Good morning, and thank you for standing by. Welcome to Pluxee third quarter fiscal 2026 revenue presentation. After the presentation, there will be an opportunity to ask questions by pressing star and one at any time. I advise you that this conference is being recorded. At this time, I would like to hand over the conference to Pauline Bireaud, Head of Investor Relations. Please go ahead, madam.
Good morning, everyone, and thank you for joining us today for Pluxee third quarter fiscal 2026 revenue call. I hope you are having a good start to the summer season. I'm Pauline, and I'm pleased to be here with you today to share our first nine months revenue performance. I'm pleased to be joined by Aurélien, our CEO, and Stéphane, our CFO. Before we begin, let me walk you through today's agenda, which you can see on the next slide.
Aurélien will start the highlights and the key figure for the third quarter and the first nine months of fiscal 2026, including an overview of our commercial momentum, and Stéphane will then take you through our top-line performance in more detail. Finally, Aurélien will conclude with our outlook, including an update on the situation in Brazil before we open the floor to Q&A. With that, I will now hand over to Aurélien.
Thank you, Pauline, and good morning, everyone. I'm pleased to be with you today to present our performance over the first nine months of fiscal 2026. Let me start with the key takeaways. First, we continue to make progress towards our full-year business targets. This was supported by continuous momentum in new client acquisition and resilient net retention, confirming the relevance of Pluxee's value proposition in a more demanding environment. Second, business volumes growth strengthened during the third quarter. Employee Benefits volumes continued to gain momentum while Other Products & Services benefited from the lower comparison base in public benefits. Third, revenues evolved as anticipated. Operating revenue growth remained positive over nine months, including the third quarter performance, reflecting, as anticipated, the initial effect of the PAT reform in Brazil, as well as some headwinds from the current macro environment.
Finally, we confirm our financial objectives based on the performance delivered over the first nine months and the robustness of Pluxee's fundamentals. Let me now turn to the key revenue figures for the quarter and the first nine months. In the third quarter, total revenue reached EUR 312 million, down -3.3% organically year-on-year and up +0.9% on a reported basis, supported mainly by positive currency effects. This performance was anticipated and mainly reflects the impact of the reform in Brazil on our take-up rate since the beginning of Q3. Looking at the first nine months, total revenues reached EUR 967 million, up +2.7% organically and +2.3% on a reported basis. Overall, Pluxee's nine months revenue performance remained positive, keeping us on track to deliver our full-year objectives. Let me now focus on our commercial performance.
Over the first nine months of fiscal 2026, we continued to make progress across our key business indicators. First, new client development reached EUR 1.2 billion in annualized BVI. This puts us significantly ahead of our plan, given our full-year target of more than EUR 1.3 billion. Second, net retention remained resilient at 99% in BVI, excluding the temporary delay in the ordering of a large employee benefit program in Romania.
It reflects robust client loyalty and active portfolio management while facing pressure from end-user portfolio trends in certain markets. Third, face value growth remained a major structural driver of net retention. Since fiscal 2024, increases in average face value have generated EUR 3.2 billion of cumulative additional BVI, meaning that we are already ahead of our cumulative three-year target of more than EUR 3 billion. Let's now take a closer look at new client wins.
New client development reached EUR 1.2 billion in annualized BVI over the first nine months, close to 20% growth year-on-year. This performance was broad-based across all three regions, with particularly robust momentum in Latin America, and especially in Brazil, despite the evolving regulatory environment. SMEs continued to play a key role in client acquisition.
This segment represented more than 32% of new client development over the first nine months when excluding the large Concessioni public contract in Italy. It is ahead of our 30% + target and was supported by strong contributions across geographies, notably from Brazil and Southern Europe. In a nutshell, we are ahead of our plan and expect to exceed our annual development target of more than EUR 1.3 billion, supported by a dense and diversified pipeline. Let me now turn to net retention, the second key pillar of our commercial performance.
Over the first nine months, net retention stood at 99% in BVI, excluding the temporary delay in the ordering of the large employee-based program in Romania. This performance reflected, first, client loyalty maintained at a high level across client sizes and geographies, confirming the strength of Pluxee's value proposition in a more demanding environment. Second, sales value also continued to grow across all regions.
Over the first nine months, increases in average sales value generated EUR 0.8 billion of additional BVI, bringing the cumulative contribution in fiscal 2024 to EUR 3.2 billion. This means that we are already ahead of our target. We also continue to see further upside, notably in continental Europe, where recently announced legal cap increases are taking time to fully materialize. Third, cross-selling has continued to gain traction, driven by both employee mobility and Gift benefits across Europe and Latin America. Lastly, the evolution of our end-user portfolio remained negative, as some clients in several markets tend to freeze recruitment or reduce headcounts as a result of the current macroeconomic context. I will now hand over to Stéphane, who will take you through our financial performance in more detail, starting with business volumes.
Thank you, Aurélien. Good morning, everyone. It's a pleasure to be with you today to present our financial performance, focusing on our top line for this Q3 2026. I will start on slide 10 with, as usual, business volume issued, or BVI, as they remain an important leading indicator of our underlying commercial momentum. Total business volume issued reached EUR 6.6 billion in Q3 2026, reflecting a +9.4% organic growth. This was supported by, first, the positive momentum in Employee Benefits BVI, which grew organically by +8% to EUR 5.2 billion in Q3 2026. Employee Benefits accounted for close to 80% of total business volume issued and marked a clear improvement compared to H1, with all regions contributing to growth over the quarter. This confirms a strengthening of our underlying commercial momentum during the quarter.
Second, Other Products & Services BVI returned to positive growth, delivering +15% organic growth in Q3 2026. This improvement was primarily driven by continental Europe, as the Q3 2025 comparison base in public benefits was lower. Overall, Q3 confirms a stronger volume trajectory compared to H1. Echoing Aurélien's presentation on our key growth levers, let's now look at how the growth in Employee Benefits BVI was fueled as of the end of Q3 on page 11. Over the first nine months of fiscal 2026, Employee Benefits BVI grew by +6.6% organically to EUR 15.3 billion. This was driven by, first, new client acquisition, which contributed approximately EUR 1.1 billion of additional business volumes over the period. This highlights the effectiveness of our commercial strategy and the strength of demand for our solutions across markets and client sizes.
Second, a slightly negative net retention contribution of EUR -0.2 billion as active sales value management and cost-saving did not fully offset pressure on our end-users' portfolios in several markets. Third, a EUR 0.2 billion contribution on positive currency and scope effects. Let's now see how total revenues trended over the period on slide number 12. Total revenues over the first nine months of fiscal 2026 reached EUR 967 million, up +2.7% organically and +2.3% on a reported basis. This includes a +0.8% scope effect, partly offsetting a -1.2% currency impact. Focusing now on Q3, total revenues reached EUR 312 million, down -3.3% organic. Reported revenue growth remained positive at +0.9%, supported by a favorable +3.7% currency impact and a +0.5% scope effect.
Looking at the breakdown by nature, Operating revenue, which represented 89% of total revenues reached EUR 270 million in the third quarter, down -4.1% organically. While underlying trends remain solid, this performance mainly reflected the anticipated initial effect of the implementation of the PAT reform in Brazil on the group take-up rate, as well as the challenging macroeconomic environment in Continental Europe.
Over the first nine months, Operating revenue continued to deliver a solid +2.5% organic growth, reaching EUR 843 million. At the same time, float revenue reached EUR 42 million in Q3 2026, up +2.8% organically and +7.4% on a reported basis, including a +4.6% currency impact. This continued growth was supported by a positive volume effect in countries where interest rates remained elevated and by higher investment yield year-on-year. Over the first nine months, float revenue generated a solid +4.5% organic growth, reaching EUR 124 million.
I will now turn to the underlying trends behind Operating revenue by line of service on page 13. Operating revenue reflected a differentiated trend between Employee Benefits and Other Products & Services. Focusing first on Q3, Employee Benefits were down -2.6% organically, reaching EUR 239 million as anticipated. While business volume remained well-oriented, revenue conversion was impacted by a circa -50 basis point decline in the group take-up rate. It was mainly driven by the implementation of the 3.6% regulatory cap on the merchant discount rate in Brazil. In Continental Europe, performance was also affected by the indirect effect on clients of the more uncertain macroeconomic and geopolitical environment. Second, Other Products & Services continued to face headwinds, declining by -14.3% organically over the quarter to EUR 31 million.
This was primarily driven by the ongoing transformation initiative underway in both the U.K. and the U.S., as well as by the continuous effect of the anticipated scale-downs of certain public benefit contracts in Europe. Looking now at the first nine months, Employee Benefits remained the group's main growth engine, delivering a +5.4% organic growth despite the implementation of the regulatory evolution in Brazil since Q3. Let's now turn to the geographic mix of such Operating revenue on slide 14. Operating revenue performance continued to reflect contrasted regional dynamics in Q3 and over the first nine months of fiscal 2026. Starting with Continental Europe, Operating revenue reached EUR 368 million over nine months, down -1.5% organically, and almost stable on a reported basis. In Q3, Operating revenue were down -3.2% organically.
While Southern Europe as well as countries such as Belgium remained well-oriented, this was offset by persistent macroeconomic headwinds and lingering public benefits base effect in other countries, which are both expected to continue into the first quarter. Moving to Latin America, Operating revenue reached EUR 336 million over nine months, up +6.1% organically, and +8.3% on a reported basis, benefiting from a +1.5% currency impact. In Q3, Operating revenue declined by -5.6% organically as anticipated, mainly driven by the initial impact of the PAT reform in Brazil on the take-up rate. This regional trend is expected to become more pronounced in Q4 with the further rollout of the reform in Brazil. Lastly, Operating revenue in the rest of the world reached EUR 140 million over nine months, up +5% organically and -2.6% on a reported basis.
In Q3, operating revenue declined by -2.9% organically, but increased by +3.4% on a reported basis, supported by a favorable +5.6% currency impact. Performance was primarily driven by continued strength in core Employee Benefits, particularly in Turkey, more than offset by transformation-related headwinds in the U.K. and the U.S. From Q4, we expect the region to return to growth. Overall, the group maintained a resilient growth trajectory over the first nine months, despite the third quarter marked by specific and time-bound regional headwinds. After operating revenue, I will now conclude this top-line performance review on how float revenue also contributed to growth on page 15. Float revenue reached EUR 124 million over the first nine months, up +4.5% organically and +0.7% on a reported basis, including EUR 42 million in Q3, up +2.8% organically and +7.4% reported.
This performance continued to reflect the continuous expansion of the float base in countries where interest rates remained elevated. It also benefited from a higher investment yield, up circa +30 basis points to 6.2% over nine months. This was driven by slightly higher interest rates year-on-year and by Pluxee's disciplined investment approach. Overall, float revenue has remained a consistent contributor to the group top-line performance over the first nine months. This now concludes my comments on the financial performance, and I will now hand back to Aurélien to walk you through the outlook. Over.
Thank you, Stéphane. Before turning to our full-year objectives, I will start with an update on Brazil and how we are navigating the ongoing market conditions. Since the revised framework was announced, we have consistently executed our action plan in Brazil with tangible progress across our three work streams in line with the regulatory milestones. Starting with operation readiness, our open arrangement is now in place alongside the rollout of our best-in-class offering. This provides the operational foundation required to adapt to the new market framework, and it serves our client effectively. Going forward, we will continue to build and innovate to strengthen our leadership position in that market. In parallel, our adaptation plan is being progressively deployed across all dimensions of the business with a clear focus on efficiency gains.
This includes commercial, operational, and cost levers, which we'll continue to work on as the reform is being implemented and market conditions evolve. On engagement with public authorities, discussions remain active and focused on technical implementation, feasibility, scope, and timeline. Lastly, on the legal front, we continue to pursue the appropriate legal proceedings, including our appeal on the merits of the case, both independently and in coordination with the industry association, ABBT. Overall, we are executing our roadmap in line with plan, supported by fully mobilized teams in Brazil and at group overall. This supports our confidence in confirming all our financial objectives. The performance delivered over the first nine months, together with our strong execution capabilities, give us confidence in confirming our financial objectives for the year-end. First, total revenues are expected to remain stable on an organic basis.
While Q3 reflected the anticipated first effect of the PAT reform in Brazil, our top-line performance over the first nine months remains positive, supported by solid underlying business trends. This gives us confidence as we enter Q4. Second, we continue to expect a slight organic expansion in recurring EBITDA margin. This illustrates the resilience of our business model, our disciplined cost management, and our ability to adapt our operating model in a more demanding environment.
Third, we continue to target around 80% recurring cash conversion on average over fiscal 2024 to fiscal 2026, backed by the strength of our cash-generative profile and disciplined execution. Before opening the floor to questions, let me briefly wrap up this presentation. Over the third quarter, top-line evolution reflected, as anticipated, the first effects of the regulatory changes in Brazil and some macro headwinds, while remaining consistent with our planned full-year outlook.
At the same time, commercial TPI stayed well-oriented overall, and business volume growth regained momentum, confirming the underlying strength of our business and providing a solid foundation for future revenue growth. Overall, our performance over the first nine months reinforces our confidence in the resilience of Pluxee's business model and in our ability to navigate a more demanding environment while delivering on our fiscal 2026 commitments. Going forward, our priorities are unchanged: maintain robust commercial execution, manage the transition in Brazil with discipline, and leverage the group's fundamentals and execution capabilities to continue creating long-term value for all our stakeholders. Thank you for your attention. Now, with Stéphane, we will be happy to take your questions.
Thank you. This is the conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on your touchtone telephone. To remove yourself from the question session. Please press star and two. Please pick up the receiver when asking questions. In the interest of time, we ask that you please limit yourself to two questions per caller. The first question is from Estelle Weingrod, JPMorgan.
Hi, good morning, and thanks for taking my questions. I have a first question on Brazil. In LatAm, operating organic growth was a lot better than what we were initially anticipating. Can you elaborate a bit more on this? Is it likely largely a timing/phasing effect? If so, should we expect Q4 to be the first quarter reflecting the full impact from the shift to open-loop? Actually, my second question will also be on Brazil. Could you also explain how the shift to open loop is shaping up in Brazil at the moment? More technically speaking, are you seeing any surprise? What are the biggest challenges so far? Are you also working on a hybrid model whereby you can also be the acquirer in the transaction? Thank you.
Thank you, Estelle. I'm going to answer maybe your two questions in one answer. Yes, coming back on the implementation of the PAT reform, as I said, it's progressing broadly in line with the timeline that we anticipated. The first measure, including the MDR cap and the 15-day payment cycle, came into effect on March 1. At the beginning of Q3. Since then, we have successfully opened our arrangement and launched what we believe is the best-in-class offer, while, as I was mentioning, still focusing on the commercial execution, the operational adoption, and all the mitigation initiatives. Based on what we observe so far, the Q3 performance has been broadly in line with our initial assumption. It's fair to say that looking ahead, Q4 will provide us greater insight into the tangible effect of the opening of our arrangement.
What we expect is the negative impact to intensify in Q4, with the further rollout of the reform. This is what we should anticipate for Q4 indeed. Again, technically speaking, in the implementation of our current arrangement, we are in line with our plan. We've not been facing any unexpected changes on this aspect. We will still see some impact, of course, on H1, the first semester of our fiscal year 2027.
The next question is from Pravin Gondhale, Barclays.
Hi, thanks for taking my questions. I also have a question on regulations. Could you please provide an update on where do we stand on meal vouchers framework review in France, the timing of it, and if there has been any change in text recently versus what we have seen in the past? Related to that, any other sort of new regulatory developments in your markets, including an update on Chile inquiry, would be helpful here. The second question is on float revenues, which was stronger than expected in Q3. Does this drive any change to your expectations for full-year float revenues in FY 2026 and also next year? Thank you.
Thank you, Pravin. Good morning. I'm going to start, and Stéphane, you take the question regarding the float revenue. For France, quite recently in June, a member of Parliament has submitted a bill. The intent proposal remains broadly consistent with all the previous reform initiatives, with still the objective of modernizing the meal benefit system while simplifying the framework.
This bill more specifically proposed measures that include the full digitization of the meal vouchers, the permanent extension of their use to all food products, the ban on client discounts, and the facilitation of donation of meal vouchers to NGO. No surprise. This is what somehow was stated by Serge Papin, the minister in charge, a couple of months ago. Timing-wise, we expect this bill to be discussed by parliament after summer, and of course it will depend on the legislative agenda.
Regarding Chile. Indeed, there is a case that is related to a claim filed by the Chilean Antitrust Authority before the Chilean Antitrust Court concerning the Employee Benefits market in Chile. The allegations relate to an historical period before 2021. Of course, Pluxee has been fully cooperating with the authority during the investigation, and we will continue to engage constructively and transparently throughout the judicial process. It's fair to say that this case remains at an early stage. Proceedings in front of this antitrust court are typically quite long.
They may take several years for final outcome to be reached. More importantly, we've been taking this matter very seriously right from the beginning. We have engaged with all our stakeholders, starting with our clients, our partners, and all other stakeholders to provide transparency on the situation, and to share as well our ethics, compliance, and governance framework that is in place. So far, we have a good continuation of our business in Chile. Stéphane?
Good morning, Pravin. Regarding your second question on float revenue. This is true that float revenue remained for the first nine months and into three again, a consistent and a constant contributor to growth, to organic growth. When we compare to what we had in mind at the very beginning of the fiscal year, this is true that there have been less interest rates cuts compared to what we had initially planned, and it was only based on the consensus of market. In countries like Brazil or Turkey, for example, in Turkey, there were no cuts at all yet. In Brazil, the SELIC interest rate remained high all along the year with a slight cut recently.
We have been able to roll out since the spin-off and still in this fiscal year 2026, our discipline investment approach, extending a little bit the maturity of our investment in order to support a strong yield. All this being put together, we have been able, compared again to what we had initially in mind, to deliver a strong organic growth. Going forward, we don't guide on a quarterly basis, what I can tell you is that what we will deliver in Q4 will be a little bit lower compared to what we delivered so far in terms of organic growth. Overall, this mean that for the full year, for the full fiscal year 2026, we are now tending to a slight organic growth positive, a slight positive organic growth for revenue, of course.
This doesn't move the needle for the overall organic growth. Keep in mind that float revenue represents a little bit more than 10% of our revenue. The big growth engine is the operating revenue. Of course, we have this additional push from float revenue, but this does not change things for the overall stable top-line guidance that we have for the top line as a whole.
For fiscal year 2027, this is far too early to provide you with some detail on this. As you know, the geopolitics environment has been very uncertain and very volatile in the last months. On one side, we are still working on the management of the maturity of our investment, which will provide with some basis for fiscal year 2027, we'll have to take into account, when the time comes, the current situation by the end of next October.
The next question is from Hannes Leitner, Jefferies.
Yes. Thanks for letting me on. I got two questions. The first one is on Brazil, the regulatory headwinds. You mentioned it only just started. If we are now thinking about the absolute impact and then the trajectory over the next couple of quarters. You had let them around low double-digit organic growth. If you're calculating the headwind, it could be between EUR 10 million and EUR 15 million or EUR 10 million and EUR 17 million headwind from the Brazilian regulation.
I think originally you talked about high single-digit impact for the year. You mentioned everything going according to plan. Should we then expect in Q4 quite a big increase in these headwinds? Maybe you can talk about what caused that dynamic. I guess the foresee model will not be such a big cliff. Maybe just a second question on the European macro situation.
Maybe you can talk there a little bit about the moving parts. You called out also face value being a positive or starting to develop a positive tailwind. Given the macro concerns, maybe you can flesh that out a little bit. Where do you see that? Is it which country? Which sector? Or is it rather more competitive nature, which you obviously priced into very well with the incremental wins in BVI. Thank you.
Hi, thanks for your question. We start with the macro situation in Europe. Indeed, continental Europe continued to be soft in Q3. This reflects a combination of macroeconomic factors and specific portfolio dynamics, and still some public benefits phasing effect. From a pure macro standpoint, we continue to see a cautious environment in several markets. It was the case previously, it remains the case, with clients remaining prudent on hiring and in some cases on the increase of employee benefit budget.
What we see as well is that the end user portfolio trends remain a headwind in a number of countries. France is an example, Germany, Romania. While also recent increases in face value caps are taking longer than to materialize and what we initially expected. Again, the picture remains quite different across the region. Southern Europe continue to show good resilience and a solid commercial activity, while other markets are facing, more importantly, this challenging economic backdrop. Again, I think some countries that I mentioned are France and some countries in the Central and Eastern Europe. Regarding Brazil, maybe, Stéphane , you want to comment?
Good morning, Hannes. Regarding what is currently happening, as we started to explain in the presentation, this is true that the impact of the reform is going to be higher in Q4 compared to what we have seen in Q3. I'm not going to share with you some absolute number as you try to put them together, because there is still a lot of uncertainties remaining on this reform and the impact of this reform. Please keep in mind that this reform defines a merchant discount cap. Our business in Brazil, like in other countries, if we leave aside the float revenue, remains based on two main work streams. Revenue work stream on merchant, but also on client, with some balance being constantly adjusted with the competition on the market.
Of course, we are facing all these changes with all of the competitors still are fighting strongly in order to gain market shares. It's really difficult for us to assess precisely the impact. What I can tell you is that in Q4, the impact will be somehow, in term of organic growth, twice the impact that we had in Q3 for Brazil. In Q1 and Q2 of next year, same thing. We'll have strong impacts, stronger compared to what we have experienced in Q3. We will come back to you later when we have more clarity with all the remaining uncertainties based on what I was explaining on how the market is operating, but also on what Aurélien report regarding legal uncertainties, the discussion we are still having with the government, and the legal proceedings.
Maybe just to add on. For us, what matters as well is that the fundamentals in Brazil remain very strong. Our commercial momentum continues to be robust, supported by solid client acquisition and a healthy retention level. This stronger plans definitely reinforce our confidence in the long term regarding the attractiveness of the Brazilian market and our ability to create value even through this period.
The next question is from André Juillard at Deutsche Bank.
Good morning. Congratulations for these solid results. Two questions, if I may. First one about competition. Do you see any moving parts in Brazil following the new regulation, any small players being under difficulties and pushing for consolidation? Second question about your balance sheet. The fact that you still got a pretty solid net cash position and you have a better visibility or better idea on this use of cash between M&A, potential return to shareholders or any other decision. Thank you.
Stéphane, do you want to start? Hello, good morning, André. Do you want to start with the second question from André?
Good morning, André. Referring to your question regarding our balance sheets, as you will know very well, on Q3, there is no update on the balance sheet, it remains really unchanged compared to what we communicated end of H1. As you are seeing with the significant firepower remaining on our balance sheet. I remember all of us that this is on purpose, that the time of the spin-off the balance sheet of Pluxee was designed with this very sound basis in order to provide us with some good potentials in order to deliver some M&A. Since the spin-off, we have pretty cope with our capital allocation strategy, which was to, on one side, go on investing in order to feed the organic growth with some CapEx through many new technologies.
Accelerate the potential for organic growth by acquiring new targets and something that we did as well. Of course, return value to our shareholders through a dividend or even a share buyback, which we did by rolling out this EUR 100 million share buyback that we launched at the beginning of the current fiscal year, and which came to an end at the beginning of May. When you compare all these three pillar of our capital allocation, it has been very well-balanced since the beginning of this new story for Pluxee. With approximately EUR 200 million for each of them spent since the spin-off. Leave aside the non-cash transaction that we had with Santander going forward.
We remain really dedicated to go on delivering this capital allocation, with still the possibility to accelerate in terms of M&A, in case we were able to identify and negotiate and close some attractive deal. We remain very disciplined in this area with some ambition. Again, very disciplined. No change to this capital allocation policy. What was behind your question, is there anything that we should share regarding some further return to shareholder? This is a question that should be decided by the board, and so far, no, there is nothing, and this is too early. We will first close fiscal year 2026, then we'll see. Again, this is something that should be decided by the board.
Okay. Regarding your first question, competition in Brazil and the impact on the small player. It's too early to see any major impact on their activities. Is there been some discussion regarding any consolidation move? To my knowledge, for the moment, we've seen none of it. There might have been some discussion between some of them, again, it might be just rumor. Again, I think that we need to wait a bit of time to see all the potential impact that this PAT reform could have on the competitive environment.
The next question is from Justin Forsythe , UBS.
Thank you very much. Good morning, Aurélien and Stéphane. Thank you for the time. A couple of questions on my end. Just wanted to ask one on Brazil here. It seems like you're flagging quite a bit of uncertainty in the legislative environment moving forward. Maybe you could just elaborate on the latest there, like exactly where you stand with the appeal process. It feels like maybe there's some feeling on your side, some aspects of the regulation could get overturned. Just further on that point and the competition point, it seems like some of the newcomers are growing incredibly fast.
I think iFood was growing over 100% in their voucher business in Brazil in FY 2026. Maybe you could just elaborate on that. Stéphane, a question on FX impact. You flagged Turkish lira, which was strongly negative, Brazilian real, and Mexican peso as the main drivers of FX. If I look at other countries, the FX benefit was 6%, and that would also include a strongly negative Turkish lira. Can you just help us understand what's driving that FX positive in other countries? Thank you.
Hi, Justin. Thanks for the question. Regarding, I will not comment, of course, on any of my competitors' performance. What I can tell you is that from a business volume standpoint, we've been still delivering a double-digit organic growth. Again, a very solid performance in Brazil and we remain very confident in our future there. Regarding what you qualify as uncertainty, as I said in the presentation, indeed, there is still some legal proceedings in progress, it does include our appeal on the merit of the case. There are two procedures in parallel, one run by Pluxee, another one run by the industry association.
What we are trying to get through those procedures is more clarity on whether or not the implementation of the four C's should be mandatory, could it be the end of the three C's, the closed loop model, and still some visibility on the interoperability. This is what we are trying to address through those proceedings. Regarding the FX impact, Stéphane.
Good morning, Justin. On the FX situation, we have seen significant changes over the last months. Basically, if you refer back to fiscal year 2025, we had a significant headwind in terms of FX, mainly coming from Brazil and Turkey. In this year, month after month, the situation has significantly changed with first Brazilian real reinforcing against euro, the same thing for Turkey in the last Q3, which now is really something new. If you look at the Turkish lira in our Q3, for our Q3, when you compare with the year before, the Turkish lira against EUR is 6% higher compared to what it was one year ago.
Last year we had, overall, in fiscal year of 2025, 8% headwind in terms of reported growth because of foreign exchange exposure. Beginning of this year, in the first quarter, it was only -4%. It turned close to balance in Q2, now it's positive. It's positive with mainly Brazil, then Turkey contributing for this positive trend in terms of foreign exchange exposure. We'll see what is going to happen in the next months. We can't manage it. When you look at the consensus, the situation is currently quite at least balanced in terms of foreign exchange exposure.
As a reminder, if you wish to register for a question, please press star one on your telephone. The next question is from Pavan Daswani, Citi.
Morning, Aurélien, Stéphane. Thanks for taking my questions. I've also got a couple. Firstly, could you talk about the next steps in Brazil since you implemented the open-loop infrastructure? Have you seen merchant acquirers connecting to this? Have you seen volumes shifting over? Or it sounds like that's really going to be in Q4. Then secondly, on face value increases, I think you mentioned some delays in seeing the higher inflation levels come through in face value increases. What's really driving that? Is that mainly a timing issue, and you should expect that to kind of come through in the next few months?
Okay. Regarding the face value, and again, good morning, Pavan. Face value remains a very structural driver of our BV growth and upon defense and consequently. The performance has been strong. Indeed, it's fair to say that looking ahead, we still see further upside, especially in countries where recent legal cap increases have been approved. It's taking more time to be fully implemented, more time than anticipated. For example, it's mainly in countries in continental Europe, Belgium, Italy, Romania. It's because at the moment, clients are still hesitant, given the uncertainty of the macroeconomic environment.
In Latin America, and rest of the world, situation is different because the inflation dynamic is quite supportive there, and it will continue to contribute to the sales value growth. Regarding Brazil and the implementation of the open arrangement, as I said, it's quite early. Our arrangement was opened mid of May, it's early stage. We are currently discussing with acquirers that would like to join our scheme, and it will be extended over time. It's quite encouraging indeed.
The next question is from Johanna Jourdain , Oddo BHF.
Yes, good morning to on my side, please. On the PAT reform in Brazil, can you please clarify the expected impact on the revenue and cash flow, or at least give us a direction coming from the next regulatory milestone? In particular, the interoperability November 26, and also the transition to a prepaid model for public sector clients. Second, on Other Products & Services, the revenue remains under pressure in Q3. When do you expect this business to stabilize, particularly after the U.K. and U.S. transformation initiatives? Thank you.
Stéphane, do you want to start with the question from Johanna?
Good morning, Johanna. Your question was about the impact on two main indicator, revenue and the cash flow of the PAT reform happening in Brazil. I'm not sure exactly what is behind your question, I'm going to provide you with some color. In term of revenue, we clearly indicated that, and already insisted that there is no impact on the business volume, and we are still seeing a strong momentum in this country.
This business remaining very attractive. We have, and this is what is happening on revenue, an impact from the merchant discount rate cap, which has an impact on the take-up rate with some, again, balance in between the client revenue work stream and the merchant revenue work stream. There will be an impact with lower revenue, of course. This is what we are seeing, and this is what is going to happen.
With some uncertainties regarding the balance of operating and float revenue, as we will need to see the behaviors of merchants. Many merchants in Brazil have been activating, over the last years, this express reimbursement option that we offer to them. We will see with the shortening of the repayment terms, if this has some impact on their behaviors going forward. I'm saying here that we don't see if the impact will only be on operating revenue with much lower express reimbursement option. The float revenue remaining unchanged, or if some merchant will decide to keep the express reimbursement, which in this case, for us, still the same level of operating revenue in this respect, and lower float revenue.
This is just to share with you some color, that there is a lot of uncertainties regarding what will be the final impact of this 8.6% cap on merchant discount rate, and the impact of what is behind this reduction in payment term down to 15 days in term of merchant behaviors. In term of free cash flow, it's a little bit the same things, but we have some positive tailwinds also in front of us, and notably for fiscal year 2027. I was explaining that we have this express reimbursement option that is open for merchant, and depending on what they decide to do, there might be a higher or lower impact.
If I say it again, if the merchant don't change the option to activate this express reimbursement, there will be more significant impact on the free cash flow for us, because this mean that we will have the amount On our balance sheet of the float amount being reduced by quicker repayments all in all to merchants. In case they decide to stop activating this option, there should be limited impact on the float amount in the balance sheet, and in this case, limited impact on the free cash flow.
Again, we'll see. This is too early to say what will happen. Going forward in fiscal year 2027, we also have, as part of the decree, the current request requirement that public clients should move to a prepaid scheme, which is not the case right now, which might have some positive impact on the free cash flow. A lot of uncertainties. I just can share some colors of the potential upside or downside. We will have more clarity, hopefully, by the end of fiscal year 2026 or beginning of fiscal year 2027.
Regarding Other Products & Services, it's a combination of the two factors, the performance of public benefit and we've been facing headwinds. What we expect is those headwinds to gradually moderate, compared with earlier in the year. This is public benefit on one hand, and on the other hand, the performance of U.K. and U.S., which will still remain, this drive will still remain on support. Maybe a few words on U.K. and U.S. The repositioning that we started is progressing broadly in line with our plan. The drag over the first nine months reflects the deliberate exit from the non-core and lower return activity.
While we, as we explained to you, we continue to pivot towards the employee engagement solutions that are supported by fully digital platform. We are focused on how to build long-term value creation model there, and with the objective on, just in, to build the fast-growing, scalable, and profitable platform. Having said this, we continue to expect U.K. and U.S. to progressively improve and become more supportive to our growth, but from fiscal 2027 as our new model scales up there.
Gentlemen-
Okay.
No more questions registered at this time. I turn the conference back to you for any closing remarks.
Thank you, Berta. Thanks everyone for joining us today and for all your questions. As a team, we remain fully focused on executing our strategy with discipline, achieving our financial objectives, and continuing to deliver sustainable, profitable growth. We appreciate your continued interest in Pluxee and look forward to speaking with you again soon. Have a good day, all. Goodbye.
Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones.