On Thursday, Edenred SA (EDEN) reported its second quarter earnings and discussed the following topics in its earnings conference call. Take a look.
Working Cap for the Full Year
Vaughan Lewis – Morgan Stanley: On the working capital there are quite of lot moving parts with Hungary, FX, and the gift cards, so could you give us some idea about how those plan out for the full year and what we should expect for the working capital move across the full-year? Second one, on the digital transition in Europe, can you just go into a bit more detail about what you’ve learned from Belgium, so is the process customers option in line with what you expected and is the impact on float as you would expect? Then final, a technical one, what sort of tax rate should we expect for the full year because the H1 tax rate of 27% looks very low?
Loic Jenouvrier – CFO in charge of Legal Affairs: For the working cap, while if you take into consideration, our fuel float, meaning our vouchers and depletion minus our account receivable. When you look at the ratio of float compared to issue volume today in H1 2012, we have seven weeks, and last year we had 7.2 weeks, so meaning that as you know that our expense management business have not significant float. We have a quite stable ratio of float compared to issue volume. What is true, the impact of Hungary, I’d said roughly EUR34 million in H1, it’s a one year effect, I mean that we won’t have any additional EUR34 in H2 because it’s a mechanically the float of Hungary, which disappeared in H1. So, basically for the end of this year there is no reason except those EUR34 million attributable to us, a variation of the float, which is comparable of what we have last year. Before leaving the floor to Jacques for the tax rate, you’re right, in H1 we have a quite low tax rate, it’s mainly due to the fact that we’ve been able to use some deficits we had in different subsidiaries, so this is I would say one of a technical, we won’t have that in H2. So for the whole year you can see roughly 32%, 33% of the income tax.
Jacques Stern – Chairman and CEO: On your question about digital, very limited answer. Yes, it is roughly in line with what we expected. So the Belgian (indiscernible) to you is quite straightforward, which basically translates into two elements; one, which is we see a demand from clients to move to electronic, which is in line with I would say the studies we have done in the past and we are not surprised from that; and the second (time) all the companies are not going for that at the same times. We see larger companies being more interested than smaller and so it would be progressive as it has been in Latin America by the way, i.e. its transition which takes usually between three and five years. And from that point of view as I said Belgium is quite comparable to what we have seen in the past. And so in terms of float, obviously you remember that we have highlighted that we are losing when she shift to electronic between 10% and 15% to the float, which in average. So obviously we are seeing that I would say in Belgium. Nothing more, nothing less. But obviously it’s a percentage of percentage, so the impact on the group in total is something which is absolutely manageable.
New Client Wins
James Ainley – Citi: Two questions please. Firstly, can you talk about the source of your new client wins? I mean are these first time uses of the product or if you’ve won them from one of your competitors, and if so what’s your unique selling point? Then secondly could you update us on the progress of legislation in France in terms of shifting to digital solutions?
Jacques Stern – Chairman and CEO: In terms of new clients, you have a bunch of things, which are different than what they have highlighted. Obviously in some cases like Brazil, obviously ITAU was using the solution already and we have taken that from competition, but in a way which is quite interesting, because we have (complete digital) with global agreement, which is not only on the client side, i.e. the fact that their employee are taking our solution, but also in terms of, as you know, for example, Ticket Frete, they are partnering with us in a way that they are selling our solution to their clients and also the fact that if we need some credit for the clients in this for (indiscernible) Ticket Frete they will do that. So that we have, I would say, no impact on our float. So ITAU is from that point of view quite interesting because it’s really a partnership and a very long one, because it’s a contract over five years, renewal one-time for five years, which means that it’s a long-term partnership. In the case of – for example, Tata in India and Lala in Mexico, it’s mainly so Tata is a new client and Lala it’s an extension of clients which was already there where we had been able to increase the numbers of beneficiaries within the company, which are taking our solution. So in that case it’s a mix between Tata a total new client and Lala, which is an extension the beneficiary, i.e. all the beneficiary of this company will not be taking the solution. Everis in Spain is quite interesting. This is a client that we used to have five years ago in Spain and which has been taken by new entrants called (indiscernible) I would say regenerating our solution and proposing a new feature and new functionality. We have been able to take this client back five years after which translate also the dynamism I said of our customers. In the end, the last one which is La Poste, which is also an extension of beneficiary on an existing contract. It’s quite interesting because I think there it’s really our capability to fit with the client needs in terms of delivery and in terms also of added value which had been the key driver for them to extend the contract in terms of number of beneficiary for that. From that point of view, I would say that those translate, I mean all the various type of new contract or the extension of contract we have – we can have from a pure, I have said new clients to expansion of clients. Your second question which was the legislation in France, obviously, you know that in France in order to introduce a digital solution, we need to have a new framework. Today’s it’s fair to say that during the summer, with the new government, it was not on their top of priority, so we are expecting that around — in, I would say in 2013, for launch which should be between end of 2013 and early 2014, but even if in the meantime of the summer, the government has not worked a lot. I would say that our team has worked a lot in order to be ready when this new framework will be voted by the assembly and with the government proposal.
James Ainley – Citi: Can I just quickly follow-up on the first question. Have you lost any major clients in the first half and if so, why?
Jacques Stern – Chairman and CEO: I can say that we have not lost any major one and we are very proud of that, I must say.