December 2010 ROADSHOW PRESENTATION
Chapter 1 EDENRED OVERVIEW
Three Families of Products Employees & Citizen Benefits Expense Management Incentive & Rewards Food Quality of Life Corporate Public Human Resources Manager Marketing/Sales Finance/Purchase Our core business is today the B2B2E* (*) E = Employee 3
A Unique Business Model Based on a Win-Win Relationship Refund Claims Edenred Design & Management at the heart of Customer fees Merchant Customer a win-win BtoBtoC 1.6% fees: 3.1% fees: 1.6% + relationship Merchant fees 3.1% + Lost and expired Expired/lost prepaid 0.6% 1.2 million products: 0.6% = Merchants 490,000 Operating Corporate Customers Filtered Acceptance Network revenue/Issue (restaurants, supermarkets, etc.) volume 5.3% Financial revenue + on float: 0.8% Financial revenue 0.8% 33 million = Use Distribution End-users Total revenue/ Issue volume Citizens and 6.1% Corporate Employees Based on EDENRED 2009 results Close ties with corporate customers, network of merchants and end-users generating average revenue/issue volume = 6 to 6.5% 4
Robust Benefits Business / Fast Growing Performance Products Employees & Incentive & Expense Citizen Benefits Rewards Total Management Total Total Quality of Food In € millions Life Issue Volume (IV) 9,755 1,198 10,953 827 627 1,454 12,407 IV (% of total) 78% 10% 88% 7% 5% 12% CAGR 2005-2009 6% 17% 7% 15% 30% 20% Operating Revenue 510 131 641 57 110 167 808 Operating revenue 63% 16% 79% 7% 13% 21% (% of total) No. of Countries 30 22 33 16 25 31 40 Same business model for every product, based on BtoBtoC relationship One blockbuster growing at 5+% and more new products growing at 15+% 5
Geographical Exposure Well-Balanced Between Developed and Emerging Markets Developed Markets Emerging Markets Total Benefits Other Total Benefits Other Total Total Issue Volume (IV) 5,394 582 5,976 5,559 872 6,431 12,407 IV (% of total) 43% 5% 48% 45% 7% 52% CAGR 2005-2009 8.3% 29.9% 9.6% 5.7% 15.8% 6.7% Operating Revenue 307 109 416 334 58 392 808 Operating revenue 38% 13% 51% 42% 7% 49% (% of total) No. of Countries 15 11 17 18 20 23 40 2009 Issue Volume by Geography Developed Emerging markets 48% 52% markets 6
A Growth-Driven, Cash Generative, Low Capital-Intensive Business Model with a Strong Track Record A growth-driven model A cash generative model Issue volume (in € bn) Funds from operations* (in € m) +10.5% CAGR 12.7 12.4 11.4 10.0 8.4 7.1 6.8 217 +25% CAGR 184 166 141 92 2003 2004 2005 2006 2007 2008 2009 68 46 A low-capital intensive model Maintenance capex (in € m) 2003 2004 2005 2006 2007 2008 2009 *FFO = PBT + depreciation - taxes New product development: 40 30 35 € 1m to € 2m 30 to 40 35 30 per product 30 24 25 18 A business which generates about € 2bn in float 20 New country 18 15 opening: Negative working capital of € 1.6bn as of 2009 end 10 € 2m to € 3m 5 per country 0 2007 2008 2009 2010 / 2012 7
Benefits: Competitive Landscape Number of Competitors Market Position Edenred ’ market Meal & food Quality of Life position France 4 12 N.1 Two Global Players Brazil 60 92 N.1 1 42 UK N.1 Italy 12 3 N.1 Other Belgium 2 5 N.1 International smaller No.1 player players Hungary 11 11 N.2 Mexico 11 9 N.1 No.2 No.3 3 4 Czech Rep N.2 Turkey 5 2 N.1 10 N/A Venezuela N.1 Edenred, the global leader in a fast growing market 8
Chapter 2 EDENRED STRATEGY
Our Strategy 1 1 Increase penetration rate 2-5% Volume 2 Create / rollout new products 2-4% 5 2 Strategy 5 growth 3 Extend geographical coverage 1-2% drivers 4 3 4 Increase face value 1-3% Product/Service Systematic Paperless Migration Rollout 5 Select targeted acquisitions Innovation Objective of normalized (1) like-for- Target of normalized (1) annual like growth in FFO > 10% over the organic growth in issue volume: medium term 6% to 14% (1) Normalized growth: objective that the Group considers to be attainable when unemployment is not increasing 10
1 Volume 1 5 2 Increase Penetration Rates 5 growth drivers 4 3 Still low penetration rates: Penetration rates e.g. only 12% in France (in %) 75% Uruguay Numerous factors to deepen penetration 70% 65% Hungary rates: 60% 55% Distribution channels Product range 50% Romania 1 1 5 Volume 2 …By offering a diversified range of media 5 Volume 2 1 5 growth …By aligning distribution channels with customer size drivers 1 5 growth 4 3 drivers 4 3 45% Czech Republic Multi-media Multi-use Untapped Market: Brazil Users Venezuela (in millons) New Services + Competitors Electronic media Total potential users Contactless deliver optional 40% technology solutions : possibility for Total population: 191.5m end-users to top-up their Active population: 110.1m Currently out Cards meal card with their own of target: (80.0)m 21% money Unemployment, Informal Telephone 35% market, public sector, 96% 13.7 Belgium Mexico canteens, etc. Multi-use cards: a single card for 10.7 different purposes Slovakia Total 69% Internet 5.7 8.5 addressable users : 30.1m Voucher Multi- 1.8 0.6 Expense purpose 30% Mgt BtoBtoC 0-99 employees 100 - 499 emp. > 500 emp. Brazil card Distribution Channels Sales force Sales force Call center Call center A single solution to manage Internet Internet business expenses Third parties Third parties 25% Diversify distribution channels to reach every potential customer A differentiating multi-media offer aligned with customer needs and local culture 20% May 16, 2010 28 May 16, 2010 29 29 Chile Italy 15% Bulgaria Turkey France Value-added solutions Customer portfolio 10% Austria 1 1 5 Volume 2 5% Peru … By creating competitively differentiated solutions 5 Volume 2 1 5 growth … By optimizing customer portfolios drivers 1 5 growth 4 3 drivers 4 3 Greece Spain Public Corporate Additional volume Cross-product penetration rates 0% Value-added services Authorities customers Set up + help to increase our transaction fees through IT market share platforms Leverage installed on Example: France customer’s 100 1,000 10,000 100,000 products site, distributing New Services, 7% are customers of at least 2 products prepaid Gifts at the heart of a products (Meal, Gift, CESU) win-win They represent 33% of issue volume New sources of relationship Car revenue (multi-product sales mainly occur among Customer key large accounts) Food Major cross selling opportunities in voucher every company, especially SMEs Portugal Affiliated service End-users Mea l Meal network voucher voucher Example: Brazil Double positive Targeted population impact on 7% of TR customers also buy Ticket Car Geo-location revenue 7% of TA customers also buy Ticket Car Fees from corporate customers paying to offer their employees the possibility of rebates on a selection of products + Fees from merchants who want to get more visibility through the Beneficio Club (in thousands) Increase cross-selling initiatives to maximize corporate customer issue volume Value-added solutions systematically offered to all stakeholders May 16, 2010 May 16, 2010 30 31 11
1 Volume 2 2 5 …Our Product Strategy: From One to Multiple Blockbusters 5 growth drivers 4 3 Average annual growth Issue volume > 20% Long-Term Future New Prepaid Solutions + 10 to 20% blockbusters Quality of Life Benefits, + 4 to 10% Expense Management, 2016 E Incentive & Reward Take-off of 3 new blockbusters 2010 Less than 50% Food Benefits 20% 1 blockbuster 80% Time Long-term growth capability 12
1 Volume 2 3 5 Extend Geographical Coverage 5 growth drivers 4 3 Number of operating countries New Services geographical coverage (2009) 1+ new country per annum (1990-2009) 60 46 to 48 48 50 40 Number of Countries 40 31 30 20 13 10 0 1990 2000 2009 2016E 15 countries under study today, 2 to 4 new countries by 2012, 6 to 8 new countries by 2016 13
1 Volume 4 5 2 Increase Face Value 5 growth drivers 4 3 Inflation Upsale Projected annual CPI growth Current average face value 2010-2015 E (in %) vs. maximum face value (defined by law) FRANCE HUNGARY Maximum face value Maximum face value 48% gap 48% gap Average face value Average face value BELGIUM ROMANIA Maximum face value Maximum face value 29% gap 3% gap Average face value Average face value Face value of most Edenred products Strong revenue growth potential by closing the is indexed to local inflation, offering room for gap between maximum face value defined by revenue growth law and average face value of products ordered 14
1 5 Volume 5 2 Select Targeted Acquisitions 5 growth drivers 4 3 Edenred ’ focus: BtoBtoC businesses + Acquire businesses to accelerate deployment of Edenred ’ strategy focused on growing issue volume + Acquisition Criteria Acquire competitors in markets offering high potential for cash flow growth + Acquisitions for cash or shares Objective: maintain high Investment Grade rating Main targeted markets: Latin America, Europe and Asia-Pacific 15
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