July 22, 2016 / 7:02 AM / 2 years ago

UPDATE 1-Edenred eyes higher profit in 2016, opportunity in recession-hit Brazil

* Voucher, prepaid card provider eyes Europe, Latam growth

* Forecasts 2016 EBIT of 350-370 mln euros vs 341 mln in 2015

* CEO sees very limited Brexit impact for Edenred (Adds CEO comments from call, details)

By Dominique Vidalon

PARIS, July 22 (Reuters) - French voucher and prepaid card provider Edenred said on Friday it expected full-year operating profit to increase this year, helped by stronger growth in Europe, Mexico and Brazil.

Chief Executive Bertrand Dumazy also told a call with journalists that Britain’s vote to leave the European Union was a “non-event” for Edenred as it derives only about 6 percent of its operating profit from the country. That mostly comes from selling child care vouchers, a sector not heavily dependent on economic activity.

The owner of the Ticket Restaurant brand predicted full-year earnings before interest and tax (EBIT) would be between 350 million and 370 million euros ($408.11 million), against 341 million euros in 2015.

This compares with average market expectations of 359 million for full-year EBIT, Thomson Reuters I/B/E/S data shows.

“Issue volume growth is expected to remain solid in the second half 2016, reflecting sustained sales momentum in Europe, improved trends in Latin America thanks notably to Mexico and increased exposure to the fast-growing expense management market in Brazil,” Dumazy said.

Edenred sells prepaid meal vouchers that employers offer to workers. It is developing products such as fuel cards, a sector that is growing faster than other employee benefits, notably in recession-hit Brazil, as companies seek to control business expenses more effectively.

In May Edenred finalised an alliance with Brazilian group Embratec to combine their expense management assets in Brazil, a move that will enable Edenred to double the size of its fuel card business in the country.

Edenred, which competes with caterers Sodexo and Compass, as well as credit card networks MasterCard and Visa, earns about 50 percent of its operating profit in Brazil.

Edenred said EBIT reached 161 million euros in the first half. That was a like-for-like rise of 13 percent from a year earlier, excluding currency impacts, acquisitions and divestments.

On a reported basis, operating profit was down 2.2 percent as a weaker Brazilian real and Mexican peso weighed.

Closely watched issue volumes - the face value of its vouchers and the amount put on its prepaid cards - grew 8.4 percent in the first half. Edenred reiterated its full-year growth target at the lower end of an historical target of between 8 percent and 14 percent like-for-like. ($1 = 0.9066 euros) (Reporting by Dominique Vidalon, Noelle Mennnella; Editing by Maya Nikolaeva and Susan Fenton)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below