Worldline: Weaker than expected results, disappointing strategic plan … Worldline slackens on the stock market

(BFM Bourse) – The electronic payments specialist has unveiled its quarterly results in quick succession and then its strategic plan for the period 2022-2024, and accuses the blow on the stock market, despite the expected announcement of a future withdrawal from its activity of payment terminals

It is decidedly not good to disappoint the market on the occasion of this great session of high-risk quarterly results, where investors scrutinize the publications and outlook of groups in a degraded environment. However, for Worldline, market expectations are still high, as evidenced by the plunge of nearly 9% at the end of July after a publication just in line with expectations.

This Wednesday, the title of the payment and transaction services group loose again 5.7% to 61.7 euros shortly after 9:30 am, in the wake of a “3rd quarter 2021 weaker than expected”, point out analysts at Oddo BHF in their morning note.

Over the period, Worldline recorded organic revenue growth of 8.3% over one year to 960 million euros, an increase deemed “particularly robust and in line with our central scenario for the year” by its CEO Gilles Grapinet, but which therefore comes out slightly below analysts’ expectations. In reported data, turnover jumped nearly 70% year-on-year between July and September, due to the consolidation of Ingenico’s accounts, the acquisition of which was finalized last October.

Complete disposal of terminals from 2021

“Worldline has benefited from a steady dynamic in domestic transaction volumes” specifies Gilles Grapinet, according to whom “these trends should continue, paving the way for a new acceleration in the fourth quarter”. “In this context, we are confirming our objectives for 2021, which now exclude those of the” Terminals “activity”, he adds.

As part of the review of payment terminal activities, the group’s Board of Directors has in fact validated the strategic direction to withdraw from the TSS activity (Payment Terminal Solutions & Services). After announcing last July that there were only two options left on the table for the future of TSS (a complete sale this year or a “temporary” retention in the group), the Board therefore decided in favor of the first scenario.

The group has also set out new objectives for the next three years, on which it expects to record between 9 and 11% of annual growth in its revenues. “Our multiple growth engines, including our positioning with retailers and banks […] will allow us to accelerate our rate of organic growth to double-digit rates, “says Gilles Grapinet.” This acceleration in growth associated with solid operating leverage […] will allow us to increase our profitability to 30% “, he adds. The group’s gross operating surplus (EBO) reached 700 million euros in 2020, or 25.5% of turnover.

In addition, as announced during the takeover of Ingenico, Worldline has put in place a new governance structure made up of a CEO and a Chairman of the Board of Directors. Gilles Grapinet, until then CEO, became the group’s CEO and the independent director Bernard Bourigeaud, now serves as chairman of the board of directors. “On the strength of our European identity and our differentiating competitive positioning, we are fully committed to executing our vision: to make Worldline a leading international Paytech” concludes the new CEO.

Quentin Soubranne – ©2021 BFM Bourse

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