Earnings call transcript: Pluxee NV reports strong H1 FY2025 growth

Pluxee NV reported robust financial results for the first half of fiscal year 2025, with revenue reaching €635 million, marking a 10.8% organic increase. The company also achieved a significant rise in net profit, up 55.5% year-over-year to €106 million. Following the earnings report, Pluxee NV’s stock experienced a notable surge, climbing 10.26% in pre-market trading. According to InvestingPro data, the company maintains a "GREAT" overall financial health score of 3.19 out of 5, with particularly strong performance in price momentum (4.28) and profit metrics (3.64).

Key Takeaways

• Pluxee NV’s revenue increased by 10.8% organically in H1 FY2025.
• Net profit soared by 55.5% compared to the previous year.
• The stock price rose 10.26% in pre-market trading following the earnings release.
• The company expanded its EBITDA margin by 260 basis points.
• Pluxee NV remains resilient amid macroeconomic uncertainties.

Company Performance

Pluxee NV demonstrated strong financial performance in the first half of FY2025, driven by organic growth across its operations. The company’s strategic focus on digital tools and AI-driven solutions contributed to its robust results. Pluxee NV’s expansion in Latin America and other international markets also played a crucial role in its success. The acquisition of Kobi has further solidified its market position in Spain, enhancing its competitive edge.

Financial Highlights

• Revenue: €635 million, up 10.8% organically year-over-year.
• Operating revenue: €552 million, up 10.1% organically.
• Recurring EBITDA: €225 million, up 22.5% organically.
• Recurring EBITDA margin: 36.4%, expanding by 260 basis points.
• Net profit: €106 million, up 55.5% year-over-year.
• Recurring free cash flow: €171 million.
• Net financial cash position: €1,045 million.

Market Reaction

Pluxee NV’s stock price reacted positively to the earnings announcement, rising by 10.26% in pre-market trading. This surge reflects investor confidence in the company’s strong financial performance and strategic initiatives. The stock’s movement places it closer to its 52-week high of €31.82, indicating a favorable market sentiment.

Outlook & Guidance

Looking ahead, Pluxee NV has upgraded its FY2025 recurring EBITDA margin objective and is targeting low double-digit organic revenue growth. The company anticipates mid to high single-digit growth in float revenue and remains committed to its fiscal 2026 financial objectives. Strategic partnerships and mergers and acquisitions, such as the recent Santander partnership, are expected to drive future growth. InvestingPro analysts maintain a consensus recommendation of 2.0 (Buy), with price targets ranging from $14 to $15, suggesting potential upside. For deeper insights into Pluxee’s growth prospects and comprehensive analysis, investors can access the detailed Pro Research Report, available exclusively to InvestingPro subscribers.

Executive Commentary

"We continue to deliver strong performance in H1, both on top line and margin expansion," stated Aurelia Anthony, CEO. Stephane Lopito, CFO, noted, "Most of our improvement in EBITDA margin came from operational items."

Risks and Challenges

• Macroeconomic uncertainties could impact market conditions.
• Potential challenges in integrating acquisitions like Kobi.
• Fluctuations in currency exchange rates affecting international operations.
• Regulatory changes, such as Italian commission cap negotiations, may influence profitability.
• Continued investment in digital infrastructure requires careful management to maintain margins.

Q&A

During the earnings call, analysts inquired about the macroeconomic environment, with Pluxee NV observing cautious hiring in some sectors. The company emphasized its focus on delivering value to clients and maintaining stable take-up rates. Additionally, Pluxee NV reassured stakeholders of its resilient business model in high-inflation environments.

Full transcript - Pluxee NV (PLX) Q2 2025:

Conference Operator: Good morning. Thank you for standing by, and welcome to Pluxi First Half Fiscal ’20 ’20 ’5 Results I advise you that this conference is being recorded today on Thursday, April 2025. At this time, I would like to hand over the conference to miss Pauline Bijou, Head of Investor Relations. Please go ahead, madam.

Pauline Bijou, Head of Investor Relations, Plexi: Good morning, everyone. Thank you for joining us today for Plexi first half fiscal year two thousand twenty five results. So my name is Pauline. I’m head of investor relation, and we are very pleased to be here today with, you for this presentation. So we are joined with our CEO, Aurelia Anthony, and our CFO, Stephane Lopito.

And here is our agenda for the call today. So first, Aurelia will start with the highlights of the semester, and this will be followed by an in-depth analysis of the group key growth lever, which we felt was helpful at the midpoint of our three year strategic plan. Stephane will then walk you through our financial performance in detail before Aurelien come back to discuss our outlook for the year. And with that, I will hand over to Aurelian.

Aurelia Anthony, CEO, Plexi: Thank you, Pauline, and, good morning, everyone. I’m pleased to be with you today to share the achievements that Plexig delivered in the first half fiscal twenty twenty five. So starting with our key highlights on the next slide. First, I’m pleased to share that the group is well on track with the deployment of its strategic growth plan as shared at the time of the spinoff. We continue to successfully execute our roadmap and deliver on our key initiatives quarter after quarter, including M and A, where we are beginning to capture the benefits of our initial deals.

The broad set of levers available across our markets allowed us to sustain profitable growth, illustrating the group’s resilience in a volatile and uncertain environment. Second, I would like to highlight our strong commercial execution. I’ll come back later on the detailed KPI, but let me emphasize that our teams on the ground have done a remarkable job both in retaining and signing new clients. This demonstrates the effectiveness of our commercial strategy and the relevance of our product offering, translating into market share gains in the countries where we operate. Turning to financial performance, we delivered another strong semester, starting with low double digit total revenue organic growth.

We also achieved remarkably strong recurring EBITDA margin expansion, while recurring free cash flow conversion remained above our average target. Based on the strong execution and performance achieved in the first semester, and while closely monitoring the macroeconomic environment, we upgrade our fiscal twenty twenty five recurring EBITDA margin objective, while reconfirming our organic total revenue growth and recurring cash conversion full year objectives. I will come back on this later in the presentation. And let’s now focus on the key financials of the semester on Slide six. Total revenue organic growth stood at plus 10.8% for the first half, in line with our low double digit full year objective.

This performance comes on top of a high comparison base with plus 24% total revenue organic growth delivered in H1 twenty twenty four. Recurring EBITDA margin reached 36.4% on an organic basis, expanding by plus two sixty basis points at constant rate, so well above the plus 75 basis points objective set for the full year 2025. This translates into a 35.4% recurring EBITDA margin at current rates, representing an improvement of over plus 150 basis points. While float revenue growth continued to contribute positively, the expansion of the recurring operating EBITDA margin was a key driver of this improvement, partly supported by the fading impact of certain spin off related base effects. Moving to recurring cash conversion rate, which stood at 76%.

It remained again above our three year average target despite some base effects affecting the change in working capital that Stephane will detail later. In short, we are delivering on all of our financial KPIs. This is particularly remarkable considering that our objectives were set in early twenty twenty four at a time when we were certainly not anticipating the current macro and geopolitical environment and its impact on the top right sector. Let’s now turn to our commercial trajectory, which continued to show strong momentum in the first half. On the new client front, we signed an incremental EUR800 million of annualized business volume over the semester, marking another period of strong performance, especially when compared to our €1,300,000,000 annual target.

This highlights the relevance of our offering, the agility of our commercial teams, and the effectiveness of our go to market strategy deployed across each country. Moving on to net retention, which, as you remember, encompasses client loyalty, increase in average face value, portfolio growth, and cross selling. I will go into more detail on these drivers in the next section, and I will just focus for now on the net retention rate, which reached 102% this semester. It excludes it excludes the one off impact related to the purchasing power program, which was launched in Belgium during the second half of twenty twenty three calendar for only a few months to sustain employees purchasing power in the country. As part of our net retention, we delivered an additional circa €600,000,000 increase in face value during the semester, representing already more than 60% of our cumulative objective of €3,000,000,000 for fiscal twenty twenty four to ’20 ’20 ’6.

So we are well on track to deliver on all our commercial objectives. And we’ll now come back on our strong commitment to sustainability illustrated by the multiple awards that the group has received over the semester. Starting with our environmental commitment, I’m pleased to share that after our first rating assessment, we received a BISCORE from the Carbon Disclosure Project, materializing our efforts to reduce our environmental impact across all our operations. Continuing with our engagement towards sustainable business practices, we earned the highest sustainable IT rating in France, the Label Numerique Responsaume, which highlights our focus on driving accessible, efficient, and secure IT and data management operations. Lastly, the group has been recognized with several awards across countries, underscoring our commitment to creating inclusive and engaging work environments.

This includes a great place to work levels in several countries such as Belgium, Romania, India, and Turkey. All these awards reflect our determination to implement concrete initiatives that make Plexi a sustainable player, actively engaged with all our stakeholders in every country where we operate. Following this high level perspective on our first half performance, we will now take a closer look at the structural levels activated by the group to support this growth trajectory. At Plexi, our profitable growth ambition relies on a balanced and sustainable model, which has proven its resilience in the past. It is built it is built on multiple levels, which I will outline in the following slides.

As you remember, our top line growth is fueled in two main ways. First, we rely on organic growth. Our strong value proposition to all stakeholders, and in particular, to our client and merchants, enables us to continue unlocking the full potential of the large, underpenetrated, and steadily expanding employee benefits and engagement market. Second, we are committed to accelerating growth through M and A. Strategic acquisitions and partnerships are not only enhancing the group’s momentum, but also complementing organic growth by expanding our market reach and enhancing our product and tech capabilities.

To generate growth, we can activate a number of key levers that drive first business volume, which serves as a foundation for our revenue generation model, and second, our take up rate. All this reinforces our balanced model, ensuring we remain well positioned and agile in seizing opportunities in an ever evolving market. Let’s now dive deeper into our key growth levers in the next slide, starting with new client acquisition. In H1 twenty twenty five, we signed circa €800,000,000 of additional business volume through new client acquisition. So first, it puts us well on track to achieve our €1,300,000,000 annual objective.

Second, the contribution from new client development is well distributed across regions, and this demonstrates the strength of our geographic footprint and the effectiveness of our global commercial strategy, which is adapted by our local teams to the unique dynamics of each market. Third, we are seeing a growing contribution from SME, representing now more than 30% of development business volumes over the semester. Thanks to our com tailored commercial strategy and simplified offering, we are well equipped to further unlock this significant market potential. And fourth, m and a is also a very compelling accelerator for new client acquisition. Santander exclusive partnership allows us to benefit from a much wider reach to offer our solutions to Brazilian companies, while the Kobi platform has been a game changer in Spain.

So this first pillar of growth is most robust and balanced, and we certainly feel encouraged by the sales pipeline ahead of us to continue building on this momentum. Let’s now look at how we maximize the potential of our existing client portfolio. The KPI we are tracking here is the net retention rate, which allows us to measure the growth in business volume generated from existing clients. It is driven by several components. While not all of them are delivering at the same pace and can vary across countries, they collectively provide a solid foundation for growth.

It is evidenced by our robust 102% net retention rate achieved in h one fiscal year twenty five after adjusting for the one off purchasing power program in Belgium. Let’s take a closer look at each of the components of this net retention, starting with client loyalty, which has significantly improved as of end of h one versus the previous years. This is a testament to the quality of our solutions, the value we bring to our clients, and the resilience of our business model. The second contributor is a further increase in average face value. It has consistently risen over the past years, with positive contribution from all regions.

Remarkably, this growth has continued even as inflation has stabilized in several of our markets, reflecting the strength of our portfolio management led by our local sales teams. And we still see significant growth potential ahead, as evidenced by our €3,000,000,000 target for fiscal twenty twenty four to 2026. Last but not least, average fair value serves as a highly effective natural hedge against inflation, which is important to keep in mind given the possible inflationary pressures expected in certain macro scenarios. Switching now to portfolio growth, which primarily refers to the number of employees benefiting from our services within our existing client base. Portfolio growth has been somewhat less significant during the first half, partly due to the uncertainty and cautious approach to hiring observed among corporates in certain countries.

A notable example is Mexico, where uncertainty around US tariffs has led some local businesses and international players to freeze hiring. The final contributor to net retention is cross selling, which remains a significant driver of business volume growth, highlighting the effectiveness of our multi benefit approach. To convert our business volume growth into revenue growth, our key focus is on the take up right now that I’m going to discuss in more detail in the next slide. We remain constantly focused on delivering value to all our stakeholders. The KPI which reflects this constant focus is our take up rates, meaning the ratio of operating revenue to business volume generated on our platform.

It reached 4.8% for employee benefits in the first half of fiscal twenty twenty five, representing a 40 basis point increase from H1 fiscal twenty twenty three, which over the period was mainly driven by sustained client commission limits. This performance is underpinned by our ongoing effort to enhance our value proposition for our more than 500,000 client base and our more than 1,700,000 merchant community. I won’t go into detail on all the initiatives that we launched in recent years, but I do want to highlight the importance of our multi benefit approach. Whether it’s meal, gift, mobility, or wellness, our suite of benefits is designed to support employees in every aspect of their daily lives. Aggressively rolled out across an increasing number of countries, multi benefit allows us to support our clients with a comprehensive offering, addressing the full spectrum of their employee needs.

It is also a key driver of increased loyalty for our clients. On the other hand, we are constantly strengthening our value proposition for merchants by paying close attention to their daily experience and interactions with the group. In that respect, we’ve been focused on rolling out best in class digital tools, such as our merchant app, enhancing and boarding onboarding and support processes through solutions like our self affiliation platform and developing tailored value added services to better meet their daily needs. Finally, let me conclude this section by exploring how m and a is helping us accelerate growth. Our final growth lever is m and a, which, as you know, plays a central role in our value creation model.

Over the last months, we have started capturing the first benefits of the deals recently closed, demonstrating our ability to successfully execute value accretive transactions. Let me highlight the type of opportunities that we’ve been targeting, focusing on three key strategic themes. First, gaining market share. Second, expanding our product portfolio. And third, enhancing our tech capabilities.

The Santander partnership has significantly boosted our distribution capabilities in Brazil, creating a win win model that delivers value for both partners. There may also be opportunities down the road to expand our offering, and we will share more on that in due course. The acquisition of Kobi was driven by a combination of market share gains and product and tech enhancements. This powerful multi benefit platform is completely transforming our growth profile in Spain, positioning us as the number one player in the market. And finally, the acquisition of Beneficio Facil in Brazil enables us to strengthen our multi benefit approach in the country by bringing a key partner in employee mobility benefits into our ecosystem.

This will drive additional revenues through cross selling. So step by step, we are strengthening our track record in sourcing and acquiring strategic targets, while demonstrating our ability to successfully integrate them and generate growth synergies. While market volatility tends to delay transactions, we remain encouraged by the pipeline ahead of us. And now I will hand over to Stephane to go through the detailed review of our financial performance.

Stephane Lopito, CFO, Plexi: Thank you, Orenian, and good morning, everyone. It is a pleasure to be with you today to present our financial performance for the first half of fiscal year twenty twenty five. Let’s start this financial review with our total business volume issued on Slide number 16. Total business volumes issued, also called BVI, reached EUR 13,100,000,000.0 in H1 twenty twenty five, reflecting a plus 9.3% organic growth, including a plus 9.4% organic growth in Q2. Employee benefits BVI, which represented 73% of total dividend volume issued, reached €9,600,000,000 showing a sustained organic growth of plus 8.4%.

The group faced a high base effect with H1 twenty four partly due to a one off employee benefit program in Belgium, the purchasing power program launched at the end of calendar year 2023. Excluding this program, employee benefits BBI organic growth would have reached plus 10.1% in H1 twenty five, demonstrating solid dynamics, especially in Latin America and the rest of the world. Concerning other products and services, BVI were back to growth in H1 twenty twenty five. This improved trajectory was partly due to a temporary phasing effect in a large public benefit contract, which fully offset the residual impact of the discontinuation of a contract in Chile until December 24. Keeping in mind Borrelia’s presentation on key growth levers, let’s now look at how the growth in employee benefits BVI was fueled over the semester on page number 17.

As we just saw it on the previous slide, employee benefits BVI grew from 9,200,000,000.0 to €9,600,000,000 an increase of approximately €400,000,000 including the impact of the purchasing power program recognized last year in cross selling. Solid dynamics was driven by a combination of factors. First, contribution from net retention stood at €200,000,000 fueled by a combined increase in client loyalty and face value across regions. It also included a constrained portfolio growth due to the impact of the macroeconomic environment in specific sectors and countries as previously mentioned by Eurea. Second, new client gains contributed up to €800,000,000 over the semester illustrating the group’s solid development trend, especially among SMEs.

The BVI bridge disclosed on the page also included a positive scope effect of €300,000,000 resulting from the integration of the recently closed deals of which the exclusive partnership with Santander in Brazil and COBi in Spain. The impact of currency evolution contributed negatively over the semester, most of it being related to Latin America. The sustainable growth in experienced in BVI over the semester has been, of course, a key contributor to revenue growth for both operating and float revenue as disclosed on Slide number 18. Total revenues reached EUR635 million in H1 twenty twenty five, up plus 10.8% organically, on track with the low double digit organic revenue growth objective for the full year. On a reported basis, total revenues were up plus 7.2% year on year, including a plus 2.8% scope effect, partly offsetting a minus 6.5% currency impact.

Operating revenue, which represented 87% of total revenues, reached €552,000,000 in H1 twenty twenty five, up plus 10.1% organically or plus 6.6% on a reported basis. This growth was primarily driven by the employee benefits line of service and by a progressive return to revenue growth for other projects and services. Focusing on Q2 performance, operating revenue amounted to EUR203 million, up plus 8.4% organically. The robust underlying business trends were partially compensated by a significant base effect in Q2 twenty twenty four due to non recurring programs, notably in Belgium and Romania along with the residual impact of the discontinuation of the public benefit contract in Chile. Moving out the Belgium purchasing power program and the discontinued Chilean contract, operating revenue growth would have reached plus 10% in Q2 twenty twenty five.

Turning now to float revenue, it increased by plus 16.2% organically year on year, reaching €83,000,000 in H1 twenty twenty five, including €43,000,000 in Q2 twenty twenty five plus 11.9% organically. I will come back on float revenue growth drivers in more details later in the presentation. But before doing so, let’s focus on the solid organic growth in operating revenue over the semester that has been driven by your two lines of services as presented on page number 19. Employee benefits operating revenue reached EUR $464,000,000 in H1 twenty twenty five, up plus 11.8% organically or plus 7.7% on a reported basis, including a positive plus 3.2% scope effect, partly compensating a minus 7.4% currency effect. Employee benefits represented approximately 84% of total operating revenue over the semester.

This strong performance was fueled by the increasing business volumes issued that we saw earlier in the presentation, particularly in Latin America and the rest of the world as expected, along with a steady rise in the average take up rate, up plus 13 basis points year on year to 4.8% in H1 twenty twenty five. This take up rate improvement highlights the Group’s strong commercial focus and its continuously enhanced value proposition to both client and merchants. Focusing now on Q2 twenty twenty five, the employee benefits service line generated operating revenue of €252,000,000 up plus 9.3% organically, confirming the continued momentum despite a high comparison basis year on year notably in Continental Europe. The other line of service, other products and services, generated €88,000,000 in operating revenue, up plus 1.3% organically in h one twenty five and plus 4.3% in q two. Therefore, we are pleased that other products and services revenues were back to growth over the semester fueled by solid trends in both reward and recognition solution and public benefit programs despite the remaining impact of the contract discontinuation in Chile.

And please keep in mind that a portion of these contracts has now been redeemed from March 25 onwards. While both service lines supported operating revenue growth this semester, The contribution by geography was more weighted toward Latin America and the rest of the world as expected. Switching to slide number 20 to walk you through the regional trends in more detail. Continental Europe top right reached €248,000,000 in H1 twenty five, up plus five percent organically or plus 6.7% reported as anticipated. This represented 45% of total group operating revenue over the semester.

The h one twenty five growth in the region was primarily driven by Southern Europe, particularly in Spain, where the group started benefiting from growth synergies following the Covia acquisition in addition to the strong performance of Plexispan. On the other hand, the exceptionally strong performance delivered in Q2 twenty twenty four in the region when operating revenue increased by plus 19.5% organically at that time, created a significant base effect. This was partly due to one off programs as already mentioned in Belgium as well as in Romania. Latin America reached $2.00 €4,000,000 in H1 twenty five, up plus 12.3% organically or plus 2.5% on a reported basis, representing 27% of total operating revenue of the group. The robust organic performance delivered over the semester reflected strong dynamics in business volumes in the region.

It ramped ramped up sequentially over the semester as the impact of the discontinued public benefit contract in Chile faded away. Despite a positive scope effect with the Santander deal, reported growth included a negative currency impact over the semester, mainly related to the group’s operation in Brazil and to a lesser extent in Mexico. In Rest of the World, operating revenue amounted to €99,000,000 in H1 twenty twenty five, up plus 18.5 organically, representing plus 15.7% on a reported basis, including a negative currency impact mostly related to the evolution of the Turkish lira. It is worth noting that the group continued to take advantage of the hyperinflationary environment in Turkey, driving further increases in face value across its client portfolio, while expanding also its presence in the meal benefit segments through new clients acquisition. After operating revenue, we will now see how float revenue also contributed to growth over the semester on page number 21.

Revenue rose to €83,000,000 in H1 twenty five, up plus 16.2% organically year on year, including €43,000,000 in Q2, up plus 11.9% organically. This sustained growth over the semester was driven by the float base expansion underpinned by a continuous increase in BBI, particularly in Latin America and the rest of the world. The group also benefited from rising interest rates in a few countries such as Brazil and Turkey, while a downward trend was observed in Continental Europe as expected. In order to mitigate interest rate fluctuations and protect float revenue in the concerned countries, the group continued to opt for longer maturity and fixed rates tailored to each country’s financial market condition. Based on the current forward curves, we now anticipate float revenue to grow by mid to high single digit in fiscal twenty five.

After business volumes and revenues, we will see now how revenue growth has fueled recurring EBITDA growth and the related margin improvement over the semester on slide number 22. We are very pleased with the group’s recurring EBITDA increase over the first semester. It stood at €225,000,000 in H1 twenty five, increasing organically by plus 22.5 or plus 12% reported year on year. Recurring EBITA margin stood at 36.4% on an organic basis, growing by plus two sixty basis points organically and putting us on track to significantly exceed our recurring EBITDA margin objective for the full year in 2025. On a reported basis, this margin reached 35.4% in H1 twenty twenty five, growing by plus 151 basis points versus H1 twenty twenty four.

All regions contributed to the strong margin expansion, which relied on ongoing operational improvement combining further operating leverage and efficiency gains, as well as on the conclusion of some spin off non recurring effect that impacted recurring EBITDA margin in H1 twenty twenty four. The margin also benefited in H1 twenty twenty five on a further float revenue positive contribution notably in Latin America and the rest of the world. This strong growth in recurring EBITDA along with additional normalization effect on the other lines of the P and L contributed positively to the full income statement all the way down to net profit as disclosed on Page 23. Below EBITDA, recurring operating profit reached EUR171 million, representing a plus 6.4% increase on a reported basis after accounting for minus EUR54 million in depreciation and amortization charges. Those D and A charges rose by plus 34%, mainly as a result of the recently closed M and A transaction, notably the exclusive distribution agreement with Santander in Brazil.

Other operating income and expenses, also called OI, amounted to minus €13,000,000 in H1 twenty twenty five, mainly reflecting some one off residual charges related to the finalization of the IT carve out for minus 9,000,000 and some costs related to business combination for minus €2,000,000. This is a significant improvement versus the minus €41,000,000 recognized in H1 twenty twenty four, which reflected a portion of last year’s spin off and rebranding cost. All of this led to a plus 31.9% year on year surge in EBIT reaching €158,000,000 in H1 twenty twenty five. Financial income and expenses stood at minus €3,000,000 compared to minus €10,000,000 in H1 twenty twenty four, reflecting a positive swing of plus €7,000,000 primarily due to the group’s one off refinancing costs last year. Income tax expense was minus €48,000,000 with the effective tax rate progressively normalizing at 31% from 38% in H1 twenty twenty four because of last year’s spin off costs.

Overall, in the end, net profit reached €106,000,000 up plus 55.5% year on year, fueled by a significant increase in total revenues, a continued expansion of the recurring EBITDA margin and a gradual normalization of other operating financial and tax expenses. Excluding OIE, adjusted net profit group share amounted to €107,000,000 growing up plus 10.5% reported while adjusted EPS group share stood at €0.73 up plus 11.4%. After the income statement, let’s now take a look at how operational and financial performance also translated into strong cash flow generation over the semester on Slide number 24. Recurring free cash flows stood at EUR171 million in H1 twenty twenty five versus €228,000,000 reported in H1 twenty four corresponding to a comparable €180,000,000 when stripping out the positive last year impact from the regulatory change in Brazil. The strong recurring free cash flow generation was driven over the semester by a significant increase in recurring EBITDA and by a positive contribution from the change in working capital while consistently executing the group’s investment strategy.

Indeed, capital expenditures amounted to €43,000,000 in H1 twenty twenty five, representing 6.7% of total revenues, temporarily lower due to the finalization of the IT carve out during the semester. Additionally, operational investment have been progressively shifting towards more OpEx categorization, particularly in areas such as cloud migration, IT service management, and process automation. Change in working capital stood at €38,000,000 in H1 twenty twenty five compared to €218,000,000 in H1 twenty twenty four. This change reflects some one off effects, including a positive plus €48,000,000 impact from the regulatory change in Brazil of H1 twenty four and some working cap swings in H1 twenty five versus H1 twenty four due to large benefit programs in Belgium and Romania for a total of €70,000,000 As a result, recurring cash conversion rate came in at 76% in H1 twenty five, remaining again above our average objective for fiscal twenty twenty four to 2026. This strong free cash flow generation sustained the Group’s net financial position, offsetting the impact of acquisition, disposal and dividend payment as illustrated on page number 25.

Net financial cash position as of February ’25 stood at €1,045,000,000 compared to €1,054,000,000 as of August ’24, remaining overall stable. This mainly reflected the positive inflow on the strong recurring free cash flow of €171,000,000 along with a positive currency impact due to the appreciation of the Brazilian real and Mexican peso in between the last August and February closing dates. This positive inflow nearly fully offset both the cash out paid and short term debt recorded for the Covia acquisition and the distribution of dividend to the group shareholders and non controlling interest. Brepsey’s strong financial cash position and cash generation is also reflected in the triple A plus setting with a stable outlook confirmed by S and P in the course of the semester. Before handing over back to Aurelia, I will conclude this presentation of our financial performance in H1 twenty five with a focus on our capital structure and financial profile on slide number 26.

The Group’s net cash position of EUR 1,045,000,000.000 as of end of H1 twenty twenty five was made of minus €1,300,000,000 of gross debt plus €1,500,000,000 of cash and cash equivalent and €828,000,000 of current financial assets. It excluded EUR975 million of restricted cash stable year on year. As of end of H1 twenty twenty five, gross debt mainly consisted of long term bonds. The group’s liquidity is further strengthened by an undrawn revolving credit facility of €650,000,000 and by a €400,000,000 unused commercial paper program recently announced in March 25. On the assets side, cash allocation between cash and cash equivalents and current financial assets reflects the group’s flexible investment strategy tailored to each country’s financial market conditions.

These efficient cash management and liquidity strategies are designed to support the group’s operation on long term growth reflecting our commitment to maintaining financial stability and diversifying funding sources. And I will now hand it back to Aurelia to conclude the presentation with our outlook.

Aurelia Anthony, CEO, Plexi: Thank you, Stephane. So now let me wrap up this presentation with our outlook. In the in the current uncertain environment, we continue to benefit from the resilience of our model, namely, in a nutshell, the nature of our of our solutions, helping our clients meet the essential daily needs of their employees in both large and small companies, and our balanced growth engine supported by multiple levers across a diversified geographic footprint. And, of course, it includes a natural hedge against inflation, thanks to face value in a macro and trade context where inflation could reemerge. In today’s context context, I would also stress that the group has no direct exposure to the contemplated tariff changes because we don’t export or import any goods, and we rely on local in country businesses.

So as a result, and on the back of a strong first half of the year and while closely monitoring the current environment, we are upgrading our fiscal twenty twenty five recurring EBITDA margin objective, and we remain committed to deliver on all our other full year objectives, which implies first, low double digit total revenue organic growth, and it would be predominantly supported by operating revenue growth, whilst float revenue should land in the mid to high single digit organic growth based on the H1 performance and the latest forward curve. Second, as discussed, plus 150 basis points recurring EBITDA margin expansion at constant rates compared to plus 75 basis points initially, and this is backed by the strong margin expansion in the first half. And third, above 75 recurring cash conversion on average over fiscal twenty twenty four to 2026. In addition, we keep our fiscal twenty twenty six financial objectives unchanged. All these objectives take into account the growth synergies expected from the deployment of our partnership with Santander and the integration of Cognizant.

To conclude, I would say that from the spin off, we have envisioned Pluxi as an independent company that would be stronger, more agile, and better positioned to generate greater value for all its stakeholders. That vision is now translating into tangible results quarter after quarter, and we remain fully committed to continue this trajectory even in a challenging environment. We are now pleased with, Stephane to answer your questions.

Conference Operator: Thank you. This is the conference operator. We will now begin the question and answer session. That you please limit yourself to questions per caller. The first question is from Ed Young, Morgan Stanley.

Please go ahead.

Ed Young, Analyst, Morgan Stanley: Good morning. First of all, I wanted to ask about the macroeconomic situation. You’ve said you remain vigilant. Obviously, you’ve upgraded your guidance in the face of it, which is, you know, perhaps a sign of confidence. But your main peer said they are already seeing signs of job cuts within the portfolio as they see it.

Is that a comment and a trend that you recognize? And what are you looking for, in the business as signs of macroeconomic business within your portfolio? And then second of all, could you elaborate a bit more on where the margin gains have come from versus your initial expectations, I. E, the drivers behind the guidance upgrade? And within that, perhaps, if you could specify what FX impact you’re expecting from a margin perspective on top of the organic recurring EBITDA margin expansion that you’re guiding to?

Thank you.

Aurelia Anthony, CEO, Plexi: Maybe, Stephane, you want to start with the second question from Ed regarding the FX impact?

Stephane Lopito, CFO, Plexi: On on on the the end of the margin improvement? Oh, okay. So the 260 basis point improvement in term of recurring EBITDA margin, organic recurring EBITDA margin in the first half came out of three three main, impacts, three main favorable impact. The first one, I don’t know if you remember it, but last year in in h one twenty four, we had to support some kind of extra cost related to the spin off process. So at the time where we not where we we were still part of Sodexo, so we were facing the ramp up of our stand alone cost plus as still a member of the Sodexo group, we had to support the Sodexo management fees.

And this was a kind of overcoat that we had in the last year and we didn’t have in this year. Then we we had a push from the float revenue, and this is a push that was not expected as strong as is when we initially guided for the year. Because what happened in terms of float revenue is that we we have been able to benefit from higher increase in interest rates in Latin America and the rest of the world versus, the initial consensus, the initial expectation. And in Europe, we also benefited from lower or later decreases in interest risk versus the initial expectation. I don’t know if you remember, but, you know, a few months ago, we were all waiting, expecting some some some cuts from the the ECB, and these cuts came, but they came later.

And so this was both the push, you know, part of the 260 basis point improvement, but also difference between, our initial guidance because we didn’t have this in mind. And then the the biggest part of this 260 basis point improvement is the efficiency gain that we have been able to get on all the all the plexi teams have been fully focused on on on delivering scale effect, operational efficiency. And yes, we did slightly better compared to what we had initially in mind. So this is very good news. We are on track to improve our profitability.

Aurelia Anthony, CEO, Plexi: Okay. Sorry, the last part of

Stephane Lopito, CFO, Plexi: your question was regarding FX. So the FX effect was a little bit higher, in this first half. So we don’t guide on FX effect because no nobody knows, but it was a little bit higher compared to to to to what we had in mind based on the Bloomberg consensus, the forward curves at the beginning of the semester, and this is fully, related to to what happened in in in Brazil. Even though we saw at the very end of the semester, an improvement, in the Brazilian real, But now with what is happening today, it’s really difficult to have a clear view on what’s going to happen in the next semester. This is another reason why we only guide on on organic numbers at constant rates because nobody knows.

And this is true that if the Brazilian real was to remain, in the second half of the year, as it is today, we might face some quite higher currency translation and favorable effect. But, but we we don’t know, and and we’d see what what is going to happen based on the macroeconomic environment in the next months.

Aurelia Anthony, CEO, Plexi: So so talking about the macroeconomic environment and the, you know, the impact on our portfolio, it’s fair to say that we we we have observed over the semester some some adverse impacts, notably due to this uncertainty. But just in in a few countries or in a few sectors, and and and this has affected the the employment indeed. It could be could be, you know, hiring freeze or a a cut. And we touch this point when we when we discuss about the the portfolio growth performance. But it’s also, you know, worth noting that regardless of the current environment, some countries and and, you know, even in Europe have continued to deliver a strong and a sustained growth, particularly in the South Of Europe, such as, you know, Spain, where, you know, we we have started to benefit from, you know, not only the growth synergies from the the the Kobi’s acquisition, but also, you know, benefiting from a strong performance of the Spain as well.

After if we step back and we look at the, you know, the overall, let’s say, uncertain environment, why we are, we we are confident because as we as we said, not only we we benefit from diversified footprint, both geographically, we are in 29 countries, but also given the nature of our business with more than half a million of clients, you know, public, private, small, mid, large companies or organization. But also because as we as we explained during the the presentation, you know, our business model is by a sense resilient, with multiple growth drivers, and we we we describe them during the the presentation. And and we keep on, you know, by the way, working on new sources of revenue, you know, trying to keep take advantage of, you know, the data and and the artificial intelligence. And well, of course, we we sell it as well. We we benefit from a a natural hedge against inflation through the increase of fair value, but also the currency risk, I mean, through the the float revenue.

But plus and and and definitely not the least, you know, our solutions are an essential, you know, engagement and motivation tools for organization, you know, for our client. And it’s it’s even truer during this this period of time because we we we are helping them to address the daily the daily needs of of their employees. So so so that’s this is this is why we we are confident as of today.

Ed Young, Analyst, Morgan Stanley: Thank you very much.

Aurelia Anthony, CEO, Plexi: Thank you, Rui.

Conference Operator: The next question is from Praveen Gondali, Barclays. Please go ahead.

Praveen Gondali, Analyst, Barclays: Firstly, on the new business development, can you please share how that $800,000,000 new business development splits between Q1 and Q2? And what was the volume contribution from the Santander deal in Q2 within that? And then secondly, on the float revenue, can you share some color on current average maturities of your float investments? How that has developed over the last twenty four months, and if there is any further headroom for extension of those maturities? Thank you.

Aurelia Anthony, CEO, Plexi: Thank you, Praveen. So regarding the new biz, we we we saw the same, you know, same trends between q one and and q two. Yeah. I shared this during the the q one announcement. You know, we we see a very strong pipeline, and and, you know, we keep on enriching this development pipeline.

So so the trends remain positive. And after, you know, from a from a country to another, what what we see is that the the pace of the decision making process from from our clients, you know, can can take can take more time. This is what what we currently see. Regarding the float revenue, Stephane, maybe you want to

Stephane Lopito, CFO, Plexi: answer On your question about the maturity of our cash investment, and so your question was about the the the current situation and how it has changed over the last twenty four months. So the current situation, overall, the remaining maturity of our cash investment is close to six months. And twenty four months ago, it was close to three months. But I’m talking about the residual maturity. And in term of maturity at the time when we invest, it used to be twenty four months ago close to six months, and now it’s close to ten months.

So we have extended overall the maturity of our investments in the last twenty four months quite significantly, but monitoring it, you know, very tightly on a country by country basis. Because as as we explained it in the presentation, we we really need to tailor our, you know, our investment to each financial market situation in every country. If you think about what happened in Brazil, you know, the the the strong rise in the city trade in the last month was not expected a few months ago. So we we absolutely need to remain agile. So on a country by country basis, we, we are balancing, the the maturity of our investment.

In Continental Europe, we have significant increase these maturities in the last months, and we we did it a lot in in in in fiscal year twenty four. But, you know, in other countries, we we always have to to be careful. So this is really a very specific monitoring on a country by country basis.

Praveen Gondali, Analyst, Barclays: Thank you very much. That’s really helpful.

Conference Operator: The next question is from Justin Forsyte, UBS. Please go ahead.

Justin Forsyte, Analyst, UBS: Awesome. Thank you so much for having me here. A couple of questions on my end. So question number one, maybe you could just parse through your percentage mix of revenues or business volume in the employee benefit side between government contracts and private contracts and whether you think either of those might be more resilient in a potential recessionary environment? You know, perhaps government jobs in Brazil or Europe are are a little bit safer in the scenario, but maybe you could just walk us through that.

Secondarily, I caught actually in the footnotes the the float guidance that you refreshed because I recall, I think historically, you you had talked about for this year a a slight increase maybe on a year over year basis. So just directionally, it seems like maybe that’s, call it, 9 to $1,112,000,000 euros of incremental float revenue. Now if I put that against the guidance increase you had on EBITDA margin, seems like that it is basically the entirety of the upgrade is tied to float in in in EBITDA margin. I just wanted to confirm that. Or are you also guiding to operating EBITDA margin expansion upgrade as well?

Thank you.

Stephane Lopito, CFO, Plexi: Okay. So I’m just going to take the second question Yep. On on on on the on the float revenue and then the the related impact on guidance. And then you you will take, like, the okay. The other one.

So, Justin, regarding float revenue, so we are we we started the year by getting on on slight increase. And now we we are upgrading. Now this is not really a a target, but this is some color that we share as part of our global objective and which is our guidance. We only guide on total revenue growth, but we share some color. So the slight increase at the beginning of the year is now turning to a mid to high single digit increase on float.

If you do the math with the 16.2% that we delivered in h ’1, so this means that overall in h ’2, this is going to be 0% growth, so that you can make, you know, the average mid to high single digits for the full year. So we don’t expect any, any push, from the float in h two. And in h two, it’s going to be the opposite. The float revenue are not going to go. So this mean that the proportion of float revenue within total revenue is going to be reduced.

So this mean that although we had some some push from the float in h one to support the improvement in the margin, and I am now moving slowly to your to the second part of this question regarding the the the margin guidance. So in h one, we had a push from the float revenue. In h two, we’re going to face a drag from the float revenue in terms of margin improvement because the the portion of float within total revenue is going to be lower. And so then if you look at the improvement in term of efficiency, you could also give a look at the operating margin, not this recurring operating EBITDA margin and compared to the two sixty basis point that we have in the recurring EBITDA margin, the operating one showed in H1 a two thirty five basis point improvement. So we are truly delivering, leaving aside and you’re getting with the question we had from Ed on this, leaving aside the push from the float, which was only 25 basis points in h one when you make the the difference between the 260 basis point improvement for the full recurring EBITDA margin and the 235 basis point improvement for the operating EBITDA margin.

So we had only a small push from the float, meaning that most of our improvement in the EBITDA margin came from operational items, operational improvement in H1, and it’s going to be the same in H2. But in H2, the improvement of the margin is going to be lower because we won’t have the push from the float. It’s going to be derived from the float, and we won’t have this one off effect that I I recalled when answering to Ed, which is this one off code that we had the year before. I don’t know if this is clear enough. This is answering your question, but in the end, most of And that recurring EBITDA margin come from operational efficiencies even though there was a small push from float in h one.

And in h two, it’s going to be a drag. So we’ll have to update it by strong operational efficiency.

Aurelia Anthony, CEO, Plexi: And and and regarding your first question, Justine, you know, the since the difference of take up rate between the public and private, Actually, there is not really a difference, you know, of take up rate. So the difference in the take up rate could be more between, you know, as a very small or small clients and large organization. And regarding the, you know, the behavior of our portfolio in a in a in in an environment that would be, I mean, a a recessionary environment, Look. It’s it’s it’s going to be really it would be really, you know, a sector by sector or country by country, typology of activity by activity. So it’s it’s not possible for me to to answer, to answer this question precisely.

But to give you Yeah. Or to to to remind you, you know, and we share this during the Capital Market Day. For a country like Brazil, Twenty Percent, at least of our business volume, comes from, you know, public, public sector. And, again, overall, if you look back at this, at this slide of the the deck, I mean I mean, we we we shared with with you that I mean, how much diversified, you know, our current portfolio is, and and and we took Brazil as a good illustration of, you know, what we are having across geographies.

Justin Forsyte, Analyst, UBS: Got it. No, that’s really helpful. And I guess you hit the point there, that last point, which was 20% mix in Brazil on government contracts. That makes sense. I mean, the overexposure to or I guess growth being overexposed to small businesses, do you view that as a risk?

Maybe there’s a little bit more risk, around small businesses that are having their supply chains impacted, less ability to pass through pricing, etcetera, or not really contemplating that in in the go forward?

Stephane Lopito, CFO, Plexi: Look. For what what I

Aurelia Anthony, CEO, Plexi: can tell you, Justy, is that for the moment, you know, we we don’t see any specific trend, you know, that would allow me to confirm what, what you are saying.

Justin Forsyte, Analyst, UBS: Okay. Great. Thank you very much. Appreciate it.

Conference Operator: The next question is from Pawan Daswani at Citigroup. Please go ahead.

Stephane Lopito, CFO, Plexi: Hi. Thanks for taking my questions. I’ve got a couple as well. Maybe firstly, coming back to your comments on the macro, you talked about seeing some kind of pockets of hiring freeze in the job cuts. What about new wins?

Are you seeing any impact to sales cycles or RFPs? And then secondly, on take up rates, can you help us understand what drove the increases so far this year? Also, what does your guidance for 2025 and 2026 assume about take up rates versus BVI as key drivers?

Aurelia Anthony, CEO, Plexi: Thank you, Pevan. I will take the first question and Stephane will answer the second. So so regarding the, you know, the the I mean, what what we see on the market at the moment, we we we continue to see, you know, RFP We continue to see small companies, you know, willing to enroll into our program as well. I mentioned it.

The size of our pipeline is significant. It has never been as big as it is today. But, again, it’s fair to say that, you know, the pace for the the the the for our clients or prospects, you know, to make a decision is is longer than what it was one year back. And and and so there is a bit of a lag effect. But but, you know, in the on the on the opposite side, I mean, it it has also a very positive impact on on the retention, you know, the level of retention of our our clients portfolio as well.

So so it’s a it’s it’s a it’s a combined dynamic. But but but, again, we don’t see, we have not seen so far, you know, a massive change in the behavior of our clients.

Stephane Lopito, CFO, Plexi: Regarding regarding the the take up rate, so to part in your question, what what what we have delivered so far and and what what might happen going forward. In terms of delivery, Aurelia explained it in in in the presentation, which I think it makes more sense looking at the evolution of the pickup rate over the long term and the 40 basis point improvement that Aurelia recalled, you know, is is most of it, not to say all of it, was was related to some improvement in the client commission in the last year. So this is really something that we’ve been able to to to deliver. And we we had some some push as well on this and and thanks to the to the change in regulation in in some countries like Brazil where, you know, negative client commission were forbidden by law. And overall, when we compare, because I don’t want to avoid your question specifically on on the first half of this year.

So this is the same trend, and there are also some mix effect. And when you compare just one half year to the other half year, there are some mix effect which also help to to increase this, take a break. Because what what we said at the end of of, fiscal year twenty four and what we are still seeing today that, you know, we, of course, we have a target to go on improving all the value we deliver to client and merchant, but not to support higher take up rate, but to to fully substantiate, you know, this take up rate. And so our strategy is not to increase the take up rate going forward, but, of course, to to maintain it as high as it is, and we consider it as as a fair as a fair take up rate so far. And going forward, we will go on increasing the value we deliver to client and merchant, in order to justify this fair ticket price.

Thank you.

Conference Operator: The next question is from Hanliner Jefferies. Please go ahead.

Hanliner, Analyst, Jefferies: Yes. Thanks for letting me on. Yeah. I got also two questions. When we when we drill down in a little bit into the Italian commission cap and the conversation you have with companies, we know you are not so exposed to the meal voucher directly, but more employee benefits.

Now given the common knowledge is that actually the rebates get reduced to corporates, should how do you see your negotiation around employee benefits outside the meal voucher? Is there any cuts expected or any tough conversation? That’s the first question. The second one is on Turkey. You called out the initiative around hyperinflation and face value increase.

Maybe you can just like stop there, double click on it and give us there a little bit more information. Thank you.

Aurelia Anthony, CEO, Plexi: Thank you, Hans. So regarding the situation in Italy, so so you said it. I mean I mean, we we we are right in the middle of the, you know, client renegotiation campaign, and and and the the team is pretty confident regarding the outcome. And and is there I mean, have we seen have we observed any impact on the, you know, the other employee benefit, but the answer is no. So far, I mean I mean, we we we didn’t see any correlation, you know, between, I mean, between this renegotiation campaign and and and how much, I mean, they could, you know, they could grant in terms of additional employee benefits.

Stephane Lopito, CFO, Plexi: And and that’s regarding your question on the connection between this hyperinflation and sales value in Turkey. No. This is making me thinking that maybe, you know, there was some confusion in in in the way I introduced the matter during the presentation. So in Turkey, basically, let let’s forget hyperinflation, which is more an accounting matter. So there is strong inflation.

There is there is right now very strong inflation in the country as we all know. And, of course, this strong inflation environment is for us to push to for for all our sales, we can go to the client and and propose some additional increases in sales value. And what we are saying is that our business is resilient to inflation situation because in such in such situation, we are able to place with our clients some additional face value increases. And then in term of hyperinflation recording or accounting in our books, I think, you know, it’s important to remember that the organic growth that we calculate is without the application of the, hyperinflationary indexes that we have in the country. So we calculate the organic growth without taking into account this potential push from hyperinflation, but then for our numbers at current rates, of course, we have to record it because this is the accounting standard.

So, again, sorry about that because maybe, yes, there was some confusion. We should not have talking about an interflationary environment, but an no. High inflation environment, hyperinflation being just again an accounting standard matter.

Hanliner, Analyst, Jefferies: And so I understood that. But when you have those face value conversation, is this now a particular driver and impacting the overall growth? Because on one side, you have the currency effect, which you adjust away, but then you still have the face value increase. Can you maybe express that as a

Stephane Lopito, CFO, Plexi: Absolutely. So it’s part it’s part of the organic growth. You know, there is no automatic key automatic, increases in face value due to inflation. This is up to our salespeople to go to the client and translate this inflation environment into fair value increases. So, yes, this is part of our organic growth.

Aurelia Anthony, CEO, Plexi: Okay. You. Thank you, hence, for and thank you, everyone, for for your questions. Again, thank you for your attention and and interest in in Plexi. So so now if I had to wrap up what we discussed, my my three takeaways would be that, first, we continue to deliver strong performance in h one, both on top line and margin expansion.

Second, we are reconfirming all our objectives and upgrading our EBITDA margin target for fiscal twenty twenty five. And lastly, we have again demonstrated, through our business and financial performance, the strength and the resilience of our business model, making us confident in our ability to create, to continue to create value over the long term. So now looking forward to continuing our discussion in the in the coming weeks. And with Stephane and Pauline, we wish you a very good day. Thank you very much.

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

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