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Investing.com -- Worldline SA (EPA:WLN) on Tuesday reported a 3.4% organic decline in first-half revenue to €2.21 billion, missing analyst expectations as the payment services provider continues to face challenges across its business segments.
The company also announced a significant downward revision to its full-year guidance and confirmed the sale of its Mobility & e-Transactional Services (MeTS) division.
Shares in the company fell 3.6% in European morning trading after the results.
The company reported adjusted EBITDA of €401 million for the first half, representing an 18.2% margin and falling 7% below consensus estimates of €433 million.
Free cash flow came in at just €40 million, reflecting a conversion rate of only 9.9% of adjusted EBITDA. Second-quarter revenue declined 4.4% organically to €1.14 billion, slightly below analyst expectations of €1.15 billion.
Worldline’s core Merchant Services division saw revenue fall 3.4% in Q2, with net-net revenue (adjusted for interchange fees) declining more steeply at 7.3%.
Financial Services revenue dropped 10.6% in the quarter, while the MeTS division was the only bright spot, growing 2.1%.
"Beyond the results of the period that reflect our current challenges, H1 was a defining period for Worldline," said CEO Pierre-Antoine Vacheron. "We laid the groundwork for the future, by restoring project delivery, strengthening our brand through independent portfolio audits, consolidating our financial position, and executing on our commitment to focus on our core portfolio."
The company significantly lowered its 2025 outlook, now projecting a low single-digit percentage decline in organic revenue for the full year, compared to previous expectations of growth.
Adjusted EBITDA is now expected to be between €825-875 million, approximately 11% below consensus estimates of €953 million. Free cash flow is projected to be neutral at the midpoint of the EBITDA guidance, well below previous analyst expectations of €188 million.
In a significant strategic move, Worldline announced it has entered exclusive negotiations to sell its MeTS division to Magellan Partners for an enterprise value of up to €410 million, representing approximately 11x the division’s 2024 pro-forma standalone adjusted operating income. The transaction is expected to close in mid-2026.
The company also recognized a €4.1 billion impairment on goodwill attributed to its Merchant Services activity, reflecting recent underperformance and acknowledgment of long-lasting changes in the European payment market environment.
Worldline’s management indicated that preliminary findings from an external audit of its high-risk merchant portfolio have not identified material need for additional merchant offboarding beyond what has already been performed since 2023.