Edenred posts Q3 sales beat, citing better European performance

French vouchers and benefit cards provider Edenred EDEN on Tuesday reported third-quarter sales that were above expectations, citing a better performance in Europe and faster growth across all its business lines.

CONTEXT

Benefits providers, such as Edenred and Pluxee PLX, increasingly rely on areas such as Latin America to drive profits as they cope with a slowdown in Europe caused by economic uncertainty and a focus on reducing public deficits.

Edenred relies on regulatory clarity and public subsidies to help companies manage staff expenses and to provide benefits like its "Ticket Restaurant" vouchers.

WHY IT'S IMPORTANT

French Prime Minister Sebastien Lecornu survived two no-confidence votes in parliament on Thursday, winning a temporary reprieve for his days-old government and the chance to deliver a budget for 2026.

France is in the midst of its worst political crisis in decades as a succession of minority governments seek to push deficit-reducing budgets through a gridlocked legislature.

KEY QUOTES

"The new increases in the face value of meal vouchers, combined with the deployment of our employee engagement solutions and the strengthening of our mobility offerings, will continue to support Edenred's growth in the coming quarters," CEO Bertrand Dumazy said in a press release.

BY THE NUMBERS

Edenred reported a 7.3% organic growth third quarter sales to 726 million euros ($846.66 million) above the 707 million euros expected by analysts in a consensus provided by the company.

WHAT’S NEXT

The group maintained its full-year guidance, it said in a statement, noting this included a 60 million euro EBITDA hit from the introduction of a cap on merchants' fees in Italy that takes effect in the second half of the year.

"We think the real catalyst will be the upcoming CMD (Capital Markets Day), especially (for) the new mid-term targets," analysts at Jefferies published in a preview note.

($1 = 0.8575 euros)