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INGENICO GROUP - Q3 2017: Acceleration towards our 2017 objectives

Press Release
Paris, 25th October 2017

  • Third-quarter revenue of €597 million
    • Up 6% on a comparable basis[1]
    • Up 5% on a reported basis
  • Acceleration towards our 2017 objectives
    • Back-end loaded year after a confirmed steadiness in North America
    • Double-digit growth in ePayments despite a tough comparison basis
    • Resilience in Europe & Africa with growth fuelled by Eastern Europe
    • Growth in Middle East and Chinese stabilisation offsetting Indonesian contraction
  • Bambora closing on track and expected during Q4
  • Objective for 2017 reiterated
    • Organic growth1 c. 7%
    • EBITDA2 margin slightly above 20.6%


Ingenico Group (Euronext: FR0000125346 - ING), the global leader in seamless payment, today announced its third-quarter revenues for 2017.

Philippe Lazare, Chairman and Chief Executive Officer of Ingenico Group, commented: "The third quarter has shown gradual improvement in terms of dynamics as expected. Our situation is becoming more normalised in North America and stabilised in Brazil. Anticipating a back-end loaded semester as our pipeline is full for the end of the year, we reiterate with confidence our objectives for 2017.
Since the beginning of 2017 we have continued to accelerate the development of our payment service offers as illustrated by the acquisition of IECISA Electronic Payment System to directly address the retail market and to strengthen our leadership in Spain. In parallel, we are well on track to integrate Bambora and we expect to close the transaction during Q4'17."

Third quarter key figures

Q3 2016
Reported
Q3 2016
Pro forma*
Q3 2017
€m % change
€m €m Comparable1 Reported
Retail 251 252 259 4% 3%
Banks & Acquirers 319 323 338 7% 6%
Total 570 574 597 6% 5%
Europe & Africa 224 224 235 4% 5%
APAC & Middle East 115 119 118 8% 3%
Latin America 44 44 48 10% 8%
North America 62 62 56 -5% -9%
ePayments 126 126 141 10% 12%
Total 570 574 597 6% 5%
* including the previous year acquisitions on a pro forma basis

Third quarter 2017 performance

In the third quarter 2017, revenue totalled €597 million, representing a 5% increase on a reported basis, including a negative foreign exchange impact of €18 million. Total revenue included €390 million from Terminals and €207 million from Payment Services.

On a comparable basis, revenue was 6% higher than in the third quarter of 2016, including a 3% increase in Terminals and an 11% increase in Payment Services.

Within our new organisational framework, the Banks and Acquirers Business Unit posted a revenue of €338 million, an increase of 6% on reported figures and including a negative foreign exchange impact of €9 million. The activity performed well this quarter, increasing by 7% on a comparable basis, thanks to our solid leadership, local initiatives favouring electronic payments and a range of products dedicated to our clients, offering value added services.
The Retail Business Unit reported a revenue of €259 million, an increase of 3% on reported figures including a negative currency impact of €9 million. On a comparable basis, revenue was up 4%, driven by In-store services in Europe, the progressive ramp up of our omnichannel offer and the continuous dynamic of ePayments.

Compared with Q3'16, the various divisions performed as follows on a like-for-like basis:

- Europe & Africa (up 4%): Despite a very tough comparison basis, the performance showed a very dynamic momentum fuelled by most of the countries. In the Banks and Acquirers Business Unit, despite the PCI V1 to V3 migration that is now behind us, western countries were very resilient, driven by a good performance in France and Italy. Eastern European countries are a powerful growth engine, especially in Russia, benefiting from the cash transactions to electronic payment shift.
In the Retail Business Unit, the in-store activities continued their strong performance driven by the dynamic of the Axis platform. Ingenico Group is increasingly solicited on pan-European deals to provide global solutions integrating both hardware and payment services or omnichannel solutions. In order to strengthen our position in Europe, Ingenico Group has recently announced the acquisition of IECISA Electronic Payment System, enabling the Group to directly address the Spanish retail market.

- Asia-Pacific & Middle East (up 8%): In the Banks and Acquirers Business Unit, the Chinese dynamic improved with the APOS (c. 330k units shipped during Q3'17) partially offsetting the pricing pressure. India is normalising as expected since no regulation regarding Biometric solutions has yet been implemented. South East Asia is on a positive trend with the exception of Indonesia, as this market is on a "wait and see" momentum due to regulatory changes.
In the Retail Business Unit, Turkey showed a steady performance driven by Terminals with fiscal memory and associated services enabling the relevant data to be transferred to the tax authorities.

- Latin America (up 10%): The vast majority of this region's operations come under the Banks and Acquirers Business Unit. The quarter was still impacted by the unfavourable macroeconomic situation in Brazil but recent indices seem to highlight a slight recovery of the Retail market. This should lead to the end of the cycle seen over the past two years, illustrated by an extended POS lifetime, and see acquirers resume ordering going forward to renew their estate. Besides Brazil, other countries in the division are very dynamic. In Mexico, the Group is continuing with the deployment of Telium Tetra and benefitting from the development of services dedicated to terminals estate.

- North America (down 5%): The quarter showed a mixed performance between Canada, facing a strong comparable basis and the United-States stabilising.
The Canadian business faced a tough comparative basis mainly due to strong orders last year. Despite that specific event, the country is evolving as anticipated and we expect it to return to growth as early as Q4'17. The US market is stable with a back-end loaded semester profile driven by significant orders to come in Q4'17 as certain acquirers are expected to increase order volumes in preparation for the new year. The activity continues to benefit from the adoption of our mobile solutions from new merchants, as well as the ramp up of the healthcare and the hospitality verticals through the contracts signed with new customers such as Inova Healthcare, Darden and NCR Silver, the latter having selected our mobile range of products for its SMB, Retail and Hospitality solutions.

- ePayments (up 10%): The division, part of the Retail Business Unit, confirmed a strong performance in line with its objectives despite a tough basis of comparison. The investments made continued to pay off with the enhancement of our infrastructure enabling the platforms to increase their stability and improve customer satisfaction. As a result, the churn rate has continued to improve throughout the quarter. In parallel, the transformation of Ogone's pure gateway into a more integrated model is progressing rapidly, as reflected by collecting volumes up 50% in Q3'17. Meanwhile, new customer wins enabled the Group to maintain the positive dynamic, despite the tough comparison basis, with clients such as Anantara, Allyouneed Fresh, Go Sport or Ryder Cup.


Outlook

Ingenico Group reiterates its 2017 objectives:

  • A revenue growth around 7% on a comparable basis
  • A slight increase of the EBITDA margin compared to 2016 (20.6%)

Conference Call

The third quarter 2017 revenue will be discussed in a Group telephone conference call to be held on 25th October 2017 at 6.00pm Paris Time (5.00pm UK). The call will be accessible by dialling one of the following numbers: +33 (0)1 70 99 32 08 (from France), +1 646 851 2407 (from the US) and +44 (0)20 7162 0077 (from other countries) with the conference ID: 962920. A presentation will be available at 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 to the performance of Ingenico Group and its subsidiaries. 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 realisation 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. This release shall not constitute an offer to sell or the solicitation of an offer to buy or subscribe for securities or financial instruments.

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.

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Contacts / Ingenico Group

Investors
Laurent Marie
VP Investor Relations &
Financial Communication
laurent.marie@ingenico.com
(T) / (+33) (0)1 58 01 92 98
Investors
Kevin Woringer
Investor Relations Manager
kevin.woringer@ingenico.com
(T) / (+33) (0)1 58 01 85 09

Communication
Coba Taillefer
External Communication Manager
coba.taillefer@ingenico.com
(T) / (+33) (0)1 58 01 89 62

Upcoming events

Full year 2017 results: 22nd February 2018 after market


EXHIBIT 1

First nine-month key figures

9 months 2016 Rep. 9 months 2016 PF* 9 months 2017
€m % change
€m €m Comparable1 Reported
Retail 744 744 775 3% 4%
Banks & Acquirers 960 973 1,044 7% 9%
Total 1,703 1,717 1,819 5% 7%
Europe & Africa 632 632 669 5% 6%
APAC & Middle East 377 390 420 12% 11%
Latin America 130 130 135 -3% 4%
North America 210 210 184 -13% -12%
ePayments 356 356 411 11% 16%
Total 1,703 1,717 1,819 5% 7%
* including the previous year acquisitions on a pro forma basis

EXHIBIT 2

Following the evolution of its activities and in order to support its position as world leader in omnichannel payments, Ingenico Group has put in place a new client-focused organisation. The Group's reporting is structured around two business units: Banks and Acquirers (B&A) and Retail. On top of that, the geographical split has changed to better reflect the organisation of Ingenico Group. From now on, Europe & Africa will include the Middle East (formerly included in Asia Pacific & Middle East) and become EMEA. In parallel, the EBS platform, that used to be reported in the Asia Pacific & Middle East region, will now be part of ePayments.

To facilitate the reading of the Group's performance as of 1st January 2017, 2016 revenues are restated below, including, from 1st January 2016, the acquisitions of the previous year ("pro forma 2016").

1. FORMER GEOGRAPHICAL REPORTING
In millions of euros Q1'16 Q2'16 Q3'16 Q4'16 2016 Q1'17 Q2'17 Q3'17
Retail 235 257 251 267 1,010 243 273 259
Banks & Acquirers 317 324 319 342 1,302 351 355 338
Total 552 581 570 609 2,312 594 628 597
Europe-Africa 193 215 224 215 846 209 225 235
APAC & Middle East 129 133 114 153 530 162 140 118
Latin America 45 41 44 42 172 44 44 48
North America 74 74 62 66 276 52 76 56
ePayments 111 119 126 133 488 127 144 141
Total 552 581 570 609 2,312 594 628 597
2. NEW GEOGRAPHICAL REPORTING
In millions of euros Q1'16 Q2'16 Q3'16 Q4'16 2016 Q1'17 Q2'17 Q3'17
Retail 235 257 251 267 1,010 243 273 259
Banks & Acquirers 317 324 319 342 1,302 351 355 338
Total 552 581 570 609 2,312 594 628 597
EMEA 209 236 237 229 911 228 242 256
APAC 112 111 100 138 462 143 122 96
Latin America 45 41 44 42 172 44 44 48
North America 74 74 62 66 276 52 76 56
ePayments 112 120 127 134 493 128 145 142
Total 552 581 570 609 2,312 594 628 597

3. NEW GEOGRAPHICAL REPORTING ON A PRO FORMA BASIS
In millions of euros Q1'16 PF Q2'16 PF Q3'16 PF Q4'16 PF 2016 PF
Retail 235 257 251 267 1,010
Banks & Acquirers 321 329 323 340 1,313
Total 556 586 574 607 2,323
EMEA 209 236 237 229 911
APAC 117 115 105 136 474
Latin America 45 41 44 42 172
North America 74 74 62 66 276
ePayments 112 120 127 134 493
Total 556 586 574 607 2,323




[1]On a like-for-like basis
[1]EBITDA is not an accounting term; it is a financial metric defined here as profit from ordinary activities before depreciation, amortization and provisions, and before share-based compensations.


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Source:INGENICO GROUP SA