(AOF) – Edenred presented record 2023 operating results. Net profit, group share, down 30.6% to 267 million euros. It was impacted by the accounting recording of the charge corresponding to the fine of 158 million euros from the competition authority paid by the group in 2021. Ebitda stood at 1.094 billion euros, in increase of 30.7%, showing a margin of 43.5%, an increase of 2.3 points. Ebitda increased by 33.9% organically. “Edenred benefited fully from the scale effect of its platform,” the company explained.
Total revenue exceeded 2.5 billion euros, up 23.7%, including growth of 18.7% in the fourth quarter, including 20% on a comparable basis. Operating turnover reached 2.3 billion euros, up 18.8%, including 17.4% internally.
Free cash flow also stands at a record level of 905 million euros in 2023, reflecting an Ebitda to free cash flow conversion rate of 83%.
The debt ratio was reduced to a level of 1 times Ebitda following the acquisition in 2023 of Reward Gateway for 1.3 billion euros.
The group will propose a dividend of 1.10 euros, up 10%.
Edenred has confirmed the objectives of its Beyond strategic plan for 2024. It targets organic Ebitda growth of at least 12% and a free-cash-flow conversion rate on Ebitda greater than 70%. In addition, Edenred has the potential to seize new external growth opportunities.
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Key points
– World leader, born in 1962, in service titles with 30% of the market;
– Group historically specialized in employee benefits (restaurant vouchers, holiday vouchers and other bonuses for 60% of turnover of €1.6 billion) and diversified in professional mobility solutions (26%), motivation and solutions complementary (gift vouchers and other vouchers, social programs);
– Strong positioning, with a number one rank in Latin America (29% of billings), with Europe representing 62% of turnover;
– Business model based on the digital intermediation and payment platform aiming for strong growth in existing markets, acceleration of value-added services, increased monetization via the exploitation of data and penetration of the United States ;
-Capital held at 14.74% by the Californian fund manager The Capital Group, Bertrand Dumazy being chairman and CEO of the 11-member board of directors;
– Very healthy financial situation with net debt reduced to €1.1 billion at the end of June, the rating of which has been put in a positive perspective.
Challenges
– “Gardian” 2025 strategic plan, a platform serving labor stakeholders:
– Beyond Food: benefits to employees beyond food,
– Beyond Fuel: support for professional mobility with value-added services,
– Beyond Payment: solutions beyond the automation of inter-company payments,
– financial objectives: annual increase of +12% in operating income,
– distribution policy: commitment to an annual increase in the dividend in absolute value;
– Innovation strategy financed by investments of 6 to 7% of revenues and focused on:
– security and agility of data centers and information systems, with private Cloud and cybersecurity program,
– the effectiveness of the digital platform, an asset for penetrating new markets,
– the diversity of digital offers, the deployment of mobile offers and solutions for maintaining links with teleworking employees;
– Environmental strategy aiming for net zero carbon in 2050 validated by the SBTi1 standard
– via energy efficiency for information systems and buildings, use of renewable energies, waste recycling and biodiversity,
– issuance of a “green” loan and integration of ESG criteria in free share allocations,
– Continued acquisitions with an investment capacity of €1.5 to €2 billion;
– Success of the offers launched in 2021: multi-products in employee benefits, vehicle fleet maintenance solutions, 100% dematerialized solutions, mobile payment and connection to 200 meal delivery platforms, etc.
Challenges
– 3 key elements in the assessment of the company: the evolution of the issue volume (face value of securities and checks issued), the economic situation in Brazil, the leading contributor to operating profit and the evolution of salaried employment;
– Two catalysts for growth: increase in the penetration rate in SMEs (+ 21% in 2021), and, above all, professional mobility solutions, a sector reinforced by the takeover of full control of UTA;
– Entry into the CAC 40 on June 19;
-Acquisition, for 1.1 billion pounds, of the British Reward Gateway, world leader in employee benefits present in the United Kingdom, Australia and the United States, for which 10 million euros in annual synergies and 50 million euros in turnover are expected. additional business within 5 years;
-After a 27% increase in revenues in the 1st quarter, 2023 objective of an operational increase of +12%;
Sector sheet – Business services
A new entity in employee benefits
Pluxee, the division specializing in employee benefits of the services giant Sodexo, will take off on the stock market in 2024. This activity benefits from strong dynamism with organic growth in the third quarter (ended at the end of May) higher than expectations (+25 .5% versus 17.5% expected). The new entity will thus be able to better compete with its competitor Edenred. Since its split from the Accor group in 2010, this company has seen its activity jump and almost double. Having become the world leader in meal vouchers, it even recently joined the flagship stock market index of the Paris market, the CAC 40. This success comes from targeted acquisitions, international development and successful digitalization.