Investor Day 2020 Strategic Plan
Today’s agenda Philippe Lazare, 9.00 CONVICTIONS Chairman & CEO Thierry Denis, 9.15 MARKET TRENDS CEO Advisor Pierre-Antoine Vacheron, 9.35 POSITIONING & EVP ePayments OFFER Jacques Guérin, EVP Smart Terminals & Mobile Solutions Pierre-Antoine Vacheron 10.45 Q&A session Jacques Guérin 11.00 BREAK 2 INVESTOR DAY - LONDON // MARCH 23 RD 2016
PHO PHOTOS OS Today’s agenda Michel Léger, 11.30 INNOVATION EVP Innovation MODERATOR 11.40 ROLLING OUT Panel and Q&A session Adrian Dearnell THE STRATEGY WORLDWIDE Jacques Behr, Patrice Le Marre, EVP Europe & Africa EVP Asia Pacific & Middle East David Jimenez José Luis Arias, Chief Revenue Officer- EVP Latin America ePayments Oscar Bello, EVP North America 3 INVESTOR DAY - LONDON // MARCH 23 RD 2016
Today’s agenda Nathalie Lomon, 12.40 FINANCE CFO 13.00 Q&A with Philippe Lazare and speakers 13.30 Lunch & Demos 4 INVESTOR DAY - LONDON // MARCH 23 RD 2016
Investor Day Introduction Philippe Lazare, Chairman & CEO
Ingenico Group always a step ahead Pa Past st st stra rate tegic decisions Financial targ Financial t rgets achie s achieved ed are p paying off off to toda day 1 year in adv 1 y ar in advanc nce First mover in China 2016 revenue above €2.2bn* Leading position Investments in the US against the tide 2016 EBITDA margin above 20% Largest market today From hardware to transaction services FCF/Ebitda 45%-50% 30% of revenue today Dividend policy based on a 35% pay-out Continuous investments in Terminals to keep on leading the race STRONG TRACK RECORD STRONG TRACK RECORD *€1.8Bn targeted in 2013, €2.2Bn including GlobalCollect acquired in 2014 6 INVESTOR DAY - LONDON // MARCH 23 RD 2016
What are we good at? Connect merchants with Connect merchants with acquirers acquirers Provide payment Provide payment acceptance, whatever acceptance, whatever the form factor, the the form factor, the channel and the channel and the Protect merchants Protect merchants and and payment method payment method consumers credentials in a consumers credentials in a fully secured fully secured manner manner 7 INVESTOR DAY - LONDON // MARCH 23 RD 2016
Customers’ needs CHIFFRES CHALLENGES CHALL ES Large r rge retailer ilers’ needs s’ needs Banks’ and Banks’ and Acquir quirer ers’ s’ needs needs Follow consumers across channels Strengthen relationships with small merchants • • Expand cross border sales Reduce total cost of ownership • • Increase conversion rate Differentiate their offer from competition offer • • ~40% ~40% of 2015 of 2015 ~60% ~60% of 2015 of 2015 r evenue r evenue r evenue r evenue CREATE A GLOBAL LEADER CREATE A GLOBAL LEADER IN OMNI-CHANNEL ACCEPTANCE IN OMNI-CHANNEL ACCEPTANCE 8 INVESTOR DAY - LONDON // MARCH 23 RD 2016
What can we bring to customers that competitors can’t? Omni-channel acceptance VALUE F VA FOR INGENICO GR INGENIC GROUP OUP MERCHANTS MER HANTS IDEALL IDEALLY POSITIONED Y POSITIONED • Customer knowledge & customer • Global scale in both in-store tracking and online payments • Cost savings • Most advanced omni-channel player • Driving additional revenue OMNI-CHANNEL IS INGENICO GROUP’S KEY OMNI-CHANNEL IS INGENICO GROUP’S KEY DIFFERENTIATOR, DIFFERENTIATOR, ENABLING INGENICO GROUP TO OUTPERFORM THE ENABLING INGENICO GROUP TO OUTPERFORM THE MARKET MARKET 9 INVESTOR DAY - LONDON // MARCH 23 RD 2016
Strategic initiatives paving the way to 2020 KEY INITIATIVES KEY INITIA TIVES 1 Strengthen our unique in-store leadership 2 Further develop our strong online position 3 Drive convergence towards omni-channel acceptance 4 Anticipate market evolution through innovation program CREATE A GLOBAL LEADER IN OMNI-CHANNEL CREATE A GLOBAL LEADER IN OMNI-CHANNEL ACCEPTANCE ACCEPTANCE 10 INVESTOR DAY - LONDON // MARCH 23 RD 2016
2020 ambition plan / a growth story Re Revenue o objecti ctive EBITD EBITDA margin margin >€4bn* >€4bn* Double-digit 22-23% 22-23% organic growth FCF/Ebit F/Ebitda da Pay-ou -out r t ratio tio co conversion ra ratio 35% 35% 45% 45% * At 2015 exchange rate and including targeted acquisitions 11 INVESTOR DAY - LONDON // MARCH 23 RD 2016
Market trends & business dynamics Thierry Denis, CEO Advisor
Market trends Ecosystem trends
Solid growth drivers WA WAR O ON C CASH CONNE NNECTED W CTED WORLD RLD ACCELERA CELERATING ING DRIVING DIGITAL U DRIVING DIGIT L USAGE Global non-cash payments Global consumers spend by origin (# of transactions, $bn) (in value/$ Trn) 660 660 9% Cagr: +14% 4 7% 2 360 360 Cagr: +6% 240 240 23 23 28 28 Online In-store 2015 2019 2007 2013 2020F Source: ATKearney/Ingenico Source: eMarketer/Ingenico 14 INVESTOR DAY - LONDON // MARCH 23 RD 2016
Solid growth drivers FAVORABLE RE RABLE REGULA GULATORY GR GROWING MIDDLE ING MIDDLE CLAS CLASS FRAMEW FRAMEWORK ORK IN EMERGING IN EMER GING COUNTRIES UNTRIES By 2022, nearly • Local regulations, payment methods 200 200 & certifications million million • Global regulation developing on security Households Households (>$35,000 income (>$35,000 income per year) per year) 3x the current figure • Cashless payment initiatives Source: Ernst & Young Rapid-Growth Markets Forecast (2014) 15 INVESTOR DAY - LONDON // MARCH 23 RD 2016
More complex physical world MORE DEVICES MORE DEVICES MORE POINTS MORE POINTS OF S OF SALES LES M-commerce on track to reach Self-serve unattended, connected $900 billion in 2020 objects will become additional points of sale beyond the store Payments with wearables expected to reach $500 billion by 2020 Source: eMarketer/Ingenico Group/Edgar Dunn 16 INVESTOR DAY - LONDON // MARCH 23 RD 2016
More complex online world MORE P MORE PAYMENT YMENT METHODS METHODS MORE ONLINE CHANNELS MORE ONLINE CHANNELS APMs originating online but Payment will occur in places as expanding into the physical world diverse as search results, social and very strong in certain network posts, advertising messages, geographies, notably China press articles. 17 INVESTOR DAY - LONDON // MARCH 23 RD 2016
More complex consumer journeys PROPOSITION 3 OM OMNI NI-CHANNEL I -CHANNEL IS KEY KEY 18 INVESTOR DAY - LONDON // MARCH 23 RD 2016
Merchants will have to widen and deepen interactions with customers WIDEN DEEPEN Deliver customer touchpoints Provide richer interactions at each anywhere and any time on any step of the customer journey device • Multiplicity of payment types and form factors • Offline/online/mobile… • Incorporation into the omni-channel • In app/on social networks… customer journey • In store/at home/on the go/through • Big data and analytics connected devices THIS IS THE BASIS FOR INGENICO GROUP VALUE CREATION FROM NOW TO 2020 19 INVESTOR DAY - LONDON // MARCH 23 RD 2016
Market trends Ingenico Group Business dynamics
Payment terminals / a sustainable growth rate s (1) (1) Payment T yment Terminals r rminals revenue nue pool in pool in billion eur billion euros 2015-2020 Revenue CAGR Still a growing market ~+ 6% >€4BN >€4BN • 50% of terminal market growth toward 2020 n will come from China and the US >€3BN >€3BN • In emerging countries, POS penetration increasing 50% to more than 14 terminals per 1,000 habitants by 2020 • In mature markets, regulation and technology upgrades driving replacement Competition • Global market dominated by top 2 global 2015 2020 players, due to high barriers to entry • Ingenico Group best positioned to capture the Ingenico Group revenue share growth of the two largest markets (China / US) Total market revenue (1) Hardware revenue excluding maintenance and mPOS 21 INVESTOR DAY - LONDON // MARCH 23 RD 2016
Online payment market / doubling to 2020 s (1) (1) Online Payment servic Online P yment services es revenue nue pool in pool in billion eur billion euros 2015-2020 Revenue CAGR Market revenue growth will continue to be ~+16% strong €13BN €13BN • Increasing share of full-service business model fueled by cross-border ecommerce • Driven by emerging countries, social €6BN €6BN commerce Competition • Gateway market mostly dominated by regional & local players addressing their home market 2015 2020 • Full service dominated by 3 global players but very fragmented beyond this top 3 Ingenico Group revenue Total market revenue excl. China domestic & marketplaces 1 Ingenico Estimates based on ecommerce flows 22 INVESTOR DAY - LONDON // MARCH 23 RD 2016
Business dynamics conclusion Sustainable growth How to address in Payment terminals Positive convergence underlying and complexity? growth fundamentals How to capture Strong market dynamics growth? in online payment 23 INVESTOR DAY - LONDON // MARCH 23 RD 2016
Addressing complexity and convergence Pierre-Antoine Vacheron, EVP ePayments
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