Earnings call transcript: Pluxee NV Q3 2025 sees stock rise despite revenue miss

Pluxee NV’s Q3 2025 earnings call revealed a revenue of €310 million, falling short of the €319 million forecast. Despite this, the company’s stock surged 7.78%, closing at €20.64, driven by strong organic growth and strategic initiatives. InvestingPro analysis shows the company maintains a "GOOD" overall financial health score of 2.92, with consistent profitability over the last twelve months.

Key Takeaways

• Revenue came in at €310 million, missing the forecast by €9 million.
• Stock price increased by 7.78% post-earnings announcement.
• Organic growth reported at 11.1% for Q3.
• Strategic acquisitions and partnerships bolster future prospects.
• Challenges persist in European markets due to economic conditions.

Company Performance

Pluxee NV demonstrated robust performance with an 11.1% organic revenue growth in Q3, totaling €310 million. The company continues to capitalize on strategic acquisitions and partnerships, notably with MyBenefits in Romania and Santander in Brazil. However, it faces a challenging macroeconomic environment in Europe, impacting its revenue forecast.

Financial Highlights

• Revenue: €310 million, up 11.1% year-over-year.
• Business Volume Issued: €5.7 billion in Q3.
• Operating Revenue: €270 million, reflecting 11.1% organic growth.
• Float Revenue: €39 million, up 10.8% year-over-year.

Earnings vs. Forecast

Pluxee NV’s Q3 revenue of €310 million missed the projected €319 million, a shortfall of €9 million. Despite this, the market reacted positively, likely due to strong organic growth and strategic initiatives.

Market Reaction

Following the earnings release, Pluxee NV’s stock price rose by 7.78%, closing at €20.64. Trading at a P/E ratio of 30.4x and a Price/Book multiple of 2.64x, the stock appears overvalued according to InvestingPro Fair Value calculations. Analyst price targets range from $13 to $15, suggesting potential upside. This increase suggests investor confidence in the company’s strategic direction and growth potential, despite the revenue miss.

Outlook & Guidance

Pluxee NV reaffirms its fiscal 2025 objectives, targeting low double-digit organic revenue growth and a 150 basis points expansion in recurring EBITDA margin. The company anticipates softer growth in Q4 but maintains its fiscal 2026 financial targets. For deeper insights into Pluxee’s growth trajectory and comprehensive financial analysis, access the detailed Pro Research Report available exclusively on InvestingPro, covering over 1,400 top stocks with expert analysis and actionable intelligence.

Executive Commentary

CEO Aurelian Soni stated, "Q3 marked another quarter of solid commercial momentum and top-line growth," highlighting the company’s resilience and diverse growth drivers. Soni emphasized the strength of Pluxee’s business model amid challenging conditions.

Risks and Challenges

• Economic instability in Europe could impact future revenue.
• Regulatory changes in France and Brazil present ongoing challenges.
• Market saturation in key regions may limit growth potential.
• Currency fluctuations could affect financial results.

Q&A

During the Q&A session, analysts inquired about the French meal voucher regulation and the progress of the Santander partnership. Discussions also covered macroeconomic challenges and the company’s disciplined M&A strategy.

Full transcript - Pluxee NV (PLX) Q3 2025:

Conference Operator: Good morning. Thank you for standing by, and welcome to the PLUXI Third Quarter twenty twenty five Fiscal Results Presentation. I advise you that this conference is being recorded today on Thursday, 07/03/2025. At this time, I would like to hand the conference over to Ms. Pauline Bierro.

Please go ahead, madam, Head of Investor relations.

Pauline Bierro, Head of Investor Relations, Plexus: Good morning, everyone. Thank you for joining us today for Plexus third quarter fiscal two thousand twenty five revenue call. I hope you have all a great start to the summer season. So I’m Pauline, Edna of investor relations for Plexi. So today, I’m joined with our, CEO, Aurelian Soni and CFO, Stephane Lopito.

And so before we begin, let me walk you through today’s agenda. So Aurelia will start with the highlights and the key figure for the third quarter of fiscal twenty twenty five with an overview of our business performance, highlighting some of our key achievement of the quarter. And Stephane will then take you through our financial performance in detail before Roselian comes back to conclude on our outlook for fiscal twenty twenty five and 2026. And with that, I will hand over to Aurelia.

Aurelian Soni, CEO, Plexus: Thank you, Pauline, and, good morning, everyone. I’m very pleased to be with you today to share the key achievements and milestones that Plexig delivered in the third quarter of fiscal twenty twenty five. Let’s start with our key highlights on the next slide. Q3 marked another solid quarter. We maintained a strong focus on execution and continued to consistently deploy our strategic roadmap across the group.

Let’s start with revenue growth. Performance came in line with expectations, both across regions and business segments, confirming the strength and resilience of our balanced business model, fueled by multiple growth drivers. On the commercial front, momentum remains strong. Our sales engine has continued to deliver. We are seeing a steady pace of new client wins and a sustained net retention rate above 100%.

This reflects not only the attractiveness and relevance of our solutions, but also the strength of the relationships that we have built with our clients. Now on the execution of our M

: and A

Aurelian Soni, CEO, Plexus: roadmap. First, we are pleased to announce the signing in Romania of the acquisition of MyBenefits, a fast growing company recognized for its innovative technology that supports flexible and personalized employee benefit solutions. We are also making solid progress on the integration of COBIN Spain and Beneficio Facil in Brazil. Lastly, the strategic partnership with Santander is now running at full speed. We see strong commercial traction and encouraging results from our joint go to market approach.

All in all, the performance delivered in the first nine months makes us confident in delivering on our financial and strategic objective for fiscal twenty twenty five. Let’s now look at our revenues performance in the next slide. In the third quarter, total revenues reached €310,000,000 reflecting a solid plus 11.1% organic growth in line with expectations. This performance was driven by a robust trend in operating revenue and slightly stronger than expected float revenue, despite a progressive deceleration quarter after quarter. Over the first nine months of fiscal twenty twenty five, total revenue amounted to €945,000,000 up plus 10.9% organically.

The performance delivered so far demonstrates our ability to generate consistent top line growth, while navigating and absorbing quarter to quarter volatility across geographies. This puts us on track to deliver on our low double digit organic growth target for the full year. Let’s now turn to our commercial trajectory, which continued to show strong momentum in the third quarter. Starting with new development. Over the first nine months of the fiscal year, we signed €1,100,000,000 in annualized business volume, in line with our full year target of €1,300,000,000 This strong performance reflects the relevance of our client value proposition and the effective execution of our go to market strategy across countries, with SMEs remaining a key growth driver.

Moving on to net retention, it came in at 101, consistently above the 100% target by fiscal twenty twenty six. This figure excludes the one off impact from the purchasing power program launched in Belgium at the end of calendar twenty twenty three. I will come back later on the various drivers of the net retention. For now, I just wanted to highlight the contribution of the additional increase in face value over the first nine months, representing approximately €900,000,000 in line with the trend of last year. Altogether, this means that we have already delivered close to 75% of our €3,000,000,000 cumulative objective for fiscal year twenty twenty four to 2026.

Now let’s take a closer look at some concrete examples of how our commercial strategy is translating into strong delivery on the ground. In the third quarter, we have remained very active on the new client acquisition front, thanks to a combination of direct sales execution and the contribution of our strategic partnership. While some mid to large sized clients may have shown a tendency towards slightly longer decision making cycle, business momentum has remained strong with new client wins reaching 1,100,000,000 over the first nine months as previously mentioned. So now let me share two concrete examples, starting with Brazil, where we made great progress in rolling out our exclusive distribution agreement with Santander. First, all integration and transition phases have been successfully executed, and the volume migration is now fully complete.

Second, the collaboration is running at full speed with the share of Santander sales team having sold the Plexi solution, rising from 14% to more than 20% in just in just one quarter. And finally, we are seeing a strong commercial ramp up, particularly through joint key account wins and deeper SME penetration, further reinforcing our market leadership in the country. Now in India, our consultative selling approach has continued to gain strong traction, powered by our compelling multi benefit offering and disciplined commercial execution. As a result, we secured key B2B wins, adding over 35,000 new end users to our platform in a single quarter, which has allowed us to further expand our presence in this large and fast growing market. Let’s now focus on our net retention rate.

Our solid business performance is also reflected in our net retention rate, which remains above 100%, excluding the PPP program in Belgium. This is supported by first, a high client retention, with a notable 20 basis points improvement year on year and second, our effective client portfolio management, driven by a robust trend of increasing face value over the first nine months. This strong performance enabled us to more than offset the impact of the macroeconomic environment on our end user portfolio growth, particularly in Continental Europe and Mexico. To illustrate the importance of strong client engagement, let me share the example of our long standing relationship with Koda in Czech Republic. Since the very beginning of the contract in 2019, we’ve been constantly by our client side, which has enabled us to unlock significant cross sell and upsell opportunities.

In response to SCODA’s employee retention challenges, we have progressively implemented a broader benefit structure to address the evolving employee needs. This includes solutions such as culture, travel, pharmacy, and even more recently, maternity support, while also advising the company on an attractive annual contribution per employee. Over the past six years, we have multiplied annual business volume by more than 40 times, and today, over 37,000 active users benefit from our Telenor Multi Benefit solution. This client journey is a great reflection of how we continue to grow and innovate alongside our clients, adapting our solutions to meet their evolving needs over time. So to sum up, Q3 marked another quarter of solid commercial momentum and top line growth, keeping the group firmly on track to achieve its full year target.

And with this, I will now hand over to Stephane

Stephane Lopito, CFO, Plexus: to walk

Aurelian Soni, CEO, Plexus: us through the financial figures.

Stephane Lopito, CFO, Plexus: Thank you, Oren, and good morning, everyone. It’s a pleasure to be with you today to present in more details of top line performance for Q3 twenty five, starting with the business volumes issued on page number 11. In Q3 twenty five, total business volume issued or BVI reached EUR5.7 billion, bringing the cumulative figure for the first nine months to EUR18.8 billion. Focusing first on employee benefits, we recorded a plus 6.7% organic growth in Q3 and a plus 7.8% over the first nine months or plus 9% if we exclude the one off effects related to the purchasing power program in Belgium. As expected, employee benefits BVI growth remained geographically more weighted toward Latin America and the rest of the world, while Continental Europe showed contrasted dynamics.

If Southern Europe stood out with strong commercial traction, this was tempered, as Ovellier mentioned, by the impact of macroeconomic headwinds notably on end users portfolio growth in some other European countries. Looking now at other products and services, which temporarily weighed on BVI growth this quarter, this line of service BVI reached EUR1.2 billion in Q3 and EUR4.7 billion over the first nine months compared to EUR1.4 billion and EUR4.5 billion respectively in fiscal twenty twenty four. Momentum in public benefit was restored, particularly in Latin America following the recovery of a large contract in Chile, but this was temporarily offset by phasing effects in ordering from two major contracts in Belgium and Romania. Let’s now take a closer look at the key drivers behind the growth in employee benefits BBI over the first nine months on Slide number 12. As we just saw on the previous page, employee benefits BBI increased from €13,800,000,000 to €14,200,000,000 representing a gain of approximately €400,000,000 over the first nine months of the fiscal year.

The plus 7.8% organic growth in employee benefit BBI was driven by a combination of factors. First, net retention contributed around €200,000,000 supported by both strong client loyalties and higher average sales value across regions. This growth was fully offset by the best effect from the last year one off purchasing power program in Belgium. Second, new client wins added up to €1,100,000,000 over the first nine months, reflecting Plexi’s solid development trend, particularly among SMEs. The BVI bridge disclosed on the page also includes a positive scope effect of €500,000,000 coming from the integration of their recently closed deeds and a negative impact of currency fluctuation mainly related to Brazil, Turkey and Mexico.

This continued DDI positive momentum has translated into total revenues growth on page number 13. In Q3 twenty twenty five, total revenues reached €310,000,000 up plus 11.1% organically and plus 4.3% on a reported basis. This bring our nine month performance to plus 10.9% on an organic growth basis and plus 6.2% reported. Q3 twenty twenty five was indeed impacted by adverse currency effect, which brought a minus 10.3% impact on our total revenues reported growth, primarily due to the currency depreciation of the Brazilian real and the Turkish lira. While our float revenue natural hedge, which usually offsets negative currency effects through higher interest rates, has worked at full strength in Brazil this quarter, this has not yet been the case in DOT, but it is expected to start playing out from Q4 onwards now that interest rates have been raised again in Turkey.

Such negative foreign exchange impacts were partially compensated by a plus 3% scope effect, mainly related to the acquisition of Ben as part of the partnership with Santander in Brazil and to the acquisition of COBi in Spain and Beneficio facility in Brazil. Excluding these currency and scope effects, total revenues organic performance in Q3 was driven by first, solid low double digit growth in operating revenue reaching €270,000,000 up plus 11.1% organically supported notably by the easing of best effects in employee benefits assessed in Q2 twenty twenty five. And second, slightly stronger than expected float revenue reaching EUR39 million, up plus 10.8% organically. While this low double digit organic growth of total revenues was more regionally balanced than in Q2, Latin America and rest of the world continued to stand out as key contributors as we will see later in the presentation. Before that, I would like to take you through the underlying trends behind operating revenue by line of service on Page 14.

As just mentioned, we recorded €270,000,000 in operating revenue in Q3 twenty twenty five, reflecting a plus 11.1% organic growth. This momentum was primarily driven by employee benefits, which delivered plus 12.8% organic growth this quarter. It resulted from a robust trend in business volumes combined with an improving take up rate year on year in line with fiscal twenty twenty four full year level. Operating revenue in other products and services showed a minor improvement in Q3, reaching €36,000,000 reported, up plus 0.5% organically. The positive trend in public benefit programs, notably supported by the beginning of a large public benefit contract in Chile, was partly compensated by the ongoing portfolio rationalization in The UK and The US.

Beyond this performance by line of business, let’s now turn to geographic mix and explore how operating revenue organic growth was achieved across regions on slide number 15. As expected, operating revenue organic growth in Q3 and over the first nine months of fiscal twenty twenty five was more weighted toward Latin America and the rest of the world. Starting with Latin America, Q3 twenty twenty five organic growth reached plus 13.6%, slightly increasing compared to Q2 and a clear improvement compared to Q1. This performance reflects notably the strong commercial execution in Brazil, further supported by the Santander partnership now operating at full speed and the recovery of a major public benefit contract in Chile. Meanwhile, Mexico’s economic environment continued to face pressure stemming from the impact of US economic policies.

Overall, this performance is fully aligned with the trend we previously highlighted and we expect momentum in LatAm to continue in the coming quarters. Moving to Continental Europe, Q3 twenty twenty five organic growth reached plus 8.8%, marking a rebound after plus 1.8% in Q2, in line with our anticipation. That said, we anticipate bad effect to impact again the fourth quarter given that Q4 twenty twenty four operating revenue growth reached plus 12.7% last year in the regions. This should be considered when evaluating Continental Europe’s growth outlook for Q4 alongside the softening of macroeconomic conditions in the region.

Aurelian Soni, CEO, Plexus: Lastly,

Stephane Lopito, CFO, Plexus: in the rest of the world, Q3 twenty five organic growth reached plus 11%, primarily driven by strong business volume momentum in countries such as Turkey, India, or The Philippines. Turkey remain a key growth contributor, but the country is also facing increasing best effect due to the exceptionally high growth achieved in the recent years. Lastly, we have also continued over the quarter the repositioning of our business toward core employee engagement solution in The UK and The US. Overall, in terms of operating revenue for all regions and after a strong performance in Q3, we anticipate a softer Q4. In fact, the pattern of organic growth between Q3 and Q4 is expected to mirror the phasing observed between Q1 and Q2 in the first half of the current fiscal year.

Before I hand it back to Aurelien, I have also one last page about the still strong float revenue dynamics on page number 16. In Q3 twenty twenty five, float revenue grew slightly ahead of expectation, increasing by plus 10.8% organically to reach €39,000,000 Over the quarter, float revenue organic growth was fueled by a larger float baseline on the balance sheet, supported by the continued increase in business volume issued and by an overall stronger investment yield year on year. Looking at the first nine months, float revenue has reached €123,000,000 growing plus 14.3% organically. As expected, the organic growth pace has gradually leveled off compared to fiscal twenty twenty four and compared to the first two quarters of this year. That’s mainly because interest rate peaked last year in most of our market, especially in Continental Europe.

That said, we continue to benefit overall from higher rates in some countries, especially in Brazil and Turkey, as well as from our agile and disciplined investment strategy tailored to local conditions. As a consequence, we now expect float revenue organic growth to land in the low double digit territory for the full year. And now, I will hand over to Renier for the final outlook section combining our expectation in both operating and float revenue trends.

Aurelian Soni, CEO, Plexus: Thank you, Stefano. In summary, so this quarter’s performance confirms that we are on track to achieve our full year ambitions. As such, we are confident in reiterating our fiscal twenty twenty five key financial objectives, which are first, low double digit total revenue organic growth and second, plus 150 basis points of recurring EBITDA margin expansion calculated at constant fiscal twenty twenty four exchange rates. In addition, we keep our fiscal twenty twenty six financial objectives unchanged. Now to conclude, I would say that in an environment increasingly marked by macroeconomic challenges, our performance this quarter and more broadly over the past nine months highlights the resilience of our business model, supported by recurring revenue streams, a broad geographic footprint, and a disciplined execution of our strategy.

And with that, we are now with Stephane happy to take your questions.

Conference Operator: This is the conference operator. We will now begin the question and answer session. The first question comes from Andre Jouillard of Deutsche Bank.

Andre Jouillard, Analyst, Deutsche Bank: Good morning. Congratulations on this solid revenues. First question about regulation. Could you give us some more visibility on what is going on in France with the recent announcement and, where we are in Brazil? Second question, could you give us some more color that the dynamic on SMEs and big corporates and give us maybe slightly more visibility on the weight of these two segments?

And third question about M and A. You announced this morning acquisition of a company in Romania. Could you give us some more color about the weight, in terms of revenues, profitability of the recent acquisitions you’ve been doing? And quantify maybe the spending on M and A you’ve been doing this year and maybe give us some more color about what you plan to do in term of re leveraging? Thank you very much.

Aurelian Soni, CEO, Plexus: Thank you, Andre, for your three questions. I will start with the regulation to give you an update. So, with France first, so last week, the minister, who had already announced the main measures for the meal benefits reform. So first, at Plexi, we have welcomed the government’s road map. We believe that it it does support the modernization of the system by better aligning the practices and the expectation of the key stakeholders and starting with merchants and employees, while still preserving the core purpose of the mill voucher, which is to enable the employees to enjoy a healthy meal during the break.

So coming on the the main measures,

Stephane Lopito, CFO, Plexus: that are that were part

Aurelian Soni, CEO, Plexus: of the announcements, so that there is a full digitization by January 27. And the continued eligibility of qualifiers, non immediately consumable food product. And and on this topic, we will continue to to engage with governments in order to to to to try and introduce a a dual spending limit that could be differentiated by by merchant category, and it it would be a way for us to to help restore a good balance between between supermarkets and restaurant. And another strong measure is the implementation of the transparency charter, and that will provide merchants with a common framework to clearly understand and compare the cost associated to the transaction. So that’s, I mean, the main measure contained in the in the announcement.

In terms of political calendar, so for the moment, there is no clarity on the legislative vehicle nor the calendar for for adoption. And but but what was what was said is that the draft of law could be submitted to the parliament either this fall or between, you know, this fall and and next spring. So this is for France. Now Brazil, just just to to to remind you over the last months, the the macro environment in Brazil has been marked by reemerging higher level of inflation. And in this context, it puts the LUVAS government under strong pressure to find solution to reduce the food inflation and the access to food for consumers.

And so we in this context, we remain in constant dialogue with the government to discuss ways to enhance the employee benefit system in Brazil that could definitely contribute to this, you know, to to address this this challenge and and and our main common objective both for the government and issuers such as PUXY is really to ensure the sustainability of the system over the long term. So to be more precise on the interoperability and portability topic as a decree required for the for the implementation is still pending. And and as you know, we are actively engaged in ongoing discussion to establish the appropriate framework. But for the moment, nothing was announced. And and regarding possible other measures, we are constantly monitoring the situation as as we speak.

So this is for the regulatory part. In terms of development, you’re asking about the development to give you a bit more of color, so first with the 1,100,000,000 over the nine months, our new client wins have remained very strong. And given the robust pipeline that we’ve developed, we think that we are well on track to reach our target of over €1,300,000,000 of new business on fiscal year twenty twenty five. And interestingly enough, this momentum has been partly driven by an increasing contribution from SMEs. And this is true across markets.

And so far, so after nine months, we have already surpassed the 30% target that we set for fiscal year twenty twenty six. And and regarding mid to large account, as I mentioned, we’ve seen some lengthening in the, you know, in the signing process in certain geographies that we associate to macro related caution. But again, the overall pace of winning remains robust. Regarding M and A and the impact from the MyBenefits acquisition, Stefan, and the total envelope. The

Stephane Lopito, CFO, Plexus: the MyBenefits acquisition in in Romania is know, as a little bit like what what we did with Beneficio Facil in Brazil. So this is a a bolt on acquisition with with a company that, we have been partnered with for for some years, so a company that we know very well, which means that the integration of this company, we have been able to anticipate for it. This company is going to bring us scalable tech asset, which is going to help us to learn from the personalized experience of our consumer in and our clients in in Romania. It’s going to be highly synergistic acquisition. We are talking here about a few million.

So in terms of stakes, financial stakes, so this is really a bolt on and a few millions of additional revenue, but with strong synergies and this acquisition is going to be accretive to the EBITDA margin starting in the first year. Very, very much like, what we did with the beneficiary of Facil a few weeks ago in Brazil.

Andre Jouillard, Analyst, Deutsche Bank: And and in term of, really leveraging, considering that you have a a comfortable, cash net position?

Stephane Lopito, CFO, Plexus: In term of what? You said? In term of

Andre Jouillard, Analyst, Deutsche Bank: The releveraging.

Stephane Lopito, CFO, Plexus: You mean, in term of of, credit metrics?

Andre Jouillard, Analyst, Deutsche Bank: No. I mean, the the use of cash, you have on your balance sheet. Could you consider some bigger acquisitions and or some return to shareholders, to be clear?

Stephane Lopito, CFO, Plexus: Have sorry, okay. So we have a a strong potential M and A pipeline, but still, you know, keeping very disciplined and

Aurelian Soni, CEO, Plexus: and and

Stephane Lopito, CFO, Plexus: targeted approach. And there might be some additional bolt on or maybe a little bit of bigger size acquisition considered going forward, but nothing that is to be announced shortly. So we’ll see. But we are still working on this lever. This M and A lever for us is important.

This is a key complement to organic growth, being able to seize M and A opportunities so that we can then accelerate further inorganic growth going forward, thanks to synergies. So yes, we have a strong pipeline of potential acquisition of different sites.

Andre Jouillard, Analyst, Deutsche Bank: Okay. Thank you.

Conference Operator: The next question is from Praveen Gondahl of Barclays.

Praveen Gondahl, Analyst, Barclays: Hi. Thanks for taking my questions. Firstly, on the net retention rate, it was 101% at q three compared to 103% at full year last year. Can you just help explain the moving parts of this gradual decline in retention apart from understand a a part of that is coming from face value revisions, which are which are moderated, but the the other two parts, which is cross selling and then client churn. Can you just explain how that has trended over first nine months?

And then secondly, you you just suggested on on Brazil regulation that topic of interruptive or interoperability and portability. It’s still pending. Can you can you please confirm that it’s still under discussion, or it’s just been sort of pushed back a bit given the other priorities the government has? Thank you.

Aurelian Soni, CEO, Plexus: Hey, Praveen. So so so regarding maybe your second question, indeed, I I think that there’s there’s a political agenda in Brazil has been a bit challenged recently, but for for measures that are nothing to see with with with our business. But but I think discussions are still ongoing. I mean, anyway, it’s it’s not a pushback to to any time. We we we are we are still expecting, you know, decision in in the coming weeks, hopefully.

And regarding your question the net retention performance, again, I mean, would like to insist on the weight of the end user portfolio growth in this performance because and you said it, the net retention remains solid. But it’s fair to say that the end user portfolio growth has been gradually weakening and showing for the first time this quarter a slight overall negative contribution, albeit it’s very limited in absolute terms. And when we look more precisely on the trend, we would say that these trends mainly reflect deterioration of the macroeconomic environment in in certain Continental Europe as mentioned by by Stephane. For instance, France and Romania, where, I mean, we see corporates, some corporates, you know, starting to freeze recruitment and and adopting a more cautious approach to to hiring. And and we have very similar situation that emerged in Mexico a bit earlier, where ongoing U.

S. Trade policy continues to weigh on the manufacturing sector. But nonetheless, the improved client loyalty, stronger core trend in sales value growth and the continued resilience of our end user portfolio growth in countries such as Brazil and Southern Europe have more than offset the negative impact from the end user portfolio contraction elsewhere.

Praveen Gondahl, Analyst, Barclays: Thanks for the color. That’s really helpful.

Conference Operator: The next question is from Estelle Weingrad of JPMorgan.

Estelle Weingrad, Analyst, JPMorgan: Hi, good morning. One question on other products and services.

Conference Operator: You mentioned

Estelle Weingrad, Analyst, JPMorgan: both temporary phasing effects in ordering from two contracts in Belgium and Romania, but also some sort of business repositioning in The UK and The U. S. Could you just clarify a little more exactly between the two what’s happening and for other and also the expected time frame for that? Would you mind just giving us also maybe a split, I mean, within your 3.6% scope this quarter, the split between the three recent acquisitions? Thank you.

Aurelian Soni, CEO, Plexus: Stephane, want to take

Stephane Lopito, CFO, Plexus: the So on on other products and services, so the I don’t know. Instead, if your question was just on the second part, I’m going to elaborate a little bit on on on the two on the two phasing effects first and then go into the details for The US and UK. So the phasing effects we are referring to Belgium and Romania related to, in Belgium, one program on which we received significant orders earlier in the year. So this means that for Q3, the ordering was lower compared to the year before because we had a significant upside in Q2. Then the other contract is one contract in Romania for which the ordering is postponed to a later period either in this year or in the next year and potentially lower amount.

In The US and The UK, we are so these are countries which are more reward and recognition solution than the pure employee benefits as we deliver them in many countries. And we are now refocusing more on pure core engagement solution for all clients reserve and seeing that we are more closer to pure rewards solution. And so this led us to exit a few contracts, which weighed a little bit on the organic growth. And at the same time, we also made the decision to change the management team. So these are two countries where the country managing directors were were changing in the last weeks.

And then regarding the 3.6% scope effect in the quarter, so these are fully related to the acquisition we have referred to with the acquisition of Ben as part of the Santander partnership in Brazil being the biggest one, followed then by COBY and Beneficio Facilities will be recorded as part of scope effect in the coming quarter. Because right now in in Q3, no, it it was not it was very, very small, very small part of of of the scope effect. So mainly two third of it, this is related to to the Santander one cell, one small cell to Kobi and the rest related to Beneficiophase.

Estelle Weingrad, Analyst, JPMorgan: Okay. Thank you.

Conference Operator: The next question is from Hans Litner of Jefferies.

Hans Litner, Analyst, Jefferies: Yes. Thanks. Got a couple of questions as well. Maybe just because you made this acquisition in Romania and seems like a small bolt on acquisition, maybe you can remind us how big your business is there in Romania? And then a couple of other questions are in you talked about M and A already, but maybe you can just like talk about what appetite for larger M and A you have?

Or should we continue to think that you will do a series of small bolt on acquisitions? And then a question on the take up rate. Take up rate had been improving throughout last year and kind of, I think, expectations whether it will then level out. Where do you see take up rate progressing from here? Thank you.

That’s maybe a follow-up then.

Aurelian Soni, CEO, Plexus: Thank you, Jens. Stefan, you want to

Stephane Lopito, CFO, Plexus: Mhmm. Answer. So we don’t we don’t disclose, and and and I’m sorry about this, but we don’t disclose the size of our countries. We don’t communicate, but I can tell you that Romania is a big country for us. We are we have a leadership position in this country.

So this this is important for us to to reinforce this leadership position with this kind of highly synergistic acquisition like the one we are we are making with with my benefit. So using with your second question regarding M and A, of course, we might consider at some point some some large M and A as I was saying, or M and A potential pipeline is strong with many things we are looking at, but in a very disciplined way. We the objective remains the same and with a strong focus to to be able to complement, and and extend our offering with, engagement solution for all clients while while we are already very strong in term of employee benefits, that engagement solution to support our clients retaining, getting strong strong commitment from our employees is an important focus for us. And then in term of take rate, so this take rate has improved a little bit versus the year before. So year on year for the first nine months, we are delivering a plus 19 basis point improvement.

If you look at our take up rate over the last years, over the last four to three years, we have improved it a little bit, but on the back of improvement of client commission, while at the same time, over this four to three years period, the merchant commission has been slightly reduced. So this is really by improving overall, the the client commission that we’ve been able to increase it, so something to close to 5%. And, you know, we are considering that this is a fair rate, taking into account all the value we bring to clients, consumer, and, of course, merchants. So we don’t intend to to increase it. Now there are some potential mix effect depending on the mix of our products.

For example, you have in mind that, or take a price is higher for gift than for meal and food, for example. And so depending on the weight of our business and the way, our products offering is going to evolve over time, so there might have some additional impact on this take up rate. But we don’t have a target to increase the take up rate. As it is, we consider it fair right now.

Hans Litner, Analyst, Jefferies: Okay. Thank you. And just maybe a follow-up here on looking at FY 2026, you maintained the margin target. This year, you upgraded it and the upgrade was probably mostly on better float expectations. Now float for to get to your low double digit growth for float means actually Q4 will drop to probably low to mid single digit float growth.

How should we think about next year in terms of the margin progression and the moving parts between the different businesses?

Stephane Lopito, CFO, Plexus: We are confirming today our objective for for next year. This is true that, in term of float revenue, we are in in a global environment in the world where, interest rates are going down. Now they are also engine in order to improve the float, which is in order to improve the float revenue, which is the float baseline on the balance sheet. So we expect to go on delivering, some growth in term of business volume in the coming years with all the growth engine that already have gone through in the previous question. So we see, but, so far, no, our target remains the same, and we’ll come back to you with further details, at, when we when we release our full year numbers in the October for more details about what is going to happen next year.

Aurelian Soni, CEO, Plexus: And and maybe just just just to add on because, of course, we I mean, we are not immune against the macroeconomic context, but but our model is is quite resilient. And and this is because we leverage a combination of key strengths. And I would mention our diversified footprint, both geographically, we are present in 29 countries. The nature of our client portfolio, we are serving public private clients, small, mid and large sized clients, as well as the broad exposure by sector of this client portfolio. We benefit from multiple growth drivers, and we do have this natural hedge against inflation through the increase of the face value and the currently risk through the the float revenue.

And last but not least, the essential, you know, nature of our solutions because for clients, it remains key to to retain and and attract talent, especially in times of economic slowdown. So that’s why also it makes us confident.

Hans Litner, Analyst, Jefferies: Thank you so much.

Conference Operator: The next question is from Julien Richer of Kepler.

: Good morning, everyone. A couple of ones for me, if I may. The first one, if you can come back on the comments you made on Q4 being softer than Q3. If I understand it correctly, you said that the difference might be more or less similar to the one you posted in Q1 and Q2 and in Q2 being lower than Q1. If it is the same magnitude, it means that Q4 will be around 4% growth.

So just want to confirm that and have your view on what is going to happen in 2026 because the exit rate of this year will be high single digit and low double digit. And the second thing, maybe I missed it or did not understand it correctly, but can you please give us a bit additional color in the float revenue evolution for next year based on the situation you are seeing today? Thank you.

Stephane Lopito, CFO, Plexus: Regarding the exit rate for the next year, I think first of all, this is I we I said it, the Q4, growth on operating revenue is going to be softer compared to what we we delivered in Q3. And if you look at the difference between q q one and q two, yes, this is likely to be in the same order of magnitude in term of operating revenue in between q three and q four. I’m talking about operating revenue, total operating revenue for for the group. Now it’s not going to be as low as you are saying. If you do the math, you will not see that the difference doesn’t give rise to to to such a low number.

Then, on this growth, I would like also to point out something that you should consider, when you or the analysts are working on your expectation in term of delivery for the full year, this is the impact of the foreign exchange fluctuation. So we are currently facing strong headwinds, in this field, which is due to Brazil. And this has last for a few months now, and there has been a new change in Turkey. In this respect, we are going to be able to benefit from this is a link to the second part of your question. We going to be able to benefit from higher interest rates in these two countries.

In Brazil, it took a bit of time before the sales rate was increased by the local authorities, the current Selic rate is up to 15%. If you look at it a few months ago, it was a little bit higher than 10%. So we have, been able to benefit from a strong increase in the Selic rate. And this is also what happened very recently in Turkey, even though it took some time from the Turkish authorities to decide to increase again the rates, but the rates have been increased. And, so you should consider when you look at the fiscal year twenty six outlook that in term of float revenue, of course, we might we we suffer and we have to face situation where the interest rates are decreased by the local authorities.

That was a countries like Brazil and, and Turkey where the rates are increasing. And we are also benefiting from our discipline and the strategy. In the last years, we have, extended the maturity of our investment, which now is reaching something close to eleven months in average at the time of the subscription or seven months in term of residual length of maturity. And so this means that we benefit from the yield of this portfolio every time there are some changes in the market. And again, so this float revenue will be supported in the next year by this existing portfolio of investment.

Aurelian Soni, CEO, Plexus: Just so on fiscal year twenty twenty five, just to conclude, all in all, as Stephane explained, we expect a pattern of organic growth between Q3 and Q4 to mirror the phasing observed between Q1 and Q2. Still, we remain fully confident in achieving our full year total revenue organic growth guidance.

: Okay, thank you.

Conference Operator: The next question comes from Justin Forsyth of UBS.

Justin Forsyth, Analyst, UBS: Thank you very much. Good morning, Aurelian and Stephane. Few questions here for me. So I just wanted to circle back on the the point around Europe operating revenue growth in the quarter. So thinking about the number, I know you had the really hard comparison in fiscal 2Q there.

So it seems like, what is that, about a five point acceleration despite a a kind of much easier comparison. Just to be clear on exactly what the impacts within Europe are is the the two contracts that you spoke about in other products and then a bit of employment weakness in in France. Is there something else there? Because I think you talked about offsets on the other direction, but in other geographies, and then maybe how we should think about Europe growth, going forward in the context of all these moving pieces. And I think you also noted a higher comparison base in 4Q as well.

I wanted to talk a little bit about the the French regulation as well-being proposed. So, I guess my my curiosity here is this seems to be taking quite a while. I mean, this was initially raised with the prior government, the Macron government, back in 2023. This government’s been in place for, what, now over a year. It seems like we’re talking about now getting into 2026.

I guess I’m curious why this seems to be taking so long. None of these proposals seem to be all that new. And and do you think there’s an appreciation, the the challenges that this uncertainty brings to to businesses in the voucher space? And and one further question on the dynamics there. I I think it calls for the abolishment of the the CNTR, that central, voucher agency.

Do you expect that to have any impact on on the way that you engage with the the broader voucher scheme in France? Thank you.

Aurelian Soni, CEO, Plexus: So so I will start with the French regulation. And thanks for your series of questions. So so regarding the French regulation, I mean, actually, I mean, the government has not been put in place, you know, one year back. It’s it’s much more recent. They started in I mean, this new government started in in So they’ve they’ve been working actively to come out with their list of measures that they shared last week.

Again, we are welcoming this move because it’s a positive move. Do they realize that, I mean, it brings uncertainty as long as we we we we don’t have the reform being passed? I guess so. I guess so. But after, you know, they need to go through the political the the the the the political process, which which means that a law needs to be voted by the parliament.

So it has to be presented to the parliament. And the parliament has many, you know, they they they do have a quite busy backlog of of bills, you know, to be discussed and and approved. So that’s why it’s taking it’s taking time. But but, yeah, again, now I think that the French government is moving quite actively in order to come out with a final bill that will be passed as soon as possible. Regarding the impact on Europe, maybe Stephane, you want to take this one?

Stephane Lopito, CFO, Plexus: So the acceleration of the growth in Continental Europe in Q3 compared to Q2 is due to some impact on Q2 and not on Q3. So this is really what happened in Q2 at the time of the release of our H1 numbers. I think we explained that in Q2, we had to face two main effects in Continental Europe, but there was the impact of this purchasing power program in Belgium the year before, which had been which had generated this was a one off. These had generated strong growth in Q2 of fiscal year twenty twenty four, so making the comparison base very high for Q2 twenty twenty five. And we also had a very strong, gift campaign, in 2024, so raising the bar quite high.

This gift campaign has been successful again in the Q2 of fiscal year twenty twenty five, but to generate even more growth, that was really a challenge. And we had also other program, for example, in Australia or social police in Romania, which were with stronger volumes in 2024 than in 2025 and again, it in Q2. So Q3 of this year is with less impact. The impact I was referring to and that you pointed out, which are these phasing effects are more related to the business volume issue than revenue. And I don’t want to go into too many details, but when I was referring to one program in Belgium, so what happened is that there was a change in regulation in Belgium in the year end, in the calendar year end, so in the end of calendar year of ’24, which was a reduction of the potential of the tax benefit from the Belgian citizens when they use what is called the tetra service.

And so this is a benefit that is available in Belgium and the tax benefit related to this benefit was reduced. So this led many of the Belgian citizen to order a bigger month before the year end, but this has no impact on the revenue because the related revenue, it is spread all over the next month. So this had a phasing impact on the ordering and on the business volume issued. If you look at our balance sheet at the end of H1, you might see the impact because this led to a significant increase in the future and situation by something close to EUR 500,000,000. And at the same time, because we didn’t have the cash in immediately, there is a significant amount by EUR 500,000,000 in the in the receivable.

Justin Forsyth, Analyst, UBS: Yep. Got got it. Sorry. I I just I I think that’s super helpful. I I guess what I’m trying to understand is it looks like on a two year basis, this is effectively the lowest growth of of 2025 thus far organically in operating revenue in in Europe in 3Q.

And I think you were talking about some impacts to to hiring and such that was maybe also serving to offset there. So just trying to think of and we’ve seen the growth rate kind of fluctuate in quite a volatile fashion across the year in Continental Europe going back two years, really. So just trying to think about the jumping off point for 4Q, taking into consideration the challenging comp that you mentioned in 4Q.

Aurelian Soni, CEO, Plexus: Justin, as we said, you know, the the the way I mean, we we we we expect Latin America and rest of the world, you know, to to to to keep on driving more the growth of flux in the in the coming months. So it was the case. I mean, we we we expected it already few quarters ago. So so so we we do expect that this trend will will pursue again in the coming in the coming month. And regarding the C and T, because I did not sorry.

I mean, I didn’t get the questions straight ahead. So so so indeed, I mean I mean, one of the plan of the the French government would be to, to evolve the governance of of the system. Today, it is done through a public, agency called the commission. What will be the future of this entity? We don’t know, but but we we we consider it’s it’s it’s good to keep an independent body helping us to to ensure the right you know, the right operation and and and the right governance of this so important system for the for the French employees.

Justin Forsyth, Analyst, UBS: Thanks. Thanks, Alex. That’s clear. Thank you so much.

Conference Operator: As a reminder, if it’s oh, please go ahead, sir. Sorry.

Aurelian Soni, CEO, Plexus: Can you please give the reminder, please?

Conference Operator: K. As a reminder, if you wish to register for a question, The next question comes from Sabrina Blanc of Bernstein.

Pauline Bierro, Head of Investor Relations, Plexus0: Yes. Good morning, everybody. I have two questions from my part. The first one is regarding the partnership with Santander. Can you provide a bit more color on how it goes and if you have any figures that you can share with us?

And the second question is regarding, I would say the cross selling between mill voucher and the other employee benefits products. Could we have also an idea of the development and how you are happy with that?

Aurelian Soni, CEO, Plexus: Yes. So thank you, Sabrina, for your questions. So regarding the, you know, the the partnership with Santander, so we, we said it during the presentation. And so the mean, the integration phase is now behind us. I mean, all the old volumes from from Santander were migrated on the on the on the Plexi platform and with a very high level of, you know, satisfaction from from from, from Santander’s clients.

And and it’s it’s fair to say that the feedback, as well from Santander’s, you know, sales engines, have been very positive. So that’s why, I mean, it’s a good it’s a good driver. You know? It’s a good incentive, I mean, to to have them now sell our our our our our our our solution. And one number, I mean, that I’m pleased to share is the the number of sales agents that have already signed one proxy contract, and it’s more than 20%.

And and remember that Santander has a sales team of above 4,000, people. So it’s a I mean, looking at the size of our sales team, you know, the dedicated plexi sales team, I mean, it’s it’s a big extension, and that’s why we are we are confident in in the future. So we are we are on track with the with the initial plan that we that we had. And and what I’d like to add is that we are signing both some very large clients, but we are also taking advantage of their huge SME portfolio, to further penetrate this, this segment. And regarding the cross selling contribution and the performance in cross selling, it’s a steady performance.

We don’t see yet the full acceleration, but this is what we expect in for the years to come.

Conference Operator: Thank you very much. The last question is from Pavan Daswani of Citigroup.

Pauline Bierro, Head of Investor Relations, Plexus1: Good morning and thanks for fitting my couple of questions in. I’ve got a couple. Firstly, appreciate the color on the phasing of Q4 operating revenue growth. How should we think about the drivers of growth to accelerate back to kind of low double digits in 2026? And then secondly, on Italy, appreciate it’s relatively small exposure, but could you provide update on the renegotiation process ahead of the CCAP, please?

Aurelian Soni, CEO, Plexus: Okay. Regarding Italy, so first, let me remind you that the our million food business represent less than 3% of our total financial aggregate there. So as you know, the amendment capping the merchant commission at 5% came into effect for all new merchant contracts in January, and it will be applicable for existing merchant network starting September 1, so meaning almost two months. And and we are currently in the in the middle of our client renegotiation campaign. So early feedback has has been positive with rebalancing already underway on on certain accounts.

So so it should it should and it will help us mitigate the impact of of this regulatory change knowing that, we said it and that we don’t anticipate any impact on our ability to meet our financial objective for fiscal year twenty twenty five and 2026 at group level. And regarding the drivers to accelerate the double digit growth, a bit of color. Again, when you look at the performance of Q3 and over the past nine months, When you exclude the one off effects, our BVI growth continued to show healthy growth in Latin America and Rest of the World. And this relies on the a robust development trend in new client acquisition. And this is across regions, Europe, Continental Europe, Latin America and Rest of the World.

Again, it does contribute to EUR 1,100,000,000.0 with a notable increase from SME. We also benefit from the solid net retention that continue to stand above 100%. And this is thanks to the combination of reduced churn rate, robust additional increase in sales value that allows us to offset the recent end user portfolio evolution. And last but not least, the M and A deals are helping us to deliver a progressive contribution through synergies and scope effects. So that’s why we remain confident in our growth outlook as reflected in the objective of fiscal year 2026 that we have reaffirmed today.

So thank you, Pawan. Thanks thanks a lot. Thank you. To to to wrap up, I’d

Stephane Lopito, CFO, Plexus: like

Aurelian Soni, CEO, Plexus: to highlight again that q three has been a a solid quarter, both in terms of business momentum and financial performance. We are on track to deliver our strategic and financial objectives, which supports our reiteration of guidance for both fiscal twenty twenty five and 2026. And now with that, I wish you a very good day and look forward to connecting again at the October for the release of our full year results.

Conference Operator: Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones.

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