INGENICO GROUP: First Quarter 2019 - A strong start to the year
April 23 2019 - 11:47AM
Press Release |
Paris, 23rd April 2019 |
Revenue of €753 million, up 12% on a
comparable basis[1]Retail accelerated to 11 % vs. 8 % in
fourth quarter 2018B&A growth reached 12 % boosted by
major market share gain in BrazilAll other B&A regions
in line with expectations2019 organic growth guidance raised
to c. 6 % (vs. 4 % to 6
%) EBITDA
& Free Cash Flow objectives confirmed
Ingenico Group (Euronext: FR0000125346 - ING),
the global leader in seamless payment, today announced its revenue
for the first quarter 2019.
Nicolas Huss, Chief Executive Officer of
Ingenico Group, commented: "The first quarter performance is
strong and a great start to 2019. The Group performance was fuelled
by an acceleration of Retail reaching 11 % and by an outstanding 12
% growth of B&A, boosted by a major market share gain in Brazil
against competition, while the B&A operations in mature markets
(EMEA, North America) were fully in line with expectations. The
performance in Brazil exemplifies the B&A revival program that
we launched in November 2018, and which is a key component of the
Fit for Growth transformation that started two months ago. The team
is fully mobilized to optimize the shift of the B&A business
mix towards the emerging markets. To even further accelerate the
revival of B&A, I am glad to welcome Matthieu Destot, as the
new leader of this Business unit. Matthieu is great addition to the
team and is already focused at reinforcing the profitable growth
profile of B&A. The Retail team, led by Johan Tjärnberg,
delivered a strong performance in Q1. Payone teams are now fully
part of Ingenico and integration is progressing well. The three
Business Lines posted organic growth ranging from 11 % in Global
Online, benefiting from recent customer wins, to 15 % in SMB
embodying the quality of our Retail offer to Merchants and 20 % in
Enterprise, boosted by a strong performance of our Healthcare
vertical, of our Axis platform and early shipments in North
America. This Q1 performance enables us to raise our 2019 organic
growth to the upper end of the initial guidance."
Key figures
|
Q1 2018 Reported |
Q1 2018Pro forma* |
Q1 2019 |
€m |
% Change |
€m |
€m |
Comparable1 |
Reported |
Retail |
302 |
389 |
435 |
11% |
44% |
SMBs |
70 |
70 |
79 |
15% |
13% |
Global Online |
117 |
117 |
133 |
11% |
14% |
Enterprise |
67 |
76 |
91 |
20% |
37% |
Payone |
48 |
125 |
131 |
4% |
175% |
B&A |
280 |
280 |
318 |
12% |
14% |
EMEA |
114 |
114 |
110 |
-6% |
-4% |
Latin America |
34 |
34 |
65 |
99% |
92% |
North America |
30 |
30 |
31 |
-4% |
2% |
Asia-Pacific |
101 |
101 |
112 |
8% |
11% |
TOTAL |
581 |
669 |
753 |
12% |
29% |
* 2018 PF figures including acquisitions made during the year
at 100% |
|
|
First quarter 2019 performance
In the first quarter of 2019, revenue totalled
€753 million, representing a 12% increase on a comparable
basis. On a reported basis revenue was 29% higher than in the first
quarter of 2018 and included a positive foreign exchange impact of
€6 million as well as a positive contribution from the newly
consolidated BS Payone and Paymark.
The Retail Business Unit reported a
revenue of €435 million, showing an increase of 11% over the
quarter on a comparable basis. On a reported basis, revenue
increased by 44% during this first quarter and included a positive
foreign exchange impact of €2 million and the positive contribution
of BS Payone and Paymark. Compared with Q1'18, the various
activities performed as follows on a like-for-like basis:
- SMB (up 15%): The Business Line performed well
this quarter, in line with our expectations. As a reminder, the
division no longer recognizes the German assets that are now part
of the Payone JV. This performance has been driven by the
continuous increase of the merchant base, growing by more than
4,000 new clients per month, as well as the continued performance
of the SMB online full-service offering. The acquiring volumes are
still growing strongly even if the pace is decelerating compared to
last year after rebalancing our risk portfolio. Restated following
these changes, volumes were growing at a similar pace to last
year.
- Global Online (up 11%): The quarterly performance
is fully in line with our expectations. The main drivers this
quarter are derived from emerging countries where the growth
trajectory is accelerating as in Latin America or in India where
organic growth was over 30% during the quarter. The deployment of
new products and services is on track and participates the growth
of the Business Line, such as the recent launch of the Global
Online Russian capabilities. The division has started this quarter
to leverage the ramp up of clients wins that occurred over the past
12 months. The Business Line has continued to gain new clients
during the quarter such as Radial in the United States of America,
Intcomex in Latin America or fly365 in Asia.
- Enterprise (up 20%): The Business Line
experienced a very strong quarter driven by both the transaction
activities and the sale of POS. As a reminder, with the exception
of the healthcare activity, all the German assets are now
recognized under the Payone JV. The targeted healthcare vertical in
Germany has grown significantly this quarter, benefiting from a
local equipment incentive which started in Q2'18. In North America,
the Business Line had a strong quarter after a market share win of
a large US retailer. On the transaction side, Axis, our omnichannel
retail platform, continues to show a double-digit growth,
benefiting from a recurring business model with processed volumes
ramping up. In the meantime, our Turkish activities are
accelerating benefiting from our local POS footprint and the ramp
up of volumes processed by our fiscal gateway, both are creating a
more recurring revenue profile. In the Pacific region, the
integration of Paymark is on track with our plan and is adding
scale to our transaction activities
- Payone (up 4%): The performance was in line with
our expectations. The integration of all the assets into the newly
created entity is on track and is already delivering positive
outputs. Nevertheless, the Business Line growth profile is not yet
at its cruising speed, expected to be reached in 2020. Moreover,
the first months of common activity show that both partners are
working closely together. The JV is very well perceived by clients,
both on the large enterprise segment and by the German saving
banks. An important milestone has already been reached by luring
some saving banks away from one of the main local competitors over
to the JV. While the integration progresses, growth trajectory of
the JV shall accelerate throughout the year.
During the quarter, B&A posted a
revenue of €318 million, an increase of 12% on comparable
basis. On a reported basis the activity increased by 14% and
included a positive foreign exchange impact of €4 million.
Compared to Q1'18, the various regions performed as follows on a
like-for-like basis:
- Europe, Middle-East & Africa (down 6%): The
dynamic was in line with our expectation this quarter. The mature
countries are slightly declining while the emerging parts of the
market are ramping up. Restated from the Iran business we decided
to phase out from in Q2'18 the performance is stable. In parallel,
we have benefited from commercial successes in Russia and CIS
countries, Middle-East/Africa and an improving dynamic in Eastern
Europe (Greece) are fuelling the pipeline of projects over the next
quarters. We have received the first signs of interest from clients
in Russia regarding the APOS, our Android terminal range. Western
Europe is still impacted by the consolidation even if this impact
is beginning to fade.
- Asia-Pacific (up 8%): The quarterly performance
came in slightly above our expectation following a stronger demand
in China from the large Chinese banks, third-party processors and a
lower price erosion than expected due to APOS shipments accounted
for a greater share of the overall business. South East Asia is
progressing well with Indonesia benefiting from a strong demand in
APOS while Thailand remains challenging as expected. India
continues to grow, though benefiting from a low comparison basis.
In the meantime, Japan keeps on ramping up in the eve of the EMV
migration. Australia, as a mature market, remained stable this
quarter.
- Latin America (up 99%): The whole region remained
very dynamic this quarter driven mostly by Brazil but benefiting as
well from good traction in Mexico, Peru, Colombia or Chile.
Ingenico Group took advantage of a dynamic Brazilian market in
which we invested in production capacity. Our Direct Sales model is
a clear differentiator and continue to be deployed within new
acquirers. The Group has therefore won significant market share
against competition over the quarter. However, even if the Group is
benefiting from a very strong momentum, we remain cautious due to
the historically volatile Brazilian market.
- North America (down 4%): The region has been
impacted this quarter by the Canadian activities following a strong
performance during the previous semester. The Canadian trajectory
will keep on contracting throughout the first semester before
benefiting from a more positive momentum driven by the consumption
of POS inventories from existing clients as well as the
finalization of the Tetra certifications with main customers
ensuring higher deliveries. Ingenico US activities were stable
throughout the quarter with the EMV renewal cycle still feeding the
pipeline of projects for the second part of the year. The
verticalization of our go to market continues as more than 150 ISVs
certifications were ongoing at the end of the quarter. The team
scored a major commercial win on the unattended sector with Red
box.
2019 objectives
- Revenue: The Group raises its 2019 expectations to
achieve an organic growth of c. 6% compared to the 4% to 6%
initial range. B&A revenue is expected to grow by c. 2% (vs.
flat initially) compared to last year and Retail to achieve a
double-digit organic growth.
- EBITDA (before application of IFRS 16): The Group
targets an EBITDA above 550 million. This target
factors in c. €45 million derived from the contribution of BS
Payone and Paymark and net savings of €20 million related to
the Fit for Growth plan. The group expects the Retail EBITDA above
€270 million and the B&A EBITDA at c.
€280 million
- Free cash-flow: The Group's ambition is to reach a
free cash-flow conversion rate of c. 50% (before application
of IFRS 16).
- The Group estimates the impact of IFRS 16 to increase EBITDA
by c. €30 million, with no impact on Free cash-flow,
thus reducing the conversion rate to c. 47%
Audio Webcast & Conference Call
The first quarter 2019 revenue will be discussed
in an audio webcast and a Group telephone conference call to be
held on 23rd April 2019 at 6.00pm Paris time (5.00pm UK time).
The presentation and audio webcast will be accessible at
www.ingenico.com/finance. The call will be accessible by
dialling one of the following numbers:
+33 (0) 1 72 72 74 03 (from France),
+1 646 722 4916 (from the US) and
+44 20 7194 3759 (from other countries) with the
conference ID: 10709919#.
This press release contains forward-looking
statements. The trends and objectives given in this release are
based on data, assumptions and estimates considered reasonable by
Ingenico Group. These data, assumptions and estimates may change or
be amended as a result of uncertainties connected in particular to
the performance of Ingenico Group and its subsidiaries. These
forward-looking statements in no case constitute a guarantee of
future performance, and involve risks and uncertainties. Actual
performance may differ materially from that expressed or suggested
in the forward-looking statements. Ingenico Group therefore makes
no firm commitment on the realization of the growth objectives
shown in this release. Ingenico Group and its subsidiaries, as well
as their executives, representatives, employees and respective
advisors, undertake no obligation to update or revise any
forward-looking statements contained in this release, whether as a
result of new information, future developments or otherwise. This
release shall not constitute an offer to sell or the solicitation
of an offer to buy or subscribe for securities or financial
instruments.
About Ingenico Group
Ingenico Group (Euronext: FR0000125346 - ING) is
the global leader in seamless payment, providing smart, trusted and
secure solutions to empower commerce across all channels, in-store,
online and mobile. With the world's largest payment acceptance
network, we deliver secure payment solutions with a local, national
and international scope. We are the trusted world-class partner for
financial institutions and retailers, from small merchants to
several of the world's best known global brands. Our solutions
enable merchants to simplify payment and deliver their brand
promise.
Stay in touch with
us:www.ingenico.com
twitter.com/ingenico
For more experts' views, visit our blog.
Contacts / Ingenico Group
Investors Laurent MarieVP Investor Relations & Financial
Communication laurent.marie@ingenico.com (T) / (+33) (0)1 58 01 92
98 |
InvestorsKévin WoringerInvestor Relations
Managerkevin.woringer@ingenico.com(T) / (+33) (0)1 58 01 85 09
|
CommunicationHélène CarlanderPR
Officerhelene.carlander@ingenico.com(T) / +33 (0) 1 58 01 83
17 |
Upcoming events
Capital Market Day: 24th April 2019Annual General
Meeting: 11th June 2019 2019 half-year results: 23rd July 2019
EXHIBIT 1 Following the closing of the
combination of BS Payone with the Ingenico DACH assets, the
reporting evolves towards greater transparency and making it easier
to read the joint-venture performance. In parallel, the former
Ogone activities recognized in Global Online and Enterprise are
transferred to SMB and Bambora Pacific is now consolidated in
Enterprise.
1. FORMER REPORTING ON A REPORTED BASIS |
|
|
|
In millions of euros |
Q1 2018 |
Q2 2018 |
Q3 2018 |
Q4 2018 |
2018 |
Retail |
302 |
328 |
345 |
364 |
1 339 |
SMBs |
88 |
98 |
103 |
105 |
393 |
Global Online |
119 |
126 |
136 |
141 |
521 |
Enterprise |
95 |
105 |
106 |
118 |
424 |
B&A |
280 |
319 |
342 |
364 |
1 305 |
EMEA |
114 |
128 |
127 |
125 |
495 |
Latin America |
34 |
38 |
58 |
69 |
199 |
North America |
30 |
46 |
42 |
44 |
163 |
APAC |
101 |
107 |
113 |
126 |
447 |
TOTAL |
581 |
648 |
687 |
727 |
2 643 |
|
|
|
|
2. NEW REPORTING ON A REPORTED BASIS |
|
|
|
In millions of euros |
Q1 2018 |
Q2 2018 |
Q3 2018 |
Q4 2018 |
2018 |
Retail |
302 |
328 |
345 |
364 |
1 339 |
SMBs |
70 |
78 |
82 |
84 |
314 |
Global Online |
117 |
124 |
134 |
139 |
514 |
Enterprise |
67 |
76 |
75 |
91 |
309 |
Payone |
48 |
51 |
54 |
50 |
202 |
B&A |
280 |
319 |
342 |
364 |
1 305 |
EMEA |
114 |
128 |
127 |
125 |
495 |
Latin America |
34 |
38 |
58 |
69 |
199 |
North America |
30 |
46 |
42 |
44 |
163 |
APAC |
101 |
107 |
113 |
126 |
447 |
TOTAL |
581 |
648 |
687 |
727 |
2 643 |
|
|
|
|
3. NEW REPORTING ON A PRO FORMA BASIS |
|
|
|
In millions of euros |
Q1 2018 PF |
Q2 2018 PF |
Q3 2018 PF |
Q4 2018 PF |
2018 PF |
Retail |
389 |
425 |
447 |
466 |
1 728 |
SMBs |
70 |
78 |
82 |
84 |
314 |
Global Online |
117 |
124 |
134 |
139 |
514 |
Enterprise |
76 |
86 |
84 |
101 |
348 |
Payone |
125 |
137 |
147 |
142 |
551 |
B&A |
280 |
319 |
342 |
364 |
1 305 |
EMEA |
114 |
128 |
127 |
125 |
495 |
Latin America |
34 |
38 |
58 |
69 |
199 |
North America |
30 |
46 |
42 |
44 |
163 |
APAC |
101 |
107 |
113 |
126 |
447 |
TOTAL |
669 |
744 |
789 |
830 |
3 032 |
[1] On a like-for-like basis and at constant
rate
- First Quarter Revenue 2019.pdf