Investors Presentation June 21 2011
Disclaimer All forward-looking statements are Ingenico management’s present expectations of future events and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Investors presentation - June 2011• 2
Ingenico at a glance Shareholder structure Group transformation for profitable growth as of May 31 2011 easycash integration & growth in Value Added Services 2010 Phase 3: 2010-2013 easycash acquisition: acceleration of strategic development towards services Changing • company’s profile 2009 Merger with Sagem Monetel: acquisition of best in class R&D Phase 2: 2008-2009 Landi acquisition (#2 in China): investing Consolidating POS leadership • in fast growing countries Business model resilience Market capitalization Market capitalization • as of September 15 2010 as of June 17 2011 2008 Moving to a fabless model Phase 1: 2006-2008 Number of shares: 51.9 million Transforming to profitable group Share price: €31.34 • Money Line acquisition: 2008 Revenue: €728m (vs. 506m 2006 • Market capitalization: €1.6 billion in 2006) pre-processing solutions for Tier 2008 EBIT margin: 12.5% • 1 retailers in (vs. 6% in 2006) France Investors presentation - June 2011• 3
Leader in the payment terminal market World leading manufacturer Payment terminals: of payment terminals a highly concentrated market - Leading world installed base with 15 million POS - Ingenico: 39%* - Strong & balanced geographical presence - Verifone: 35%* Top 3: 85-90% between mature and emerging markets - Hypercom: 14%* Europe - Other players: mostly local players N 1 China North America N 1 (MS>30%) N 2 Middle East-Africa … with high barriers to entry N 1 Asia Pac-Australia - Certification/ Security Latin America N 1 N 1 - Market driven by global & local (Brazil, Colombia standards Mexico) - Constant intensification of the Global Card Regulation over the last 10 years - >1,000 Payments & Value-added Applications in - Scale portfolio - Proximity - Fab-less model / Optimized supply chain - Portfolio of customer application - Focused strategy (*) Estimated market share based on published revenue. Assumed constant share for other players Investors presentation - June 2011• 4
A global partner of banks and retailers Providing merchants with POS- based payment solutions: Directly for Tier1/2 retailers – Indirectly for small merchants – through banks and acquirors Major financial institutions and merchants are using our products and solutions all over the world (in more than 100 countries). Dual vendor policy More than 100,000 small merchants directly managed in France and Germany Investors presentation - June 2011• 5
Innovation driving technological leadership on payment terminals Strong R&D investments: 8% of revenue in 2010 Telium 2 virtuous dynamics Less production costs Less repair Telium 2 as a cost differenciating factor Less costs components Greater A single platform speed of – transaction Increased Generic features: Color, contactless – Lighter reliability weight Largest range of payment terminals covering all merchant segments Addressing traditional market Addressing new market segments segments Counter PINPad Sign Wireless Pay Petrol WebP Health Top Capture PDA OS -care Investing in next generation payment form factor NFC: all terminals integrated in all terminal range – Multimedia – Investors presentation - June 2011• 6
Payment terminal business: a robust and recurring business model… - Demonstrated ability to expand revenue fueling profitability 907 1000 Adjusted EBIT (in % of revenue) 900 728 13.9% Published revenue in m€ 700.7 800 568 700 12.5% 11.4% 600 11.4% 506 500 400 300 200 6.6% 100 5% 2006 2007 2008 2009 2010 - While fueling profitability: Adj. EBIT at 13.9% in 2011, +250 basis points - Continued expansion of Terminal gross profit over last 5 years: Scale, Optimized supply chain, Fabless model, Telium2 platform - Terminal gross profit at 44.0% in 2010, increase >600bp from 2006 to 2010, illustrating group technological transformation - Generating strong recurring operating cash flow - Strong operating cash flow: €158.9m in 2010 - Strong cash conversion* : 96% in 2010 - Low capital intensive model: capex < 3% of revenue * Net operating cash: EBITDA+working capital changes-capex Investors presentation - June 2011• 7
… with growth potential in payment terminals market Multi-application • Loyalty cards • Gift cards • Prepaid top up Emerging countries Value-added Services Technology - Payment terminals Security & as a marketing tool: design to Regulation advertising (video, - Contactless color display, - Wireless Card touch screen) - Biometry - Fraud: a concern - Source of revenue Penetration - EMV: an for merchants: opportunity loyalty/top up,... - Accelerating POS replacement - 11.5Mio EMV Structural cycle POS (vs. 45Mio - development of installed base) cards vs. checks Investors presentation - June 2011• 8
Emerging countries as key sources of growth Emerging markets & Number of POS terminals per ‘000 people urbanization drive growth Mature Payment Countries Increased middle class with access to financial services avg. 24 terminals p.1,000 inh. Governments pushing for tax collection Emerging Countries avg. 2 terminals p. 1,000 inh. Source: Euromonitor / IMF Investors presentation - June 2011• 9
Leveraging our robust business model to fuel development towards services Continuous shift towards electronic payments In the payment ecosystem, payment terminal will remain a key element Continuous shift towards card electronic payment – Gateway to cash usage moving towards dematerialized services – Convergence of Physical + Online + Mobile payments – On-going positioning of Ingenico on the fast growing services industry Capturing growth of electronic transactions: >10% p.a. checks – cash Source: MasterCard Increasing addressable market: from c. €2-2.5bn to more than €10bn* – Providing secure transaction services to merchants (payment & non-payment) Increased direct access to (small) merchants – Long term contracts – Recurring revenue through a per monthly fee and fixed transaction fee business – model Improving visibility on revenues & margins. Increasing business model resilience to economic conditions. *Company estimates Investors presentation - June 2011• 10
easycash: a major step to move up the value chain Merchant Services Processor Acquirer VAS provider Value Value-added Terminal Connectivity Pre- Hardware Processing Settlement chain services processing Services Fixed fee % of Monthly fee+ Revenue Monthly Monthly Monthly One off per transaction Fixed charge / type fee fee fee transaction in value transaction POS terminal market Transaction services Financial VAS Market institutions mostly Ingenico entities Ingenico mostly provides POS Easycash operates payment & VAS services for merchants terminals to either directly (large Revenue business model relies on recurring revenue through a per transaction payment type of business retailers) or indirectly (banks, distributors) Revenue business model mostly relies on one off fees Investors presentation - June 2011• 11
2010-2013: towards a new company profile with 40% target of recurring service revenues Evolution of revenues >€1bn Payment terminals: continuing growth (average growth of 5% p.a.) €907m €762m Recurring service revenues: target of 40% by 2013 Maintenance revenues: expected to – be flat with improved reliability from Telium OS 40% Transactions revenues: x3* – 28% (payment & non payment solutions) 2009 Pro 2010 2013 forma Target Transactions Maintenance Hardware Combination of growth & increased recurring revenues => more visibility *compared to €84m in 2009 PF Investors presentation - June 2011• 12
2011: in line with expectations Q1’11 : a good start of the year Sustained growth: – Revenue of €204.9m (+18% year-on-year; like-for-like: +9%) – Strong performance of both terminals (+6.4%*) and Transactions (+25%*) – Continuation of trends observed at the end of 2010 – 2011 guidance confirmed 2011 revenue target revised upwards – Like-for-like revenue* ≥ 985m € (as against 965-985m€) – Like-for-like growth: ≥ 6.3% – Continuous profitability improvement – Adjusted profit from ordinary activities** ≥ 13.9% – EBITDA: ≥ 18.3% – Enhanced financial flexibility €250m raised through convertible bonds (OCEANE) due 1 January 2017 – * At constant group perimeter & FX ** Before Price Purchase Allocation Investors presentation - June 2011• 13
Ingenico investment case Investors presentation - June 2011• 14
Appendix Investors presentation - June 2011• 15
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