SECTION 1 -

• insufficient electronic data protection; and
• political or economic policy changes affecting a region or country.
The occurrence of one or several of these events could have a material adverse effect on the
Group’s results of operations and financial position. For instance, Venezuela’s decision to devalue the
Bolivar by 50% in January 2010 caused a €39 million loss recorded in 2009 pro forma net income
before tax and non‐recurring items.
Information systems
In the course of the Group’s business, the Group and its service providers use various
software programs and IT systems, especially in the management of the Group’s card‐based products
and in its prepaid services business (see section 1.9.3 of this prospectus). Even though the Group and
its service providers maintain database backup systems, if the databases and their back‐ups were
destroyed or damaged in any way in the event of an IT system failure, the Group’s business could be
disrupted.
3.2.2 Risks arising from the Group’s growth strategy
Organic growth strategy
The Group’s organic growth strategy is based on the leveraging of its existing strengths
through initiatives that could prove difficult to implement. The Group may not be able to reproduce
its historic growth rates for a number of reasons, including the following:
• some of the Group’s markets could become saturated;
• the Group may not be able to persuade customers to choose higher voucher face
values;
• new regional markets may prove less attractive than countries where the Group has
been operating up to this point;
• the products the Group markets in one country may not have the same commercial
success in other countries; and
• the increase in issue volumes resulting from the introduction of electronic product
formats may be less than expected.
Geographic Expansion
The Group’s ability to successfully implement its geographic expansion strategy is subject to
several obstacles and uncertainties, the most important being possible regulatory and political
changes over which the Group has no control. In order to sell the Group’s employee and public
benefits products in new countries, the Group must convince governments to set up an appropriate
tax regime, which normally requires specific legislation. The Group may need to make significant
upfront investments to establish its business in a new market without any guarantee that such a tax
regime will be created.
Successful penetration of a new market requires the Group to develop a network of affiliated
merchants in order to make its products attractive to customers and their employees. During the first
few years of operation in a new country, the Group could realize losses due to the lack of economies
of scale. Once established in a new country, the Group’s market share could decline due to the arrival
of new entrants that would be able to benefit from the Group’s upfront investment without bearing
the associated risks and costs.
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