Edenred: How does it compare to Pluxee?

Is bigger better?

I’ve been very interested in the employee benefits business this year as the market continues to hate it. One of my first deep dives on the blog was Pluxee, the second-largest player in the market. Over the months, I built this to my largest position (by cost basis) and have received valid questions about my opinion on Edenred, the market leader. Both companies have been getting sold off since May. Let’s look at Edenred and the differences between it and Pluxee. Maybe it’s worth considering a basket approach for this sector.

A market leader thrown out with the bathwater

History

Edenred has 60 years of history in the market, bringing meal vouchers to the French market in 1962. In 1967, it became an officially recognized employee benefit, and in 1976, other countries started adopting the concept. The company expanded into Fleet & Mobility solutions in the early 2000s. In 2010, the company demerged from Accor and became Edenred. As a standalone company, Edenred focused on digitizing its business and pushing new business segments. The history sounds similar to Pluxee, but Edenred has a longer history as a standalone public company (2010) than Pluxee (2024 spin-off from Sodexo).

Business model

Both companies run a similar base business model. They issue balances to companies, who then charge cards for their employees. The employees spend the money on the selected merchant network, and Edenred/Pluxee reimburses the merchants. The companies earn revenue from merchant fees, customer fees (from businesses) and interest on the float. I detailed this whole process in more detail in my Pluxee analysis.

A market leader thrown out with the bathwater

The difference between both arises in their product portfolio. While Pluxee Employee benefits account for 83% of revenue and 17% in other products and services, Edenred has a much more diversified portfolio with 63% in Benefits and engagement, 25% in Mobility (like fuel/charging cards) and 12% in Complementary Solutions (like corporate payments through virtual cards).

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