Worldline ends a year in the red, penalized by inflation

The French payment specialist Worldline announced on Wednesday a net loss of 817 million euros for 2023, high inflation having led it to write down its main activity, merchant services.

The rise in prices has led to a sharp slowdown in sales volumes among retailers, commented the general director of Worldline, Gilles Grapinet, during a press conference. This affected the group’s profitability and forced it to write off a downward adjustment to its book value.

A solid first half gave way to a second half marked by a deterioration (…) in consumption in Europe, noted Mr. Grapinet.

In addition to the sharp slowdown in sales volumes among retailers, high inflation (4.9% in France last year according to INSEE, even more in other markets of the group) has led to arbitrage (…) of certain categories of consumers, abandoning small businesses in favor of large-scale businesses, underlined Mr. Grapinet.

However, Worldline achieves a better margin on its myriad of small customers than on the largest, such as hard discount players for example, who negotiate very reduced costs with their payment providers thanks to their business volume.

Results with serious repercussions for Worldline shares on the stock market

These dynamics (…) structurally unfavorable on significant scales (…) were confirmed or even deepened during the fourth quarter and remain for the moment those that we observe at the start of 2024, explained Mr. Grapinet. Excluding exceptional items, including the accounting adjustment of 1.15 billion euros, the group’s share of net income came out positive, 521 million euros, however down 4.3% over one year, the company said.

Worldline now has a cautious objective of growth of at least 3% in its turnover for 2024, and aims for an increase of between 5 and 9% from 2025, thanks to its merchant services activity.

The downward revision of the turnover growth forecast for 2023 (6 to 7% instead of 8 to 10%) had frightened investors and triggered a historic fall in Worldline’s stock price on October 25, order of 60%, pushing the stock out of the CAC40 a few weeks later.

In 2023, Worldline’s turnover increased by 6%, to 4.61 billion euros, in line with the expectations of analysts surveyed by the financial agency Bloomberg.

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