Third-quarter 2021 revenue
Full-year 2021 outlook upgraded, supported by double digit like-for-like growth in the third quarter
On the back of the success of its innovative solutions and the strong momentum in its direct and indirect sales channels, Edenred’s operating revenue in the third quarter was 13% higher than its 2019 pre-health-crisis baseline year on a like-for-like basis:
- Operating revenue at €393 million in the third quarter, up 13.6% (+12.7% like-for-like) on third-quarter 2020, and up 0% like-for-like on third-quarter 2019
- Acceleration in like-for-like growth in the third quarter versus third-quarter 2019 in the Group’s three main regions, after the good performance already reported in first-half 2021
- Double-digit like-for-like growth in all business lines compared to third quarter 2019
- For the nine months ended September 30, 2021, Edenred recorded operating revenue of €1,130 million, up 14% like-for-like on the same period in 2020 and up 11% on the first nine months of 2019
In light of its year-to-date performance and growth momentum, Edenred is confident in its ability to generate full-year 2021 EBITDA in the upper half of its target range (between €620 million and €670 million, press release dated July 27, 2021), providing there are no new major restrictions as a result of the health crisis.
Lastly, assuming no major pandemic surge, Edenred is reinstating the objectives set in its “Next Frontier” 2019-2022 strategic plan:
- Like-for-like annual operating revenue growth of more than 8%
- Like-for-like annual EBITDA growth of more than 10%
- Annual free cash flow/EBITDA conversion rate of more than 65%
Bertrand Dumazy, Chairman and Chief Executive Officer of Edenred, said: “After a good first half, the Group’s strong performance in the third quarter demonstrates the pertinence of our solutions as well as the strength of our sales strategy. Global leader in earmarked funds, the Group’s unrivaled human, commercial, technological and financial strengths will enable it to continue delivering sustainable and profitable growth going forward. Thanks to its investments, Edenred is at the forefront of the sweeping changes affecting the world of work, improving the customer experience and making its products more efficient and user-friendly. For instance, the deployment of our fully digital, plasticless solutions, is in step with the changes in our society and the shift towards a more digital and responsible world.
Building on this momentum, we are upgrading our outlook for full-year 2021 and are now expecting EBITDA in the upper half of the target range announced in July. Further, provided there is no major resurgence of Covid-19 resulting in fresh restrictions on our main markets, for 2022 we are reinstating the growth, profitability and cash generation objectives set out in our “Next Frontier” 2019-2022 strategic plan.”
THIRD QUARTER AND NINE-MONTH 2021 TOTAL REVENUE
(in € millions) |
Third- quarter 2021 |
Third- quarter 2020 |
% change (like-for-like) |
% change (reported) |
Operating revenue |
393 |
346 |
+12.7% |
+13.6% |
Other revenue |
11 |
11 |
+9.0% |
+8.2% |
Total revenue |
405 |
357 |
+12.6% |
+13.4% |
(in € millions) |
First nine months 2021 |
First nine months 2020 |
% change (like-for- like) |
% change (reported) |
Operating revenue |
1,130 |
1,021 |
+14.4% |
+10.7% |
Other revenue |
32 |
32 |
+10.0% |
+0.4% |
Total revenue |
1,162 |
1,053 |
+14.3% |
+10.4% |
Total revenue
For the third quarter of 2021, total revenue amounted to €405 million, up 12.6% like-for-like compared with third-quarter 2020. The reported increase was 13.4% and included a favorable currency effect (+1.2%) and a slightly negative scope effect (-0.4%) for the period.
For the first nine months of 2021, total revenue amounted to €1,162 million, a rise of 14.3% like-for-like versus the same period in 2020, and of 10.4% as reported, including a negative exchange rate impact (-3.6%) and a slightly negative currency effect (-0.3%).
Operating revenue
Operating revenue for third-quarter 2021 came to €393 million, up by 12.7% like-for-like and by 13.6% as reported versus the third quarter of 2020. Compared with third-quarter 2019, Edenred generated double-digit organic growth in each of its business lines and in each of its regions except Hispanic Latin America, which continues to be affected by a challenging health situation.
Posting a like-for-like increase of 13.0% on its 2019 baseline year, Edenred accelerated its growth in third-quarter 2021, after a like-for-like growth of almost 10% in first-half 2021 versus first- half 2019. This performance reflects the dynamism of Edenred’s sales teams as well as the Group’s ability to continuously enhance its portfolio and offer its clients innovative digital solutions.
Operating revenue for the first nine months of 2021 was up by 14.4% like-for-like and by 10.7% as reported compared with the same period in 2020, including a negative exchange rate impact (-3.5%) and a slightly negative currency effect (-0.3%).
Operating revenue by business line
(in € millions) |
Third-quarter 2021 |
Third-quarter 2020 |
% change (like-for-like) |
% change (reported) |
Employee Benefits |
233 |
207 |
+12.2% |
+12.9% |
Fleet & Mobility Solutions |
110 |
89 |
+22.2% |
+24.0% |
Complementary Solutions |
50 |
51 |
-1.6% |
-1.7% |
Total |
393 |
346 |
+12.7% |
+13.6% |
(in € millions) |
First nine months 2021 |
First nine months 2020 |
% change (like-for-like) |
% change (reported) |
Employee Benefits |
682 |
619 |
+13.0% |
+10.2% |
Fleet & Mobility Solutions |
300 |
262 |
+20.8% |
+14.8% |
Complementary Solutions |
148 |
140 |
+8.9% |
+5.4% |
Total |
1,130 |
1,021 |
+14.4% |
+10.7% |
Revenue for the Employee Benefits business line, which accounts for 59% of the Group’s total operating revenue, was €233 million in third-quarter 2021, a 12.2% like-for-like increase year on year (+12.9% as reported).
Revenue for the business line accelerated sharply compared to the third quarter of 2019, up 10.1% like-for-like (+3.3% in the first half). This acceleration was driven by the strong appeal of the virtual canteen solution, as well as by new client wins in the small- and medium-sized business segment. Amidst a more stable health situation in Europe and an improving situation in Brazil, reopenings of partner merchants – and particularly restaurants – also contributed to this performance.
For the nine months ended September 30, 2021, operating revenue for the business came to €682 million, up 13.0% like-for-like (+10.2% as reported) compared to the same period in 2020.
In the Fleet & Mobility Solutions business line, which accounts for 28% of the Group’s total operating revenue, operating revenue for third-quarter 2021 amounted to €110 million, up 22.2% like-for-like (+24.0% as reported) compared to third-quarter 2020.
Compared to the third quarter of 2019, the business reported further strong double-digit growth in operating revenue on a like-for-like basis (+18.1%), on a par with first-half 2021 (+17.3% versus first-half 2019). This performance was driven by a robust sales momentum and by the success of the “Beyond Fuel” strategy, integrating services such as maintenance and toll management solutions. The extended coverage of the single European toll box UTA One, which now provides a toll payment solution for 15 countries, illustrates the continuing deployment of this strategy.
For the nine months ended September 30, 2021, operating revenue for the business came to €300 million, up 20.8% like-for-like (+14.8% as reported) compared to the same period in 2020.
The Complementary Solutions business line, which includes Corporate Payment Services, Incentive & Rewards Solutions and Public Social Programs, generated operating revenue of €50 million in the third quarter of 2021, up 15.9% like-for-like compared to third-quarter 2019, reflecting the strong momentum in this business line. Development continued apace in Corporate Payment Services, driven in particular by the distribution partnerships signed in North America with several banks (including Citi) and accounting software suppliers (such as Sage for its Sage Intacct solution). However, the volume of transactions remains down on third-quarter 2019 in certain sectors worst affected by the health situation, particularly Hotels.
Compared to the third quarter of 2020, operating revenue for the business was down 1.6% like- for-like (-1.7% as reported), attributable to the fact that in the third quarter of 2020, Edenred had set up several earmarked fund programs to support those worst affected by the pandemic. However, with the end of lockdown periods, some of these programs were terminated, such as those supporting pupils from low-income families in the United Kingdom.
For the nine months ended September 30, 2021, operating revenue for the business line came to €148 million, up 8.9% like-for-like (+5.4% as reported) compared to the same period in 2020.
Operating revenue by region
(in € millions) |
Third-quarter 2021 |
Third-quarter 2020 |
% change (like-for-like) |
% change (reported) |
Europe |
241 |
224 |
+7.0% |
+7.5% |
Latin America |
120 |
95 |
+22.0% |
+26.2% |
Rest of the World |
33 |
27 |
+27.6% |
+19.7% |
Total |
393 |
346 |
+12.7% |
+13.6% |
(in € millions) |
First nine months 2021 |
First nine months 2020 |
% change (like-for-like) |
% change (reported) |
Europe |
716 |
635 |
+12.3% |
+12.6% |
Latin America |
324 |
298 |
+18.7% |
+8.9% |
Rest of the World |
90 |
88 |
+15.7% |
+2.9% |
Total |
1,130 |
1,021 |
+14.4% |
+10.7% |
In Europe, operating revenue amounted to €241 million in the third quarter, an increase of 14.8% like-for-like on the third quarter of 2019, and an acceleration after the 11.2% growth recorded in first-half 2021. The increase came to 7.0% like-for-like (+7.5% as reported) versus third-quarter 2020, which represented a high basis of comparison during which Edenred saw a sharp pick- up in business following the strict lockdowns in spring 2020, especially in France, as well as the roll-out of specific Covid-related programs.
Over the nine months to September 30, 2021, Europe accounted for 63% of the Group’s total operating revenue. The region saw operating revenue increase by 12.3% like-for-like (+12.6% as reported) on the first nine months of 2020, and by 12.4% like-for-like on the first nine months of 2019.
In France, operating revenue was up 11.8% like-for-like in the third quarter 2021 on the same period in 2019, a sharp acceleration on the like-for-like growth recorded in first-half 2021. This performance reflects the solid sales momentum of Edenred’s solutions, particularly its Ticket Restaurant, the leading digital solution on the market. Business in France also benefited from users spending the funds they had accumulated during previous lockdowns and/or while restaurants and certain retailers were shut. The introduction of the Covid certificate in France in August had little impact on operating revenue. Compared to third-quarter 2020, operating revenue rose by 2.1% like-for-like and as reported, owing to a particularly tough basis for comparison resulting from the sharp pick-up in business recorded in 2020 (+9.5% versus third-quarter 2019).
For the nine months ended September 30, 2021, Edenred reported operating revenue of €200 million, up 14.2% like-for-like (+14.2% as reported) compared to the same period in 2020, and up 7.0% like-for-like compared to the first nine months of 2019.
Third-quarter 2021 operating revenue in Europe excluding France was 9.0% higher like-for-like (+9.7% as reported) versus third-quarter 2020. Like-for-like growth compared to the third quarter of 2019 accelerated to 16.0%. This excellent performance was notably driven by the success of the “Beyond Fuel” strategy – a good illustration of which is the single European toll box, UTA One, and by dynamic sales in the small- and medium-sized company segment. The Employee Benefits business also benefited from the easing of health restrictions and the reopening of restaurants.
For the nine months ended September 30, 2021, operating revenue for Europe excluding France came to €516 million, up 11.6% like-for-like (+12.0% as reported) compared to the same period in 2020, and up 14.7% like-for-like compared to the first nine months of 2019.
Operating revenue in Latin America came to €120 million for the third quarter, a rise of 22.0% like-for-like and of 26.2% as reported compared to the same period in 2020. This represents a like-for-like increase of 8.7% on the third quarter of 2019, and is an improvement on the growth reported in the first half 2021 versus first-half 2019 (+6.0%).
For the nine months ended September 30, 2021, operating revenue came to €324 million, or 29% of the Group’s total operating revenue, 18.7% higher like-for-like (+8.9% as reported) versus the same period in 2020, and 6.9% higher like-for-like compared to the first nine months of 2019.
In Brazil, operating revenue rose by 22.0% like-for-like in third-quarter 2021 versus third-quarter 2020.
Compared to the third quarter of 2019, Brazil saw double-digit like-for-like growth in operating revenue of 12.1%, a sharp acceleration on the growth recorded in first-half 2021 versus first-half 2019. This performance reflects robust growth in the Fleet & Mobility Solutions, driven notably by the ongoing deployment of maintenance and toll management solutions, along with the promising ramp-up of the partnership with Itaú Unibanco in Employee Benefits. These developments took place amid a gradually improving health situation during the quarter.
Thanks to the acceleration in the third quarter, like-for-like growth in operating revenue for the nine months ended September 30, 2021 came to 20.3% compared to the first nine months of 2020, and to 9.3% compared to the first nine months of 2019.
In Hispanic Latin America, operating revenue was up 21.9% like-for-like versus third-quarter 2020, reaching its pre-health-crisis level (+0.4% like-for-like versus third-quarter 2019), despite the ongoing challenging health situation in a region where in Mexico for example, schools only reopened in September after being closed for 18 months. In the Fleet & Mobility Solutions, Edenred continued to gradually roll out its “Beyond Fuel” solutions and delivered a solid sales performance.
For the nine months ended September 30, 2021, operating revenue for the region rose by 15.2% like-for-like compared to the same period in 2020, and by 1.2% like-for-like compared to the first nine months of 2019.
In the Rest of the World, operating revenue came to €33 million for the third quarter, up 27.6% like-for-like and up 19.7% as reported.
Operating revenue for this region was 19.3% higher like-for-like compared to third-quarter 2019, an acceleration on the growth reported in first-half 2021 versus first-half 2019 (+13.9%). This performance was spurred by the success of fully digital solutions available in Taiwan. In North America, CSI (Corporate Spending Innovations) continued to recover, driven mainly by the ramp-up of its commercial partnerships with several banks, capitalizing on the quality and integration of its corporate payments automation platform, and despite continuing subdued volumes in the Hotels segment.
For the nine months ended September 30, 2021, operating revenue came to €90 million, an increase of 15.7% like-for-like (2.9% as reported) versus the same period in 2020, and of 15.8% like-for-like compared to the first nine months of 2019.
- Other revenue
Other revenue totaled €11 million in third-quarter 2021, up 9.0% like-for-like and up 8.2% as reported, benefiting from a slight rise in interest rates in some countries outside Europe. For the nine months ended September 30, 2021, other revenue came to €32 million, representing an increase of 10.0% like-for-like (+0.4% as reported).
OUTLOOK
Thanks to its strong sales momentum and the attractiveness of its solutions, in third-quarter 2021 Edenred delivered an acceleration in like-for-like growth versus 2019 in its three main regions, after an already robust growth performance achieved in first-half 2021 versus first-half 2019.
On the strength of this good performance, Edenred is upgrading its outlook for full-year 2021. Edenred is confident in its ability to generate full-year 2021 EBITDA in the upper half of its target range of between €620 million and €670 million (as indicated on July 27, 2021), providing there are no new major restrictions as a result of the health crisis.
Edenred intends to leverage its solid fundamentals in order to continue delivering sustainable and profitable growth beyond 2021. Assuming no further major waves of the pandemic, for 2022 Edenred is reinstating the objectives set in its “Next Frontier” 2019-2022 strategic plan, namely:
- Like-for-like annual operating revenue growth of more than 8%
- Like-for-like annual EBITDA growth of more than 10%
- Annual free cash flow/EBTIDA4 conversion rate of more than 65%
SIGNIFICANT EVENTS IN THE THIRD QUARTER
- Edenred and Gecina working to transform the lunch-break experience with the “virtual canteen”
Gecina, Europe’s leading office real estate company, and Edenred, the world leader in specific-purpose payment solutions, are joining forces to make the lunchtime experience more flexible for YouFirst brand clients, thanks to its Ticket Restaurant®.
Edenred’s digital solution enables users to eat what they want for lunch, when and where they want, be it in the office, in a restaurant, or at home. Users can make contactless payments using their smartphone in any of the 220,000 Ticket Restaurant® member establishments, or have their food delivered thanks to Edenred’s partnerships with over 70 meal delivery platforms in France. The ultimate goal of this alliance between the two companies is to provide the 100,000 users of Gecina’s YouFirst brand living spaces with special access to these digital services.