(AOF) – On the occasion of the presentation of its new strategic plan for 2025 called Beyond, Edenred indicated that it is targeting annual organic growth in EBITDA of more than 12% and an annual conversion rate over this period. free-cash-flow on Ebitda above 70%. The company stresses that they are higher than the objectives of the previous plan.
Edenred plans to pursue an ambitious capital allocation policy over the 2022-2025 period, based on a virtuous balance between technological investments, external growth and return to shareholders, while confirming its desire to maintain a “Strong” rating Investment Grade”.
He will devote an annual investment envelope of between 7% and 8% of his total income.
Finally, the Beyond plan provides for the continuation of a policy of progressive dividend growth over the period, resulting in an increase in absolute value each year.
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Key points
– World leader, born in 1962, in service vouchers with 30% of the market;
– Group historically specialized in employee benefits (meal 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 certificates and other vouchers, social programs);
– Strong positioning, with a number one rank in Latin America (29% of billings), Europe representing 62% of turnover;
– Business model “Enrich connections. For good”: digital intermediation and payment platform with €2.5 billion in transactions and €31 billion in business volume, Z million merchant partners and 50 million employee users;
– Capital held at 14.74% by the Californian fund manager The Capital Group, Bernard Dumazy being Chairman and Chief Executive Officer 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 into positive perspective.
Challenges
– Completion of the 2019-22 “New Frontier” plan of annual growth of 8% for revenues and 10% for operating profit and a conversion rate of 65% of free cash flow, ;
– 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 / efficiency of the digital platform, advantage for penetrating new markets / the diversity of digital offers, the deployment of mobile offers and solutions for maintaining links with employees working remotely;
– “Planet for good” environmental strategy to reduce the carbon footprint (-52% in 2030 vs 2013): via energy efficiency for information systems and buildings, the use of renewable energies, waste recycling and biodiversity / issuance of a “green” loan and integration of ESG criteria in free share allocations / currently being revised with new targets expected for October;
– Continuation of 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, country 1
er
contributor to operating profit and changes in salaried employment;
– Two growth catalysts: increase in the penetration rate in SMEs (+21% in 2021), and, above all, professional mobility solutions, a division strengthened by the takeover of UTA;
– After an increase of 21% in revenues and 27.5% in net profit, the 2022 objective is raised to record operating profit of between €770 and €820 million.
Business services
The collective catering giants are reviewing their prices
In the first half (ended at the end of March) of its 2021-2022 financial year, Elior benefited from a jump of nearly 20% in its activity to 2.2 billion euros. However, its losses increased from 53 million a year earlier to 266 million euros, partly due to a deterioration in margins. This movement is linked to the inflation of food and energy prices. To remedy this, the group has set up a global and systematic program to renegotiate all price lists with its customers.
As for Sodexo, price increases have already taken place. During the third quarter, they increased by more than 5% year-on-year. The group expects a further increase in tariffs of 4 to 5% by the end of the year. Despite strong growth in its results in the first half (ending at the end of February), the group was cautious for the second half of the year due to an environment that remains uncertain. Executives estimate that the pre-covid margin will be reached again in 2023.
Road transport wants to accelerate its energy transition
The weight of fuel continues to climb in the cost structure of carriers, whereas it usually represents 20% of the cost price. The actors are well aware of the need to carry out the energy transition to free themselves from their great dependence on the price of fuel. However, professionals have to face a lack of supply of clean heavy vehicles at affordable prices. Moreover, the use of hydrogen is still too limited. As for CNG (Natural Gas For Vehicles), although investments have been made in the past, gas trucks are not currently running given the soaring prices. Professionals are therefore asking for support from the public authorities to accelerate their transition.