Sustained Growth in Issue Volume and Revenue in Edenred First-half 2012
First-half 2012: 9.5% like-for-like growth in issue volume, reflecting the strong performance in Latin America
PARIS, July 18, 2012 /PRNewswire/ --
Strong 9.5%* growth in issue volume in line with objectives[1], reflecting:
- Good economic conditions and a strong sales performance in Latin America (up 21.8%*), which accounts for more than 50% of total issue volume.
- Low growth in Europe (up 1.2%* excluding Hungary[2]), impacted by the decline in the number of people in work.
- Sustained growth in Rest of the world (up 11.7%*).
Total revenue of €511 million, up 7.3%*, reflecting:
- An increase of 9.3%* in operating revenue with issue volume[3], in line with the rise in issue volume.
- A slight decline in operating revenue without issue volume, generated by less recurring businesses.
- An increase of 7.4%* in financial revenue, despite the decline in reference rates in most countries.
*Like-for-like, year-on-year growth in the first half
(in EUR % change
millions) 1st half 2011 1st half 2012 Reported Like-for-
like[4]
Issue volume 7,264 7,865 +8.3% +9.5%
Operating revenue with IV [5] 374 401 +7.2% +9.3%
Operating revenue witho 82 64 -22.0% -2.1%
Total operating revenue 456 465 +1.9% +7.3%
Financial revenue 44 46 +2.1% +7.4%
Total revenue 501 511 +1.9% +7.3%
First-half issue volume up 9.5% like-for-like
Issue volume amounted to €7,865 million in the six months ended June 30, 2012, an increase of 9.5% like-for-like and of 8.3% as reported, reflecting the 0.2% positive impact of changes in scope of consolidation and the 1.4% negative currency effect for the period.
Like-for-like growth in issue volume by region
Like-for-like growth 1st quarter 2nd quarter
in issue volume 2012 2012 1st half 2012
Latin America +22.1% +21.5% +21.8%
Europe -0.3% -3.8% -2.1%
Europe excluding Hungary +2.7% -0.2% +1.2%
Rest of the world +13.6% +9.8% +11.7%
TOTAL +10.4% +8.5% +9.5%
- Latin America: €4.0 billion in first-half issue volume
In Latin America, which accounted for more than 50% of the Group's business in the first half, issue volume rose by a very sharp 21.8% like-for-like in a favorable economy. The increase was in particular led by an excellent sales performance, which resulted in major new client wins, especially in Brazil. Growth was also driven by the ramp-up of new solutions such as Ticket Restaurante® in Mexico (up 30.1% like-for-like) and Junaeb in Chile, a public social program for students (up 36.7% like-for-like).
In Brazil, issue volume increased by 22.7% like-for-like, with gains across the entire solutions portfolio, including meal and food vouchers (up 22.2% like-for-like) as well as the Ticket Car® expense management business (up 22.9% like-for-like).
Hispanic Latin America saw sharp growth in issue volume, which rose by 20.3% like-for-like, reflecting a strong performance in all solutions with increases of 16.9% for Ticket Restaurante®/Ticket Alimentación® and 29.6% for Ticket Car®.
- Europe: €3.6 billion in first-half issue volume
Issue volume in Europe was slightly lower in the first half, due to the impact of the situation in Hungary[6]. Issue volume rose by 1.2% like-for-like excluding Hungary, in a challenging economic environment shaped by a decline in the number of people in work and low inflation rates. Business was stable in the second quarter, reflecting an unfavorable basis of comparison (with one to two additional bank holidays) and a deteriorated situation in Italy (down 1.3% in the first half, including a 2.1% like-for-like decline in the second quarter).
In Western Europe, issue volume rose 1.3% like-for-like in the first half, mainly led by higher penetration rates. In France, for example, business performed well in the first half, with issue volume rising 2.1% like-for-like, including a 3.5% increase for Ticket Restaurant®, thanks to new client wins. In the United Kingdom, the Childcare Vouchers® business delivered a good performance with like-for-like growth in issue volume of 5.4%.
Central Europe saw a 20.3% like-for-like decline for the period, as business was negatively impacted by the situation in Hungary, where issue volume fell by 85.4%.
Total first-half revenue up 7.3% like-for-like
Total revenue corresponds to the sum of operating revenue (derived from the sale of programs and services) and financial revenue (derived from investing available cash). In the first half of 2012, it amounted to €511 million, an increase of 7.3% like-for-like over the prior-year period.
First-Half Operating Revenue Up 7.3% Like-For-Like
First-half 2012 operating revenue totaled €465 million, representing an increase of 7.3% like-for-like. On a reported basis, the increase was 1.9% after taking into account:
- The 4.3% negative effect of changes in scope of consolidation, corresponding to the divestment of non-core businesses in 2011 (notably Davidson Trahaire in Australia and WorkPlace Benefits) and the decision to stop issuing BtoC gift vouchers in France as from January 1, 2012.
- The 1.1% negative net currency effect, due mainly to the Brazilian real.
Like-for-like growth in operating revenue by type of revenue
Like-for-like growth 1st quarter 2nd quarter 1st half
in operating revenue 2012 2012 2012
With issue volume +9.4% +9.2% +9.3%
Without issue volume +0.3% -4.3% -2.1%
TOTAL +7.8% +6.7% +7.3%
- Operating revenue with issue volume climbed by a robust 9.3% like-for-like to €401 million in the first half. In Latin America, it reflected the trends seen for issue volume, which rose by more than 20%. In Europe excluding Hungary, operating revenue with issue volume rose by 2.4% for the period.
-
Like-for-like growth in operating revenue 1st quarter 2nd quarter 1st half with IV[7] 2012 2012 2012 Latin America +19.7% +19.9% +19.8% Europe -1.1% -1.3% -1.2% Europe excluding Hungary +2.4% +2.3% +2.4% Rest of the world +14.1% +8.8% +11.4% TOTAL +9.4% +9.2% +9.3% - Operating revenue without issue volume amounted to €64 million, a slight decline for the period (down 2.1% like-for-like). This revenue is primarily generated by corporate marketing and incentive consulting services, which are less recurring and generate lower margins than the other solutions. The second quarter was in particular impacted by the termination of non-recurring contracts in Germany recorded in second-quarter 2011.
First-half financial revenue up 7.4% like-for-like
In the first half, financial revenue rose by 7.4% like-for-like, thanks to a slight increase in the average investment rate and despite the decline in reference rates in most countries. Given this decline, growth slowed to 4.5% in the second quarter from 10.4% in the first.
Conclusion
In the first half of 2012, total revenue rose by a robust 7.3% like-for-like.
This performance reflects sustained 9.3% growth in operating revenue with issue volume, especially in Latin America and Rest of the world, while the economic environment was more difficult in Europe.
Financial revenue continued to trend upwards, rising 7.4% despite the decline in reference rates in most countries over the period.
Lastly, with a 9.5% increase in issue volume in the first half, Edenred is pursuing its commitment[8] to strong and sustainable growth.
Upcoming events
August 30: First-half 2012 results
October 17: Third-quarter 2012 revenue
-
Edenred, which invented the Ticket Restaurant® meal voucher and is the world leader in prepaid corporate services, designs and delivers solutions that make employees' lives easier and improve the efficiency of organizations.
Edenred solutions ensure that funds allocated by companies are used as intended. These solutions help to manage:
- Employee benefits (Ticket Restaurant®, Ticket Alimentación, Ticket CESU, Childcare Vouchers, etc.).
- Expense management process (Ticket Car, Ticket Clean Way, Ticket Frete, etc.)
- Incentive and rewards programs (Ticket Compliments, Ticket Kadéos, etc.).
The Group also supports public institutions in managing their social programs.
Listed on the NYSE Euronext Paris stock exchange, Edenred operates in 39 countries, with some 6,000 employees, nearly 580,000 companies and public sector clients, 1.3 million affiliated merchants and 36.2 million beneficiaries. In 2011, total issue volume amounted to €15.2 billion, of which 58% was generated in emerging markets.
Ticket Restaurant® and all other tradenames of Edenred products and services are registered trademarks of Edenred SA.
Appendices
Issue Volume
Q1 Q2 H1
2011 2012 2011 2012 2011 2012
In EUR millions
France 659 666 617 613 1,276 1,279
Rest of Europe 1,148 1,127 1,232 1,157 2,380 2,284
Latin America 1,628 1,987 1,742 2,054 3,370 4,041
Rest of the world 119 129 120 132 239 261
TOTAL ISSUE VOLUME 3,554 3,909 3,710 3,956 7,264 7,865
Q1 Q2 H1
Change Change Change Change Change Change
reported L/L* reported L/L* reported L/L*
In %
France 1.0% 2.7% -0.6% 1.4% 0.2% 2.1%
Rest of Europe -1.8% -2.0% -6.1% -6.4% -4.0% -4.3%
Latin America 22.1% 22.1% 17.9% 21.5% 19.9% 21.8%
Rest of the world 8.4% 13.6% 10.3% 9.8% 9.3% 11.7%
TOTAL ISSUE VOLUME 10.0% 10.4% 6.6% 8.5% 8.3% 9.5%
*At constant scope of consolidation and exchange rates
Operating Revenue
Q1 Q2 H1
2011 2012 2011 2012 2011 2012
In EUR millions
France 36 34 34 32 70 66
Rest of Europe 81 76 78 72 159 148
Latin America 94 113 100 115 194 228
Rest of the world 17 11 16 12 33 23
OPERATING REVENUE 227 234 229 231 456 465
Q1 Q2 H1
Change Change Change Change Change Change
reported L/L* reported L/L* reported L/L*
In %
France -7.1% 2.5% -3.3% 3.3% -5.3% 2.9%
Rest of Europe -5.7% -4.7% -8.0% -6.6% -6.8% -5.7%
Latin America 20.9% 20.9% 14.8% 18.8% 17.7% 19.8%
Rest of the world -35.0% 6.1% -30.7% 3.7% -32.9% 4.9%
OPERATING REVENUE 2.8% 7.8% 1.0% 6.7% 1.9% 7.3%
*At constant scope of consolidation and exchange rates
Financial Revenue
Q1 Q2 H1
2011 2012 2011 2012 2011 2012
In EUR millions
France 5 5 5 5 10 10
Rest of Europe 7 8 8 7 16 15
Latin America 9 10 9 9 17 19
Rest of the world 1 1 1 1 1 2
Financial Revenue 22 24 23 22 44 46
Q1 Q2 H1
Change Change Change Change Change Change
reported L/L* reported L/L* reported L/L*
In %
France 0.6% 5.4% -2.3% 1.1% -0.9% 3.2%
Rest of Europe 7.1% 3.8% -14.2% 2.7% -4.0% 3.2%
Latin America 13.9% 15.1% -1.1% 4.2% 6.3% 9.6%
Rest of the world 39.9% 59.5% 36.6% 51.1% 38.2% 55.1%
Financial Revenue 9.3% 10.4% -4.8% 4.5% 2.1% 7.4%
*At constant scope of consolidation and exchange rates
Total Revenue
Q1 Q2 H1
2011 2012 2011 2012 2011 2012
In EUR millions
France 41 39 39 37 80 76
Rest of Europe 88 84 87 79 175 163
Latin America 102 123 109 124 211 247
Rest of the world 18 12 17 13 35 25
Total Revenue 249 258 251 253 501 511
Q1 Q2 H1
Change Change Change Change Change Change
reported L/L* reported L/L* reported L/L*
In %
France -6.1% 2.9% -3.2% 3.0% -4.7% 3.0%
Rest of Europe -4.6% -4.0% -8.6% -5.8% -6.6% -4.9%
Latin America 20.3% 20.4% 13.5% 17.7% 16.8% 19.0%
Rest of the world -32.2% 8.1% -27.9% 5.7% -30.0% 6.9%
Total Revenue 3.4% 8.0% 0.5% 6.5% 1.9% 7.3%
*At constant scope of consolidation and exchange rates
1. Normalized organic growth target for the 2010-2016 period of 6% to 14% a year. Normalized growth is the objective that management considers to be attainable if unemployment does not rise.
2. In Europe including Hungary, issue volume was down 2.1% in the first half.
3. Corresponds to fees paid on prepaid service vouchers.
4. Based on comparable scope of consolidation and constant exchange rates.
5. IV : Issue volume.
6. Where legislation favoring local companies was introduced in the meal voucher market on January 1, 2012.
7. IV : Issue volume
8. Normalized organic issue volume growth target for the 2010-2016 period of 6% to 14% a year. Normalized growth is the objective that management considers to be attainable if unemployment does not rise
SOURCE Edenred
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