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.
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 ," Grapinet added.
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 that will drive solid medium-term performance,” the CEO concluded.
