FleetCor Pumps Up Q1 Revenue

By Jeffrey Green (@epaymentsguy)

FleetCor Technologies Inc. is acquiring Shell’s small and midsize (SME) enterprise fuel card portfolio in Germany, and it has signed a contract with Chevron International Pte. Ltd. to process fuel cards in six Asia-Pacific markets, plus South Africa, the fuel card provider announced with first quarter earnings on May 1.

The company has also signed a European framework agreement with Shell that outlines a broader expansion plan covering the potential acquisition of part of the oil company’s fuel card portfolios in up to 12 additional markets in continental Europe according to the agreement announcement.

During a conference call with analysts to discuss the company’s first-quarter quarter earnings, Ron Clarke, FleetCor chairman and chief executive officer, said the company has been trying for some to get a full outsourcing agreement in Europe that can serve as a launching pad for further growth in the region. The United Kingdom is the company’s second largest market outside the U.S., he said.

FleetCor and Shell expect to complete the conversion to FleetCor’s system by late summer, he said, noting the deal could lead to more work with Shell over time.

In the other agreement, FleetCor will process transactions for Chevron’s private-label commercial card program using its Global FleetNet fuel card processing platform in six Asia-Pacific markets plus South Africa, the companies said in announcing the deal. The deal will broaden FleetCor’s global relationships with Chevron and extend number of Global FleetNet users, Clarke said.

Terms of both the Shell and Chevron deals were not disclosed.

Also during the earnings call, Eric Dey, FleetCor chief financial officer, noted the company has not been, nor does it expect to be, directly affected by U.S. sanctions in Russia, where it does no business with sanctioned individuals or entities. However, the issue there is having an impact on the company’s business in Russia nonetheless, but whatever impact occurs will be offset by improving business activities elsewhere, he said.

Clarke later noted that he does not believe the pending legislation bringing card processing local will affect the company’s operations, where it settles and processes transactions locally.

During the quarter, FleetCor generated net revenues of $253.9 million, up 31.1 percent from $193.7 million during the same period ended March 31 last year, driven by big-business performance and acquisition revenue, Clarke said on the call. After merchant commission, revenue totaled $236.3 million, up 31.4 percent from $179.8 million. Net income rose 16.1 percent, to $75.1 million from $64.7 million.

In North America, transaction volume during the quarter reached 40.4 million, up 5.5 percent from $38.3 million a year earlier. With Q1 2014 net revenue per transaction of $3.13, total revenues for the quarter were $126.4 million, up 25.6 percent from $100.6 million during Q1 last year, when net revenue per transaction was $2.59.

International transaction volume was $47.2 million, up 31.5 percent from $35.9 million a year earlier. For Q1 2014, with net revenue per transaction of $2.70, total revenue was $127.5 million, up 36.9 percent from $93.1 million during the same period last year, when the net revenue per transaction was $2.59.