Bond investor presentation May 2014 Disclaimer This presentation - - PowerPoint PPT Presentation

Bond investor presentation

May 2014

2

Disclaimer

This presentation contains forward-looking statements. The trends and objectives given in this presentation are based on data, assumptions and estimates considered reasonable by Ingenico. These data, assumptions and estimates may change or be amended as a result of uncertainties connected in particular with the performance of Ingenico and its

• subsidiaries. These statements are by their nature subject to risks and uncertainties.

These forward-looking statements in no case constitute a guarantee of future performance, involves risks and uncertainties and actual performance may differ materially from that expressed or suggested in the forward-looking statements. Ingenico therefore makes no firm commitment on the realization of the growth objectives shown in this release. Ingenico and its subsidiaries, as well as their executives, representatives, employees and respective advisors, undertake no obligation to update or revise any forward-looking statements contained in this release, whether as a result of new information, future developments or otherwise.

3

Table of contents

1. Ingenico at a glance 2. Ingenico key assets 3. Solid business fundamentals 4. Strong financial profile 5. Outlook 6. Conclusion 7. Appendix

Ingenico at a glance

1

Ingenico, a world leading provider of payment transactions

A truly global player, with strong scale effect Positioned all across the value chain from payment terminals to services, including e-commerce and mobile Market leader in hardware: >20 million POS installed, accepting more than 250 payment means and connected to more than 1,000 acquirers/banks Managing 3.5bn payment transactions/year A well-balanced presence in mature and emerging markets A large and diversified customer base A proven track record in executing strategy

5

A large and diversified customer base

Deeper access to Tier 1 merchants & banks

> Certified by more than 1,000 acquirers/banks in over 125 countries > 70% of top 30 global retailers*

Providing solutions to the full spectrum: from large to small customers Partnering with top global players

> Apple, Google, Paypal, Microsoft

*From “Global Powers of Retailing 2013” by Deloitte

6

Active presence in fast-growing markets

The right geographies

Source: Euromonitor& World payment report

9% 22% 47% 2011-2013 CAGR

High-growth segments

223 286 413

Source: Euromonitor Emerging: LAR, Eastern Europe, MEA, emerging APAC Mature: NAR, Western Europe, mature APAC +7% +14% +9% +5% +12% +8%

7

Ingenico, the central player thanks to payment expertise and white labelling

Multiple payment standards, with local/global protocols and regulations

Merchants Acquirers GATEWAY Multi-channel Issuers Consumers

Certified connections Gifts, Loyalty programs, Prepaid services Approval Schemes Reporting, VAS, CRM and Data analytics Certified connections

8

Our ambition: to enable merchants to increase their sales with secured and cost effective payment solutions

For merchants – directly or through acquirers & banks

> Facilitating acceptance of all payment means for a multi-channel approach > Providing cost effective payment and business solutions > Enabling data capture

For consumers: providing a seamless purchasing experience whatever the sales channel and the payment means

9

Ready for a new development phase

Achieving profitability

> Moved towards fabless model > Acquired Moneyline to cover pre- processing solutions for Tier1 retailers > Philippe Lazare is appointed CEO (2007)

Consolidating POS leadership

> Merged with Sagem Monetel > Launched new product range on a single platform > Acquired Landi in China > Invested in mobile with ROAM Data

Building foundations for expansion into services

> Acquired Easycash, leading payment service provider > Increased presence in emerging markets (acquisitions in Russia and Indonesia)

Our ambition

> Acquisition of Ogone, the leading pan- European online payment services provider > Continuation of strategic partnership (Samsung, telecoms

• perator,…)

> Double digit growth and increase profitability

2006 - 2008 2008 - 2009 2010 - 2012 2013 - 2016

> FY08 Rev: €728m vs. €506m in FY06 > EBITDA: 15.9% vs. 11% in FY06 > Demonstrated business model resilience > FY12 rev: €1.2bn > FY12 Transactions & services: 30% of total revenue (+12pts/2008) > EBITDA: 18.5% 10

Ingenico: developing a well-balanced business model…

Payment Terminals Growth Driver > New business segments in both mature and emerging markets > First equipment in emerging markets > Replacement cycle (upgrade security, government requirements, …)

Dual growth engine supporting each other… … with Telium 3, our next generation payment platform, as a key accelerating component

Services Growth Driver > Growth in e-commerce and m-commerce transaction volumes > Competitive advantage from integrated capabilities across physical, on-line and mobile payments > Further growth, driven by technological leadership, experience and global footprint

11

Ingenico key assets

2

We have a multi-local differentiated strategy

13

14% 17% 9% 9% 8% 43% 2013 Revenue €1.37bn Latin America Asia Pacific EEMEA North America Central

• perations

Europe SEPA

Still strong growth potential in payment terminals worldwide

> In mature markets: US (EMV, new use cases) > Multi-channel driving new terminal sales in Europe > In emerging markets: growing middle-class (50% of the world’s population by 2030, vs 30% today)* > New regulations (Turkey) / verticals

Services: further growth, driven by technological leadership, experience and global footprint

Innovation as a key pillar of our strategy

8% of group revenue (9% excluding TransferTo) R&D engineers: 25% of group employees through a multi local presence Broad expertise in development: from hardware to software A worldwide network of data centers managing >3.5bn transactions/per year Improving consumer’s experience, whatever the channel:

14

A pragmatic innovation approach

32%

15

37%

In-house research for

cutting-edge payment security Strategic technological

partnerships for non

payment features

Acquisition of technology

for better “time-to-market” efficiency

A comprehensive offer to work with our customers and partners

16

New consumers habits

Mobility, Internet, social medias

Increased payment touch points Introduction of tablets/smartphones combined with mPOS for merchants Multichannel strategy across the full payment value chain

Mobile, multi-lane, kiosk, desk, etc Smart terminals Transaction gateway Collecting Acquiring VAS

Solid business fundamentals

3

We are the leader in smart terminals, a market with high barriers to entry

18

World leading provider of payment terminals

> Installed base with >20m POS > Fabless model / Optimized supply chain > Focused strategy

…in a highly concentrated market

> Ingenico : 44%1 > VeriFone : 38% 1 > Pax: 6% 1 > Other players: mostly local players

… with high barriers to entry

> Certification / Security

• Market driven by global & local

standards

• Constant intensification of the Global

Card Regulation over the last 10 years

> Scale > Proximity > Portfolio of customer applications > More and more technology on board

1 Estimated market share based on 2013 published revenues

Top 3: [85-90]%

...with increase software and technology into smart terminals

Global Standards Global Compliance Local Standards & Apps Multiple payment options

Terminals represent the tip

• f the iceberg

A unique & comprehensive network, connected to >1,000 acquirers/banks, with >2,000 applications

19

A unique platform for services (Telium): NFC, multimedia as a standard Open to all payment methods (international schemes, close-loop, NFC, wallets, QR code, etc.) Tailored to new regulations (ex: ECRPOS in Turkey)

We have the right and innovative products and services

Fiscal Memory solutions New payment methods Mobile Apps

20

We have started to diversify the business model towards payment services

Group Europe-SEPA

21

48% 52%

2013 Revenue

28% 5% 67%

2013 Revenue

Europe/SEPA as the forefront of business diversification

22

~50% of revenue derived from services (vs. 27% in 2009)

1000 employees on payment services 160k merchants connected to our platforms in Europe Managing payment services, whatever the channel

in-store / on-line / mobile

Strong financial profile

4

24

Strong financial track record

568 728 701 907 1001 1206 1371 2007 2008 2009 2010 2011 2012 2013

Revenue EBITDA

Merger with Sagem Monetel Easycash acquisition Ogone acquisition Moving to Telium 2 platform Investing into promising segments and markets

2013 organic growth: +14% 2013 EBITDA: +25% 2013 EBITDA margin: 20.4%

87 116 105 166 180 223 279

15,3% 15,9% 15,0% 18,3% 18,0% 18,5% 20,4% 14,0% 19,0% 24,0% 29,0% 34,0% 50 100 150 200 250 300

2007 2008 2009 2010 2011 2012 2013

25

Revenues and gross profit by business

In M€ FY 2013 FY 2013 / FY 2012 Revenue 1 074 +14%* Gross Profit 494 +13% In % of revenue 46.0% +160bps

Increased volumes Strong purchasing capacity Strong track record in managing supply chain

Terminals (Hardware, Services & Maintenance)

*Growth rate at constant FX & scope ** TransferTo divested as of December 1st, 2013

In M€ FY 2013 FY 2013 / FY 2012 Revenue 297 +11%* Gross Profit 106 +38% In % of revenue 35.8% + 140bps In % of revenue excluding TransferTo** 43.8%

• 50 bps

Transactions

Gross profit fostered by on-line development

• f Ogone

26

Operating expenses: Continuing to invest in a fast moving environment to support future growth

In M€ FY 2012 FY 2013 Research & Development 85 94 Sales & Marketing 105 121 General & Administrative 133 146 Operating expenses

In % of revenue

323

26.8%

361

26.4%

Preserving our capacity to keep on investing in fast moving ecosystem through focused R&D roadmap and S&M: US market, mobility, multi-channel Strict control of G&A costs following a past but necessary phase of spending to take the Group to the next level 2013 PF** operating expenses at 27.5% of revenue

*Excluding PPA

**Excluding the contribution of TransferTo divested on December 1, 2013

27

Continuing to strongly focus on cash generation

58 101 69 125 177

55,2% 60,8% 38,3% 56,1% 63,4% 30,0% 40,0% 50,0% 60,0% 70,0% 80,0% 90,0% 100,0% 110,0% 20 40 60 80 100 120 140 160 180 200 2009 2010 2011 2012 2013 Free cash flow (FCF) Conversion (from EBITDA to FCF)

Free cash flow (in €m)

Strict monitoring of our working capital Targeting conversion ratio by 2016 between 45 and 50% Capex remain limited

28

Maintaining a solid financial structure to support the group’s strategy

In m€

FY 2013 FY 2012

Net debt as of January 1

75 110

Free Cash Flow

177 125

Dividend paid

(13) (14)

Acquisitions net of disposals

(363) (69)

Others

(22) (7)

Change in net debt

(221) 35

Net debt as of December 31

296 75

Net debt (in m€)

*2012 Pro forma Net debt assuming the acquisition of Ogone as of Dec 31 2012

Strong cash flow generation ensuring a rapid deleveraging 2013 Free cash flow representing 50% of Ogone acquisition Debt ratios remain strong

430

1.8x 0.6x

• 77,5

144 109 110 75 296

0,3x 0,2x 0,2x 0,1x 0,4x 1,4x 0,7x 0,6x 0,3x 1,1x

• 200
• 100

100 200 300 400 500

2008 2009 2010 2011 2012 2013

Net debt Net Debt/Equity Net Debt/EBITDA

2013 2013 2012 PF*

Oceane (227)

Resulting in a smooth debt maturity profile

Long debt maturity profile and strong liquidity

29

Well balanced debt structure with diversified sources of funding

Convertible bond

1 As of April 30th 2014, share price at [•] 2 Initial conversion price of €37.44 and initial Soft Call Price of €48.672 adjusted for dividend payment

as of May 2013 which leads to a new conversion ratio of 1,010 shares per OCEANE

3 Including finance lease obligations

… with untapped liquidity facilities

>

€100m of undrawn facilities

>

€352m of cash and cash equivalents as at 31 dec 2013

Bank debt 3

• /w bank confirmed facilities (including

syndicated facility) as of dec 31, 2013 :

>

Amounts to €482.5m

>

Drawn amount as at dec31, 2013 : €382m

>

Maturity: 1st Jan 2017

>

Accounted for 227M€ as at dec 31, 2013 under IFRS

>

€250m, coupon of 2.75%

>

adjusted conversion price of €37.072

>

deeply in the money1 with Soft Call Price of €48.19 from January 15th, 2015

250 53 53 242 35 2014 2015 2016 2017 2018 Convertible bond Bank debt

In m€

39% 61%

Outlook

5

31

Q1 & 2014 targets: Continued growth

• Revenue: €325millions
• Like-for-like: +20%
• Double digit growth in all business segments
• Strong performance across all regions

Outstanding performance in Q1

• Organic growth between 10% and 15%*
• EBITDA margin ≥ 21%

Specified guidance for 2014

* At constant exchange rate and based on FY13 pro forma revenue at €1.301bn (excluding TransferTo disposed on December 1, 2013)

Ambitious 2016 targets

Positioning Ingenico as the global leader in seamless payment, whatever the channel: in store, on line, mobile Continued profitable growth

> Revenue > €1.8bn > EBITDA margin> 20%

Maintaining a strict financial discipline

> Free Cash Flow conversion between 45% and 50%

Complementing organic growth through targeted acquisitions

32

Conclusion

5

34

Key investment considerations

A global expert in payment solutions Business model diversification Technological leadership Large and diversified customer base

• Positioned all across the value chain
• Leveraging on #1 in terminal
• Present in 125 countries
• To provide payment solutions whatever the channel:

in-store, on line and mobile

• Strong, pragmatic and proven innovation strategy
• A strong network connected >1000 acquirers & banks
• Deep access to all tier merchants
• Partnering with top global players

Balanced presence between matured and emerging countries

• Active presence in fast growing markets
• Right international presence to leverage market
• pportunities

35

Key investment considerations

Delivering profitable growth Strong cash flow generation Focused acquisition strategy Solid financial position Strong liquidity profile

• Revenues x2.4 from 2007 to 2013
• EBITDA x3.2 from 2007 to 2013
• Strong increase in EBITDA and control on working

capital requirements and capex => Free cash flow of €177m in 2013 (+42%)

• 3 unchanged areas: Geographical Scope, Services and

Technology

• Strong debt ratios: Gearing of 0.39x and leverage of

1.1x in 2013

• Convertible bond maturing in 2017 in the money
• As of 31/12/13: €100m of undrawn facilities and €352m
• f cash and cash equivalents
• Smooth debt maturity profile

Appendix

6

Group Regions & Business Line Patrice Durand EVP Finance and Operation Pierre-Antoine Vacheron EVP SEPA – Europe Jacques Guérin EVP Chief Solutions Officer Oscar Bello EVP Latin America Michel Léger EVP Global Sales and Marketing Patrice Le Marre EVP Asia-Pacific and China Martine Birot EVP HR and Internal Communication Thierry Denis EVP North America Chloé Mayenobe EVP Governance, Audit & Risk Jacques Behr EVP EMEA Jean-Marc Thienpont EVP Mobile Payment 37

Ingenico management team

Philippe Lazare Chairman & CEO

Key data on selective acquisitions to position Ingenico on the whole payment value chain

Easycash

A leading German payment services provider Enabling customers all over Europe to use electronic payment transaction Acquisition completed in November 2009

Roam Data

Mobile payment solutions market in the US Strategic investment in November 2009 completed with the acquisition of a controlling interest in February 2012

Ogone

a leading independent provider of « Non Card Present » payment service Acquisition in January 2013 +32% revenue growth in 2013 Ogone and easycash platforms connected 2 months after the acquisition

38

39

P&L (1/2)

*+14%: growth rate at constant FX & scope

In M€ FY 2013 FY 2012 Changes

• vs. FY 2012

Revenue 1371 1 206 +14%* Gross Profit In % of revenue 600 43.8% 513 42.5% +17% + 130 bpts EBITDA In % of revenue 279 20.3% 223 18.5% +25% + 180 bpts EBIT In % of revenue 239 17.4% 190 15.7% +26% + 170 bpts Net profit, attributable to shareholders 114 97 +18%

40

In M€ FY 2013 FY 2012 EBIT in % of revenue 239 17.4% 190 15.7% Purchase Price Allocation (30) (26) Other income & expenses (21) 1 Financial result & Equity Method (18) (15) Income before tax 169 150 Income tax Income tax rate (56) 33% (50) 33% Net Result Net Result, attributable to shareholders 113 114 100 97

P&L (2/2)

Limited increase despite Ogone acquisition of €360 millions Impact of TransferTo divestment & Ogone acquisition

271 366 413 513 600 38,7% 40,4% 41,3% 42,5% 43,8%

38,0% 39,0% 40,0% 41,0% 42,0% 43,0% 44,0% 45,0% 100 200 300 400 500 600 700

2009 2010 2011 2012 2013

41

Sustaining high level of gross profit

Gross profit

(in €M)

Moving to Telium 2 platform

Key strengths mitigating potential price pressure

> Telium successive generations

• Improved design to cost
• Increased value for customers

> Strong purchasing capacity > Track record in managing supply

chain

• Strong relationship with key

suppliers

• Proven ability to manage

external factors (Japan, volcano in Iceland, floods in Thailand)

42

Operating expenses: Continuing to invest in a fast moving environment

>

As expected, accelerating investment in H2 in focused R&D and Sales & Marketing to support strategy deployment: Telium 3, mobility and multichannel

>

G&A costs under control

>

2013 PF* operating expenses at 27.5% of revenue

*Excluding the contribution of TransferTo divested on December 1, 2013

64 71 71 85 94 46 69 83 105 121 78 100 118 133 146 2009 2010 2011 2012 2013 R&D S&M G&A 188 272

26.8% 26.3%

Operating expenses

(in €M)

323 240 361

26.8% 27.2% 26.4%

In M€ FY 2013 Pro forma FY 2013 Reported Revenue 1301 1371 Adjusted Gross Profit In % of revenue 593 45.6% 600 43.8% Adjusted OPEX In % of revenue (358) 27.5% (361) 26.4% EBITDA In % of revenue 276 21.2% 279 20.3% Adjusted EBIT In % of revenue 235 18.1% 239 17.4%

43

2013 Pro Forma, excluding TransferTo for the full year

To ensure continuity in reporting and facilitate the assessment of Ingenico’s performance, key financial figures for FY13 are presented to reflect the disposal of TransferTo occured on Decembre 1st 2013