First-half 2020 results

uploaded on 27 July 2020

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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 million 
  • 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."


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. 

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 forthe 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% ofbusiness 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 97 -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 float 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 items.

  • 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.


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 million.

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.


  • Edenred ties social and environmental criteria to one of its financing instrumentsfor 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 intensity 5 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 “Morethan Ever” relief plan, through which the Group pledged to commit up to €15 million to mitigatethe 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.

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