Ingenico Group has reduced its objective for revenue growth in the second half due to the rapid and temporary market decline in the US caused by the change in the EMV rules, and persistent difficult macroeconomic conditions in Brazil.
Ingenico says that in all other geographies, as well as for the ePayments division, the group will deliver excellent performances.
The group highlights the continued solid growth dynamics in Asia Pacific and in Europe. The ePayments division will also deliver strong growth in the second half of the year, enabling the group to accelerate its transition to on-line and mobile services activity.
The updated group's objectives for the full year are:
- Organic revenue growth >= 7% (from >=10% previously)
- EBITDA margin >=20% (from c.21% previously)
Ingenico says that in recent weeks it has been facing a sudden and significant decline in its US market which accounts for approximately 10% of group revenues. The group now anticipates a strong decline in sales for this country in the second half of 2016.
This market decline has been caused by a relaxation in the EMV rules. The result of this is a slowing down in the pace of adoption of EMV technology, of which Ingenico Group is one of the main providers.
Ingenico says the relaxation of the rules is temporary and the group remains confident in the continued roll-out of EMV in the United States which should continue to progress in 2017 and beyond.
In Brazil, the economic deterioration is affecting the Group's performance. Despite resilient performances in other Latin American countries, the decline in this region for the second half of the year is now anticipated to be greater than in the first half.
Ingenico Group will deliver excellent performances in all other geographies as well as for the ePayments division.Excluding Brazil and the United States,the group will maintain a double digit growth for the second half of 2016.
Chairman and chief executive Philippe Lazare said: "The elements which have come at the same time have led us to take a more prudent approach to our objective for the end of this year. This temporary situation, to which we are giving our fullest attention, does not in any way affect the fundamentals of our strategy and the objectives which we have laid out for 2020."