Paris, France – Worldline, the Paris-listed payments company, suffered a severe blow as its stock prices plummeted by half on Wednesday. The company attributed this significant decline to the current challenging economic conditions in Germany.
Previously predicting a robust growth rate of 8% to 10% for the year, Worldline has now revised its forecast to a more modest 6% to 7% growth in organic sales. Despite achieving a commendable 7.7% growth in the first nine months, the company acknowledges the need to adjust expectations for the remainder of the year.
In addition to the reduced sales outlook, Worldline has also slashed its free cash flow guidance. The company now expects a conversion rate of 30% to 35%, as opposed to the previous estimate of 46% to 48%. The margin projection has undergone a significant shift as well, with an anticipated decline of approximately 150 basis points, compared to the initial expectation of an increase exceeding 100 basis points. Notably, Worldline has chosen to abandon its 2024 guidance.
Gilles Grapinet, CEO of Worldline, emphasized that the ongoing economic situation is driving a notable transformation in consumer behavior. With discretionary spending on the decline, both growth and profitability face considerable challenges.
Worldline has taken proactive steps in response to these circumstances, ending certain merchant relationships and expediting its cost-cutting initiative known as Power24. The company anticipates the recovery of revenue in 2024. However, experts at Stifel assert that these revised revenue projections imply an approximate decrease of 15% to 17% in consensus profit guidance.
Reflecting the diminished investor confidence, Worldline’s shares (WLN, -57.16%) experienced a staggering 49% drop, resulting in a total decline of 74% over the past year. Adyen (ADYEN, -6.28%), another payments firm, also observed a 6% slump in its shares.