INGENICO GROUP: Solid results, 2017 objectives achieved Mid-term outlook: EBITDA double digit CAGR between 2018 and 2020

2/22/2018, 7:03 AM (Source: GlobeNewswire)
Press Release
Paris, 22nd February 2018 

2017 operating and financial performance

  • Revenues of €2,510 million, up 9% on reported basis
  • 7% organic growth[1]
  • EBITDA[2]: €526 million, up 10% and representing an EBITDA margin of 21.0%
  • 51% adjusted FCF[3] to EBITDA conversion rate in line with the long-term objective
  • Group net profit of €256 million, up 5%
  • Proposed dividend of €1.60, up 7% (39% payout)

Mid-term ambition: our key priorities

  • Maintain leadership in acceptance solutions across all customer segments and channels
  • Introduce our next-generation Open Android payment platform
  • Expand direct-to-merchant access with our unique Blueprint and repeatable model

Financial outlook

  • 2018: €545m - €570m EBITDA range
    • Integrating c. €25-30 million negative impact from currencies
  • Mid-term outlook: EBITDA double digit CAGR between 2018 and 2020
    • EBITDA over €700m at constant scope and exchange rate in 2020
    • Adjusted FCF3 conversion to EBITDA over 45%
    • Payout ratio over 35%

Philippe Lazare, Chairman and Chief Executive Officer of Ingenico Group, commented: "In 2017, we have been focused on building the Ingenico of tomorrow by strengthening our management team and adjusting our organization to better address our customers' needs. We have enriched our offers dedicated to banks and acquirers and invested organically in our Retail platforms. The successful integrations of Bambora and Techprocess will enable us to accelerate the Group transformation. We now have two Business Units offering our clients a complete panel of solutions in order to help them grow their business.
After reaching all of our 2017 financial objectives, 2018 will be dedicated to the continuation of the operational deployment of the three divisions of Retail. In parallel, Banks & Acquirers will keep on growing despite a neutral environment, less driven by exceptional drivers as experienced in the previous years.
Ingenico Group will rely on all of its skills and assets to achieve its 2020 ambition."
Ingenico Group (Euronext: FR0000125346 - ING), the global leader in seamless payment, today announced a mid-term update and its 2017 full-year results.

Key figures

(in millions of euros) 2017 2016 Year-on-Year Difference
Revenue 2,510 2,312 +9%
Adjusted gross profit 1,067 1,005 +6%
  As a % of revenue 42.5% 43.5%  -100 bps
Adjusted operating expenses (541) (529) +2%
  As a % of revenue -21.5% -22.9% -130 bps
EBITDA 526 476 +10%
  As a % of revenue 21.0% 20.6% +40 bps
Profit from ordinary activities, adjusted (EBIT) 453 403 +12%
  As a % of revenue 18.1% 17.5% +60 bps
Operating income 371 357 +4%
Net profit 260 251 +4%
Net profit attributable to Group shareholders 256 244 +5%
       
Adjusted free cash flow[4] 269 255 +6%
Free cash flow 239 248 -4%
Net debt 1,471 126 N/A
  Net debt-to-EBITDA ratio 2.8x 0.3x  
Equity attributable to Group shareholders 1,840 1,703 +8%

Mid-term outlook: EBITDA double digit CAGR between 2018 and 2020

The electronic payment market is evolving with customers' usages developing and merchants' needs multiplying. In the meantime, complexity is increasing as the commercial scale is expanding geographically but also within new channels opened to commerce. In light of this, value has extended beyond mere payment acceptance devices, and now lies in bringing business solutions to points of interaction that are multiplying in line with the development of customer and merchant touch points.

In recent years, the Group has invested organically and through several acquisitions to gather the relevant skills and assets in order to build products, offers and solutions that help the merchants grow their business. From a pure point of acceptance provider, the Group has enriched its value proposition towards acquiring, full service and online and in-store processing in order to build seamless end-to-end solutions. Today, our client centric organization addresses all kinds of merchants, SMBs, organized retailers or digital players. Our two business units enable us to address the merchants' needs indirectly through B&A and directly with Retail. The latter has recently been organized into three dedicated business lines focusing on distinct merchant segments: SMBs, Global Online and Enterprise.

In order to achieve our ambition to enable payments everywhere, enhance merchant and consumer experiences and deliver an end-to-end full service offer, Ingenico Group has established three key priorities for the period 2018 - 2020:

  • Maintain our leadership in acceptance solutions across all customer segments and channels
  • Introduce our next-generation Open Android payment platform
  • Expand our direct-to-merchant footprint with a unique Blueprint and repeatable business model

These priorities, which will be deployed within our two business units, Banks & Acquirers and Retail, will enable Ingenico Group to create value for all stakeholders.


11% Organic growth in revenues in the fourth quarter 2017

  FY 2017 Q4 2017
M€ % change M€ % change
Comparable1 Reported Comparable1 Reported
Retail 1,099 5% 9% 325 9% 21%
Banks & Acquirers 1,411 8% 8% 367 12% 8%
Total 2,510 7% 9% 692 11% 14%
Europe & Africa 907 7% 7% 238 11% 11%
APAC & Middle East 568 9% 7% 148 3% -3%
Latin America 185 5% 8% 50 27% 20%
North America 256 -6% -7% 72 16% 8%
ePayments 596 11% 22% 184 11% 39%
Total 2,510 7% 9% 692 11% 14%

Fourth quarter 2017 performance

In the fourth quarter of 2017, revenue totalled €692 million, representing a 14% increase on a reported basis, including a negative foreign exchange impact of €29 million. Total revenue included €440 million from Terminals and €252 million from Payment Services.

On a comparable basis, revenue was 11% higher than in the fourth quarter of 2016, including a 10% increase in Terminals and a 12% increase in Payment Services.

Compared with Q4'16, the various divisions performed as follows on a like-for-like basis:

  • Europe & Africa (up 11%): The quarterly performance showed a very resilient market fuelled by the vast majority of countries.

      In the Banks and Acquirers Business Unit, most countries drove the overall dynamic. Western countries showed a very strong performance, mainly fuelled by France, Spain and Italy with the Telium Tetra deployment. Eastern Europe remained dynamic, mostly driven by Greece and Poland and their local regulations, while the other countries were resilient facing a difficult comparison basis.
      In the Retail Business Unit, the quarter was still very dynamic and marked by the gaining of several contracts. The Axis platform has shown a very good performance for existing clients, but also good traction with new customers such as Uniqlo or New Bbalance in Spain. Ingenico Group continued to expand its pan-European offer with new deals with players like Adeo (Leroy Merlin, Weldom, Brico Center, Alice Délice,.) to provide cross-channel solutions.
       

  • Asia-Pacific & Middle East (up 3%): In the Banks and Acquirers Business Unit, dynamic was driven by China, which benefited from the successful launch of the APOS. Close to 400k units were shipped during Q4'17, bringing the number of units shipped during the year to over 1.3m. As expected India is now back to a normative level of business. Therefore the country has been declining as it faced a challenging comparable basis due to the demonetization process which started in Q4'16 and ended in June 2017. South East Asia showed a mixed performance between Indonesia, where the market is currently standing by following ongoing regulatory changes, and other countries such as Thailand and Japan in which the Group performed well.

      In the Retail Business, the main part of the activity is located in Turkey with a positive dynamic, benefiting from the government push for POS with fiscal memory and services enabling transaction data to be transferred to tax authorities.

  • Latin America (up 27%): The region, which is part of the Banks and Acquirers Business Unit, showed a very strong quarter. The Brazilian market seems to have recovered as Ingenico Group is back to positive growth during the fourth quarter. Following the same trend as in the first nine months, the other countries have driven the performance, with Mexico benefiting from the Telium Tetra deployment and Chile, Peru or Costa Rica which have become very strong drivers over the past quarter.
     
  • North America (up 16%): The quarter showed a very strong dynamic as expected.

      Canada's performance was in line with our expectations, still facing a tough comparison basis in Q4, although to a lesser extent than in Q3'17.
      The US market showed a very strong performance in Q4'17, still driven by the verticals targeted over the past 18 months. The Unattended sector was a very strong driver, especially with a major deal signed in the Vending vertical. Solutions for mobility showed a strong traction and this quarter saw the successful launch of the new mobile device M70, which is an "all-in-one" Open Android Tablet including Chip and contactless payment acceptance capabilities. The other verticals such as Hospitality, Restaurants or Healthcare continued to deliver with new customers like Choice Hotels or Adventist Health.
             

  • ePayments (up 11%): The quarter showed another strong performance enabling the Group to reach its double-digit growth objectives for the full year despite a strong comparison basis in the second half. Ingenico's online activities were able to provide a strong conversion rate improvement over the quarter, enabling our clients to improve sales performance, especially during specific events such as Single Day, Black Friday or Cyber Monday. Volumes processed within Ingenico's platforms on those specific days were up to three times the average daily volume globally, mainly driven by the globalization of these commercial events which gives increasing credibility to the online cross border offer. In parallel, the quarter was driven by very good traction from the Ogone collecting activity with volumes up 46% versus Q4'16. In parallel, the integration between our two platforms in India (EBS and TechProcess) is about to be completed, enabling the Group to accelerate the deployment of the online offer.

      In the meantime, new clients such as Gamivo, Aerolineas Argentinas or Lyca Mobile have been onboarded on our platforms during the fourth quarter.

Within our new client centric organization, the Banks and Acquirers Business Unit posted a revenue of €367 million, an increase of 8% on reported figures and including a negative foreign exchange impact of €17 million. The activity performed strongly this quarter, increasing by 12% on a comparable basis thanks to the ramp up in the United States, the Brazilian recovery, the dynamic in China driven by the success of the APOS and the resilience of the European markets. This strong performance was partially offset by some headwinds in Indonesia and a strong comparison basis in India.
The Retail Business Unit reported a revenue of €325 million, an increase of 21% on reported figures including a negative currency impact of €12 million. On a comparable basis, revenue was up 9%, driven by the very good performance of the European markets, especially fuelled by the ramp up of in-store services with Axis and the resilience of the ePayment division despite the strong comparison basis.

Performance for the full year 2017

In 2017, revenue totalled €2,510 million, representing a 9% increase on a reported basis and including a negative foreign exchange impact of €35 million. Total revenue included €1,661 million from Terminals and €849 million from Payment Services.

On a comparable basis, revenue was 7% higher than 2016, including a 5% increase in Terminals and an 11% increase in Payment Services.
Over the year, ePayments (+11%) showed strong improvement in terms of stability and customer satisfaction, enabling the division to perform well throughout the year. New milestones were reached during the year such as the merger between the two Indian platforms that is about to be completed, or the evolution of the Ogone model from a pure gateway to a cross-border platform. In Latin America (+5%) the Brazilian dynamic was deeply impacted by the difficult macroeconomic situation, but it showed a slight recovery in the second half of 2017 despite the competitive landscape. The other countries were very dynamic, mainly driven by the Telium Tetra launch. In North America (-6%), Ingenico Group outperformed the market as US inventories were cleaned up, and the course of the Banks & Acquirers activity was back to normal. In parallel, the Retail Business Unit slowed down because of a difficult comparison basis. EMV is no longer a driver in the region, but all the verticals targeted for more than a year are now fuelling growth. Canada recorded a performance in line with our expectations despite a tough comparison basis in the second half of the year. The performance of Europe - Africa (+7%) reflects the leadership of Ingenico Group in the region. The beginning of the year was driven by the tailwind of the PCI V1 to V3 migration which was followed by the deployment of Telium Tetra, while the dynamic of the Eastern countries was very good throughout the year. Asia-Pacific & Middle East (+9%) showed a mixed performance across the countries as India was strong over the first half, driven by the demonetization process, followed by a difficult comparison basis in the second half. China was impacted at first by the ramp up of the QR code based APMs before benefiting from the successful launch of the APOS, accounting for more than 1.3 million shipments over the period. The remaining Asian countries showed a strong dynamic and resilience with the exception of Indonesia, where the switch implementation amongst public banks resulted in a "wait and see" momentum. In the meantime, Turkey continued to perform strongly, fuelled by the deployment of POS with fiscal memory.

As part of our new organization, our reporting is evolving towards the two Business Units, Banks & Acquirers and Retail. Over the year 2017, Banks & Acquirers posted a revenue of €1,411 million, an increase of 8% on reported figures and including a negative foreign exchange impact of €14 million. On a comparable basis the activity increased by 8%. The Retail Business Unit reported a revenue of €1,099 million, showing an increase of 9% over the period on reported figures and including a negative foreign exchange impact of €20 million. On a comparable basis, revenue increased by 5% during the year, impacted by a difficult comparison basis in the United States.

Adjusted gross profit up 6%

In 2017, adjusted gross profit reached €1,067 million, up 6% compared to €1,005 million in 2016, and representing 42.5% of revenues.

Operating expenses contained throughout the year

In 2017, adjusted operating costs were €541 million, representing 21.5% of revenue, compared to 2016 when adjusted operating costs represented 22.9% of revenue.

This decrease highlights the first results of the efficiency plan implemented in July 2017. As of 31st December 2017, the efficiency plan has generated more than half of the €20 to €25 million plan of efficiencies to be realized on a full-year basis. Those efficiencies concern all types of expenses, with a specific effort on the G&A.

Expansion of the EBITDA margin reaching 21.0% of revenues

EBITDA was €526 million against €476 million in 2016, representing an EBITDA margin of 21.0%, up 40 basis points compared to 2016. EBIT margin represented 18.1% of revenue and reached €453 million compared to €403 million in 2016, an increase of 60 basis points, thanks to the strong control of operating expenses.

A resilient operating result

The other income and expenses reached €-30 million. In 2016 they were €-5 million. The increase is mainly due to acquisition costs, mostly related to Bambora, that account for more than €20 million over the year. The operating result includes price purchase allocation costs that represented €52 million in 2017 compared to €42 million in 2016.

After taking into account these charges and other operating costs, profit from operations was €371 million, against €357 million in 2016. Operating margin represented 14.8% of revenue, against 15.4% in 2016.

Net profit attributable to shareholders progressing year after year

The financial results account for €-23 million, down from €-8 million in 2016, a year which benefited from the sale of the Visa Europe equity securities that represented €12 million. Taxation costs were reduced by 10% to €87 million, against €97 million in 2016. This improvement is explained by a streamlining of the operational structures leading to an effective tax rate for the Group of 25.1%, against 27.9% in 2016.

In 2017, Group net profit attributable to shareholders rose 5% to €256 million, against €244 million in 2016.

A strong cash generation despite increase of non-recurrent expenses

The adjusted free cash flow[5] was up 6% in 2017 at €269 million, i.e. a conversion rate of 51%. 2017 has been a very dynamic year in terms of acquisitions which has led to significant non recurrent expenses mainly related to Bambora. Group's operations, post other income and expenses, generated a free cash flow of €239 million, i.e. a FCF/EBITDA conversion ratio of 45.5%. The cash generation was impacted by a negative change in working capital, mainly due to the currency effect and a very strong acceleration of the Q4'17 activity. Investments increased by 15% to €88 million against €77 million in 2016.

The Group net debt increased to €1,471 million against €126 million one year ago. The ratio of net debt to equity is 80% and the ratio of net debt to EBITDA is up to 2.8x from 0.3x at the end of 2016. The increase of the net debt level is mainly related to the acquisition of Bambora for a total consideration of €1.5 billion. Note that the leverage calculation is not factoring in a full impact of Bambora.

Proposed dividend of €1.60 per share, an increase of 7%

In line with the Group's dividend policy, a proposal to distribute a dividend of €1.60 per share will be presented to the Annual General Meeting of shareholders on 16th May 2018, representing a distribution rate of 39%. This dividend will be payable in cash or shares, according to the holder's preference.

2018 outlook

In 2018, Ingenico Group expects an EBITDA between €545 million and €570 million. The guidance factored in an assumptions of a negative impact from currencies of c. €25-30 million. Given the tough comparison basis and the pipeline of projects, the phasing of the year should be reflected in a soft first half 2018 followed by a stronger second half.

Audio Webcast & Conference Call

The 2017 full-year financial results and mid-term outlook will be discussed in an audio webcast and a Group telephone conference call to be held on 22nd February 2017 at 9.00am Paris time (8.00am UK time). A presentation will be available and the 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 75 07 11 (from France), +1 631 913 1422 (from the US) and +44 33 3300 0804 (from other countries) with the conference ID: 84510290#.

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.

About Ingenico Group

Ingenico Group (Euronext: FR0000125346 - ING) is the global leader in seamless payment, providing smart, trusted and secure solutions to empower commerce across all channels, in-store, online and mobile. With the world's largest payment acceptance network, we deliver secure payment solutions with a local, national and international scope. We are the trusted world-class partner for financial institutions and retailers, from small merchants to several of the world's best known global brands. Our solutions enable merchants to simplify payment and deliver their brand promise.

Stay in touch with us:
 www.ingenico.com         twitter.com/ingenico 

For more experts' views, visit our blog.

Contacts / Ingenico Group

Investors
Laurent Marie
VP Investor Relations &
Financial Communication
laurent.marie@ingenico.com
(T) / (+33) (0)1 58 01 92 98
Investors
Kevin Woringer
Investor Relations Manager
kevin.woringer@ingenico.com
(T) / (+33) (0)1 58 01 85 09

 
Communication
Coba Taillefer
External Communication Manager
coba.taillefer@ingenico.com
(T) / (+33) (0)1 58 01 89 62

Upcoming events

First quarter 2018 revenues: 25th April 2018


EXHIBIT 1
Basis for preparing the 2017 financial statements

The consolidated interim financial statements have been drawn up in accordance with International Financial Reporting Standards (IFRS). In order to provide meaningful comparable information, these data have been presented on an adjusted basis, i.e. restated to reflect the depreciation and amortization expenses arising on the acquisition of new entities. Pursuant to IFRS3R, the purchase price for new entities is allocated to the identifiable assets acquired and subsequently amortized over specified periods.

The main financial data for 2017 has been analyzed on an adjusted basis, i.e., before purchase price allocation (PPA). Please see Exhibit 7.

Non-IFRS financial data shown in the exhibit 4 are adjusted from any impact related to purchase price allocation (PPA).

The adjusted gross margin and the adjusted operational expenses disclosed are excluded from depreciation and amortization, provisions, expenses for share distributed to employees and officers and purchase price allocation ("PPA"). - Please see Exhibit 4.

EBITDA is not an accounting term; it is a financial metric defined here as profit from ordinary activities before depreciation, amortization and provisions, and before expenses for shares distributed to employees and officers. The reconciliation of adjusted profit from ordinary operations to EBITDA is available in Exhibit 7.

EBIT (Earnings Before Interest and Taxes) is equal to profit from ordinary activities, adjusted for amortization of the purchase price for newly acquired entities allocated to the identifiable assets acquired.

Free cash flow is equal to EBITDA less: cash and other operating income and expenses, changes in working capital requirements, investing activities net of disposals, financial expenses net of financial income, and tax paid (Note 5e in the exhibit of interim financial statements).

The financial net debt disclosed excludes the financing line of merchants pre-financing.


EXHIBIT 2

Following the evolution of its activities and in order to support its position as world leader in omnichannel payments, Ingenico Group has put in place a new organization that is focused on clients. The Group's reporting is structured around two business units: Banks and Acquirers (B&A) and Retail. On top of that, the geographical split has changed to better reflect the organization of Ingenico Group. From now on, Europe & Africa will include the Middle East (formerly included in Asia Pacific & Middle East) and become EMEA. In parallel, the EBS platform, which used to be reported in the Asia Pacific & Middle East region, will now be part of ePayments.

The pro forma revenues for the period ended on December 31st, 2017 integrates Techprocess, IECISA, SST and Bambora. It has been built as if each of these acquisitions would have been integrated from January 1st, 2017.

1. FORMER GEOGRAPHICAL REPORTING
              
In Millions of euros Q1'17 Q2'17 Q3'17 Q4'17 2017   
Retail 243 273 259 325 1,099   
Banks & Acquirers 351 355 338 367 1,411   
Total 594 628 597 692 2,510   
Europe-Africa 209 225 235 238 907   
APAC & Middle East 162 140 118 148 568   
Latin America 44 44 48 50 185   
North America 52 76 56 72 256   
ePayments 127 144 141 184 596   
Total 594 628 597 692 2,510   
              
2. NEW GEOGRAPHICAL REPORTING
              
In Millions of euros Q1'17 Q2'17 Q3'17 Q4'17 2017   
Retail 243 273 259 325 1,099   
Banks & Acquirers 351 355 338 367 1,411   
Total 594 628 597 692 2,510   
EMEA 228 242 256 270 995   
APAC 143 122 96 115 475   
Latin America 44 44 48 50 185   
North America 52 76 56 72 256   
ePayments 128 145 142 185 601   
Total 594 628 597 692 2,510   
              
3. NEW REPORTING ON A PRO FORMA BASIS
              
In Millions of euros Q1 2017 PF Q2 2017 PF Q3 2017 PF Q4 2017 PF 2017 PF   
Retail 297 327 314 348 1,286   
Banks & Acquirers 359 364 344 361 1,428   
TOTAL 656 690 658 709 2,714   



EXHIBIT 3 
2017 Pro forma key figures

The pro forma key figures for the period ended on December 31st, 2017 integrates Techprocess, IECISA, SST and Bambora. It has been built as if each of these acquisitions would have been integrated from January 1st, 2017.

(in millions of euros) 2017

Pro Forma*
2017
Revenue 2,714 2,510
Adjusted Gross Profit 1,146 1,067
  As a % of revenue 42.2% 42.5%
Adjusted Operating Expenses (598) (541)
  As a % of revenue -22.0% -21.5%
EBITDA 549 526
  As a % of revenue 20.2% 21.0%
Profit from ordinary activities, adjusted (EBIT) 470 453
  As a % of revenue 17.3% 18.1%


EXHIBIT 4 
2017 Bridge between adjusted and non-IFRS P&L

(in millions of euros) 2017
Adjusted Impact Non-IFRS
Revenue 2,510 - 2,510
Adjusted gross profit 1,067 -16 1,051
  As a % of revenue 42.5%   41.9%
  Sales & Marketing (186) -2 (188)
  As a % of revenue -7.4% -7.5%
  Research & Developments (146) -40 (186)
  As a % of revenue -5.8%   -7.4%
  General & Administrative (209) -15 (224)
  As a % of revenue -8.3%   -8.9%
Adjusted operating expenses (541) -57 (598)
  As a % of revenue -21.5%   -23.8%
EBITDA 526    
  As a % of revenue 21.0%    
  Depreciation & Amortization and share-based compensations (73)    
  As a % of revenue -2.9%    
Profit from ordinary activities, adjusted (EBIT) 453    
  As a % of revenue 18.1%    
Operating income 371    
Net profit 260    
Net profit attributable to Group shareholders 256    


2016 Bridge between adjusted and non-IFRS P&L

(in millions of euros) 2016
Adjusted Impact Non-IFRS
Revenue 2,312 - 2,312
Adjusted gross profit 1,005 -18 987
  As a % of revenue 43.2%   42.7%
  Sales & Marketing (170) -5 (175)
  As a % of revenue -7.4% -7.6%
  Research & Developments (158) -19 (177)
  As a % of revenue -6.8%   -7.7%
  General & Administrative (200) -32 (232)
  As a % of revenue -8.7%   -10.0%
Adjusted operating expenses (529) -55 (584)
  As a % of revenue -22.9%   -25.3%
EBITDA 476    
  As a % of revenue 20.6%    
  Depreciation & Amortization and share-based compensations (73)    
  As a % of revenue -3.2%    
Profit from ordinary activities, adjusted (EBIT) 403    
  As a % of revenue 17.5%    
Operating income 357    
Net profit 251    
Net profit attributable to Group shareholders 244    


EXHIBIT 5 
2017 Sales and non-cash adjusted gross margin split by activities

(in millions of euros) Terminals Payment Services FY 2017
Revenues 1,661 849 2,510
  Like for like growth +5% +11% +7%
Non-cash adjusted gross margin 777 274 1,051
  As a % of revenue 46.8% 32.3% 41.9%


EXHIBIT 5 
Income statements, balance sheet, cash flow statements

1. INTERIM CONSOLIDATED INCOME STATEMENTS   
   
(in millions of euros) 2017 2016
     
REVENUE 2,510 2,312
Cost of sales (1,475) (1,337)
     
GROSS PROFIT 1,035 975
     
Distribution and marketing costs (224) (205)
Research and development expenses (186) (178)
Administrative expenses (224) (232)
     
PROFIT FROM ORDINARY ACTIVITIES 402 361
     
Other operating income 0 4
Other operating expenses (30) (8)
     
PROFIT FROM OPERATING ACTIVITIES 371 357
     
Finance income 47 77
Finance costs (69) (84)
     
NET FINANCE COSTS (23) (8)
     
Share of profits in equity-accounted investees (1) (1)
     
PROFIT BEFORE INCOME TAX 347 348
     
Income tax expense (87) (97)
     
NET PROFIT 260 251
     
Attributable to:    
- Ingenico Group SA shareholders 256 244
- non-controlling interests 4 7
     
EARNINGS PER SHARE (in euros)    
Net earnings:    
- basic earnings per share 4.14 4.00
- diluted earnings per share 4.06 3.91



2. INTERIM CONSOLIDATED BALANCE SHEET (REVIEWED)   
   
ASSETS   
(in millions of euros) 2017 2016
Goodwill 2,479 1,409
Other intangible assets 958 488
Property, plant and equipment 88 75
Investments in equity-accounted investees 8 9
Financial assets 20 17
Deferred tax assets 61 58
Other non-current assets 39 27
TOTAL NON-CURRENT ASSETS 3,652 2,083
Inventories 171 172
Trade and related receivables 557 501
Receivables related to intermediation activities 173 29
Other current assets 39 24
Current tax assets 21 27
Derivative financial instruments 8 12
Funds related to intermediation activities 461 273
Cash and cash equivalents 596 1,014
TOTAL CURRENT ASSETS 2,024 2,052
TOTAL ASSETS 5,677 4,136
   
EQUITY AND LIABILITIES   
(in millions of euros) 2017 2016
Share capital 62 61
Share premium account 818 762
Other reserves 982 841
Translation differences (22) 38
Equity for the period attributable to Ingenico Group SA shareholders 1,840 1,703
Non-controlling interests 11 4
TOTAL EQUITY 1,851 1,707
Non-current borrowings and long-term debt 1,549 896
Provisions for retirement and benefit obligations 25 25
Other long-term provisions 24 24
Deferred tax liabilities 227 134
Other non-current liabilities 67 127
TOTAL NON-CURRENT LIABILITIES 1,892 1,206
Short-term loans and borrowings 553 244
Other short-term provisions 19 30
Trade and related payables 511 505
Payables related to intermediation activities 598 302
Other current liabilities 226 119
Current tax liabilities 24 20
Derivative financial instruments 3 4
TOTAL CURRENT LIABILITIES 1,934 1,223
TOTAL LIABILITIES 3,826 2,429
TOTAL EQUITY AND LIABILITIES 5,677 4,136


3. INTERIM CONSOLIDATED CASH FLOW STATEMENTS (REVIEWED)   
   
(in millions of euros) 2017 2016
     
Profit for the period 260 251
Adjustments for:    
- Share of profit of equity-accounted investees 1 1
- Income tax expense/(income) 87 97
- Depreciation, amortization and provisions 111 93
- Change in fair value 3 (4)
- (Gains)/losses on disposal of assets 0 0
- Net interest costs/(revenue) 19 3
- Share-based payment expense 13 24
Interest paid (12) (12)
Income tax paid (97) (131)
Cash flows from operating activities before change in net working capital 386 322
  Inventories (10) (26)
  Trade and other receivables (65) (12)
  Trade payables and other payables 7 25
Change in net working capital (68) (12)
Change in net working capital coming from intermediation activities 21  
NET CASH FLOWS FROM OPERATING ACTIVITIES 340 310
     
Acquisition of fixed assets (88) (77)
Proceeds from sale of tangible and intangible fixed assets 1 9
Acquisition of subsidiaries, net of cash acquired (1,257) (53)
Disposal of subsidiaries, net of cash disposed of - 3
Loans and advances granted and other financial assets (4) (16)
Loan repayments received 8 1
Dividend received 6  
Interest received 7 8
CASH FLOWS FROM INVESTING ACTIVITIES (1,327) (125)
     
Proceeds from share capital issues 2 -
Purchase/sale of treasury shares 0 0
Issuance of borrowings 919 -
Proceeds from loans and borrowings (275) (38)
Repayment of loans and borrowings 9 1
Change in the Group's ownership interests in controlled entities (21)  
Changes in other financial liabilities (1) (0)
Effect of financial derivative instruments - (14)
Dividends paid to shareholders (40) (36)
Taxes on financing activities (2) (1)
NET CASH FLOWS FROM FINANCING ACTIVITIES 591 (88)
Effect of exchange rates fluctuations (18) 6
CHANGE IN CASH AND CASH EQUIVALENTS (415) 103
     
Net cash and cash equivalents at beginning of the year 1,003 900
Net cash and cash equivalents at year end 589 1,003
   
   
  2017 2016
CASH AND CASH EQUIVALENT    
Short-term investments and short-term deposits (only for the portion considered as cash equivalents) 90 285
Cash 506 729
Bank overdrafts (7) (11)
TOTAL NET CASH AND CASH EQUIVALENTS 589 1,003

EXHIBIT 6

Impact of purchase price allocation (« PPA »)

(in millions of euros) 2017 excl.
PPA
PPA Impact 2017
Gross profit 1,051 (16) 1,035
Operating expenses (598) (36) (634)
Profit from ordinary activities 453 (52) 402

Reconciliation of profit from ordinary activities to EBITDA

EBITDA represents profit from ordinary activities, restated to include the following:

  • Provisions for impairment of tangible and intangible assets, net of reversals (including impairment of goodwill or other intangible assets with indefinite lives, but not provisions for impairment of inventories, trade and related receivables and other current assets), and provisions for risks and charges (both current and non-current) on the liability side of the balance sheet, net of reversals.
  • Expenses related to the restatement of finance lease obligations on consolidation.
  • Expenses recognized in connection with the award of stock options, free shares or any other payments to be accounted for using IFRS 2, Share-based compensation.

Reconciliation :

(in millions of euros) 2017 2016
Profit from ordinary activities 402 361
Allocated assets amortization (PPA) 52 42
EBIT 453 403
Other D&A and changes in provisions 60 49
Share-based compensation 13 24
EBITDA 526 476




[1]On a like-for-like basis

[2]EBITDA is not an accounting term; it is a financial metric defined here as profit from ordinary activities before depreciation, amortization and provisions, and before share-based compensations.

[3]Free Cash flow adjusted from non-recurring items (acquisition and restructuring costs)

[4]Free Cash flow adjusted from non-recurring items (acquisition and restructuring costs)

[5]Free Cash flow adjusted from non-recurring items (acquisition and restructuring costs)


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