Press release

July 27, 2021

First-half 2021 results

With a strong increase in business in the first half of the year, Edenred resumes its pre-crisis growth trajectory

Edenred has much more than recovered the ground lost in revenue in first-half2020, with like-for-likegrowth of nearly 10% versus 2019

- +31%: like-for-like operating revenue growth in second-quarter 2021 versus second- quarter 2020

  • +15%: like-for-like operating revenue growth in first-half 2021 versus first-half 2020, with gains of more than 10% across all business lines and regions
  • +10%: like-for-like operating revenue growth in first-half 2021 versus first-half 2019

Margin improvement and strong cash generation

  • Total revenue: €757 million, up 15% like-for-like versus first-half 2020 (+9% as reported)
  • EBITDA: €295 million, up 21% like-for-like (+16% as reported), driving the EBITDA margin up 2 points, to 39%
  • Net profit, Group share of €133 million, up 33%
  • Strong cash generation, with funds from operations before other income and expenses (FFO) of €254 million, up 23%
  • Net debt: €1.45 billion, down slightly from June 30, 2020

Edenred upgrades its guidance for minimum like-for-like EBITDA growth in 2021by 3 points

  • Thanks to the relevance of its solutions and the strength of its sales dynamic, Edenred will continue to capitalize on the opportunities created by changes in the world of work and to further penetrate its markets
  • In certain regions still impacted by health restrictions in the second quarter (France and Latin America), the Employee Benefits business line is expected to gradually get back to pre-crisis levels
  • As a result, despite the uncertainties related to the development of the pandemic and the exit timing of the health crisis, Edenred is upgrading its guidance for like-for-like EBITDA growth to minimum 9% versus 6% previously
  • Edenred therefore intends to generate 2021 EBITDA of between €620 million and €670 million1

***

1 Based on the assumption of an average Brazilian real/euro exchange rate for 2021 equal to 6.35.

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Bertrand Dumazy, Chairman and Chief Executive Officer of Edenred, said: "After getting back to like-for-likegrowth across all business lines and all regions in first-quarter2021, Edenred succeeded in maintaining this momentum in the second quarter. With growth of nearly 10% compared with the first half of 2019, we have much more than recovered the ground lost in 2020. This shows that Edenred is returning to its pre-crisistrajectory of sustainable and profitable growth, which is why we are upgrading our minimum EBITDA growth guidance for the year. To continue on this path, our teams will leverage a comprehensive and innovative range of solutions in our three business lines to win over new clients of all sizes. By targeting underpenetrated markets and developing solutions that are particularly relevant to the world of work - which is increasingly centered around digital technology, automation and flexibility - Edenred will be able to harnessits huge growth potential in the coming years."

FIRST-HALF 2021 RESULTS

At its meeting on July 26, 2021, the Board of Directors reviewed the Group's consolidated interim financial statements for the six months ended June 30, 2021.

First-half 2021 key financial metrics:

(in € millions)

First-half

First-half

% change

% change

2021

2020

(like-for-like)

(reported)

Operating revenue

736

675

+15.3%

+9.2%

Other revenue (A)

21

21

+10.4%

-3.5%

Total revenue

757

696

+15.2%

+8.8%

EBITDA

295

255

+20.9%

+15.6%

Operating EBIT (B)

211

171

+27.8%

+23.5%

EBIT (A + B)

232

192

+25.8%

+20.5%

Net profit, Group share

133

100

+32.9%

  • Total revenue: €757 million

Total revenue for first-half 2021 amounted to €757 million, up 15.2% like-for-like compared with first-half 2020. The reported increase came to 8.8%, reflecting an unfavorable currency effect (-6.1%) and a slightly negative scope effect (-0.2%) during the period.

Total revenue for the second quarter was up 30.2% like-for-like and up 27.3% as reported, including a negative currency effect (-2.6%) and a slightly negative scope effect (-0.3%).

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  • Operating revenue: €736 million

Operating revenue for the first six months of 2021 came to €736 million, up 15.3% like-for-like versus the prior-year period, reflecting double-digit growth in all business lines and in all major regions. On a reported basis, an unfavorable currency effect (-5.9%) and a slightly negative scope effect (-0.2%) resulted in growth of 9.2%.

After an encouraging start to the year, nonetheless still impacted by health restrictions, this good performance was achieved thanks to the continued rebound in business during the second quarter, when operating revenue rose by 30.6% like-for-like and by 27.9% as reported.

Compared with first-half 20192, like-for-like growth came to 9.6%. This means that the Group has much more than recovered the ground lost in first-half 2020, even though some of its operations were still impacted by the health crisis, notably the Employee Benefits business in Latin America.

Edenred has therefore demonstrated its ability to return to a high level of growth, thanks to the relevance of its offering - which includes innovative new solutions such as the Télétravail platform launched in France during the period - and a sales dynamic that enables the Group to continue penetrating its markets. The number of new contracts signed with SMEs in the first half of 2021, for example, was equivalent to that in the same period in 2019.

  • Operating revenue by business line

(in € millions)

First-half

First-half

% change

% change

2021

2020

(like-for-like)

(reported)

Employee Benefits

448

412

+13.4%

+8.8%

Fleet & Mobility Solutions

190

173

+20.1%

+10.1%

Complementary Solutions

98

90

+14.8%

+9.4%

Total

736

675

+15.3%

+9.2%

The Employee Benefits business line, which accounted for 61% of the Group's business, generated €448 million in operating revenue in first-half 2021, representing like-for-like growth of 13.4% (+8.8% as reported), including a sharp 31.5% rise in the second quarter on a like-for-like basis (+29.5% as reported).

With a like-for-like increase in operating revenue of 3.3% versus first-half 2019, Edenred has successfully neutralized the decrease recorded in 2020. This was achieved notably thanks to a robust performance in Europe, despite the fact that business continues to be impacted by a still challenging health situation in Latin America and that most of the funds accumulated on prepaid solutions have not yet been spent via the Group's network of partner merchants, notably in France.

2 Like-for-like comparisons with 2019 correspond to the sum in euros of like-for-like growth for the period in 2020 and 2021.

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During the first half of 2021, Edenred continued to roll out its initiatives aimed at offering the most seamless experience possible to its clients, its partner merchants and the users of its products. For example, Edenred has now deployed its virtual Ticket Restaurant solution without a plastic card in France, Spain, Finland, Italy and Poland, enabling employers to equip their workers quickly, simply and securely, particularly at a time when remote working is becoming increasingly widespread. Accelerated by the health crisis, this dramatic change in the world of work is also creating new opportunities for the Group to further penetrate its markets. Thanks to the partnerships Edenred started forging back in 2018, Ticket Restaurant now has more than 100 online partners in 16 countries, including both international and local meal delivery platforms. This flexible and innovative experience notably led Gecina, the leading owner of office space in Europe, to work with Edenred to integrate the Group's solutions into its offer for its 100,000 customers and users in France.

In the Fleet & Mobility Solutions business line, which accounted for 26% of the Group's business, operating revenue came to €190 million in the first half of the year, up 20.1% like-for-like over the period (+10.1% as reported), and up 40.0% in the second quarter (+35.6% as reported).

First-half operating revenue was 17.3% higher than in first-half 2019, notably reflecting the commercial success of Edenred's solutions for fleet managers and its "Beyond Fuel" strategy. "Beyond Fuel" was strengthened during first-half 2021 by innovations such as the cloud-based platform in Brazil, which gives fleet managers direct access to all their services, and by the expansion of the UTA One toll solution to five more countries.

The Complementary Solutions business line, which includes Corporate Payment Services, Incentive & Rewards and Public Social Programs, generated operating revenue of €98 million in first-half 2021, representing an increase of 14.8% like-for-like (+9.4% as reported). For the second quarter alone, growth came to 11.7% like-for-like (+8.5% as reported).

Compared with first-half 2019, operating revenue for the Complementary Solutions business line was up 26.7%.

The growth recorded by this business line notably reflects the Group's ability to implement new, specific earmarked funds programs designed, for instance, to help public authorities effectively combat the impacts of Covid-19. One example is the fully digital food aid program deployed in Romania to provide elderly people on low incomes with a purchasing power supplement for food.

In Corporate Payment Services, business improved during the period, with revenue back to first-half 2019 levels despite the number of transactions remaining lower in certain sectors, such as hotels and media. The improvement was the result of new client wins, achieved partly thanks to the partnerships recently signed by CSI with Citi and Sage. These wins confirm the growing interest among North American companies in automated, digital accounts payable services, which are particularly well suited to new ways of working and available 24/7 thanks to their integration into the cloud.

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  • Operating revenue by region

(in € millions)

First-half

First-half

% change

% change

2021

2020

(like-for-like)

(reported)

Europe

475

411

+15.1%

+15.4%

Latin America

204

203

+17.2%

+0.8%

Rest of the World

58

61

+10.3%

-4.6%

Total

736

675

+15.3%

+9.2%

In Europe, operating revenue amounted to €475 million in first-half 2021, an increase of 15.1% like-for-like and of 15.4% as reported. Growth in the second quarter alone came to 28.7% like- for-like and 29.3% as reported. The region represented 64% of Group operating revenue.

Compared with first-half 2019, operating revenue for the region was up 11.2% like-for-like, reflecting a return to above-2019 levels both in France and in Europe excluding France.

In France, operating revenue amounted to €135 million, representing an increase of 21.1% both like-for-like and as reported. In the second quarter, growth came to a strong 59.6% like-for-like and as reported. After the implementation of local lockdowns in the first quarter, lockdown measures were extended to the whole country at the beginning of the second quarter. Against this backdrop, Edenred recorded a very good sales performance in France, notably with Ticket Restaurant, the leading digital solution on the market. In addition, the gradual reopening of restaurants from May 19 contributed to an acceleration in the use of funds allocated to employees, which had accumulated through to the end of first-quarter 2021.

Operating revenue in Europe excluding France totaled €340 million in first-half 2021, an increase of 12.9% like-for-like (+13.3% as reported), driven by a good sales performance. Second-quarter operating revenue rose by 19.9% like-for-like (+20.6% as reported). In Employee Benefits, the gradual easing of health restrictions and the reopening of restaurants facilitated the use of Edenred's solutions. Revenue growth in the Fleet & Mobility Solutions business line was driven by new client wins, the continuation of the "Beyond Fuel" strategy, notably with the success of toll solutions, and a recovery in economic activity in the region's countries.

Operating revenue in Latin Americaamounted to €204 million, up 17.2% like-for-like in the first half (+0.8% as reported), with a 37.8% like-for-like increase in the second quarter (+31.9% as reported). The region represented 28% of total consolidated operating revenue in first-half 2021.

Operating revenue for the region was up 6.0% on a like-for-like basis compared with first-half 2019, reflecting higher business levels than in 2019 in both Brazil and Hispanic Latin America.

In Brazil, operating revenue growth came to 19.4% like-for-like(-0.9% as reported) in the first six months of the year, including a 40.9% like-for-like increase in the second quarter. The success of "Beyond Fuel" maintenance and toll management solutions continued to drive growth in Fleet & Mobility Solutions, while Employee Benefits recorded a strong

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Edenred SA published this content on 27 July 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 July 2021 07:19:05 UTC.