Ingenico Group: Very weak H1 earnings, FY 2018 guidance adjusted from Iran, JV with BS PAYONE as of 2019
Ingenico Group: (SELL, Fair Value EUR67 (-7%))Very weak H1 earnings, FY 2018 guidance adjusted from Iran, JV with BS PAYONE as of 2019
ING’s H1 results fell short of expectations (lfl revenue decline of 3% and EBITDA margin of only 15.7%). The group has not succeeded in returning to growth in Q2 (revenue -2% lfl). Note that the management has adjusted its FY target from the anticipated phasing out from Iran (in line with the US law). As a result, it now targets an EBITDA of at least EUR545m (vs. prior EUR545-570m). All in all, we believe that this half-year release is not likely to reassure the market on the group’s ability to reach its guidance. We expect FY 2018 to be a very back-end loaded year (65% of the FY EBITDA now has to be generated in H2 and short positions could continue to increase pointing to the risk on the 2020 guidance). As a result, we expect that doubts remain until at least the FY earnings release. We maintain our Sell recommendation and FV of EUR67.
Ingenico Group is a business technology company, operating in 125 countries. Co. designs, develops and supplies payment terminals, offering mercantile payment solutions, cross-border and global payment services and certified global service platform. Co.'s services are done around Payment terminals and software; Terminal estate management, security application updates; Connectivity ensuring the terminal-to-bank host connection; Full after-sales service taking charge of every phase in the lifecycle of terminals and software; 24/7, from installation, maintenance & repair to upgrades; Centralization of transactions; End-to-end security - from terminal to bank or processor..
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