(Boursier.com) — New gadin for Worldline. The title of the electronic payments specialist fell by more than 15% to 10.4 euros at the opening of the Paris market, sanctioned after its annual publication. Accounts marked by a net loss, group share of 817 million euros, mainly due to a depreciation for goodwill worth E1.15 billion linked to its customer service activities. tradespeople. The adjusted EBITDA (previously EBO) was stable at 1.110 billion euros, for a turnover up 6% to 4.61 billion euros. Free cash flow from continuing operations was €355 million, representing an adjusted EBITDA conversion rate of 32.0%.
This depreciation, which affected the group’s share of net income, reflects “the change in industry valuations”, according to the group. It is “totally linked to the evolution of sector values and the stricter application to technical parameters in the accounting and non-cash valuation of our assets”, according to the financial director, Grégory Lambertie, who added that “the result “net share of the group was relatively stable compared to 2022”.
A few weeks ago, Worldline announced the launch of its ‘Power24’ plan under which it will cut around 8% of its global workforce, or around 1,400 positions, in order to reduce its cost base by around 200 million euros from next year. The total cost of implementing the plan is expected to amount to around 250 million euros. In October, Worldline lowered its sales outlook, saying consumers were more cautious and spending less, hurting the company’s growth and profitability. This warning, which adds to a series of bad news for the payments sector in Europe, caused the company’s stock to plunge by around 60% in a single day.
After a sharp deterioration in the macroeconomic environment during the fourth quarter of 2023 and prospects for GDP and consumption growth still weak in Europe, 2024 will be a year of active transformation for Worldline, focused mainly on internal initiatives, leading to following objectives: at least 3% organic growth in turnover; at least 1.17 billion euros of adjusted EBITDA; and at least 230 million euros of free cash flow, including around 150-170 million euros of exceptional costs linked to the implementation of ‘Power24’. Objectives that are a little fair compared to market expectations, particularly in terms of growth, since the consensus was positioned at +4.1%.
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Thanks to all the actions implemented in 2024, Worldline’s competitive and financial profile will be considerably strengthened from 2025 and in the medium term, benefiting from the benefits of Power 24, as well as new growth initiatives, a rapid reduction in integration costs and a mergers and acquisitions policy refocused on bolt-ons including products and technologies, says Worldline. The group therefore has the following ambitions for the medium term: mid-to-high single-digit organic revenue growth; continued improvement in adjusted EBITDA from 2024; rapid progression of the conversion of adjusted EBITDA towards a rate of around 50%.
On the management side, the search for a new Chairman of the Board of Directors was launched at the beginning of January and a mandate was given to an international headhunting firm. This new President should be identified before the end of March. The board of directors is also working on a partial renewal of its composition, to bring it down to a maximum of thirteen members, plus two salaried directors. This renewal could possibly include the arrival of external profiles.
Worldline this morning published quarterly results slightly below expectations on turnover but better than expected on profitability and FCF generation, says Bryan Garnier (‘neutral’). As a reminder, the company had to lower its annual forecasts for the third quarter of 2023 to take into account the impact of the slowdown in consumer spending and the termination of several merchant contracts which caused a loss of around 130 million euros. of turnover. Its guidance, in line with expectations, is unlikely to increase demand for the stock in the short term.