First quarter 2016 revenue

Solid Q1 performance well in line with full year objectives

• Revenue: € 299 million, up +6.5% organically at constant scope and exchange rates
• Free cash flow: € 35 million, up +10.7%
• Growth acceleration in all three Global Business Lines
• Equens transaction expected to close end of Q2 2016
• All 2016 objectives confirmed

Revenue was € 298.8 million, representing an organic growth of +6.5 % at constant scope and exchange rates compared to the first quarter of 2015. All three Global Business Lines contributed to the growth, with a strong acceleration in particular in Merchant Services & Terminals, which grew by 11.2%. Free cash flow was € 35.3 million, up 10.7%.

Gilles Grapinet, Worldline CEO said: “Worldline today announces a good start of the year and a solid performance for the first quarter of 2016, well in line with its full year objectives. Business growth accelerated as planned, with in particular a very good performance of our Merchant Services & Terminals division, while free cash flow generation improved by more than 10%. During the past quarter, several milestones necessary to the completion of the Equens and Komercni Banka (KB) have been successfully achieved. In parallel, integration preparation works have been conducted with the objective of being operationally ready at the closing of these transactions. In a context of deep changes within the European payment industry, the Group stays particularly active in projects to capture payment assets opportunities.”  

Q1 2016 revenue performance by Global Business Line
 

* at constant scope and at Q1 2016 exchange rates

During the first quarter of 2016, Merchant Services & Terminals revenue was € 103.4 million, up +11.2%. Commercial Acquiring revenue continued to accelerate, with notably a favorable price/volume mix and a continued strong commercial momentum across all our geographies, in e-Commerce and in India. Payment Terminals grew at a double digit rate thanks particularly to the fast international distribution expansion through existing and new business partners. In Online Services, strong volume growth was reported while fewer projects were delivered compared with the same quarter last year.

Financial Processing & Software Licensing revenue was € 102.6 million, +5.0% compared with Q1 2015 thanks to high volumes recorded on our issuing processing, acquiring processing, OBeP and eSEPA platforms. It is also notable that, confirming the trend of previous quarters, high levels of activity have been recorded in Authentication services and in payment software licensing both in Europe and in Asia.

Revenue in Mobility & e-Transactional Services reached € 92.8 million, up +3.5%, therefore succeeding in more than offsetting this quarter the impact of the termination of a public sector contract in the UK from the end of Q3 2015 (the VOSA contract). This performance could be achieved thanks to strong sales recorded in e-Consumer & Mobility, in particular in Contact and Consumer Cloud in France and in Connected Living in Germany and in France, as well as in e-Government Collection (particularly in France, Austria and Argentina).

Commercial activity

In Merchant Services & Terminals, a significant alliance in Commercial Acquiring was announced end of February with KOMERCNI BANKA (KB), a leading bank in Czech Republic. Major commercial acquiring contracts were renewed in Belgium with petrol stations and in the Hospitality sector. The growth trend of Payment terminals continued to be supported by the international sales through both established sales channel and new partners. A simplified packaged card payment acceptance offering was successfully launched in the Benelux, targeting small and medium merchants. Last, a major digital retail solution was launched with Sephora in France.

In Financial Processing & Software Licensing, the issuing processing contract with one of the leading Belgium banks has been renewed for a new 3-year period. 3D Secure authentication control services have been extended for another 5 years with a major French bank and a new 5-year contract has been signed with Bajaj Finance Ltd in India for a closed user group program, where Worldline will be handling the end-to-end processing for both issuing and acquiring. Last, a strategic agreement was signed with Gemalto to enable seamless onboarding of banks and card issuers to mobile payment wallets provided by device manufacturers. With this agreement, the two industry leaders will be able to offer banks an end-to-end ready-to-use and customizable solution.

In Mobility & e-Transactional Services, commercial activity in eTicketing included notably a 9-year contract for the provisioning of revenue settlement services for the UK rail industry, able to settle over € 9 billion of annual revenue across more than twenty train operating companies. A Mobile Ticketing Service solution has also been sold to a UK rail operator (4-year contract), which will enable the retail of train tickets via an app through a smartphone, including a contactless payment feature. In e-Government Collection, the contract for automatic fare collection for public transportation has been renewed for another 2.5 years in Argentina.

Backlog remained high at € 1.7 billion, representing 1.4 years of revenue.

The weighted qualified pipeline remains healthy, with several large contracts expected to be signed in the next few quarters, particularly around Private Label Cards in Merchant Services, Issuing Processing in Financial Processing & Software Licensing as well as Connected Living offers, payment management solutions for Governments and e-Ticketing in Mobility & e-Transaction Services.

Free Cash Flow 

Worldline free cash flow totaled € 35.3 million for the first quarter of 2016, up +10.7% compared with Q1 2015. Net cash position reached € 362.3 million.

M&A activities

Transaction with Equens and Paysquare

The transaction closing process is progressing as planned and significant milestones have been reached, such as the signature of the transaction documentation and the issuance of the opinion of the European and French Workers Councils. The completion of the carve-out activities of the businesses that will be contributed from Worldline to Equens Worldline Company progresses as per the planned schedule.

A global clearance on the transaction has been obtained from European Antitrust Authorities under two conditions that Worldline has accepted:

• The commitment to dispose the PaySquare business in Belgium;
• The commitment to grant licenses of the Poseidon software in Germany (Worldline owned acceptance software) on fair reasonable and non-discriminatory terms during a period of 10 years.

These commitments have no material impact on the expected benefit of the transaction

The closing of the transaction is now pending the completion of the formal review processes by the regulatory authorities (the Dutch National Bank and the Belgium National Bank), which timing is expected to lead to a closing at the end of Q2 2016.

Transaction with KOMERCNI BANKA (KB),

As part of its expansion strategy in Merchant Services and Commercial Acquiring, Worldline has announced in February 2016 an agreement with KOMERCNI BANKA (KB), subsidiary of the Société Générale group and one of the leading banks in the Czech Republic, to further develop product and services for the Czech merchants.

The legal documentation of this deal has now been signed.

The Group expects this transaction to close during the summer of 2016.

2016 Objectives

Taking into consideration the anticipated impact of the termination of the automated traffic offence management system contract in France (the “Radar” contract), the Group confirms all the objectives for 2016 as stated in the February 23, 2016 press release.

These objectives below do not include any contribution from Equens, PaySquare and KB and will be updated after the closing of these transactions to take into consideration their contributions after closing.

Revenue

The Group expects to achieve organic growth of its revenue, at constant scope and exchange rates, of circa +3%.

OMDA

The Group has the objective to increase the OMDA margin by circa +80 basis points compared to 2015.

Free cash flow

The Group has the ambition to generate free cash flow of between € 135 million and € 140 million, including the exceptional cash-out linked to the acquisition costs (c. € 12 million) related to Equens.

Appendix: Reconciliation of Q1 2015 reported revenue with Q1 2015 revenue at constant scope and exchange rates

* at constant scope and at Q1 2016 exchange rates

Exchange rate effects reflect mostly the depreciation of the Argentinian Peso and the British Pound versus the Euro. There was no change in scope in Q1 2016 compared with Q1 2015.

The 2015 figures presented in this press release are based on the constant foreign exchange rates data.

You can listen to the webcast here

Forthcoming event 

• May 26, 2016              Annual General Meeting
• July 26, 2016              Results for the first semester 2016
• October 19, 2016        Q3 2016 revenue

About Worldline  

Worldline [Euronext: WLN] is the European leader in the payments and transactional services industry. Worldline delivers new-generation services, enabling its customers to offer smooth and innovative solutions to the end consumer. Key actor for B2B2C industries, with over 40 years of experience, Worldline supports and contributes to the success of all businesses and administrative services in a perpetually evolving market. Worldline offers a unique and flexible business model built around a global and growing portfolio, thus enabling end-to-end support. Worldline activities are organized around three axes: Merchant Services & Terminals, Mobility & e-Transactional Services, Financial Processing & Software Licensing. Worldline employs more than 7,300 people worldwide and generated 1.22 billion euros revenues in 2015. Worldline is an Atos company. worldline.com

Disclaimer
 

This document contains further forward-looking statements that involve risks and uncertainties concerning the Group's expected growth and profitability in the future. Actual events or results may differ from those described in this document due to a number of risks and uncertainties that are described within the 2014 Registration Document filed with the Autorité des Marchés Financiers (AMF) on April 27, 2015 under the registration number: R.15-021 and its update filed on August 6, 2015 under the registration number D. 15-0292-A01.

Revenue organic growth is presented at constant scope and exchange rates. 2016 objectives have been considered with exchange rates as of December 31, 2015.

Global Business Lines include Merchant Services & Terminals (in Belgium, France, Germany, India, Luxembourg, Spain, The Netherlands and United Kingdom), Financial Processing & Software Licensing (in Belgium, China, France, Germany, Hong Kong, India, Indonesia, Malaysia, Singapore, Spain, Taiwan and The Netherlands), and Mobility & e-Transactional Services (in Argentina, Austria, Belgium, Chile, France, Germany, Spain, and the United Kingdom).

This press release does not contain or constitute an offer of Worldline’s shares for sale or an invitation or inducement to invest in Worldline’s shares in France, the United States of America or any other jurisdiction.