Worldline takes 1.15 billion-euro hit from merchant services write down

FRENCH payment company Worldline on Wednesday (Feb 28) posted a 6 per cent rise in full-year revenue, but reported a net loss group share after it took a 1.15 billion euros (S$1.7 billion) “goodwill impairment” linked to its merchant services activities.

Worldline, which processes digital payments for clients ranging from merchants to government agencies, reported a net loss group share of 817 million euros for 2023, compared with a 211 million euros profit a year earlier.

“Net income Group share from continued operations was...mainly impacted by the 1.15 billion euros goodwill impairment mostly materialized in Merchant Services, based on conservative assumptions reflecting the change in valuation paradigm in the payments’ Industry,” Worldline said in a statement.

The impairment is non-cash and is linked to “the evolution of sector values and the stricter application of technical parameters in the accounting and non-cash valuation of our assets”, CFO Grégory Lambertie said in a call with journalists.

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”.

Worldline’s market capitalisation fell by more than half in October, sending ripples across the sector, after it cut its full-year financial targets, citing the economic slowdown and heightened scrutiny over money-laundering risks in Germany.

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CEO Gilles Grapinet said the group was still looking for a new chairperson following the death of Bernard Bourigeaud in late 2023, and that this new chair should be identified before the end of March. He added that Worldline intends cut the composition of its Board of Directors to a maximum of 15 members, including two employee directors.

The group also said it generated revenue of 4.61 million euros, in line with analysts expectations, according to a company provided consensus. For 2024, it now targets organic revenue growth of at least 3 per cent, adjusted EBITDA of at least 1.17 billion euros and FCF of at least 230 million euros. REUTERS