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Edenred : Sharp Increase In 2011 Financial Results

Stocks in this article: EDEN

EBIT up 11.2% like-for-like to €355 million, at the high end of the €340-360 million target range

Operating EBIT (which excludes financial revenue) rose by a strong 9.9% like-for-like in 2011 to €263 million. Underpinning this good performance, the operating flow-through ratio [ 14] stripped out from the extra costs generated by the digital transition [15] stood at 47%, in line with the Group's objective of 40% to 50%.

Financial EBIT (corresponding to financial revenue) was 15.2% higher like-for-like at €92 million.

Recurring profit after tax up 23.1%

After deducting net financial expense of €40 million, income tax expense [16] of €101 million and minority interests of €11 million, recurring profit after tax came to €203 million, an increase of 23.1% from €165 million in 2010.

Net profit, Group share stood at €194 million for the year , compared with €68 million for 2010.

A solid financial position

The Group had net cash [17]   of €74 million at December 31, 2011 as opposed to net debt of €25 million at end-2010. The ratio of adjusted funds from operations to adjusted net debt stood at 93%, corresponding to a strong investment grade rating [18].

The float (created by a structurally negative working capital requirement) amounted to €2,343 million at December 31, 2011, an increase of €94 million from the year-earlier figure on a reported basis. The medium-term goal is to improve the average rate of interest earned on the float, while holding firm to the prudent investment guidelines issued by the Group in terms of counterparties and instruments. To help meet this goal, investment periods were extended in 2011, particularly in Brazil. At the year-end, 30% of the float at Group level was invested at maturities of more than one year, compared with 13% at end-2010. The average rate of interest earned by the Group was 4.3% in 2011.

The Edenred business model, which generates large amounts of cash, helped to lift funds from operations before non-recurring items (FFO) to €257 million and free cash flow to €306 million in 2011. The 20.8% like-for-like growth in FFO was considerably higher than the Group's normalized target of over 10% a year.

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