Worldline H1 2022 results
This strong business trends coupled with cost optimization plans, integration synergies and operating leverage, allowed the Group to deliver a 80 basis points margin expansion led, as planned, by a very significant improvement in Merchant Services profitability.
In parallel, we continued to execute our strategic initiatives during the semester with the closing of three acquisitions (Axepta Italy, ANZ commercial acquiring business in
Thanks to this very strong start of the year, we fully confirm our 2022 annual guidance, and reiterate our 2024 ambition to establish
H1 2022 key figures
In € million |
H1 2022 |
H1 2021 |
Change |
Revenue* |
2,020 |
1,794 |
+12.6% |
OMDA* |
468 |
401 |
+16.7% |
% of revenue |
23.2% |
22.3% |
+80 bps |
Net income Group share from continued operations** |
53 |
53 |
+0.4% |
% of statutory revenue from continued operations |
2.6% |
3.1% |
|
Normalized net income Group share from continued operations** |
213 |
169 |
+26.2% |
% of statutory revenue from continued operations |
10.5% |
10.0% |
|
Free cash flow (FCF) from continued operations |
229 |
143 |
+60.4% |
OMDA to FCF conversion rate*** |
49.0% |
37.3% |
|
Closing net debt (before IFRS 5)* |
3,456 |
2,939 |
* H1 2021 at constant scope and exchange rates
** H1 2021 amounts restated in application of IFRS 5
*** H1 2021 conversion rate calculated on H1 2021 statutory OMDA from continued operations
This strong execution also materialized in the Group's Operating Margin before Depreciation and Amortization (OMDA) reaching € 468 million in H1 2022; representing 23.2% of revenue, an improvement by +80 basis points compared to H1 2021 at constant scope and exchange rates. This profitability improvement was led in particular by Merchant Services posting +310 basis points thanks to the acceleration of revenue growth fostering operating leverage; synergies from
Net loss Group share amounted to €-42 million, including a €-96 million loss attributable to discontinued operations. Net income Group share from continued operations reached € 53 million, stable year-on-year. Normalized net income Group sharefrom continued operations (excluding unusual and infrequent items, Group share, net of tax) reached € 213 million, increasing by +26.2% or € 44 million compared to H1 2021 Normalized net income Group share (restated in application of IFRS 5).
Normalized diluted EPS was € 0.76 in H1 2021 compared to € 0.59 in H1 2021 (restated in application of IFRS 5).
Free cash flow from continued operations in H1 2021 was € 229 million, representing a 49.0% cash conversion of OMDA (free cash flow divided by OMDA), in line with the expected half-yearly patteof 2022.
Group Net debt before IFRS 5 amounted to € 3,456 million at the end of
Focus on Q2 2022 revenue performance
In € million |
Q2 2022 |
Q2 2021* |
Organic change |
Merchant Services |
751 |
639 |
+17.6% |
Financial Services |
235 |
228 |
+3.0% |
Mobility & e-Transactional Services |
95 |
86 |
+10.3% |
|
1,081 |
952 |
+13.5% |
* at constant scope and exchange rates
Merchant Services
Merchant Services' revenue in Q2 2022 reached € 751 million, representing an strong organic growth by +17.6%, led in particular by the strong acquiring MSV growth and new merchants gained. The growth was mainly led by:
- Commercial Acquiring showed a strong double-digit growth trending towards 30%, for almost all geographies and customer segments with strong dynamics and a good cash-to-card conversion trend;
- Payment Acceptance also contributed to the growth of Merchant Services thanks to mid-single-digit organic growth. Growth was spread in all geographies with strong volumes for SMBs and large retailers. While benefiting from a significant recovery of travel related volumes, digital commerce (representing almost half of the acceptance business) faced a more difficult situation due to the impact of the stop of Russian activities; and
- Digital Services grew at a high single-digit, led by a strong recovery in
Germany compensating as anticipated some limited delays in POS supply during the quarter.
Merchant Services performance reflects a very strong development of market positions all along the semester, notably in commercial acquiring, as illustrated by the following business KPI:
Worldline's acquiring merchant base continued to steadily grow with c. 60,000 new merchants onboarded on the Group platform over the first semester of the year, reaching 1.2 million merchants as of end ofJune 2022 (including Axepta Italy andHandelsbanken merchants in both H1 2022 and H1 2021). It represents a +10% increase over the semester led by a strong dynamic in both instore (+9%) and online (+14%) merchants count.- Acquired MSV also continued to expand with an overall acquiring MSV reaching € 147 billion in H1 2022, up +30% versus H1 2021 and up +28% versus H1 2019. This H1 2022 MSV performance has been fuelled by market share gains in both instore (+30%) and online (+31%).
During the second quarter of the year, commercial activity in Merchant Services has been strong with numerous wins for both upsell with existing clients and contracts with large new merchants such as, among others, Myra,
In Q2,
Financial Services
Financial Services delivered a +3.0% organic growth in Q2 2022, a slight acceleration compared to Q1 2022 (+2.5%), with solid revenue flows partly compensating the temporary impact from the price decrease conceded by the Group for the renewals of historical large contracts of Equens in Q4 2021. As a results, Q2 2022 revenue reached € 235 million with the following performance by division:
- Card-based payment processing activities (Issuing Processing and Acquiring Processing altogether) benefitted from improved volume trends over the quarter and a decent level of project activities. Nevertheless, these two units decreased organically due to price reductions conceded at renewal time of large processing contracts, as planned and already disclosed;
- Account Payments grew at a double-digit rate in Q2, supported by increased volumes and strong project demand, notably in
Germany ; - Digital Banking delivered a mid-single digit organic growth led by higher authentications volumes related to ecommerce transactions due to enforcement of the PSD2 regulation compensating for lower iDeal volumes in
the Netherlands .
During the second quarter, several Financial Services contracts were signed or renewed by
Mobility & e-Transactional Services
Revenue in Mobility & e-Transactional Services reached € 95 million in Q2 2022, up organically by +10.3%, accelerating after +8.4% in Q1. Growth was spread in each of the three divisions:
- Trusted Digitization in particular strongly grew double-digit with several new projects and improving volumes in
France , as well as higher volumes in Tax collection and digital healthcare inLatin America . The division also benefited from more support and project activity on eHealth solutions inGermany and increasing activity inSpain . - e-Ticketing also grew at a double-digit rate thanks to higher transportation volumes and fare collection in the
UK and as well as inLatin America where the activity also benefited from ticket tariff increases. - e-Consumer & Mobility growth was supported in particular by the ramp-up of newly signed Contact contracts and the sale of solutions for connected vehicles.
Commercial activity in Mobility & e-Transactional Services was strong in Q2, notably with a 6-year duration agreement with GTR, the
H1 2022 OMDA performance per Global Business Line
OMDA |
OMDA % |
|||||
In € million |
H1 2022 |
H1 2021* |
Organic change |
H1 2022 |
H1 2021* |
Organic change |
Merchant Services |
352 |
264 |
+33.1% |
25.5% |
22.4% |
+310 bps |
Financial Services |
123 |
129 |
-5.0% |
26.8% |
29.0% |
-220 bps |
Mobility & e-Transactional Services |
26 |
25 |
+2.6% |
13.9% |
14.9% |
-90 bps |
Corporate costs |
-32 |
-18 |
+82.7% |
-1.6% |
-1.0% |
-60 bps |
|
468 |
401 |
+16.7% |
23.2% |
22.3% |
+80 bps |
* at constant scope and exchange rates
Merchant Services
Merchant Services' OMDA in H1 2022 amounted to € 352 million, 25.5% of revenue, representing a strong improvement by +310 basis points. It was positively supported by:
- Acceleration of revenue growth fostering operating leverage;
- Synergies from
Ingenico integration program; and - The effects of transversal productivity improvement actions.
Financial Services
H1 2022 OMDA reached € 123 million, representing 26.8% of revenue. The overall profitability of Financial Services remained high despite the renewal of Equens contracts at a lower price and to a lesser extent the temporary impact related to cost inflation not yet compensated by the full impact of already launched mitigation measures.
Mobility & e-Transactional Services
Mobility & e-Transactional Services' OMDA reached € 26 million in H1 2022, representing 13.9% of revenue. Positive business trends and cost optimization plans addressing both fixed and variable costs helped to offset the overall cost inflation.
Corporate costs
Corporate costs amounted to € 32 million in H1 2022, representing 1.6% of total Group revenue compared to 1.0% in H1 2021 at constant scope and exchange rates. This increase reflect the implementation of a more centralized operating model following recent acquisitions.
2022 objectives fully confirmed
2022 objectives are the following:
- Revenue organic growth: +8% to +10%
- OMDA margin: +100 to +150 basis points improvement vs. proforma 2021 OMDA margin
- Free cash flow: circa 45% OMDA conversion rate
2024
The Group ambitions to deliver:
- Revenue organic growth: +9% to +11% CAGR
- OMDA margin: above 400 basis points improvement over the 2022-2024 period, trending towards 30% of revenue by 2024
- Free cash flow: circa 50% OMDA conversion rate
Appendices
H1 2022 revenue by Global Business Line
In € million |
H1 2022 |
H1 2021* |
Organic change |
Merchant Services |
1,378 |
1,180 |
+16.8% |
Financial Services |
458 |
445 |
+2.8% |
Mobility & e-Transactional Services |
184 |
168 |
+9.4% |
|
2,020 |
1,794 |
+12.6% |
* at constant scope and exchange rates
Reconciliation of H1 2021 statutory revenue and OMDA with H1 2021 revenue and OMDA at constant scope and exchange rates
For the analysis of the Group's performance, revenue and Operating Margin before Depreciation and Amortization (OMDA) for H1 2022 are compared with H1 2021 revenue and OMDA at constant scope and exchange rates. Reconciliation between the H1 2021 reported revenue and OMDA and the H1 2021 revenue and OMDA at constant scope and foreign exchange rates is presented below per Global Business Lines:
Revenue |
|||||
In € million |
H1 2021 |
Scope effect** |
TSS scope out** |
Exchange rates effect |
H1 2021* |
Merchant Services |
1,084 |
+89.6 |
+6.8 |
1,180 |
|
Terminals, Solutions & Services |
579 |
-578.7 |
0 |
||
Financial Services |
442 |
+3.4 |
445 |
||
Mobility & e-Transactional Services |
168 |
+0.1 |
168 |
||
|
2,272 |
+89.6 |
-578.7 |
+10.4 |
1,794 |
OMDA |
|||||
In € million |
H1 2021 |
Scope effect** |
TSS scope out** |
Exchange rates effect |
H1 2021* |
Merchant Services |
248 |
+16.5 |
-0.1 |
264 |
|
Terminals, Solutions & Services |
149 |
-148.9 |
0 |
||
Financial Services |
127 |
+0.0 |
+1.8 |
129 |
|
Mobility & e-Transactional Services |
25 |
+0.1 |
25 |
||
Corporate costs |
-18 |
-0.0 |
-0.1 |
-18 |
|
|
531 |
+16.5 |
-148.9 |
+1.7 |
401 |
* at constant scope and
** at
Over the semester, compared to the same period last year, exchanges rates effect is mainly due to:
- the Euro depreciation versus the Swiss franc as well as, to a lesser extent, versus the Australian dollar, the Indian rupee, and the British pound, and
- the Euro appreciation versus the Turkish lira and Swedish krona.
Scope effects on H1 2021 reported are related to the exclusion of Benelux and Austrian assets disposed following
FY 2021 estimated proforma
For the analysis of the Group's organic performance, revenue and OMDA in 2022 are compared with 2021 revenue and OMDA at constant scope and exchange rates as presented below (at
Q1 |
Q2 |
H1 |
Q3 |
Q4 |
H2 |
FY |
|
In € million |
Revenue |
Revenue |
Revenue |
Revenue |
Revenue |
Revenue |
Revenue |
Merchant Services |
542 |
639 |
1,180 |
723 |
758 |
1,480 |
2,660 |
Financial Services |
217 |
228 |
445 |
236 |
251 |
487 |
932 |
Mobility & e-Transactional Services |
83 |
86 |
168 |
87 |
91 |
178 |
347 |
|
841 |
952 |
1,794 |
1,046 |
1,100 |
2,146 |
3,939 |
In € million |
OMDA |
OMDA |
OMDA |
||||
Merchant Services |
264 |
405 |
670 |
||||
Financial Services |
129 |
165 |
294 |
||||
Mobility & e-Transactional Services |
25 |
27 |
52 |
||||
Corporate costs |
-18 |
-21 |
-39 |
||||
|
401 |
576 |
977 |
||||
In € million |
OMDA% |
OMDA% |
OMDA |
||||
Merchant Services |
22.4% |
27.4% |
25.2% |
||||
Financial Services |
29.0% |
33.8% |
31.5% |
||||
Mobility & e-Transactional Services |
14.9% |
15.0% |
14.9% |
||||
Corporate costs |
-1.0% |
-1.0% |
-1.0% |
||||
|
22.3% |
26.8% |
24.8% |
Components of the estimated scope impact from 2021 reported to FY 2021 estimated proforma:
- Sale of Benelux and Austrian assets related to
Ingenico acquisition for 10 months (excluded for 2 months from 2021 reported) - Cardlink and
Handelsbanken added contribution of 9 months (integrated for 3 months to 2021 reported) - Axepta Italy integrated for 12 months (from
January 1 st, 2022) - ANZ integrated for 9 months (from
April 1 st, 2022) - Eurobank integrated for 6 months (from
July 1 st, 2022)
Forthcoming event
October 25, 2022 Q3 2022 revenue
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About
Disclaimer
This document contains forward-looking statements that involve risks and uncertainties, including references, concerning the Group's expected growth and profitability in the future which may significantly impact the expected performance indicated in the forward-looking statements. These risks and uncertainties are linked to factors out of the control of the Company and not precisely estimated, such as market conditions or competitors' behaviours. Any forward-looking statements made in this document are statements about
Revenue organic growth and Operating Margin before Depreciation and Amortization (OMDA) improvement are presented at constant scope and exchange rate. OMDA is presented as defined in the 2021 Universal Registration Document. All amounts are presented in € million without decimal. This may in certain circumstances lead to non-material differences between the sum of the figures and the subtotals that appear in the tables. 2022 objectives are expressed at constant scope and exchange rates and according to Group's accounting standards.
This document is disseminated for information purposes only and does not constitute an offer to purchase, or a solicitation of an offer to sell, any securities in
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