INGENICO : Very strong annual performance in 2012
February 27, 2013 - Neuilly-sur-seine, France
* Strong increase in 2012 revenue to EUR1.206 billion, up 20% on a
reported basis and 14.5% on a comparable basis[1]
* Proven ability to increase margins while investing in future
sources of growth
* EBITDA up 24% to 18.5% of revenue
* Profit attributable to Ingenico S.A. shareholders up 71%
to EUR97 million
* Free cash flow up 82% to EUR125 million
* Proposed dividend of EUR0.70 euro, up 40%
* 2013 outlook at constant perimeter: like-for-like growth greater
or equal than 8% and EBITDA margin exceeding 18.5%
Paris, February 27, 2013 - Ingenico (Euronext: FR0000125346 - ING)announcedtoday its fourth quarter 2012 revenue and its audited financial statementsforthe full year ended December 31, 2012.
|2012 | 2011 2011 | 2012/2011 | Key figures | | restated restated| change | (in millions| |pro forma reported| | Euro) | | [2] [3] [3] | | | | | | | | | |-------------+-----+-------------------+---------------------------------+ | | | Comparable Reported basis,| | | | basis [2] restated [3] |-------------+-----+-------------------+---------------------------------+ Revenue |1 206| 1 022 1 001 | 14% [1] +20% |-------------+-----+-------------------+---------------------------------+ EBITDA | 223 | 184 180 | 21% +24% | | | | | As a % of|18.5%| 18.0% 18.0% | +50 bpts +50 bpts | revenue | | | |-------------+-----+-------------------+---------------------------------+ EBIT | 190 | 153 151 | 24% +26% | | | | | As a % of|15.7%| 14.9% 15.1% | +80 bpts +60 bpts | revenue | | | |-------------+-----+-------------------+---------------------------------+ Net Profit | 97 | - 56 | - +71% | attributable| | | | to | | | | shareholders| | | |-------------+-----+-------------------+---------------------------------+
Philippe Lazare, Chairman and CEO of Ingenico, commented: "Ingenico hasonceagain performed outstandingly in 2012 in an unsettled macroeconomicenvironment.Fueled by innovation and products, growth has been strong in all oursegments.As a result, we have strengthened our positions in our legacy markets whilesteadily developing in emerging markets.
We have also significatively increased our margins and cash flow, whileinvesting heavily in high-growth markets and mobile payment.
Our acquisition of Ogone is particularly positive news. We can nowimplement ourstrategy more effectively and expand our offer to include multi-channelpaymentsolutions for merchants and acquirers.
Finally, Ingenico will consolidate its lead by leveraging its diversifiedinternational footprint, its innovative strength, its move into multi-channeldelivery solutions and a long-term relevant strategy. So we have everyreason tofeel confident about the outlook for 2013 and anticipate further growth inrevenue and profitability."
Subsequent events
Agreement for the acquisition of Ogone, leading pan-European online paymentservices provider
On January 29, Ingenico announced it has reached an agreement in principlewithSummit Partners to acquire Ogone, the leading pan-European online paymentservices provider for an enterprise value of EUR 360 million.
This acquisition represents a key milestone in the execution of Ingenico'sstrategy of becoming the unique "one-stop-shop" provider covering multi-channelpayment solutions: point-of-sale, online and mobile. The finaldocumentation andclosing are expected in the end of Q1 2013.
In 2012, with more than 280 employees, Ogone reached EUR 42 million ofrevenue,with an EBITDA margin of around 30%. The recent commercial initiatives,including the Barclaycard white-label contract win, should generate arevenuegrowth in excess of 30% in 2013.
2012 Results
Key figures
(in million euros) FY2012| FY2011 pro FY2011 | | forma restated 2 3 Reported restated 3 |-----------------------------+--------------------------------------------+ Revenue 1 206 | 1 022 1 001 | | | Adjusted gross profit 513 | 425 413 | | | As % of revenue 42.5% | 41.6% 41.3% | | | Adjusted operating (323) | (272) (263) | expenses | |-----------------------------+--------------------------------------------+ Profit from ordinary | | activities, adjusted 190 | 153 151 | (EBIT) | | | | As % of revenue 15.7% | 14.9% 15.1% |-----------------------------+--------------------------------------------+ Profit from operating 164 | - 107 | activities | |-----------------------------+--------------------------------------------+ Net profit 100 | - 58 |-----------------------------+--------------------------------------------+ Net profit 97 | - 56 | attributable to | | shareholders | |-----------------------------+--------------------------------------------+ EBITDA 223 | 184 180 | | | 18.5% | 18.0% 18.0% |-----------------------------+--------------------------------------------+ Free Cash Flow 125 | - 69 |-----------------------------+--------------------------------------------+ Net debt 75 | - 110 | | | Equity attributable 689 | - 623 | to shareholders | |-----------------------------+--------------------------------------------+ Revenue: up 14% +------------------+-------------------------+------------------------+| | 2012 | Fourth quarter 2012 || +-----+-------------------+----+-------------------+| | MEUR| Change 2012/2011 |MEUR| Change 2012/2011 || | +----------+--------+ +----------+--------+| | |Comparable|Reported| |Comparable|Reported|+------------------+-----+----------+--------+----+----------+--------+|Europe-SEPA | 507 | 9% | 12% |131 | -2% | -1% |+------------------+-----+----------+--------+----+----------+--------+|Latin America | 211 | 29% | 22% |66 | 31% | 22% |+------------------+-----+----------+--------+----+----------+--------+|Asia-Pacific | 207 | 13% | 23% |73 | 27% | 35% |+------------------+-----+----------+--------+----+----------+--------+|North America | 91 | 9% | 17% |31 | 3% | 9% |+------------------+-----+----------+--------+----+----------+--------+|EEMEA | 90 | 16% | 17% |26 | -2% | 0% || | | | | | | ||Central Operations| 100 | 23% | 98% |25 | 18% | 56% |+------------------+-----+----------+--------+----+----------+--------+|Total |1 206| 14% | 20% |353 | 10% | 13% |+------------------+-----+----------+--------+----+----------+--------+
Performance for the year
In 2012, revenue totaled EUR1,206 million, up 20 percent on a reportedbasis. Thisincluded a positive foreign exchange impact of EUR25 million. Total revenueincluded EUR981 million generated by the Payment Terminal activity(hardware,servicing and maintenance) and EUR225 million generated by TransactionServices.
On a comparable basis,(1) revenue was 14 percent higher than the 2011 proformafigure, thanks to vigorous growth across all segments. Revenue from PaymentTerminals increased by 13 percent, driven by high growth in emergingeconomies,a changing competitive landscape and product offers tailored to thedifferentgeographic areas. Revenue from Transaction Services also continued toincrease(up 23 percent) thanks to TransferTo's expanding business and theincreasinginternational presence of easycash and Axis payment solutions. ExcludingTransferTo, organic growth in Transaction Services reached 8 percent in2012.
All regions contributed to the Group's overall strong performance. Duringtheyear, Ingenico took full advantage of the changing competitive landscapeandhigh growth in the emerging markets,[4] whose share of total revenueincreasedfrom 45 percent in 2011 to 48 percent.
- The pace has accelerated in Latin America (up 29 percent), the main driver being extremely strong growth in Brazil, where the Group has taken advantage of a rapidly expanding payment terminal business and a greater share of the market. - Rapid growth has continued in Asia-Pacific (up 13% percent), as Ingenico has consolidated its strong foothold in China and expanded its market presence in Southeast Asia, notably in Indonesia. - Business in the EEMEA region is up by 16 percent. In particular, sales activity has increased in Russia where Ingenico strengthened its direct presence by acquiring its distributor during the year.
Sales performance was likewise very strong in Europe (up 9 percent). InPaymentTerminals, Ingenico took full advantage of a changing competitive landscapeinthe most important markets, above all in the United Kingdom, France andCentralEurope.
And finally, as expected, business grew in North America (up 9 percent).Saleswere up 9 percent in the U.S., where the Group marketed its Telium terminalrange (EMV and contactless) to large retail, but also to a lesser andincreasingextent to merchants through distributor networks and ISOs (IndependentSalesOrganizations).
The Group's Central Operations"division reported 23 percent growth, due toexpanding business for TransferTo.
Services, Maintenance and Transactions accounted for 30 percent of totalrevenue, with Transactions alone contributing 19 percent, up approximately2points compared with the reported figure for 2011.
Performance in the fourth quarter
In the fourth quarter 2012, revenue totaled EUR353 million, up 13 percenton areported basis. This included a positive foreign exchange impact of EUR5million.Total revenue included EUR294 million generated by the Payment Terminalactivity(hardware, servicing and maintenance) and EUR59 million generated byTransactionServices.
On a comparable basis,(1) revenue was 10 percent above the Q4 2011 proformafigure. Revenue in Payment Terminals was up 10 percent, even with anunfavorablebasis of comparison with Q4 2011, when growth was particularly strong inEurope-SEPA (independently of underlying economic conditions) and Latin America.Organic growth in Transaction Services increased by 9 percent, or by 3percentexcluding TransferTo.
During the fourth quarter, Ingenico exceeded expectations with continuedhighgrowth in Latin America (up 31 percent). The primary driver was stillBrazil,where the Group capitalized on its expanding market share.
As expected, revenue increased significantly in Asia-Pacific (up 27percent),with China and Southeast Asia as key contributors. Although performance inEurope-SEPA (down 2 percent) was affected by an unfavorable basis ofcomparison,business has remained robust in most countries.
In North America (up 3 percent), sales increased considerably in Canada,whileperformance in the United States was impacted by the postponement,requested bya major chain store, of a large shipment starting in the first quarter of2013.The Group remains confident, however, about the business outlook in theUnitedStates, given that contracts have already been signed with large-scaleretailersand intermediaries/ISO to equip small merchants.
Gross margin high - up 90 basis points
On a pro forma basis, gross margin increased by 90 basis points to 42.5percentin 2012. The main driver of this performance was the 200 basis pointincrease ingross margin in Payment Terminals (hardware, servicing and maintenance) to44.4percent of revenue, mostly due to strong volume growth and the Group'sprocurement power.
Gross profit on Transaction Services was 34.4 percent, compared with 37.4percent in 2011 on a pro forma basis, reflecting TransferTo's growth, whichhasa dilutive impact on gross profit. Excluding TransferTo, gross profit was44.3percent in 2012 versus 44.7 percent in 2011 pro forma.
Operating expenses under control at 26.8 percent of revenue
In 2012, adjusted operating expenses stood at EUR323 million, as againstEUR272million in 2011 on a pro forma basis. This increase was primarilyattributableto higher performance-based sales expenses, along with R&D investments infuturesources of growth, particularly in the United States and in the mobilepaymentsegment. The higher general and administrative expenses reflect the moveinitiated in 2011 to expand support functions at Group and regional level.In2012, adjusted operating expenses were stable at 26.8 percent of revenue,asagainst 26.7 basis percent of revenue in 2011 (pro forma).
As expected, adjusted operating expenses in the second half of 2012 werestableat EUR163 million as against EUR160 million in the first half, notably asthe resultof a decrease in general and administrative expenses. The Group thus droveoperating expenses down by 490 basis points to 24.6 percent of revenuecomparedwith the first half of 2012.
EBITDA up 21 percent
EBITDA increased by 21 percent to EUR223 million, up from EUR184 million in2011(restated pro forma figures). The EBITDA margin increased by 50 basispoints to18.5 percent of revenue, as against restated pro forma 2011.
EBIT margin up 80 basis points
In 2012, EBIT increased by 24 percent to EUR190 million, compared withEUR153million in 2011 (restated pro forma figures). The EBIT margin was 15.7percentof revenue, up by 80 basis points.
Continued significant growth in profit from operations: 54 percent
In 2012, other operating income and expenses showed net income of EUR1.0million,versus an EUR18 million net expense in 2011. This improvement reflects thepositive impact of remeasurement of ROAM Data's assets and liabilitiesafter theGroup gained control of this entity in February 2012, as well as higherotherexpenses in 2011.
Purchase Price Allocation expenses held steady at EUR26 million.
Profit from operations is up by 54 percent to EUR164 million from EUR107million in2011. Operating margin increased by 290 basis points to 13.6 percent ofrevenue.
Net profit attributable to Ingenico S.A. shareholders up 71 percent toEUR97million
In 2012, the net profit attributable to Ingenico S.A. shareholders wasEUR97million, up from just EUR56 million in 2011.
This result includes a decrease in net finance costs to EUR14 million (downfromEUR26 million in 2011): the non-recurring expenses on the syndicated loanfacilityrefinanced in August 2011 were over, and losses by equity-accountedassociateswere much lower than in the previous year.
Income tax expense increased from EUR22 million in 2011 to EUR50 million in2012.The tax rate stood at 33.1 percent[5] in 2012, compared with 26.9 percentin2011, due primarily to a shift in the Group's sources of profit towardhigher-tax jurisdictions and the lack of factors favorable to deferred taxrecognition.
Proposed dividend of 0.70 euro per share, up 40 percent
In 2012, net earnings per share were EUR1.87, up from EUR1.11 in 2011. TheBoard ofDirectors will be proposing that the shareholders vote at their AnnualMeetingof April 29, 2013 to distribute a dividend of EUR0.70 per share, withdividendspayable in cash or in shares, at the option of the holder.
A sound financial position
Total equity attributable to shareholders increased to EUR689 million.
Net debt decreased to EUR75 million at December 31, 2012 from EUR110million atDecember 31, 2011.
During the year, Ingenico's operations generated free cash flow of EUR125million,up 82 percent. This increase is mainly attributable to a strong increase inEBITDA to EUR223 million and good control over working capital, with asurplus ofEUR3 million, versus a EUR30 million deficit in 2011. This was madepossible bystrict management of inventories and trade receivables, and by higher nettradepayables in a period of strong business expansion. At the same time,Ingenicocontinued to invest to support Group expansion, with investing activitiesnet ofdisposals totaling EUR44 million.
The main cash outflows in 2012 were EUR14 million in dividend payments(EUR0.50 pershare) in respect of 2011 and the acquisitions carried out during the year,totaling EUR69 million net of disposals, and notably: the Group gained acontrolling interest in ROAM Data, acquired its distributor in Russia andstrengthened its strong positions in China, exercising a put option onLandishares and forming a joint venture with ZTE to develop a mobile paymentacceptance network for merchants in China.
Ingenico's financial ratios at December 31, 2012 demonstrate the Group'ssoundfinancial position. The net to equity ratio was 11 percent, while the netdebt to EBITDA(1) ratio was 0.3.
2013 outlook
In a contrasting macroeconomic environment, the Group has begun 2013 withfullconfidence in its ability to sustain the momentum - in terms of bothrevenue andprofitability - thanks to its excellent positioning, its wide range ofsolutionsand its recent strategic investments.
In this early portion of the year, business seems to be holding up well andshould continue to expand in emerging markets and North America. The Groupreminds that 2011 represents a very high basis of comparison, given thatindependently of underlying economic conditions, revenue in that periodwereparticularly high in the Europe SEPA Region and in Latin America as thecompetitive landscape changed significantly.
In this context and not including the impact of the Ogone acquisition,whichshould be completed by the end of the first quarter, Ingenico should post arevenue growth greater or equal than 8% on a comparable basis (on a like-for-like basis at constant exchange rates) and an EBITDA1 margin growth of18.5% orhigher.
CONFERENCE CALL
A conference call to discuss Ingenico's 2012 results will be held onFebruary27, 2013 at 6.00 p.m., Paris time. Dial in number: 01 70 99 32 12 (Frenchdomestic) or +44 (0)20 7162 0177 (international). The presentation willalso beavailable on www.ingenico.com/finance.
This press release contains forward looking statements. The trends andobjectives given in this release are based on data, assumptions andestimatesconsidered reasonable by Ingenico. These data, assumptions and estimatesmaychange or be amended as a result of uncertainties connected in particularwiththe performance of Ingenico and its subsidiaries. These statements are bytheirnature subject to risks and uncertainties as described in Ingenicoregistrationdocument ("document de reference"). These forward looking statements in nocaseconstitute a guarantee of future performance, and involve risks anduncertainties. Actual performance may differ materially from that expressedorsuggested in the forward looking statements. Ingenico therefore makes nofirmcommitment on the realization of the growth objectives shown in thisrelease.Ingenico and its subsidiaries, as well as their executives,representatives,employees and respective advisors, undertake no obligation to update orreviseany forward looking statements contained in this release, whether as aresult ofnew information, future developments or otherwise.
About Ingenico (Euronext: FR0000125346 - ING)
Ingenico is a leading provider of payment solutions, with over 20 millionterminals deployed in more than 125 countries. Its 4,000 employeesworldwidesupport retailers, banks and service providers to optimize and secure theirelectronic payments solutions, develop their offer of services and increasetheir point of sales revenue. More information on www.ingenico.com |twitter.com/Ingenico. |
Next events FY12 conference call: February 27 2013 at 6pm (Paris) Investor Day: March 26 2013 (London) Q1 13 revenue release: April 24 2013 EXHIBIT 1: Basis for preparing the 2012 annual accounts
The consolidated financial data has been drawn up in accordance withInternational Financial Reporting Standards. In order to provide meaningfulcomparable information, that data has been presented on an adjusted basis,i.e.restated to reflect the depreciation and amortization expenses arising ontheacquisition of new entities. Pursuant to IFRS 3 and to IFRS3R, the purchaseprice for new entities is allocated to the identifiable assets acquired andsubsequently amortized over specified periods.
As of 2012, foreign exchange gains and losses from translation ofoperationsdenominated in foreign currency (including the effective portion of anyrelatedhedging instruments) are now recognized in cost of sales, instead of in netfinance costs. To facilitate comparison, the income statements for the halfyearended June 30, 2011 and the fiscal year ended December 31, 2011 have beenrestated and are available in Exhibit 3.
The main financial data for 2012 is discussed on an adjusted basis, i.e.,beforePurchase Price Allocation (PPA); see Exhibit 4.
To facilitate the assessment of Ingenico's performance in 2012, revenue andkeyfinancial figures for first half 2011 have been restated from January 1,2011 toreflect the change in the scope of consolidation which have occurred during2011 fiscal year (acquisition of TNET, Paycom and XIRING) and the change intherecognition of foreign exchange gains and losses arising on translation oftransactions denominated in foreign currency (« pro forma 2011restated »).
EBITDA is not an accounting term; it is a financial metric defined here asprofit from ordinary activities before amortization, depreciation andprovisionsand before expenses of shares distributed to employees and officers (thereconciliation of profit from ordinary operations to EBITDA is available inExhibit3).
EBIT is equal to profit from ordinary activities, adjusted for amortizationofthe purchase price for newly acquired entities allocated to theidentifiableassets acquired.
Free cash flow is equal to EBITDA less: cash and other operating income andexpenses, changes in working capital requirements, investing activities netofdisposals, financial expenses net of financial income and tax paid.
EXHIBIT 2: Income statement, balance sheet, cash flow statement 1. CONSOLIDATED INCOME STATEMENT (AUDITED) 2. CONSOLIDATED BALANCE SHEETS (AUDITED) 3. CONSOLIDATED CASH FLOW STATEMENTS (AUDITED) EXHIBIT 3: Impact of evolution of recognition of foreign exchange gains and losses
As of 2012, foreign exchange gains and losses from translation ofoperationsdenominated in foreign currency (including the effective portion of anyrelatedhedging instruments) are now recognized in cost of sales, instead of in netfinance costs. The income statements for the fiscal year ended December31, 2011 have been restated to facilitate comparison.
2011 (in million euros) |2011 Reported| Adjustments| Reported Restated|----------------------------+-------------+------------+------------------+ Revenue | 1001 | - | 1001 | | | | | Adjusted gross profit | 417 | (4) | 413 | | | | | Adjusted operating expenses| (262) | - | (262) |----------------------------+-------------+------------+------------------+ Profit from ordinary | 155 | (4) | 151 | activities, adjusted (EBIT)| | | |----------------------------+-------------+------------+------------------+ Profit from operating | 111 | (4) | 107 | activities | | | |----------------------------+-------------+------------+------------------+ Financial result and equity| (30) | +4 | (26) | method | | | |----------------------------+-------------+------------+------------------+ Net profit before tax | 81 | - | 81 |----------------------------+-------------+------------+------------------+ Net profit | 58 | - | 58 |----------------------------+-------------+------------+------------------+ Net profit attributable to | 56 | - | 56 | Shareholders | | | |----------------------------+-------------+------------+------------------+ EBITDA | 184 | (4) | 180 |----------------------------+-------------+------------+------------------+ EXHIBIT 4: Impact of purchase price allocation (PPA) (in millions of euros) 2012 PPA Impact 2012 reported excl. PPA--------------------------------------------------------------------------- Gross Profit 513 (-) 513--------------------------------------------------------------------------- Operating expenses (323) (26) (349)--------------------------------------------------------------------------- Profit from ordinary activities 190 (26) 164--------------------------------------------------------------------------- Reconciliation of profit from ordinary activities to EBITDA EBITDA represents profit from ordinary activities, restated to include thefollowing: * 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) 2012 2011 pro forma 2011 reported restated restated--------------------------------------------------------------------------- Profit from ordinary 163 127 125 activities--------------------------------------------------------------------------- Allocated assets 26 26 26 amortization--------------------------------------------------------------------------- EBIT 190 153 151--------------------------------------------------------------------------- Other amortization and 29 27 25 provisions for liabilities Share based payment 5 4 4 expenses--------------------------------------------------------------------------- EBITDA 223 184 180--------------------------------------------------------------------------- --------------------------------------------------------------------------- [1] On a like-for-like basis at constant exchange rates. [2] Data restated to reflect the Group's structure at January 1, 2012. [3] Data restated to reflect a change in the recognition of exchange gainsorlosses on operations denominated in foreign currency. [4] The term "emerging markets" refers here to Latin America, Asia Pacific,EEMEA and TransferTo. [5] Tax rate: tax expense/(profit before income tax - share of profits ofassociates).
INGENICO:http://hugin.info/143483/R/1681702/549854.pdf
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