Investors presentation - December, 2018 - Edenred
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Investors presentation December, 2018
Agenda
1. Edenred In A Nutshell
2. Fast Forward Strategic Plan
3. Financial Performance
4. Focus on recent acquisitions
Appendices
2
AT THE HEART OF A WIN-WIN ECOSYSTEM
44 million Public institutions
employee users
+ traceability and efficiency
Distribution of the + Use of the
service service
purchasing power
and simplicity
+ +
performance and €26 billion revenue
770,000 attractiveness
business volume
and loyalty
1.5 million
corporate partner
clients 2 billion transactions with various merchants
payment technologies
Filtered loop payment network
App-to-app payment
Mobile payment
Virtual cards
Management Request
and sale reimbursement
In 2017
3
UNIQUE TECHNOLOGICAL LEADERSHIP
A global platform to fuel the Fast Forward growth strategy
Edenred’s global technology platform
MULTI-TECHNOLOGY OMNICHANNEL
Mobile Cards NFC tag Smart transfers
PROPRIETARY - NFC - Plastic/virtual
- QR code - Prepaid/postpaid Strong competitive
- App-to-App - Closed/filtered loop
Instore or remote advantage to accelerate
transactions growth
WALLET SERVICE PROVIDERS LEADING E-COMMERCE PLATFORMS WHITE LABEL GLOBAL REACH
PARTNERSHIPS TIME TO MARKET
COST EFFICIENCY
Meal delivery Retail/Travel Fintechs
VALUE-ADDED SERVICES
SUCCESSFUL MIGRATION OF ACQUIRED COMPANIES GENERATING STRONG SYNERGIES TAILOR-MADE
SOLUTIONS
INTEGRATIONS
~R$60m in synergies
Current migration of No attrition during
delivered 1 year in DIFFERENTIATION
processing platform client migration
advance
4
3 BUSINESS LINES
65%* 26%* 9%*
EMPLOYEE BENEFITS FLEET & MOBILITY SOLUTIONS COMPLEMENTARY SOLUTIONS
#1 in Latin America
#1 worldwide
#2 in Europe**
More than 100 solutions for Corporate Payment
A full range of solutions
food to help companies manage employee Incentive & Rewards
well-being business expenses, especially those
Public Social Programs
culture linked to mobility
*% of 9 months 2018 operating revenue
**#2 Europe-wide player in multi-brand fuel cards 5
Agenda
1. Edenred In A Nutshell
2. Fast Forward Strategic Plan
3. Financial Performance
4. Focus on recent acquisitions
Appendices
6
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 global player
> +9%
Operating in Fleet & Mobility solutions
EBIT
… strengthen our positioning in
> +10% FFO Employee Benefits
Generate a profitable & sustainable growth on all our business lines and geographies
7
2016-2017-H1/9M 2018: OUTPERFORMANCE
An organic growth higher than objectives
Reported figures in € million
(1)
Annual medium-term
(1)
Like-for-like growth figures FY 2016 FY 2017 H1 2018 9M 2018 objectives
Operating revenue
1,000 1,073 1,272 +8% +9% +12% +13% > +7%
640
2015 2016 2017 H1 2018
Operating EBIT
272 304 370
+17% +16% +20% > +9%
190
2015 2016 2017 H1 2018
Funds from operations
280 299 388
+15% +22% +18% > +10%
200
2015 2016 2017 H1 2018
(1) Due to Venezuelan current high inflation, the like-for-like performance is temporary calculated excluding Venezuela.
8
ACQUISITIONS
Successful integrations
FY 2017
Reported growth 2 transformational acquisitions in Fleet & Mobility Solutions
+1,300 employees joining the Group
+19%
Operating
revenue
European expansion
Operating
EBIT +22%
Building a leader in Brazil
Business & costs synergies
Funds from
operations +30% Other significant
acquisitions
9
DEBT PROFILE AND CAPITAL ALLOCATION POLICY
Gross debt(in €m): Floating-rate Fixed-rate Cost of debt Edenred’s capital allocation policy
as of 31.12.2017
2 000 3.2% 3.5%
3.1%
2.8%
2.7% 2.7%
2.5% 3.0% Maximize value creation for shareholders through a
1 500
2.0% 2.5% balanced deployment of capital between:
1.8%(1)
2.0%
1 000 Immediate return to shareholders through a payout ratio of at
1.5% least 80% of net profit, Group share:
500 1.0%
0.5%
€0.85 per share in 2017
0 0.0%
2010 2011 2012 2014 2013 2015 2016 2017 +37% vs. 2016
Net debt (€m) 637 588 696
Leverage ratio (Net 1.6x 1.4x 1.4x 0.84 0.85
debt/EBITDA) 0.62
Average maturity 5.5 4.4 6.0 2015 2016 2017
(years)
Selected growth investments, applying stringent financial criteria
“Strong investment grade” BBB+ while maintaining strong credit rating.
Group rating by Standard & Poor’s
(1) Excluding BRL debt, 2017 average cost of debt was 1.2%, down 44bps vs. 2016.
10Agenda
1. Edenred In A Nutshell
2. Fast Forward Strategic Plan
3. Financial Performance
4. Focus on recent acquisitions
Appendices
119M 2018 TOTAL INCOME (FORMERLY TOTAL REVENUE): €990M
Accelerated growth in Q3
Q3 9M
2018 €325m €990m
Total income (formerly total revenue) growth in Q3 2018
Reported +4.8% +3.1%
Reported L/L change
In €m Q3 18 Q3 17 change
(excluding
Venezuela)
Venezuela +0.2% -0.3% Operating revenue 313 293 +6.5% +14.6%
Other operating income 12 17 -25.7% -15.1%
Scope +0.7% +0.9%
Total income 325 310 +4.8% +13.0%
Currency -9.1% -8.5%
(excluding Venezuela)
Total income (formerly total revenue) growth in 9M 2018
Like-for-like +13.0% +11.0%
(excluding Venezuela) Reported L/L change
In €m 9M 18 9M 17 change
(excluding
Venezuela)
Operating revenue 953 909 +4.8% +12.6%
Restated 2017 €310m €960m
Other operating income 37 51 -26.8% -16.8%
IFRS impacts €0m €0m
Total income 990 960 +3.1% +11.0%
Reported 2017 €310m €960m
129M 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
% OF 9M 2018 Incentive & Rewards
GROUP OPERATING 65% 26% 9% Public Social Programs
REVENUE
9M 2018 OPERATING
REVENUE €618m €246m €90m
+11.1% +17.0% +10.5%
9M 2018 L/L
OPERATING REVENUE GROWTH
(excluding Venezuela)
139M 2018 OPERATING REVENUE BREAKDOWN & GROWTH BY GEOGRAPHY
Sustained growth across all regions
Europe
57%
+14.6% L/L
+16.2% as reported
Rest of the World
6% +8.7% L/L
Latin America
-3.9% as reported
+10.7% L/L
37% (excluding Venezuela)
-7.6% as reported
% of 9M 2018 Group
operating revenue 14H1 2018 TOTAL EBIT: €215M
L/L operating EBIT and EBIT margins up 2.2pts and 1.2pts, respectively
Reported H1 2017
In € millions H1 2018 H1 2017 L/L change(1)
change published
Operating revenue 640 616 +4.0% +11.6% 616
Other operating income (A) 25 34 -27.3% -17.5% 34
Total income 665 650 +2.3% +10.1% 650
EBITDA(2) 251 243 +3.8% +13.1% 237
Operating EBIT (B) 190 173 +10.6% +20.3% 167
Operating EBIT margin 29.7% 27.9% +1.8pts +2.2pts 27.0%
EBIT (C)=(A)+(B) 215 207 +4.3% +14.0% 201
EBIT margin 32.4% 31.8% +0.6pt +1.2pts 30.9%
(1) Like-for-like growth excluding Venezuela.
(2) EBITDA corresponds to total income less operating expenses (excluding depreciation and amortization)
15EDENRED CONFIRMS ITS FULL-YEAR 2018 TARGETS
Edenred to substantially outperform its annual medium-term targets in 2018
> +7 % > +9 % > +10%
L/L operating L/L operating
L/L FFO growth
revenue growth EBIT growth
Edenred aims to achieve FY 2018 EBIT of between:
€440m and €470m (1)
(vs. €429m in 2017)
(1) Based on an assumption of an average Brazilian real/Euro exchange rate for the second half of the year equal to the actual rate as of June 30, 2018.
16Agenda
1. Edenred In A Nutshell
2. Fast Forward Strategic Plan
3. Q3 2018 Financial Performance
4. Focus on recent acquisitions
Appendices
17CSI, A LEADING, FAST-GROWING AND PROFITABLE FINTECH
A unique corporate payment technology platform, with a strong track record
CSI technology
CSI financials platform and offer
2018E key figures
• 800+ clients in Accounts Payable with high retention
• Around 900k transactions in a year
• Payment volume: USD11bn Accounts Payable Corporate Travel Fleet Management
• Revenue: USD43m 10 years’ experience New 28 years’ experience
• Adj. EBITDA(1): USD26m 90%UNIQUE CORPORATE PAYMENT AUTOMATION PLATFORM
Connected to any payer system, using any payment methods to pay any vendor
Comprehensive payment offering including
the most advanced virtual payment methods
Virtual Closed Procurement Global
ACH Check
Card Loop Card Payments
Highly connected technology platform Intelligent payment routing, a key differentiator
350+ existing integrations with 3rd parties
A wide acceptance network of 475k+ vendors
for Accounts Payable and Corporate Travel
Virtual card acceptance network exceeding
market standards
Intelligent payment routing system to automatically
ERPs offer the best payment method to the vendor
Accounting systems
Automated Initially focused on key verticals to increase
Invoice automation decision to use the electronic payment enablement
most appropriate
Banks payment method
Procure to pay
Travel booking systems
Treasury systems Now expanding into new verticals, of which:
Education Healthcare Telecoms
Uunique user-friendly front-end software
19A MULTI-CHANNEL GO-TO-MARKET STRATEGY
CSI integrates and partners with leading industry participants to maximize its sales reach
Direct sale
Direct to clients Direct sales force with regional and industry expertise
channel
Partnership with financial Indirect sales
White-label institutions through
channel through
payment platform white-labeled solutions
generating referral fees white-labeling
Accounts Payable Corporate Travel
Software system
integrations with
Partnership and Integration with leading
integration software providers referral
agreements
20A LARGE ADDRESSABLE NORTH AMERICAN MARKET
A market undergoing a digital transition
Global market data(1) North America market data(1)
B2B PAYMENT VOLUME
B2B PAYMENT VOLUME $25tn
$120tn 4% 10%
10%
40%
32% Medium
CARD PENETRATION 2016 term
64%
2% 40%
Cash/check Enhanced ACH
ACH Virtual card
• Close to 2/3 of B2B payment volume in North America is still
check/cash-based
• More than 70% of vendors are likely to convert their B2B payments
from checks to electronic payments within 3 years(2)
(1) Source: STRH estimates, MasterCard Investor Day.
(2) Source: Barclays research, 2016 AFP Electronic Payments Survey. 21DIGITAL B2B PAYMENT SOLUTIONS: NORTH AMERICAN VALUE PROPOSITION
Key benefits of shifting to digital payment methods such as virtual cards
For Buyers For Vendors
Reduce costs Reduce costs
Automation and integration, FX Easy reconciliation of each transaction, lower
optimization fees for receiving money in foreign currencies
Reduce fraud Secure cash-in
No IBAN required, alternative to checks Instant confirmation for each payment
Save time Improve efficiency
No more manual paper-based processes, Full invoice remittance details, no checks
with full integration meaning less paper work
Create revenue Increase business
Turning an overhead function into a Facilitate payment for clients
revenue-generating activity
22ENHANCING EDENRED’S CORPORATE PAYMENT OFFERING
VIRTUAL CARD ACCOUNTS CORPORATE IDENTIFIED BANK TAILOR-MADE
ISSUING PAYABLE SOLUTION TRAVEL TRANSFERS PROGRAMS
Solution
provider
PAY-OUT CASH-IN
MasterCard virtual Best-in-class Virtual card Identified Deployment of
cards issuing in cloud-based payment tools payment solutions IATA EasyPay in
Europe automated integrated with in Europe more than 110
payment Travel Booking countries
Dual issuing (Visa &
platform in North Systems
MasterCard) for
America
virtual cards in the
United States Further
opportunities for
User-friendly front-
international
end solution
clients
Reinforced
connectivity with an
additional set of APIs
Solution
users
23ACQUISITION OF THE RIGHT FUELCARD COMPANY (TRFC) IN THE UK
Consolidating Edenred’s global position in Fleet & Mobility solutions in line with
the Fast Forward strategy
TRFC description Deal financials
4th fuel card program manager in the United Kingdom Acquisition of 80% of the share capital of
TRFC(1)
One of the most important fleet & mobility market in Europe:
Low-teens EBITDA multiple valuation
o The largest European fuel cards market
o The third largest market in liters of fuel spent by companies ~£95 cash-out with a closing expected
(>19 billion liters per year) by early 2019
Provides monobrand (e.g., Shell, BP) and multibrand cards Directly accretive on the Group EBIT and
program, giving access to 90% of UK gas stations to light and net profit, Group share
heavy fleets
27k corporate clients, 150k card holders
Highly profitable business; 2018e EBITDA: £11m
(1) Following the transaction, Rontec, specialist in the service station management industry, and the Bayford group, specialist in the fuel distribution, both in the United Kingdom,
will each hold 10% of the TRFC group’s share capital. 24Agenda
1. Edenred In A Nutshell
2. Fast Forward Strategic Plan
3. Financial Performance
4. Focus on recent acquisitions
Appendices
25A
Digital
Company
26A DIGITAL COMPANY
Ambition: more than 85% Edenred’s business volume will be digital by 2020
DIGITAL
% OF BUSINESS
VOLUME IN 2017
By geography By business line
Latin America
Fleet & Mobility
97% +1pt vs 2016 99% Solutions
Rest of the World Employee
68%
79% +6pts vs 2016 78% Benefits
Complementary
Europe 49% Solutions
61% +18pts vs 2016
+8pts vs 2016
Strong acceleration of digitalization in Europe
27RECENT EMBLEMATIC PARTNERSHIPS TO ENHANCE THE USER EXPERIENCE
The most advanced global digital means of payment empowering Edenred’s ecosystem
Payments APIs:
Fast, seamless payment with mobile
Edenred Direct Payment Services (EDPS) offer
Proprietary solutions Edenred’s unique global
technological platform
leverages the fast growing
online food-tech segment
Fast roll-out reflecting strong end-user adoption rate:
Up to 12 transactions per month per user
Stick to new usage trends:
o >10,000 transactions per week
o 75% Millennials among Edenred Direct Payment Services users
1st 5 programs 10 programs
16 programs
Boost stickiness for meal delivery platforms: 34% of EDPS users
program in 5 countries in 8 countries in 11 countries ordered more than 5 times
Drive incremental volume for merchants: 4x more volume online vs.
H1 2016 H1 2017 FY 2017 Oct. 2018 instore(1)
Additional partnerships to come in 4 other countries by year-end
(1) Volume generated through Edenred solutions for the Top 20 merchants registered on Edenred Direct Payment Services
28Financial
Performance
Details
29Q3 & 9M 2018 OPERATING REVENUE
Accelerating operating revenue gains in Q3 leading to solid double-digit L/L growth
Q3 9M
2018 €313m €953m L/L operating growth (excluding Venezuela)
Reported +6.5% +4.8% 13.4%
14.6%
12.6%
9.3% 9.8%
Venezuela +0.2% -0.3%
FY 17 Q1 18 Q2 18 Q3 18 9M 18
Scope +0.8% +0.9%
2017 growth rates do not take into account IFRS 15 impacts
Currency -9.0% -8.4%
(excluding Venezuela)
Currency effect in €m (excluding Venezuela)
Like-for-like +14.6% +12.6% Q1 Q2 Q3 9M
(excluding Venezuela)
BRL (17) (19) (20) (56)
MXN (2) (3) (1) (6)
Restated 2017 €293m €909m Other (5) (5) (5) (15)
Total (24) (27) (26) (77)
IFRS impacts €0m €0m
Reported 2017 €293m €909m
30Q3 & 9M 2018 OPERATING REVENUE - EMPLOYEE BENEFITS
Innovative offers creating differentiation and fueling growth
L/L operating revenue growth (excluding Venezuela)
9M 2018 operating revenue
€618m
13.4%
11.8% 11.1%
8.5%
7.1%
+11.1% L/L
FY 17 Q1 18 Q2 18 Q3 18 YTD 18
STRONG Q3 2018 INNOVATIVE ACHIEVEMENTS BY EDENRED
Fast, seamless payment with mobile
Increased penetration of SMEs, enhanced digital
offer creating more differentiation, large corporate 16 programs, developed as Edenred
client wins proprietary solutions or in partnership
Fast ramp-up of innovative solutions, such as Ticket with major wallet service providers
Welfare (Italy) and Edenred Direct Payment Services In 11 countries, on 3 continents
for meal delivery platforms
Strong adoption and engagement
Brazil in positive territory for the 2nd quarter in a row, rate, with up to 12 transactions per
and positive long-term trends with Itaú partnership month per user
31Q3 & 9M 2018 OPERATING REVENUE - FLEET & MOBILITY SOLUTIONS
Sustained growth across all our segments
L/L operating revenue growth
9M 2018 operating revenue
€245m 19.7%
14.7%
17.9% 18.4%
17.0%
+17.0% L/L
FY 17 Q1 18 Q2 18 Q3 18 YTD 18
STRONG Q3 2018 INNOVATIVE ACHIEVEMENTS BY EDENRED
Fuel & Fleet Contract with Carrefour Consolidation of the Global, flexible corporate
o UTA’s pan-European expansion strategy starts in France European toll market expenses offer
paying off
o Good ramp-up of mono- and multibrand
Light Fleet offers in France and Italy
o Further market penetration in Latin America
Corporate expenses
o Sustained performance of Empresarial, the Carrefour card processing & UTA acquired the Road Roll-out of Empresarial in
successful corporate expenses solution distribution, Account client portfolio in Latin America
Ticket Fleet Pro/UTA cards Germany
acceptance
32Q3 & 9M 2018 OPERATING REVENUE – EUROPE
Double-digit organic growth in France and Rest of Europe
2018 vs. 2017 L/L growth
9M 2018
operating revenue
Q1 Q2 Q3 9M
of Group €541m France +8.6% +10.2% +12.4% +10.3%
operating 57% +14.6% L/L
revenue Europe excl. France +13.8% +15.9% +20.6% +16.7%
+16.2% as reported vs.
€465m in 9M 2017 Total Europe +11.9% +14.1% +18.0% +14.6%
France: Europe excluding France:
Increased competitive edge in Employee Benefits Sustained growth momentum due to:
thanks to Edenred’s unique digital offering, o Fast ramp-up of innovative solutions (e.g., Ticket Welfare
leading to further market penetration (especially in Italy), SME client wins, and face-value increases (e.g.,
among SMEs), cross-selling and client wins Spain & Slovakia) in Employee Benefits
o Strong performance in Fleet & Mobility solutions thanks to
Ramp-up of Light Fleet solutions:
UTA’s extensive offer (e.g., UTA One toll system, light fleet
o Strong multi-brand offer with Ticket Fleet Pro, the card) and expansion strategy (e.g., organic
second-largest network in France development in Slovakia)
o LCCC #2 on mono-brand card market in volume
33Q3 & 9M 2018 OPERATING REVENUE – LATIN AMERICA
Sustained double-digit organic growth in the first nine months
2018 vs. 2017 L/L growth (excluding Venezuela)
9M 2018
operating revenue
Q1 Q2 Q3 9M
of Group €359m Hispanic Latin America +15.8% +15.4% +16.8% +16.0%
37% operating +10.7% L/L
revenue Brazil +4.7% +12.3% +9.4% +8.8%
-7.6% as reported vs.
€389m in 9M 2017 Total Latin America +7.6% +13.1% +11.3% +10.7%
Hispanic Latin America: Brazil:
Sustained momentum in Employee Benefits Double-digit L/L growth in Fleet & Mobility Solutions
Strong L/L growth of Fleet & Mobility Solutions:
Employee Benefits growth in positive territory
o Double-digit growth of Ticket Car, thanks to again in Q3, in an unstable political context due to
new client wins the presidential election in October, and despite
o Fast ramp-up of Empresarial unfavorable calendar effects this quarter
34Q3 & 9M 2018 OTHER OPERATING INCOME (FORMERLY FINANCIAL REVENUE)
Decrease mainly linked to less favorable investment conditions in Europe
and negative currency effects in Latin America
9M reported 9M L/L
In €m Q1 Q2 Q3 9M change change
9M 2018
(excluding Venezuela)
Latin America 8 8 8 24 -18.7% -4.8% Other operating income
(ex financial revenue)
Europe 4 3 3 10 -42.4% -42.3%
Rest of the World 1 1 1 3 -13.1% +15.8% €37m
Total 13 12 12 37 -26.8% -16.8%
Float increase in H1 2018: €2,572m, +6.6% vs. H1 2017
Latin America: strong currency effect
Europe (where most of the float is located): very low interest rates and
less favorable investment conditions for investments reaching maturity
Cautious and optimized cash management: Only money market
instruments in local currencies (bank term deposits with no risk on
capital). No float transfer between currencies.
35H1 2018 NET PROFIT: €124M
Increase in net profit, Group share
Reported
In € millions H1 2018 H1 2017
change
EBITDA 251 243 +3.8%
Depreciation and amortization excluding PPA (25) (24)
Purchase price allocation (PPA) (11) (12)
EBIT 215 207 +4.3%
Including +€19m in capital
Share of net profit from equity-accounted companies 6 5 gains on remeasurement at
fair value of Edenred’s initial
investment in UTA
Other income and expenses (3) 16
Operating profit including share of net profit from
218 228 -4.3%
equity-accounted companies
Mainly resulting from 2017
Net financial expense (15) (26) refinancing operations & BRL
currency effect
Income tax expense (61) (65)
Net profit attributable to non-controlling interests (18) (14) Mainly related to Ticket Log
and UTA minority shareholders
Net profit, Group share (A) 124 123 +0.8%
36H1 2018 CASH FLOW STATEMENT
Strong funds from operations and free cash flow generation
In € millions H1 2018 H1 2017
Funds from operations 200 179 +17.5% L/L
Increase/(decrease) in cash linked to changes in float (1) (270) (263)
(Increase)/decrease in restricted cash (121) (83)
(Increase)/decrease in working capital (excl. float) 83 (8)
Recurring capex (37) (36)
Of which €(228)m related to UTA
Free cash flow (145) (211)
Acquisitions (149) (267)
Mainly related to the acquisitions of
Dividends paid to Edenred SA shareholders (104) (112) Timex Card and of minority interests
in ProwebCE
Dividends paid to non-controlling interests (23) (15)
Capital increase(2) 7 8
Increased 2017 dividend vs. 2016 but
(Buyback)/sale of treasury shares (30) (17) higher amount of scrip dividend
Currency effects (55) (50)
Other non-recurring items 5 36
(Increase)/decrease in net debt (494) (628)
(1) The float corresponds to vouchers in circulation less trade receivables.
(2) Related to stock options. 37NO MAJOR REPAYMENTS DUE BEFORE 2025
H1 2018 Total gross debt:
Debt repayment schedule
€2.199bn
(€m)
Repayments (bonds, Schuldschein loan, bank loans)
Undrawn revolving credit facility
700
500 500
254 229
2 117 137
60 (1)
(2)
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Share of
total debt (%) 0% 3% 14% 7% 13% 8% 28% 28%
Excluding NEU CP
(1) Of which bank loans in BRL of €56 million based on a closing price of BRL 4.49 for EUR 1 on June 30, 2018.
(2) As of June 30, 2018, the group issued Negotiable EUropean Commercial Paper (short term negotiable debt) for €400m. 38Corporate
Social
Responsibility
&
Governance
39CORPORATE SOCIAL RESPONSIBILITY
Three main pillars
1 2 3
Foster a better life Preserve the environment Create value responsibly
Be a top employer by ensuring Reduce our carbon footprint Ensure Ethics performance on
a positive environment for and amount of energy, natural our entire value chain
professional resources and waste
Disclose transparent practices
Promote wellbeing services Develop environmental- and commitments on IT
through healthy food friendly services for mobility security and data privacy
and food waste
Contribute to local Meet our stakeholders
development by involving Manage sustainable impacts expectations by onboarding
ourselves and sharing the fruit of our solutions during their them in our digital
of our growth lifecycle transformation
40CORPORATE SOCIAL RESPONSIBILITY
2022 and 2030 targets
2017 2022 2030
TRAINING - % employees who received at least 1 training 78% 80% 85%
DIVERSITY - % women among executive positions 21% 25% 40%
SOLIDARITY - Number of days of volunteering 586 1,000 5,000
NUTRITION - % food users & merchants sensitized 29% 50% 85%
GAS EMISSION - % reduction intensity vs 2013 (GHG*/m2) 18% 26% (SBTI**) 52% (SBTI**)
SERVICES - Number of environmental-friendly services 9 20 1 / country
SOLUTIONS - % eco-designed / recycled solutions 27% 35% 70%
ETHICS - % acknowledgment employees to Ethics Charter 83% 100% WMEC***
Binding
DATA PROTECTION - % subsidiaries under common standard 100% 100%
Corporate rules
of compliance & employees sensitized to personal data issues European Group & certification
QUALITY - % subsidiaries quality management certified 39% 50% 85%
*GHG: Green House Gas
**SBTI: Science Based Targets Initiatives – based on COP21 targets
***WMEC: World Most Ethical Company 41WOMEN AND MEN OF EDENRED
7 782
In 2017, 90% of Edenred’s employees were
working in an environment engaged in the
“Best Place to Work” approach
employees
50% 50% 32% Sales
Women Men & Marketing
50% 15%* IT
aged under 35
Engines of our
commercial wins
19% & innovation
Managers
* 21% including contractors
42GOVERNANCE 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 Lead Independent Director
Annual reelection of a third
4-year term
Three committees prepare Board discussions and decisions:
Corporate Audit and Risks Committee
Governance Compensation and Appointments Committee
Commitments Committee
* Excluding employee-director
43EDENRED’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 compensation booster ▌ Ensure expense tax sales force motivation and
for corporates deductibility distribution
I&R : Business volume &
Driving business and ▌
revenue driver for affiliate
generating ▌ Business volume & revenue driver for affiliate network network
incremental revenues
for merchants ▌ I&R: Retain consumers
Increasing purchasing No need to advance I&R: Increasing
Offering additional ▌ ▌ ▌
power cash purchasing power
purchasing power to
Positive impact on health Simplified reporting
employees ▌
& work-life balance
▌
procedure
Formalization of economy
Improving Formalization of economy
▌
effectiveness of
▌
▌ Formalization of economy ▌ PSP: Improved traceability of
▌ Job creation Carbon emission control the funds allocated / avoid
public institutions’ ▌ Lower health spending
▌
cash distribution
policies
44Employee
Benefits
45CREATOR 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
900,000
restaurants
or food shops
affiliated
Edenred offers More than
its solutions in
more than 1 billion
35
countries
meals served per year
using Edenred solutions
Figures as of 2017
46EMPLOYEE BENEFITS
Competitive landscape: Edenred is the industry leader on a large, global
and growing market
3 global players Local and regional 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 underlying growth fundamentals: economic formalization, intensifying urbanization,
aspirations for a better work-life balance
(1) Non exhaustive
(2) Source: Edenred estimates
(3) On an addressable market > €180bn and potential market > €340bn
47EMPLOYEE BENEFITS
Harnessing the untapped potential of Employee Benefits thanks to
digitization, product innovation and cross-selling
1 2 3
Increased market penetration New solutions Cross-selling
Products and sales channels digitization Digital allows A key driver to
improve our capacity to reach new clients innovation and improve client
faster growth retention and
increase profitability
SMEs New segments
More convenience in Target new segments
managing digital such as IT services firms
solutions
Target new areas such
Telesales & websales as countryside
Lower distribution costs
in tier 2/3 zones
~40% SME client growth
in 2017
48DIGITIZATION 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 ++ More penetration due to more
convenience (e.g., consulting
+ card, new services)
New revenues from users (e.g.,
e.g., Ticket Restaurant
firms, SMEs) data collection)
New digital More solutions possible (e.g., web
platforms)
solutions
e.g., ProwebCE,
+ But not every solution based on
volumes (e.g., e-commerce)
++ Additional revenue
Employee Savings Boosts cross-selling
More sales efficiency (e.g.
New digital sales industrialized telesales Lower price sensitivity of
channels ++ organization)
More penetration
++ some client categories
(e.g., SMEs)
e.g., Telesales
(e.g., SMEs, Tie r2/3 cities)
49EMPLOYEE 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
FEES
Ensure that the
FEES
allocated funds are
Free Float(2) used as intended
and restricted
funds Operating revenue
without business volume(3)
Partner Corporate
Other operating Total merchants clients
Operating revenue
income income
Restaurants and
food shops
100% Operating expenses
Financial Total Employee
Operating EBIT(5)
EBIT(4) EBIT users
Use Distribution
(1) Issue volume: total face value of the preloaded employee benefit services issued by Edenred to its
corporate and public sector clients
(2) The free float increase is contributing to the Free Cash Flow generation
(3) For example, maintenance and installation costs and periodic subscription fees
(4) 100% of other operating income (formerly financial revenue) is converted to EBIT
(5) ~30% of operating EBIT margin.
50EDENRED SIGNS AN EXCLUSIVE PARTNERSHIP WITH ITAÚ UNIBANCO (SEP. 2018)
A game-changer for the employee benefits Brazilian market
+
The association of Growth-oriented
1 Itaú Unibanco 2 2 market leaders 3 Deal structure 4 partnership
A unique business partner in Brazil: A significant competitive Incentives on the new sales Building a powerful platform to
Largest privately-owned bank advantage in Brazil’s employee originated by Itaú-Unibanco outperform the high potential
in the country with a market benefits market: Employee Benefits Brazilian
Acquisition of a strategic
capitalization of €53bn unparalleled commercial market
minority stake of 11% in Ticket
extensive sales network with reach Serviços(3), with the possibility Large pipeline of innovative
4,400 branches and digital proven innovation and digital to gradually increase their products:
channels capabilities stake over time Salary advance, health,
large corporate customer base wellbeing and fitness
with more than 1 million
corporate clients(1) PlusMD
Saùde MD
strong distribution brand: “The
most valuable” Brazilian brand
for the last 14 years(2)
Ambition to outperform the Brazilian employee benefits market, leading to 1%
additional organic operating revenue growth at Group level
Accretive on EBITDA from Year 1 post-closing
(1) Of which 1 million are digital corporate clients
(2) Source : http://interbrand.com/br/best-brands/best-brazilian-brands/2017/ranking
(3) Ticket Serviços is Edenred’s subsidiary in Brazil dedicated to Employee Benefits, known under the brand Ticket
51Fleet &
Mobility
Solutions
52FLEET & 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
2.6 million >90,000 6.6 billion
means of payment points of acceptance liters of fuel
efficiently managed
Figures as of 2017
53FUEL & 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 &
AMERICA AMERICA MIDDLE-EAST EUROPE APAC
Local issuers & resellers
Annual spend €225bn €100bn €35bn €300bn €375bn
Light Vehicle Low- International, regional and national oil
Medium Low Low Low
penetration Medium companies
Heavy Vehicle
High Medium Low High Low
penetration
Source: Alphanova, Edenred estimates
54EDENRED 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 Brazil for Light Fleet
#2 in Brazil for Heavy Fleet
#1 in Mexico
In 2017, Edenred managed
6.6bn liters of fuel, 2.6m payment media, >90K points of acceptance
55FLEET & MOBILITY SOLUTIONS
Focus on UTA in Europe
Gradually increased stake, from a 34% minority interest in 2015, to an 83% stake in early 2018(1)
New growth strategy well on track:
Expand internationally Enhance the network Tackle Light Fleet market
2014 – before acquisition 2018
In # of acceptance points Development of Ticket Fleet Pro,
French solution giving access to
UTA network (2,700 service stations
2015 2017 in France)
40K 55K
Launch of a Light Fleet offer in
Germany and Italy
UTA footprint
Direct Opened Acceptance No (1) The Eckstein family holds a put option on the remaining 17% of UTA’s share capital.
Sales since 2015 network only presence
56FLEET & 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
Corporate
Hotels Maintenance Tolls Fuel stations
Operating revenue with clients
business volume
Free Float(1) &
Negative Working
Operating revenue Employee
Capital
without business volume(2) users
Other operating Total
Operating revenue
income income
100% Operating expenses Operating revenue generation is a mix of:
• Percentage based fees on transaction value
• Other fees related and not related to volumes
Financial Total
Operating EBIT(3) • EBIT margin is comparable to Employee Benefits (~30%)
EBIT(4) EBIT
• Some preloaded solutions and DPO/DSO optimization generate negative
working capital contributing to the Free cash flow generation
(1) The free float increase is contributing to the Free Cash Flow generation
(2) For example, maintenance and installation costs and periodic subscription fees
(3) ~30% of operating EBIT margin.
(4) 100% of other operating income (formerly financial revenue) is converted to EBIT
57Complementary
Solutions
58COMPLEMENTARY 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
proposition companies and build customer loyalty
Virtual cards, Private payment Incentives programs, Social benefits solutions
Solutions network, payment API, … gift cards… (human service or education)
Brands &
Products
59CONTACT
Solène Zammito
solene.zammito@edenred.com
Loïc Da Silva
loic.dasilva@edenred.com
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