Edenred : Sharp Increase In 2011 Financial Results

The Group's policy consists of allocating free cash flow on a balanced basis to the payment of dividends, the repayment of gross debt and the financing of targeted acquisitions, while ensuring a solid financial situation with a strong investment grade rating. Based on this policy, the Group is aiming to increase the amount of the dividend on a recurring basis in the coming years.

In light of the 23.1% growth in 2011 recurring profit after tax and the proposed increase in the payout ratio close to 80% from 68% in 2010, the recommended dividend ^[19] for 2011 will amount to €0.70 per share, up 40% on 2010. The dividend will be paid on May 31, 2012.

A STRONG AND SUSTAINABLE GROWTH STRATEGY

Since July 2010, the management team has involved Edenred's 6,000 employees in a three-steps strategic process: by setting up the conditions to be a standalone company ("Win 2010"), strengthening the Group's foundations to drive future growth ("Conquer 2012") and opening new growth territories ("Invent 2016").

The reinforcement of the Group's foundations to support strong and sustainable growth will be achieved by:

Pursuing organic issue volume growth in the core business, through four drivers:

• Increasing penetration rates in existing markets, through the introduction of differentiated solutions backed by a unique quality of service. This should contribute 2 to 5 points of issue volume growth per year.
• Creating new solutions. A total of 26 solutions will be launched between July 2011 and the end of 2012, including the high potential Ticket Frete expense management solution in Brazil and Ticket Plus Card employee benefit solution in Germany. This accelerated deployment, which demonstrates the Group's innovation capabilities, should help to contribute to 2 to 4 points of issue volume growth per year from 2013.
• Expanding geographically. This will contribute more gradually to organic growth, adding 1 to 2 points after 2014. Following the launch of an employee benefit solution in Finland at the end of 2011, the Group plans to enter one or two new countries in 2012 with the objective of adding 6 to 8 new countries by 2016.
• Increasing average face values, helped by higher inflation rates. This should add 1 to 3 points of growth.

- Accelerating the digital transition.

The Group confirms its target of 50% digital issue volume by end-2012 (versus 41% at end-2011) and over 70% by 2016.

During the acceleration phase (in 2012), the target operating flow-through ratio of 40% to 50% will be affected by the extra costs generated by the transition process, estimated at around €10-15 million. Starting in 2013, the digital transition will have a positive effect on margins, with the target operating flow-through ratio rising to over 50%.

The shift to digital will enable the Group to expand its client offers and propose new value-added services to affiliated merchants and beneficiaries.  

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