Press Release
Paris, 29th October 2020
Third quarter 2020
Q3’20 strongly supports 2020 guidance
Mid to high single digit full year organic
decline confirmed All 2020 objectives reiterated
Revenue of €646 million, down 9% on
a comparable basis1Retail growth down 5% in Q3’20,
better than expectedActivity in SMB, Enterprise
and Payone stabilized while Global Online is still impacted by the
Travel vertical
B&A performance in the trajectory of
a gradual recovery with a 14% organic decline in Q3’20
Fit for Growth and Covid-19 action plan
on-track to deliver €135 million impact in 2020,
All 2020 objectives
reiteratedMid to high single digit organic decline
in revenues for FY’20FY’20 EBITDA in percentage of
net revenue above 21%Free Cash Flow conversion
rate above 50%
Ingenico Group (Euronext: FR0000125346 - ING),
the global leader in seamless payments, today announced its revenue
for the third quarter 2020.
Michel-Alain Proch, Chief Financial Officer of
Ingenico Group, commented: “In the context of the Covid-19
crisis, the Group posted a solid performance in the third quarter,
achieving 9% organic decline with a better than expected
performance of Retail while B&A came fully in line with our
expectations. The latest evolution of the health situation leads us
to be cautious regarding the recovery curve of the fourth quarter
which will be smoother than expected. Considering the dynamics of
the last two quarters of the year, we confirm our scenario, a mid
to high single digit organic decline in revenues for
2020.
During the first nine months, we have
successfully pursued the execution of our Covid-19 action plan on
top of the Fit for Growth plan and we confirm our objective to
deliver a combined €135 million EBITDA savings impact in 2020. I
would like to thank our teams for their proactive mobilization
during this period and their full commitment to deliver quarter
after quarter a very solid EBITDA performance despite the health
situation. Finally, the combination with Worldline is now completed
and integration is fully on track to create the undisputed European
champion in payments.”
Key figures
|
9-months 2020 |
Q3 2020 |
€m |
% Change |
€m |
% Change |
Comparable1 |
Reported |
Comparable1 |
Reported |
Retail |
980 |
-4% |
-7% |
348 |
-5% |
-7% |
SMBs |
174 |
-3% |
-4% |
60 |
-6% |
-6% |
Global Online |
252 |
-7% |
-8% |
84 |
-14% |
-15% |
Enterprise |
268 |
-3% |
-10% |
98 |
4% |
-3% |
Payone |
286 |
-5% |
-5% |
107 |
-5% |
-5% |
B&A |
908 |
-12% |
-16% |
297 |
-14% |
-22% |
EMEA |
323 |
-9% |
-9% |
111 |
-4% |
-4% |
Latin America |
142 |
-17% |
-41% |
53 |
-13% |
-45% |
North America |
176 |
22% |
36% |
54 |
-8% |
-4% |
Asia-Pacific |
266 |
-26% |
-26% |
79 |
-27% |
-29% |
TOTAL |
1,888 |
-8% |
-12% |
646 |
-9% |
-14% |
Third quarter 2020 performance
In the third quarter of 2020, net revenue
totalled €646 million, representing a 9% decrease on a
comparable basis. On a reported basis net revenue was 14% lower
than in the third quarter of 2019 and included a negative foreign
exchange impact of €34 million and the effect of Healthcare France
disposal.
Over the quarter, the Retail
Business Unit reported a net revenue of €348 million, showing
a decrease of 5% on a comparable basis. On a reported basis, net
revenue decreased by 7% during the quarter and included a negative
foreign exchange impact of €6 million and the effect of Healthcare
France disposal. Compared with Q3’19, the various activities
performed as follows on a like-for-like basis:
- SMB (down 6%): The third
quarter performance was slightly above our expectations with a
positive performance on the non-travel verticals. SMB continued to
deliver a steady onboarding rate of merchants on its platform with
c.1,000 net new customers per month (c.4,000 gross new customers),
thanks to an ongoing decrease of the churn rate during the period
and a strong dynamic on online merchants. During the third quarter,
the all-in one instore offering, Bambora connect, tailored for
ISVs, is continuing to gain traction with a significant ramp-up of
one of the contracts signed in H1’20 and good growth prospects
expected for the fourth quarter of 2020.
- Global Online (down 14%): The
third quarter performance came in line with our expectations driven
by a good dynamic in the non-Travel verticals such as marketplaces,
gaming and digital goods continuing to grow double-digit, but not
able to fully compensate the Travel impact. The latter vertical
remains impacted by the fall of international travel traffic, as
expected, despite some domestic and intra-regional travel recovery,
and less refunds flows accounted than in Q2’20. On the regional
side, APAC continued showing good momentum again growing double
digit. During the period, Global Online pursued its geographical
and acceptance network expansion with new client wins during the
quarter and expanded relationships with existing clients such as
Shein, Zendesk or Mindbody.
- Enterprise (up 4%):
Performance came slightly better than expected during the third
quarter despite the high comparison basis in Q3’19 driven by
Healthcare Germany activities. Excluding this specific effect,
Enterprise was up 9% on an organic basis. The division is
benefiting from a strong traction on both sale of POS and
transaction activities. In the latter, the transaction business
continued its double-digit growth, driven by the European
omnichannel instore platform (Axis), in which processed volumes
recovered during the third quarter after a Q2’20 strongly impacted
by the lockdowns in Europe. POS activities enjoyed a good dynamic.
North America has been a strong driver this quarter, with an
activity back to normative levels.
- Payone (down 5%): The third
quarter performance came in line, with transaction activities
fuelled by an acceleration of the shift towards electronic
payments, in the trajectory of Q2’20. Usage of card payment in the
German market continued to strongly increase, thanks to the
improvement of payment threshold leading to a higher usage of
contactless payments that represent today c.60% of electronic
payments vs c.50% pre-Covid. The conversion of saving banks
customers to Payone payment solution remained steady during the
quarter, driven by the one-stop shop offering and digital
onboarding capabilities, with more than 1,000 net new merchants
joining the platform every month. The DACH region shift
acceleration towards electronic payments will benefit to Payone
performance in the coming quarters.
The B&A Business Unit
posted a net revenue of €297 million, a 14% decrease on a
comparable basis. On a reported basis, the activity decreased by
22% and included a negative foreign exchange impact of
€28 million. Compared to Q3’19, the various regions performed
as follows on a like-for-like basis:
- Europe, Middle-East & Africa (down
4%): The third quarter performance came in solid and
slightly above our expectations with a steady improvement of the
dynamic quarter to quarter. In Q3’20, France was back to growth,
while countries such as DACH and Iberia have shown a good dynamic,
fuelled by Terminal as a Service contract signed in H1’20 and the
first deliveries of Android POS for the latest. In the meantime,
the UK and Italy remained impacted in the current environment. As
expected, Eastern Europe, after being back to growth in H1’20, has
pursued on the same trajectory, while Russia has continued to
suffer from a high comparison basis and a low pipeline of projects.
The trajectory of the region should remain solid in the coming
quarters with an improvement of the overall performance.
- Asia-Pacific (down 27%): The
dynamic in the region came in below our expectations during the
quarter. China has been still impacted by a very low pipeline due
to the lack of projects initiated in H1’20. The situation should
continue in the coming quarters. In parallel, India has been
strongly impacted by the ongoing lockdowns that are still
implemented in the country. As during H1’20, South East Asia came
in softer on the back of Indonesia suffering from a high comparison
basis. In the meantime, the Pacific region has shown a good
dynamic, benefitting from the ongoing impact of commercial
successes and pipeline of projects that would continue to deliver
good growth basis in Q4’20.
- Latin America (down 13%): The
dynamic in the region came in slightly better than our expectations
with Brazilian market still impacted by the Covid-19 spread during
the quarter, combined with high comparison basis. This situation
should continue to weight in the coming quarters. In other
countries, such as Columbia, Argentina and Peru, the momentum keeps
ongoing on the same trajectory as H1’20, fuelled by the contracts
signed and the pipeline of projects.
- North America (down 8%): The
third quarter performance came in line with a level of activity
stabilizing sequentially after four quarters of strong growth. On
the regional side, Canada is back to a normative level of activity
during the last quarter. US-based activity remained strong
benefitting from the early implementation of our ISV vertical
initiative showing a continuous strong dynamic fuelled by project
delivery and development of partner programs. In the meantime, the
first Terminal as a Service contract has been signed during the
Q3’20. The ongoing demand on back of the EMV cycle renewals remains
robust and some consolidation of market shares has been achieved.
Overall, the pipe should sustain sequentially the level of activity
in the coming quarters.
All 2020 objectives
confirmed
- Net revenue: a mid to high single digit
organic decline
- EBITDA: an EBITDA margin above 21% (20.9% in
FY’19)
- Free cash-flow conversion: a FCF conversion
above 50%
The 2020 objectives communicated in April have
been built on the three following scenarios structured around
different recovery curves:
- Scenario 1: return to the pre-Covid-19 guidance of 4% to 6%
organic growth in Q4’20 leading to a mid-single digit organic
decline in FY’20;
- Scenario 2: return to the pre-Covid-19 guidance of 4% to 6%
organic growth in December 2020 leading to a mid to high single
digit organic decline in FY’20;
- Scenario 3: return to the pre-Covid-19 guidance of 4% to 6%
organic growth in Q1’21 leading to a high single digit organic
decline in FY’20.
After nine months of activity, the Group’s
business assumptions remain unchanged, i.e. a progressive pick-up
in consumption while stores re-open depending on health
constraints, a central scenario on travel with no recovery of
international travel before 2021 and a gradual pick-up on regional
travel, and some possible short and local re-confinements in the
countries in which the Group operates.
Based on the recent performance with a third
quarter better than expected driven by a post-confinement pick-up
in activity, Ingenico anticipates for the fourth quarter a gradual
recovery curve.
Despite this phasing, the overall group’s
performance for the full year should remain in the mid to high
single digit organic decline, confirming the expected growth
scenario.
Based on this scenario, Ingenico Group confirms
its strong and holistic action plan activated early March, aiming
at adapting its cost structure, protecting profitability and
preserving cash. Consequently, on top of the Fit for Growth plan
that will deliver €35 million EBITDA impact in 2020, this C19
action plan implemented during Q1’20 will deliver €100 million
added EBITDA impact in 2020.
Ingenico Group’s long-term growth drivers remain intact and we
are convinced that the Group should come out of the current crisis
even stronger with the engagement of all of the teams serving our
clients for the benefit of all of our stakeholders.
Audio Webcast & Conference
Call
The third quarter 2020 revenue will be discussed
in an audio webcast and a Group telephone conference call to be
held on 29th October 2020 at 7.15am Paris time (6.15am 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 70 37 71 66 (from France),
+1 212 999 6659 (from the US) and
+44 20 3003 2666 (from other countries) with the
conference password: Ingenico.
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
shaping the future of payments for sustainable and inclusive
growth. As a global leader in seamless payments, we provide
merchants with smart, trusted and secure solutions to empower
commerce across all channels and enable simplification of payments
and deliver customer promises. We are the trusted and proactive
world-class partner for financial institutions and retailers, from
small merchants to the world’s best-known global brands. We have a
global footprint with more than 8,000 employees, 90 nationalities
and a commercial presence in 170 countries. Our international
community of payment experts anticipates the evolutions of commerce
and consumer lifestyles to provide our clients with leading-edge
complete solutions wherever they are needed.www.ingenico.com
@ingenico
For more experts’ views, visit our blog.
Contacts / Ingenico Group
InvestorsLaurent Marie - VP Investor Relations
& Financial Communication(T): +33 (0)1 58 01 83
24laurent.marie@ingenico.com
MediaHélène Carlander - PR Officer(T): +33 (0)7
72 25 96 04helene.carlander@ingenico.com
EXHIBIT 1GROSS AND NET
REVENUE
Following the achievement of the Group operating
model redesign, the reporting has been adjusted as follow:
- Restatement of Healthcare France contribution after the
disposal of the entity end 2019
- Mexico is now allocated in North America versus Latin America
previously following a change in management responsibility
In parallel, as announced and to provide a
greater transparency and to make it easier to read the performance,
revenue are now reported on a net basis (excluding interchange
fees).
1. FORMER REPORTING ON REPORTED BASIS (GROSS
REVENUE) |
|
|
In Millions of euros |
Q1 2019 |
Q2 2019 |
Q3 2019 |
Q4 2019 |
2019 |
Retail |
435 |
471 |
501 |
512 |
1,919 |
SMBs |
79 |
85 |
90 |
89 |
343 |
Global Online |
133 |
141 |
152 |
155 |
582 |
Enterprise |
91 |
104 |
101 |
116 |
412 |
Payone |
131 |
142 |
158 |
152 |
582 |
Banks & Acquirers |
318 |
387 |
379 |
367 |
1,451 |
EMEA |
110 |
130 |
116 |
118 |
473 |
Latin America |
65 |
78 |
96 |
85 |
325 |
North America |
31 |
42 |
56 |
60 |
189 |
APAC |
112 |
136 |
111 |
104 |
463 |
TOTAL |
753 |
858 |
880 |
879 |
3,370 |
|
|
|
|
|
|
2. NEW REPORTING ON A PRO FORMA BASIS (GROSS
REVENUE) |
|
|
In Millions of euros |
Q1 2019 PF |
Q2 2019 PF |
Q3 2019 PF |
Q4 2019 PF |
2019 PF |
Retail |
430 |
464 |
500 |
512 |
1,906 |
SMBs |
79 |
85 |
90 |
89 |
343 |
Global Online |
133 |
141 |
152 |
155 |
582 |
Enterprise |
87 |
96 |
99 |
116 |
399 |
Payone |
131 |
142 |
158 |
152 |
582 |
Banks & Acquirers |
319 |
389 |
376 |
365 |
1,449 |
EMEA |
111 |
132 |
117 |
119 |
479 |
Latin America |
57 |
72 |
83 |
81 |
293 |
North America |
37 |
46 |
62 |
57 |
201 |
APAC |
115 |
140 |
114 |
108 |
477 |
TOTAL |
749 |
853 |
875 |
878 |
3,355 |
3. FORMER REPORTING ON REPORTED BASIS (NET
REVENUE) |
|
|
In Millions of euros |
Q1 2019 |
Q2 2019 |
Q3 2019 |
Q4 2019 |
2019 |
Retail |
324 |
351 |
376 |
394 |
1,444 |
SMBs |
57 |
60 |
64 |
66 |
246 |
Global Online |
85 |
90 |
99 |
101 |
374 |
Enterprise |
91 |
104 |
101 |
116 |
412 |
Payone |
91 |
98 |
112 |
111 |
412 |
Banks & Acquirers |
318 |
387 |
379 |
367 |
1,451 |
EMEA |
110 |
130 |
116 |
118 |
473 |
Latin America |
65 |
78 |
96 |
85 |
325 |
North America |
31 |
42 |
56 |
60 |
189 |
APAC |
112 |
136 |
111 |
104 |
463 |
TOTAL |
642 |
738 |
755 |
761 |
2,895 |
|
|
|
|
|
|
4. NEW REPORTING ON A PRO FORMA BASIS (NET
REVENUE) |
|
|
In Millions of euros |
Q1 2019 PF |
Q2 2019 PF |
Q3 2019 PF |
Q4 2019 PF |
2019 PF |
Retail |
319 |
344 |
374 |
394 |
1,431 |
SMBs |
57 |
60 |
64 |
66 |
246 |
Global Online |
85 |
90 |
99 |
101 |
375 |
Enterprise |
87 |
96 |
99 |
116 |
399 |
Payone |
91 |
98 |
112 |
111 |
412 |
Banks & Acquirers |
319 |
389 |
376 |
365 |
1,449 |
EMEA |
111 |
132 |
117 |
119 |
479 |
Latin America |
57 |
72 |
83 |
81 |
293 |
North America |
37 |
46 |
62 |
57 |
201 |
APAC |
115 |
140 |
114 |
108 |
477 |
TOTAL |
638 |
733 |
750 |
760 |
2,881 |
1 On a like-for-like basis and at constant rate
on net revenues
- Q320_PR_ING_GROUP_29_10_20