Edenred First-half 2021 results: With a strong increase in business
in the first half of the year, Edenred resumes its pre-crisis
growth trajectory
First-half 2021 results
With a strong increase in business in
the first half of the year, Edenred resumes its pre-crisis growth
trajectory
Edenred has much
more than recovered the ground lost in revenue in
first-half 2020, with
like-for-like growth of
nearly 10% versus 2019
- +31%: like-for-like
operating revenue growth in second-quarter 2021 versus
second-quarter 2020
- +15%: like-for-like
operating revenue growth in first-half 2021 versus first-half 2020,
with gains of more than 10% across all business lines and regions
- +10%: like-for-like operating revenue growth
in first-half 2021 versus first-half 2019
Margin improvement and strong cash
generation
- Total revenue:
€757 million, up 15% like-for-like versus
first-half 2020 (+9% as reported)
- EBITDA:
€295 million,
up 21% like-for-like (+16% as reported), driving the EBITDA margin
up 2 points, to 39%
- Net profit, Group
share of €133 million, up 33%
- Strong cash generation, with
funds from operations before other income and expenses
(FFO) of €254 million, up 23%
- Net debt:
€1.45 billion, down slightly from June 30,
2020
Edenred upgrades its guidance for minimum
like-for-like EBITDA growth in 2021 by 3 points
- Thanks to the relevance of
its solutions and the strength of its sales dynamic, Edenred
will continue to capitalize on the opportunities created by changes
in the world of work and to further penetrate its markets
- In certain regions still impacted by
health restrictions in the second quarter (France and Latin
America), the Employee Benefits business line is expected to
gradually get back to pre-crisis levels
- As a result, despite the uncertainties
related to the development of the pandemic and the exit timing of
the health crisis, Edenred is upgrading its guidance for
like-for-like EBITDA growth to minimum 9% versus 6%
previously
- Edenred therefore intends to generate
2021 EBITDA of between €620 million and
€670 million1
*** Bertrand Dumazy,
Chairman and Chief Executive Officer of Edenred, said:
“After getting back to like-for-like growth across all business
lines and all regions in first-quarter 2021, Edenred succeeded in
maintaining this momentum in the second quarter. With growth of
nearly 10% compared with the first half of 2019, we have much more
than recovered the ground lost in 2020. This shows that Edenred is
returning to its pre-crisis trajectory of sustainable and
profitable growth, which is why we are upgrading our minimum EBITDA
growth guidance for the year. To continue on this path, our teams
will leverage a comprehensive and innovative range of solutions in
our three business lines to win over new clients of all sizes. By
targeting underpenetrated markets and developing solutions that are
particularly relevant to the world of work – which is increasingly
centered around digital technology, automation and flexibility –
Edenred will be able to harness its huge growth potential in the
coming years.” |
FIRST-HALF 2021 RESULTS
At its meeting on July 26, 2021, the Board of
Directors reviewed the Group’s consolidated interim financial
statements for the six months ended June 30, 2021.
First-half 2021 key financial metrics:
(in € millions) |
First-half 2021 |
First-half 2020 |
% change (like-for-like) |
% change (reported) |
Operating
revenue |
736 |
675 |
+15.3% |
+9.2% |
Other revenue
(A) |
21 |
21 |
+10.4% |
-3.5% |
Total revenue |
757 |
696 |
+15.2% |
+8.8% |
EBITDA |
295 |
255 |
+20.9% |
+15.6% |
Operating EBIT (B) |
211 |
171 |
+27.8% |
+23.5% |
EBIT (A + B) |
232 |
192 |
+25.8% |
+20.5% |
Net profit, Group share |
133 |
100 |
|
+32.9% |
- Total revenue: €757
million
Total revenue for first-half 2021 amounted to
€757 million, up 15.2% like-for-like compared with
first-half 2020. The reported increase came to 8.8%, reflecting an
unfavorable currency effect (-6.1%) and a slightly negative
scope effect (-0.2%) during the period.
Total revenue for the second quarter was up
30.2% like-for-like and up 27.3% as reported, including a negative
currency effect (-2.6%) and a slightly negative scope effect
(-0.3%).
- Operating revenue: €736
million
Operating revenue for the first six months of
2021 came to €736 million, up 15.3% like-for-like versus
the prior-year period, reflecting double-digit growth in all
business lines and in all major regions. On a reported basis, an
unfavorable currency effect (-5.9%) and a slightly negative
scope effect (-0.2%) resulted in growth of 9.2%.
After an encouraging start to the year,
nonetheless still impacted by health restrictions, this good
performance was achieved thanks to the continued rebound in
business during the second quarter, when operating revenue rose by
30.6% like-for-like and by 27.9% as reported.
Compared with first-half 20192,
like-for-like growth came to 9.6%. This means that the Group has
much more than recovered the ground lost in first-half 2020, even
though some of its operations were still impacted by the health
crisis, notably the Employee Benefits business in Latin
America.
Edenred has therefore demonstrated its ability
to return to a high level of growth, thanks to the relevance of its
offering – which includes innovative new solutions such as the
Télétravail platform launched in France during the period – and
a sales dynamic that enables the Group to continue penetrating
its markets. The number of new contracts signed with SMEs in the
first half of 2021, for example, was equivalent to that in the same
period in 2019.
- Operating revenue by
business line
(in € millions) |
First-half 2021 |
First-half 2020 |
% change (like-for-like) |
% change (reported) |
Employee Benefits |
448 |
412 |
+13.4% |
+8.8% |
Fleet &
Mobility Solutions |
190 |
173 |
+20.1% |
+10.1% |
Complementary Solutions |
98 |
90 |
+14.8% |
+9.4% |
Total |
736 |
675 |
+15.3% |
+9.2% |
The Employee Benefits business
line, which accounted for 61% of the Group’s business, generated
€448 million in operating revenue in first-half 2021,
representing like-for-like growth of 13.4% (+8.8% as reported),
including a sharp 31.5% rise in the second quarter on a
like-for-like basis (+29.5% as reported).
With a like-for-like increase in operating
revenue of 3.3% versus first-half 2019, Edenred has successfully
neutralized the decrease recorded in 2020. This was achieved
notably thanks to a robust performance in Europe, despite the fact
that business continues to be impacted by a still challenging
health situation in Latin America and that most of the funds
accumulated on prepaid solutions have not yet been spent via the
Group’s network of partner merchants, notably in France.
During the first half of 2021, Edenred continued
to roll out its initiatives aimed at offering the most seamless
experience possible to its clients, its partner merchants and the
users of its products. For example, Edenred has now deployed its
virtual Ticket Restaurant solution without a plastic card in
France, Spain, Finland, Italy and Poland, enabling employers to
equip their workers quickly, simply and securely, particularly at
a time when remote working is becoming increasingly
widespread. Accelerated by the health crisis, this dramatic change
in the world of work is also creating new opportunities for the
Group to further penetrate its markets. Thanks to the partnerships
Edenred started forging back in 2018, Ticket Restaurant now has
more than 100 online partners in 16 countries, including
both international and local meal delivery platforms. This flexible
and innovative experience notably led Gecina, the leading owner of
office space in Europe, to work with Edenred to integrate the
Group’s solutions into its offer for its 100,000 customers and
users in France.
In the Fleet & Mobility
Solutions business line, which accounted for 26%
of the Group’s business, operating revenue came to
€190 million in the first half of the year, up 20.1%
like-for-like over the period (+10.1% as reported), and up 40.0% in
the second quarter (+35.6% as reported).
First-half operating revenue was 17.3% higher
than in first-half 2019, notably reflecting the commercial success
of Edenred’s solutions for fleet managers and its “Beyond Fuel”
strategy. “Beyond Fuel” was strengthened during first-half 2021 by
innovations such as the cloud-based platform in Brazil, which gives
fleet managers direct access to all their services, and by the
expansion of the UTA One toll solution to five more
countries.
The Complementary Solutions
business line, which includes Corporate Payment Services, Incentive
& Rewards and Public Social Programs, generated operating
revenue of €98 million in first-half 2021, representing an
increase of 14.8% like-for-like (+9.4% as reported). For the second
quarter alone, growth came to 11.7% like-for-like (+8.5% as
reported).Compared with first-half 2019, operating revenue for the
Complementary Solutions business line was up 26.7%.
The growth recorded by this business line
notably reflects the Group’s ability to implement new, specific
earmarked funds programs designed, for instance, to help public
authorities effectively combat the impacts of Covid-19. One example
is the fully digital food aid program deployed in Romania to
provide elderly people on low incomes with a purchasing power
supplement for food.
In Corporate Payment Services, business improved
during the period, with revenue back to first-half 2019 levels
despite the number of transactions remaining lower in certain
sectors, such as hotels and media. The improvement was the result
of new client wins, achieved partly thanks to the partnerships
recently signed by CSI with Citi and Sage. These wins confirm the
growing interest among North American companies in automated,
digital accounts payable services, which are particularly well
suited to new ways of working and available 24/7 thanks to their
integration into the cloud.
- Operating revenue by
region
(in € millions) |
First-half 2021 |
First-half 2020 |
% change (like-for-like) |
% change (reported) |
Europe |
475 |
411 |
+15.1% |
+15.4% |
Latin
America |
204 |
203 |
+17.2% |
+0.8% |
Rest of the World |
58 |
61 |
+10.3% |
-4.6% |
Total |
736 |
675 |
+15.3% |
+9.2% |
In Europe, operating revenue
amounted to €475 million in first-half 2021, an increase of
15.1% like-for-like and of 15.4% as reported. Growth in the second
quarter alone came to 28.7% like-for-like and 29.3% as reported.
The region represented 64% of Group operating revenue. Compared
with first-half 2019, operating revenue for the region was up 11.2%
like-for-like, reflecting a return to above-2019 levels both in
France and in Europe excluding France.
In France, operating revenue
amounted to €135 million, representing an increase of 21.1%
both like-for-like and as reported. In the second quarter, growth
came to a strong 59.6% like-for-like and as reported. After the
implementation of local lockdowns in the first quarter, lockdown
measures were extended to the whole country at the beginning of the
second quarter. Against this backdrop, Edenred recorded a very good
sales performance in France, notably with Ticket Restaurant, the
leading digital solution on the market. In addition, the gradual
reopening of restaurants from May 19 contributed to an
acceleration in the use of funds allocated to employees, which had
accumulated through to the end of first-quarter 2021.
Operating revenue in Europe excluding
France totaled €340 million in first-half 2021, an
increase of 12.9% like-for-like (+13.3% as reported), driven by a
good sales performance. Second-quarter operating revenue rose by
19.9% like-for-like (+20.6% as reported). In Employee Benefits, the
gradual easing of health restrictions and the reopening of
restaurants facilitated the use of Edenred’s solutions. Revenue
growth in the Fleet & Mobility Solutions business line was
driven by new client wins, the continuation of the “Beyond Fuel”
strategy, notably with the success of toll solutions, and a
recovery in economic activity in the region’s countries.
Operating revenue in Latin
America amounted to €204 million, up 17.2%
like-for-like in the first half (+0.8% as reported), with a 37.8%
like-for-like increase in the second quarter (+31.9% as reported).
The region represented 28% of total consolidated operating revenue
in first-half 2021. Operating revenue for the region was up 6.0% on
a like-for-like basis compared with first-half 2019, reflecting
higher business levels than in 2019 in both Brazil and Hispanic
Latin America.
In Brazil, operating revenue
growth came to 19.4% like-for-like (-0.9% as reported) in the first
six months of the year, including a 40.9% like-for-like increase in
the second quarter. The success of “Beyond Fuel” maintenance and
toll management solutions continued to drive growth in Fleet &
Mobility Solutions, while Employee Benefits recorded a strong sales
performance, thanks notably to the ramp-up of the partnership with
Itaú Unibanco. The Group continued, nevertheless, to be impacted by
the still unstable health situation, which saw the implementation
of partial restrictions.
In Hispanic Latin America,
operating revenue rose by 12.1% like-for-like over the period
(+4.5% as reported), with a 31.3% like-for-like increase in the
second quarter. The region recorded a solid recovery despite the
still challenging and fast-changing health situation. Fleet &
Mobility Solutions continued to grow strongly during the second
quarter.
In the Rest of the World,
operating revenue amounted to €58 million, up 10.3%
like-for-like and down 4.6% as reported. Second-quarter operating
revenue rose by 22.1% like-for-like (+6.3% as reported).Compared
with first-half 2019, like-for-like growth in operating revenue
came to 13.9%. This performance reflects the success of the
innovative solutions offered by the Group in the region’s
countries, such as the fully digital Benefit Xpress solution in
Taiwan, which was converted into a “Covid-19 survival pack” to
finance the online purchase of basic necessities during
lockdown.
- Other revenue: €21
million
For the first six months of the year, other
revenue amounted to €21 million, up 10.4% like-for-like,
despite lower interest rates in non-euro European countries. On a
reported basis, other revenue fell by 3.5%, impacted by negative
currency effects, mainly in Latin America.
In first-half 2021, EBITDA amounted to
€295 million, up 20.9% like-for-like and up 15.6% as
reported. EBITDA increased by 23.4% like-for-like in Europe and by
20.6% in Latin America, driven by strong business growth in both
regions.
EBITDA margin came to 39.0%, up 2.3 points
as reported and up 1.8 points like-for-like, demonstrating
Edenred’s capacity to invest and develop its business, while also
improving its margins, and thereby move gradually back to 2019
levels.
Net profit, Group share amounted to
€133 million in first-half 2021, versus €100 million in
the prior-year period, with the increase primarily driven by growth
in EBITDA. Net profit takes into account other income and expenses
for a net expense of €7 million (versus a net expense of
€13 million in first-half 2020), a net income tax expense
of €73 million (versus €57 million in 2020), a net
financial expense of €9 million (versus €15 million in
2020) and €(14) million attributable to non-controlling
interests (versus €(13) million in first-half 2020).
- Strong cash flow
generation
Edenred’s business model generates significant
cash flows, delivering funds from operations before other income
and expenses (FFO) of €254 million in first-half 2021, up
27.3% like-for-like and up 22.7% as reported.
At June 30, 2021, Edenred had net debt of
€1.45 billion, versus €1.50 billion at end-June 2020. The
improvement in net debt notably takes into account the
€459 million in free cash flow generated over the previous
12 months and the €93 million returned to shareholders.
The net debt position also reflects the negative €280 million
impact of changes in exchange rates and non-recurring items3.
- A robust financial
position
Edenred enjoys a robust financial position with
a high level of liquidity and a solid balance sheet. In May 2021,
Standard & Poor’s affirmed the Group’s BBB+ Strong Investment
Grade rating with a stable outlook.
OUTLOOK
In first-half 2021, Edenred demonstrated its
capacity to harness its still-intact growth potential to rebound
sharply and generate double-digit growth across all its business
lines and regions. As a result, the Group has much more than
recovered the ground lost in first-half 2020, recording
like-for-like operating revenue growth of nearly 10% compared with
first-half 2019. This momentum is expected to continue during the
second half of the year.
However, recent pandemic-related developments
such as the reintroduction of restrictions in certain European
countries, as well as the uncertainties surrounding the exit timing
of the health crisis, provide reason to be cautious, particularly
in Latin America. Edenred is nonetheless sufficiently confident
about its outlook for the second half of the year to upgrade its
guidance for minimum like-for-like EBITDA growth for 2021 by three
points to 9% (versus 6% previously). The Group intends to generate
full-year EBITDA of between €620 million and
€670 million4, versus €580 million in 2020.
More generally, Edenred will continue to fully
harness the intact growth potential created by its unique
positioning as a global, digital, flexible and connected platform.
It will notably be able to capitalize on an offering aligned with
trends in home working, new mobility solutions, sustainable
development and digital payments to get back to the levels of
sustainable and profitable growth attained before the onset of the
health crisis.
SIGNIFICANT EVENTS SINCE THE BEGINNING
OF THE YEAR
-
Edenred’s
subsidiary Corporate Spending Innovations (CSI) expands its
partnership with Sage and collaborates with Citi
- In March 2021, Sage and Edenred’s
subsidiary Corporate Spending Innovations (CSI), a leader in
electronic B2B payment solutions, announced an expanded
relationship. The companies are working together to deliver new
vendor payments capabilities natively within the Sage Intacct cloud
financial management system – providing a seamless experience from
bill to reconciliation for joint customers5 .
- In April 2021, CSI announced that
it had signed an agreement with the Commercial Cards division of
international bank Citi to offer US businesses a joint solution
combining CSI’s digital supplier payment expertise and Citi’s
financial firepower. This collaboration strengthens CSI’s value
proposition with key accounts, for whom the banking relationship is
particularly valued.
- Edenred unveils its
purpose: “Enrich connections. For
good.”
Edenred unveiled its purpose at its General
Meeting on May 11, 2021. Defined by its employees and approved by
the Board of Directors, the Group’s overriding goal is to
“Enrich connections. For
good.”This purpose is intended to inform
the Group’s strategic decisions and unite its teams by giving
meaning to its organization, in line with its “Ideal” corporate
social responsibility policy. It is based on three strong
commitments:
- Ideal People: 40% women among
executive positions by 2030;
- Ideal Planet: -56% greenhouse gas
emissions by 2030 versus 2013;
- Ideal Progress: 85% of merchants
and users sensitized to nutrition and food waste by 2030.
As part of this approach, free share allocation
plans will now include a 25% portion contingent on the achievement
of these criteria, assessed over three consecutive financial
years6.
- Appointment to the
Executive Committee
In June 2021, Jean-Urbain Hubau was appointed
Chief Operating Officer of Edenred’s Fleet & Mobility Solutions
and joined the Group’s Executive Committee. He had been Director of
Fleet & Mobility Solutions for Brazil since 2018 and for all of
Latin America since January 20217 .
- Edenred successfully places
its first sustainability-linked convertible bonds for a nominal
amount of approximately €400 million
On June 9, 2021, the Group launched and placed
its inaugural sustainability-linked bonds convertible into and/or
exchangeable for new and/or existing shares (“OCEANEs”) due 2028
for an aggregate amount of approximately €400 million. The bonds
have a conversion premium of 37.5%, a yield to maturity of -0.12%
and do not bear interest.The net proceeds of the offering will be
used by Edenred for general corporate purposes, including the
financing of potential external growth operations.To coincide with
the placement, Edenred published its first Sustainability-Linked
Bond Framework, which was reviewed by an external third party and
is based on the achievement of three sustainable performance
targets (People, Planet, Progress)8.
UPCOMING EVENTS
October 21, 2021: Third-quarter 2021 revenue
▬▬
About Edenred
Edenred is a leading digital platform for
services and payments and the everyday companion for people at
work, connecting over 50 million users and 2 million partner
merchants in 46 countries via more than 850,000 corporate
clients.
Edenred offers specific-purpose payment
solutions for food (such as meal benefits), mobility (such as
multi-energy, maintenance, toll, parking and commuter solutions),
incentives (such as gift cards, employee engagement platforms) and
corporate payments (such as virtual cards).
True to the Group’s purpose, “Enrich
connections. For good.”, these solutions enhance users’
well-being and purchasing power. They improve companies’
attractiveness and efficiency, and vitalize the employment market
and the local economy. They also foster access to healthier food,
more environmentally friendly products and softer mobility.
Edenred’s 10,000 employees are committed to
making the world of work a connected ecosystem that is safer, more
efficient and more responsible every day.
In 2020, thanks to its global technology assets,
the Group managed close to €30 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,
CAC Large 60, Euronext 100, FTSE4Good and MSCI Europe.
The logos and other trademarks mentioned and
featured in this press release are registered trademarks of
Edenred S.E., its subsidiaries or third parties. They may not
be used for commercial purposes without prior written consent from
their owners.
▬▬
CONTACTS
Communications Department
Emmanuelle Châtelain +33 (0)1 86 67 24 36
emmanuelle.chatelain@edenred.com Media
Relations Matthieu Santalucia+33 (0)1 86 67 22
63matthieu.santalucia@edenred.com |
Investor
Relations Cédric Appert+33 (0)1 86 67 24
99cedric.appert@edenred.com Loïc Da Silva+33 (0)1 86
67 20 67loic.dasilva@edenred.com
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