Nightmare session for Worldline. The shares of the payments specialist fell by almost 60% on Wednesday on the Paris Stock Exchange, after the group significantly revised its financial outlook downwards when announcing its quarterly results.
The stock ended at 9.42 euros, or 59.24% lower than its closing price on Tuesday. The price is almost nine times lower than its peak in July 2021, above 80 euros, and is at its lowest level since the IPO of the company, a former subsidiary of Atos, in 2014.
The French electronic payments specialist Worldline experienced a difficult session on the stock market to say the least on Wednesday after having revised downwards its financial objectives for 2023, citing “the global economy (which) has started to deteriorate, particularly in Germany”. The little thumb of the CAC40 fell 59.24% to 9.42 euros, to its lowest level since its IPO in 2014.
The group, which achieved turnover in the third quarter up 4.8% year-on-year at constant scope and exchange rates, at 1.18 billion euros, is now targeting organic growth in its turnover. business from 6% to 7% in 2023, compared to 8% to 10% previously. As reported, revenue growth stood at 2% year-on-year in the third quarter, with Worldline lowering its margin and free cash flow targets for 2023.
Faced with the economic slowdown experienced by certain countries where Worldline operates, and in particular Germany, consumers have reduced their spending on goods deemed non-essential, which has an impact on the growth and profitability of the payments specialist, including remuneration depends in particular on the number and amount of transactions.
It is “much worse than expected: forecasts for 2023 revised downwards, targets for 2024 abandoned,” Stifel analysts summarized in a note, while those at Oddo stressed that “beyond macroeconomic fears , the end of certain contracts with online merchants could fuel the feeling that Worldline is losing market share.
“Faced with the general rise in cybercrime, the emergence of new fraudulent behaviors and the tightening of regulatory directives and market constraints”, the group has also ceased its services “to certain merchants for whom the associated costs and risks potential were not compatible” with its new requirements.
The value of the company has almost been divided by nine since its peak in July 2021, to more than 80 euros. In detail, the turnover of merchant services, the group’s flagship activity, amounted to 868 million euros (4.8% over one year) in the third quarter, while that of financial services fell by 3.7% to 232 million euros, and that of transactional web services by almost 9% to 81 million euros.
In this context, and “to successfully cope with this temporary environment”, it targets 200 million euros in savings from 2025. The precise contours of this plan have yet to be defined and no details have been communicated. , on possible job cuts in particular.
However, it should be based on four pillars, according to general manager Gilles Grapinet, who spoke during a press briefing: “product transformation”, “technological optimization”, “organizational improvement” and the “rationalization” of supplies. The cost of implementing this savings program, which must begin in 2024 and reach 200 million euros per year from 2025, could reach 250 million euros.
The general director also returned to this weekend’s outage, which affected “several dozen” large brands for “around fifty minutes”. “I have no memory, in the nearly ten years that I have been running Worldline, that we have had a breakdown of this kind” which “remains absolutely exceptional,” he declared. “It goes without saying that we are 100% mobilized to ensure that this never happens again,” added Gilles Grapinet.