Edenred on a Downward Spiral Based on EndofSeptember Figures

$EDEN (-1.86%)
fell 5.1% to 27.7 EUR after the services group reported total revenue of 2,198 million EUR for the first nine months. Compared to the first nine months of 2025, this represents an increase of 1% on a reported basis and 0.6% on a comparable basis

The payment service provider’s operating revenue remained virtually stable on a reported basis, rising 0.6% to EUR 2,027 million, and increased by 1.1% on a comparable basis in the first nine months of this year.

In the third quarter alone, operating revenue totaled 667 million EUR. On a comparable basis, this represents a 1.2% decline, attributable to the impact of regulatory changes affecting meal vouchers in Italy and Brazil. Excluding these effects, the company would have achieved organic growth of 6.6%.

Based on this revenue growth in the third quarter, which is considered solid, Edenred confirms its targets for 2026. The year is marked by a realignment of the business foundation against the backdrop of regulatory reforms in the food and meal sectors in Italy and Brazil.

Edenred reaffirmed its forecast of a 7 to 10% decline in EBITDA on a comparable basis in 2026. “At the same time, the Group has lowered its EBITDA range on a reported basis by 10 million euros. It is now expected to be between 1.22 and 1.26 billion euros to account for the sale of Edenred North America,” writes Jefferies.

"This forecast is broadly in line with the consensus, which expects an 8% organic decline, but falls short of our expectations of a 5% decline," explains the U.S. investment bank, which maintains its “Hold” rating and its price target of 27.5 EUR.

What’s your take @investron on the numbers? Looks like growth has stalled, but dividends still make holding the stock worthwhile, in my opinion.

Edit: YoC on dividends is close to 9% for me.

Kini - Dividend Strategy@investron

Thanks for the tag. My last Edenred run (Oct 17) has it in 🟢 OPTIMAL, and this print doesn't change the thesis,:

The stall is regulatory re-basing, not demand. Q3 operating revenue was -1.2% comparable, but strip out the Italy/Brazil meal-voucher reforms and it was +6.6% organic. The business is still growing; two markets are being re-priced by law. That's exactly the "temporary problem" my framework screens for.

There's nothing new in the guidance. The -7/-10% comparable EBITDA decline for 2026 was already in consensus (~-8%). The only new piece is the €10M trim to the reported range, and that's the North America disposal, accounting, not operations.

On the dividend: agreed with you. At today's price it's roughly 4.8% yield + ~6% buyback ≈ ~11% total shareholder yield, with ~3.2x FCF dividend coverage and a ~26% cash-flow payout. That's a comfortably funded distribution. The one blemish on the record is the 2020 COVID cut; since 2021 it's been consecutive double-digit raises.

The biggest overhang is gone: France ruled out statutory fee caps on the core market. Italy/Brazil are enacted, i.e. known quantities, and at ~12.7x trailing / ~10x forward P/E a lot of pessimism is already in the price.

Your ~9% YoC reflects a good entry. For me the question is whether that dividend keeps compounding, and on current coverage it looks sustainable. We'll re-run the analysis with these numbers.

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Edenred on a Downward Spiral Based on End-of-September Figures