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INGENICO GROUP 2018 full year results - Challenging year - Improved revenue trajectory in the second half 2018 - 2019 EBITDA above €550m -Launch of Fit for Growth transformation plan

Nachrichtenquelle: GlobeNewswire
12.02.2019, 17:42  |  481   |   |   
Press Release
Paris, 12th February 2019

2018 full year results
Challenging year with 2% organic growth and €488m EBITDA

In line with January 22th, 2019 communication
Improved revenue trajectory in the second half 2018 with 6% organic growth
2019 EBITDA above €550m with a FCF conversion at c. 50%
Launch of Fit for Growth transformation plan

2018 operating & financial performance

  • Revenues of €2,643 million, up 2% on an organic basis[1] and 5% on a reported basis
  • EBITDA[2]: €488 million, representing a margin of 18.4%
  • 49% FCF[3] to EBITDA conversion rate, highlighting the strong cash generation
  • Group net profit attributable to shareholders of €188 million
  • Proposed dividend of €1.10 representing a 36% pay out

Launch of Fit for Growth transformation plan:

  • Banks & Acquirers revival through an industrial and commercial redesign
  • Accelerate Retail growth profile with strategic initiatives and a new operating model
  • Global transformation plan aiming at improving operational efficiencies and streamlining G&A
  • Net savings of €35 million and investments of €15 million

2019 financial objectives

  • Organic growth between 4% and 6%
  • EBITDA above €550m
  • c. 50% of FCF/EBITDA conversion

Ingenico Group (Euronext: FR0000125346 - ING), the global leader in seamless payment, today announced its 2018 full-year results.

Nicolas Huss, Chief Executive Officer of Ingenico Group, commented: "As the new CEO, I am very proud of leading Ingenico, which enjoys leading technologies and positions in integrated payment solutions. 2018 has however been a challenging year. I have now assessed key issues faced in 2018 and set up a new seasoned and international management team to drive the company repositioning. The Group is already in motion to deliver a 2019 EBITDA above €550 million.
Retail performance will be sustained by ongoing deployment of our direct access to merchant's strategy, and strategic growth initiatives. B&A performance has been affected by adverse market conditions and lack of execution in mature countries in 2018. B&A is thus being repositioned and optimized to benefit from ongoing opportunities such as recovery in Emerging Countries or deployment of Android. Ingenico management team will also be very focused on executing the Fit for Growth transformation plan, together with renewed attention on cash-flow generation.
We are looking forward to detailing our new strategic plan during a Capital Markets Day on April 24th".

Key figures

(in millions of euros) 2018 2017* Year-on-Year Difference
Revenue 2,643 2,505 +2%1
Adjusted gross profit 1,048 1,066 -2%
  As a % of revenue 39.6% 42.5% -2.9 pts
Adjusted operating expenses (560) (540) +4%
  As a % of revenue -21.2% -21.6% -0.4 pts
EBITDA 488 526 -7%
  As a % of revenue 18.4% 21.0% -2.6 pts
Profit from ordinary activities, adjusted (EBIT) 416 453 -8%
  As a % of revenue 15.7% 18.1% -2.4 pts
Operating income 278 371 -25%
Net profit 189 257 -26%
Net profit attributable to Group shareholders 188 253 -26%
       
Adjusted free cash flow[4] 285 269 +6%
Free cash flow 238 239 -0%
Net debt 1,518 1,471 +3%
  Net debt-to-EBITDA ratio 3.1x 2.8x
Equity attributable to Group shareholders 1,845 1,832 +1%

* 2017 reported, restated from IFRS 15 impact

2018 full-year performance

In 2018, revenue totalled €2,643 million, representing a 2% increase on a comparable basis, with an acceleration in the second semester while organic growth reached 6%. On a reported basis revenue was 5% higher than 2017 and was including a negative foreign exchange impact of €110 million.

Over the year, Banks & Acquirers posted a revenue of €1,305 million, a decrease of 4% on comparable basis, but returning to a slight organic growth of 2% in the second semester. On a reported basis the activity decreased by 8% and was including a negative foreign exchange impact of €62 million.

The Retail Business Unit reported a revenue of €1,339 million, showing an increase of 8% over the period on comparable basis, with a strong organic growth acceleration in the second semester reaching double digit. On a reported basis, revenue increased by 22% during the year and was including a negative foreign exchange impact of €48 million.

Adjusted gross profit

In 2018, adjusted gross profit reached €1,048 million, down 2% compared to €1,066 million in 2017, and representing 39.6% of revenues.

Operating expenses contained throughout the year

In 2018, adjusted operating costs were €560 million, representing 21.2% of revenue, compared to €540 million in 2017 when adjusted operating costs represented 21.6% of revenue.

The short term savings plan launched in July 2018 delivered €15 million in the second half of this year.

18.4% of EBITDA margin

EBITDA was €488 million against €526 million in 2017, representing an EBITDA margin of 18.4%, down 1.9 points compared to the 2017 pro forma figures and 2.6 points compared to 2017 on a reported basis.

The Banks & Acquirers EBITDA stood at €277 million, down from €371 million last year. It represented a 21.2% EBITDA margin, down 4.8 points compared to the 26% pro forma EBITDA margin of 2017, significantly impacted by the negative geographical mix.

The Retail EBITDA came in at €210 million, up 18% versus last year. The margin this year represented 15.7%, up 1.9 points compared to the 2017 pro forma EBITDA, driven by the repositioning of the business unit carried out over the past two years.

EBIT and operating income

EBIT margin represented 15.7% of revenue and reached €416 million, compared to €453 million in 2017.

The other income and expenses reached €-48 million compared to €-30 million in 2017. The increase is mainly due to reorganization and M&A related costs. The operating income also includes price purchase allocation costs that represented €90 million in 2018 compared to €52 million in 2017 (see exhibit 4).

After taking into account the other income & expenses and price purchase allocation above described, operating income was €278 million (10.5% of revenue), against €371 million in 2017 (14.8% of revenue).

Net profit attributable to shareholders

The financial results account for €-38 million compared to €-27 million in 2017. Income tax were reduced to €52 million in 2018 from €86 million in 2017. This improvement is mainly explained by the US tax reform and a more favourable change in the country mix. Those changes led to an effective tax rate for the Group of 21.5%, against 25.0% in 2017.
In 2018, Group net profit attributable to shareholders came in at €188 million, against €253 million in 2017.

A strong cash generation despite increase of non-recurring expenses

The adjusted free cash flow4 was up 6% in 2018 at €285 million, i.e. a conversion rate of 59%. The group's operations, post other income and expenses, generated a free cash flow of €238 million, i.e. an FCF/EBITDA conversion ratio of 49%. The capital expenditures increased as expected to €117 million against €88 million in 2017.

The Group's net debt increased slightly to €1,518 million against €1,471 million one year ago. This was mainly due to the purchase of the 20% stake in Ingenico Holdings Asia Limited, that of Airlink and €87 million of Ingenico's shares buyback. The ratio of net debt to EBITDA is up to 3.1x from 2.8x at the end of 2017, but down from the first half of 2018 that landed at 3.6x.

Proposed dividend of €1.10 per share

In line with the Group's dividend policy, a proposal to distribute a dividend of €1.10 per share will be presented to the Annual General Meeting of shareholders on 11th June 2019, representing a distribution rate of 36%. This dividend will be payable in cash or shares, according to the holder's preference.


Performance in the fourth quarter of 2018


 
FY 2018 Q4 2018
€m % Change €m % Change
Comparable1 Reported Comparable1 Reported
Retail 1,339 8% 22% 364 9% 12%
SMBs 393 16% 125% 105 20% 46%
Global Online 521 9% 6% 141 8% 7%
Enterprise 424 2% -2% 118 0% -3%
Banks & Acquirers 1,305 -4% -8% 364 1% -1%
EMEA 495 -16% -18% 125 -21% -21%
Latin America 199 36% 17% 69 61% 43%
North America 163 -9% -13% 44 -13% -12%
Asia-Pacific 447 -4% -2% 126 12% 13%
TOTAL 2,643 2% 5% 727 5% 5%

In the fourth quarter of 2018, Ingenico Group reported a revenue of €727 million, up 5% on a comparable basis compared to the fourth quarter 2017. On a reported basis, revenue increased by 5% including a negative foreign exchange impact of €17 million.

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