PARIS--(Marketwired - Jul 30, 2013) -
Outstanding results in the first half of 2013
* H1 2013 revenue of EUR656 million
* Up 21% on a reported basis
* Up 19% on a comparable basis[1]
* Net profit attributable to shareholders: up 41% to EUR45 million
* Strong improvement in free cash flow management
* Free cash flow of EUR46 million vs. (EUR16) million in H1 2012
* Guidance raised for 2013:
* Low double-digit like-for-like growth
* EBITDA margin exceeding or equal to 19%
Ingenico (Euronext: FR0000125346 - ING) announced today
its reviewed interim financial statements for the six-month period ended
June
30, 2013.
Key figures (in |H1 2013|H1 2012 |H1 2013/H1 2012 change|
millions of euros) | | | |
| | | |
------------------------+-------+-----------+-----------------------------+
Revenue | 656 | 542 | +21% |
------------------------+-------+-----------+-----------------------------+
EBITDA | 122 | 80 | +53% |
| | | |
As a % of revenue | 18.6% | 14.8% | +380 bp |
------------------------+-------+-----------+-----------------------------+
EBIT | 103 | 66 | +56% |
| | | |
As a % of revenue | 15.7% | 12.2% | +350 bp |
------------------------+-------+-----------+-----------------------------+
Net profit attributable| 45 | 32 | +41% |
to shareholders | | | |
------------------------+-------+-----------+-----------------------------+
Philippe Lazare, Chairman and CEO of Ingenico, commented: "Our excellent results in the first six months of the year are in line with our strategy geared towards profitable growth. This has enabled us to raise our full-year revenue and EBITDA guidance for 2013.
Those results also demonstrated our ability to deploy a geographically differentiated sales and service strategy, across all channels: in store, on-line and mobile.
As anticipated, we enjoyed strong business growth in the United States.
The integration process of Ogone takes place in accordance with our roadmap, and will accelerate the expansion of our service business, which accounted for 48 percent of revenue in the Europe-SEPA region in the first half of the year.
As we enter the second half of the year, we are confident that we will be meeting our full-year targets and that our multi-channel approach will gradually come on stream."
H1 2013 financial data
Key figures
(in millions of euros) H1 13 | H1 12 |
-----------------------------------------------------------+-------+
Revenue 656 | 542 |
| |
Adjusted gross profit 277 | 226 |
| |
As a % of revenue 42.2% | 41.7% |
| |
Adjusted operating expenses (174) | (160) |
-----------------------------------------------------------+-------+
Profit from ordinary activities, adjusted (EBIT) 103 | 66 |
| |
As a % of revenue 15.7% | 12.2% |
-----------------------------------------------------------+-------+
Profit from operating activities 75 | 57 |
-----------------------------------------------------------+-------+
Net profit 44 | 34 |
-----------------------------------------------------------+-------+
Net profit attributable to shareholders 45 | 31 |
-----------------------------------------------------------+-------+
EBITDA 122 | 80 |
| |
As a % of revenue 18.6% | 14.8% |
-----------------------------------------------------------+-------+
-----------------------------------------------------------+-------+
Free cash flow 46 | (16) |
-----------------------------------------------------------+-------+
Net debt 414 | 155 |
| |
Equity attributable to shareholders 715 | 649 |
-----------------------------------------------------------+-------+
Revenue up 19%
+------------------+---------------------------+--------------------------+ | | H1 2013 | Q2 2013 | | +----+----------------------+----+---------------------+ | |EURm| Change 2013/2012 |EURm| Change 2013/2012 | | | +-------------+--------+ +------------+--------+ | | |Comparable(1)|Reported| |Comparable |Reported| | | | | | |(1) | | +------------------+----+-------------+--------+----+------------+--------+ |Europe-SEPA |283 | 5% | 15% |150 | 4% | 14% | +------------------+----+-------------+--------+----+------------+--------+ |Latin America |102 | 20% | 11% |53 | 18% | 12% | +------------------+----+-------------+--------+----+------------+--------+ |Asia-Pacific |109 | 36% | 36% |62 | 15% | 14% | +------------------+----+-------------+--------+----+------------+--------+ |North America |51 | 41% | 39% |30 | 50% | 47% | +------------------+----+-------------+--------+----+------------+--------+ |EMEA |57 | 48% | 46% |31 | 40% | 37% | | | | | | | | | |Central Operations|54 | 13% | 13% |27 | 4% | 3% | +------------------+----+-------------+--------+----+------------+--------+ |Total |656 | 19% | 21% |353 | 14% | 17% | +------------------+----+-------------+--------+----+------------+--------+
Performance in the first half
In the first half of 2013, revenue totaled EUR656 million, supporting a 21 percent increase on a reported basis, including a EUR26 million contribution from Ogone and a negative foreign exchange impact of EUR13 million. Total revenue included EUR511 million generated by the Payment Terminal business and EUR145 million generated by Transaction Services. More generally, the share of total revenue generated by Services was 33 percent, including Ogone's contribution.
On a comparable basis(1), the growth in revenue stood at 19 percent compared to the first half of 2012, driven by an outstanding performance in Payment Terminals (up 21 percent). Transaction Services revenue increased by a healthy 10 percent. Excluding TransferTo and Ogone, the revenue of Transaction Services was up 5 percent, while on a pro forma basis[2] and excluding TransferTo, it increased by 9 percent, driven by the merger of Ogone into the Group.
All regions contributed to the Group's overall performance, thanks to a geographically differentiated product and service offer. Ingenico has strengthened its position in its legacy Europe-SEPA markets through successful implementation of its service strategy and accelerated its growth in North America, particularly in the U.S., where revenue is up 50 percent. The Group has also continued to expand in the emerging markets, with encouraging business trends in Latin America, Asia-Pacific and the EMEA region.
The Group's Central Operations is mainly based upon the TransferTo's business and, to a lesser extent, on the deployment of the Group's mobile payment strategy through ROAM Data.
Performance in the second quarter
In the second quarter of 2013, revenue totaled EUR353 million, supporting a 17 percent increase on a reported basis, including a EUR14 million contribution from Ogone and a negative foreign exchange impact of EUR7 million. Total revenue included EUR277 million generated by the Payment Terminal business and EUR76 million generated by Transaction Services.
On a like-for-like basis(1), revenue was 14 percent higher than in Q2 2012. This performance can be attributed to high growth in Payment Terminal revenue (up 15 percent) and continuous development in Transaction Services (up 9 percent). Excluding TransferTo and Ogone, Transaction Services grew organically by 5 percent during the quarter; and by 9 percent on a pro forma basis(2) without TransferTo.
In the second quarter, Ingenico posted strong organic growth across all regions, successfully deploying its geographically differentiated strategy.
Performance for the quarter by geography, compared with Q2 2012, was as follows:
* Europe-SEPA: Despite a challenging macroeconomic environment, Ingenico's Payment Terminal revenue increased at a respectable pace, due to the Group's diversified geographic footprint in the region, and following very high growth in the United Kingdom in 2012. In addition, the Group has accelerated the deployment of its strategy based on its Transaction Services strategy combining point-of-sale (Axis, easycash), on-line and m-payment with the integration process of Ogone growing 24 percent. Ingenico also won an award from KFC for the improvement of its payment systems in the United Kingdom.
* Latin America: Business continued to grow, thanks to an ongoing robust performance in Brazil and strong growth across the other countries in the region. Ingenico has contributed to a payment technology upgrade, particularly in Central America and Mexico, where the Group is deploying contactless payment solutions with Banamex.
* Asia-Pacific: Strong growth across the region continued to push revenue higher. The momentum has remained strong in China. Moreover, Ingenico has maintained its rapid deployment drive in Indonesia by acquiring its distributor and has accelerated its market penetration in India.
* North America: Accelerating growth in the region reflects the Group's increased traction in the United States, where Ingenico has continued to implement its strategy at large retailers and to win over smaller merchants through ISOs (Independent Sales Organizations). To date, Ingenico has already obtained certification from 8 of the 10 leading organizations in the processor/acquirer segment, including Heartland Payments, as announced on May 3rd.
* EMEA: In most countries in the region, Ingenico enjoyed strong growth fueled by the direct access to the Russian market, where the Group has continued to deploy its solutions to new banks customers, and the expansion of its distribution network, particularly in the Middle East, where a partnership agreement has been signed with Alhamrani Universal.
* Central Operations: Growth was driven primarily by TransferTo's expanding business.
Gross margin still high - up 50 basis points
Gross margin reached 42.2 percent, an increase of 50 basis points compared to H1 2012. The main driver of this performance was the 120 basis points increase in gross margin in Payment Terminals (hardware, servicing and maintenance) to 44.8 percent of revenue, due in large measure to outstandingly high growth in revenues volume and procurement cost optimization.
Gross margin in Transaction Services decreased slightly from 34.5 percent in the first half of 2012 to 33.5 percent. This decrease reflected a one-off expense of EUR5 million related to the bankruptcy of a German customer and the somewhat greater weight of TransferTo in the second quarter. However, solid business growth at Ogone has helped improve overall performance in Transaction Services. Excluding TransferTo and the impact of the incident in Germany, gross margin reached 47.1 percent, up from 44.6 percent in H1 2012.
Operating expenses under control at 26.5 percent of revenue
In the first half of 2013, adjusted operating expenses stood at EUR174 million, versus EUR160 million in the first half of 2012, and were down 300 basis points to 26.5 percent of revenue, compared with 29.5 percent in H1 2012.
Due to limited growth in general and administrative expenses, Ingenico was able to invest further, particularly in Research & Development and sources of future growth (Telium3, m-payment segment).
EBITDA up 53 percent
EBITDA increased by 53 percent to EUR122 million, up from EUR80 million in the first half of 2012. The EBITDA margin increased by 380 basis points to 18.6 percent of revenue.
EBIT margin up 350 basis points
In the first half of 2013, EBIT increased by 56 percent to EUR103 million, compared with EUR66 million in H1 2012. The EBIT margin was 15.7 percent of revenue, up by 350 basis points.
Continued significant growth in profit from operations: 31 percent
Other operating income and expenses showed a net expense of EUR13 million, which included a non-recurring EUR8 million partial impairment loss on TransferTo goodwill. This non-cash accounting item reflects revenue synergies below expectations between TransferTo and the rest of the Group.
In the first half of 2012, other operating income and expenses showed net income of EUR4 million, due in large part to the EUR9 million impact of the remeasurement of assets and liabilities previously acquired or taken over from Roam Data when Ingenico gained control of that company in February 2012.
At EUR15 million, Purchase Price Allocation expenses show little change, even though acquisitions carried out in the first half have added EUR3.7 million.
Profit from operations was up 31 percent to EUR75 million from EUR57 million in the first half of 2012. Operating margin increased by 90 basis points to 11.4 percent of revenue.
Profit attributable to Ingenico S.A. shareholders up 41 percent to EUR45 million
In the first half of 2013, net profit attributable to Ingenico S.A. shareholders increased significantly to EUR45 million, compared with EUR32 million in H1 2012.
This result includes net finance costs of EUR8 million (versus EUR7 million in H1 2012), which increased only slightly despite higher debt following the Ogone acquisition in January 2013.
Income tax expense rose from EUR16 million to EUR23 million. As of June 30, 2013, Group effective tax rate - excluding impact of partial impairment loss on TransferTo goodwill - stood at 32.7 percent[3] compared with 31.9 percent as of June 30, 2012.
A sound financial position
Total equity attributable to shareholders increased to EUR715 million.
Net debt increased to EUR414 million at June 30, 2013, from EUR155 million at June 30, 2012 and EUR75 million at December 31, 2012, due in particular to the EUR360 million required to finance the acquisition of Ogone. However, Ingenico's financial ratios at June 30, 2013 demonstrated the Group's sound financial position. The net debt to equity ratio stood at 58 percent, while the net debt to EBITDA ratio was 1.6x[4].
During the first half of 2013, Ingenico's operations generated free cash flow of EUR46 million, compared to a negative EUR16 million in the first half of 2012. This improvement is mainly attributable to a strong increase in EBITDA and good control over working capital, limiting the negative change in working capital to EUR11 million, versus EUR45 million in H1 2012. This was made possible by strict management of inventories and trade receivables in a period of strong business expansion. At the same time, Ingenico continued to invest to support Group expansion, with investing activities net of disposals totaling EUR18 million.
Update on Ogone integration
Following the acquisition of Ogone in January, all of the Group's Transaction Services business in Europe was merged together into the same entity now managed by Peter de Caluwe, the CEO of Ogone, to ensure that the Group's strategy will be effectively implemented whatever the channel: in store, on-line and mobile. The Ogone and easycash platforms are now interconnected, and the Group has deployed its in-store and on-line payment services for a first customer in Germany. More broadly, the first contacts initiated with clients and prospects (banks and merchants) have confirmed their interest for combined payment offers.
Outlook
In the first half of 2013, Ingenico performed outstandingly well, particularly in Payment Devices, and therefore expects less of a seasonal difference in revenue and EBITDA margin between the first and second halves than in previous years.
Accordingly, the Group has raised its annual revenue outlook, now anticipating low double-digit organic growth(1)compared with above or equal to 8 percent previously. The Group reminds that the fourth quarter of 2012 represents a very high basis of comparison, given that order volume from emerging markets was particularly high.
Ingenico has likewise raised its outlook for EBITDA margin, which is now expected to exceed or be equal to 19 percent, compared with above 18.5 percent previously.
This revised guidance for 2013 applies to the expanded consolidated Group, i.e., including Ogone in the accounts for the year. Ingenico also confirms that the Ogone integration process should be neutral to net earnings per share in 2013 (excluding PPA).
CONFERENCE CALL
A conference call to discuss Ingenico's H1 2013 results will be held on July 30, 2013 at 6.00 p.m., Paris time. Dial in number: 01 70 99 32 08 (French domestic) or +44 (0)20 7162 0077 (international).
The presentation will also be available on www.ingenico.com/finance .
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. These data, assumptions and estimates may change or be amended as a result of uncertainties connected in particular with the performance of Ingenico and its subsidiaries. These statements are by their nature subject to risks and uncertainties as described in Ingenico registration document ("document de reference"). 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 therefore makes no firm commitment on the realization of the growth objectives shown in this release. Ingenico 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.
About Ingenico (Euronext: FR0000125346 - ING)
Ingenico is a leading provider of payment solutions, with over 20 million terminals deployed in more than 125 countries. Its 4,000 employees worldwide support retailers, banks and service providers to optimize and secure their electronic payments solutions, develop their offer of services and increase their point of sales revenue.
More information on : www.ingenico.com | twitter.com/Ingenico
Next events
Conference call on H1'13 results: July 30 at 6pm (Paris)
Q3'13 revenue : October 30, 2013
EXHIBIT 1:
Basis for preparing the 2013 interim accounts
The consolidated financial data has been drawn up in accordance with
International Financial Reporting Standards. In order to provide meaningful
comparable information, that data has been presented on an adjusted basis,
i.e.
restated to reflect the depreciation and amortization expenses arising on
the
acquisition of new entities. Pursuant to IFRS 3 and to IFRS3R, the purchase
price for new entities is allocated to the identifiable assets acquired and
subsequently amortized over specified periods.
As of 2012, foreign exchange gains and losses from translation of operations denominated in foreign currency (including the effective portion of any related hedging instruments) are now recognized in cost of sales, instead of in net finance costs.
The main financial data for 2013 is discussed on an adjusted basis, i.e., before Purchase Price Allocation (PPA); see Exhibit 3.
Change in scope that occured in 2013 with the acquisition of Ogone were not restated for 2012 figures.
Following IAS 18, revenue from certain activities related to transaction services operated by the Group (TransferTo and "Credit Acquiring" of easycash) is presented gross without deducting TransferTo's payments to operators and interchange fees paid by easycash for credit acquiring, respectively.
EBITDA is not an accounting term; it is a financial metric defined here as profit from ordinary activities before amortization, depreciation and provisions and before expenses of shares distributed to employees and officers (the reconciliation of profit from ordinary operations to EBITDA is available in Exhibit3).
EBIT is equal to profit from ordinary activities, adjusted for amortization of the purchase price for newly acquired entities allocated to the identifiable assets acquired.
Free cash flow is equal to EBITDA less: cash and other operating income and expenses, changes in working capital requirements, investing activities net of disposals, financial expenses net of financial income and tax paid.
EXHIBIT 2 :
Income statement, balance sheet, cash flow statement
1. INTERIM CONdensed SOLIDATED INCOME STATEMENT (reviewed)
2. INTERIM CONdensed CONSOLIDATED BALANCE SHEETS (reviEWED)
3. INTERIM condensed CONSOLIDATED CASH FLOW STATEMENTS (reviewed)
EXHIBIT 3
Impact of purchase price allocation (PPA)
(in millions of euros) H1 13 PPA Impact H1 13 reported
excl. PPA
---------------------------------------------------------------------------
Gross Profit 277 (-) 277
---------------------------------------------------------------------------
Operating expenses (174) (15) (189)
---------------------------------------------------------------------------
Profit from ordinary activities 103 (15) 88
Reconciliation of profit from ordinary activities to EBITDA
EBITDA represents profit from ordinary activities, restated to include the following:
* Provisions for impairment of tangible and intangible assets, net of reversals (including impairment of goodwill or other intangible assets with indefinite lives, but not provisions for impairment of inventories, trade and related receivables and other current assets), and provisions for risks and charges (both current and non-current) on the liability side of the balance sheet, net of reversals.
* Expenses related to the restatement of finance lease obligations on consolidation.
* Expenses recognized in connection with the award of stock options, free shares or any other payments to be accounted for using IFRS 2, Share-based Payment.
* Changes in the fair value of inventories in accordance with IFRS 3, Business Combinations, i.e. determined by calculating the selling price less costs to complete and sell.
Reconciliation
(in millions of euros) H1 13 H1 12
---------------------------------------------------------------------
Profit from ordinary activities 88 53
---------------------------------------------------------------------
Allocated assets amortization 15 14
---------------------------------------------------------------------
EBIT 103 66
---------------------------------------------------------------------
Other amortization and provisions for liabilities 15 13
Share based payment expenses 4 1
---------------------------------------------------------------------
EBITDA 122 80
---------------------------------------------------------------------
[1] On a like-for-like basis at constant exchange rates.
[2] Pro forma growth calculated on Transaction Services revenue for 2012, restated from January 1, 2012 to reflect the consolidation of Ogone in 2013.
[3] Tax rate: tax expense/(profit before income tax - share of profits of associates).
[4] Ratio based on last 12 months EBITDA
INGENICO: Outstanding results in the first half of 2013: http://hugin.info/143483/R/1719881/572473.pdf
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Source: INGENICO via Thomson Reuters ONE
[HUG#1719881]
INGENICO - Investors Contact Catherine Blanchet VP Investor Relations & Corp. Communication Email Contact Tel: +33 1.58.01.85.68 INGENICO - Press Contact Mathilde Ordas External Communication Manager Email Contact Tel: +33 1.58.01.80.80
