By Federica Mileo and Diana Mandia
(Reuters) -French vouchers and cards provider Edenred reported a record full-year core profit on Tuesday, as the group continued its growth momentum driven by the development of digital services.
Caterers managed to navigate the COVID-19 crisis thanks to a shift to fully digital offerings which allowed the group to benefit from COVID-induced remote working.
Edenred posted full-year earnings before interest, taxes, depreciation, and amortisation (EBITDA) of 670 million euros ($757 million), at the upper end of the announced target range, representing a rise of 18% like-for-like from 2020.
The group, which helps companies manage staff expenses and benefits and is known for its “Ticket Restaurant” vouchers, said it will propose a dividend of 0.90 euros per share for 2021, up 20% from the prior year.
Edenred’s shares were up 6% at 0930 GMT, reversing course after falling 1.0% in early trade, with French large- and mid-cap index SBF 120 down 0.6%, as European markets continue to be impacted by geopolitical tensions.
“All in all, we see the print as reassuring, further highlighting the group’s solid momentum and business resilience,” JPMorgan said, pointing to the H2 EBITDA beat, strong cashflow and better net debt.
“A dividend of 0.90 euros is well ahead of expectations and will be taken well,” Berenberg analyst Stuart Gordon said, adding Edenred delivered a “strong set of numbers”, with revenue in line but a better-than-expected EBITDA margin.
The group, which confirmed the annual targets set out in its “Next Frontier” strategic plan, added it should also benefit in 2022 from economic tailwinds such as higher inflation, rising interest rates and lower unemployment.
“Thanks to a record level of cash generation in 2021, we’ve strengthened our financial profile and are able to propose a higher dividend than before the pandemic, while maintaining an ambitious M&A strategy,” Edenred Chief Executive Bertrand Dumazy said.
“In order to develop, enrich, interconnect and secure our digital platform, our technological investments currently represent more than 300 million euros per year and will continue to grow in 2022,” he added.
The group announced on Tuesday that it had acquired a 51% controlling interest in Greenpass, an issuer of electronic toll services in Brazil.
Edenred had forecast in October an EBITDA in the top half of a 620-670 million euro range for the year, while analysts polled by the company had on average forecast an EBITDA of 658 million euros for the year.
($1 = 0.8850 euros)
(Reporting by Diana Mandia and Federica Mileo; editing by David Evans)
