Ingenico Sees 2009 Profit Drop From 2008

Ingenico SA, a France-based point-of-sale terminal maker, foresees a return to growth this year after posting declining revenue and profit results for 2009 compared with 2008.

Ingenico had revenue of $953.6 million (700.7 million euro) in 2009, a 3.8% decrease from its 2008 revenue of $990.8 million (728 million euro). The company made a profit of $36.5 million in 2009, a 26.9% decrease from its 2008 profit of $49.9 million. The company cited the recession as a primary reason for the decreases.

Ingenico hopes to improve its 2010 results over last year with a dual strategy of building its hardware business while expanding its services offerings.

In North America, that entails expansion of Ingenico’s managed services, Christopher Justice, Ingenico president of North America, tells PaymentsSource. Managed services enables Ingenico to send new applications to payment terminals, such as software that can deliver coupons for display on terminal screens.

Justice says the company will continue its recently announced effort to expand mobile acceptance options for merchants (see story). This technology enables payment card acceptance with most mobile phones. “Merchants interested in mobile commerce typically aren’t getting ready to spend several hundred dollars on a mobile terminal,” Justice says.

Ingenico also will continue to rely on its resellers to reach merchants with its products and services, Justice says. “It gets distributed through them rather than working around the [independents sales organization] or acquirer,” he says.

Justice also foresees more security-related services in 2010, including adding more products for securing data at rest and in transit.

Internationally, Ingenico’s strategy, especially in Europe, will hinge on Easycash, a Germany-based payment processor it bought last year (see story). Ingenico is also eyeing growth in the United Kingdom, Spain and Eastern Europe.

Ingenico says under current economic conditions it expects revenue growth for 2010 to range from 3% to 5% more than in 2009 with an increase in profit, too.

Analyst Robert Dodd with Memphis, Tenn.-based Morgan Keegan & Co. says Ingenico’s 2009 results, especially for the second half of the year, illustrate the benefits of its cost-cutting measures last year.

For the first six months of 2009, Ingenico’s profit was $6.5 million, but as cost-cutting measures and other efforts took hold in the second half of the year, profit increased to $30.8 million.

“That’s what one would expect from a company strongly focused on cost improvement and margin control,” Dodd tells PaymentsSource.