Edenred : Q3 Revenue / 2021 10 21 edenred q3 revenue pr eng vdef

Press release

October 21, 2021

Third-quarter 2021 revenue

Full-year 2021 outlook upgraded, supported by double- digit like-for-like growth in the third quarter

On the back of the success of its innovative solutions and the strong momentum in its direct and indirect sales channels, Edenred's operating revenue in the third quarter was

13% higher than its 2019 pre-health-crisis baseline year on a like-for-like basis:

• Operating revenue at €393 million in the third quarter, up 13.6% (+12.7% like-for-like)on third-quarter2020, and up 13.0% like-for-like on third-quarter 20191
• Acceleration in like-for-like growth in the third quarter versus third-quarter 2019 in the Group's three main regions, after the good performance already reported in first-half2021
• Double-digitlike-for-like growth in all business lines compared to third quarter 2019
• For the nine months ended September 30, 2021, Edenred recorded operating revenue of €1,130 million, up 14% like-for-likeon the same period in 2020 and up 11% on the first nine months of 2019

In light of its year-to-date performance and growth momentum, Edenred is confident in its ability to generate full-year2021 EBITDA in the upper half of its target range (between €620 million and €670 million2, press release dated July 27, 2021), providing there are no

new major restrictions as a result of the health crisis.

Lastly, assuming no major pandemic surge, Edenred is reinstating the objectives set inits "Next Frontier" 2019-2022strategic plan:

• Like-for-likeannual operating revenue growth of more than 8%
• Like-for-likeannual EBITDA growth of more than 10%
• Annual free cash flow/EBITDA conversion rate of more than 65%3

***

1. Like-for-likecomparisons with 2019, the pre-health-crisis baseline year, correspond to the sum in euros of growth for the period in 2020 and 2021 based on constant exchange rates and scope of consolidation.
2. Based on the assumption of an average Brazilian real/euro exchange rate for 2021 equal to 6.35.
3. Based on constant regulations and methods.

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Bertrand Dumazy, Chairman and Chief Executive Officer of Edenred, said: "After a good first half, the Group's strong performance in the third quarter demonstrates the pertinence of our solutions as well as the strength of our sales strategy. Global leader in earmarked funds, the Group's unrivaled human, commercial, technological and financial strengths will enable it to continue delivering sustainable and profitable growth going forward. Thanks to its investments, Edenred is at the forefront of the sweeping changes affecting the world of work, improving the customer experience and making its products more efficient and user-friendly.For instance, the deployment of our fully digital, plasticless solutions, is in step with the changes in our society and the shift towardsa more digital and responsible world.

Building on this momentum, we are upgrading our outlook for full-year 2021 and are now expecting EBITDA in the upper half of the target range announced in July. Further, provided there is no major resurgence of Covid-19 resulting in fresh restrictions on our main markets, for 2022 we are reinstating the growth, profitability and cash generationobjectives set out in our "Next Frontier" 2019-2022strategic plan."

THIRD QUARTER AND NINE-MONTH 2021 TOTAL REVENUE

		Third-		Third-	% change	% change
(in € millions)			(like-for-
	quarter 2021		quarter 2020	(reported)
			like)
Operating revenue		393		346	+12.7%	+13.6%
Other revenue		11		11	+9.0%	+8.2%
Total revenue		405		357	+12.6%	+13.4%
		First nine		First nine	% change	% change
(in € millions)			(like-for-
	months 2021		months 2020	(reported)
			like)
Operating revenue		1,130		1,021	+14.4%	+10.7%
Other revenue		32		32	+10.0%	+0.4%
Total revenue		1,162		1,053	+14.3%	+10.4%

• Total revenue

For the third quarter of 2021, total revenue amounted to €405 million, up 12.6% like-for-like compared with third-quarter 2020. The reported increase was 13.4% and included a favorable currency effect (+1.2%) and a slightly negative scope effect (-0.4%) for the period.

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For the first nine months of 2021, total revenue amounted to €1,162 million, a rise of 14.3% like-for-like versus the same period in 2020, and of 10.4% as reported, including a negative exchange rate impact (-3.6%) and a slightly negative currency effect (-0.3%).

• Operating revenue

Operating revenue for third-quarter 2021 came to €393 million, up by 12.7% like-for-like and by 13.6% as reported versus the third quarter of 2020. Compared with third-quarter 2019, Edenred generated double-digit organic growth in each of its business lines and in each of its regions except Hispanic Latin America, which continues to be affected by a challenging health situation.

Posting a like-for-like increase of 13.0% on its 2019 baseline year, Edenred accelerated its growth in third-quarter 2021, after a like-for-like growth of almost 10% in first-half 2021 versus first- half 2019. This performance reflects the dynamism of Edenred's sales teams as well as the Group's ability to continuously enhance its portfolio and offer its clients innovative digital solutions.

Operating revenue for the first nine months of 2021 was up by 14.4% like-for-like and by 10.7% as reported compared with the same period in 2020, including a negative exchange rate impact (-3.5%) and a slightly negative currency effect (-0.3%).

• Operating revenue by business line

		Third-quarter		Third-quarter	% change	% change
(in € millions)			(like-for-
	2021		2020	(reported)
			like)
Employee Benefits		233		207	+12.2%	+12.9%
Fleet & Mobility Solutions		110		89	+22.2%	+24.0%
Complementary Solutions		50		51	-1.6%	-1.7%
Total		393		346	+12.7%	+13.6%
		First nine		First nine	% change	% change
(in € millions)			(like-for-
	months 2021		months 2020	(reported)
			like)
Employee Benefits		682		619	+13.0%	+10.2%
Fleet & Mobility Solutions		300		262	+20.8%	+14.8%
Complementary Solutions		148		140	+8.9%	+5.4%
Total		1,130		1,021	+14.4%	+10.7%

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Revenue for the Employee Benefits business line, which accounts for 59% of the Group's total operating revenue, was €233 million in third-quarter 2021, a 12.2% like-for-like increase year on year (+12.9% as reported).

Revenue for the business line accelerated sharply compared to the third quarter of 2019, up 10.1% like-for-like (+3.3% in the first half). This acceleration was driven by the strong appeal of the virtual canteen solution, as well as by new client wins in the small- and medium-sized business segment. Amidst a more stable health situation in Europe and an improving situation in Brazil, reopenings of partner merchants - and particularly restaurants - also contributed to this performance.

For the nine months ended September 30, 2021, operating revenue for the business came to €682 million, up 13.0% like-for-like (+10.2% as reported) compared to the same period in 2020.

In the Fleet & Mobility Solutions business line, which accounts for 28% of the Group's total operating revenue, operating revenue for third-quarter 2021 amounted to €110 million, up 22.2% like-for-like (+24.0% as reported) compared to third-quarter 2020.

Compared to the third quarter of 2019, the business reported further strong double-digit growth in operating revenue on a like-for-like basis (+18.1%), on a par with first-half 2021 (+17.3% versus first-half 2019). This performance was driven by a robust sales momentum and by the success of the "Beyond Fuel" strategy, integrating services such as maintenance and toll management solutions. The extended coverage of the single European toll box UTA One, which now provides a toll payment solution for 15 countries, illustrates the continuing deployment of this strategy.

For the nine months ended September 30, 2021, operating revenue for the business came to €300 million, up 20.8% like-for-like (+14.8% as reported) compared to the same period in 2020.

The Complementary Solutions business line, which includes Corporate Payment Services, Incentive & Rewards Solutions and Public Social Programs, generated operating revenue of €50 million in the third quarter of 2021, up 15.9% like-for-like compared to third-quarter 2019, reflecting the strong momentum in this business line. Development continued apace in Corporate Payment Services, driven in particular by the distribution partnerships signed in North America with several banks (including Citi) and accounting software suppliers (such as Sage for its Sage Intacct solution). However, the volume of transactions remains down on third-quarter 2019 in certain sectors worst affected by the health situation, particularly Hotels.

Compared to the third quarter of 2020, operating revenue for the business was down 1.6% like- for-like(-1.7% as reported), attributable to the fact that in the third quarter of 2020, Edenred had set up several earmarked fund programs to support those worst affected by the pandemic. However, with the end of lockdown periods, some of these programs were terminated, such as those supporting pupils from low-income families in the United Kingdom.

For the nine months ended September 30, 2021, operating revenue for the business line came to €148 million, up 8.9% like-for-like (+5.4% as reported) compared to the same period in 2020.

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Operating revenue by region

(in € millions)		Third-quarter		Third-quarter	% change	% change
	2021		2020	(like-for-like)	(reported)
Europe		241		224	+7.0%	+7.5%
Latin America		120		95	+22.0%	+26.2%
Rest of the World		33		27	+27.6%	+19.7%
Total		393		346	+12.7%	+13.6%

(in € millions)		First nine		First nine	% change	% change
	months 2021		months 2020	(like-for-like)	(reported)
Europe		716		635	+12.3%	+12.6%
Latin America		324		298	+18.7%	+8.9%
Rest of the World		90		88	+15.7%	+2.9%
Total		1,130		1,021	+14.4%	+10.7%

In Europe, operating revenue amounted to €241 million in the third quarter, an increase of 14.8% like-for-like on the third quarter of 2019, and an acceleration after the 11.2% growth recorded in first-half 2021. The increase came to 7.0% like-for-like (+7.5% as reported) versus third-quarter 2020, which represented a high basis of comparison during which Edenred saw a sharp pickup in business following the strict lockdowns in spring 2020, especially in France, as well as the roll-out of specific Covid-related programs.

Over the nine months to September 30, 2021, Europe accounted for 63% of the Group's total operating revenue. The region saw operating revenue increase by 12.3% like-for-like (+12.6% as reported) on the first nine months of 2020, and by 12.4% like-for-like on the first nine months of 2019.

In France, operating revenue was up 11.8% like-for-like in the third quarter 2021 on the same period in 2019, a sharp acceleration on the like-for-like growth recorded in first-half 2021. This performance reflects the solid sales momentum of Edenred's solutions, particularly its Ticket Restaurant, the leading digital solution on the market. Business in France also benefited from users spending the funds they had accumulated during previous lockdowns and/or while restaurants and certain retailers were shut. The introduction of the Covid certificate in France in August had little impact on operating revenue. Compared to third-quarter 2020, operating revenue rose by 2.1% like-for-like and as reported, owing to a particularly tough basis for comparison resulting from the sharp pick-up in business recorded in 2020 (+9.5% versus third-quarter 2019).

For the nine months ended September 30, 2021, Edenred reported operating revenue of €200 million, up 14.2% like-for-like (+14.2% as reported) compared to the same period in 2020, and up 7.0% like-for-like compared to the first nine months of 2019.

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