Resilient Q1’20 despite the first Covid-19 impacts.
Revenue of €658 million, up 4% on a comparable basis1
2020 outlook updated after Covid-19 impact
Ingenico Group (Euronext: FR0000125346 - ING), the global leader in seamless payments, today announced its revenue for the first quarter 2020.
In the context of the Covid-19 crisis, the Group posted a truly resilient performance in the first quarter, achieving 4 % organic growth. We actually performed above expectations until mid-March when we felt the impact of the spread of Covid-19 triggering store closures, travel halts and confinements. Based on our current analysis of the Covid-19 situation, we expect our second quarter to be down around 20%.
In the light of this unprecedented health crisis, our first responsibility was to protect the health of our employees whilst continuing to operate the business and support our clients 24/7. But this crisis is economic in nature too and we therefore launched, as early as March, a strong and holistic action plan to quickly adapt our cost structure, to protect profitability and cash throughout the year, without hampering our long-term growth profile and rebound capacity. Finally, all Fit for Growth initiatives are being executed and our teams are fully mobilized to overcome the current situation. Our long-term growth drivers remain intact and I am convinced that we should come out of the current crisis even stronger, for the benefit of all our stakeholders.
In the first quarter of 2020, revenue totalled €658 million, representing a 4% increase on a comparable basis. On a reported basis revenue was 3% higher than in the first quarter of 2019 and included a negative foreign exchange impact of €4 million and the impact of the divestment of Healthcare France activities.
The Retail Business Unit reported a revenue of €341 million, showing an increase of 7% over the quarter on a comparable basis. On a reported basis, revenue increased by 5% during this first quarter and included a neutral foreign exchange impact and the impact of the divestment of Healthcare France activities. Compared with Q1’19, the various activities performed as follows on a like-for-like basis:
During the quarter, B&A posted a revenue of €318 million, an increase of 1% on comparable basis. On a reported basis the activity is stable and included a negative foreign exchange impact of €4 million. Compared to Q1’19, the various regions performed as follows on a like-for-like basis:
Today, all countries are facing an unprecedented health crisis, both in terms of magnitude and complexity, and with a recovery scenario that remains difficult to confirm.
In such context, the Board and the Ingenico leadership team, with the support of all Ingenico’s employees, have renewed their engagement towards our society implementing several measures such as:
Ingenico Group has been committed for many years to promoting social responsibility across the company. With these types of measures, the Group intends to bring its own contribution and support to our society in a common effort during this unprecedented health crisis.
Updated FY’20 outlook and dividend after Covid-19 outbreak impact
Today, the macroeconomic situation is still uncertain for the second part of the year 2020. For this reason, the previous guidance provided to the market on 3rd February, 2020 is no longer valid.
In that context and based on a tight monitoring of the situation, Ingenico Group has defined major business assumptions and several recovery scenarios that have been integrated to assess the potential organic growth profile for FY’20. Our major business assumptions are based on a staged end of confinements for Europe and the United States from mid-May to June 2020, a progressive pick-up in consumption while stores re-open depending on sanitary constraints, a central scenario on travel with no recovery of international travel before end 2020 and a gradual pick-up on regional travel, and some possible short and local re-confinements in the countries in which the Group operates.
Based on these assumptions, the Group has derived the three following scenarios structured around different recovery curves, all articulated around a conservative c.20 % organic decline in Q2:
In this context, Ingenico Group has sized and activated in early March a strong and holistic action plan aimed at adapting its cost structure, protecting profitability and preserving cash. This sizing was decided upon the basis of the most conservative scenario (Scenario 3). Consequently, on top of the Fit for Growth plan that will deliver €35 million EBITDA impact in 2020, this C19 action plan implemented during Q1’20 will deliver €100 million added EBITDA impact in 2020. The combination of the two plans will reduce the Group’s operating expenses and other cost of sales by up to 13 %.
The Covid-19 action plan is already fully in execution and is focused on a holistic approach of the Group cost structure:
In that context, Ingenico Group revises its FY’20 guidance as follows:
On this last point, to be consistent with the partial unemployment measures, the Board of Directors has exceptionally decided not to propose a dividend distribution this year. This proposal will be presented to the Annual General Meeting of shareholders on 11th June, 2020.
Ingenico Group’s long-term growth drivers remain intact and we are convinced that the Group should come out of the current crisis even stronger with the engagement of all of the teams serving our clients for the benefit of all of our stakeholders.
The first quarter 2020 revenue will be discussed in an audio webcast and a Group telephone conference call to be held on 22nd April 2020 at 6.00pm Paris time (5.00pm UK time). The presentation and audio webcast will be accessible at www.ingenico.com/finance. The call will be accessible by dialling one of the following numbers: +33 (0) 1 70 37 71 66 (from France), +1 212 999 6659 (from the US) and +44 20 3003 2666 (from other countries) with the conference password: Ingenico 2020.
This press release contains forward-looking statements. The trends and objectives given in this release are based on data, assumptions and estimates considered reasonable by Ingenico Group. These data, assumptions and estimates may change or be amended as a result of uncertainties connected in particular to the performance of Ingenico Group and its subsidiaries. These forward-looking statements in no case constitute a guarantee of future performance, and involve risks and uncertainties. Actual performance may differ materially from that expressed or suggested in the forward-looking statements. Ingenico Group therefore makes no firm commitment on the realization of the growth objectives shown in this release. Ingenico Group and its subsidiaries, as well as their executives, representatives, employees and respective advisors, undertake no obligation to update or revise any forward-looking statements contained in this release, whether as a result of new information, future developments or otherwise. This release shall not constitute an offer to sell or the solicitation of an offer to buy or subscribe for securities or financial instruments.
Ingenico Group (Euronext: FR0000125346 – ING) is shaping the future of payments for sustainable and inclusive growth. As a global leader in seamless payments, we provide merchants with smart, trusted and secure solutions to empower commerce across all channels and enable simplification of payments and deliver customer promises. We are the trusted and proactive world-class partner for financial institutions and retailers, from small merchants to the world’s best-known global brands. We have a global footprint with more than 8,000 employees, 90 nationalities and a commercial presence in 170 countries. Our international community of payment experts anticipates the evolutions of commerce and consumer lifestyles to provide our clients with leading-edge complete solutions wherever they are needed.