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Investing.com -- Edenred (EPA:EDEN) reported negative free cash flow of €118 million in the first half of 2025, compared with €18 million a year earlier, citing a seasonal drop in float and changes in working capital, sending shares down on Wednesday.
The French company also reported flat sequential revenue in the second quarter and a slight miss versus consensus.
Total (EPA:TTEF) revenue rose 6.2% year over year on a like-for-like basis to €727 million, 1% below consensus.
Operating revenue increased 7.1% to €672 million, unchanged from the first quarter. Other revenue fell 4% to €55 million, with lower interest income in Europe and higher rates in Brazil.
EBITDA increased 14% year over year on a like-for-like basis to €654 million, beating expectations by 3%.
The EBITDA margin reached 45.1%. Operating expenses declined on a like-for-like basis.
By segment, Benefits & Engagement grew 9% to €435 million, supported by core products and beyond solutions.
Mobility rose 10% to €175 million, with contributions from fuel card volumes and toll and freight management.
Complementary Solutions dropped 9% to €62 million, affected by the exit from a B2C banking-as-a-service arrangement, lower performance in North America, and the non-renewal of a public contract in Romania.
Adjusted earnings per share rose to €1.16, a 16% beat. Share buybacks during the period reduced the share count by 0.7%.
Capital expenditures declined 3% to €94 million, or 6.5% of operating revenues, down from 7% in the first half of 2024.
The company’s float stood at €4 billion at June-end, flat year over year but down from €4.3 billion in December.
France revenue declined 2% year over year to €95 million due to weaker customer demand.
Revenue in the rest of Europe was flat. Latin America grew 14%, with Brazil up 17% and Hispanic Latin America rising 8%. Revenue in the rest of the world increased 17%.
Foreign exchange was a 670-basis-point headwind, mainly due to the Brazilian real and Mexican peso.
Scope changes contributed €20 million in revenue. Net debt rose €400 million to €2.3 billion from €1.9 billion at the end of 2024.
Edenred reaffirmed its full-year guidance, including like-for-like EBITDA growth of at least 10%, or about €1.34 billion based on June-end exchange rates.
The company also maintained its target of more than 70% free cash flow conversion, implying over €938 million in full-year free cash flow.
To meet these goals, Edenred must deliver over €686 million in EBITDA and €1.06 billion in free cash flow in the second half.
“We anticipate stagnating topline and soft FCF (float down €300m vs. Dec-end) will be key debate today including rising net debt position,” said analysts at Jefferies in a note.