• Revenue: EUR4.6 billion, representing organic growth of 0.5%.
• Adjusted EBITDA: EUR1.07 billion, with a margin of 23.1% of revenue.
• Free Cash Flow: EUR201 million, including EUR139 million nonrecurring expense linked to Power24.
• Normalized Net Income Group Share: EUR434 million, representing 9.4% of revenue.
• Reported Net Income Group Share: Loss of EUR297 million due to one-off provision related to Power24 and impact from revised fair value of TSS preferred shares.
• Normalized Diluted EPS: EUR1.53 per share.
• Net Debt: EUR2 billion, or 1.9 times adjusted EBITDA.
• Merchant Services (MS) Revenue: Organic growth of 1.9% for the full year.
• Financial Services (FS) Revenue: Down 8.9% in Q4, impacted by reinsourcing process.
• Mobility & e-Transactional Services (MeTS) Revenue: Grew 1.6% in Q4, driven by new business development in France.
• Power24 Cost Savings: EUR220 million cash cost savings with full run rate expected by end of 2025.

• Warning! GuruFocus has detected 5 Warning Signs with WRDLY.

Release Date: February 26, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Worldline SA (WRDLY) reported a revenue of EUR4.6 billion for 2024, achieving organic growth of 0.5% despite a challenging macroeconomic environment.
• The company successfully executed its Power24 initiative, resulting in cash cost savings of EUR220 million, with further savings expected in 2025.
• Worldline SA (WRDLY) has signed significant partnerships, including with GTB and Credem in Italy, and expanded its market reach through ISVs like Tabesto and Wix.
• The joint venture with Credit Agricole is progressing well, with plans to launch products for SMBs and the enterprise segment later in the year.
• The company maintained a strong focus on cost control, achieving a free cash flow of EUR201 million in 2024, despite nonrecurring expenses linked to Power24.

Negative Points

• Worldline SA (WRDLY) experienced a revenue slowdown in the second half of 2024, with a slight decline of 1% in H2.
• The company faced specific challenges in Northern Europe, particularly in Belgium, due to slower product deliveries and market share loss.
• Financial Services division was impacted by the reinsourcing of a significant client, leading to an 8.9% decline in Q4.
• The adjusted EBITDA margin was affected by one-off items and specific issues, resulting in a reported net income group share loss of EUR297 million.
• The company anticipates a slow start to 2025 due to ongoing refocusing efforts and continued headwinds in the business.

Q & A Highlights

Q: You mentioned you're losing market share in Northern Europe. Can you give us more detail about that? Who are you losing market share to and why? Also, how do you manage the business in the interim with all the uncertainty before the new CEO presents a strategic plan? A: In Northern Europe, specifically Belgium, we've faced slower product deliveries. We've implemented an action plan and leadership changes, similar to what we did in Australia, which is now back to growth. The new CEO, who knows the industry well, will manage the business with the team until the strategic plan is presented in the autumn.

Q: Can you discuss the 4.3% net revenue decline in Q4 for Merchant Services and the outlook for free cash flow in 2025? A: The decline was due to lower hardware sales and a shift towards higher-fee international schemes. We expect to grow unlevered free cash flow in 2025 despite higher financing costs from recent debt refinancings. Working capital was an outflow in 2024, but we expect it to normalize going forward.

Q: Can you provide an update on the joint venture with Credit Agricole and comment on the French banks' joint venture, Estreem? A: The partnership with Credit Agricole is progressing well, with product deliveries expected in H1 and H2. The Estreem joint venture is a continuation of a long-standing partnership and does not impact our business materially.

Q: What happened with the special regulator in Germany, and are you seeing increased competition there? Also, can you discuss the EBITDA margin expectations and embedded payments strategy? A: The special regulator issue in Germany is in the remediation phase, with no new developments. We haven't seen changes in competition. We'll provide more details on EBITDA margins in the Q1 call. Our embedded payments strategy involves integrating solutions into marketplaces, with plans to expand further.

Q: Why did you choose an external candidate for CEO, and what are the Board's ambitions for Worldline? Also, should we be concerned about insourcing by banks in Europe? A: The Board's decision for an external CEO is aimed at bringing fresh perspectives. The insourcing by banks is not a trend but a specific case due to a merger. We remain optimistic about the financial services market and are progressing with portfolio pruning as planned.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.