INGENICO : Sustained growth in the third quarter of 2013

Ingenico: Sustained growth in the third quarter of 2013

• 9 months revenue of ?1.004 billion, up 17% on a comparable basis1
   
• Q3 2013 revenue of ?348 million driven by solid performance across all geographies and segments
  • Up 12 % on a reported basis
  • Up 14 % on a comparable basis^{[1]:
    #_ftn1}
     
• Growth momentum in North America (+40%)1
   
• Growth acceleration in Transactions services due to Ogone's successful integration (+15%)^{[2]:
  #_ftn2}
   
• Full-year guidance raised for revenue and profitability
  • Organic growth above or equal to 12 percent
  • EBITDA^{[3]:
    #_ftn3} margin expected to exceed 19.5% 

Paris - October 30, 2013. Ingenico (Euronext: FR0000125346 - ING) announced today its revenue figures for the third quarter of 2013.

Philippe Lazare, the Chairman and CEO of Ingenico, commented: "We are very pleased with our performance over the third quarter, which illustrates the prompt and efficient execution of our geographically tailored strategy. We are making significant progress in the US market. In addition, we continue to accelerate the expansion of the Services business which accounted for about 50% of revenue in the Europe-SEPA region this quarter thanks to greater traction in the Transactions segment, driven by the successful integration of Ogone.

Thanks to this outstanding performance, our revenue has exceeded the ?1 billion threshold in nine months, for the first time ever.

Moving forward, we believe that our multichannel strategy - to enable merchants to manage their payment infrastructure through a single provider for both in-store and e-commerce - will perfectly address customers' needs and support the Group's growth going forward.

In this context, we raise our full year guidance in line with our 2016 strategic plan."

Revenue

Performance in the first nine months

In the first nine months of 2013, revenue totaled ?1,004 million, representing a 18 percent increase on a reported basis, including a ?40 million contribution from Ogone and a negative foreign exchange impact of ?34 million. Total revenue included ?782 million generated by the Payment Devices business and ?222 million generated by Transaction Services. More generally, the share of total revenue generated by Services amounted to 33 percent, including Ogone's contribution.

On a comparable basis, revenue was up 17 percent, driven by double digit growth in all business segments. Growth in Payment Devices remains particularly dynamic (up 18 percent) thanks to the Group's multi-local presence and the steady growth in Transaction Services (up 11 percent). On a pro forma basis and excluding TransferTo2, revenue increased by 12 percent, driven by Ogone's integration process.

Since the start of the year, every region has contributed to the Group's strong overall performance. Ingenico has strengthened its position in its legacy Europe-SEPA markets through solid position in Payment devices and the successful implementation of its strategy to increase its services offering.

As anticipated, the Group has accelerated its growth in North America, particularly in the U.S. (up 49 percent) fueled by the successful deployment of solutions focused on large retailers, and increased traction with the ISOs.

The Group has also generated double digit growth in emerging markets (Latin America, Asia-Pacific and the EMEA region) as a consequence of new equipment supply and technology upgrade in these geographies.

The Group's Central Operations activity has generated a 9-percent increase in revenue notably driven by the growth of TransferTo's business.

Performance in the third quarter

In the third quarter of 2013, revenue totaled ?348 million, representing a 12 percent increase on a reported basis, including a ?14 million contribution from Ogone and a negative foreign exchange impact of ?21 million. Total revenue included ?272 million from the Payment Devices activity and ?76 million from the Transaction Services.

On a like-for-like basis¹, revenue was 14 percent higher than in Q3 2012, fueled by double digit growth both in Payment Devices (up 14 percent) and Transaction Services (up 12 percent). On a pro forma basis and without TransferTo2, revenue growth has accelerated to 15 percent.

In the third quarter, Ingenico posted strong organic growth across all regions reflecting the geographically tailored product and services offer.

Performance for the quarter, by geography and on a like-for-like basis compared with Q3 2012, was as follows:

• Europe-SEPA (up 5 percent): In a challenging macroeconomic environment, the Payment devices revenue continued to increase this quarter, thanks to the Group's diversified range of activities and solid geographic footprint. In addition, the Group has accelerated the deployment of its strategy based on its Transaction Services offering combining point-of-sale (Axis, easycash) and on-line, driven by the integration process of Ogone, which sales have increased by 39 percent. More generally, the Group is seeing a marked interest from customers and prospects to reduce their payment infrastructure complexity through a single point of contact.
   
• Latin America (up 11 percent): The activity continued to grow in the region with robust performance in Brazil and strong growth across the other countries. The Group has successfully increased its sales presence outside Brazil through payment technology upgrades, particularly in Central America and Mexico, where the Group is providing contactless payment solutions to Elavon, one of the world's most important players in the electronic payment industry. The group also announced a partnership with Carvajal Tecnología y Servicios to deploy biometric solutions in Colombia and the Dominican Republic.
   
• Asia-Pacific (up 28 percent): Ingenico continued to enjoy strong growth in all countries. The momentum remained strong in China, whilst Ingenico also maintained its strong growth profile in Indonesia through its direct access to the market. In addition, Ingenico supported mobile payment initiatives throughout the region for retailers and smaller merchants with in-store solutions for Metro in Singapore or a fully integrated and secure solution for taxis in Australia.
   
• North America (up 40 percent): Strong performance reflects increased traction in the region, especially in the USA, where Ingenico has continued to provide large retailers with technologically advanced solutions. The Group has also built up its position with smaller merchants through strong relationships with ISOs (Independent Sales Organizations), for which Ingenico has doubled its shipments since last year. More recently, the Group has announced the deployment of in-store innovative solutions for apparel retailer Caché and CenPOS, a merchant-centric end-to-end payment gateway.
   
• EMEA (up 28 percent): Ingenico continued to enjoy strong growth fueled by direct access to the Russian market and the expansion of its distribution network in the Eastern Europe region and in South Africa where the Group has recently signed an agreement with Standard Bank, a major financial institution.
   
• Central Operations (up 1 percent): Continued growth of TransferTo was partially offset by decrease of pure mobile payment devices in the US while contribution of mobile service-based revenue increased strongly with accounts like Blackbaud and Southwestern Advantage. The Group has continued to deploy an increased number of mobile payment pilots internationally, leveraging on its strong acquiror, bank and telco base.

Post-closing events

Ingenico has reached a management buyout agreement (MBO) in principle upon which Ingenico will sell a 70% stake to TransferTo management. This transaction is expected to be closed before the end of the year.

This agreement does not change the Group's 2016 financial perspectives to sustain profitable growth, with revenue over ?1.8 billion while improving its operational performance with an EBITDA margin above 20%.

Outlook

Over the first nine months of the year, Ingenico has performed extremely well, particularly in Payment Devices while accelerating steadily its evolution towards Transactions thanks to the Ogone acquisition.

On this basis, Ingenico gives further details on its full-year revenue guidance, anticipating organic growth above or equal to 12%, compared to an organic growth above or equal to 10%, as guided previously. This should translate into full-year revenue above or equal than ?1,370^[4]:
#_ftn4 million, with stronger negative foreign exchange impact expected in the second half of the year. The Group reminds that the fourth quarter of 2012 represents a very high basis for comparison, notably in emerging markets, independent of underlying macroeconomic conditions.

In addition, Ingenico raises its outlook for EBITDA margin³ and now expects EBITDA margin above 19.54 percent, compared to an EBITDA margin above or equal to 19%, as guided previously.

The Group reminds that the guidance for 2013 applies to the expanded consolidated Group, i.e., including Ogone in the accounts for the year. Ingenico also confirms that the Ogone integration process should be neutral to net earnings per share in 2013 (excluding PPA).

Conference call

A conference call to discuss Ingenico's Q3 revenue will be held on October 30, 2013 at 6.00 p.m., Paris time. Dial-in number: 01 70 99 32 08 (French domestic) or +44 (0)20 7162 0077 (international). The presentation will also be available on www.ingenico.com/finance:
http://www.ingenico.com/finance.

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. These data, assumptions and estimates may change or be amended as a result of uncertainties connected in particular with the performance of Ingenico and its subsidiaries. These statements are by their nature subject to risks and uncertainties as described in Ingenico registration document ("document de reference"). 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 therefore makes no firm commitment on the realization of the growth objectives shown in this release. Ingenico 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.

About Ingenico (Euronext: FR0000125346 - ING)

Ingenico is a leading provider of payment solutions, with over 20 million terminals deployed in more than 125 countries. Its 4.500 employees worldwide support retailers, banks and service providers to optimize and secure their electronic payments solutions, develop their offer of services and increase their point of sales revenue. More information on: www.ingenico.com:
http://www.ingenico.com/ | twitter.com/Ingenico:
http://twitter.com/Ingenico.