2.1.10 Research and development activities
2.1.11 Subsequent events
Extension of the maturity of the €750 million credit facility
At December 31, 2020, Edenred had a €750 million undrawn confirmed line of credit, expiring in February 2025. This facility will be used for general corporate purposes.
In January 2021, the maturity of the €750 million syndicated credit facility was extended by one year beyond its February 12, 2025 expiry date, following Edenred’s exercise of the maturity extension option granted in the facility agreement. All participating banks have accepted this extension. With the new five-year maturity, the facility will now be utilizable until February 2026.
2.2 Results of operations for the Edenred parent company
2.2.1 Description of the business
As the Group holding company, Edenred S.A. manages a portfolio of equity interests, collects dividends from subsidiaries and drives the Group’s development.
The Company owns a portfolio of brands, including Ticket Restaurant, Ticket Alimentaçao, Ticket Compliments, Childcare Vouchers and Ticket EcoCheque, and earns revenues from licensing these brands.
It also provides services to other members of the Group regarding prepaid solutions, staff secondment, cash management and IT, as well as advisory services. These services are billed as a percentage of the subsidiaries’ revenue and/or profit, as a flat fee or on a per-service basis. They are determined on arm’s length terms.
2.2.2 Significant events in 2020
Edenred S.A. tax audit
In 2018 and 2019, a tax audit was carried out at Edenred S.A., covering the period from 2014 to 2016.
In December 2018, the French tax authorities notified the Company of a proposed reassessment of the tax paid in 2014, on the grounds that the brand royalties billed to the Brazilian subsidiaries were understated and were not on arm’s length terms.
Notification of the proposed reassessments of tax paid in 2015 and 2016 was received by the Company in July 2019. As originally expected, the tax authorities reduced the 2014 reassessment to align its position with that adopted with regard to 2015 and 2016.
The total tax, late interest and penalties claimed for the three years amount to €17 million. The Company has contested the reassessments and filed a claim with the national tax board in early 2019. Following a sitting on January 24, 2020, the tax board issued an opinion against the reassessment. The tax authorities nevertheless notified the Company on July 3, 2020 that they would be maintaining the reassessment.
Based on the opinion of its tax advisers, the Company believes that it has solid arguments in its defence. The Company has not set aside a related provision.
2.2.3 2020 results
Analysis of Edenred S.A.’s revenue
The Company reported revenue of €87 million in 2020 versus €80 million in 2019, including all royalties and service fees earned in the normal course of business.
Service fees relate to services billed under the Master Services Agreement as well as IT services, the secondment of staff and various additional costs.