French paytech Worldline’s shares tumble after company revises guidance
Paris-listed payments firm Worldline’s shares plunged almost 60% after the company lowered its revenue expectations for 2023 in its Q3 earnings report, citing tough macroeconomic conditions as the leading factor.
Worldline shares plunge after it revises outlook
As part of its revised guidance for 2023, Worldline states it now expects 6% to 7% in organic growth with respect to revenue, as opposed to its previous forecast of 8% to 10% growth for the year.
It attributes the revision to a “much tougher macro context” in the second half of 2023, including economic slowdown in its core geographies – in particular Germany – as well as shifts in consumer behaviour from “discretionary to non-discretionary spendings”, which are impacting its growth and profitability.
Worldline also highlights temporary challenges within the company, including the termination of some of its merchant relationships following an assessment of associated risks and costs, and a low conversion of opportunities seen in its financial services division.
Additionally, the company has also decided to tighten its risk appetite policy, citing a general increase in cybercrime and the emergence of new fraud patterns, the evolving regulatory environment, and a rise in monitoring and diligence costs.
To achieve that, Worldline says it will undertake a “group-wide portfolio review” and terminate merchants that do not meet its revised risk criteria over H2 2023 and H1 2024. It will also launch a cost-cutting plan called Power24 to streamline operations and bring its revenue back on track in the new year.
“To reinforce Worldline’s competitiveness and structural mid-term profile and successfully face this temporarily challenging environment, we announce Power24, our planned post-integration transformation ambition,” says Gilles Grapinet, CEO of Worldline.
“We target €200 million run-rate cash costs savings in 2025, with a fast ramp-up in 2024.”
