By Dimitri Rhodes
(Reuters) – French vouchers and cards provider Edenred reported first-quarter operating revenue in line with estimates on Wednesday, citing good performance in Latin America and its Mobility unit despite a slowdown in its main businesses in Europe.
Edenred, which helps companies manage staff expenses and benefits and is known for its “Ticket Restaurant” vouchers, said first-quarter operating revenue rose 7.1% like-for-like to 667 million euros ($752.1 million), in line with the 668 million euros forecast by analysts in a company-compiled consensus.
The results “came in mixed with pockets of known weaknesses like high base in Benefits & Engagement and Complementary Solutions, while Mobility accelerated, likely helped through cross-selling on recent M&A,” analysts at Jefferies published in a note on Wednesday.
The group carried out a series of acquisitions in 2024, notably Spirii, IP and RB, to seize external opportunities to cushion any deterioration in the economic environment.
Shares in Edenred dropped 1.4% at 08:42 GMT, paring losses after falling as much as 4%, with Jefferies sounding concern on near-term macro challenges, a change in narrative towards cost containment and several issues across its units.
“This is where its diversified business mix is a strength and a weakness,” Morningstar analyst Ben Slupecki told Reuters, adding he sees a lot of pessimism around the stock.
“You could easily point to Europe and say there is weakness in their core market while someone else can say their regional diversification allowed them to grow 7+% LfL despite weakness in their core market, demonstrating their resilience.”
The group said in February it expected slower revenue growth in 2025 as it winds down its medium-term “Beyond 22-25” strategic plan amid economic uncertainty in Europe.
It plans to carry out an optimization program called “Fit for Growth” aimed at curbing a rise in operational expenses.
“Our business model is characterized by high recurrence, as well as a diversity of revenue sources, whether geographically or in terms of products,” Chairman and CEO Bertrand Dumazy said. “In other words, we are going to rediscover the charms of Edenred’s resilience.”
The company confirmed its objectives for 2025.
($1 = 0.8868 euros)
(Reporting by Dimitri Rhodes; Editing by Leslie Adler and Shailesh Kuber)
