Worldline - H1 2023 results - Press Release
H1 2023 results
Strong business trends, solid
first-halfRevenue: €
2,242 million,
+9.3%
organically, with
+9.4% in Q2’23OMDA:
€ 519 million,
23.1% of revenue,
+80 bpsFree cash
flow: € 232 million, 44.7% OMDA conversion
Strategic
initiatives developing as per
planMilestones reached on Crédit
Agricole partnership confirminga closing
by end of 2023Closing of
Banco Desio completed and merchants’ migration ongoing
All 2023 objectives
confirmed
Paris La Défense, 26
July 2023 – Worldline
[Euronext: WLN], a global leader in payment services, today
announces its results for the
first semester of
2023.
Gilles
Grapinet, CEO of Worldline, said:
“Worldline executed a very satisfactory first half of the year with
a 9.3% organic growth, supported by a solid double-digit
performance in merchant Services, confirming, in particular, our
enhanced competitive positioning resulting from our continued
successful integration of and the former Ingenico. This strong
business trends coupled with cost optimization plans, integration
synergies and operating leverage, allowed the Group to deliver a 80
basis points margin expansion led, as planned, by a solid
improvement in Merchant Services profitability despite inflationary
headwinds impacting our costs base.
As part of our M&A roadmap, we entered
during the semester into exclusive discussions with Crédit Agricole
for a strategic long-term partnership and the creation of a
joint-venture. Combining Worldline leading technology and products
with the distribution power of Crédit Agricole, we have the joint
ambition to create the future leading player in the French market
able to deliver premier services to all merchants. The preparatory
work post-announcement is progressing well, fully in line with a
targeted signing in the course of Q3 2023 and a closing before the
end of the year.Last, end of March, we have completed the
acquisition of Banco Desio Merchant Acquiring activities
reinforcing our local presence in the Italian market with a strong
partner.
Based on this good first-half showing its
enhanced competitive strengths 2 years after the start of the
ex-Ingenico integration the Group confirms its 2023 objectives and
reaffirms its strategic projects to establish Worldline as a
premium global Paytech while actively participating in the Payment
industry consolidation.”
H1 2023 key figures
In € million |
|
H1 2023 |
H1 2022 |
change |
|
|
|
|
|
Revenue* |
|
2,242 |
2,051 |
+9.3% |
|
|
|
|
|
OMDA* |
|
519 |
457 |
+13.4% |
% of revenue |
|
23.1% |
22.3% |
+80 bps |
|
|
|
|
|
Net income Group share from continued
operations** |
|
81 |
53 |
+51.6% |
% of statutory revenue from continued operations |
|
3.6% |
2.6% |
|
|
|
|
|
|
Normalized net income Group share from continued
operations** |
|
243 |
213 |
+14.3% |
% of statutory revenue from continued operations |
|
10.8% |
10.5% |
|
|
|
|
|
|
Free cash flow (FCF) from continued
operations |
|
232 |
230 |
+0.8% |
OMDA to FCF conversion rate*** |
|
44.7% |
49.0% |
|
|
|
|
|
|
Closing net debt (before IFRS 5)* |
|
1,837 |
3,456 |
|
* H1 2022 at constant scope and exchange rates |
|
|
|
|
** Normalized net income Group share on continued operations |
|
|
|
|
*** H1 2022 conversion rate calculated on H1 2022 statutory OMDA
from continued operations |
|
|
Worldline’s H1 2023 revenue
reached €
2,242
million, representing
+9.3%
revenue organic growth (of which
+9.4%
in Q2). This achievement was reached thanks, in
particular, to the continuous growth dynamic in Merchant Services
reflecting the robustness of the business model. It reflects the
benefit of the widespread and rapid shift towards digital payments
as well as the Group’s strong positioning following the acquisition
of Ingenico.
This strong execution also materialized in the
Group’s Operating Margin before Depreciation and
Amortization (OMDA) reaching €
519 million in H1 2023;
representing
23.1% of
revenue, an improvement by
+80 basis points
compared to H1 2022 at constant scope and exchange rates. This
profitability improvement was led in particular by Merchant
Services posting +100 basis points thanks to the acceleration of
revenue growth fostering operating leverage; synergies from
Ingenico; and effects of transversal productivity actions.
Net income Group share from continued
operations reached €
81 million, an
improvement of
+5.6%.
Normalized net income Group share from continued
operations (excluding unusual and infrequent items, Group
share, net of tax) reached €
243 million, up
+14.3%.
Normalized basic EPS was €
0.86
in H1 2023 compared to €
0.76 in H1 2022.
On a dilutive basis, it was up
10.5% to € 0.84.
Free cash flow from continued
operations in H1 2023 was €
232 million, representing a
44.7%
cash conversion of OMDA (free cash flow divided by OMDA),
in line with the expected half-yearly pattern of 2023.
Group Net debt amounted to
€
1,837
million at the end of June 2023, reflecting good
free cash flow generated over the semester. It represents a Group
leverage ratio at 1.6x on a LTM basis.
Focus on Q2 2023
revenue performance
In € million |
|
Q2 2023 |
Q2 2022 * |
Organic change Q2 |
|
|
|
|
|
Merchant Services |
|
849 |
749 |
+13.5% |
Financial Services |
|
236 |
235 |
+0.2% |
Mobility & e-Transactional Services |
|
87 |
87 |
-0.3% |
Revenue |
|
1 172 |
1 071 |
+9.4% |
* at constant scope and exchange rates
Worldline’s Q2 2023 revenue reached
€
1,172
million, representing a
+9.4%
organic growth. This achievement was notably reached
thanks to the solid growth in Merchant Services at +13.5%
organically, fueled by payment volumes both instore and online in
commercial acquiring activities. Financial Services was broadly
stable, in line with anticipated full year trajectory. Mobility
& e-Transactional Services benefited of a solid underlying
growth but remained impacted, as already disclosed, by the
re-insourcing of a secured mail telco operator contract end of Q2
22, leading to an overall flat performance in Q2 2023.
Merchant Services
Merchant Services’ revenue in
Q2 2023 reached € 849 million, representing a
solid organic growth by +13.5%. Acquiring MSV
reached € 120 billion in Q2, a solid performance led in particular
by the strong Online acquiring MSV growth and new merchants
gained.
By division, the dynamics were the
following:
- Commercial Acquiring: Strong
double-digit growth driven by the good performance for almost all
geographies especially in Switzerland, Benelux and Germany and
fueled as well by the good start of new activities integrated in
Italy and Greece.
- Payment Acceptance: Good
double-digit growth mainly led by Digital Commerce benefitting from
the good ramp-up of new customers recently signed and the
continuous recovery of travel related verticals, while omnichannel
solutions continue to gain traction in the vast majority of our
geographies.
- Digital
Services: Soft performance despite a good level of activity in
Turkey and Benelux related to retailers’ activities.
During the second quarter of the year,
commercial activity in Merchant Services materialized in numerous
wins or extensions for both Commercial Acquiring and Payment
Acceptance, in-store and online, with among others, Blizzard,
Valve, Evonity, Amazing Talker, and new key partnerships signed
with Vtex (Digital commerce platform) and travelplanbooker.com.
Financial Services
Q2 2023 revenue reached
€ 236 million up
+0.2% organically, with a soft growth in the
second quarter as expected.
The performance by division was the
following:
- Card-based payment processing
activities (Issuing Processing and Acquiring Processing):
Significant improvement driven by APAC, thanks to new project
deliveries, as well as continuous good development of volumes in
Benelux and France.
- Account Payments: Soft performance
despite a good level of activity with large German contracts
(Commerzbank and Unicredit)
- Digital Banking: Good Dynamic
fueled by increased volumes and new contracts in France, Belgium
and Switzerland, offsetting a soft performance in the
Netherlands
In Q2 2023, Financial services activity was also
marked by the successful delivery of a front end prototype in
collaboration with ECB to shape the future digital euro. Worldline
delivered the person-to-person (P2P) fully offline payment
use-case, allowing individuals to make payments using the digital
euro, even when no party involved has network access. The
prototype’s success confirms the technological feasibility and
industrial scaling potential of the offline scenario, contributing
to a more resilient payment system.
Mobility & e-Transactional
Services
Revenue in Mobility &
e-Transactional Services reached €
87 million, stable
organically with a good underlying growth still offset by
the effect of the re-insourcing of the secured mail telco operator
contract end of H1 22, as already disclosed.
The performance by division was the
following:
- Trusted Digitization: Soft
performance despite a good dynamic in France driven new projects
signed and volumes growth from energy subsidies.
- e-Ticketing: Double-digit growth
driven by increased volumes in transportation and a strong momentum
in the UK with the ramp-up of contracts signed such as WECA.
- Finally,
e-Consumer & Mobility: Organic decline despite a solid growth
in Iberia and the contribution of the new contract signed with SNCF
(the French railway national organization) not able to offset the
re-insourcing of a French telco operator contract.
Commercial activity in Mobility &
e-Transactional Services was dynamic during the quarter, in
particular with the signature of a contract with Paris-
Ile-de-France regional authority to realize and to operate the new
generation of its digital services platform for highschoolers. This
service will be use by 1.5 million highschoolers and will be the
center piece of the digital education policy for Paris region. This
major win opens new growth perspectives for the Trusted Services
business line.
H1 2023
OMDA performance per Global Business Line
|
|
OMDA |
|
OMDA % |
|
|
|
|
|
|
|
|
|
In € million |
|
H12023 |
H12022 * |
Organic change |
|
H12023 |
H12022 * |
Organic change |
Merchant Services |
|
399 |
339 |
+17.6% |
|
24.8% |
23.9% |
+100 bps |
Financial Services |
|
127 |
129 |
-1.3% |
|
27.4% |
28.1% |
-70 bps |
Mobility & e-Transactional Services |
|
22 |
22 |
+3.7% |
|
13.1% |
12.6% |
+50 bps |
Corporate |
|
-30 |
-32 |
-7.2% |
|
-1.3% |
-1.6% |
+30 bps |
Worldline |
|
519 |
457 |
+13.4% |
|
23.1% |
22.3% |
+80 bps |
* at constant scope and exchange rates
Merchant Services
Merchant Services’ OMDA in H1
2023 amounted to € 399 million, 24.8% of
revenue, representing a strong improvement by +100
basis points. It was positively supported by:
- Acceleration of revenue growth
fostering operating leverage;
- Synergies from Ingenico integration
program; and
- The effects of contract revaluation
and repricing initiated in H2 2022.
Financial Services
H1 2023 OMDA reached
€ 127
million, representing
27.4%
of revenue, down 70 basis points compared to the same
period last year. The division was affected by cost inflation not
yet compensated by measures launch in term of cost base monitoring
and workforce management.
Mobility & e-Transactional
Services
Mobility & e-Transactional Services’
OMDA reached
€ 22.4
million in H1 2023, representing
13.1% of
revenue. OMDA margin was up
50 basis points compared to last
year driven by the improvement of the workforce management and
positive business trends.
Corporate costs
Corporate costs amounted to €
30 million in H1 2023,
representing
1.3% of
total Group revenue compared to 1.6% in H1 2022
(+30 basis
points compared to last year). This good performance
reflect the implementation of a rigorous cost monitoring in support
functions.
Financing activity
In H1 2023, Worldline has been very active
regarding its debt maturity management.
Thanks to the 1.4 bn TSS proceeds and a strong
cash generation, two operations occurred:
- Bought back for an amount of € 385
million on bonds maturing in 2024 split as follows:
- € 245,300,000 of the Series A Bonds
at a purchase price of 97.656% plus 1.117% accrued interest, of
which € 354,700,000 will remain outstanding after cancellation of
the repurchased Bonds, and;
- € 140,300,000 of the Series B Bonds
at a purchase price of 95.891% plus 0.168% accrued interest, of
which € 359,700,000 will remain outstanding after cancellation of
the repurchased Bonds.
- The settlement date for the Tender
Offer occurred on 22 May 2023.
- Repayment of €500m of bonds
maturing end of June 2023, using Worldline’s cash available on the
balance sheet.
Strategic initiatives
update
On April 19, 2023, Worldline entered into
exclusive discussions with Crédit Agricole with
the objective to create a major player in the attractive French
payment market. Leveraging Worldline’s vertical expertise and
Crédit Agricole’s strong distribution networks and deep French
market presence, the contemplated partnership would offer a
state-of-the-art combination of technological and commercial
offerings at scale allowing to adequately respond to any type of
evolving merchant needs. The joint-company would be majority owned
(50% of total capital plus one share) and fully consolidated by
Worldline and would be in charge of leveraging Worldline’s global
processing power and of developing all the innovative products
dedicated to the French market. The joint-company would also be in
charge of the commercial development of the alliance, both directly
for largest merchants in particular, and indirectly by providing an
active support to the bank distribution channels. In order to
implement the partnership, targeting a joint-company that will
start to generate revenue and OMDA early 2025, important milestones
have been reached as per plan. Worldline work councils’
consultation has been finalized with a positive advice obtained and
the antitrust filling is in progress. Based on these developments,
we are on-tracks for signing expected in Q3 2023 and a closing of
the transaction in Q4 2023.
Last, we have completed the acquisition
of Banco Desio Merchant Acquiring activities on March 28,
2023, reinforcing Worldline presence in the promising Italian
market with a strong partner. Since the closing of the acquisition,
we have started the migration of the c. 15 thousand merchants on
Worldline platform. The process of migration is expected to be
fully completed by end Q3 2023.
Ongoing
developments in our CSR
roadmap
During this first Semester, Worldline is well on
track regarding the achievements of its CSR Transformation
programme. As far as the environment is concerned, the objectives
have even been exceeded. These excellent results demonstrate the
perfect alignment between the programme and the Group's CSR
expectations. Furthermore, we are pleased to announce that, with an
Axylia® Carbon Score of A, Worldline has been included in the 2023
edition of @Axylia's Vérité40 index. This index brings together the
40 French listed companies capable of paying their "carbon bill®"
equivalent to all CO2 emissions converted into euros. Deducted from
profits, this bill indicates how profitable the company remains.
Obtaining this A score recognises the maturity of Worldline's
climate commitments and the environmental Strategy implemented
since the Worldline IPO.
2023 objectives confirmed
- Revenue organic
growth: +8% to +10%
- OMDA margin: Above
100 bps OMDA margin improvement vs. 2022 pro forma
- Free
cash flow: 46% to 48% OMDA conversion rate
2023 objectives are based on unchanged
macro-economic situation.
2024 ambition reiterated
The Group ambitions to deliver:
- Revenue organic
growth: +9% to +11% CAGR over the 2022-2024 period
- OMDA margin: above
400 basis points improvement over the 2022-2024 period
- Free
cash flow: circa 50% OMDA conversion rate
Appendices
RECONCILIATION OF
H1 2022 STATUTORY REVENUE WITH
H1 2022 REVENUE AT CONSTANT SCOPE AND
EXCHANGE RATES
For the analysis of the Group’s performance,
revenue and Operating Margin before Depreciation and Amortization
(OMDA) for H1 2023 are compared with H1 2022 revenue and OMDA at
constant scope and exchange rates. Reconciliation between the H1
2022 reported revenue and OMDA and the H1 2022 revenue and OMDA at
constant scope and foreign exchange rates is presented below per
Global Business Lines:
|
|
Revenue |
|
|
|
|
|
|
In € million |
|
H1 2022 |
Scopeeffect** |
Exchange rates effects |
H1 2022* |
Merchant Services |
|
1 378.0 |
+58.2 |
-14.8 |
1 421.4 |
Financial Services |
|
457.5 |
-0.2 |
+1.1 |
458.4 |
Mobility & e-Transactional Services |
|
184.2 |
-11.6 |
-1.4 |
171.2 |
Worldline |
|
2 019.7 |
46.4 |
-15.0 |
2 051.1 |
|
|
|
|
|
|
|
|
OMDA |
|
|
|
|
|
|
In € million |
|
H1 2022 |
Scopeeffect** |
Exchange rates effects |
H1 2022* |
Merchant Services |
|
351.9 |
-9.8 |
-3.0 |
339.1 |
Financial Services |
|
122.6 |
+5.4 |
+0.9 |
128.9 |
Mobility & e-Transactional Services |
|
25.7 |
-3.7 |
-0.3 |
21.6 |
Corporate |
|
-32.4 |
0 |
-0.0 |
-32.4 |
Worldline |
|
467.8 |
-8.1 |
-2.4 |
457.3 |
* At constant scope and June 2023 YTD average exchange rates |
|
|
|
|
(0.0) |
** At June 2022 YTD average exchange rates |
|
|
|
|
|
Over the semester, compared to the same period last
year, exchanges rates effect is mainly due to:
- the Euro
depreciation versus the Swiss franc;
- the Euro appreciation versus the
Turkish lira, the Swedish krona and the Australian dollar
Scope effects on H1 2022 reported are related to
the exclusion Ingenico and MTS Latam and to the integration of ANZ
and Eurobank.
2022 ESTIMATED
PRO FORMA
For the analysis of the Group’s organic
performance, revenue and Operating Margin before Depreciation and
Amortization (OMDA) in 2023 are compared with 2022 revenue and OMDA
at constant scope and exchange rates. FY 2022 estimated pro forma
is presented below (per Global Business Lines):
|
|
2022 estimated proforma (at June 2023 YTD average exchange
rates) |
|
|
|
|
|
|
|
|
|
|
|
Q1 |
Q2 |
H1 |
Q3 |
Q4 |
H2 |
FY |
|
|
|
|
|
|
|
|
|
In € million |
|
Revenue |
Revenue |
Revenue |
Revenue |
Revenue |
Revenue |
Revenue |
Merchant Services |
|
673 |
749 |
1 421 |
810 |
827 |
1 637 |
3 059 |
Financial Services |
|
223 |
235 |
458 |
240 |
259 |
499 |
957 |
Mobility & e-Transactional Services |
|
84 |
87 |
171 |
81 |
88 |
169 |
341 |
Worldline |
|
980 |
1 071 |
2 051 |
1 131 |
1 175 |
2 305 |
4 357 |
|
|
|
|
|
|
|
|
|
In € million |
|
|
|
OMDA |
|
|
OMDA |
OMDA |
Merchant Services |
|
|
|
339 |
|
|
503 |
842 |
Financial Services |
|
|
|
129 |
|
|
154 |
283 |
Mobility & e-Transactional Services |
|
|
|
22 |
|
|
24 |
45 |
Corporate costs |
|
|
|
-32 |
|
|
-29 |
-61 |
Worldline |
|
|
|
457 |
|
|
652 |
1 110 |
|
|
|
|
|
|
|
|
|
In € million |
|
|
|
OMDA% |
|
|
OMDA% |
OMDA% |
Merchant Services |
|
|
|
23.9% |
|
|
30.7% |
27.5% |
Financial Services |
|
|
|
28.1% |
|
|
30.9% |
29.6% |
Mobility & e-Transactional Services |
|
|
|
12.6% |
|
|
14.0% |
13.3% |
Corporate costs |
|
|
|
-1.6% |
|
|
-1.3% |
-1.4% |
Worldline |
|
|
|
22.3% |
|
|
28.3% |
25.5% |
Main components of the scope effects on 2022
estimated pro forma:
- ANZ added contribution of 3 months
(integrated for 9 months in 2022 reported)
- Eurobank added contribution of 6
months (integrated for 6 months in 2022 reported)
- Disposal of Mobility &
e-Transactional Services activities in Latin America for 11 months
(excluded for 1 month in 2022 reported)
- Impacts of the
disposal of TSS
FORTHCOMING EVENTS
- October 25,
2023 Q3 2023
revenue
INVESTOR RELATIONS
Laurent MarieE
laurent.marie@worldline.com
Benoit d’AmécourtE
benoit.damecourt@worldline.com
COMMUNICATION
Sandrine van der GhinstE
sandrine.vanderghinst@worldline.com
Hélène CarlanderE
helene.carlander@worldline.com
ABOUT WORLDLINE
Worldline [Euronext: WLN] helps businesses of
all shapes and sizes to accelerate their growth journey – quickly,
simply, and securely. With advanced payments technology, local
expertise and solutions customised for hundreds of markets and
industries, Worldline powers the growth of over one million
businesses around the world. Worldline generated a 4.4 billion
euros revenue in 2022. worldline.com
Worldline’s corporate purpose (“raison d’être”)
is to design and operate leading digital payment and transactional
solutions that enable sustainable economic growth and reinforce
trust and security in our societies. Worldline makes them
environmentally friendly, widely accessible, and supports social
transformation.
DISCLAIMER
This document contains forward-looking
statements that involve risks and uncertainties, including
references, concerning the Group's expected growth and
profitability in the future which may significantly impact the
expected performance indicated in the forward-looking statements.
These risks and uncertainties are linked to factors out of the
control of the Company and not precisely estimated, such as market
conditions or competitors’ behaviors. Any forward-looking
statements made in this document are statements about Worldline’s
beliefs and expectations and should be evaluated as such.
Forward-looking statements include statements that may relate to
Worldline’s plans, objectives, strategies, goals, future events,
future revenues or synergies, or performance, and other information
that is not historical information. Actual events or results may
differ from those described in this document due to a number of
risks and uncertainties that are described within the 2022
Universal Registration Document filed with the French Autorité des
marchés financiers (AMF) on April 28, 2023 under the filling
number: D.23-0371.
Revenue organic growth and Operating Margin
before Depreciation and Amortization (OMDA) improvement are
presented at constant scope and exchange rate. OMDA is presented as
defined in the 2022 Universal Registration Document. All amounts
are presented in € million without decimal. This may in certain
circumstances lead to non-material differences between the sum of
the figures and the subtotals that appear in the tables. 2023
objectives are expressed at constant scope and exchange rates and
according to Group’s accounting standards.
Worldline does not undertake, and specifically
disclaims, any obligation or responsibility to update or amend any
of the information above except as otherwise required by law.
This document is disseminated for information
purposes only and does not constitute an offer to purchase, or a
solicitation of an offer to sell, any securities in the United
States or any other jurisdiction. Securities may not be offered or
sold in the United States unless they have been registered under
the U.S. Securities Act of 1933, as amended (the “U.S. Securities
Act”) or the securities laws of any U.S. state, or are exempt from
registration. The securities that may be offered in any transaction
have not been and will not be registered under the U.S. Securities
Act or the securities laws of any U.S. state and Worldline does not
intend to make a public offering of any such securities in the
United States.
- 20230726 - Worldline - H1 2023 results - Press Release -
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