Quarterly Report • Jul 26, 2022
Quarterly Report
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CONDENSED HALF-YEAR CONSOLIDATED FINANCIAL STATEMENTS
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AUDITORS' REVIEW REPORT ON THE HALF-YEAR CONSOLIDATED FINANCIAL STATEMENTS ……………………………………62
STATEMENT BY THE PERSON RESPONSIBLE FOR THE HALF-YEAR FINANCIAL REPORT
…………....…………………………………………..65
II. OUTLOOK
III. MAIN RISKS AND UNCERTAINTIES
Edenred should also benefit from a favorable macro-economic context, with rising inflation making its solutions even more attractive and driving additional revenue for the Group, notably due to higher interest rates.
In view of these factors, the Group is targeting record-high EBITDA of between €770 million and €820 million for full-year 20221, versus €670 million in 2021.
Bertrand Dumazy, Chairman and Chief Executive Officer of Edenred, said: "Thanks to very tangible growth momentum in the second quarter, Edenred delivered a record performance in the first half of 2022, with a strong increase in earnings. Operating revenue grew by double digits across all of the Group's business lines and regions, and EBITDA came in at an all-time high for a first half. These results show how Edenred is leveraging the unique benefits of its digital platform to continue its market penetration in a new macroeconomic environment. The solutions the Group offers are attracting more and more clients who view them as an opportunity to increase their employees' purchasing power, encourage more responsible behaviors or tighten their cost control. Edenred is now better poised than ever to pursue its sustainable and profitable growth trajectory in the second half of the year and beyond. The Group is continuing to step up its technology investments, which have made it the leading innovator in its markets. In light of these achievements, we are confident in our prospects for the second half of 2022 and are targeting record-high EBITDA of between €770 million and €820 million for the full year."
Turkey is now qualified as a hyperinflationary economy. The Group has therefore applied IAS 29 – Financial Reporting in Hyperinflationary Economies to its operations in this country since January 1, 2022.
At its meeting on July 25, 2022, the Board of Directors reviewed the Group's interim consolidated financial statements for the six months ended June 30, 2022.
| (in € millions) | First-half 2022 |
First-half 2021 |
% change (reported) |
% change (like-for-like) |
|---|---|---|---|---|
| Operating revenue | 891 | 736 | +20.9% | +17.3% |
| Other revenue (A) | 31 | 21 | +49.1% | +46.5% |
| Total revenue | 922 | 757 | +21.7% | +18.1% |
| EBITDA | 365 | 295 | +23.6% | +22.0% |
| Operating EBIT (B) | 264 | 211 | +25.2% | +24.3% |
| EBIT (A + B) | 295 | 232 | +27.3% | +26.3% |
| Net profit, Group share | 170 | 133 | +27.5% |
First-half 2022 key financial metrics:
1 Calculated based on an assumption of an average euro/ Brazilian real exchange rate for the second half of 2022 equal to the closing spot rate on June 30, 2022.
Total revenue for first-half 2022 amounted to €922 million, up 21.7% as reported compared with first-half 2021. This year-on-year increase includes a favorable 4.0% currency effect and a slightly negative 0.4% scope effect. On a like-for-like basis, total revenue was up 18.1%. In the second quarter, total revenue rose by 25.7% as reported and by 20.4% like-for-like, with growth accelerating versus the first quarter of the year, when total revenue increased by 17.6% as reported and by 15.7% like-for-like.
Operating revenue for the first six months of 2022 came to €891 million, up 20.9% as reported. The currency effect was a favorable 4.1% and the scope effect was a slightly negative 0.5%. On a like-for-like basis, the increase in operating revenue was 17.3% year on year.
Second-quarter operating revenue totaled €465 million, up 24.5% as reported and 19.2% likefor-like.
This solid performance came on the back of an excellent start to the year and strong growth in operating revenue during the first quarter. It clearly shows the Group's ability to keep up a sustained pace of growth, with double-digit growth figures recorded across all of its business lines and regions. By fully leveraging its digital platform, the Group has continued to penetrate its markets by capitalizing on its stand-out technology assets and sales expertise. For example, thanks to the online sales platforms it has developed in 14 countries, the Group saw a morethan 50% increase in the number of new contracts it won with SMEs in the first half of 2022 versus the first six months of 2021.
Edenred's first-half 2022 performance was also boosted by a favorable macro-economic environment, notably the current high rates of inflation. This has made the Group's solutions even more attractive, as clients see them as a way of increasing their employees' purchasing power, through the Employee Benefits offering, and tightening control of their fleet management costs, through Fleet & Mobility Solutions.
| (in € millions) | First-half 2022 |
First-half 2021 |
% change (reported) |
% change (like-for-like) |
|---|---|---|---|---|
| Employee Benefits | 528 | 448 | +17.7% | +15.7% |
| Fleet & Mobility Solutions | 252 | 190 | +32.3% | +24.0% |
| Complementary Solutions | 111 | 98 | +13.6% | +11.4% |
| Total | 891 | 736 | +20.9% | +17.3% |
The Employee Benefits business line generated €528 million in operating revenue in first-half 2022, representing an increase of 17.7% as reported (+15.7% like-for-like) and accounting for 59% of the consolidated total.
The Group continued to penetrate its markets during the period, fueled by strong sales activity, both with key accounts and in the particularly fast-growing SME segment. Drawing on a broader portfolio of solutions resulting from its Beyond Food strategy, and amid radical changes in the working world, Edenred is fully meeting the needs of its clients, who are seeking to strengthen their employer brand and employee engagement. In France, for example, the Group has a comprehensive range of digital solutions for food, incentives and mobility, with 7 million employees benefiting from them. These solutions provide employers with an effective means to boost each employee's purchasing power by up to €5,000 per year, while adapting to new consumption patterns, which have become more digital and more responsible.
This momentum has led to an increase in the benefits granted to employees, particularly in countries where the public authorities have raised the statutory maximum face value of benefits, such as in Romania and Turkey for meal benefits.
In the Fleet & Mobility Solutions business line, which accounted for 28% of the Group's business, operating revenue came to €252 million in the first half of the year, up 32.3% as reported over the period (+24.0% like-for-like).
This strong year-on-year growth reflects brisk sales momentum, especially in the vastly underpenetrated SME segment. It also reflects the successful deployment of the Beyond Fuel strategy, notably through the maintenance management solution in Latin America. Thanks to this fully digital offering, with a broad portfolio of services such as dashboards, customized maintenance plans and dedicated mobile apps, Edenred provides a first-class user experience for fleet managers, drivers and repair shops in the network. In light of the success of this offering in Brazil (more than 400,000 vehicles managed and orders up by over 20% in the first half of 2022), Edenred has begun to roll it out to Mexico and Argentina as well.
The Complementary Solutions business line, which includes Corporate Payment Services, Incentive & Rewards and Public Social Programs, generated operating revenue of €111 million in first-half 2022, representing 13% of the Group total. This figure was up 13.6% year on year as reported (+11.4% like-for-like), despite a high basis of comparison for the first quarter due to the specific earmarked funds programs set up during the first quarter of 2021 amid the health crisis.
Growth for this business line reflects the good performance of Corporate Payment Services in North America, operated through CSI, driven by new contracts won through its direct and indirect sales channels, and the continued recovery in sales volumes generated by clients in the media and hospitality segments.
The sharp rise in Complementary Services operating revenue is also the result of Edenred's ability to develop new value-added services for its stakeholders, such as in the United Arab Emirates, where the salary advance offering is meeting the growing needs of the 500,000 users of the C3Pay mobile app.
| (in € millions) | First-half 2022 |
First-half 2021 |
% change (reported) |
% change (like-for-like) |
|---|---|---|---|---|
| Europe | 551 | 475 | +16.0% | +15.7% |
| Latin America | 270 | 204 | +32.5% | +16.9% |
| Rest of the World | 70 | 58 | +20.5% | +31.3% |
|---|---|---|---|---|
| Total | 891 | 736 | +20.9% | +17.3% |
In Europe, operating revenue amounted to €551 million in first-half 2022, an increase of 16.0% as reported and of 15.7% like-for-like. In the second quarter, operating revenue was up 18.1% as reported and 18.0% like-for-like. Europe represented 62% of Group operating revenue.
In France, operating revenue amounted to €150 million, representing an increase of 11.2% both as reported and like-for-like. In the second quarter, operating revenue growth was 12.2% as reported and like-for-like. This performance was notably led by robust growth for Employee Benefits solutions, fueled by contract wins for the Ticket Restaurant® offering – the market's digital leader with a market share of over 40% – as well as the broader range of solutions integrated into the MyEdenred mobile app. Fleet & Mobility Solutions also drove up operating revenue, propelled by ongoing high demand, notably in the SME segment.
Operating revenue in Europe excluding France totaled €401 million in first-half 2022, up 17.8% as reported (+17.5% like-for-like). Second-quarter operating revenue rose by 20.3% as reported (+20.2% like-for-like). This sustained growth is the result of the growing attractiveness of the solutions offered by the Group in its various business lines. In Employee Benefits, Ticket Restaurant® meal benefits once again delivered robust growth, boosted by an increase in face values introduced by clients in the current inflationary context, and the Beyond Food strategy continued to be a success. Performance for the Fleet & Mobility Solutions business line was driven by strong sales momentum in the SME segment.
Operating revenue in Latin America amounted to €270 million, up 32.5% as reported in the first half (+16.9% like-for-like), with a 38.0% reported increase in the second quarter (+17.2% like-forlike). The region represented 30% of total consolidated operating revenue in first-half 2022.
In Brazil, operating revenue growth came to 17.1% like-for-like in the first six months of the year, including a 17.7% increase in the second quarter. This robust year-on-year growth reflects the strong momentum of the Fleet & Mobility Solutions business, led notably by the success of the Beyond Fuel offering, which was underpinned by a sharp increase in demand for maintenance and toll management solutions. Employee Benefits also contributed to growth in Brazil, spurred by the ongoing success of the partnership with Itaú Unibanco and the rollout of the multi-benefit offering.
In Hispanic Latin America, operating revenue rose by 16.4% like-for-like, with a 16.3% increase in the second quarter. The recovery in the Employee Benefits business continued in the region in the second quarter, while in Fleet & Mobility Solutions growth was driven by the gradual rollout of the Beyond Fuel offering with its toll solutions.
In the Rest of the World, operating revenue amounted to €70 million, up 20.5% as reported and 31.3% like-for-like over the period. Second-quarter operating revenue rose by 26.9% as reported (+36.7% like-for-like).
This performance was notably driven by the success of digital solutions proposed in countries such as the United Arab Emirates and Taiwan. In North America, CSI's Corporate Payment Services business saw strong sales momentum, notably buoyed by a recovery in volumes for its
.
historical portfolio, as well as the ramp-up of distribution partnerships entered into with several banks.
For the six months ended June 30, 2022, other revenue came to €31 million, representing an increase of 49.1% as reported and of 46.5% like-for-like. This solid growth notably reflects the continued increase in float, resulting from the high level of business during the first half of the year. Other revenue also benefited from the rise in interest rates compared with first-half 2021, notably in Latin America and in European countries outside the euro zone.
In first-half 2022, EBITDA amounted to €365 million, up 23.6% as reported and 22.0% like-for-like. The EBITDA margin came in at 39.6%, up 0.6 of a percentage point compared with first-half 2021. On a like-for-like basis, the EBITDA margin was 1.3 percentage points higher year on year, demonstrating Edenred's ability to capitalize on its operating leverage while continuing to invest in technology and innovation to help drive the Group's growth.
Net financial expense amounted to €-17 million in first-half 2022 compared with €-9 million in the year earlier period.
Gross borrowing costs for first-half 2022 include amortization of bond issuance costs for €5 million and interest income on Neu CP issued at negative interest rates.
Hedging instruments relate to expenses and income on interest rate swaps as presented in Note 6.6 "Financial instruments and market risk management".
Other financial income and expenses mainly concern bank fees, banking expenses, miscellaneous interest, and financial provisions.
Profit before tax stands at €270 million versus €220 million at June 30, 2021.
Income tax expense stood at €84 million for the period, versus €73 million in first-half 2021. The effective tax rate declined from 33.3% in first-half 2021 to 31.2% in the six months to June 30, 2022. The calculation is available hereafter chapter 2, Note 7 to the consolidated financial statements.
Net profit, Group share amounted to €170 million versus €133 million in first-half 2021, a 27.5% increase primarily driven by growth in EBITDA.
Net profit takes into account other income and expenses for a net expense of €9 million (versus a net expense of €7 million in first-half 2021), a net financial expense of €17 million (versus €9 million in 2021)2, a net income tax expense of €84 million (versus €73 million in 2021), and €(16) million attributable to non-controlling interests (versus €(14) million in 2021).
2 The net financial expense in first-half 2021 included the positive impact of the increase in the fair value of Edenred's investments in the Partech funds.
| In € millions | June 2022 | June 2021 |
|---|---|---|
| Net profit attributable to owners of the parent | 170 | 133 |
| Non-controlling interests | 16 | 14 |
| Dividends received from equity-accounted companies | 10 | 14 |
| Difference between income tax paid and income tax expense | 10 | 14 |
| Non-cash impact from other income and expenses | 4 | 9 |
| = Funds from operations before other income and expenses (FFO) | 299 | 254 |
| Decrease (Increase) in working capital | (628) | 415 |
| Recurring decrease (Increase) in restricted cash | 419 | (18) |
| = Net cash from (used in) operating activities | 90 | (179) |
| = Net cash from (used in) investing activities | (101) | (77) |
| = Net cash from (used in) financing activities | (403) | (440) |
| = Free cash flows (FCF) | (404) | 185 |
Edenred's business model generates significant cash flows, delivering funds from operations before other income and expenses (FFO) of €299 million in first-half 2022, up 17.8% as reported.
Negative working capital requirement at June 30, 2022 increased by €569 million compared with June 30, 2021. Table with details is available hereafter in chapter 2, note 4.5 of the consolidated financial statements.
At June 30, 2022, Edenred had net debt of €1.06 billion, versus €1.45 billion at end-June 2021. This sharp year-on-year decrease in net debt notably reflects free cash flow generation of €767 million over the twelve months ended June 30, 2022, €269 million returned to shareholders, and a negative €45 million impact of currency effects and non-recurring items.
For details, see les Notes to consolidated financial statement:
Edenred therefore enjoys a robust financial position with a high level of liquidity and a solid balance sheet. In April 2022, Standard & Poor's reaffirmed the Group's BBB+ Strong Investment Grade rating and upgraded its outlook from stable to positive.
Equity represented a negative amount of €806 million at June 30, 2022 and €869 million at December 31, 2021.
This is due to the recognition at historical cost of the assets contributed or sold to Edenred by Accor through the asset contribution-demerger transaction. It has no impact on the Group's refinancing capacity, the underlying strength of its financial position or its dividend paying ability. Further information about changes in consolidated equity is presented in the condensed half-year consolidated financial statements hereafter chapter 2, section 1.5.
In the first half of 2022, Edenred continued to put its commitment to corporate social responsibility (CSR) into practice.
One of the ways it does this is by deploying solutions that encourage more responsible behaviors. For example, in June, the Group launched "Move for Good", a global green and sustainable mobility program for its clients in the transportation and mobility sector, which is based on four pillars: awareness, reduction and avoidance, offsetting, and preservation. Also, in the first half of the year, the Group rolled out its Agri digital solution in Cameroon to support local agriculture – serving 600,000 farmers – and broadened its range of value-added services that support financial inclusion in the United Arab Emirates, including a salary advance system. At the same time, the Group continued to implement its "Ideal" CSR policy through the policy's three main components, "People, Planet and Progress", and is well on the way to achieving its targets for 2030. In April, Edenred's commitment to CSR was recognized once again, when it was assigned a rating of 79 out of 100 by S&P Global Ratings, well above the global average for the other companies assessed. This rating notably highlights how the Group's ESG goals are underpinned by a strong corporate culture and effective strategic planning and decisionmaking processes.
Edenred will further strengthen its CSR commitments, notably those related to the climate, at the Capital Markets Day to be held in October 2022.
On February 22, Edenred announced that it had acquired a 51% controlling interest in Greenpass, an issuer of electronic toll solutions in Brazil. The deal strengthens Edenred's position in this business as well as its technology and sales capabilities in an attractive market offering significant cross-selling potential with its client base. It is fully in line with the Group's Beyond Fuel strategy to develop new non-fuel fleet and mobility services, enhancing its value proposition for fleet managers and expanding its addressable market.
On April 5, Edenred announced a partnership with ChargePoint, a leading electric vehicle charging network provider in Europe and in the USA. This partnership enables customers of UTA Edenred, a leading mobility service provider in Europe, to access over 240,000 public electric charge points across 32 European countries. Edenred supports fleet managers in the transition towards electric vehicle usage, notably through the introduction of an all-in-one, fully integrated solution that combines an electric vehicle charging solution with UTA Edenred's proven energy, toll and maintenance services.
On June 15, Edenred launched "Move for Good", a global sustainability program enabling its transportation and mobility clients to mitigate their environmental impact, while promoting biodiversity preservation. Already operational in some European and Latin American countries, this program will be deployed by Edenred globally.
In the first half of 2022, Edenred once again proved its capacity to leverage the benefits of its digital platform, thanks to its ongoing strong sales and innovation momentum.
In an environment accelerating new structural trends, such as increased digitalization among stakeholders (clients, partner merchants and users), radical transformations in the working world and the beginning of a new era of greener mobility, Edenred is ideally positioned to seize the opportunities arising from these changes.
At the same time, the Group expects to continue benefiting from a favorable macroeconomic context that is further enhancing the attractiveness of its offerings. This can be seen both in Employee Benefits, against a backdrop of "talent wars" for employers and a desire by both governments and companies to protect workers' purchasing power, and in Fleet & Mobility Solutions, where fleet managers are looking to tighten control over their expenses.
Edenred is therefore better poised than ever to generate sustainable and profitable growth. The Group is targeting full-year EBITDA of between €770 million and €820 million3 for 2022, versus €670 million in 2021.
In addition, Edenred has an investment capacity of between €1.5 billion and €2.0 billion to be able to carry out any external growth transactions.
The main risks and uncertainties that may affect the Group in the last six months of the year are presented in the "Risk Factors" section of the 2021 Universal Registration Document filed with French securities regulator AMF on March 30, 2022.
Furthermore, details about different impacts of the inflation and the conflict between Russia and Ukraine are presented in chapter 2, Note 1.4 and 1.5.
The amounts relating to market and financial risks at 30 June 2022 are described in the note 6.6 in section "Notes to financial statements" of this Half-year Report. Furthermore, claims and litigation are presented in the note 10.3 in section "Notes to financial statements" of this Half-year Report.
There were no material changes in related party transactions during the half year of 2022.
3 Calculated based on an assumption of an average euro/ Brazilian real exchange rate for the second half of 2022 equal to the closing spot rate on June 30, 2022.
More details in the 2020 Universal Registration Document page 301, Note 11.2 to 2021 Universal Registration Document.
None
Like-for-like or organic growth corresponds to comparable growth, i.e., growth at constant exchange rates and scope of consolidation. This indicator reflects the Group's business performance.
Changes in activity (like-for-like or organic growth) represent changes in amounts between the current period and the comparative period, adjusted for currency effects and for the impact of acquisitions and/or disposals.
The impact of acquisitions is eliminated from the amount reported for the current period. The impact of disposals is eliminated from the amount reported for the comparative period. The sum of these two amounts is known as the impact of changes in the scope of consolidation or the scope effect.
The calculation of changes in activity is translated at the exchange rate applicable in the comparative period and divided by the adjusted amount for the comparative period.
The currency effect is the difference between the amount for the reported period translated at the exchange rate for the reported period and the amount for the reported period translated at the exchange rate applicable in the comparative period.
Business volume comprises total issue volume of Employee Benefits, Incentive and Rewards, Public Social Program solutions and Corporate Payment Services, plus the transaction volume of Fleet & Mobility Solutions and other solutions.
Issue volume is the total face value of the funds preloaded on all of the payment solutions issued by Edenred to its corporate and public sector clients.
Transaction volume represents the total value of the transactions paid for with payment instruments, at the time of the transaction.
The alternative performance measurement indicators outlined below are presented and reconciled with accounting data in the Annual Financial Report.
| Indicator | Reference note in Edenred's 2022 condensed interim consolidated financial statements |
|---|---|
| Operating revenue | Operating revenue corresponds to: |
| • operating revenue generated by prepaid vouchers managed by Edenred, • and operating revenue from value-added services such as incentive programs, human services and event-related services. • It corresponds to the amount billed to the client company and is recognized on delivery of the solutions. |
|
|---|---|
| Other revenue | Other revenue is interest generated by investing cash over the period between: • the issue date and the reimbursement date for vouchers, • and the loading date and the redeeming date for cards. The interest represents a component of operating revenue and as such is included in the determination of total revenue. |
| EBITDA | This aggregate corresponds to total revenue (operating revenue and other revenue) less operating expenses. |
| Operating EBIT | This aggregate corresponds to EBIT adjusted for other revenue. As per the consolidated financial statements, operating EBIT as of June 30, 2022, amounted to €264 million, comprising: • plus €295 million in EBIT minus €31 million in other revenue. • |
| EBIT | This aggregate is the "Operating profit before other income and expenses", which corresponds to total revenue (operating revenue and other revenue) less operating expenses, depreciation, amortization (mainly intangible assets, internally generated or acquired assets) and non-operating provisions. It is used as the benchmark for determining senior management and other executive compensation as it reflects the economic performance of the business. |
| EBIT excludes the net profit from equity-accounted companies and excludes the other income and expenses booked in the "Operating profit including share of net profit from equity-accounted companies". |
|
| Other income and expenses |
See Note 10.1 of consolidated financial statements |
| Funds from operations (FFO) |
See consolidated statement of cash flows (Part 1.4) |
| Indicator | Definitions and reconciliations with Edenred's 2022 condensed interim consolidated financial statements |
|---|---|
| Free cash flow | Free cash flow corresponds to cash generated by operating activities less investments in intangible assets and property, plant and equipment. |
| Q1 | Q2 | H1 | ||||
|---|---|---|---|---|---|---|
| In € millions | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 |
| Europe | 270 | 237 | 281 | 238 | 551 | 475 |
| France | 76 | 69 | 74 | 66 | 150 | 135 |
| Rest of Europe | 194 | 168 | 207 | 172 | 401 | 340 |
| Latin America | 123 | 97 | 148 | 107 | 270 | 204 |
| Rest of the world | 33 | 29 | 36 | 28 | 70 | 58 |
| Total | 426 | 363 | 465 | 373 | 891 | 736 |
Operating revenue
| Q1 | Q2 | H1 | ||||
|---|---|---|---|---|---|---|
| In % | Change reported |
Change L/L |
Change reported |
Change L/L |
Change reported |
Change L/L |
| Europe | +13.8% | +13.4% | +18.1% | +18.0% | +16.0% | +15.7% |
| France | +10.3% | +10.3% | +12.2% | +12.2% | +11.2% | +11.2% |
| Rest of Europe | +15.3% | +14.8% | +20.3% | +20.2% | +17.8% | +17.5% |
| Latin America | +26.5% | +16.5% | +38.0% | +17.2% | +32.5% | +16.9% |
| Rest of the world | +14.3% | +26.0% | +26.9% | +36.7% | +20.5% | +31.3% |
| Total | +17.3% | +15.3% | +24.5% | +19.2% | +20.9% | +17.3% |
| Q1 | Q2 | H1 | ||||
|---|---|---|---|---|---|---|
| In € millions | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 |
| Europe | 5 | 3 | 6 | 3 | 11 | 7 |
| France | 2 | 1 | 1 | 1 | 3 | 3 |
| Rest of Europe | 3 | 2 | 5 | 2 | 8 | 4 |
| Latin America | 7 | 6 | 10 | 6 | 17 | 11 |
| Rest of the world | 1 | 1 | 2 | 1 | 3 | 3 |
| Total | 13 | 10 | 18 | 10 | 31 | 21 |
| Q1 | Q2 | H1 | ||||
|---|---|---|---|---|---|---|
| In % | Change reported |
Change L/L |
Change reported |
Change L/L |
Change reported |
Change L/L |
| Europe | +40.5% | +39.1% | +89.8% | +88.9% | +65.2% | +64.1% |
| France | +5.6% | +5.6% | -2.0% | -2.0% | +1.7% | +1.7% |
| Rest of Europe | +66.0% | +63.5% | +159.5% | +158.0% | +112.4% | +110.4% |
| Latin America | +33.5% | +22.8% | +71.1% | +44.1% | +52.5% | +33.6% |
| Rest of the world | -18.9% | +35.3% | +10.1% | +78.4% | -4.3% | +56.9% |
| Total | +28.9% | +29.7% | +69.1% | +63.0% | +49.1% | +46.5% |
| Q1 | Q2 | H1 | ||||
|---|---|---|---|---|---|---|
| In € millions | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 |
| Europe | 275 | 240 | 287 | 241 | 562 | 481 |
| France | 78 | 70 | 75 | 67 | 153 | 137 |
| Rest of Europe | 197 | 170 | 212 | 174 | 409 | 344 |
| Latin America | 130 | 103 | 158 | 113 | 287 | 216 |
| Rest of the world | 34 | 30 | 38 | 30 | 73 | 60 |
| Total | 439 | 373 | 482 | 384 | 922 | 757 |
| Q1 | Q2 | H1 | ||||
|---|---|---|---|---|---|---|
| In % | Change reported |
Change L/L |
Change reported |
Change L/L |
Change reported |
Change L/L |
| Europe | +14.2% | +13.8% | +19.1% | +19.0% | +16.6% | +16.4% |
| France | +10.2% | +10.2% | +11.9% | +11.9% | +11.0% | +11.0% |
| Rest of Europe | +15.9% | +15.3% | +21.9% | +21.7% | +18.9% | +18.5% |
| Latin America | +26.9% | +16.8% | +39.6% | +18.6% | +33.6% | +17.7% |
| Rest of the world | +12.9% | +26.5% | +26.1% | +38.6% | +19.4% | +32.5% |
| Total | +17.6% | +15.7% | +25.7% | +20.4% | +21.7% | +18.1% |
| In € millions | H1 2022 | H1 2021 | Change reported |
Change L/L |
|---|---|---|---|---|
| Europe | 242 | 192 | +25.8% | +25.5% |
| France | 55 | 49 | +13.5% | +13.5% |
| Rest of Europe | 187 | 144 | +30.0% | +29.5% |
| Latin America | 120 | 88 | +36.5% | +18.6% |
| Rest of the world | 18 | 13 | +38.3% | +60.7% |
| Others | (15) | 2 | N/A | N/A |
| EBITDA | 365 | 295 | +23.6% | +22.0% |
| In € millions | H1 2022 | H1 2021 | Change reported |
Change L/L |
|---|---|---|---|---|
| Europe | 205 | 157 | +30.0% | +29.7% |
| France | 44 | 38 | +16.4% | +16.4% |
| Rest of Europe | 161 | 120 | +34.3% | +33.9% |
| Latin America | 99 | 72 | +39.6% | +20.8% |
| Rest of the world | 11 | 5 | +93.7% | +141.9% |
| Others | (20) | (3) | N/A | N/A |
| EBIT | 295 | 232 | +27.3% | +26.3% |
| In € millions | H1 2022 | H1 2021 | Change reported |
Change L/L |
|---|---|---|---|---|
| Europe | 194 | 151 | +28.5% | +28.2% |
| France | 41 | 35 | +17.6% | +17.6% |
| Rest of Europe | 153 | 116 | +31.7% | +31.3% |
| Latin America | 82 | 60 | +37.2% | +18.5% |
| Rest of the world | 8 | 3 | +198.0% | +232.3% |
| Others | (20) | (3) | N/A | N/A |
| Operating EBIT | 264 | 211 | +25.2% | +24.3% |
| In € millions | In € millions | ||||||
|---|---|---|---|---|---|---|---|
| ASSETS | June 30, 2022 |
Dec. 31, 2021 |
June 30, 2021 |
LIABILITIES | June 30, 2022 |
Dec. 31, 2021 |
June 30, 2021 |
| Goodwill | 1,608 | 1,506 | 1,499 | Total equity | (806) | (869) | (1.006) |
| Intangible assets | 728 | 677 | 674 | ||||
| Property. plant & equipment | 155 | 156 | 165 | Gross debt and other financial liabilities |
3,706 | 3,538 | 3,715 |
| Investments in associates | 59 | 67 | 58 | Provisions and deferred tax | 181 | 185 | 185 |
| Other non-current assets | 181 | 178 | 186 | ||||
| Float (Trade receivables. net) | 1,397 | 1,322 | 1,246 | Vouchers in circulation (Float) | 5,184 | 5,258 | 4,815 |
| Working capital excl. float (assets) |
1,711 | 1,267 | 1,174 | Working capital excl. float (liabilities) |
2,235 | 2,211 | 2,206 |
| Restricted cash | 2,011 | 2,428 | 2,647 | ||||
| Cash & cash equivalents | 2,650 | 2,722 | 2,266 | ||||
| TOTAL ASSETS | 10,500 | 10,323 | 9,915 | TOTAL LIABILITIES | 10,500 | 10,323 | 9,915 |
| June 30, 2022 |
Dec. 31, 2021 |
June 30, 2021 |
|
|---|---|---|---|
| Total working capital | 4,311 | 4,880 | 4,601 |
| Of which float: | 3,787 | 3,936 | 3,569 |
| In € millions | June 2022 | June 2021 |
|---|---|---|
| Net profit attributable to owners of the parent | 170 | 133 |
| Non-controlling interests | 16 | 14 |
| Dividends received from equity-accounted companies | 10 | 14 |
| Difference between income tax paid and income tax expense | 10 | 14 |
| Non-cash impact from other income and expenses | 93 | 79 |
| = Funds from operations before other income and expenses (FFO) | 299 | 254 |
| Decrease (Increase) in working capital4 | (628) | (258) |
| Recurring decrease (Increase) in restricted cash | 419 | (18) |
| = Net cash from (used in) operating activities | 90 | (22) |
| Recurring capital expenditure | (66) | (46) |
| = Free cash flows (FCF)4 | 24 | (68) |
4 Including the payment of the €157 million fine issued by France's antitrust authority, increase in working capital amounted to €415 million and free cash flow amounted to a negative €225 million for first-half 2021.
| (in € millions) | Notes | First-half 2022 | First-half 2021 |
|---|---|---|---|
| Operating revenue | 4.1 | 891 | 736 |
| Other revenue | 4.1 | 31 | 21 |
| Total revenue | 4.1 | 922 | 757 |
| Operating expenses | 4.2 | (557) | (462) |
| Depreciation, amortization and impairment losses | 5.5 | (70) | (63) |
| Operating profit before other income and expenses (EBIT) | 4.4 | 295 | 232 |
| Share of net profit from equity-accounted companies | 5.4 | 1 | 4 |
| Other income and expenses | 10.1 | (9) | (7) |
| Operating profit including share of net profit from equity-accounted companies | 287 | 229 | |
| Net financial expense | 6.1 | (17) | (9) |
| Profit before tax | 270 | 220 | |
| Income tax expense | 7 | (84) | (73) |
| NET PROFIT | 186 | 147 | |
| Net profit attributable to owners of the parent | 170 | 133 | |
| Net profit attributable to non-controlling interests | 16 | 14 | |
| Earnings per share (in €) | 8 | 0.68 | 0.54 |
| Diluted earnings per share (in €) | 8 | 0.64 | 0.51 |
| (in € millions) | First-half 2022 | First-half 2021 |
|---|---|---|
| Net profit | 186 | 147 |
| Other comprehensive income | ||
| Currency translation adjustment | 153 | 75 |
| Fair v alue adjustments to financial instruments and assets at fair v alue through other comprehensiv e income |
(18) | (24) |
| Tax on items that may be subsequently reclassified to profit or loss | 5 | 7 |
| Items that may be subsequently reclassified to profit or loss | 140 | 58 |
| Actuarial gains and losses on defined-benefit plans | 12 | - |
| Tax on items that may not be subsequently reclassified to profit or loss | (3) | - |
| Items that may not be subsequently reclassified to profit or loss | 9 | - |
| TOTAL OTHER COMPREHENSIVE INCOME | 149 | 58 |
| COMPREHENSIVE INCOME | 335 | 205 |
| Comprehensiv e income attributable to owners of the parent 1.5 |
312 | 187 |
| Comprehensiv e income attributable to non-controlling interests 1.5 |
23 | 18 |
| (in € millions) | Notes | June 30, 2022 | Dec. 31, 2021 |
|---|---|---|---|
| Goodwill | 5.1 | 1,608 | 1,506 |
| Intangible assets | 5.2 | 728 | 677 |
| Property, plant and equipment | 5.3 | 155 | 156 |
| Investments in equity-accounted companies | 5.4 | 59 | 67 |
| Non-current financial assets | 6.2 | 143 | 140 |
| Deferred tax assets | 38 | 38 | |
| TOTAL NON-CURRENT ASSETS | 2,731 | 2,584 | |
| Trade receivables | 4.5 | 2,573 | 2,119 |
| Inventories, other receivables and accruals | 4.5 | 535 | 470 |
| Restricted cash | 4.6 | 2,011 | 2,428 |
| Current financial assets | 6.2/6.5 | 7 | 43 |
| Other marketable securities | 6.3/6.5 | 1,483 | 1,185 |
| Cash and cash equivalents | 6.3/6.5 | 1,160 | 1,494 |
| TOTAL CURRENT ASSETS | 7,769 | 7,739 | |
| TOTAL ASSETS | 10,500 | 10,323 |
| (in € millions) | Notes | June 30, 2022 | Dec. 31, 2021 |
|---|---|---|---|
| Issued capital | 499 | 499 | |
| Additional paid-in capital and consolidated retained earnings (accumulated losses) |
(890) | (770) | |
| Currency translation adjustment | (471) | (615) | |
| Treasury shares | (48) | (67) | |
| Equity attributable to owners of the parent | (910) | (953) | |
| Non-controlling interests | 104 | 84 | |
| Total equity | (806) | (869) | |
| Non-current debt | 6.4/6.5 | 2,846 | 3,023 |
| Other non-current financial liabilities | 6.4/6.5 | 298 | 120 |
| Non-current provisions | 10.2 | 24 | 34 |
| Deferred tax liabilities | 148 | 137 | |
| TOTAL NON-CURRENT LIABILITIES | 3,316 | 3,314 | |
| Current debt | 6.4/6.5 | 520 | 348 |
| Other current financial liabilities | 6.4/6.5 | 42 | 47 |
| Current provisions | 10.2 | 9 | 14 |
| Funds to be redeemed | 4.5 | 5,184 | 5,258 |
| Trade payables | 4.5 | 1,107 | 721 |
| Current tax liabilities | 4.5 | 38 | 27 |
| Other payables | 1,090 | 1,463 | |
| TOTAL CURRENT LIABILITIES | 7,990 | 7,878 | |
| TOTAL EQUITY AND LIABILITIES | 10,500 | 10,323 |
| (in € millions) | Notes | First-half 2022 | First-half 2021 | |
|---|---|---|---|---|
| + | Net profit attributable to owners of the parent | 170 | 133 | |
| + | Non-controlling interests | 16 | 14 | |
| - | Share of net profit from equity-accounted companies | 5.4 | (1) | (4) |
| - | Depreciation, amortization and changes in operating provisions | 73 | 65 | |
| - | Expenses related to share-based payments | 10 | 2 | |
| - | Non-cash impact of other income and expenses | 4 | 9 | |
| - | Difference between income tax paid and income tax expense | 10 | 14 | |
| + | Dividends received from equity-accounted companies | 5.4 | 10 | 14 |
| = | Funds from operations including other income and expenses | 292 | 247 | |
| - | Other income and expenses (including restructuring costs) | 7 | 7 | |
| = | Funds from operations before other income and expenses (FFO) | 299 | 254 | |
| + | Decrease (increase) in working capital | 4.5 | (628) | (415) |
| + | Recurring decrease (increase) in restricted cash | 4.6 | 419 | (18) |
| = | Net cash from (used in) operating activities | 90 | (179) | |
| +/- Other income and expenses (including restructuring costs) received/paid | (7) | (20) | ||
| = | Net cash from (used in) operating activities including other income and expenses (A) | 83 | (199) | |
| - | Acquisitions of property, plant and equipment and intangible assets | (66) | (46) | |
| - | Acquisitions of investments | (2) | (6) | |
| - | External acquisition expenditure, net of cash acquired | (46) | (30) | |
| + | Proceeds from disposals of assets | 13 | 5 | |
| = | Net cash from (used in) investing activities (B) | (101) | (77) | |
| + | Capital increase | - | - | |
| - | Dividends paid(1) | 3.1 | (225) | (68) |
| + | (Purchases) sales of treasury shares | 9 | (17) | |
| + | Increase in non-current debt | 1 | 410 | |
| - | Decrease in non-current debt | - | (2) | |
| + | Change in current debt net of change in short-term investments | (188) | 117 | |
| = | Net cash from (used in) financing activities (C) | (403) | 440 | |
| - | Net foreign exchange differences (D) | 17 | 21 | |
| = | Net increase (decrease) in cash and cash equivalents (E) = (A) + (B) + (C) + (D) | (404) | 185 | |
| + | Cash and cash equivalents at beginning of period | 1,393 | 1,016 | |
| - | Cash and cash equivalents at end of period | 989 | 1,201 | |
| = | NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (404) | 185 |
(1) Including cash dividends paid to owners of the parent for €224 million (€0.90 per share) and cash dividends paid to non-controlling interests for €1 million.
Net cash and cash equivalents at the end of the period can be analyzed as follows:
| (in € millions) | Notes | June 30, 2022 | June 30, 2021 | |
|---|---|---|---|---|
| + | Cash and cash equivalents | 6.3 | 1,160 | 1,322 |
| - | Bank overdrafts | 6.5 | (171) | (121) |
| = | NET CASH AND CASH EQUIVALENTS | 989 | 1,201 |
| (in € millions) | Issued capital |
Additional paid | in capital Treasury shares | Consolidated retained earnings (accumulated losses)(2) |
Cumulative compensation costs – share based payments |
Cumulative fair value adjustments to financial instruments |
Cumulative actuarial gains (losses) on defined-benefit plans |
Cumulative currency translation adjustment(1) |
Net profit attributable to owners of the parent |
Equity attributable to owners of the parent |
Total non controlling interests |
Total equity |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Dec. 31, 2020 | 493 | 950 | (37) | (2,363) | 141 | 33 | (10) | (675) | 238 | (1,230) | 96 | (1,134) |
| Appropriation of 2020 net profit | - | - | - | 238 | - | - | - | - | (238) | - | - | - |
| Increase (decrease) in share capital | ||||||||||||
| - in cash | - | - | - | - | - | - | - | - | - | - | 1 | 1 |
| - cancellation of treasury shares | - | (13) | - | - | - | - | - | - | - | (13) | - | (13) |
| - options exercised | - | - | - | - | - | - | - | - | - | - | - | - |
| - dividends reinvested in new shares | 6 | 118 | - | - | - | - | - | - | - | 124 | - | 124 |
| Dividends paid | - | - | - | (185) | - | - | - | - | - | (185) | (8) | (193) |
| Changes in consolidation scope(4) | - | - | - | 1 | - | - | - | - | - | 1 | (2) | (1) |
| Compensation costs – share-based payments | - | - | - | - | 2 | - | - | - | - | 2 | - | 2 |
| (Acquisitions) disposals of treasury shares | - | - | (5) | - | - | - | - | - | - | (5) | - | (5) |
| Other | - | - | - | 9 | - | - | - | - | - | 9 | (1) | 8 |
| Other comprehensive income | - | - | - | - | - | (15) | - | 69 | - | 54 | 4 | 58 |
| Net profit for the period | - | - | - | - | - | - | - | - | 133 | 133 | 14 | 147 |
| TOTAL COMPREHENSIVE INCOME | - | - | - | - | - | (15) | - | 69 | 133 | 187 | 18 | 205 |
| June 30, 2021 | 499 | 1,055 | (42) | (2,300) | 143 | 18 | (10) | (606) | 133 | (1,110) | 104 | (1,006) |
| Dec. 31, 2021 | 499 | 1,055 | (67) | (2,294) | 153 | 10 | (7) | (615) | 313 | (953) | 84 | (869) |
| Appropriation of 2021 net profit | - | - | - | 313 | - | - | - | - | (313) | - | - | - |
| Increase (decrease) in share capital | ||||||||||||
| - in cash | - | - | - | - | - | - | - | - | - | - | - | - |
| - cancellation of treasury shares | - | (10) | - | - | - | - | - | - | - | (10) | - | (10) |
| - options exercised | - | - | - | - | - | - | - | - | - | - | - | - |
| - dividends reinvested in new shares | - | - | - | - | - | - | - | - | - | - | - | - |
| Dividends paid(3) | - | - | - | (224) | - | - | - | - | - | (224) | (1) | (225) |
| Changes in consolidation scope(4) | - | - | - | (36) | - | - | - | - | - | (36) | 2 | (34) |
| Compensation costs – share-based payments | - | - | - | - | 10 | - | - | - | - | 10 | - | 10 |
| (Acquisitions) disposals of treasury shares | - | - | 19 | - | - | - | - | - | - | 19 | - | 19 |
| Other(5) | - | - | - | (28) | - | - | - | - | - | (28) | (4) | (32) |
| Other comprehensive income | - | - | - | - | - | (11) | 9 | 144 | - | 142 | 7 | 149 |
| Net profit for the period | - | - | - | - | - | - | - | - | 170 | 170 | 16 | 186 |
| TOTAL COMPREHENSIVE INCOME | - | - | - | - | - | (11) | 9 | 144 | 170 | 312 | 23 | 335 |
| June 30, 2022 | 499 | 1,045 | (48) | (2,269) | 163 | (1) | 2 | (471) | 170 | (910) | 104 | (806) |
(1) See Note 1.4 "Presentation currency and foreign currencies" detailing the main exchange rates used in 2021 and 2022. The €471 million negative translation reserve attributable to owners of the parent corresponds mainly to translation adjustments arising from changes in exchange rates for the Brazilian real for a negative €315 million, the Venezuelan bolivar for a negative €130 million, the Argentine peso for a negative €24 million, the Turkish lira for a negative €23 million and the US dollar for a positive €57 million.
(2) This amount includes the €1,894 million negative impact of acquiring Edenred entities owned by Accor and deducted from equity following the demerger in June 2010.
(3) Corresponding to the distribution of €224 million paid to Group shareholders in cash (Note 3.1 "Payment of the 2021 dividend") and €1 million paid to non-controlling interests.
(4) Changes in consolidation scope in 2021 (excluding the currency effect) corresponded mainly to the exercise of the last call option on the remaining 19.52% of La Compagnie des cartes carburant.
In first-half 2022, the impact corresponded to the first-time consolidation of Greenpass, which resulted in a €4 million increase in non-controlling interests, and to the acquisition of the remaining 20% noncontrolling interest in TRFC, which led to a €36 million decrease in equity attributable to owners of the parent and a €2 million decrease in non-controlling interests (see Note 2 "Acquisitions, development projects and disposals").
(5) The line "Other" corresponds mainly to the impact of the liability relating to the option over the 49% non-controlling interest in Greenpass, resulting in a €34 million decrease in equity attributable to owners of the parent and a €4 million decrease in non-controlling interests (see Note 2 "Acquisitions, development projects and disposals"), and to the impact of hyperinflation in Argentina and Turkey, resulting in an €8 million increase in attributable equity.
This icon indicates an IFRS standard issue.
This icon indicates a definition specific to the Edenred Group.
This icon indicates the use of an estimate or judgment. In the absence of standards or interpretations applicable to a specific transaction, the management of Edenred uses judgment to define and apply the accounting methods that will provide relevant and reliable information, so that the financial statements present a true and fair view of the financial position, the financial performance and the cash flows of the Group, and show the economic reality of transactions.
This icon indicates the Group's figures for the current period as well as the comparative period.
The Edenred Group's condensed consolidated financial statements for the six months ended June 30, 2022 were approved for publication by the Board of Directors on July 25, 2022.
Pursuant to European Regulation (EC) No. 1606/2002 of July 19, 2002, the Edenred consolidated financial statements for the six months ended June 30, 2022, have been prepared in accordance with IAS 34 – Interim Financial Reporting. Since they are condensed financial statements, they do not include all the disclosures required under IFRS for the preparation of complete financial statements and must therefore be read in conjunction with the 2021 consolidated financial statements.
The accounting principles used to prepare the condensed consolidated financial statements are in line with IFRS standards and interpretations, as adopted by the European Union at June 30, 2022, which can be viewed at the following address:
https://ec.europa.eu/info/business-economy-euro/company-reporting-and-auditing/companyreporting/financial-reporting\_fr#overview
The accounting policies used by the Group to prepare the condensed interim consolidated financial statements are the same as those applied to prepare the 2021 consolidated financial statements, with the exception of:
For the interim consolidated financial statements, current and deferred income tax expense is calculated by applying the estimated annual average tax rate for the current fiscal year for each entity or tax group to profit before tax for the period. Income tax on any material non-recurring items for the period is measured at the actual income tax rate applicable to the items concerned.
The expense for the period relating to post-employment benefits and other long-term employee benefits corresponds to half of the projected annual expense, determined based on the data and actuarial assumptions used at the prior year-end.
In the event of significant changes in certain factors, such as market conditions and plan settlements and curtailments, the actuarial assumptions used by the Group to calculate the employee benefit obligation at the end of interim periods differ from those used at year-end. The impact of any changes in assumptions is recognized as appropriate in the consolidated statement of comprehensive income (see section 1.2).
In accordance with IAS 21 – The Effects of Changes in Foreign Exchange Rates, and for consolidation needs, balance sheet items expressed in a functional currency other than the euro are translated into euros at the exchange rate on the balance sheet date (closing exchange rate). Income statements expressed in a functional currency other than the euro are translated at the average rate for the period. Differences arising from translation are recorded as a separate component of equity and recognized in profit or loss on disposal or closing of the business.
| First-half 2022 | Full-year 2021 | First-half 2021 | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Closing rate at June 30, 2022 |
Average rate | Closing rate at Dec. 31, 2021 |
Average rate | Closing rate at June 30, 2021 |
Average rate | ||||
| ISO code | Currency | Country | EUR 1 = | EUR 1 = | EUR 1 = | EUR 1 = | EUR 1 = | EUR 1 = | |
| ARS | Peso | ARGENTINA | 130.06 | 130.06 | 116.36 | 116.36 | 113.75 | 113.75 | |
| BRL | Real | BRAZIL | 5.42 | 5.55 | 6.31 | 6.38 | 5.91 | 6.49 | |
| USD | US dollar | UNITED STATES | 1.04 | 1.09 | 1.13 | 1.18 | 1.19 | 1.20 | |
| MXN | Peso | MEXICO | 20.96 | 22.16 | 23.14 | 23.98 | 23.58 | 24.32 | |
| RON | Leu | ROMANIA | 4.95 | 4.95 | 4.95 | 4.92 | 4.93 | 4.90 | |
| GBP | Pound sterling |
UNITED KINGDOM | 0.86 | 0.84 | 0.84 | 0.86 | 0.86 | 0.87 | |
| SEK | Krona | SWEDEN | 10.73 | 10.48 | 10.25 | 10.15 | 10.11 | 10.13 | |
| CZK | Koruna | CZECH REPUBLIC | 24.74 | 24.64 | 24.86 | 25.64 | 25.49 | 25.86 | |
| TRY | Lira | TURKEY | 17.32 | 17.32 | 15.23 | 10.51 | 10.32 | 9.52 | |
| AED | Dirham | UNITED ARAB EMIRATES | 3.82 | 4.02 | 4.16 | 4.34 | 4.39 | 4.43 | |
| TWD | Taiwan dollar TAIWAN | 30.89 | 31.38 | 31.34 | 31.04 | 33.33 | 33.79 | ||
| VES* | Bolivar | VENEZUELA | 5.72 | 5.07 | 5.20 | 3.77 | 3,805,348.31 | 2,701,510.81 |
* Entry into force of the digital bolivar in 2021, with a new monetary scale that removed six zeros from the currency.
The impact on attributable consolidated equity of currency translation adjustments was a positive €144 million between December 31, 2021 and June 30, 2022. The difference mainly reflects movements in the following currencies :
| ISO code | Currency | Country | June 30, 2022 |
|---|---|---|---|
| USD | US dollar | UNITED STATES | 48 |
| MXN | Peso | MEXICO | 21 |
| GBP | Pound sterling | UNITED KINGDOM | (5) |
| BRL | Real | BRAZIL | 80 |
Argentina and Turkey have been qualified as hyperinflationary economies since July 1, 2018 and January 1, 2022, respectively. The Group applies IAS 29 – Financial Reporting in Hyperinflationary Economies to its operations in these countries.
A EUR/ARS exchange rate of 130.06 and a EUR/TRY exchange rate of 17.32 have been used. Nonmonetary items have been adjusted using Argentina's IPC consumer price index, published by national statistics institute INDEC, and Turkey's TÜFE consumer price index, respectively.
The impact of the adjustment on the first-half 2022 interim financial statements is not material.
The preparation of financial statements requires the use of judgments, estimates and assumptions to determine the reported amount of certain assets, liabilities, income and expenses, and to take into account the potential positive or negative effect of uncertainties existing at the balance sheet date.
Due to changes in the assumptions used and economic conditions different from those existing at the balance sheet date, the amounts in the Group's future financial statements could be materially different from current estimates.
At June 30, 2022, Edenred states that, following the conflict between Russia and Ukraine, the Group ceased all operations in Russia indefinitely in March 2022 in line with sanctions imposed by the European Union. Its operations in the country were limited to providing access to a fuel distribution network. In Ukraine, the Group's operations are also limited to providing access to a fuel distribution network. Edenred's direct economic exposure to this conflict is therefore limited.
However, the Group has observed that certain countries have levied economic sanctions on Russia due to the conflict. While the Group did not observe any impact on its operations in the six months ended June 30, 2022, these sanctions could nevertheless lead to a worldwide slowdown in business activity and therefore negatively impact growth in the business volume generated by the Group's solutions. Although this impact is difficult to estimate accurately at the date the 2022 condensed interim consolidated financial statements were approved for publication, Edenred reaffirms its confidence in its ability to generate sustainable and profitable growth in 2022 and to achieve its full-year objectives.
On February 21, 2022, Edenred acquired a 51% controlling interest in Greenpass, an issuer of electronic toll solutions in Brazil.
The provisional purchase price allocation primarily led to the recognition of goodwill for €15 million.
On June 10, 2022, Edenred raised its stake in The Right Fuel Card to 100% following the exercise of its call option on the remaining 20% of the share capital (see section 1.5 "Consolidated statement of changes in equity").
At the Combined General Meeting on May 11, 2022, Edenred shareholders approved a dividend of €0.90 per share in respect of 2021.
The total dividend amounted to €224 million and was paid in cash to Group shareholders on June 9, 2022.
Not applicable.
IFRS 8 requires companies to present financial information aggregated into "operating segments". The operating segments must reflect the groupings made by "the chief operating decision maker" for the purposes of allocating resources and assessing the performance of the consolidated group.
For aggregation to occur, IFRS 8 requires that the operating segments have similar long-term economic characteristics, and be similar in each of the following respects:
d) the methods used to distribute their products or provide their services; and
e) if applicable, the nature of the regulatory environment, for example, banking, insurance or public utilities.
Edenred's chief operating decision maker is the Chief Executive Officer assisted by the Executive Committee (or "executive management"). Executive management makes decisions about resource allocation to the operating segments and assesses their performance.
Executive management decisions are based on data produced by the Group's internal reporting system. The internal reporting system presents information at the country level. This is because Edenred's business is multi-location with operational decisions made at the level of each homogeneous geographic area. In the Group's internal reporting system, country-level information is aggregated into four geographical operating segments:
Except France, the presented segments are thus aggregations of operating segments.
The "Europe (excluding France)" and "Latin America" aggregations meet the criteria mentioned above.
The "Rest of the World" segment aggregates the countries that are not included in "France", "Europe (excluding France)" and "Latin America".
Finally, "Other" mainly comprises holding companies, regional headquarters and companies with no operating activity.
Transactions between segments are not material.
Executive management uses the following indicators to track business performance:
FIRST-HALF 2022
Income statement
| (in € millions) | France | Europe (excl. France) |
Latin America |
Rest of the World |
Other | First-half 2022 |
|---|---|---|---|---|---|---|
| Operating revenue | 150 | 401 | 270 | 70 | - | 891 |
| Other revenue | 3 | 8 | 17 | 3 | - | 31 |
| Total external revenue | 153 | 409 | 287 | 73 | - | 922 |
| Inter-segment revenue | - | - | - | - | - | - |
| TOTAL REVENUE FROM OPERATING SEGMENTS |
153 | 409 | 287 | 73 | - | 922 |
| EBITDA | 55 | 187 | 120 | 18 | (15) | 365 |
| EBIT | 44 | 161 | 99 | 11 | (20) | 295 |
| (in € millions) | France | Europe (excl. France) |
Latin America |
Rest of the World |
Other | First-half 2021 |
|---|---|---|---|---|---|---|
| Operating revenue | 135 | 340 | 204 | 58 | - | 736 |
| Other revenue | 3 | 4 | 11 | 3 | - | 21 |
| Total external revenue | 137 | 344 | 216 | 60 | - | 757 |
| Inter-segment revenue | - | 6 | - | - | (6) | - |
| TOTAL REVENUE FROM OPERATING SEGMENTS |
137 | 350 | 216 | 60 | (6) | 757 |
| EBITDA | 49 | 144 | 88 | 13 | 2 | 295 |
| EBIT | 38 | 120 | 72 | 5 | (3) | 232 |
Changes in revenue and earnings
Changes in revenue and earnings between first-half 2021 and first-half 2022 break down as follows:
| Δ First-half 2022/First-half 2021 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Organic growth | Changes in consolidation scope | Currency effect | Total change | |||||||
| (in € millions) | First-half 2022 First-half 2021 | In €m | As a % | In €m | As a % | In €m | As a % In €m | As a % | ||
| Operating revenue | 891 | 736 | +127 | +17.3% | (3) | (0.5)% | +31 | +4.1% | +155 | +20.9% |
| Other revenue | 31 | 21 | +10 | +46.5% | +0 | +1.7% | +0 | +1.0% | +10 | +49.1% |
| Total external revenue | 922 | 757 | +137 | +18.1% | (3) | (0.4)% | +31 | +4.0% | +165 | +21.7% |
| EBITDA | 365 | 295 | +65 | +22.0% | (8) | (2.6)% | +13 | +4.2% | +70 | +23.6% |
| EBIT | 295 | 232 | +61 | +26.3% | (7) | (3.0)% | +9 | +4.1% | +63 | +27.3% |
| (in € millions) | France | Europe (excl. France) |
Latin America |
Rest of the World |
Other | TOTAL |
|---|---|---|---|---|---|---|
| Total revenue | 153 | 409 | 287 | 73 | - | 922 |
| Operating expenses | (98) | (222) | (167) | (55) | (15) | (557) |
| EBITDA – first-half 2022 | 55 | 187 | 120 | 18 | (15) | 365 |
| EBITDA – first-half 2021 | 49 | 144 | 88 | 13 | 2 | 295 |
| (in € millions) | France | Europe (excl. France) |
Latin America |
Rest of the World |
Other | June 30, 2022 |
|---|---|---|---|---|---|---|
| Goodwill | 160 | 557 | 389 | 502 | 0 | 1,608 |
| Intangible assets | 83 | 250 | 254 | 117 | 24 | 728 |
| Property, plant and equipment | 39 | 65 | 25 | 9 | 17 | 155 |
| Non-current financial assets and investments in equity-accounted companies |
49 | 77 | 10 | 7 | 59 | 202 |
| Deferred tax assets | 5 | 14 | 22 | - | (3) | 38 |
| Non-current assets | 336 | 963 | 700 | 635 | 97 | 2,731 |
| Current assets | 1,309 | 2,996 | 1,783 | 374 | 1,307 | 7,769 |
| TOTAL ASSETS | 1,645 | 3,959 | 2,483 | 1,009 | 1,404 | 10,500 |
| Equity and non-controlling interests | (271) | 686 | 786 | 601 | (2,608) | (806) |
| Non-current liabilities | 49 | 116 | 157 | 11 | 2,983 | 3,316 |
| Current liabilities | 1,867 | 3,157 | 1,540 | 397 | 1,029 | 7,990 |
| TOTAL EQUITY AND LIABILITIES | 1,645 | 3,959 | 2,483 | 1,009 | 1,404 | 10,500 |
| Europe | Latin | Rest of | ||||
|---|---|---|---|---|---|---|
| (in € millions) | France | (excl. France) | America | the World | Other | June 30, 2021 |
| Goodwill | 160 | 558 | 340 | 441 | - | 1,499 |
| Intangible assets | 78 | 248 | 218 | 113 | 17 | 674 |
| Property, plant and equipment | 46 | 64 | 23 | 12 | 20 | 165 |
| Non-current financial assets and inv estments in equity-accounted companies |
4 | 116 | 12 | 3 | 64 | 199 |
| Deferred tax assets | 5 | 19 | 14 | 1 | 6 | 45 |
| Non-current assets | 293 | 1,005 | 607 | 570 | 107 | 2,582 |
| Current assets | 1,332 | 3,162 | 1,341 | 304 | 1,194 | 7,333 |
| TOTAL ASSETS | 1,625 | 4,167 | 1,948 | 874 | 1,301 | 9,915 |
| Equity and non-controlling interests | (217) | 677 | 740 | 537 | (2,743) | (1,006) |
| Non-current liabilities | 53 | 115 | 93 | 16 | 3,067 | 3,344 |
| Current liabilities | 1,789 | 3,375 | 1,115 | 321 | 977 | 7,577 |
| TOTAL EQUITY AND LIABILITIES | 1,625 | 4,167 | 1,948 | 874 | 1,301 | 9,915 |
Total revenue is made up of operating revenue and other revenue.
Changes in total revenue between first-half 2021 and first-half 2022 break down as follows:
| (in € millions) | France | Europe (excl. France) |
Latin America |
Rest of the World |
TOTAL |
|---|---|---|---|---|---|
| Total revenue – first-half 2022 | 153 | 409 | 287 | 73 | 922 |
| Total revenue – first-half 2021 | 137 | 344 | 216 | 60 | 757 |
| Change | +16 | +65 | +71 | +13 | +165 |
| % change | +11.0% | 18.9% | +33.6% | +19.4% | +21.7% |
| LIKE-FOR-LIKE CHANGE | +16 | +64 | +37 | +20 | +137 |
| LIKE-FOR-LIKE CHANGE AS A % | +11.0% | 18.5% | +17.7% | +32.5% | +18.1% |
Changes in operating revenue between first-half 2021 and first-half 2022 break down by region as follows:
| (in € millions) | France | Europe (excl. France) |
Latin America |
Rest of the World |
TOTAL |
|---|---|---|---|---|---|
| Operating revenue – first-half 2022 | 150 | 401 | 270 | 70 | 891 |
| Operating revenue – first-half 2021 | 135 | 340 | 204 | 58 | 736 |
| Change | +15 | +61 | +66 | +12 | +155 |
| % change | +11.2% | 17.8% | +32.5% | +20.5% | +20.9% |
| LIKE-FOR-LIKE CHANGE | +15 | +60 | +34 | +18 | +127 |
| LIKE-FOR-LIKE CHANGE AS A % | +11.2% | 17.5% | +16.9% | +31.3% | +17.3% |
Operating revenue for Brazil amounted to €190 million in first-half 2022, versus €139 million in first-half 2021.
Other revenue is the interest generated by investing cash over the period between:
| (in € millions) | France | Europe (excl. France) |
Latin America |
Rest of the World |
TOTAL |
|---|---|---|---|---|---|
| Other revenue – first-half 2022 | 3 | 8 | 17 | 3 | 31 |
| Other revenue – first-half 2021 | 3 | 4 | 11 | 3 | 21 |
| Change | - | +4 | +6 | - | +10 |
| % change | +1.7% | +112.4% | +52.5% | (4.3)% | +49.1% |
| LIKE-FOR-LIKE CHANGE | +0 | +4 | +4 | +2 | +10 |
| LIKE-FOR-LIKE CHANGE AS A % | +1.7% | +110.4% | +33.6% | +56.9% | +46.5% |
In accordance with IFRS 15, revenue is recognized upon the transfer of control to the customer. The Group acts almost exclusively as an agent for its three main businesses, recognizing only an agency commission. For any other transactions in which the Group acts as the principal, the revenue is recognized in full.
For the Employee Benefits and Fleet & Mobility Solutions business lines:
In addition to the information broken down by region as presented in the section on segment information and in accordance with IFRS 15, the following tables show a breakdown of the Group's operating revenue by business line.
| (in € millions) | Employee Benefits | Fleet & Mobility Solutions |
Complementary Solutions |
TOTAL |
|---|---|---|---|---|
| Operating revenue – first-half 2022 | 528 | 252 | 111 | 891 |
| Operating revenue – first-half 2021 | 448 | 190 | 98 | 736 |
| Change | +80 | +62 | +13 | +155 |
| % change | +17.7% | +32.3% | +13.6% | +20.9% |
| LIKE-FOR-LIKE CHANGE | +70 | +46 | +11 | +127 |
| LIKE-FOR-LIKE CHANGE AS A % | +15.7% | +24.0% | +11.4% | +17.3% |
Complementary Solutions encompasses Corporate Payment Services, Incentive & Rewards Solutions, and Public Social Programs.
Other operating expenses consist mainly in IT expenses, external fees, marketing and advertising expenses, additions to and reversals of impairment of current assets, and development expenses for IT projects.
| (in € millions) | France | Europe (excl. France) |
Latin America |
Rest of the World |
Other | TOTAL |
|---|---|---|---|---|---|---|
| EBITDA – first-half 2022 | 55 | 187 | 120 | 18 | (15) | 365 |
| EBITDA – first-half 2021 | 49 | 144 | 88 | 13 | 2 | 295 |
| Change | +6 | +43 | +32 | +5 | (17) | +70 |
| % change | +13.5% | +30.0% | +36.5% | +38.3% | N/A | +23.6% |
| LIKE-FOR-LIKE CHANGE | +6 | +43 | +16 | +8 | (8) | +65 |
| LIKE-FOR-LIKE CHANGE AS A % | +13.5% | +29.5% | +18.6% | +60.7% | N/A | +22.0% |
| (in € millions) | France | Europe (excl. France) |
Latin America |
Rest of the World |
Other | TOTAL |
|---|---|---|---|---|---|---|
| EBIT – first-half 2022 | 44 | 161 | 99 | 11 | (20) | 295 |
| EBIT – first-half 2021 | 38 | 120 | 72 | 5 | (3) | 232 |
| Change | +6 | +41 | +27 | +6 | (17) | +63 |
| % change | +16.4% | +34.3% | +39.6% | +93.7% | N/A | +27.3% |
| LIKE-FOR-LIKE CHANGE | +6 | +41 | +14 | +8 | (8) | +61 |
| LIKE-FOR-LIKE CHANGE AS A % | +16.4% | +33.9% | +20.8% | +141.9% | N/A | +26.3% |
| (in € millions) | June 30, 2022 | Dec. 31, 2021 | Change |
|---|---|---|---|
| Inventories, net | 54 | 46 | 8 |
| Trade receivables, net, linked to funds to be redeemed | 1,312 | 1,239 | 73 |
| Trade receivables, net, not linked to funds to be redeemed | 1,261 | 880 | 381 |
| Other receivables, net | 481 | 424 | 57 |
| WORKING CAPITAL – ASSETS | 3,108 | 2,589 | 519 |
| Trade payables | (1,107) | (721) | (386) |
| Other payables | (1,090) | (1,463) | 373 |
| Funds to be redeemed | (5,184) | (5,258) | 74 |
| WORKING CAPITAL – LIABILITIES | (7,381) | (7,442) | 61 |
| NEGATIVE WORKING CAPITAL | (4,273) | (4,853) | 580 |
| Current tax liabilities | (38) | (27) | (11) |
| NET NEGATIVE WORKING CAPITAL (incl. corporate income tax liabilities) | (4,311) | (4,880) | 569 |
At June 30, 2022, working capital stood at negative €4,311 million versus negative €4,880 million at December 31, 2021. The difference in working capital (excluding corporate income tax liabilities) is mainly attributable to:
| (in € millions) | First-half 2022 | First-half 2021 |
|---|---|---|
| Working capital at beginning of period | (4,853) | (4,913) |
| Change in working capital(1) | 628 | 415 |
| Acquisitions | (3) | - |
| Disposals/liquidations | - | - |
| Change in impairment of current assets | (3) | (2) |
| Currency translation adjustment | (39) | (74) |
| Reclassifications to other balance sheet items | (3) | 4 |
| NET CHANGE IN WORKING CAPITAL | 580 | 343 |
| WORKING CAPITAL AT END OF PERIOD | (4,273) | (4,570) |
(1) See section 1.4 "Consolidated statement of cash flows".
The update to the statistical impairment rates used for Group entities' current assets did not lead to any additional material provisions being recognized in the first half of 2022.
Restricted cash corresponds to voucher reserve funds. These funds, which are equal to the face value of vouchers in circulation, are subject to specific regulations in some countries, such as France for the Ticket Restaurant® and Ticket CESU solutions. In particular, use of the funds is restricted and they must be clearly segregated from the Group's other cash. The funds remain Edenred's property and are invested in locally regulated interest-bearing financial instruments. Restricted cash also includes funds relating to PPS's direct clients.
Restricted cash corresponds mainly to voucher reserve funds subject to special regulations in the following countries: France (€822 million), the United Kingdom (€570 million), Belgium (€227 million), Romania (€114 million) and the United States (€88 million).
| (in € millions) | First-half 2022 | First-half 2021 |
|---|---|---|
| Restricted cash at beginning of period | 2,428 | 2,578 |
| Change for the period(1) | (419) | 18 |
| Acquisitions | - | - |
| Currency translation adjustment | 8 | 53 |
| Other changes | (6) | (2) |
| Net change in restricted cash | (417) | 69 |
| RESTRICTED CASH AT END OF PERIOD | 2,011 | 2,647 |
(1) See section 1.4 "Consolidated statement of cash flows".
| (in € millions) | June 30, 2022 | Dec. 31, 2021 |
|---|---|---|
| Goodwill, gross | 1,781 | 1,676 |
| Accumulated amortization and impairment losses | (173) | (170) |
| GOODWILL, NET | 1,608 | 1,506 |
No indications of impairment were identified on Group goodwill or non-current assets in 2022.
| (in € millions) | June 30, 2022 | Dec. 31, 2021 |
|---|---|---|
| France (mainly Ticket Cadeaux, Proweb CE and Moneo Resto) | 160 | 160 |
| UTA (including Road Account) | 169 | 169 |
| United Kingdom (including Prepay Technologies and TRFC) | 148 | 151 |
| Italy (including Easy Welfare) | 92 | 92 |
| Romania (including Benefit Online) | 35 | 35 |
| Finland | 19 | 19 |
| Slovakia | 18 | 18 |
| Poland (including Timex) | 17 | 17 |
| Sweden | 16 | 17 |
| Czech Republic | 13 | 13 |
| Lithuania (EBV) | 12 | 12 |
| Belgium (including Merits & Benefits and Ekivita) | 11 | 11 |
| Portugal | 6 | 6 |
| Other (individually representing less than €5 million) | 1 | 1 |
| Europe (excl. France) | 557 | 561 |
| Brazil (including Repom, Embratec and Coopercard) | 332 | 270 |
| Mexico | 45 | 41 |
| Other (individually representing less than €5 million) | 12 | 11 |
| Latin America | 389 | 322 |
| United States (including CSI) | 464 | 426 |
| Dubai (including Mint) | 30 | 28 |
| Japan | 8 | 9 |
| Other (individually representing less than €5 million) | - | - |
| Rest of the World | 502 | 463 |
| GOODWILL, NET | 1,608 | 1,506 |
Changes in the carrying amount of goodwill during the period presented were as follows:
| (in € millions) | First-half 2022 | First-half 2021 |
|---|---|---|
| NET GOODWILL AT BEGINNING OF PERIOD | 1,506 | 1,457 |
| Increase in gross goodwill and impact of scope changes | 15 | - |
| Greenpass (acquisition) | 15 | - |
| Goodwill written off on disposals for the period | - | - |
| Impairment losses | - | - |
| Currency translation adjustment | 87 | 42 |
| NET GOODWILL AT END OF PERIOD | 1,608 | 1,499 |
Intangible assets are measured at cost less accumulated amortization and any accumulated impairment losses, in accordance with IAS 38 – Intangible Assets.
Incurred expenses related to internal projects are differentiated based on whether they are incurred during the research phase or the development phase. This differentiation is essential as the financial treatment is different for the two categories.
Expenses incurred during the research phase of an internal project are not capitalized but expensed in the income statement of the period during which they occurred.
Expenses incurred during the development phase of an internal project are analyzed in order to determine whether or not they can be capitalized. If the six criteria defined by IAS 38.57 are simultaneously met, expenses can be capitalized and amortized over the period defined by the category of assets in which they are included. If not, they are expensed in the income statement of the period during which they occurred.
According to IAS 38.57, expenses may only be capitalized if the entity demonstrates the following six items:
In accordance with the IFRIC agenda decision of March 2021 on the recognition of customization or configuration costs in a Software as a Service (SaaS) arrangement, the Group has maintained as intangible assets both specific developments that it controls based on IAS 38 capitalization criteria, and the cost of interfaces. Other previously capitalized costs that do not meet these criteria are now recognized as expenses either when they are incurred (if the services are performed internally or by a third party unrelated to the publisher of the SaaS solution) or over the term of the SaaS contract (if the
services are performed by the publisher or its subcontractor) (see Note 11 "Update on accounting standards").
| (in € millions) | June 30, 2022 | Dec. 31, 2021 |
|---|---|---|
| GROSS CARRYING AMOUNT | 1,328 | 1,212 |
| Brands | 65 | 65 |
| Customer lists | 622 | 586 |
| Licenses and software | 445 | 397 |
| Other intangible assets | 196 | 164 |
| ACCUMULATED AMORTIZATION AND IMPAIRMENT LOSSES | (600) | (535) |
| Brands | (11) | (11) |
| Customer lists | (229) | (201) |
| Licenses and software | (303) | (268) |
| Other intangible assets | (57) | (55) |
| NET CARRYING AMOUNT | 728 | 677 |
Changes in the carrying amount of intangible assets
| (in € millions) | First-half 2022 | First-half 2021 |
|---|---|---|
| CARRYING AMOUNT AT BEGINNING OF PERIOD | 677 | 655 |
| Intangible assets of newly consolidated companies | 1 | - |
| Internally generated assets | 50 | 43 |
| Additions | 12 | - |
| Disposals | (3) | - |
| Amortization for the period | (49) | (43) |
| Impairment losses for the period | - | - |
| Currency translation adjustment | 41 | 19 |
| Reclassifications | (1) | - |
| CARRYING AMOUNT AT END OF PERIOD | 728 | 674 |
Property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses, in accordance with IAS 16 – Property, Plant and Equipment. Assets under construction are measured at cost less any accumulated impairment losses. They are depreciated from the date when they are put in service.
| June 30, 2022 | Dec. 31, 2021 | |||||
|---|---|---|---|---|---|---|
| (in € millions) | GR OSS C A R R YIN G A M OUN T |
D EP R EC IA T ION A N D IM P A IR M EN T LOSSES |
N ET C A R R YIN G A M OUN T |
GROSS CARRYING AM OUNT |
DEPRECIATION AND IM PAIRM ENT LOSSES |
NET CARRYING AM OUNT |
| Land | 2 - |
2 | 2 - |
2 | ||
| Buildings | 19 | (8) | 11 | 19 | (8) | 11 |
| Fixtures and fittings | 29 | (19) | 10 | 29 | (18) | 11 |
| Equipment and furniture | 108 | (86) | 22 | 104 | (83) | 21 |
| Assets under construction | 2 - |
2 | 2 - |
2 | ||
| Right-of-use assets | 197 | (89) | 108 | 186 | (77) | 109 |
| Total | 357 | (202) | 155 | 342 | (186) | 156 |
Changes in the carrying amount of property, plant and equipment during the period were as follows:
| (in € millions) | First-half 2022 | First-half 2021 |
|---|---|---|
| CARRYING AMOUNT AT BEGINNING OF PERIOD | 156 | 148 |
| Property, plant and equipment of newly consolidated companies | - | - |
| Additions to property, plant and equipment | 4 | 4 |
| Right-of-use assets | 13 | 32 |
| Disposals and retirements | - | - |
| Depreciation for the period | (21) | (20) |
| Currency translation adjustment | 3 | 1 |
| Reclassifications | - | - |
| CARRYING AMOUNT AT END OF PERIOD | 155 | 165 |
At June 30, 2022, this item consisted mainly of AGES (AGES Maut System GmbH & Co KG and Ages International GmbH & Co KG), MSC (Mercedes Service Card Beteiligungs GmbH and Mercedes Service Card GmbH & Co KG) and Freto.
| (in € millions) | First-half 2022 | First-half 2021 |
|---|---|---|
| Investments in equity-accounted companies at beginning of period | 67 | 64 |
| Additions to investments in equity-accounted companies | - | 3 |
| Share of net profit from equity-accounted companies | 1 | 4 |
| Capital increase | - | 1 |
| Impairment of investments in equity-accounted companies | - | - |
| Currency translation adjustment | 1 | - |
| Changes in consolidation scope | - | - |
| Dividends received from investments in equity-accounted companies | (10) | (14) |
| Investments in equity-accounted companies at end of period | 59 | 58 |
| (in € millions) | First-half 2022 | First-half 2021 |
|---|---|---|
| Amortization of fair v alue adjustments to assets acquired in business combinations | (18) | (17) |
| Amortization of intangible assets | (31) | (26) |
| Depreciation of property, plant and equipment | (7) | (6) |
| Depreciation of right-of-use assets | (14) | (14) |
| TOTAL | (70) | (63) |
| (in € millions) | First-half 2022 | First-half 2021 |
|---|---|---|
| Gross borrowing cost | (26) | (26) |
| Hedging instruments | 10 | 10 |
| Income from cash and cash equivalents and other marketable securities | 12 | 10 |
| Net borrowing cost | (4) | (6) |
| Net foreign exchange gains (losses) | - | (1) |
| Other financial income | 2 | 2 |
| Other financial expenses | (15) | (4) |
| NET FINANCIAL EXPENSE | (17) | (9) |
Gross borrowing costs for first-half 2022 include amortization of bond issuance costs for €5 million and interest income on Neu CP issued at negative interest rates.
Hedging instruments relate to expenses and income on interest rate swaps as presented in Note 6.6 "Financial instruments and market risk management".
Other financial income and expenses mainly concern bank fees, banking expenses, miscellaneous interest, and financial provisions.
IFRS 9 defines financial assets as a contractual right to receive an economic benefit that will ultimately result in the receipt of cash flows or an equity instrument. Financial assets are initially recognized at fair value plus transaction costs that are directly attributable to the acquisition of the asset. The initial fair value corresponds to the asset's purchase price.
Non-current financial assets consist mainly of equity interests in non-consolidated companies, loans, and deposits and guarantees.
| June 30, 2022 | Dec. 31, 2021 | |||||
|---|---|---|---|---|---|---|
| (in € millions) | Gross carrying amount |
Impairment losses |
Net carrying amount |
Gross carrying amount |
Impairment losses |
Net carrying amount |
| Equity interests | 99 | (8) | 91 | 83 | (3) | 80 |
| Deposits and guarantees | 21 | - | 21 | 19 | - | 19 |
| Other non-current financial assets | 32 | (1) | 31 | 42 | (1) | 41 |
| NON-CURRENT FINANCIAL ASSETS | 152 | (9) | 143 | 144 | (4) | 140 |
| June 30, 2022 Dec. 31, 2021 |
||||||
|---|---|---|---|---|---|---|
| (in € millions) | Gross carrying amount |
Impairment losses |
Net carrying amount |
Gross carrying amount |
Impairment losses |
Net carrying amount |
| Other current financial assets | 12 | (5) | 7 | 9 | (5) | 4 |
| Derivatives | - | - | - | 39 | - | 39 |
| CURRENT FINANCIAL ASSETS | 12 | (5) | 7 | 48 | (5) | 43 |
Other current financial assets primarily represent short-term loans with external counterparties.
Derivatives are recognized according to IFRS 9 – Financial Instruments. Their accounting treatment is detailed in Note 6.6 "Financial instruments and market risk management" to the consolidated financial statements for the year ended December 31, 2021.
Both cash and cash equivalents and other marketable securities are taken into account for the calculation of net debt.
| June 30, 2022 | Dec. 31, 2021 | |||||
|---|---|---|---|---|---|---|
| (in € millions) | Gross carrying amount |
Impairment losses |
Net carrying amount |
Gross carrying amount |
Impairment losses |
Net carrying amount |
| Cash at bank and on hand | 677 | - | 677 | 937 | - | 937 |
| Term deposits and equivalent – less than 3 months | 394 | - | 394 | 503 | - | 503 |
| Bonds and other negotiable debt securities | 58 | - | 58 | 18 | - | 18 |
| Mutual fund units in cash – less than 3 months | 31 | - | 31 | 36 | - | 36 |
| CASH AND CASH EQUIVALENTS | 1,160 | - | 1,160 | 1,494 | - | 1,494 |
| Term deposits and equivalent – more than 3 months | 1,191 | (1) | 1,190 | 853 | (1) | 852 |
| Bonds and other negotiable debt securities | 292 | - | 292 | 332 | - | 332 |
| Mutual fund units in cash – more than 3 months | 1 | - | 1 | 1 | - | 1 |
| OTHER MARKETABLE SECURITIES | 1,484 | (1) | 1,483 | 1,186 | (1) | 1,185 |
| TOTAL CASH AND CASH EQUIVALENTS AND OTHER MARKETABLE SECURITIES | 2,644 | (1) | 2,643 | 2,680 | (1) | 2,679 |
| June 30, 2022 | Dec. 31, 2021 | ||||||
|---|---|---|---|---|---|---|---|
| (in € millions) | Non-current | Current | Total | Non-current | Current | Total | |
| Convertible bonds | 885 | - | 885 | 884 | - | 884 | |
| Non-bank debt | 1,958 | 32 | 1,990 | 2,134 | 228 | 2,362 | |
| Bank borrowings | 3 | 16 | 19 | 5 | 19 | 24 | |
| Neu CP | - | 301 | 301 | - | - | - | |
| Bank overdrafts | - | 171 | 171 | - | 101 | 101 | |
| DEBT | 2,846 | 520 | 3,366 | 3,023 | 348 | 3,371 | |
| Lease liabilities | 84 | 29 | 113 | 86 | 28 | 114 | |
| Deposits and guarantees | 24 | 3 | 27 | 22 | 4 | 26 | |
| Put options over non-controlling interests | 56 | 2 | 58 | 9 | 1 | 10 | |
| Derivatives | 134 | 4 | 138 | - | 10 | 10 | |
| Other | - | 4 | 4 | 3 | 4 | 7 | |
| OTHER FINANCIAL LIABILITIES | 298 | 42 | 340 | 120 | 47 | 167 | |
| DEBT AND OTHER FINANCIAL LIABILITIES | 3,144 | 562 | 3,706 | 3,143 | 395 | 3,538 |
The contractual documents for debt and other financial liabilities do not include any particular covenants or clauses that could significantly change the terms.
Convertible bonds and non-bank debt
At June 30, 2022, the Group's gross outstanding bond position amounted to €3,000 million, which breaks down as follows:
| Issuance date | Amount in €m | Coupon | Maturity |
|---|---|---|---|
| 7 years | |||
| June 14, 2021 | 400* | 0% | June 14, 2028 |
| 9 years | |||
| June 18, 2020 | 600 | 1.375% | June 18, 2029 |
| 5 years | |||
| September 6, 2019 | 500* | 0% | September 6, 2024 |
| 7 years & | |||
| December 6, 2018 | 500 | 1.875% | 3 months |
| March 6, 2026 | |||
| 10 years | |||
| March 30, 2017 | 500 | 1.875% | March 30, 2027 |
| 10 years | |||
| March 10, 2015 | 500 | 1.375% | March 10, 2025 |
| Gross outstanding bond position | 3,000 |
* Conv ertible bonds (OCEANEs).
Following the distribution to Edenred SE shareholders of a dividend of €0.90 per share, paid out on June 9, 2022, the conversion/exchange ratio will be increased from 1 Edenred SE share per OCEANE to 1.001 Edenred SE shares per OCEANE, in accordance with the provisions of section 2.6.B.10 of the Terms and Conditions. This change will have no material impact on the financial statements.
Following the distribution to Edenred SE shareholders of a dividend of €0.90 per share, paid out on June 9, 2022, the conversion/exchange ratio will be increased from 1 Edenred SE share per OCEANE to 1.003 Edenred SE shares per OCEANE, in accordance with the provisions of section 2.6.B.10 of the Terms and Conditions. This change will have no material impact on the financial statements.
| Issuance date | Amount in €m | Coupon | Maturity |
|---|---|---|---|
| June 14, 2021 | 400* | 0% | 7 years June 14, 2028 |
| June 18, 2020 | 600 | 1.375% | 9 years June 18, 2029 |
| September 6, 2019 | 500* | 0% | 5 years September 6, 2024 |
| December 6, 2018 | 500 | 1.875% | 7 years & 3 months March 6, 2026 |
| March 30, 2017 | 500 | 1.875% | 10 years March 30, 2027 |
| March 10, 2015 | 500 | 1.375% | 10 years March 10, 2025 |
| May 23, 2012 | 225 | 3.75% | 10 years May 23, 2022 |
| Gross outstanding bond position | 3,225 |
At December 31, 2021, the gross outstanding bond position amounted to €3,225 million.
* Convertible bonds (OCEANEs).
In December 2019, a €105 million portion of the €250 million Schuldschein private placement was redeemed ahead of maturity. In June 2021, a further €113 million was redeemed at maturity. There was €32 million outstanding under this loan at June 30, 2022:
| Issuance date | Rate | Amount in €m | Maturity |
|---|---|---|---|
| June 29, 2016 | 1.47% Fixed |
32 | 7 years June 29, 2023 |
| Total Schuldschein loan | 32 |
At December 31, 2021, there was also €32 million outstanding under the Schuldschein loan.
Outstanding bank borrowings at June 30, 2022 amounted to €19 million.
At June 30, 2022, current debt outstanding under the Negotiable European Commercial Paper (Neu CP) program stood at €301 million, out of a total authorized amount of €750 million.
The €250 million Negotiable European Medium Term Note (Neu MTN) program had not been used at that date.
At June 30, 2022
| (in € millions) | First-half 2023 First-half 2024 First-half 2025 First-half 2026 First-half 2027 | First-half 2028 and beyond |
June 30, 2022 | ||||
|---|---|---|---|---|---|---|---|
| Convertible bonds | - | - | 500 | - | - | 385 | 885 |
| Non-bank debt | 32 | - | 468 | 478 | 471 | 541 | 1,990 |
| Bank borrowings | 16 | 3 | - | - | - | - | 19 |
| Neu CP | 301 | - | - | - | - | - | 301 |
| BANK OVERDRAFTS | 171 | - | - | - | - | - | 171 |
| DEBT | 520 | 3 | 968 | 478 | 471 | 926 | 3,366 |
| Lease liabilities | 29 | 24 | 17 | 14 | 12 | 17 | 113 |
| Deposits and guarantees | 3 | 24 | - | - | - | - | 27 |
| Put options over non-controlling interests | 2 | 5 | - | 44 | 1 | 6 | 58 |
| Derivatives | 4 | 5 | 20 | 25 | 28 | 56 | 138 |
| Other | 4 | 0 | - | - | - | - | 4 |
| OTHER FINANCIAL LIABILITIES | 42 | 58 | 37 | 83 | 41 | 79 | 340 |
| TOTAL | 562 | 61 | 1,005 | 561 | 512 | 1,005 | 3,706 |
| (in € millions) | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 and beyond |
Dec. 31, 2021 |
|---|---|---|---|---|---|---|---|
| Convertible bonds | - | - | 500 | - | - | 384 | 884 |
| Non-bank debt | 228 | 32 | - | 488 | 510 | 1,104 | 2,362 |
| Bank borrowings | 19 | 4 | 1 | - | - | - | 24 |
| Neu CP | - | - | - | - | - | - | - |
| Bank overdrafts | 101 | - | - | - | - | - | 101 |
| DEBT | 348 | 36 | 501 | 488 | 510 | 1,488 | 3,371 |
| Lease liabilities | 28 | 22 | 17 | 15 | 12 | 20 | 114 |
| Deposits and guarantees | 4 | 22 | - | - | - | - | 26 |
| Put options over non-controlling interests | 1 | - | 2 | - | - | 7 | 10 |
| Derivatives | 10 | - | - | - | - | - | 10 |
| Other | 4 | 3 | - | - | - | - | 7 |
| OTHER FINANCIAL LIABILITIES | 47 | 47 | 19 | 15 | 12 | 27 | 167 |
| TOTAL | 395 | 83 | 520 | 503 | 522 | 1,515 | 3,538 |
| (in € millions) | June 30, 2022 | Dec. 31, 2021 |
|---|---|---|
| Non-current debt | 2,846 | 3,023 |
| Other non-current financial liabilities | 298 | 120 |
| Current debt | 349 | 247 |
| Other current financial liabilities | 42 | 47 |
| Bank overdrafts | 171 | 101 |
| DEBT AND OTHER FINANCIAL LIABILITIES | 3,706 | 3,538 |
| Other current financial assets | (7) | (4) |
| Derivatives | - | (39) |
| Other marketable securities | (1,483) | (1,185) |
| Cash and cash equivalents | (1,160) | (1,494) |
| CASH AND CASH EQUIVALENTS AND OTHER CURRENT FINANCIAL ASSETS |
(2,650) | (2,722) |
| NET DEBT | 1,056 | 816 |
Other non-current and current financial liabilities include lease liabilities recognized in application of IFRS 16 in an amount of €113 million.
| (in € millions) | First-half 2022 | First-half 2021 |
|---|---|---|
| Net debt at beginning of period | 816 | 1,115 |
| Increase (decrease) in non-current debt | (177) | 121 |
| Increase (decrease) in other non-current financial liabilities | 178 | 25 |
| Decrease (increase) in other marketable securities | (298) | 157 |
| Decrease (increase) in cash and cash equiv alents, net of bank ov erdrafts |
404 | (185) |
| Increase (decrease) in other financial assets and liabilities | 133 | 216 |
| Increase (decrease) in net debt | 240 | 334 |
| NET DEBT AT END OF PERIOD | 1,056 | 1,449 |
Debt before interest rate hedging breaks down as follows:
| June 30, 2022 | Dec. 31, 2021 | |||||
|---|---|---|---|---|---|---|
| (in € millions) | Amount | Interest rate | % of total debt | Amount | Interest rate | % of total debt |
| Fixed-rate debt(1) | 3,194 | 1.0% | 100% | 3,270 | 1.4% | 100% |
| Variable-rate debt | 1 | 6.0% | 0% | - | 0.0% | 0% |
| DEBT* | 3,195 | 1.0% | 100% | 3,270 | 1.4% | 100% |
* Debt excluding bank overdrafts.
(1) The rates mentioned for fixed-rate debt correspond to the contractual rates (1.375% and 1.875%) applied to the exact number of days in the year divided by 360.
Debt after interest rate hedging breaks down as follows:
| June 30, 2022 | Dec. 31, 2021 | |||||
|---|---|---|---|---|---|---|
| (in € millions) | Amount | Interest rate | % of total debt | Amount | Interest rate | % of total debt |
| Fixed-rate debt | 1,339 | 0.2% | 42% | 1,254 | 0.6% | 38% |
| Variable-rate debt | 1,856 | 1.0% | 58% | 2,016 | 0.8% | 62% |
| DEBT* | 3,195 | 0.7% | 100% | 3,270 | 0.7% | 100% |
* Debt excluding bank overdrafts.
Debt before currency hedging breaks down as follows:
| June 30, 2022 | Dec. 31, 2021 | ||||||
|---|---|---|---|---|---|---|---|
| (in € millions) | Amount | Interest rate | % of total debt | Amount | Interest rate | % of total debt | |
| EUR | 3,185 | 1.0% | 100% | 3,260 | 1.3% | 100% | |
| Other currencies | 10 | 6.9% | 0% | 10 | 6.7% | 0% | |
| DEBT* | 3,195 | 1.0% | 100% | 3,270 | 1.4% | 100% | |
* Debt excluding bank overdrafts.
Debt after currency hedging breaks down as follows:
| June 30, 2022 | Dec. 31, 2021 | |||||||
|---|---|---|---|---|---|---|---|---|
| (in € millions) | Amount | Interest rate | % of total debt | Amount | Interest rate | % of total debt | ||
| EUR | 3,148 | 0.6% | 99% | 3,227 | 0.7% | 99% | ||
| Other currencies | 47 | 4.1% | 1% | 43 | 2.6% | 1% | ||
| DEBT* | 3,195 | 0.7% | 100% | 3,270 | 0.7% | 100% |
* Debt excluding bank overdrafts.
Interest rate hedges include derivatives in the form of swaps that transform a fixed rate into a variable rate over a euro-denominated debt initially issued at a fixed rate. The derivatives are therefore variablefor-fixed swaps and classified as fair value hedges under IFRS 9.
These interest rate swaps represent a total notional amount of €1,982 million relating to an underlying debt of €2,132 million. At June 30, 2022, the derivatives had a fair value of negative €118 million, recorded in liabilities.
Changes in the fair value of the hedges have no material impact on the income statement because they qualify for hedge accounting under IFRS.
The effective tax rate is calculated based on:
• profit before tax;
.
• income tax expense adjusted for the tax on dividends, withholding tax, utilization of tax loss carryforwards and non-recurring items.
Based on these calculations, the effective tax rate changed from 33.3% in first-half 2021 to 31.2% in the six months to June 30, 2022.
At June 30, 2022, the Company's share capital was made up of 248,588,059 shares.
At June 30, 2022, the number of shares outstanding and the weighted average number of shares outstanding broke down as follows:
| (in shares) | First-half 2022 | First-half 2021 |
|---|---|---|
| SHARE CAPITAL AT END OF PERIOD | 249,588,059 | 249,588,059 |
| Number of shares outstanding at beginning of period | 248,536,041 | 245,905,514 |
| Number of shares issued for dividend payments | - | 3,004,708 |
| Number of shares issued on conversion of performance share plans | 237,271 | 282,008 |
| Number of shares issued on conversion of stock option plans | - | - |
| Number of shares canceled | (237,271) | (282,008) |
| Issued shares at period-end excluding treasury shares | - | 3,004,708 |
| Treasury shares not related to the liquidity contract | 479,123 | 280,227 |
| Treasury shares under the liquidity contract | 191,779 | (55,393) |
| Treasury shares | 670,902 | 224,834 |
| NUMBER OF SHARES OUTSTANDING AT END OF PERIOD | 249,206,943 | 249,135,056 |
| Adjustment to calculate weighted average number of issued shares | (9,207) | (2,654,159) |
| Adjustment to calculate weighted average number of treasury shares | (315,200) | 14,784 |
| Total weighted average adjustment | (324,407) | (2,639,375) |
| WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING DURING THE YEAR | 248,882,536 | 246,495,681 |
In addition, 1,592,013 performance shares were granted to employees between 2020 and 2022. Conversion of all of these potential shares, and of the 14,353,082 convertible bonds, would increase the number of shares outstanding to 265,152,038.
Based on the above number of potential shares and the average Edenred share price calculated:
The diluted weighted average number of shares outstanding at June 30, 2022 was 263,976,483.
| First-half 2022 | First-half 2021 | |
|---|---|---|
| Net profit attributable to owners of the parent (in € millions) | 170 | 133 |
| Weighted average number of issued shares (in thousands) | 249,579 | 246,934 |
| Weighted average number of treasury shares (in thousands) | (696) | (438) |
| Number of shares used to calculate basic earnings per share (in thousands) | 248,883 | 246,496 |
| BASIC EARNINGS PER SHARE (in €) | 0.68 | 0.54 |
| Number of shares resulting from the exercise of stock options (in thousands) | - | - |
| Number of shares resulting from performance share grants (in thousands) | 740 | 845 |
| Convertible bonds (in thousands) | 14,353 | 14,353 |
| Number of shares used to calculate diluted earnings per share (in thousands) | 263,976 | 261,694 |
| DILUTED EARNINGS PER SHARE (in €) | 0.64 | 0.51 |
Main characteristics
Performance shares vest when the performance conditions are fulfilled. However, if the grantee is no longer employed by the Group on the vesting date, depending on the reason for his or her departure the performance share rights may be forfeited or the number of rights may be reduced proportionately to his or her actual period of service since the grant date. The total number of vested shares may not exceed 100% of the initial grant.
Under the three-year Plan 16, the 646,845 shares granted on February 23, 2022 will vest on February 23, 2025 provided that several performance conditions are met.
Fulfillment of the performance conditions for the plan will be assessed over the period from January 1, 2022 to December 31, 2024, based on the degree to which the following objectives have been met:
(i) two internal performance objectives, which will determine 75% of the total grant and are linked to growth in:
(ii) one external (market) performance objective, which will determine 25% of the total grant and is linked to:
• Edenred's total shareholder return (TSR) compared with the average TSR of the companies in the SBF 120 index.
Depending on the actual percentage of fulfillment of each of the plan's three performance conditions, the percentage of fulfillment of each performance condition may reach a maximum of 150% and the
conditions can offset each other, when one condition is exceeded and another is not met or only partially met. However, the total number of vested shares may not exceed 100% of the initial amount of shares granted.
Performance shares vest subject to the fulfillment of performance conditions and provided that the grantees are still employed by the Group at the end of the vesting period.
The fair value of performance shares corresponds to the share price on the day of the grant, net of the expected dividend payment during the vesting period.
The fair value of performance shares is recognized on a straight-line basis over the vesting period in employee benefit expense, with a corresponding adjustment to equity.
For Plan 16, the fair value amounts to €36.68 per performance share, compared with a share price of €40.57 on February 23, 2022, the grant date.
The fair value of performance shares is recognized on a straight-line basis over the vesting period in employee benefit expense, with a corresponding adjustment to equity. The total expense recognized in respect of the 2022 plan amounted to €2 million in first-half 2022.
To make the consolidated financial statements easier to read, certain specific items of income and expense are reported under "Other income and expenses". This item is used only for income and expenses:
Other income and expenses can be analyzed as follows:
| (in € millions) | First-half 2022 | First-half 2021 |
|---|---|---|
| Movements in restructuring provisions | 3 | - |
| Restructuring and reorganization costs | (6) | (3) |
| Restructuring expenses | (3) | (3) |
| Impairment of property, plant and equipment | - | - |
| Impairment of intangible assets | - | - |
| Impairment of assets | - | - |
| Capital gains and losses | (1) | (2) |
| Reclassification of currency translation adjustments | - | - |
| Movements in provisions | - | - |
| Non-recurring gains (losses) | (5) | (2) |
| Other | (6) | (4) |
| TOTAL OTHER INCOME AND EXPENSES* | (9) | (7) |
* Net cash costs included under this caption amounted to €7 million in first-half 2022 and €7 million in first-half 2021.
Other income and expenses in first-half 2022 were primarily as follows:
Other income and expenses in first-half 2021 were primarily as follows:
Movements in non-current provisions between January 1, 2022 and June 30, 2022 can be analyzed as follows:
| (in € millions) | Dec. 31, 2021 | Impact on equity |
Additions | Used amounts |
Reversals of unused amounts |
Currency translation adjustment |
Reclassi fications and changes in scope |
June 30, 2022 |
|---|---|---|---|---|---|---|---|---|
| - Provisions for pensions and loyalty bonuses | 26 | (11) | 1 | (1) | - | - | - | 15 |
| - Provisions for claims and litigation and other contingencies | 8 | - | 1 | - | (1) | 1 | - | 9 |
| TOTAL NON-CURRENT PROVISIONS | 34 | (11) | 2 | (1) | (1) | 1 | - | 24 |
Movements in current provisions between January 1, 2022 and June 30, 2022 can be analyzed as follows:
| (in € millions) | Dec. 31, 2021 | Impact on equity |
Additions | Used amounts |
Reversals of unused amounts |
Currency translation adjustment |
Reclassi fications and changes in scope |
June 30, 2022 |
|---|---|---|---|---|---|---|---|---|
| - Restructuring provisions | 5 | - | 1 | (3) | (1) | - | 1 | 3 |
| - Provisions for claims and litigation and other contingencies | 9 | - | 2 | (3) | - | - | (2) | 6 |
| TOTAL CURRENT PROVISIONS | 14 | - | 3 | (6) | (1) | - | (1) | 9 |
Taken individually, all ongoing disputes are immaterial, with the exception of those presented in Note 10.3 "Claims, litigation and tax risk".
In the normal course of its business, the Group is involved in a certain number of disputes with third parties or with judicial or administrative authorities (including tax authorities).
In 2015, the French company Octoplus and three hospitality unions filed a complaint with the French Antitrust Authority against several French companies in the meal voucher sector, including Edenred France. The Antitrust Authority's board met on April 5, 2016 and on July 7, 2016 to hear all the parties concerned as well as the investigation departments. On October 6, 2016, the Antitrust Authority decided to pursue its investigations without passing provisional measures against Edenred France.
On February 27, 2019, the investigation departments provided Edenred France with their final report, which contained two complaints dating from the early 2000s concerning information sharing through the Centrale de Remboursement des Titres (CRT) and the use of the CRT to lock up the meal voucher market. However, the Antitrust Authority dismissed all allegations made by Octoplus and the three hospitality unions. Edenred submitted its observations to the Antitrust Authority on April 29, 2019. On December 17, 2019, the Antitrust Authority announced that it had decided to fine Edenred €157 million on the grounds of the above two complaints. Edenred received an official request from the French tax authorities to pay the fine. In response, Edenred requested a stay of payment until March 31, 2021 with no impact on the fine, by providing a surety in the same amount. On March 31, 2021, Edenred paid the fine in an amount of €157 million and canceled the related surety. The associated asset has been recognized in other receivables.
Edenred believes that the Antitrust Authority has misunderstood the competitive situation in the French meal voucher market and the CRT's role in this market. Edenred has therefore appealed. Following the appeal hearing on November 18, 2021, the appeal court is expected to hand down its decision on November 24, 2022. Based on the opinion of its legal advisers, Edenred believes that it has strong arguments to challenge the Antitrust Authority's decision. Therefore, the Company has not set aside a related provision.
The following standards, amendments and interpretations adopted by the European Union became effective on January 1, 2022:
These amendments are effective for annual reporting periods beginning on or after January 1, 2022.
Their application had no material impact on the periods presented.
In addition, the financial statements presented in 2022 take into account the IFRIC agenda decision on the costs of configuring or customizing a supplier's application software in a Software as a Service (SaaS) arrangement. The impact of this interpretation amounted to €2 million and was recognized in equity at January 1, 2022.
Standards, amendments and interpretations published by the IASB but not yet adopted by the European Union
The following standards, amendments and interpretations published by the IASB are not yet effective in 2022:
The Edenred group chose not to early adopt these standards, amendments and interpretations at January 1, 2022. Their application is currently being analyzed.
TSA 14444 92037 Paris-La-Défense cedex S.A.S. à capital variable 344 366 315 R.C.S. Nanterre
Société de Commissariat aux Comptes inscrite à la Compagnie Régionale de Versailles et du Centre
6, place de la Pyramide 92908 Paris-La Défense cedex S.A. au capital de € 2 188 160 572 028 041 R.C.S Nanterre
Société de Commissariat aux Comptes inscrite à la Compagnie Régionale de Versailles et du Centre
This is a free translation into English of the statutory auditors' review report on the half-yearly financial information issued in French and is provided solely for the convenience of English-speaking users. This report includes information relating to the specific verification of information given in the Group's half-yearly management report. This report should be read in conjunction with, and construed in accordance with, French law and professional standards applicable in France.
For the period from January 1 to June 30, 2022
To the Shareholders,
In compliance with the assignment entrusted to us by your annual general meetings and in accordance with the requirements of article L. 451-1-2 III of the French monetary and financial code ("Code monétaire et financier"), we hereby report to you on:
• the review of the accompanying condensed half-yearly consolidated financial statements of Edenred, for the period from January 1st to June 30th, 2022.
• the verification of the information presented in the half-yearly management report.
These condensed half yearly consolidated financial statements are the responsibility of the board of directors. Our role is to express a conclusion on these financial statements based on our review.
We conducted our review in accordance with professional standards applicable in France. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with professional standards applicable in France and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed half yearly consolidated financial statements are not prepared, in all material respects, in accordance with IAS 34 standard of the IFRSs as adopted by the European Union applicable to interim financial information.
We have also verified the information presented in the half yearly management report on the condensed half yearly consolidated financial statements subject to our review.
We have no matters to report as to its fair presentation and consistency with the condensed halfyearly consolidated financial statements.
Paris-La Défense, July 26, 2022
The Statutory Auditors French original signed by
DELOITTE & ASSOCIÉS ERNST & YOUNG Audit
Guillaume CRUNELLE Pierre JOUANNE
I declare, to the best of my knowledge, that the condensed interim financial statements have been prepared in accordance with the applicable accounting standards and give a true and fair view of the assets and liabilities, financial position and results of the Company and of all of the companies included in the scope of consolidation, and that the interim management report on page 3 includes a true and fair review of the significant events of the first six months of the year, of their impact on the interim financial statements and of the main related-party transactions as well as an overview of the main risks and uncertainties in the remaining six months of the year.
Issy-les-Moulineaux – July 26, 2022
Bertrand Dumazy
Chairman and Chief Executive Officer
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