Worldline's 2023: Revenue Up but €817M Net Loss Weighs on Results

The global payment services provider Worldline has reported its full-year 2023 financial results and outlined a business transformation plan to streamline operations. The company said its revenue grew organically in 2023 to €4.61 billion 6% compared to the previous year.

The significant net loss caused the stock market to react pessimistically to the company's results, falling by more than 11% on the French exchange.

Worldline Reports 2023 Net Loss of €817 Million

Growth was driven by an increase of 8.9% in the Merchant Services division, while Financial Services revenue declined 1.3%. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were flat at €1.11 billion. The company was not able to achieve profitability and reported a net loss of €817 million, impacted by a €1.15 billion goodwill impairment charge related to the Merchant Services unit.

"After a strong first semester and despite a positive commercial momentum in 2023, Worldline’s second half was materially impacted by a gradual overall macroeconomic and consumption slowdown in our core geographies," said Gilles Grapinet, the CEO of Worldline. "Despite further deterioration macroeconomic observed during the fourth quarter, we could deliver our revised guidance." These words are also confirmed by the previous results for Q3, after which the company experienced a stock market crash.

[#FINANCIALRESULTS] Today, we published our FY23 results, in line with the guidance provided on October 25th, 2023.

Read the press release: https://t.co/SYxCGYsboB pic.twitter.com/rxbkKu4sVQ

— Worldline (@WorldlineGlobal) February 28, 2024

Worldline said it is accelerating efforts to transform into a "leaner and more agile organization" to strengthen growth and cash flow generation. As part of this, it has launched an initiative called Power24 to streamline operations, reduce costs and improve productivity.

Worldline's Cautious 2024 Forecasts

Power24 will focus on consolidating technology platforms, adopting more agile processes, simplifying the organizational structure and optimizing procurement and sourcing. The program is expected to deliver €200 million in annual cost savings by 2025, with the first €80 million to be achieved in 2024.

"2024 will be a pivot year to achieve this transition to a streamlined Group through a reinforced focus and rigorous execution Execution Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a co Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a co Read this Term," Grapinet added.

Worldline vows to increase revenue by at least 3% this year as CEO Gilles Grapinet seeks to restore investor confidence in the payment company https://t.co/z2UVuggioD

— Bloomberg (@business) February 28, 2024

For 2024, Worldline said it expects organic revenue growth of at least 3%, adjusted EBITDA of at least €1.17 billion and free cash flow of at least €230 million. It noted that the first half would face tough comparisons due to losing some online merchant contracts. In the meantime, 7% of the company's stake was acquired by Credit Agricole.

The company said its medium-term ambition is to achieve mid to high single-digit organic growth, steadily rising profitability from 2024 and a free cash flow conversion rate approaching 50%. To achieve this, it is expanding its global footprint, recently obtaining a new Singapore license.

Worldline announced plans to reduce and reshape its Board of Directors as part of improved governance. An international search is underway for a new Chairperson to be appointed before the end of March.

"As early as 2025, the Group will benefit from strengthened operational leverage Leverage In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders Read this Term that will drive solid medium-term performance,” the CEO concluded.