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French payments group Worldline forecast that its revenue growth would slow this year as European consumers rein in spending, but pledged to cut costs and improve profitability as it seeks to move past a recent share price slump.
Worldline gave the outlook on Wednesday as it reported an €817mn loss for 2023, pointing to the revaluation of some acquisitions on its books that had led to a €1.15bn impairment charge.
The Paris-based company has been trying to claw its way back from a 60 per cent one-day collapse in its share price last October after it gave a gloomy assessment of the backdrop in Europe and amid a broader sell-off in the fintech sector.
Revenue growth in 2023 of 6 per cent to €4.6bn was in line with revised estimates that Worldline gave in the third quarter.
But it saw a weaker outlook for 2024, with sales growth expected to slow to “at least 3 per cent” as households shun splashing out on spending and instead seek out cheaper products in big supermarket chains, chief executive Gilles Grapinet said.
The group is particularly exposed to Germany, where the government has recently downgraded its economic forecast. And high inflation across Europe has weighed on shoppers’ behaviour.
“From the third quarter of last year, we started to see a notable deterioration in consumption,” 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.”
Worldline is one of the world’s largest payments specialists and has grown rapidly through acquisitions in Europe since it was spun out of French IT services group Atos in 2014.
The sector did well during the Covid-19 pandemic as investors speculated the world would rapidly shift away from cash payments. But worries about plateauing growth have more recently sparked jitters, affecting Worldline’s rivals in the US and European fintechs such as Dutch group Adyen.
Worldline shares are up more than 30 per cent since the shock of last year. They are now at €12.24 but still way off the €23 of early October.
The company recently outlined plans to axe about 1,400 jobs — or roughly 8 per cent of its staff — as it seeks to cut €200mn in annual costs from 2025.
It said on Wednesday that more automation, tech innovations and organisational changes as it digests a series of acquisitions would boost core profits as of 2024. It is also betting a partnership with French bank Crédit Agricole will provide a boost from 2025, and foresees it lifting group sales growth to between 5 per cent and 10 per cent in the medium term.
