Seven reasons to invest in the Edenred Group
Leading services and payment platform and the everyday companion for people at work
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1. Position as a global leader in relatively untapped markets with excellent development prospects 1. Position as a global leader
Edenred is a leading services and payments platform and the everyday companion for people at work, connecting 50 million employees and 2 million partner merchants in 46 countries via more than 850,000 corporate clients.
Edenred offers specific-purpose payment solutions for food, fleet and mobility, incentives and corporate payments. These solutions enhance employee well-being and purchasing power, improve companies’ attractiveness and efficiency, and vitalize the employment market and the local economy.
Thanks to its global technology assets, Edenred managed €31 billion in business volume in 2019, primarily via mobile applications, online platforms and cards.
Thanks to its agile, innovative approach, leading-edge technological expertise and close contact with each local ecosystem, Edenred seizes opportunities for development in all countries and all of its business lines. These offer significant potential, as the Group operates in underpenetrated markets and benefits from favorable demographic and social fundamentals, such as the formalization of the economy and increasing numbers of people in work worldwide; the impact of digitalization on the way we work, consume and interact; changes to urbanization and the way we relate to distance, which are generating more mobility needs and new ways of getting around; and lastly, global awareness of the climate emergency, which has led society to question the industrialization of farming and food production.
To connect the fast-changing world of work, Edenred monitors and analyzes economic, social and environmental trends everywhere it operates so that it can develop the required solutions.
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- New strategic plan (2019 Capital Markets Day presentation):
- 2019 Universal Registration Document, section 1.2
2. A strategy of sustainable and profitable growth 2. A strategy of growth
The new strategic plan “Next Frontier” (2019-2022) launches a new phase of profitable and sustainable growth. It leverages the unique nature of the Edenred platform to provide people in the world of work with the full range of services and payment solutions they need to make their working lives easier.
Edenred harnesses a virtuous business model, combining a low user acquisition cost with high levels of user adoption and retention. Operating exclusively in the working world and serving specific purposes, the Group is able to screen transactions and earmark funds for selected merchants, who appreciate the extra revenue that Edenred sends their way.
The platform model, coupled with the shift to digitalized processes and pooled support services, gives rise to significant scale effects, making it possible both to bring new solutions to market and to swiftly, extensively and cost-effectively roll out innovation and thereby generate profitable growth.
Edenred has based its new strategic plan, “Next Frontier" (2019-2022), on several drivers of profitable and sustainable growth.
Reflecting Edenred’s profitable and sustainable growth profile, its strong operating leverage and its unique, highly cash-generative business model, the “Next Frontier” plan sets out three annual financial targets for 2019-2022:
- like-for-like operating revenue growth of more than 8%;
- like-for-like EBITDA growth of more than 10%;
- a free cash flow/EBITDA conversion rate of more than 65%.
Due to the uncertain environment created by Covid-19, the Group has suspended its targets for full-year 2020.
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3. A business model generating strong cash flows 3. Business model
Edenred’s business model is underpinned by a profitable and sustainable growth profile with significant operating leverage. Its operations are not capital-intensive and generate substantial cash flows.
What makes the model unique is that the majority of the solutions developed by Edenred are prepaid, which leads to a structurally negative working capital requirement.
As a result, funds from operations before other income and expenses (FFO) totaled €524 million in 2019, a year-on-year increase of 31%.
Edenred intends to generate each year a free cash flow/EBITDA conversion rate of more than 65% (based on constant regulation and methods).
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4. Considerable technological expertise and strong innovation capacity in payments 4. Technological and innovative expertise
Continuously striving to improve user experience, Edenred has developed a leading-edge technology platform for payments. Thanks to this B2B2C platform, the Group managed €31 billion in business volume in 2019 via its payment solutions, thanks to transactions carried out primarily by card, mobile or online platforms.
Edenred’s technological expertise is a major competitive advantage, giving it an unparalleled capacity for innovation in its markets and a high level of agility in terms of deployment processes for value-added services, while keeping transactions totally secure.
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5. A generous shareholder value policy based on a solid financial position 5. Shareholder value policy
As part of the “Next Frontier” strategic plan for 2019-2022, Edenred intends to maintain a dividend payout policy based on growth of the dividend per share in absolute terms each year*.
At the same time, the Group plans to earmark between 6% and 7% of its total revenue each year for investments, focusing mainly on technology. It also intends to seize external growth opportunities that contribute to its development objectives in its different markets and meet stringent financial criteria. These acquisitions will provide the Group with an additional source of value creation.
* However, in light of the unprecedented health and economic crisis arising from the Covid-19 epidemic, Edenred’s Board of Directors decided on April 6, 2020 to decrease the dividend for 2019 proposed at the General Meeting of May 7 to €0.70 per share. This represents a 20% reduction compared with the dividend initially announced on February 26, of €0.87 per share, which was higher than the previous year’s dividend.
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6. 10,000 employees driving forward a Group committed to society 6. 10,000 committed employees
Edenred’s 10,000 employees are committed to making the world of work a better place for everyone by transforming it into a connected ecosystem that is safer, more efficient and more user-friendly.
The solutions they imagine, develop and propose to corporate clients have a positive impact on their 50 million end users and promote more environmentally responsible practices, every day and over the long term. Edenred’s programs notably encourage employees to eat a balanced diet and opt for eco-friendly modes of transportation for their daily commute.
These positive impacts on society reflect the objectives set out in the Group’s corporate social responsibility (CSR) policy, “Ideal”: improve the lives of individuals, protect the planet and create value responsibly. Edenred’s employees are ambassadors for its ambitions.
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7. A responsible governance structure that creates value 7. A responsible governance
Edenred’s governance bodies guarantee the relevance and compliance of all decisions made by the Group and actions carried out as part of its strategy.
The Board of Directors comprises 12 members and has three committees to assist it with its decisions and to ensure Edenred’s responsible development.
The 12-member Executive Committee brings together operational representatives from the major regions of the world, as well as functional managers who provide expertise to support operations.
The Board of Directors strives to ensure that its membership and that of its committees is balanced in terms of independence, experience, skills, professional expertise, international exposure, age and gender.
Experience, skills and professional expertise are fundamental criteria in the selection of directors, particularly in the fields of B2B2C relationships, digital technology, international experience, finance and corporate social responsibility (CSR).
The profiles of the directors selected must be complementary, so that the combination of their individual skills and expertise covers all of the Group’s operations.
In order to support the Group’s international dimension, the Board of Directors ensures that it includes international profiles (nationality, experience). As of December 31, 2019, the Board of Directors includes one Italian citizen, one Brazilian citizen and seven members with extensive international experience.
Moreover, all directors appointed by the General Meeting (excluding the Chairman and Chief Executive Officer) are members of at least one committee of the Board of Directors.
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