Pluxee Fiscal 2024 Results

Fiscal 2024 Results

Issy-les-Moulineaux, France October 31st, 2024

Pluxee achieved outstanding performance in Fiscal 2024 exceeding all business and financial objectives

Fiscal 2025 and 2026 objectives upgraded

Highlights

• All business targets achieved - Strong commercial development fueled by continuous investment in Pluxee's full range of innovative solutions, powerful commercial engine and best-in-class tech capabilities
• 1,210m Total revenues, representing +18.6% Organic revenue growth, well above low double-digit target
• 430m Recurring EBITDA, growing +24.8% organically, with a Recurring EBITDA margin at 35.6% reported, i.e. 36.4% on an organic basis implying a +183bps increase, compared to initial objective of stable margin
• 379m Recurring free cash flow, i.e. 88% cash conversion rate significantly above 70% target and increased Net financial cash position of 1,054m
• Enhanced shareholder distribution policy with 0.35 proposed dividend per share, corresponding to a 25% payout based on an expanded basis of Adjusted net profit¹ at 203m
• Fiscal 2025 and 2026 financial objectives revised upward reflecting the Group's confidence in structural market growth trends, its proven business model and ability to deliver successfully on its strategic plan:
  • low double-digit Organic revenue growth each year confirmed on a higher Fiscal 2024 base;
  • +75bps Recurring EBITDA margin expansion expected in each of Fiscal 2025 and 2026², leading to delivery of the initial 3-year target of +250bps organic increase one year ahead of plan
  • above 75% Recurring cash conversion rate on average over Fiscal 2024-2026 vs. above 70% previously
    
    

Fiscal 2024 key figures

(in million euros)	Fiscal 2024	Fiscal 2023	Organic growth	Total Growth
Total Revenues	1,210	1,052	18.6%	15.0%
Recurring EBITDA	430	363	24.8%	18.5%
Recurring EBITDA margin	35.6%	34.5%	+183bps	+105bps
Net profit for the year³	133	81		64.2%
Recurring free cash flow	379	289		31.1%
Recurring cash conversion (%)	88%	80%
Net Financial (Debt) / Cash	1,054	859

Aurélien Sonet, Chief Executive Officer of Pluxee, commented:

"As we conclude our first fiscal year, I am proud to announce that we have exceeded all our business and financial objectives. Fiscal 2024 was marked by the significant transformation of the Group as a standalone and listed company and by the delivery of outstanding Organic revenue growth, strong Recurring EBITDA margin expansion and robust cash conversion. Demonstrating our commitment to a clear capital allocation framework, we have made significant strides on our M&A roadmap with the deployment of our partnership with Santander in Brazil and the successful acquisition of Cobee in Spain while pursuing our investments in growth and enhancing our shareholder distribution policy.

These achievements reflect the remarkable efforts and unwavering commitment of all our employees and I would like to thank them for their contribution to this success. As we transition to Fiscal 2025, I am confident that Pluxee is well-positioned to deliver on its objectives going forward, continuing to generate sustainable low double-digit organic growth combined with steady margin expansion and strong cash flow generation. This is underpinned by the disciplined execution of our strategic roadmap, driven by product innovation, a powerful commercial engine, best-in-class tech capabilities and a targeted M&A strategy, creating value for all our shareholders, clients, consumers and merchant partners."

¹ Adjusted net profit is defined in the section Alternative performance measures (APM) in the appendix.
² At Fiscal 2024 constant rates
³ Attributable to the equity holders of the parent
⁴ Excluding a positive impact from the evolution in regulation in Brazil (191m)

Fiscal 2024 results

The Board of Directors of Pluxee N.V. prepared the financial statements for the full year Fiscal 2024. The Group's statutory auditor completed the audit of the full year consolidated financial statements.

Fiscal 2024 Income statement

(in million euros)	Fiscal 2024	Fiscal 2023	Total Growth
Total Revenues	1,210	1,052	15.0%
Operating expenses	(780)	(689)
Recurring EBITDA	430	363	18.5%
Recurring EBITDA margin	35.6%	34.5%	+105bps
Depreciation, amortization and impairment	(89)	(78)
Recurring operating profit (Recurring EBIT)	341	285	19.8%
Recurring operating profit margin	28.2%	27.1%	+113bps
Other operating income and expenses	(92)	(150)
Operating profit (EBIT)	250	135	85.1%
Financial income and expenses	(20)	28
Profit before tax for the year	230	163	41.1%
Income tax expense	(91)	(80)
Share of net profit of companies accounted for using the equity method	(0)
Net profit for the year	139	83	67.3%
Of which:
Attributable to the equity holders of the parent	133	81	64.2%
Attributable to non-controlling interests	6	2

The consolidated financial statements were prepared in thousands of euros and are presented in million euros, after rounding to the nearest million (unless otherwise specified). As a result, there may be rounding differences between the amounts reported in the various statements.

Strong business momentum in Fiscal 2024

Total Business volumes issued reached 24.0 billion euros in Fiscal 2024. Employee Benefits business volumes stood at 18.1 billion euros of which 4.4 billion euros in the fourth quarter, representing sustained organic growth of +11.5% over the fiscal year, including +11.1% in the fourth quarter.

The strong commercial dynamics across regions were driven by significant new client wins and strong net retention including a further significant increase in average face value and a growing portfolio contribution driven by cross-selling.

This robust performance was supported by the continuous enrichment of the Group's offering through further product innovation and complementary technological and data capabilities to continue improving the client and consumer experience. The Group has also consistently leveraged its powerful commercial engine and segmented sales and digital marketing strategy, along with its dedicated approach to the small and medium-sized enterprise (SME) segment.

+18.6% Organic revenue growth in Fiscal 2024

Total Revenues reached 1,210 million euros in Fiscal 2024, a +15.0% increase compared to Fiscal 2023. This amount includes a currency translation effect of -3.9% mainly due to operations in Türkiye and Brazil, particularly in Q4, and a positive scope effect of +0.4%, related to the integration of Santander Brazil's Employee Benefits activity following the closing of the strategic partnership in June 2024.

Organic growth was +18.6% in Fiscal 2024, significantly above the low double-digit Organic revenue growth objective communicated during the Capital Markets Day. This outstanding performance was primarily driven by positive business momentum in Employee Benefits and high float revenue.

In the fourth quarter, Total Revenues grew organically +10.6%, i.e. +5.7% total growth including a -6.1% currency impact.

Total Revenues by nature

(in million euros)	Fiscal 2024	Fiscal 2023	Organic Growth (%)	Total Growth (%)
Operating revenue	1,055	953	13.3%	10.7%
Float revenue	155	99	69.0%	56.4%
Total Revenues	1,210	1,052	18.6%	15.0%

(in million euros)	Fiscal Q4 2024	Fiscal Q4 2023	Organic Growth (%)	Total Growth (%)
Operating revenue	281	270	8.1%	3.8%
Float revenue	40	33	30.3%	20.6%
Total Revenues	320	303	10.6%	5.7%

Operating revenue reached 1,055 million euros, representing +13.3% organic growth in Fiscal 2024 and +10.7% total growth including a -2.9% currency translation effect and a +0.3% scope effect. Pluxee sustained its double-digit growth trajectory in Operating revenue, driven by Employee Benefits.

Operating revenue organic growth amounted to +8.1% in the fourth quarter. The strong underlying business trends were partially offset by well-flagged base effects in Latin America that will fade in the course of First Half Fiscal 2025.

Float revenue rose to 155 million euros in Fiscal 2024, increasing +69.0% organically compared to the previous year, i.e. +56.4% total growth including a -14.0% currency translation effect. The increase was driven by the continuous positive momentum in business volumes issued expanding the Float base, coupled with high interest rates overall and the Group's ability to seize investment opportunities.

In the fourth quarter Fiscal 2024, Float revenue continued to grow +30.3% on an organic basis compared to fourth quarter Fiscal 2023, to reach 40 million euros.

Operating revenue by line of service

(in million euros)	Fiscal 2024	Fiscal 2023	Organic Growth (%)	Total Growth (%)
Employee Benefits	892	786	16.7%	13.6%
Other products and services	163	167	-2.7%	-2.7%
Total Operating revenue	1,055	953	13.3%	10.7%

(in million euros)	Fiscal Q4 2024	Fiscal Q4 2023	Organic Growth (%)	Total Growth (%)
Employee Benefits	242	225	12.1%	7.2%
Other products and services	39	45	-12.4%	-13.1%
Total Operating revenue	281	270	8.1%	3.8%

Employee Benefits generated Operating revenue of 892 million euros in Fiscal 2024, growing +16.7% organically, i.e. +13.6% total growth including a -3.5% currency effect, and accounting for 85% of Total Operating revenue. This performance was propelled by strong commercial dynamics leading to double digit growth in business volumes issued supported by steady improvement of +22bps in the average take-up rate reaching 4.95% in Fiscal 2024.

In the fourth quarter Fiscal 2024, Employee Benefits generated Operating revenue of 242 million euros with organic growth of +12.1%, confirming the positive momentum.

Other Products and Services generated Operating revenue of 163 million euros in Fiscal 2024 compared to 167 million euros in Fiscal 2023 and representing 15% of Total Operating revenue. The performance of Other Products and Services reflected the base effects in some Public benefit contracts, including the discontinuation of a contract in Chile and large programs issued in Fiscal 2023 in Continental Europe. The Group has also initiated a portfolio rationalization in the UK and U.S. to focus on digital Employee Engagement offerings. Except in Chile, all significant Public benefit contracts have been successfully renewed paving the way for a progressive return to growth in Fiscal 2025.

In the fourth quarter Fiscal 2024, Other Products and Services generated Operating revenue of 39 million euros compared to 45 million euros in Fiscal 2023.

Operating revenue by region

(in million euros)	Fiscal 2024	Fiscal 2023	Organic Growth (%)	Total Growth (%)
Continental Europe	472	423	11.5%	11.4%
Latin America	405	360	13.2%	12.5%
Rest of the world	178	170	18.0%	5.2%
Total Operating revenue	1,055	953	13.3%	10.7%

(in million euros)	Fiscal Q4 2024	Fiscal Q4 2023	Organic Growth (%)	Total Growth (%)
Continental Europe	131	117	12.7%	12.7%
Latin America	103	109	2.5%	-5.5%
Rest of the world	46	45	10.0%	3.3%
Total Operating revenue	281	270	8.1%	3.8%

In Continental Europe, Operating revenue reached 472 million euros in Fiscal 2024, representing organic growth of +11.5% and total growth of +11.4%. This performance was driven by strong commercial momentum in Western European countries, especially Belgium and France, while facing higher comparison bases in Central and Eastern Europe, especially over the second half of Fiscal 2024. As an example, the French security forces entrusted Pluxee with ensuring meal benefits for more than 90,000 civil servants and military personnel during the Paris 2024 Olympics. Positive momentum was also fueled by the continuous increase in average face value to progressively reach the legal face value cap as raised by Public Authorities. Cross-selling across Pluxee's product range also significantly contributed to the steady performance delivered over the year in the region. In Belgium, the Group leveraged a non-recurring government measure supporting purchasing power by deploying a one-off benefit program, notably to existing clients, driving up cross-selling.

In the fourth quarter Fiscal 2024, Operating revenue in Continental Europe grew +12.7% organically, returning to an improved growth profile.

In Latin America, Operating revenue reached 405 million euros in Fiscal 2024, growing +13.2% organically, i.e. +12.5% total growth including a -1.5% currency impact related mainly to Brazil and Mexico especially over the fourth quarter. Solid performance in the region resulted from strong new development, driven notably by the growing penetration of small and medium enterprises. In Brazil and Mexico, small and medium enterprises represented around 35% of business volume growth over the fiscal year. Pluxee continued to pro-actively manage its portfolio, constantly leveraging analytics to advise clients in upgrading face values.

The performance in the region in the second half of Fiscal 2024 reflected the base effects related to the change in regulation in Brazil in May 2023 as well as the discontinuation of a Public benefit contract in Chile. Both effects will fade in the course of First Half Fiscal 2025.

In Rest of the world, Operating revenue amounted to 178 million euros in Fiscal 2024, showing +18.0% Organic growth excluding a -12.8% currency impact mostly related to the evolution of the Turkish Lira. Organic growth was driven in the region by increasing adoption and usage of Pluxee solutions across countries. In Türkiyes hyperinflationary environment, the Group managed to generate an additional increase in average face value within the existing client portfolio and further penetrated the meal benefit segment by signing new client contracts.. Development was also particularly strong in India across the full Employee benefit products range.

In the fourth quarter Fiscal 2024, Operating revenue came in at 46 million euros, up +10.0% organically and total growth of +3.3% including currency impacts. Positive business dynamics translated into solid double-digit organic growth in most of the countries, especially in Türkiye and India, while the UK and the U.S. underwent the rationalization of their portfolio to focus on digital Employee Engagement offerings.

Recurring EBITDA margin up +183bps on an organic basis

Recurring EBITDA reached 430 million euros in Fiscal 2024, up +24.8% organically and +18.5% year-on-year including a +0.5% scope effect and a -6.8% currency effect. Recurring EBITDA margin increased by +183bps on an organic basis while absorbing standalone costs, reaching 36.4%, well above the Group's objective of at least 34.5% at constant rates, subsequently increased to at least 35%. On a reported basis, Recurring EBITDA margin stood at 35.6%, representing a +105bps increase including currency impacts.

The increase in Recurring EBITDA, absorbing the new standalone costs, was driven by steady growth in business volumes, fueling the increase in Operating revenue in all regions, a positive contribution of Float revenue as well as the preliminary effects of the operating leverage and efficiency gains. This improvement became more apparent in the second half of Fiscal 2024, while the First Half reflected one-off effects related to the spin-off such as management fees still invoiced by Sodexo. All the regions contributed to this substantial increase in Recurring EBITDA.

Recurring operating profit (Recurring EBIT) was 341 million euros, up +19.8% year-on-year. This includes -89 million euros of Depreciation and amortization charges for the year, compared to -78 million euros in Fiscal 2023.

Other operating income and expenses amounted to -92 million euros in Fiscal 2024, compared to -150 million euros in Fiscal 2023 which incorporated the provision of -127 million euros related to the competition proceedings in Francel. For the fiscal year, Other operating expenses included the one-off charges related to (i) the Spinoff and listing, including the rebranding that introduced the new identity of the Group, for a total amount of -62 million euros, (ii) the write-off of specific digital assets related to the Zeta platform now limited to two countries for a total amount of -16 million euros, (iii) restructuring and rationalization costs of -8 million euros as well as (iv) M&A costs related to business combinations for -7 million euros. Other operating income encompassed a capital gain of 6 million euros on disposal of investments in equity-accounted companies.

Operating profit (EBIT) in Fiscal 2024 was 250 million euros compared to 135 million euros in Fiscal 2023.

Increase in Net profit by +56m

Financial income and expenses came in at -20 million euros in Fiscal 2024, compared to 28 million euros in Fiscal 2023. The Group recorded -52 million euros of gross borrowing costs in Fiscal 2024 in connection with the new capital structure established as part of the Spin-off compared to -20 million euros in Fiscal 2023. It also included 44 million euros of interest income generated from the non-Float-related cash position and -12 million euros of Other financial income and expenses comprising the effects of hyperinflation in Türkiye and the net gains and losses from foreign exchange fluctuations.

Income tax expense was -91 million euros in Fiscal 2024. The Effective tax rate decreased from 49.1% in Fiscal 2023 including the impacts of the competition proceedings in France, to 39.5% in Fiscal 2024, reflecting the effect of one-off costs related to the Spin-off.

Net profit for the year was 139 million euros in Fiscal 2024, compared to 83 million euros in Fiscal 2023, reflecting the significant increase in Total Revenues and Recurring EBITDA, the new capital structure of the Group as well as Other operating expenses and Income tax expense specifically related to Fiscal 2024.

Net profit attributable to equity holders of the parent was 133 million euros compared to 81 million euros in the previous fiscal year and Basic Earnings Per Share attributable to equity holders of the parent was 0.91 euro in Fiscal 2024 compared to 0.55 euro in Fiscal 2023.

Adjusted Net profit standing at 203m

Attributable to the equity holders of the parent	Fiscal 2024	Fiscal 2023
Net profit for the year (in million euros)	133	81
Basic earnings per share (in euro)	0.91	0.55
Diluted earnings per share (in euro)	0.90	0.55
Adjusted net profit for the year (in million euros)	203	225
Adjusted basic earnings per share (in euro)	1.39	1.54
Adjusted diluted earnings per share (in euro)	1.38	1.53

Adjusted net profit attributable to the equity holders of the parent was 203 million euros in Fiscal 2024, compared to 225 million euros in Fiscal 2023 reflecting the new capital structure of the Group following the Spin-off. Adjusted net profit excludes Other operating income and expenses net of related income tax and related non-controlling interests shares.

Adjusted basic earnings per share came in at 1.39 euro in Fiscal 2024.

Enhanced shareholder distribution policy

Consistently with the capital allocation framework presented at the Capital Markets Day, the Group has enhanced its distribution policy with 25% payout now based on Adjusted net profit (attributable to the equity holders of the parent) representing an expanded basis of 203 million euros.

As such, it is proposed that the General Meeting adopt, with due observance of the Group's articles of association and dividend policy, a dividend of 0.35 per ordinary share. This proposal would represent a total dividend payment of 51 million euros. On approval, Pluxee ordinary shares will trade ex-dividend as from December 20, 2024, the dividend record date will be on December 23, 2024, and payment of the dividend will take place on December 24, 2024.

Strong Recurring free cash flow at 379m and Recurring Cash conversion rate at 88%

Recurring free cash flow was 379 million euros in Fiscal 2024, compared to 289 million euros in Fiscal 2023 excluding the one-off impact in Change in working capital related to the evolution in regulation in Brazil in May 2023, i.e. 480 million euros reported.

Capital Expenditures were 116 million euros in Fiscal 2024, representing 9.6% of Total Revenues, compared to the objective of c. 10% of Total Revenues. It reflected the Group's commitment to leveraging the positive revenue growth momentum to invest further, especially in IT infrastructure following the spin-off as well as in technology and data, paving the way for the future growth.

Change in Working capital excluding Restricted cash stood at 168 million euros compared to 92 million euros in Fiscal 2023 excluding the one-off impact of the evolution in regulation in Brazil. Positive evolution in Change in Working capital reflected strong volume growth in Fiscal 2024.

Recurring cash conv