SECTION 1 -

Competition
The Group’s various businesses face competition from major international operators
(primarily the Sodexo Group) as well as from small regional rivals (see section 1.10 of this prospectus
for a description of the Group’s main competitors). New entrants may also begin doing business in
one or more markets. This competitive pressure could drive down commission levels (which has been
occurring in France for several years), increase the risk of non‐renewal of contracts at their expiration,
and make it more difficult to win new business. If the Group is unable to respond to this competition
effectively, it could lose market share and its business or profitability could be negatively affected.
In addition, in countries where New Services has a leadership position, certain competitors or
commercial partners could be accuse the Group of using its competitive position to circumvent
regulations or distort the market. For instance, the French competition authority is currently
investigating a complaint of one of Accentiv’ Kadéos’ competitors related to the length of exclusive
product acceptance and distribution arrangements entered into with certain of the Group’s affiliated
merchants for some of the Group’s products. On March 2, 2010, the French competition authority
rejected the competitor’s request for an injunction. At this stage, the Group is not able to predict the
outcome of the investigation.
Voucher counterfeiting and theft
The distribution of counterfeit vouchers and voucher theft present several risks for the
Group. New Services could be required to redeem counterfeit or stolen vouchers. In addition, even
though incidences of counterfeiting and theft are relatively infrequent, and the amounts involved are
generally small, the Group’s investment in fraud prevention can be considerable.
Transition from paper to electronic product formats
The Group is making the transition to the use of electronic formats (contactless cards,
internet, mobile phones) for a number of its products. While this transition offers an opportunity to
increase issue volumes and to sell higher value‐added services, it also carries some risks. This
transition could mean a drop in financial revenue because the time between the issuance and the
redemption of electronic products is generally shorter than for paper‐based products. The Group
could also lose a portion of its revenues that it currently earns from lost or destroyed paper vouchers.
Processing of payments for electronic products is often carried out through third party networks,
principally those of large banking groups, which charge transaction commissions and impose their
own procedures. Finally, in certain cases, until commissions can be collected automatically, the
Group will have to bill its affiliated merchants for its commissions after redemption, running the risk
of non‐payment.
International activities
The Group operates on a global basis, with operations in several emerging market countries,
particularly in Latin America, and, to a lesser extent in Central Europe. In 2009, Latin America
accounted for approximately 41% of issue volumes.
are:
Among the many risks the Group faces in its international businesses, the most important
• unexpected and arbitrary changes in regulations, especially tax regimes;
• limits on the repatriation of profits (such constraints exist, for example, in Venezuela);
• nationalization without adequate compensation;
• exchange rate fluctuations;
• corruption in certain countries;
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