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Worldline shares have suffered a 15% loss as the company announced that its full-year net loss after it took a €1.15 billion ($1.25 billion) impairment in its merchant services division and signalled a weak outlook.
Worldline suffers share slump
Worldline, best known for processing digital payments for clients ranging from merchants to government agencies, boomed during the pandemic from rapid growth as customers moved away from cash and into digital payments.
Worldline has been trying to claw its way back from a 60% one-day collapse in its share price last October, sending shockwaves across the sector, after it cut its full-year financial targets, citing an economic slowdown and heightened scrutiny over money-laundering risks.
The firm reported a so-called “net loss group share” of €817 million for 2023, compared with a €211 million profit a year earlier.
It also reported a 6% rise in full-year revenue, in line with expectations.
For 2024, Worldline is targeting organic revenue growth of at least 3%, adjusted core earnings (EBITDA) of at least €1.17 billion and free cash flow of at least €230 million.
The aforementioned impairment is non-cash and linked to “the evolution of sector values and the stricter application of technical parameters in the accounting and non-cash valuation of our assets,” finance chief Grégory Lambertie told reporters.
Worldline said the goodwill impairment was based on “conservative assumptions reflecting the change in valuation paradigm in the payments’ industry”.
Lambertie added that, adjusted for non-recurring items, net income group share was “relatively stable” when compared with 2022, and that the impairment “has absolutely nothing to do with the German subject”, referring to the money-laundering risks.
“From the third quarter of last year, we started to see a notable deterioration in consumption,” CEO Gilles Grapinet said. “That remained the case in the fourth quarter and it’s in line with what we’re seeing at the start of 2024.”
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