Ingenico Group ((Euronext: FR0000125346 – ING) announced today its revenue for the third quarter of 2016.
Our Q3 performance has been satisfactory, despite unfavorable market conditions in the US and in Brazil during the quarter. Europe-Africa and Asia-Pacific have performed outstandingly well, while ePayments is now back to double-digit growth, as we anticipated. As such, we reaffirm our objectives for 2016.
The long-term fundamentals of our business model remain in place. Our investments in on-line payment are yielding returns, with the ePayments division expected to be a key growth driver for the future.”
Performance in the first nine months
In the first nine months of 2016, revenue totaled €1.703 billion, representing a 6% increase on a reported basis, including a negative foreign exchange impact of €64 million. Total revenue included €1.172 billion generated by the Payment Terminals business and €531 million generated by Payment Services.
On a comparable basis1 revenue growth was 10% higher than in the prior-year period, a result that included a 10% increase in Payment Terminals and a 9% increase in Payment Services.
The strong growth achieved since the start of the year in Europe was driven by Ingenico Group’s multi-local footprint and high-quality customer service. It also reflects the Group’s ability to take advantage of regulatory change in mature markets. In Asia-Pacific, growth was particularly strong in Australia, where the new Telium Tetra range was successfully launched, and in China, where Ingenico Group has continued to enjoy high volume. In contrast, Brazil’s unfavorable macro-economic conditions heavily affected business volumes in Latin America. In North America, as indicated in early September, Ingenico Group was confronted with a sudden decline in demand for its products, due to relaxation of the deadline for EMV migration. Finally, investments in the ePayments division over the last few months has led to strong sales momentum driven in particular by implementation of the contract with Alipay.
Performance in the third quarter
In the third quarter of 2016, revenue totaled €570 million, representing a 4% increase on a reported basis, including a negative foreign exchange impact of €14 million. Total revenue included €384 million generated by the Terminals business and €186 million generated by Payment Services.
On a comparable basis1 revenue growth was 7% higher than in the third quarter of 2015, a result that included a 2% increase in Payment Terminals and an 18% increase in Payment Services.
Compared with Q3 2015, the various divisions performed as follows on a like-for-like basis and at constant exchange rates:
The Group maintains its full-year objectives for organic revenue growth in 2016 at 7% or above, as well as for EBITDA margin, which is expected to be at 20% or above.
Regarding the coming quarters, the trends observed today are as follows:
In Europe-Africa, after three quarters of particularly successful growth, the Group expects a slowdown in the PCI V1 replacement cycle.
Asia-Pacific and Middle East Region should continue to grow driven by countries which the Group has recently entered.
In Latin America, sales declines are expected to stabilize progressively.
In North America, activity will be further affected by unfavorable comparatives in Q4 of this year and at the start of next year. However market share gains are expected in new segments in the US. The ePayments division should maintain a good level of growth.
A conference call to discuss Ingenico Group’s Q3 2016 revenue will be held on October 26, 2016 at 6.00 p.m., Paris time. Dial-in numbers:
01 70 99 32 12 (French domestic), +1 646 934 6795 (for the United States) and +44 (0)20 7162 0177 (international) with the conference code: 960278.