Continued strong performance in European and Latin America markets, combined with expansion into Asia, helped provide Ingenico SA with a double-digit lift in revenue for the first half of 2011, the French terminal maker reported July 27.
Ingenico SA this year generated $633.6 million (440.3 million euros) through June 30, up 11.4% from $568.5 million euros during the same period last year. The company reported net income of $15.8 million, down slightly from $16.1 million a year earlier. (Currency conversions based on June 30 euro/dollar conversion rates.)
“Our performance in the first half is extremely encouraging, and it validates our strategy across all business segments,” Philippe Lazare, Ingenico chairman and CEO, said in a company press release. “In payment terminals, we have benefited from growth in emerging markets, now accounting for 43% of our revenue.”
By region, revenue from Europe rose 10.2%, to $315.4 million. Elsewhere, in Latin America, revenue was up 12.8%, to $113.1 million; in the Asian-Pacific market, revenue totaled $116 million, up 91%; North American revenues totaled $42.9 million, down 41.5%; and revenue from the Eastern Europe, Middle East and Africa market totaled $46.2 million, down 4.2%.
Overall transaction services revenue rose 17%, Lazare said, citing Ingenico’s acquisition of German payments-services provider Easycash and expansion into Belgium the key drivers behind the revenue boost.
Ingenico said it anticipated slower revenue growth in North America as the company awaited the benefit of its planned purchase of Hypercom Corp.’s U.S. payments system business (
Ingenico also believes its new distribution partnership with ScanSource Inc. of Greenville, S.C., will help spur product sales in North America (
In an interview, Gregory Boardman, Ingenico senior vice president of product and development, said merchants in the United States have been slower to convert to the company’s Telium Pass Plus contactless reader than in other parts of the world.
“The U.S. market is in a transition period, and we know the EMV chip card is living in our future. But this country has been slow to embrace it,” Boardman tells PaymentsSource. “Ingenico has the market for chip and PIN, and it represents a massive opportunity” for the North America market.
Boardman also believes the North America sales cycle can be longer than in other regions because of many competitors and many choices for merchants to consider with EMV, Near Field Communication and other contactless-payment systems, security features and the potential longevity of the terminal.
Boardman contends “the sky’s the limit” for bankcard and wireless payments in the U.S., but he remains cautious because of the economy and the length of time it takes to fully certify a potential Ingenico U.S. customer.
Wedbush analyst Gil B. Luria echoes Boardman’s contentions on what Ingenico faces in the coming months.
“The (North American) numbers really reflect that Ingenico is between product cycles right now,” Luria says. “The customer knows a new product is coming, so they are not going to buy the old one, so they will just wait.”
Once Ingenico gets the Tellium product fully rolled out in the U.S., it will benefit from having one of the freshest new terminal products available on the market, Luria says.
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