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INGENICO GROUP : Very strong business growth in the third quarter of 2014

  • Q3 2014 revenue of €381 million, up 16 percent on a comparable basis1
  • Revenue for the first nine months: €1.084 billion, up 19 percent on a comparable basis1
  • Double-digit growth in both Payment Terminals and Transactions
  • GlobalCollect acquisition completed
  • 2014 guidance (excluding GlobalCollect) raised
    • Organic growth1 above 15 percent
    • EBITDA margin2 between 22.5 and 23 percent



PARIS, Oct. 29, 2014 (GLOBE NEWSWIRE) -- Ingenico Group (Euronext: FR0000125346 - ING) announced today its revenue figures for the third quarter of 2014.

(in millions of euros) Q3 2014 Q3 2013 pro forma Q3 2013 reported 2014/2013 change - reported basis 2014/2013 change - comparable basis1
Revenue 381 328 348 +9% +16%

Philippe Lazare, the Chairman and CEO of Ingenico Group, commented: "We are extremely pleased with our performance in the third quarter, and more generally since the beginning of 2014.
In Europe, our service business, supported by our range of in-store, on-line and mobile payment solutions, has continued to gain traction. In the United States, revenue is up 90 percent this quarter, driven by the early deployment of EMV solutions for Tier 1 retailers ahead of the festive season. Our business has continued to expand in the emerging markets, particularly in Asia-Pacific.
Innovation is a key pillar of our strategy, and its impact will be strongly felt with the upcoming launch of our latest operating system, which for the first time combines secure payment and business applications for merchants. We are looking forward to unveiling the OS at Cartes (France) and Money2020 (U.S.) trade shows early November.
In Payment Services, the Ogone and GlobalCollect sales teams began working together as soon as the acquisition was completed, and I am delighted with how extensive their interaction has already been.
In this context, we confirm our revenue guidance and raise our profitability guidance for the year."

Subsequent events

Acquisition of GlobalCollect completed
On September 30, Ingenico Group finalized the acquisition of GlobalCollect, a leading global online full service payment provider, after approval by the relevant regulatory and antitrust authorities.
This acquisition reflects the acceleration in the implementation of the Group's strategy on a global scale, and will enable Ingenico Group to continue to simplify payment for its customers, everywhere across the world and across all channels: in store, on line and mobile.

Conversion request for 2017 convertible bonds
To date, 2,195,267 convertible bonds, representing approximately 33% of the convertible bond/OCEANE, were converted into 2,228,188 shares.
The Group reminds that all the remaining convertible bonds may be subject to an early repayment starting on January 15, 20153 . In that case, a total of 4,549,314 new shares would be issued. As of October 29, 2014 the share capital was composed of 56 110 633 shares.

Revenue

To facilitate the assessment of the Group's performance, consolidated revenue for the first nine months of 2014 is compared here with pro forma revenue with effect from January 1, 2013 to reflect the deconsolidation of TransferTo carried out in 2013.

As of September 30, 2014 3rd quarter 2014
€M Change 2014/2013 €M Change 2014/2013
Comparable*1 Reported Comparable*1 Reported
Europe-SEPA 418 9% -3%** 142 9% -3%**
Asia Pacific 207 23% 20% 74 16% 16%
Latin America 144 4% -5% 50 -2% 0%
North America 125 62% 52% 51 69% 65%
EMEA 183 28% 110% 62 20% 107%
Central Operations 7 55% -91%** 2 53% -92%**
Total 1,084 19% 8% 381 16% 9%

* Reflecting the new regional breakdown and the disposal of TransferTo as of January 1, 2013
**Based on 2013 revenue including the contribution of Italy and Eastern Europe in Europe-SEPA and of TransferTo (disposed of in December 2013) in Central Operations

Performance in the first nine months

In the first nine months of 2014, revenue totaled €1,084 million, representing an 8 percent increase on a reported basis, including a negative foreign exchange impact of €38 million. Total revenue included €903 million generated by the Payment Terminal business and €181 million generated by Transaction Services.

On a comparable basis1, revenue growth was 19 percent higher than in the prior-year period, driven by double-digit growth in both segments. Performance in Payment Terminals (up 19 percent) was fostered by accelerated order deliveries in countries like Canada and Italy along with strong dynamism in the United States. Revenue growth in Transaction Services business increased by 3-point to 15 percent4, thanks to good results for in-store and online payment solutions.
Since the start of the year, all regions have contributed to the Group's overall performance. In Europe-SEPA, Ingenico Group has been deploying its payment service strategy - in-store, on-line and mobile - through Ingenico Payment Services.
As anticipated, the Group has accelerated its growth in North America (up 62 percent) driven by Ingenico Group's active involvement with EMV payment solutions in the United States and delivery ahead of schedule of a large order for Moneris in Canada.
In fast-growing emerging countries, Ingenico Group has continued to enjoy strong revenue growth, confirming its leadership in such key markets as China and Brazil. The Group continues its expansion in other emerging markets through greater direct presence (particularly in Indonesia and Russia) and an increasingly dense commercial network, notably in the EMEA region.

Performance in the third quarter

In the third quarter of 2014, revenue totaled €381 million, representing a 9 percent increase on a reported basis, including a negative foreign exchange impact of €1 million. Total revenue included €318 million from the Payment Terminal business and €63 million from the Transaction Services.

On a comparable basis1, revenue growth was 16 percent above Q3 2013, driven by 16 percent organic growth in both business segments. Ingenico Group's performance in Payment Terminals was fueled by ongoing deployment of its multi-local strategy around the world. Transaction Services revenue grew by 16 percent, thanks to strong business dynamics in all segments. Ingenico Group has continued to deploy new payment solutions for its customers to enable them to increase conversion rate on all channels and enhance consumer experience, as recently illustrated at Loewe (mobile checkout) and the FC Barcelona megastore (interactive self-service solutions).

Performance for the third quarter, by geography and on a like-for-like basis compared with Q3'13, was as follows:

- Europe-SEPA (up 9 percent): Growth was driven primarily by the deployment of the Group's strategy combining in-store, on-line and mobile payment, through innovative offers that enhance consumer experience (e.g., at Loewe, FC Barcelona). At the same time, Ingenico Payment Services has continued to sell its customers new services such as on-line fraud detection tools, and also to offer merchants more payment alternatives to generate new growth opportunities, as illustrated by the partnership with Yapital, a pan-European cashless cross-channel wallet.

- Asia-Pacific (up 16 percent): Ingenico Group has continued to achieve high growth rates in the region, leveraging its market leadership in China and its strategy for conquering Southeast Asia. The Group has won large orders in Indonesia thanks to its direct presence, while gaining further traction in other countries in the region, and most specifically in Singapore, and in Malaysia.

- Latin America (down 2 percent): Ingenico Group's contrasted performance in the region reflects a lower business activity with Brazilian customers which should not last with expected return to double digit growth in Q4'14. The Group has strengthened its expansion elsewhere in the region, becoming the sole supplier of Banco del Bajio in Mexico and posting strong growth in Colombia and Peru through the development of 3G.

- North America (up 69 percent): Ingenico Group's accelerating growth in the region was driven mainly by business in the United States (up 90 percent), where the Group has continued to deploy secure EMV and NFC payment solutions, fostered this quarter by demand from Tier 1 retailers preparing for the festive season. Ingenico Group has also continued to provide independent merchants with secure solutions on a growing scale through partnerships with processors, distributors (ISOs). For example, the Group has expanded its global collaboration with Elavon in the United States with two key EMV initiatives, and entered into a partnership with CardConnect and FreedomPay to deploy point-to-point encryption solutions that accept EMV and NFC payments. In Canada, Ingenico Group has carried out most of the major order from Moneris initiated in the first quarter.

- EMEA (up 20 percent): Ingenico Group has continued to achieve strong growth in EMEA through its expanded direct presence (particularly in Poland and Russia) and its increasingly dense distribution network in the region. In Italy, the Group has kept up deployment of payment solutions - terminals and mobile checkout - at a sustained pace in order to respond to new regulations requiring merchants to install electronic payment acceptance equipment. The Group has also forged ahead with its diversification strategy, deploying an end-to-end integrated payment solution at DKV service stations in Hungary.

- Central Operations: Ingenico Mobile Solutions has continued to expand in the United States and worldwide, as illustrated by its white-label offer to First Data in India and its partnership with Leapfactor in the United States, which facilitates integration of payment with customers' business applications.

Outlook

During the first nine months of 2014, Ingenico Group achieved outstanding performance, in particular in its Payment Terminals business, thanks to accelerated deliveries, while increasing its shift towards Transaction Services. The Group expects business between the third and fourth quarters to be globally balanced as a consequence of early EMV deliveries in the United States and the seasonality of customer calls for tenders.

Accordingly, the Group now expects organic growth to exceed 15 percent - in line with the previously announced range of 14 to 16 percent. This should result in full-year reported revenue comprised between €1.465 billion and €1.475 billion.

In addition, the Group has raised its outlook for EBITDA margin, which is now expected to be between 22.5 and 23 percent- compared with its previous guidance of between 21.5 and 22.5 percent.

Consolidation of GlobalCollect
Following completion of the acquisition of GlobalCollect on September 30, 2014, GlobalCollect will be fully consolidated as of October 1, 2014. Its contribution to Group revenue in the fourth quarter is expected to be approximately €90 million, generating an EBITDA margin of over 15 percent.

2014 outlook with GlobalCollect consolidated as of Q4
Taking GlobalCollect's contribution in the fourth quarter into account, Ingenico Group expects consolidated reported revenue for 2014 to be between €1.555 billion and €1.565 billion, and EBITDA margin to be between 22 and 22.5 percent.

Conference call

A conference call to discuss Ingenico Group's Q3 2014 revenue will be held on October 29, 2014 at 6.00pm., Paris time. Dial-in number: 01 70 99 32 08 (French domestic), +1 334 323 6201 (for the United-States) and +44 20 7162 0077 (international).
The presentation will also be available on www.ingenico.com/finance.

This press release contains forward - looking statements. The trends and objectives given in this release are based on data, assumptions and estimates considered reasonable by Ingenico Group. These data, assumptions and estimates may change or be amended as a result of uncertainties connected in particular with the performance of Ingenico Group and its subsidiaries. These statements are by their nature subject to risks and uncertainties as described in Ingenico Group registration document (" document de reference "). These forward - looking statements in no case constitute a guarantee of future performance, and involve risks and uncertainties. Actual performance may differ materially from that expressed or suggested in the forward - looking statements. Ingenico Group therefore makes no firm commitment on the realization of the growth objectives shown in this release. Ingenico Group and its subsidiaries, as well as their executives, representatives, employees and respective advisors, undertake no obligation to update or revise any forward - looking statements contained in this release, whether as a result of new information, future developments or otherwise.

About Ingenico Group

Ingenico Group (Euronext: FR0000125346 - ING) is the global leader in seamless payment, providing smart, trusted and secure solutions to empower commerce across all channels, in-store, online and mobile. With the world's largest payment acceptance network, we deliver secure payment solutions with a local, national and international scope. We are the trusted world-class partner for financial institutions and retailers, from small merchants to several of the world's best known global brands. Our solutions enable merchants to simplify payment and deliver their brand promise.
Learn more at www.ingenico.com twitter.com/ingenico

Contacts / Ingenico Group

Investors & Communication
Catherine Blanchet
VP IR & Corporate Communication
catherine.blanchet@ingenico.com
(T) / +33 1 58 01 85 68
Communication
Coba Taillefer
External Communications Manager
coba.taillefer@ingenico.com
(T) / + 33 1 58 01 89 62
Investors
Caroline Alamy
Investor Relations
Caroline.alamy@ingenico.com
(T) / +33 1 58 01 85 09

Next events

Conference call on Q3'14 revenue: October 29, 2014 at 6pm (Paris)
Q4'14 revenue and FY14 results: February 18, 2015

EXHIBIT 1:
GlobalCollect revenue for the first nine months of 2014

(in millions of euros) Q1'14 Q2'14 Q3'14 YTD 2014
Revenue 75 80 83 238

EXHIBIT 2:
2013 pro forma key financial data

Pro forma revenue for 2013
With Ingenico Group's European business and Transactions division now combined, Italy and Eastern Europe have been included in the EMEA region with effect from January 1, 2014, reflecting their primary orientation toward Payment Terminals. At the same time, following the disposal of TransferTo in December 2013, the Central Operations division now encompasses ROAM and central procurement. Healthcare revenue is now included in the Europe-SEPA region.

(in millions of euros) Q1 2013 Q2 2013 Q3 2013 Q4 2013 2013
Europe-SEPA 123 129 129 141 522
Asia-Pacific 47 63 64 69 241
Latin America 48 53 50 37 189
North America 21 30 31 42 124
EMEA 44 56 53 63 217
Central Operations 2 2 1 3 8
Total 285 333 328 354 1,301

2013 pro forma key financial data
The key financial data have been restated, as of January 1, 2013, to reflect the disposal of TransferTo carried out on December 1, 2013 ("2013 pro forma") and presented on an adjusted basis (restated to reflect Purchase Price Allocation expenses recognized on acquisitions and divestitures).

(in millions of euros) 2013 pro forma
Revenue 1,301
Adjusted gross profit 593
As a % of revenue 45.6%
Adjusted operating expenses (358)
As a % of revenue 27.5%
Profit from ordinary activities, adjusted (EBIT) 235
As a % of revenue 18.1%
EBITDA 276
As a % of revenue 21.2%

1 On a like-for-like basis at constant exchange rates

2 EBITDA is not an accounting term; it is a financial metric defined here as profit from ordinary activities before amortization, depreciation and provisions and before expenses of shares distributed to employees and officers

3 With an advance notice of at least 30 calendar days, bonds are redeemed at a price equal to their nominal value plus accrued interests, if the arithmetic mean of the opening quoted prices on Euronext Paris Paris calculated over 20 consecutive trading days as selected by the Group from the 30 trading days preceding the date of notice of such early redemption and the conversion/exchange ratio at the date concerned (1 OCEANE for 1.015 shares) exceeds 130% of the bond nominal value (€37.44)

4 Compared to 2013 pro forma (without TransferTo contribution in 2013)


Ingenico Group

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Source: INGENICO