(News Bulletin 247) – The payment services group published growth below expectations over the last three months of the year. The group also unveiled new medium-term targets which lack ambition according to Stifel.

Having lost its status as a member of the CAC 40 since December, Worldline experienced a very difficult end to 2023 on the stock market.

The company saw its share price drop by 57% last year. Which pushed its partner Crédit Agricole to come to its aid by taking a 7% stake in January. This in order to strengthen their bonds but probably also to repel potential predators…

The group nevertheless still remains in the sights of the market. Worldline is taking another hit on the stock market this Wednesday, with the payments company falling 10.6% around 10:30 a.m. following the publication of its annual results.

“Worldline’s fiscal 2023 results were once again disappointing. While revenue growth was closer to our conservative estimate than consensus, it fell short of expectations,” the office said. independent research firm AlphaValue.

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Job cuts

Over the last three months of 2023, the payments group generated revenues of 1.187 billion euros, growth of only 1.3% on a comparable basis, while the consensus was forecasting growth of 1.7% on a comparable basis. comparable, according to Invest Securities. The company’s main division, namely payment services offered to merchants, generated revenues of 849 million euros, up 3.1% against a consensus of 3.7%.

“Despite good resilience in a degraded macroeconomic context, the quarter was penalized by the termination of merchant contracts linked to the implementation of a new risk management framework. The termination of these contracts represents an impact of approximately 30 million euros in turnover in the second half of 2023,” the company explained.

Over the whole of 2023, gross operating surplus fell by 3.7% to 905 million euros. The group’s net profit fell into the red, falling to 817 million euros against a profit compared to 211 million euros a year earlier. This account line was weighed down by an accounting depreciation (linked to “goodwill”) of 1.15 billion euros which reflects “the change in valuation of the industry” in its merchant services division.

For 2024, Worldline is heading towards a year of transition. “As a pan-European leader in digital payments, our mission is to continually adapt to changing industry trends and the environment. 2024 will be a pivotal year in making this transition to a streamlined group,” explained the general director, Gilles Grapinet, in a press release.

To adapt to this less buoyant environment, Worldline launched an adaptation plan called “Power24” at the beginning of the month which will result in the elimination of a maximum of 8% of its workforce (around 18,000 in total).

A “problematic” dynamic

Ultimately, Worldline expects to achieve like-for-like growth of 3% in 2024, an adjusted gross operating surplus of at least 1.17 billion euros and free cash flow of at least 230 million euros. . Objectives deemed “unsurprising” by Stifel.

The payments group also delivered new medium-term ambitions, without giving a precise timetable. Worldline intends to achieve like-for-like growth in its revenues at “mid to high single digits” (which can be roughly translated as a range of 4% to 9%) and aims for “continuous improvement in its gross surplus operating income adjusted from 2024”. The company also intends to achieve “rapid progress in the conversion of adjusted gross operating surplus towards a rate of around 50%”. Stifel believes that its new targets “lack ambition, particularly on adjusted gross operating surplus”.

Worldline will also hold a day dedicated to investors in the second half of the year to detail its “medium-term ambition”. Until this meeting, “we continue to think that there is a lack of catalysts” to take action, underlines Stifel.

“The group’s dynamics should remain problematic (low organic growth in turnover until the fourth quarter) and it will take time to reassure investors about the group’s competitiveness (transformation plan in progress)”, underlines for its part Oddo BHF.

“In the end, Worldline’s publication lacks good news compared to the previous communication in October, it is either in line or slightly disappointing. Furthermore, the new medium-term targets are tasteless and take us back to square one in terms of growth. We are on a range of 5% to 10% whereas on the previous strategic plan they wanted to grow from 9% to 11%. Those who thought that the company could generate growth of 10% per year are eating their hats “, concludes a financial intermediary.