By Revenue Growth Revised Downward
Worldline, the French payments company, has adjusted its full-year guidance as an economic slowdown has impacted its key markets, including Germany. The company now expects organic revenue growth of between 6% and 7% for 2023, compared to the previously anticipated growth of 8% to 10%. This revision reflects the challenges faced by Worldline in the current economic climate.
Decrease in Operating Margin
In addition to the downward revision of revenue growth, Worldline has also adjusted its expectations for its operating margin before depreciation and amortization. The company now plans to convert between 30% and 35% of this margin into free cash flow, down from the previous estimate of 46% to 48%.
Third-Quarter Performance
For the third quarter, Worldline reported a revenue of €1.18 billion, an increase from €1.13 billion in the same period last year. On an organic basis, the revenue grew by 4.8%. While the financial, mobility, and e-transactional services segments experienced a decrease in organic revenue, the merchant services segment saw growth.
Risk Management Measures
As part of its risk management strategy, Worldline has terminated some of its merchant relationships. This decision was made to reduce risk exposure, in line with a revised policy. It is estimated that the termination of these relationships could result in a maximum revenue loss of approximately €130 million.
Challenging Market Conditions
Worldline attributes the need for these adjustments to weakened demand and a deteriorating economy in some of its core markets, especially in Germany. However, the company remains optimistic about its future prospects and expects an accelerated revenue growth from the second half of 2024.
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