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Edenred sees core earnings up 10%-plus a year from 2019-22

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(Reuters) – French pre-paid meal vouchers and card provider Edenred <EDEN.PA> set financial targets for 2019-2022 on Wednesday that were slightly ahead of its previous goals, but lower than it delivered last financial year, sending its shares down 2%.

The firm, which helps companies manage staff expenses and benefits, said its “Next Frontier” plan aimed for like-for-like growth in earnings before interest tax, depreciation and amortisation (EBITDA) of more that 10% a year and operating revenue growth of more than 8%.

That compares with targets of 9% and 7% respectively under its “Fast Forward” plan for 2016-2018 and with the 16% and 13% increases delivered respectively in its last financial year.

“New financial targets seem fairly captured in current market expectations but we would note that management’s track record suggests some conservatism and over-delivery vs previous targets,” said JP Morgan in a note.

The brokerage expects underlying earnings to grow 17.5% in 2019 and 13.1% in 2020, with underlying revenue up 13.4% and 12% respectively.

Edenred, which is known for its ‘Ticket Restaurant’ vouchers, beat forecasts earlier this month with third-quarter revenue figures.,

The company said on Wednesday it planned to earmark between 6% and 7% of total revenue each year for investments in 2019-2022. It also forecast an annual increase of at least 0.01 euro ($0.0111) in its dividend, as from 2020.

($1 = 0.8992 euros)

(Reporting by Michal Aleksandrowicz in Gdansk, Editing by Sherry Jacob-Phillips and Mark Potter)

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