Merchant Services power another good quarter for Worldline

Worldine reported positive revenue growth continuing in Q1 2023 with total sales up 14% to €1.07bn. As with arch-rival Nexi, Worldline’s momentum was primarily driven by a strong performance in Merchant Services. The two other divisions published weaker results. 

Merchant Services revenue increased 20% to €758m. Worldine chooses to publicise a lower figure of 13% growth, excluding the impact of recent acquisitions. An American business would not be so modest. 

Within Merchant Services, the growth engine is commercial acquiring which saw strong double-digit sales increases in most markets boosted by a 13% increase in transactions. Instore transactions were up 11%, online by 19%. 

Merchant payment volume grew 13% to reach €100bn in a quarter for the first time. This was fuelled by newly integrated businesses in Greece and Italy where 200-300 merchants are being migrated from Banco Desio to Worldline each day. Worldline’s new joint venture with ANZ Bank in Australia is reported “a bit softer… as we are relying on an outdated bank platform.” Deputy CEO Marc-Henri Desportes said that Worldine’s own platform is now live and “we are in a position to really bounce back.” 

Management provided additional details on the proposed joint venture with Credit Agricole, highlighting the opportunity for Worldine to provide merchant services in its home country for the first time. France is the largest card payment market in continental Europe with annual payment volume of c.€700 billion. Almost 80% of this figure is Carte Bancaire and the linkup with Credit Agricole will give Worldline direct access to France’s dominant domestic debit scheme at a scale that allows it to differentiate with Stripe and Adyen. CEO Gilles Grapinet said “We are talking about billions of transactions and billions of transactions that will be live on our perform for this scheme, which will make us super competitive for the most demanding merchants on the French market.”

Worldline and Credit Agricole will each contribute €40 million to the joint venture over the next eighteen months. This financial support will cover start-up expenses and the localisation of Worldline’s products for France.  Desportes said he expected the new venture to contribute “€300-€400m of revenue four to five years after a full implementation.” 

Also with its Q1 results, Worldline referenced a number of good client wins:

  • Turkish Airlines – “the flagship win” of the quarter comes soon after Worldline’s deal with Lufthansa and represents a bold move into the airline sector.
  • Correos, the Spanish Post Office, has implemented softpos on its 6,000 Honeywell tablets using the capabilities of recently acquired Polish start-up SoftPOS.eu. By the end of 2023, 24,000 Android devices will be equipped to take payments underlining that enterprise is a much more interesting market for SoftPOS than micro merchants. 
  • SSP, the food and beverage operator,  will be using Worldline POS acceptance in DACH countries (including DCC) integrated with its Oracle Micros software.
  • Flowbird, the EV charging network has chosen Worldline for self-checkout solutions
  • Trust Payments has adopted Worldline’s payment orchestration platform for cards and APM’s. 
  • Wallee, the Swiss gateway, selected Worldine as its PF acquirer

Beyond Merchant Services, Worldine’s two smaller divisions face challenges in growing sales. Financial Services revenue increased by only 4% although management highlighted good prospects from the ING contract as well as new deals with BNP Paribas and TFBank. Revenue from Mobility and e-Transactional Services was flat at €84m. While there were new ticketing wins with French and German railway operators, the loss of two significant contracts where the client decided to bring the capability in-house offset the gains.

Detailed information on expenses and profits was not disclosed in the quarterly results report.

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