4.6 Change in working capital and funds to be redeemed

 

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Funds to be redeemed correspond to the face value of all vouchers in circulation and funds loaded on cards but not yet used. They derive from multiple transactions:

  • on the one hand, with customers to whom vouchers have been issued or whose cards have been loaded, with a corresponding inflow recognized either in available cash or – depending on applicable regulations – in restricted cash (mainly in France, Belgium, the United States, the United Kingdom, Brazil and Romania);
  • on the other hand, with merchants that are reimbursed by Edenred with respect to the vouchers and cards used by employees in their establishments.

Considering Edenred’s operations, the main components of working capital analyzed are funds to be redeemed and restricted cash. These two aggregates are key indicators for managing the business.

Funds to be redeemed are recognized in current liabilities.

 

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At December 31, 2020, working capital stood at negative €4,924 million versus negative €4,095 million at December 31, 2019. The difference reflects, one the one hand, the €363 million negative change in working capital assets owing mainly:

  • to a €330 million decrease in trade receivables due to the decline in business activity, a €134 million positive currency effect; and
  • a more assertive collection policy.

And, on the other hand, a €488 million negative change in working capital liabilities corresponding primarily to a €881 million increase in current liabilities (excluding a €421 million negative currency effect).

 

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