Q1 2017: Performance in line with expectations. 2017 objectives confirmed.

Revenue for Q1 '17

During the first quarter of 2017, the Group achieved a revenue of 594 million euros, an increase of 8% on reported numbers, reflecting a positive increase of 9 million euros. Revenue increased to 411 million euros for Payment Terminals and 183 million euros for Payment Services.
On a comparable basis, the revenue was 5% over the first quarter of 2016, with an increase of 2% for Terminals, and an increase of 13% for Payment Services.

Within new organizational framework, the Retail Business Unit reported a revenue of 243 million euros, an increase of 3% on reported figures, and including a positive foreign exchange effect of 1 million euros. On a comparable basis, the increase in revenue was 3%, driven by the strong performances of ePayments and India, but balanced by strong comparatives due to the replacement cycles that occurred in the United States and in Europe in 2016.
The Banks and Acquirers Business Unit posted revenue of 351 million euros, an increase of 11% on reported figures and including a positive foreign exchange effect of 8 million euros. On a comparable basis revenue increased by 6%, boosted by first equipment cycles in Asia and Latin America and despite difficult market conditions in Brazil and in the United-States.

Regional performance during the quarter compared to Q1 '16 at constant scope and exchange rates was as follows:

• ePayments (+12%): Following a particularly dynamic second half of 2016, the ePayments division posted a growth performance in line with its strategic plan, despite volatility seen in certain major accounts. The stability of its platforms, the significant improvement in client satisfaction indicators (Net Promoter Score) and low churn rates have confirmed the underlying quality of Ingenio's solution. In general, investments continued during the quarter (fraud prevention, evolution of the API Connect, new marketplace solution and real-time conversion rates piloting) to allow the Group to accelerate its growth for the long-term and to improve its margins in line with its medium term objectives.
  
• Europe-Africa (+8%): Payment Terminals registered a good performance in most countries in the region despite strong prior year comparatives.
  In Banks and Acquirers Business Unit, the Group benefitted from investments made in preceding years in Eastern Europe where new regulations favourable towards electronic payments have been put in place. Thanks to its leadership position in mature markets, Ingenico Group is continuing to benefit from the replacement cycle of PCI v1 terminals, notably in all the Nordic countries.
  Alongside this, Payment Services, that are now part of the Retail Business Unit, performed solidly during the quarter. Making use of its significant installed base in Western Europe, Ingenico Group increased its recurring revenues deriving from processing instore transactions. Managed volumes grew double digit on these combined platforms.
  
• Latin America (-17%): The large majority of this region's operations come under the Banks and Acquirers Business Unit. As expected, performance continues to be impacted by unfavorable macroeconomic conditions in Brazil. However, Ingenico Group registered strong growth in the other countries in the region and most specifically in Colombia and Peru where an important contract was won with one of the main acquirers in the country. Telium Tetra deployment is in progress, in particular in Brazil and Mexico.
  
• Asia Pacific and Middle East (+23%): Thanks to its footprint across the region, the Group has been able to capture the opportunities driven by the introduction of regulations that support the growth of electronic payments in this region.
  In Banks and Acquirers segment, Ingenico Group benefited from the demonetization process in India and has shipped since November 2016 more than 500,000 terminals. In Australia, Ingenico Group has witnessed strong momentum from the introduction of Telium Tetra terminals. In China, as expected, the growth is slowing down as the market is maturing but Landi consolidated its position with successful sales of more than 250,000 aPOS during the quarter.
  In Turkey, which is part of the Retail Business Unit, the Group continues to benefit from the migration to terminals with fiscal memories.
  
• North America (-33%): As expected, performance in this region continues to be impacted by higher prior year comparatives.
  The US retail operation has increased its share of large customers: their individual decision to replace or not has consequently a bigger impact on the volatility of volumes, which are more difficult to predict. Nevertheless, thanks to the quality of it the support and the range of its offers, Ingenico Group was able to capture opportunities, notably with major retailers such as Jenny Craig, and in new verticals such as unattended and healthcare.
  In Banks and Acquirers Business Unit, the Group has been impacted by the relaxation of the deadline for EMV migration in the United States and pursued the development of its mobile payment terminals that are connected to tablets. In Canada, the performance was solid, notably thanks to replacements in the installed base of certain acquirers.

Outlook

Following a first quarter which was in line with its expectations, the Group confirms its 2017 full year objectives for a revenue growth of around 7% (at constant scope and exchange rates) and its EBITDA margin slightly increasing compared to 2016 (20.6%).

Conference Call

The first quarter 2017 revenue will be discussed on a Group telephone conference call which will be held on the 26th April 2017 at 6pm Paris Time (5pm UK, and 12.00PM US). The call will be accessible by dialing one of the following numbers: +33 (0)1 70 99 32 08 (from France), +1 646 851 2407 (from the US) and +44 (0)20 7162 0077 (from other countries) with the conference ID of: 961711.

[1] At constant perimeter and exchange rates
[1] EBITDA is a non-accounting concept representing operating profit before depreciation, amortisation and provisions, [and disregarding shares distributed to employees and social funds]