Ingenico Group Reports Half-Year 2018 Results

Ingenico Group announced its results for the six-month period ended June 30, 2018.
 
In the first half of 2018, revenue totaled €1,229 million, up 1% on a reported basis, including a negative foreign exchange impact of €71 million. On a comparable basis, revenue was 3% lower than the first half of 2017.
 
EBITDA reached €193 million in the first half of 2018, i.e. a 15.7% EBITDA margin on gross revenues, down 3.6 points compared to last year on a pro forma basis. It has been impacted by the business mix. The second half of the year will be more favorable in terms of business mix.
 
During the period, the Retail Business Unit reported a revenue of €630 million, an increase of 22% on reported figures, including a negative foreign exchange impact of €34 million. EBITDA reached €77 million, representing an EBITDA margin of 12.2%, compared to €63 million last year.
 
The Banks and Acquirers Business Unit posted a revenue of €599 million, a 15% decline on reported figures including a negative foreign exchange impact of €37 million. On a comparable basis revenue declined by 11%, mainly impacted by the very tough comparison basis in India (demonetization process) and in Europe (PCI V1 to V3 migration), partially offset by the strong recovery in Latin America, especially in Brazil. EBITDA reached €116 million, representing an EBITDA margin of 19.4%, compared to €182 million last year.
 
“The first half year came in line with our expectations,” Philippe Lazare, chairman and CEO of Ingenico Group, said.
 
Ingenico Group announced it signed a deal with DSV Group (Deutscher Sparkassenverlag), a subsidiary of the Sparkassen-Finanzgruppe, regarding the combination of BS PAYONE with Ingenico Retail assets in DACH (Germany, Austria, Switzerland). This non-cash business combination, at a time when transaction multiples keep on rising, will be 52% owned and controlled by Ingenico Group.
 
“I am proud to announce that we have signed the agreement with the Sparkassen-Finanzgruppe in order to create the undisputed leader in payment services in Germany, Austria and Switzerland. The Joint Venture between BS PAYONE and Ingenico Group will enable to create value through the combination of the respective portfolio of merchants and to accelerate the deployment of our Retail strategy across all channels within the DACH1 region, the largest growth opportunity in Europe.”
 
Within the DACH region, Germany, which is the main exposure of BS PAYONE, is the third largest market in Europe and the most dynamic country in the region in terms of electronic payment. With predominant cash transactions representing more than 70% of the overall transactions, cashless volumes are accelerating and should grow by 7% over the next five years.
 
Headquartered in Frankfurt, BS PAYONE is a leading full-service payment provider offering instore and online payment solutions and employing around 700 people. Serving more than 250,000 merchants in various industries, from small and medium-sized businesses to large international accounts, BS PAYONE is the second largest international card acquirer in Germany and a major Network Service Provider (NSP), with a volume of over €50 billion processed, of which €27 billion is from international card acquiring, and more than 135,000 point-of-acceptance devices.
 
BS PAYONE benefits from close partnerships with the savings banks (Sparkassen) in Germany. In 2017 BS PAYONE generated €324 million in gross revenues and €31m EBITDA.
 
The joint venture would have a unique footprint in DACH with a combined volume processed of €125 billion and close to 335,000 point-of-acceptance devices. The combined entity would have generated a gross revenue of more than €500 million and an EBITDA of c.€75 million in 2017. Over the period 2017-2021, the combined entity is expected to grow at a low double digit CAGR in term of revenues and a high double digit CAGR in term of EBITDA. The closing is expected to occur during the first quarter of 2019, subject to approval from the relevant regulatory and antitrust authorities.