PARIS, October 19, 2010 /PRNewswire-FirstCall/ --
- Faster Growth in Issue Volume, Up 13.7% in the Third Quarter
- Operating Revenue Up 9.5% in the Third Quarter
- Full-Year EBIT Target Raised to EUR310/330 Million
- Faster growth in the third quarter
- Issue volume up 13.7% like-for-like vs. 7.8% in the first half
- Operating revenue up 9.5% like-for-like vs. 4.2% in the first half
- A business environment made of:
- A strong momentum in Latin America
- First signs of jobless rates stabilizing in Western Europe, but a
persistently challenging environment in Eastern Europe
- Full-year EBIT target raised from EUR300/330 million to EUR310/330
million
- Despite the expected negative currency effect from translation of
South American currencies
(in EUR 2009 2010 % change % change
millions)
(9 months) (9 months) (reported) (like-for-like)
Issue volume 9,119 9,843 +7.9% +9.7%
Operating 582 629 +8.1% +5.9%
revenue
Financial 74 58 -22.3% -21.1%
revenue
Total revenue 656 687 +4.6% +2.8%
ISSUE VOLUME FOR THE FIRST NINE MONTHS UP 9.7% LIKE-FOR-LIKE
Issue volume for the first nine months of 2010 amounted to EUR9,843 million, up 9.7% like-for-like. The reported increase was 7.9%, reflecting a 2.4% negative currency effect for the period.
The pace of growth accelerated in the third quarter to 13.7% like-for-like, translating robust economic environment in Latin America as well as business performance, benefiting also from a low basis of comparison. During that period, there were signs of unemployment rates stabilizing in Western Europe.
Growth in issue volume by region was as follows:
Like-for-like Q1 2010 Q2 2010 Q3 2010 First 9 months
growth in issue volume
France +4.7% -7.9% +3.2% -0.4%
Rest of Europe +4.9% +5.6% +6.1% +5.5%
Latin America +10.6% +17.9% +22.8% +17.3%
Rest of the world +5.4% +18.5% +19.4% +14.3%
TOTAL +7.2% +8.4% +13.7% +9.7%
In France, third quarter issue volume was up 3.2% like-for-like, matching the second quarter growth rate excluding CESU Social human service vouchers[1].
In the Rest of Europe, issue volume rose 6.1% like-for-like in the third quarter, reflecting the first signs of jobless rates stabilizing in Western Europe and despite the persistently challenging economic environment in Eastern Europe.
Strong momentum in Brazil and Venezuela lifted third quarter issue volume in Latin America by 22.8% like-for-like, confirming the favorable trend observed since the start of the year.
OPERATING REVENUE FOR THE FIRST NINE MONTHS UP 5.9% LIKE-FOR-LIKE
Operating revenue for the first nine months of 2010 totaled EUR629 million, representing an increase of 5.9% like-for-like. The reported increase was 8.1%, after taking into account:
- The 2.9% positive impact of changes in scope of consolidation.
- The 0.7% negative currency effect, reflecting:
- The 8.0% negative effect of applying the new official exchange rate for
the Venezuelan bolivar against the dollar (from VEF 4.3 to VEF 5.3).
- The 5.2% positive effect of the Brazilian real's appreciation over the
period.
Third quarter reported operating revenue rose by a strong 9.0% against 7.7% in the first half, due to:
- The 9.5% increase in operating revenue like-for-like (vs. 4.2% in the
first half).
- The 3.3% negative currency effect (vs. a 0.5% positive impact in first
half), mainly due to the recognition during the quarter of the full
effect of applying the new official exchange rate for the Venezuelan
bolivar since the beginning of the year.
Like-for-like growth Q1 2010 Q2 2010 Q3 2010 First 9 months
in operating revenue
France +4.2% +1.9% +8.6% +4.7%
Rest of Europe +0.3% -1.4% +3.6% +0.7%
Latin America +9.1% +11.7% +16.6% +12.6%
Rest of the world -6.8% -0.6% -3.3% -3.6%
TOTAL +3.8% +4.5% +9.5% +5.9%
- Operating revenue for the first nine months in France: EUR101 million
In France, operating revenue increased by 4.7% like-for-like in the first nine months of the year and by 8.6% in the third quarter.
The Ticket Restaurant(R) business maintained the momentum observed since the start of the year, with operating revenue rising 11.7% like-for-like in the third quarter, while the more cyclical Incentive & Rewards business experienced a 2.6% like-for-like decline in issue volume for the period, in a highly competitive environment.
- Operating revenue for the first nine months in the Rest of Europe:
EUR222 million
In the Rest of Europe, operating revenue increased by 0.7% like-for-like in the first nine months, led by a strong 3.6% gain in the third quarter that represented a step change from the increase of just 0.3% in the first quarter and the 1.4% decline in the second.
Italy and Romania remained the two countries most affected by the recession, reporting like-for-like decreases in third quarter operating revenue of 2.3% and 33.7% respectively. Although there were signs in Italy that the jobless rate was starting to stabilize, stiff local competition in both countries put pressure on commission rates.
In Belgium, operating revenue for the first nine months rose 21.3% like-for-like (with increases of 19.3% in the first quarter, 22.3% in the second and 22.5% in the third), led by good performances by the Ticket Restaurant(R) business and EcoCheque(R).
In the United Kingdom, the Childcare Vouchers business benefited from sustained demand, while the Incentives & Rewards business continued to operate in a challenging environment. In all, operating revenue in the United Kingdom rose by 3.7% like-for-like in the first nine months of the year and also in the third quarter.
- Operating revenue for the first nine months in Latin America: EUR258
million
In Latin America, operating revenue rose 12.6% like-for-like over the first nine months. The pace of growth accelerated to 16.6% like-for-like in the third quarter, from 11.7% in the second and 9.1% in the first, reflecting a combination of a robust local economic environment, a strong marketing performance and a low basis of comparison in third-quarter 2009.
In Brazil, the good marketing performance by Edenred's teams in a very buoyant macro-economic environment drove up the pace of growth in the third quarter, for both Employee & Public Benefits and Performance Products. Meal & Food Vouchers and Ticket Car(R) operating revenue rose by respectively 14.5% and 15.3% like-for-like in the third quarter, versus 8.5% and 8.4% in the second quarter. In all, operating revenue was 12.9% higher like-for-like in the third quarter, compared with gains of 7.6% in the first quarter and 8.6% in the second.
Similarly, in Hispanic Latin America, growth in operating revenue accelerated to 21.7% like-for-like in the third quarter, from 10.8% in the first quarter and 15.5% in the second. In Venezuela, sustained demand was accompanied by an 18% increase in the average face value of vouchers in the third quarter.
FINANCIAL REVENUE FOR THE FIRST NINE MONTHS DOWN 21.1%
Financial revenue, which was impacted by lower interest rates, fell 21.1% like-for-like in the first nine months of 2010. The rate of decline slowed over the period, however, standing at 11.6% in the third quarter versus 20.4% in the second and 29.5% in the first.
In Latin America, financial revenue contracted by 20.6% over the nine months. The downtrend reversed in the third quarter, with financial revenue rising 2.5% like-for-like after falling 38.7% in the first quarter and 16.4% in the second, thanks mainly to higher interest rates and the increased float[2] in Brazil in the third quarter.
There were no major changes in financial revenue in Europe during the period. In France and in the Rest of Europe, financial revenue fell by 17.9% and 19.1% respectively during the third quarter, on the back of declines of 27.9% and 20.3% in the first quarter and 28.3% and 19.0% in the second.
TOTAL REVENUE FOR THE FIRST NINE MONTHS UP 2.8% LIKE-FOR-LIKE
Like-for-like Q1 2010 Q2 2010 Q3 2010 First 9 months
growth
Operating revenue +3.8% +4.5% +9.5% +5.9%
Financial revenue -29.5% -20.4% -11.6% -21.1%
Total revenue -0.4% +1.8% +7.3% +2.8%
Total revenue for the first nine months of 2010 came to EUR687 million, up 2.8% like-for-like and 4.6% as reported. Reported growth reflected the positive 2.5% impact of changes in scope of consolidation and a 0.8% negative currency effect, corresponding to the 5.0% positive effect of the Brazilian real's appreciation and the 7.7% negative impact of the change in the official exchange rate for the Venezuelan bolivar against the dollar (from VEF 4.3 to VEF 5.3).
CONCLUSION
The faster growth in issue volume in the third quarter, at 13.7% like-for-like versus 7.8% in the first half, reflected the good overall momentum enjoyed by the business.
The 9.5% like-for-like increase in operating revenue in the third quarter was led by vibrant demand in Latin America, where the number of people in work increased during the period, particularly in Brazil. The quarter also saw the first signs of jobless rates stabilizing in Western Europe, although the environment remained challenging in Eastern Europe.
The decline in financial revenue slowed to 11.6% like-for-like in the third quarter from 25.3% in the first half, helped mainly by higher interest rates and the increased float in Brazil. On this basis, the Group now expects financial revenue to decline by around 10% like-for-like in the second half, compared with the previous forecast of a 10% to 20% fall.
For the full year, based on the trends observed over the first nine months and:
- The target of a flow-through ratio[3] of 40% to 50% like-for-like in
2010,
- The estimated EUR8 million negative impact on EBIT for the full year of
applying the new official exchange rate for the Venezuelan bolivar,
- The expected weakening of the South American currencies in the fourth
quarter (with a USD 0.1 decline translating into a EUR3m negative
impact on Q4 EBIT),
the Group's EBIT target is raised from EUR300/330 million to EUR310/330 million.
Quarterly Report
FINANCIAL POSITION AND RESULTS
In September, Edenred issued EUR800 million worth of 7-year 3.625% bonds due October 6, 2017. The bonds were placed with some 90 European institutional investors.
The proceeds were used to refinance the EUR600 million one-year bridge to bonds facility set up in June 2010. The new issue has strengthened the Group's liquidity position, diversified its financing sources and extended the average life of its debt.
Edenred confirms its objective of maintained a strong investment grade credit rating.
INVESTOR CALENDAR
Fourth quarter revenue announcement on January 18, 2011
Edenred, the world leader in prepaid service vouchers, provides solutions that enhance personal well-being and improve the performance of organizations. Operating in 40 countries, with 6,000 employees, nearly 500,000 private and public sector customers, 33 million users and 1.2 million affiliates, Edenred offers a wide range of products in two categories:
- Employee and public benefits related to meals and food (Ticket
Restaurant, Ticket Alimentation) or quality of life (Ticket CESU,
Childcare Vouchers, etc.)
- Performance products in the areas of expense management (Ticket Car),
incentive and reward (Ticket Compliments, Ticket Kadeos) and new
prepaid electronic solutions.
In 2009, Edenred generated total issue volume of EUR12.4 billion, of which more than 50% in emerging markets.
APPENDICES
Issue Volume
Q1 Q2 H1
2009 2010 2009 2010 2009 2010
In EUR millions
France 612 641 659 607 1,271 1,248
Rest of Europe 1,044 1,135 1,084 1,183 2,128 2,318
Latin America & Caribbean 1,246 1,301 1,327 1,536 2,573 2,837
Rest of the world 91 97 89 115 180 212
TOTAL ISSUE VOLUME 2,993 3,174 3,159 3,441 6,152 6,615
Q1 Q2 H1
Change Change Change Change Change Change
reported L/L* reported L/L* reported L/L*
In %
France 4.7% 4.7% -7.9% -7.9% -1.8% -1.8%
Rest of Europe 8.7% 4.9% 9.1% 5.6% 8.9% 5.3%
Latin America & Caribbean 4.4% 10.6% 15.8% 17.9% 10.3% 14.4%
Rest of the world 7.1% 5.4% 29.2% 18.5% 18.1% 11.9%
TOTAL ISSUE VOLUME 6.1% 7.2% 8.9% 8.4% 7.5% 7.8%
(continued)
Q3 September end (YTD)
2009 2010 2009 2010
In EUR millions
France 502 518 1,773 1,766
Rest of Europe 1,016 1,107 3,145 3,425
Latin America & Caribbean 1,363 1,488 3,935 4,325
Rest of the world 86 114 266 327
TOTAL ISSUE VOLUME 2,967 3,227 9,119 9,843
Q3 September end (YTD)
Change Change Change Change
reported L/L* reported L/L*
In %
France 3.2% 3.2% -0.4% -0.4%
Rest of Europe 8.9% 6.1% 8.9% 5.5%
Latin America & Caribbean 9.2% 22.8% 9.9% 17.3%
Rest of the world 32.3% 19.4% 22.7% 14.3%
TOTAL ISSUE VOLUME 8.8% 13.7% 7.9% 9.7%
* At constant scope of
consolidation and exchange rates
Operating Revenue
Q1 Q2 H1
2009 2010 2009 2010 2009 2010
In EUR millions
France 35 36 34 33 69 69
Rest of Europe 69 79 69 73 138 152
Latin America & Caribbean 74 78 81 91 155 169
Rest of the world 15 15 15 17 30 32
OPERATING REVENUE 193 208 199 214 392 422
Q1 Q2 H1
Change Change Change Change Change Change
reported L/L* reported L/L* reported L/L*
In %
France 0.9% 4.2% -2.9% 1.9% -1.0% 3.0%
Rest of Europe 15.0% 0.3% 5.5% -1.4% 10.3% -0.5%
Latin America & Caribbean 5.7% 9.1% 13.0% 11.7% 9.5% 10.4%
Rest of the world -0.5% -6.8% 13.1% -0.6% 6.3% -3.7%
OPERATING REVENUE 7.7% 3.8% 7.6% 4.5% 7.7% 4.2%
(continued)
Q3 September end (YTD)
2009 2010 2009 2010
In EUR millions
France 30 32 100 101
Rest of Europe 63 70 201 222
Latin America & Caribbean 82 89 237 258
Rest of the world 15 16 44 48
OPERATING REVENUE 190 207 582 629
Q3 September end (YTD)
Change Change Change Change
reported L/L* reported L/L*
In %
France 6.1% 8.6% 1.2% 4.7%
Rest of Europe 11.0% 3.6% 10.5% 0.7%
Latin America & Caribbean 8.1% 16.6% 9.0% 12.6%
Rest of the world 11.1% -3.3% 7.9% -3.6%
OPERATING REVENUE 9.0% 9.5% 8.1% 5.9%
* At constant scope of
consolidation and exchange rates
Financial Revenue
Q1 Q2 H1
2009 2010 2009 2010 2009 2010
In EUR millions
France 7 5 6 5 13 10
Rest of Europe 9 8 10 8 19 16
Latin America & Caribbean 11 6 8 6 19 12
Rest of the world 1 - - 1 1 1
Financial Revenue 28 19 24 20 52 39
Q1 Q2 H1
Change Change Change Change Change Change
reported L/L* reported L/L* reported L/L*
In %
France -27.9% -27.9% -28.3% -28.3% -28.1% -28.1%
Rest of Europe -17.1% -20.3% -16.5% -19.1% -16.8% -19.6%
Latin America
& Caribbean -45.2% -38.7% -17.2% -16.4% -33.3% -29.3%
Rest of the world -29.5% -30.1% -2.7% -11.5% -17.3% -21.6%
Financial Revenue -31.0% -29.5% -19.4% -20.4% -25.6% -25.3%
(continued)
Q3 September end (YTD)
2009 2010 2009 2010
In EUR millions
France 5 4 19 14
Rest of Europe 9 8 28 23
Latin America & Caribbean 7 6 25 19
Rest of the world 1 1 2 2
Financial Revenue 22 19 74 58
Q3 September end (YTD)
Change Change Change Change
reported L/L* reported L/L*
In %
France -17.9% -17.9% -25.1% -25.1%
Rest of Europe -17.4% -19.1% -17.0% -19.5%
Latin America & Caribbean -11.4% 2.5% -27.3% -20.6%
Rest of the world 6.0% -4.7% -9.8% -16.2%
Financial Revenue -14.9% -11.6% -22.3% -21.1%
* At constant scope of
consolidation and exchange rates
Total Revenue
Q1 Q2 H1
2009 2010 2009 2010 2009 2010
In EUR millions
France 42 41 40 38 82 79
Rest of Europe 78 87 79 81 157 168
Latin America & Caribbean 85 84 89 97 174 181
Rest of the world 16 15 15 18 31 33
Total Revenue 221 227 223 234 444 461
Q1 Q2 H1
Change Change Change Change Change Change
reported L/L* reported L/L* reported L/L*
In %
France -3.7% -1.0% -6.8% -2.8% -5.3% -1.9%
Rest of Europe 11.2% -2.1% 2.8% -3.5% 7.0% -2.8%
Latin America
& Caribbean -0.7% 3.0% 10.3% 9.2% 4.9% 6.2%
Rest of the world -2.1% -8.1% 12.4% -1.1% 5.1% -4.6%
Total Revenue 2.9% -0.4% 4.7% 1.8% 3.8% 0.7%
(continued)
Q3 September end (YTD)
2009 2010 2009 2010
In EUR millions
France 35 36 118 115
Rest of Europe 72 77 229 245
Latin America & Caribbean 90 96 262 277
Rest of the world 15 17 47 50
Total Revenue 212 226 656 687
Q3 September end (YTD)
Change Change Change Change
reported L/L* reported L/L*
In %
France 2.4% 4.5% -3.0% 0.0%
Rest of Europe 7.4% 0.7% 7.1% -1.7%
Latin America & Caribbean 6.6% 15.5% 5.5% 9.4%
Rest of the world 10.8% -3.3% 7.0% -4.2%
Total Revenue 6.5% 7.3% 4.6% 2.8%
* At constant scope of
consolidation and exchange rates
[1] A one-off initiative by the French government to support people who were the hardest hit by the recession, representing an issue volume of EUR71 million in June 2009.
[2] Negative Working Capital
[3] Flow-through ratio: ratio between the like-for-like change in operating EBIT and the like-for-like change in operating revenue.
SOURCE Edenred
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