Investors Presentation September 2010
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 - September 2010• 2
Ingenico at a glance Shareholder structure Group transformation for profitable growth as of September 1 2010 easycash integration & growth in Value Added Services 2010 Phase 3: 2010-2013 easycash acquisition: acceleration of strategic Changing development towards services • 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 September 15 2010 2008 Moving to a fabless model Phase 1: 2006-2008 Number of shares: 51.3 million Transforming to profitable group Share price: €20.22 • Money Line acquisition: 2008 Revenue: €728m (vs. 506m 2006 • Market capitalization: €1,037m in 2006) pre-processing solutions for Tier 2008 EBIT margin: 12.5% • 1 retailers in (vs. 6.2% in 2006) France Investors presentation - September 2010• 3
A leader in payment terminals with a global footprint Ingenico is the leader in payment terminals Ingenico’ unique geographical position (2009 revenues) shipments worldwide (2009 units sold) 35% Europe Ingenico North N 1 Verifone America China 13% N 2 N 2 Hypercom 28% MEA Other Brazil N 1 24% APAC Colombia N 1 Mexico N 1 Source: The Nilson Report – Sept 2010 - N.1 in the world for POS Shipment - 40 offices & subsidiaries - N.1 Installed base 15 million POS - Commercial presence in more than 125 countries - >1,000 Payments & Value-added Applications in portfolio - Optimized supply chain Ingenico is the only player that leverages geographies at such a scale Investors presentation - September 2010• 4
Leader on a market with high barriers to entry A market driven by global & local standards Constant intensification of the Global Card Regulation over the last 10 years Ongoing intensification of security and regulation will continue to elevate barriers to entry Ingenico masters the complex and multiple industry standards & local rules Investors presentation - September 2010• 5
Innovation driving technological leadership and costs A unique & rationalized product range Innovation driving technological leadership Strong R&D investments: 9% of revenue Comprehensive range of POS terminals in 2009 Rationalizing product ranges while addressing Making the right investment new segments (Telium) A single platform: Telium – A generic platform allowing all features – to be duplicated from one terminal to Addressing traditional market Addressing new market the other (eg. Colour, contacless) Nb of segments segments Products Significant reduction of development – time (-25% on average to 9-12 months) Previous 6 10 5 6 New New New Stable 3 4 3 4 New Driving POS terminal leadership First contactless embedded in the Counter PINPad Sign Wireless Pay Petrol WebP Health – Top Capture PDA OS -care terminal First POS with color display – First PDA with payment solution – certified PCI PED Investors presentation - September 2010• 6
An increasingly diversified customer base Banks & Acquirers Tier 1/2 merchants Small merchants Major financial institutions More than 100,000 small Thanks to its global merchants served in France presence, Ingenico is and Germany uniquely positionned to serve Tier 1/2 retailers The integration of easycash has accelerated the move towards direct access to merchants Investors presentation - September 2010• 7
Leveraging on easycash to evolve naturally from payment terminal to transactions Merchant Services Processor Acquirer Value-added Terminal Connectivity Pre- Value 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 institutions Market mostly Global ~ €2-2.5bn Size ~ €10bn The POS terminal will remain a key element in any “card-present” system of transactions Capturing growth of electronic transactions: >10% p.a. Increasing addressable market: from €2-2.5bn to more than €10bn (company’s estimate) Higher visibility on revenues & margins Investors presentation - September 2010• 8
Leveraging dynamics of the payment ecosystem Continuous shift towards electronic Changes in payment ecosystem payments – Technology – Regulation – Business demands – New players New shopping experience driving shift towards combined Physical + Online + Mobile payments Cash usage moving towards dematerialized services & on-line Payment terminal is the gateway to new Source MasterCard payment form (contactless, mobile) and value- added services deployment (loyalties, gifts, Source: MasterCard Telco prepaid top up, advertising…) POS as the secure gateway between online and physical worlds. Competences in complex physical ecosystem is a key differentiator Investors presentation - September 2010• 9
2010-2013: towards a new company profile with increased direct access to merchants Transactions Value-added POS terminals 1 2 3 Management services Loyalty Worldwide leader in a highly concentrated Large installed POS base easycash credibility & market experience New VAS terminals: Technological Brand new global Color – leadership payment infrastructure IPA280/Web POS – Telium providing First cross border Expertise in VAS: operational leverage customers Easycash loyalty – Comprehensive Transfer To – customer applications Payzone – portfolio > 1,000 Very efficient supply chain On Line payments 4 Mobile 2010-2013: direct access to merchants is a key growth driver Investors presentation - September 2010• 10
2/3 of the growth towards 2013 will be organic Revenues bridge of 2009 - 2013 (in €m) >1bn Payment terminals: average growth of 5% p.a. Maintenance revenue expected to be flat with improved reliability benefits from Telium OS 762m Revenue from Transactions x3, compared to €84m in 2009 PF 2/3 of growth: organic and – exporting easycash model 1/3: focused acquisitions – 2013 target: 60 / 40 split between one-off and recurring revenues Investors presentation - September 2010• 11
Strategic growth drivers of the payment terminals market Multi-application • Loyalty cards 5 Main Drivers • Gift cards • Prepaid top up Value-added Services Technology Security & Regulation Emerging countries Card Penetration Growth / Value Investors presentation - September 2010• 12
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 - September 2010• 13
Leveraging easycash & recent acquisitions to triple revenues from Transactions Organic growth Export easycash Tier 1 retail and in Germany Model abroad Banking processors Double digit growth in Indentified market Provide end-to-end transactions opportunities solutions on a global scale Nb of transactions Use SEPA market CAGR 12% 952 (in million) Easycash 833 changes to implement Cross border / one stop 744 670 to grow in the easycash business shop solutions for model: Tier1/2 retailers Europe Payment – Integrated services for transactions 2006 2007 2008 2009 banking customers Loyalty & VAS – New market segments (e.g. Credit Card Acquiring) Cross selling opportunities Penetrate petrol vertical in Iberica: FDI, >42,000 POS Payzone, FDI & Transfer To Deploy VAS strategy (mobile top up, loyalty) through unique access to market through distribution network in France (Payzone, >6,000 POS), Iberica (FDI) to grow VAS Opportunity to build an “easycash-like” across South East Asia, benefiting from a new Korvac debit scheme to be launched across the region in 2010 to grow in Asia Offers direct access to merchants and operates in Singapore, Thailand and Malaysia Investors presentation - September 2010• 14
Evolution of business model will boost operating leverage Evolution of operating performance Further optimize costs on POS business: milk Sagem Monetel synergies EBITDA Operating leverage driven by EBITDA >18% transactions related revenue Gross Profit Fixed cost type of business model: EBITDA – EBITDA Opex IT infrastructures, sales platforms… 16% Gross Gross Profit Profit Beyond easycash standalone growth Opex – in Germany, incremental leverage to Gross come from synergies with Ingenico Profit More visibility, more profitability - EBITDA margin target > 18% in 2013 Investors presentation - September 2010• 15
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