Edenred serves up Q1 beat boosted by digital shift and inflation

By Federica Mileo and Diana Mandia

(Reuters) -Edenred beat estimates for first-quarter operating revenue on Thursday, as the French provider of vouchers and payment cards continued to benefit from strong momentum in sales, its digital transformation and inflationary trends.

The group, which helps companies manage staff benefits with vouchers and payment cards and is known for its “Ticket Restaurant” vouchers, has been benefiting from a shift to fully digital offerings. Rising inflation has also helped its business by driving up the value of meal vouchers employers offer.

“We are confident in our ability to maintain a sustained pace of growth for the rest of the year, driven by favourable post-Covid trends and a macroeconomic environment that strengthens the appeal of our solutions,” Chief Executive Officer Bertrand Dumazy said in a statement.

Edenred’s stock was down 1.8% at 0925 GMT, reversing course after opening 1% higher. It reported better-than-expected operating revenue of 426 million euros ($461.23 million) and confirmed its annual targets.

Morningstar analyst Michael Field said investors might not be fully convinced by Edenred’s upbeat outlook given the economic environment and in particular “the risk of recession in emerging markets, where Edenred has significant exposure.”

The conflict between Russia and Ukraine, two of the world’s top crop producers, paired with a surge in energy prices, is driving up costs of living and putting household finances under pressure.

French President Emmanuel Macron in March said he was considering giving special cheques to poor households to compensate for increased food prices.

Edenred Chief Financial Officer Julien Tanguy said it was too early to say if the company would get involved, but the group had the “right technology” and the know-how.

“We will definitely be part of this discussion, but it is too early to say if we will be able to manage this programme,” he told analysts in a call.

($1 = 0.9236 euros)

(Reporting by Diana Mandia and Federica Mileo; Editing by Sherry Jacob-Phillips, Bradley Perrett and Tomasz Janowski)