Ingenico Group, the global leader in seamless payment, today announced its results for the six-month period ended on June 30th, 2020. Net revenue totalled €1,242 million, representing a 8% decrease on a comparable basis. On a reported basis net revenue was 10% lower than in the first half of 2019.
Operating income came in at €131 million, compared to €124 million in the first half of 2019 pro-forma (€124 million on a reported basis). The 2020 first half Group net profit attributable to shareholders came in at €87 million, up 9% compared to €80 million in the first half of 2019 pro-forma (up 8% vs. €80 million on reported basis).
Nicolas Huss, Chief Executive Officer of Ingenico Group, commented: „In the context of the Covid-19 crisis, which has strongly impacted the second quarter, the Group posted a relatively resilient performance, with an 8% organic decline in the first half, due in part to a good start to the year in each of the business units and the better than expected performance of Retail in Q2’20.”
2020 second quarter performance
In the second quarter of 2020, net revenue totalled €584 million, representing a 18% decrease on a comparable basis. On a reported basis net revenue was 21% lower than in the second quarter of 2019.
Over the quarter, the Retail Business Unit reported a net revenue of €291 million, showing a decrease of 14% on a comparable basis. On a reported basis, net revenue decreased by 17% during the quarter. Compared with Q2’19, the various activities performed as follows on a like-for-like basis:
SMB (down 9%): The second quarter performance „came in above our expectations” with gradual recovery across the quarter. On top, the business line has benefitted from its business model partly based on monthly subscriptions providing resilience despite the slowdown in transaction volumes. During the quarter, and despite the lockdowns, SMB has been able to deliver a steady onboarding rate of merchants on its platform with c.1,000 net new customers per months (above 4,000 gross new customers), thanks to a decrease of the churn rate during the period and a well-balanced online and instore merchants gains.
Global Online (down 11%): The second quarter performance „came in line with our expectations” driven by a drop in transaction volumes in specific verticals related to the Covid-19 spread across the globe. Our travel vertical (c.35% of volumes pre-Covid) has been strongly impacted and represents today less than 10% (below 10% in April, exiting June above 15%) of overall volumes. Some recoveries have been identified on the last part of the quarter on regional travel but international travel is not planned to revive before 2021 as mentioned in Q1’20. In the meantime, Global Online has experienced a good dynamic on the non-travel verticals, such as digital goods, gaming, or marketplaces, growing double-digit, but not able to fully compensate the Travel impact. On the regional side, APAC and North America have been dynamic while LATAM has been impacted by its verticals exposure. Despite the Covid-19 environment, Global Online has pursued its commercial deployment with new client wins during the quarter such as Asos, Porter or Rappi.
Enterprise (down 19%): Performance came „slightly better than expectations” during the second quarter despite the Covid-19 spread and the high comparison basis in Q2’19 driven by Healthcare Germany activities. Excluding this specific effect, Enterprise was down 13% on an organic basis. Both sale of POS and transaction activities have been hurt by the lockdowns in Europe, Pacific & Turkey. After a severe impact from mid-March to mid-May, transactions have grown back, reaching a normative level in End of June. In the meantime, all the local and pan-European omnichannel programs have been maintained by Retailers with an expected contribution during the second half 2020 to be back to normative levels of activity. In parallel, North American POS activities have been impacted in the same extend as Europe by the lockdowns.
Payone (down 16%): The second quarter performance came in „better than expected” with a faster recovery in May and June of transaction activities fuelled by an acceleration of the shift towards electronic payments. During the Covid-19 spread, usage of card payment in the German market has strongly increased, thanks to the improvement of payment threshold leading to a higher usage of contactless payments that represents today c.60% of electronic payments vs c.50% pre-Covid. The conversion of saving banks customers to Payone payment solution continued during the quarter, driven by the one-stop shop offering and digital onboarding capabilities, with more than 1,000 net new merchants joining the platform every month. The DACH region shift acceleration towards electronic payments will benefit to Payone performance in the coming quarters.
The B&A Business Unit posted a net revenue of €293 million, a 22% decrease on a comparable basis. On a reported basis the activity decreased by 24% and included a negative foreign exchange impact of €12 million. Compared to H1’19, the various regions performed as follows on a like-for-like basis:
Europe, Middle-East & Africa (down 21%): The second quarter performance „came in line with our expectation” in the Covid-19 spread in Europe, impacted by lockdowns in most countries. In Western Europe, some countries such as France has shown resilience in that environment, while countries such as DACH and Iberia has shown a good dynamic, fuelled by Terminal as a Service contract signed in Q1’20 for the latest. In the meantime, the UK and Italy have been strongly impacted by the lockdowns during the quarter. As expected, Eastern Europe, after being back to growth in Q1’20, has pursued on the same trajectory, while Russia has continued to suffer from a high comparison basis in Q2’20. This situation should normalize in the coming quarters on the overall performance.
Asia-Pacific (down 39%): The dynamic in the region „came in below our expectations” during the quarter. China, after a Q1’20 fuelled by the delivery and deployment of end of year 2019 APOS orders, has been impacted by a very low pipeline due to the lack of projects initiated in Q1’20 in a lockdowns environment and a very high comparison basis as Q2’19 was the highest net revenue point last year. In parallel, India has been strongly impacted by the lockdowns that will be prolonged beyond the end of June. As during Q1’20, South East Asia came in softer on the back of Indonesia suffering from a high comparison basis. In the meantime, the Pacific region has shown resilience in that context, benefitting from the ongoing impact of commercial successes and pipeline of projects.
Latin America (down 30%): The dynamic in the region „came in line with our expectations” with Brazilian market impacted by the Covid-19 spread during the quarter, combined with high comparison basis. This situation should continue to weight in the coming quarters. In other countries, such as Columbia, Argentina and Peru, the momentum keeps ongoing on the same trajectory as Q1’20, fuelled by the contracts signed and the pipeline of projects.
North America (up 43%): As for Q1’20, net revenue from the region was strong throughout the quarter, with an acceleration in Canada after being back to a normative level of activity during the last quarter. Growth of US-based activity remained strong benefitting from the early implementation of our ISV vertical initiative showing a continuous strong dynamic fuelled by project delivery and development of partner programs. The ongoing demand on back of the EMV cycle renewals remains robust and some consolidation of market shares has been achieved. Overall, the pipe should sustain the level of activity in the coming quarters, becoming stable sequentially.
„Tendinţele pe care le-am remarcat înainte de începerea pandemiei s-au accelerat pe perioada stării de urgenţă. Am văzut acest lucru ca o oportunitate, un tipping point pentru bancă. Post-pandemie nu avem cum sa ne întoarcem la comportamentul financiar pe care îl aveam până în februarie a.c. Relaţia românilor cu online-ul s-a schimbat. In plus, cardul fizic se va dematerializa. Vom asista la o scădere a cererii pentru cardurile fizice, respectiv la o creştere a preferinţei pentru componenta digitală a acestora.”