change (reported) |
% change (like-for-like) |
Employee Benefits |
412 |
473 |
-12.9% |
-8.7% |
Fleet & Mobility Solutions |
173 |
194 |
-10.7% |
-1.4% |
Complementary Solutions |
90 |
84 |
+6.1% |
+11.0% |
Total |
675 |
751 |
-10.2% |
-4.6% |
The Employee Benefits business
line, which accounted for 61% of the Group’s
business, generated €412 million in operating
revenue in first‑half 2020, representing a like-for-like
decrease of 8.7% (-12.9% as reported), including a
20.6% like-for-like decline (-26.6% as reported) in the second
quarter. The business line’s performance reflects strong growth
through to mid-March – illustrating the effectiveness of the
business drivers deployed under the Next Frontier plan – and
then the impact of the lockdown measures implemented first in
Europe and subsequently in Latin
America:- Employees subject to
short-time working arrangements only receive their benefits
pro rata to the days worked, leading to a decline in issue
volume and therefore in
revenue.- Additionally, as
stores were closed, employees were temporarily using less of the
benefits they continued to receive, resulting in a delay in revenue
generated by Edenred with partner merchants.
During the crisis, Edenred has accelerated the
digital migration of its Employee Benefits, with the share of
digitalized business volume expanding by 9 points in Europe
compared with first‑half 2019. The Group has also seen the adoption
rate for its app-to-app payment solutions sharply increase, with
close to 30% of Ticket Restaurant card holders in France now able
to pay for their meals on delivery platforms. In Brazil, where this
service was launched in March, more than 600,000 transactions have
already been carried out via Uber Eats, iFood and Rappi.
As lockdowns are lifted one by one across Europe,
the Group has observed a gradual return to normal for its clients –
with short-time working arrangements being brought to an end – and
for employee users as restaurants reopen.
In the Fleet & Mobility
Solutions business line, which accounted for
26% of the Group’s business, operating revenue
inched down 1.4% over the period on a
like-for-like basis (-10.7% as reported) to €173
million, and by 14.3% in the second quarter (-27.0% as
reported). The heavy fleet segment proved more resilient than light
fleets during the lockdown, gradually returning to normal as
restrictions were eased in the different countries, while the light
vehicle business saw a more pronounced rebound. The Group pursued
its innovation strategy during the period, with the launch of a
fleet management portal in Europe (UTA Fleet Manager).
The Complementary Solutions
business line, which includes Corporate Payment Services, Incentive
& Rewards and Public Social Programs, generated operating
revenue of €90 million for the period, versus
€84 million for first-half 2019, representing an increase of
11% like-for-like and an increase of 6.1% as
reported. Like-for-like growth came to 9.9% in the second
quarter.
This strong rise was notably driven by the launch
of new specific earmarked funds programs designed notably to help
public authorities effectively combat the impacts of Covid-19. For
example, one program saw Edenred digitally distribute funds
earmarked for food to 1.3 million British school children who
usually receive free school lunches. In Italy and Brazil, food aid
was provided to the disadvantaged in the form of meal vouchers in
partnership with local authorities and NGOs.
Corporate Payment Services were heavily impacted by
the decline in platform-based transactions, particularly in the
hospitality, travel and media sectors. However, the crisis has
sparked a growing interest for these innovative and secure digital
payment solutions as an alternative to conventional payment
methods.
·Operating revenue by region
(in € millions) |
First-half 2020 |
First-half 2019 |
% change (reported) |
% change (like-for-like) |
Europe |
411 |
422 |
-2.6% |
-3.5% |
Latin America |
203 |
269 |
-24.5% |
-8.1% |
Rest of
the World |
61 |
60 |
+1.0% |
+3.5% |
Total |
675 |
751 |
-10.2% |
-4.6% |
In Europe, operating revenue
totaled €411 million, slipping by
3.5% like-for-like versus first‑half 2019
(-2.6% as reported), including a 13.1% contraction in the second
quarter. The region represented 61% of Group
operating revenue.
In France, operating revenue
amounted to €111 million, a decrease of
13.5% like-for-like and as
reported. In the second quarter, operating revenue was down 31.3%
like-for-like. After having been one of Europe’s hardest hit
countries in terms of lockdown and short-time working measures in
April and May, France saw a strong rebound in business in June,
with client orders for all solutions up compared with the same
month in 2019. In Employee Benefits, government measures to revive
the catering industry are beginning to deliver results. On June 12,
the standard daily limit on the use of Ticket Restaurant in food
outlets was doubled, triggering a 50% increase in employee users’
average digital basket. At end-June, a portion of the funds
allocated to employees and accumulated during lockdown had not yet
been spent, representing a pool of revenue for Edenred that will be
realized as the funds are spent in the merchant network over the
coming months.
Operating revenue in Europe excluding
France totaled €300 million in first-half
2020, up 0.8% like-for-like (+2.1% as reported).
In the second quarter, operating revenue contracted by 5.9%
like-for-like. In Employee Benefits, conditions improved to varying
degrees from one country to another in the second quarter, with the
strength of the recovery largely depending on the timing of
lockdown easing. Regarding Fleet & Mobility Solutions, business
in continental Europe started regaining ground, while in the United
Kingdom, TRFC continued to be impacted by the lockdown measures
still in place at end-June. Operating revenue for Complementary
Solutions expanded during the period, notably thanks to the new
specific funds program launched in April for British school
children on behalf of the UK Department for Education.
Operating revenue in Latin America
amounted to €203 million, down
8.1% like-for-like in the first half (-24.5% as
reported), with a 20.4% like-for-like decrease in the second
quarter. The health situation in the region, which represented
30% of the Group’s operating revenue, remains
poor, with the Covid-19 epidemic yet to reach its peak at
end-June.
In Brazil, operating revenue fell
by 8.2% like-for-like (-26.2% as
reported) in the first six months of the year, including a 22.2%
like-for-like decrease in the second quarter. In Employee Benefits,
a business line impacted by temporary restaurant closures,
app-to-app payment solutions for meal delivery platforms have
enjoyed a fast adoption rate since they were launched in March. In
Fleet & Mobility Solutions, the heavy fleet segment
proved more resilient than light fleets, notably reflecting a good
harvest season. In addition, fuel prices had a negative impact in
the period.
In Hispanic Latin America,
operating revenue decreased by 8.0% like-for-like
over the period (‑20.6% as reported), with a 16.0% like-for-like
decline in the second quarter. Within the region, Mexico felt the
impact of the crisis in its two business lines, with Fleet &
Mobility Solutions weighed down by the drop in fuel prices during
the period.
In the Rest of the World,
operating revenue amounted to €61 million,
up 3.5% like-for-like and up 1.0% as reported
over the period. In the second quarter, operating revenue shrank by
9.8% like-for-like. The digital coupon business in Taiwan enjoyed
strong growth, while activity in North America continued to be
strongly impacted by lockdown measures.
·Other revenue: €21 million
Other revenue for first-half 2020 came to
€21 million,
down 9.2% like-for-like and
down 18.4% as reported. In the second quarter, other revenue
decreased by 14.7% like-for-like and by 27.9% as reported. During
the first six months of the year, despite the increase in the float
as a result of the temporary extension of the retention time for
allocated funds, interest rates decreased across the board
worldwide, notably in non-eurozone countries. On a reported basis,
other revenue was also impacted by unfavorable changes in exchange
rates, notably in Latin America.
·EBITDA: €255 million
EBITDA amounted to
€255 million in first-half 2020, versus
€310 million in the prior-year period, down 12.8%
like-for-like and 17.8% as reported. The EBITDA margin
came in at 36.7%, down 3.3 points
year‑on‑year. ·EBIT:
€192 million
In the six months to June 30, 2020, EBIT, which
comprises operating EBIT plus other revenue, came to €192
million, a contraction of 17.7%
like-for-like. The currency effect reduced EBIT by 7.5%, while the
scope effect increased it by 2.4%, resulting in a 22.8% reduction
in EBIT as reported.
Operating EBIT retreated by 18.7%
like-for-like, and by 23.4% as
reported, to €171 million.
Operating EBIT by region
(in € millions) |
First-half 2020 |
First-half 2019 |
% change (reported) |
% change (like-for-like) |
Europe |
114 |
130 |
-11.9% |
-11.9% |
Latin America |
57 |
94 |
-40.0% |
-23.4% |
Rest of the World |
0 |
7 |
-97.9% |
-121.2% |
Holding & Other |
0 |
(8) |
-96.9% |
-47.7% |
Total |
171 |
223 |
-23.4% |
-18.7% |
In Europe, operating EBIT declined by 11.9%
like-for-like and as reported. In Latin America, the contraction in
operating EBIT came to 23.4% like-for-like and to 40.0% as
reported.
The Group’s operating EBIT margin came out at 25.3%
for first-half 2020, down 4.4 points versus 2019, both
like-for-like and as reported. During the first quarter, the
Group’s expenses rose in line with the sharp increase in revenue,
before falling due to a double-digit decline in business from
mid-March. In response to the crisis, the Group launched a plan at
the end of the first quarter to save €100 million in costs compared
with the 2020 budget while preserving its technological innovation
and development capabilities. The effects of the plan will be felt
to a greater extent in the second half and, combined with the
gradual recovery in business, will have a positive impact on
operating leverage compared with the first half.
·Net profit: €100 million
Net profit, Group share totaled €100 million for
first-half 2020. This figure takes into account other income and
expenses for a net expense of €13 million, as well as a net
income tax expense of €57 million, a net financial expense of €15
million, and €13 million attributable to non-controlling
interests.
·Strong cash flow generation
Edenred’s resilient business model generates
significant cash flows, delivering funds from operations
before other income and expenses (FFO) of €207
million in first-half 2020, down 15.1% like-for-like and
21.5% as reported.
After falling by €256 million in first-half 2019,
the float2 rose by €313 million over the period, primarily due to a
temporary increase in the retention time for prepaid funds. The
Group expects retention time to return to normal levels by the end
of the year as stores and restaurants reopen.
Recurring capital expenditure totaled €53 million
in the first half, versus €37 million in the prior-year period. In
particular, this increase reflects the continuous development of
the Group’s technology assets, notably in terms of IT security and
compliance.
Thanks to the high level of cash generated from
operations, combined with an increase in the structurally negative
working capital requirement, the Group generated €113 million in
free cash flow in the first six months of the year, while
continuing to invest in its technology assets.
The Group had net debt of €1.50 billion at
June 30, 2020, versus €1.63 billion at end-June 2019.
This change takes into account €526 million in free cash flow
generation and an amount of €151 million returned to shareholders
over the past 12 months. Net debt also includes the negative €222
million impact of changes in exchange rates and non-recurring
items3.
·A robust financial position
Edenred enjoys a robust financial position with a
strong cash position and a solid balance sheet. In May 2020,
Standard & Poor’s confirmed the Group’s BBB+ Strong Investment
Grade rating with a stable outlook.
OUTLOOK
In the second half of 2020, Edenred expects the
gradual recovery in Europe to continue, and lockdown measures to be
maintained in the Americas region during the third quarter,
resulting in a still uncertain environment. In Employee Benefits,
the Group’s performance will be boosted by the delayed revenue
generated with merchants and the impact of faster digitalization.
Fleet & Mobility Solutions’ performance will reflect the
recovery in Europe and the impact of ongoing lockdown measures in
the Americas region. In Complementary Solutions, new
specific-purpose programs will make a positive contribution to
growth in the business line, which will continue to be weighed down
by lower transaction volumes in Corporate Payment Services.
On this basis, the Group estimates, at this point
in time, that the second half should bring a return to
year-on-year organic growth in operating revenue, on a monthly
basis.
The gradual recovery in the second half, combined
with the ongoing implementation of the Group’s cost savings plan,
will have a positive impact on operating leverage. In light of
this, Edenred has set an EBITDA target for 2020 of between
€540 million and €610 million4.
Based on a return in the second half to the
normal float retention time, strongly negative currency effects, a
smaller recurring capital expenditure budget than in second-half
2019 and limited projected spending on acquisitions, Edenred
estimates that its net debt at end-2020 will be below 2.8x
EBITDA.
Underpinned by strong fundamentals, the Group is
weathering the crisis with resilience. Its technological expertise
and agile organization make it well positioned to seize new
opportunities in markets undergoing digital transformation.
Thanks to its resilient business model,
strengthened digital leadership and the increased demand for
earmarked funds programs, Edenred has everything it needs to ensure
all of its business lines rebound quickly, and to pursue its
strategy of sustainable and profitable growth with a focus on
product and technology innovation.
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 intensity5 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 & Asia-Pacific 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 the 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.
The “More than Ever” plan is notably financed
through:
- the
20% decrease in the dividend 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.
·Edenred strengthens its position in the
Brazilian market with the acquisition of employee benefits
operations from Cooper Card
On May 8, 2020, Edenred signed an agreement to
acquire Cooper Card’s client portfolio for food-related employee
benefits (170,000 active users) in Brazil. With this acquisition,
Edenred is consolidating its integration into the economic fabric
of Paraná, one of the country’s most populous and dynamic
states.
The transaction has been approved by the Brazilian
antitrust authority and is subject to the approval of the Central
Bank of Brazil. It is expected to be finalized before the end of
2020.
·Edenred extends its financial resources
via a NEU MTN program and successfully issues €600 million in
bonds
On June 4, 2020, the Group extended its financial
resources by submitting a Negotiable EUropean Medium Term Note (NEU
MTN) program to France’s central bank. Under the program, the Group
will be able to issue up to €250 million of medium-term negotiable
debt with maturities beyond one year. The medium-term program
complements the €750 million Negotiable EUropean Commercial Paper
(NEU CP) program for debt with maturities of one year or less.
On June 10, 2020, Edenred successfully issued €600
million worth of nine-year bonds paying a coupon of 1.375%. The
bond issuance enabled the Group to extend the average maturity of
its debt under more favorable financial conditions than ever
previously obtained for Group bonds and to finance its upcoming
debt repayments in the second half of 2020 and in 2021.
·Edenred now owns 100% of UTA
On May 15, 2020, Edenred acquired all the remaining
outstanding shares that it did not already own in its UTA
subsidiary, Europe’s second-largest issuer of multi-brand fuel
cards and a leading provider of value-added services, such as toll
settlement, maintenance and VAT recovery solutions.
The transaction followed the exercise of a put
option on an additional 17% of outstanding shares by the Eckstein
family, co-founders of UTA. The option, which was scheduled to
expire in July 2020, was already accounted for in the Group’s net
debt. The transaction will be accretive to net profit, Group share
as of 2020.
UPCOMING EVENTS
October 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
Glossary and list of references
needed for a proper understanding of
financial information
- Main terms
- Like-for-like, impact of changes in the scope of
consolidation, currency effect:
Like-for-like or organic growth corresponds to
comparable growth, i.e., growth at constant exchange rates and
scope of consolidation. This indicator reflects the Group’s
business performance.
Changes in activity (like-for-like or organic
growth) represent changes in amounts between the current period and
the comparative period, adjusted for currency effects and for the
impact of acquisitions and/or disposals.
The impact of acquisitions is eliminated from the
amount reported for the current period. The impact of disposals is
eliminated from the amount reported for the comparative period. The
sum of these two amounts is known as the impact of changes in the
scope of consolidation or the scope effect.
The calculation of changes in activity is
translated at the exchange rate applicable in the comparative
period and divided by the adjusted amount for the comparative
period.
The currency effect is the difference between the
amount for the reported period translated at the exchange rate for
the reported period and the amount for the reported period
translated at the exchange rate applicable in the comparative
period. ·Business
volume:
Business volume comprises total issue volume of
Employee Benefits, Incentive and Rewards, Public Social Program
solutions and Corporate Payment Services, plus the transaction
volume of Fleet & Mobility Solutions and other solutions.
·Issue
volume:
Issue volume is the total face value of the funds
preloaded on all of the payment solutions issued by Edenred to its
corporate and public sector clients.
·Transaction
volume:
Transaction
volume represents the total value of the transactions paid for with
payment instruments, at the time of the transaction.
b)
Alternative performance measurement indicators included in
the June 30, 2020 Interim Financial Report
The alternative performance measurement indicators
outlined below are presented and reconciled with accounting data in
the Annual Financial Report.
Indicator |
Reference note in Edenred’s 2020 condensed interim
consolidated financial statements |
Operating revenue |
Operating revenue corresponds to:
- operating revenue generated by prepaid vouchers managed by
Edenred,
- and operating revenue from value-added services such as
incentive programs, human services and event-related services.
- It corresponds to the amount billed to the client company and
is recognized on delivery of the solutions.
|
Other revenue |
Other revenue is interest generated by investing cash over the
period between:
- the issue date and the reimbursement date for vouchers,
- and the loading date and the redeeming date for cards.
The interest represents a component of operating revenue and as
such is included in the determination of total revenue. |
EBITDA |
This aggregate corresponds to total revenue (operating revenue and
other revenue) less operating expenses. |
EBIT |
This aggregate is the "Operating profit before other income and
expenses", which corresponds to total revenue (operating revenue
and other revenue) less operating expenses, depreciation,
amortization (mainly intangible assets, internally generated or
acquired assets) and non‑operating provisions. It is used as the
benchmark for determining senior management and other executive
compensation as it reflects the economic performance of the
business. EBIT excludes the net profit from equity-accounted
companies and excludes the other income and expenses booked in the
“Operating profit including share of net profit from
equity-accounted companies”. |
Other income and expenses |
See
Note 10.1 of consolidated financial statements |
Funds from operations
(FFO) |
See consolidated statement of cash flows
(Part 1.4) |
c)
Alternative performance measurement indicators not included
in the June 30, 2020 Interim Financial Report
Indicator |
Definitions and reconciliations with Edenred’s 2020
condensed interim consolidated financial statements |
Operating EBIT |
Corresponds to EBIT adjusted for other revenue. As per the
consolidated financial statements, operating EBIT as of June 30,
2020 amounted to €171 million, comprising: ·€192 million
in EBITminus €21 million in other revenue. |
Free cash flow |
Free
cash flow corresponds to cash generated by operating activities
less investments in intangible assets and property, plant and
equipment. |
Operating revenue
|
Q1 |
Q2 |
|
H1 |
In €
millions |
2020 |
2019 |
2020 |
2019 |
|
2020 |
2019 |
|
|
|
|
|
|
|
|
Europe |
228 |
213 |
183 |
209 |
|
411 |
422 |
France |
70 |
69 |
41 |
59 |
|
111 |
128 |
Rest of Europe |
158 |
144 |
142 |
150 |
|
300 |
294 |
Latin America |
121 |
129 |
82 |
140 |
|
203 |
269 |
Rest of the world |
34 |
28 |
27 |
32 |
|
61 |
60 |
|
|
|
|
|
|
|
|
Total |
383 |
370 |
292 |
381 |
|
675 |
751 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1 |
Q2 |
|
H1 |
In % |
Change reported |
Change L/L |
Change reported |
Change L/L |
|
Change reported |
Change L/L |
|
|
|
|
|
|
|
|
Europe |
+6.9% |
+5.9% |
-12.3% |
-13.1% |
|
-2.6% |
-3.5% |
France |
+2.0% |
+2.0% |
-31.3% |
-31.3% |
|
-13.5% |
-13.5% |
Rest of Europe |
+9.3% |
+7.8% |
-4.7% |
-5.9% |
|
+2.1% |
+0.8% |
Latin America |
-5.6% |
+5.2% |
-41.9% |
-20.4% |
|
-24.5% |
-8.1% |
Rest of the world |
+18.9% |
+18.4% |
-15.0% |
-9.8% |
|
+1.0% |
+3.5% |
|
|
|
|
|
|
|
|
Total |
+3.5% |
+6.6% |
-23.4% |
-15.4% |
|
-10.2% |
-4.6% |
Other revenue
|
Q1 |
Q2 |
|
H1 |
In €
millions |
2020 |
2019 |
2020 |
2019 |
|
2020 |
2019 |
|
|
|
|
|
|
|
|
Europe |
4 |
4 |
4 |
4 |
|
8 |
8 |
France |
2 |
2 |
1 |
1 |
|
3 |
3 |
Rest of Europe |
2 |
2 |
3 |
3 |
|
5 |
5 |
Latin America |
7 |
7 |
4 |
7 |
|
11 |
15 |
Rest of the world |
1 |
1 |
1 |
2 |
|
2 |
3 |
|
|
|
|
|
|
|
|
Total |
12 |
13 |
9 |
13 |
|
21 |
26 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1 |
Q2 |
|
H1 |
In % |
Change reported |
Change L/L |
Change reported |
Change L/L |
|
Change reported |
Change L/L |
|
|
|
|
|
|
|
|
Europe |
+2.7% |
+2.4% |
-15.1% |
-14.2% |
|
-6.5% |
-6.2% |
France |
-5.8% |
-5.8% |
-1.8% |
-1.8% |
|
-3.9% |
-3.9% |
Rest of Europe |
+9.0% |
+8.5% |
-22.8% |
-21.4% |
|
-8.2% |
-7.7% |
Latin America |
-11.3% |
-3.2% |
-29.3% |
-7.4% |
|
-20.3% |
-5.3% |
Rest of the world |
-24.0% |
-20.1% |
-54.6% |
-48.2% |
|
-40.1% |
-34.9% |
|
|
|
|
|
|
|
|
Total |
-8.4% |
-3.4% |
-27.9% |
-14.7% |
|
-18.4% |
-9.2% |
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 |
Q2 |
Q3 |
Q4 |
|
FY |
Actual 2019 |
369 |
379 |
377 |
445 |
|
1 570 |
|
|
|
|
|
|
|
Pro forma 2019 |
370 |
381 |
379 |
440 |
|
1 570 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Group Other Revenue |
Q1 |
Q2 |
Q3 |
Q4 |
|
FY |
Actual 2019 |
14 |
15 |
16 |
11 |
|
56 |
|
|
|
|
|
|
|
Pro forma 2019 |
13 |
13 |
14 |
16 |
|
56 |
|
|
|
|
|
|
|
Latin America Operating
Revenue |
Q1 |
Q2 |
Q3 |
Q4 |
|
FY |
Actual 2019 |
128 |
138 |
137 |
156 |
|
559 |
|
|
|
|
|
|
|
Pro forma 2019 |
129 |
140 |
139 |
151 |
|
559 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Latin America Other Revenue |
Q1 |
Q2 |
Q3 |
Q4 |
|
FY |
Actual 2019 |
9 |
9 |
10 |
4 |
|
32 |
|
|
|
|
|
|
|
Pro forma 2019 |
7 |
7 |
8 |
9 |
|
32 |
|
|
|
|
|
|
|
Total revenue
|
Q1 |
Q2 |
|
H1 |
In €
millions |
2020 |
2019 |
2020 |
2019 |
|
2020 |
2019 |
|
|
|
|
|
|
|
|
Europe |
232 |
217 |
187 |
213 |
|
419 |
430 |
France |
72 |
71 |
42 |
60 |
|
114 |
131 |
Rest of Europe |
160 |
146 |
145 |
153 |
|
305 |
299 |
Latin America |
128 |
137 |
86 |
147 |
|
214 |
284 |
Rest of the world |
35 |
29 |
28 |
34 |
|
63 |
63 |
|
|
|
|
|
|
|
|
Total |
395 |
383 |
301 |
394 |
|
696 |
777 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1 |
Q2 |
|
H1 |
In % |
Change reported |
Change L/L |
Change reported |
Change L/L |
|
Change reported |
Change L/L |
|
|
|
|
|
|
|
|
Europe |
+6.9% |
+5.9% |
-12.4% |
-13.1% |
|
-2.7% |
-3.6% |
France |
+1.8% |
+1.8% |
-30.5% |
-30.5% |
|
-13.3% |
-13.3% |
Rest of Europe |
+9.3% |
+7.8% |
-5.1% |
-6.1% |
|
+2.0% |
+0.7% |
Latin America |
-5.9% |
+4.7% |
-41.3% |
-19.7% |
|
-24.3% |
-8.0% |
Rest of the world |
+16.8% |
+16.5% |
-17.0% |
-11.7% |
|
-1.0% |
+1.6% |
|
|
|
|
|
|
|
|
Total |
+3.1% |
+6.3% |
-23.6% |
-15.5% |
|
-10.4% |
-4.8% |
EBITDA, Operating EBIT and
EBIT
In € millions |
H1 2020 |
H1 2019 |
|
Change reported |
Change L/L |
|
|
|
|
|
|
|
|
Europe |
154 |
168 |
|
-8.3% |
-8.9% |
France |
28 |
42 |
|
-33.3% |
-33.3% |
Rest of Europe |
126 |
126 |
|
-0.1% |
-0.8% |
Latin America |
86 |
129 |
|
-33.3% |
-16.6% |
Rest of the world |
11 |
18 |
|
-40.6% |
-47.0% |
Holding and others |
4 |
(5) |
|
-170.9% |
-99.0% |
|
|
|
|
|
|
EBITDA |
255 |
310 |
|
-17.8% |
-12.8% |
In € millions |
H1 2020 |
H1 2019 |
|
Change reported |
Change L/L |
|
|
|
|
|
|
|
|
Europe |
114 |
130 |
|
-11.9% |
-11.9% |
France |
15 |
28 |
|
-48.4% |
-48.4% |
Rest of Europe |
99 |
102 |
|
-1.8% |
-1.8% |
Latin America |
57 |
94 |
|
-40.0% |
-23.4% |
Rest of the world |
0 |
7 |
|
-97.9% |
-121.2% |
Holding and others |
0 |
(8) |
|
-96.9% |
-47.7% |
|
|
|
|
|
|
Operating EBIT |
171 |
223 |
|
-23.4% |
-18.7% |
In € millions |
H1 2020 |
H1 2019 |
|
Change reported |
Change L/L |
|
|
|
|
|
|
|
|
Europe |
122 |
138 |
|
-11.6% |
-11.5% |
France |
18 |
31 |
|
-43.8% |
-43.8% |
Rest of Europe |
104 |
107 |
|
-2.1% |
-2.1% |
Latin America |
68 |
109 |
|
-37.3% |
-20.9% |
Rest of the world |
2 |
10 |
|
-79.3% |
-93.5% |
Holding and others |
0 |
(8) |
|
-96.9% |
-47.7% |
|
|
|
|
|
|
EBIT |
192 |
249 |
|
-22.8% |
-17.7% |
Summarized balance sheet
In € millions |
June 2020 |
Dec. 2019 |
June 2019 |
|
In € millions |
June 2020 |
Dec. 2019 |
June 2019 |
ASSETS |
|
LIABILITIES |
Goodwill |
1,495 |
1,604 |
1,604 |
|
Total equity |
(1,207) |
(1,043) |
(1,338) |
Intangible assets |
661 |
706 |
606 |
|
|
|
|
|
Property, plant & equipment |
151 |
169 |
139 |
|
Gross debt and other financial
liabilities |
3,832 |
3,163 |
3,237 |
Investments in associates |
64 |
69 |
64 |
|
Provisions and deferred tax |
222 |
239 |
244 |
Other
non-current assets |
188 |
169 |
144 |
|
|
|
|
|
Float
(Trade receivables, net) |
1,758 |
2,142 |
2,158 |
|
Vouchers in circulation (Float) |
|
|
|
Working
capital excl. float (assets) |
316 |
290 |
277 |
|
Working capital excl. float
(liabilities) |
4,935 |
5,161 |
4,908 |
Restricted cash |
2,295 |
1,864 |
1,574 |
|
|
1,477 |
1,366 |
1,112 |
Cash & cash equivalents |
2,331 |
1,873 |
1,607 |
|
|
|
|
|
TOTAL ASSETS |
9,259 |
8,886 |
8,173 |
|
TOTAL LIABILITIES |
9,259 |
8,886 |
8,173 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 2020 |
Dec. 2019 |
June 2019 |
|
|
|
|
|
Total working capital |
4,338 |
4,095 |
3,595 |
|
|
|
|
|
Of which float: |
3,177 |
3,019 |
2,750 |
From net profit, Group share to Free cash
flows
In € millions |
June 2020 |
June 2019 |
Net profit attributable to owners of the
parent |
100 |
146 |
Non-controlling interests |
13 |
14 |
Dividends received from equity-accounted companies |
11 |
9 |
Difference between income tax paid and income tax expense |
(7) |
6 |
Non-cash impact from other income and expenses |
90 |
89 |
= Funds from operations before other income and expenses
(FFO) |
207 |
264 |
Decrease (Increase) in working capital |
448 |
(108) |
Recurring decrease (Increase) in restricted cash |
(489) |
(132) |
= Net cash from (used in) operating
activities |
166 |
24 |
Recurring capital expenditure |
(53) |
(37) |
= Free cash flows (FCF) |
113 |
(13) |
1 Calculated based on an assumption of an average
Brazilian real/euro exchange rate for the second half of 2020 equal
to the closing spot rate on June 30, 2020.
2 The float corresponds to a portion of the
operating working capital from the preloading of funds by corporate
clients.
3 This amount does not include the €157 million
fine issued by France’s antitrust authority, which will be paid in
first-quarter 2021.
4 Calculated based on an assumption of an average
Brazilian real/euro exchange rate for the second half of 2020 equal
to the closing spot rate on June 30, 2020.
5 Targets calculated using the Science Based
Targets initiative methodology in line with the Paris Agreement
goals.
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