Earnings call transcript: Worldline Q2 2025 reveals revenue decline

Worldline SA reported its second-quarter 2025 earnings with a notable decline in revenue, reflecting ongoing challenges in the European payment market. The company experienced a 3.4% organic decline in revenue to €2.2 billion, alongside a significant goodwill impairment that impacted reported net income. The stock reacted negatively, with a 3.61% drop in pre-market trading, continuing a challenging period that has seen the stock decline over 65% in the past year according to InvestingPro data.

Key Takeaways

• Revenue for H1 2025 fell by 3.4% to €2.2 billion.
• A €4.1 billion goodwill impairment led to a reported net loss.
• Adjusted EBITDA stood at €414 million, representing 18.2% of revenue.
• Stock price decreased by 3.61% in pre-market trading.
• Company initiated a €50 million cost savings plan.

Company Performance

Worldline’s performance in the first half of 2025 was marked by a decline in key financial metrics, reflecting broader challenges in the European payment sector. Despite a strong multi-local presence and leadership in certain markets, the company faced headwinds, particularly in the small and medium-sized business (SMB) segment. The reported net income was significantly impacted by a goodwill impairment, underscoring the need for strategic adjustments. InvestingPro analysis shows the company maintains a solid gross profit margin of 66% and a healthy current ratio of 1.05, suggesting operational stability despite current challenges.

Financial Highlights

• Revenue: €2.2 billion, a 3.4% decline year-over-year.
• Adjusted EBITDA: €414 million, 18.2% of revenue.
• Free Cash Flow: €40 million, with a cash conversion rate of 9.9%.
• Normalized Net Income: €121 million.
• Reported Net Income: -€4.2 billion due to goodwill impairment.

Market Reaction

Worldline’s stock price fell by 3.61% in pre-market trading following the earnings announcement. The decline reflects investor concerns about the company’s revenue drop and the significant impairment charge. The stock is trading near its 52-week low of €3.12, indicating a cautious market sentiment. According to InvestingPro analysis, the stock appears significantly undervalued at current levels, trading at just 0.12 times book value and an EV/EBITDA multiple of 4.77. InvestingPro subscribers have access to 10+ additional exclusive insights about Worldline’s valuation and growth prospects.

Outlook & Guidance

Looking ahead, Worldline anticipates a low single-digit revenue decline for 2025, with adjusted EBITDA expected to range between €820 million and €875 million. The company is focusing on strategic areas such as SMB, global e-commerce, and regional commerce. Management expects performance improvements in Q4 compared to Q3. Notably, InvestingPro data indicates analysts remain optimistic about the company’s prospects, forecasting a return to profitability this year with projected earnings per share of €1.57.

Executive Commentary

CEO Pierre Antoine Vacheron expressed confidence in the company’s assets and future potential, stating, "We have strong assets and strength." He emphasized the company’s commitment to becoming a champion in the industry over the next three years.

Risks and Challenges

• Challenging consumption environment in Europe impacts revenue growth.
• Merchant Services faces churn challenges.
• Slowdown in the SMB segment may affect future earnings.
• The market’s reaction to the goodwill impairment could affect investor confidence.
• Competitive pressures in key markets require strategic adjustments.

Q&A

During the earnings call, analysts inquired about potential merchant portfolio terminations and the impact of media campaigns on sales processes. Management confirmed no material merchant portfolio terminations are expected and expressed confidence in the company’s long-term turnaround potential.

Full transcript - Worldline SA (WLN) Q2 2025:

Conference Operator: Good morning, and thank you for standing by. Welcome to the Worldline First Half twenty twenty five Results Conference Call. Please be advised that this conference is being recorded. I would now like to hand the conference over to your speaker today, Pierre Antoine Vacheron, Wardline Group CEO. Please go ahead.

Pierre Antoine Vacheron, Group CEO, Worldline: Thank you. Thanks a lot, and good morning to all of you for this H1 call. I’m here with Gregory Lombarty, our Group CFO for his last call with us, probably the opportunity to thank Gregory for his dedication to the company in its various shapes over the last ten years. Gregory has been Head of Strategy, then CFO during all the journey at Ingenico and wireline. And I want to thank him for all his dedication until the very last moment.

And I think we can be very proud to have had Gregory with us during those times. So, let me move now and before we enter into our presentation for H1, I would like to start with four key messages. First, as you have seen in our press releases, Q2 has been very active on many fronts with a real sense of urgency, so that we can turn around the company as soon as possible. Just to mention, entry into exclusive negotiation on METS, interim positive results on the audit of our merchant portfolio, the refinancing of the company, the assessment of our assets as part of our work on our strategy going forward, the reshuffling of the operating model in Merchant Services, and finally, the extensive renewal of our management team. Second comment, second message, we have strong assets and strength, and I can confirm that.

But as H1 results show, we are facing several challenges that have to be overcome to restore the potential of this company in terms of growth and cash flow generation. Third, I still have uncertainty for the rest of the year, but I need to provide you with some visibility with the guidance and I have to be cautious where I stand. Last, my objective is to have a robust groundwork when we turn the Capital Market Day on November 6 in Paris. I’m confident we are making good progress and I have a strong and reenergized executive team joining on the same mandate in the coming weeks. Moving on now to H1 financials.

Let’s look at the headline numbers reflecting the challenges identified and highlighted last April during our Q1 revenue publication. In the first half, we posted €2,200,000,000 in revenue, representing organic decline of 3.4% compared with the prior year, a trend consistent in Q2 and in Q1. In net net revenue terms, our revenue declined by 7.3%, impacted by the mix of products. On profitability, adjusted EBITDA reached $4.00 €1,000,000 in H1, representing 18.2% in revenue of revenue. And based on net net revenue, our adjusted EBITDA margin stands at 22.9.

The free cash flow stands at plus €40,000,000 or a conversion rate at circa 10%, which is not a good trend, still impacted by Power24. Finally, normalized net income group share reaches €121,000,000 with a reported net income group share that equals to a loss of minus €4,200,000,000 impacted by €4,100,000,000 non cash goodwill impairment, reflecting the evolution of the payment environment in Europe and also the consequences of the current performance and challenges of our Merchant Services business. I would like to precise that following this impairment, the Wireline equity remained solid at €4,900,000,000 As I said, we’ve been very active during the first half, more particularly in Q2 with clear objectives: restore trust and set the basis of our transformation. First, our immediate priority has been to address and fix the initial challenges presented last April. It has been a strong managerial focus and started to see the first tangible benefit.

On the product side, we have made clear improvements. Regarding hardware, you will remember that we had significant issues across the board. Situation has been fixed in most of the geographies, with still few terminals missing in Belgium and performance issues remaining in some markets on the Enterprise segment, but this is much better. The first ecom offering for coal, the Credit Agricole, is live and has been rolled out in the Credit Agricole branches and soon within HCL. This is based on our refactored ecom solution, which got, by the way, commitment from large merchants to migrate out of the SIUS platform to this refactored solution.

We launched Hero payment method this summer in Germany, with a planned rollout in Belgium in October and in France in early twenty twenty six. This will take some time, but based on successes of Bizoom and Twint in Spain and Switzerland, I’m quite optimistic that this will generate significant revenue going forward. Finally, on the acquiring front, we have started to deploy our U. K. Offering to be able to operate there post Brexit, and we have achieved end to end testing on Card Bunker in last June.

On SMB, we have started to stabilize our churn rate, especially in Switzerland, Sweden and Germany, but with better performance on small merchants than on midsize, which leads to still lower volumes. Our Merchant Services operating model has been redesigned to drive more delivery and fast decision. The management team of Pol is being renewed with add on on Terminal Center of Excellence and on Regional Commerce September. Last, all action plans are operationalized to deliver the $50,000,000 cash cost savings plans that we announced in April with a clear objective to over deliver it. To prepare the future, we have cleared the table on several topics, enabling us to move forward from a healthy base.

On the portfolio pruning strategy, a very significant milestone has been reached on METS towards a disposal of the activity. I will come back shortly on that specific point. But have in mind that other initiatives are getting mature with a strong momentum. We also have actively worked on our financing strategy and the coming debt refinancing are completely secured. We have made, based on our strategic work, a deep work on balance sheet to clean up the basis after several years of market consolidation.

Last, we have launched two external audit on our merchant portfolio with already interim reassuring results. I will focus on this topic. So regarding the HBA portfolio, as you remember, on July 2, we mentioned an audit to be commissioned to accuracy on the remaining hybrid risk portfolio to confirm its cleanup and its alignment with our compliance and risk framework with the preliminary outcome today. I’m very happy to say and to share that based on the preliminary findings of Accuracy, which will continue their audit over the coming weeks, there is no need for material off boarding of merchants that have been identified so far in our regulated entity, and the group has confidence that it is not to be expected. This confidence is reinforced by the fact that with very seldom exceptions that have promptly been addressed when appropriate, the cases referenced in the recent press campaigns were not or no more in the books of the Group.

As shared in June 25 press release, the Group has extended its review of the technical orchestration layer portfolio activity to assess and take actions from merchants potentially lacking proper gambling licenses in the countries they operate, but we do not anticipate significant impact in 2025. In parallel to this, Wireline is undertaking a comprehensive assessment of its compliance and risk framework and its implementation, a task assigned to Oliver Wyman. As said, the main conclusions will be communicated alongside the group earning reports on October 21. Hence, by the October, any potential remaining weakness and improvement areas will be identified and in such cases necessary action plans will be executed to ensure optimal operational integrity. The wireline top management and Board of Directors are fully committed to strict compliance with regulation and risk prevention standards.

So regarding METS, as we announced yesterday night, a major milestone has been reached in our simplification journey, with the entry into exclusive negotiations with Magellan Partners regarding the divestment of METS activities and some financial services related activities after a competitive process. This transaction, when confirmed, will be fully part of our transformation roadmap and will enable us to refocus on payments, as already announced, through exiting from adjacencies with different type of business model simplify group operations with a leaner organization optimize the allocation of our resources with more focus on payments in terms of investments while alleviating management bandwidth to be concentrating on the core. Finally, this will enhance our strategic flexibility with the reinforcement of wireline liquidity through the cash in from the disposal. As announced yesterday, the divested activities generated revenue around EUR450 million, employing some 3,800 people. The discussions are based on an enterprise value of up to EUR410 million, including EUR10 million earn out based on the 2025 operating performance of the perimeter.

This valuation represents an approximate 11 times pro form a standalone adjusted operating income for 2024, which is the relevant aggregate to look at in terms of valuation multiple. We expect to close this operation during the 2026. I want to mention here that this is also a very good opportunity for METS and their teams with a more strategic focus on their organizational structure, dedicated innovation resources and development in new market and skills with a very strong and qualitative partner, Magellan partner, who is quite renowned in digital transformation in France and in Europe. We will obviously keep informed the market in due time regarding the next steps of the process. In parallel of my business key findings, I decided to extensively renew our leadership team to drive the transformation of the company ahead.

After the disposal of METS, DXCo will be made of eight members only, out of which six will have been appointed in the last nine months. After the arrival of Paul McClark to drive MS business last November, and more recently Candide Dion to improve our technology stack, I have the pleasure today to announce three newcomers who will be with us in the coming weeks. Frigant Sejradi will be the new Group CFO. With an audit background, he comes from a tough industrial environment, which was Alstom, and he will be key to run the ongoing finance transformation initiated by Gregory and the automation of our finance processes. She will bring as well a deep expertise in treasury and financing strategy.

Anika Grant is Australian. She will be the new Group People Officer, and she will drive the people equation to manage our people cost while retaining and attracting talents, key pillars in the creation of the new airline, with a very advanced digital DNA coming from Uber in the last years. Madame Elena Kaskai will be the new Head of Financial Services. She will rejuvenate and reposition this activity, leveraging on her very strong expertise and reputation in the payment sector. Madelina did an extraordinary work to transform the SIPPS Portuguese operator over the last years and to expand it internationally.

Now I think we will have, from now, the right leadership team to drive successful wireline transformation. Let’s now go through our performance and key business highlights for Q2. So in Q2, One Line delivered external revenue of €1,140,000,000 in line with our initial expectations, With MS decreasing by 3.4% or down 7.3% on an NNR basis, revenue were slightly down by 0.3 excluding merchant termination linked to HBR activities as already announced and the hardware based effect. And while the consumption environment in Europe is challenging, the slowdown in the underlying business reflects the elevated churn rate that we’ve encountered over the last month, especially in the SMB segment. The lag in NNR versus published revenue was mainly due to merchant and product mix, notably the low performance in hardware sales, which are full NNR.

Financial Services sales were down 10.6%, driven by the already highlighted reinforcing in the Account Payment division And in the context of the high comparison base in Issuing Processing, excluding the reinforcing impact, the decline in sales would be around 4%. Finally, METS was up around 2%, in line with our plan. Looking at the trends in MS by go to market in more detail, in Enterprise, on the one hand, we had positive momentum in Travel and Hospitality and good traction in Acceptance generally. However, we were impacted as expected by lower terminal sales and the acquiring business has broadly stabilized with The Nordics showing good resilience. As illustrated by the logos on the right of the slide, we had a number of new signings and upselling in the quarters, notably in EV charging, showcasing our acquiring capabilities in this segment.

In SMB, our performance was affected by a drop in hardware sales, but POS terminals, as I said, are now available in key markets. Hopefully, we can look forward for a better momentum going forward as churn rates are stabilizing in the past few weeks and customer satisfaction is gradually improving. While we underperformed in some core markets, we had good pockets of growth in the countries where we are more challengers, especially in Central Europe, but also in Italy, as well as in travel and acceptance. We also had good momentum with ASVs in The Nordics, where the group has pretty strong positions. Last, in our joint ventures, we had a strong performance driven by solid market shares gains in Southern Europe, while benefiting specifically in Italy from the merchant portfolio migration from CCB and Credem and the benefits of our repricing actions in Australia.

Germany was impacted by a strong comparison base and a less dynamic underlying performance, notably in Acceptance. Now looking at Financial Services developments in Q2, the negative performance is mainly due to the re sourcing impact in the Account Payments segment, together with low volumes, and the comparison effect due to the signing of some licenses deals in the first quarter of last year. On the positive side, we have good growth in card based payment processing supported by our next generation card issuing platform with strong demand in APAC and in Eastern Europe. Importantly, we secured a ten year contract to manage account to account payments for our BASF in Italy and renewed our partnership with Visa for the cloud based ACS in France. These wins will help us to stabilize the business in the near future.

The Mobility and eTransactional Services segment delivered 2% organic growth in Q2. This performance, in line with expectations, was supported by strong volumes in omni channel interactions, especially with customers like SNCF, LCL and BNL. In Transport and Mobility, we had also a good performance driven by France with new mobility projects and ticketing systems and by The UK with mobile ticketing systems. Trusted services was more challenging with positive dynamics in markets like Spain, offset by lower activity in France of a high closing phase. On the commercial front, the dynamic remained positive, notably in the rail industry, as we partner, for example, with Transpining Trans Limited and Sorsister to provide their rail operations suite leveraging on METS initial solution.

And now I hand over to Gregory to talk about our H1 financial performance.

Gregory Lombarty, Group CFO, Worldline: Thank you, Pierre Antoine. Let’s look at the management actions on costs and liquidity. In this environment, cash cost control has been a key area of focus. First of all, Power24 has enabled cash cost savings of €220,000,000 so far, with the full run rate to be reached by the 2025. Beyond Power 24, we’re being ruthless in cost control.

And this materialized, as you remember, in our plan to cut cash costs by another €50,000,000 in 2025. Savings are already visible in the P and L where we had a Power24 benefit of 34,000,000 in our cost base in H1, allowing us to fully offset underlying cost inflation. And in our CapEx, which we managed to reduce by 16% in H1 in absolute terms, in line with our full year trajectory. These efforts paid off with free cash flow protected in H1 despite the challenging revenue picture. Meanwhile, we’ve maintained exceptional liquidity with cash of €1,200,000,000 at the June, pro form a the payback of the 2025 convertible bond, leaving us ample breathing room for our next maturities.

Furthermore, the maturity of our EUR 1,125,000,000.000 revolving credit facility was extended by one year to 2030 with unanimous support of our lending banks. Moving on to H1 performance by business line. In MS, in the context of a 2.3% decline in sales, the segment’s EBITDA fell 20% to EUR $311,000,000, equating to an EBITDA margin of 19.3%. The key drivers of this decline were some merchant terminations and, more importantly, a negative mix in terms of client and sector. So for example, an underperformance of the higher margin SMB segment and on the other hand, growth in the airlines or FMCG verticals, which carry lower margins.

FS segment’s EBITDA also dropped sharply by 27% to €92,000,000 on the back of a 9.8% sales decrease linked mainly to the last impact of the contract resourcing. Thus, the EBITDA margin reached 22.4% in H1. Lastly, METS EBITDA was broadly flat at €30,000,000 with a margin at 16.8%. Now on the operational items of the P and L. The increase in EBITDA to €324,000,000 is linked to a big drop in the Power24 provision, which amounted to €174,000,000 in H1 twenty twenty four and was just €16,000,000 in H1 twenty twenty five, while other restructuring costs rose slightly at €61,000,000 Operating income was a €4,060,000,000 loss due to the impact of the goodwill impairment of the same amount.

We decided to pass this impairment as we have noticed that the change in the environment in Europe and in the payment market is long lasting and the group thus decided to draw the consequences of its long term outlook, specifically in the MS business. Net finance costs reached €183,000,000 mainly impacted by €142,000,000 fair value adjustment, TSS preferred shares, reflecting the negative outlook of the terminal market. Income tax expense was €10,000,000 with an annualized effective tax rate of 24.9% when excluding the goodwill impairment and the change in fair value of the TSS prefs. As a result, normalized net income group share reached €121,000,000 positive, while the reported net income group share equates to a loss of EUR4.2 billion impacted by the EUR4.1 billion non cash goodwill impairment and the change in payment environment that is recognized through that impairment. It also includes EUR142 million fair value adjustment of the TSS preferred shares.

Looking at the cash flow statement on the next slide. We generated €40,000,000 of free cash flow in H1 twenty twenty five or 9.9% of adjusted EBITDA. Here are the main elements in our free cash flow. Change in working capital was an inflow of €25,000,000 after the normalization that occurred throughout the year. Tax paid decreased compared with prior year, in line with the group’s operational performance, but we expect catch up payment to impact H2.

CapEx was lower in euro terms as mentioned earlier. And our integration and rationalization costs are flat at €58,000,000 Overall, H1 twenty twenty five free cash flow before Power24 stood at €102,000,000 or 25% cash conversion, while after the €62,000,000 powered 24 execution cash costs, our reported free cash flow came in at €40,000,000 Finally, in terms of indebtedness, at the June, our net debt stands at €2,100,000,000 including IFRS 16 liabilities. This figure takes into account the €135,000,000 impact resulting from the acquisition of Credemp and the revaluation of put options linked to Italian and Greek business. Our net debt thus equates to 2.2 times adjusted EBITDA over the last twelve months. On the debt management front, early June, we issued a new €550,000,000 bond under the existing EMTN program, maturing in June 2030 and bearing a coupon of 5.5% per annum.

We then repurchased and canceled outstanding Haussian due July 26 for a total consideration of approximately EUR320 million. Wordline will continue to actively manage its debt maturity profile, while maintaining a high level of financial liquidity. I’ll now hand it back over to Pierre Antoine.

Pierre Antoine Vacheron, Group CEO, Worldline: Thank Thank you, Gregory. So maybe to conclude, I would like to come to our 2025 expected trajectory and my key takeaways. So in terms of outlook, we expect to deliver for 2025 a top line organic that overall should encounter a low single decline with an H2 stable or slightly negative. That would lead to an adjusted EBITDA between $820,000,000 and EUR875 million for the full year and a free cash flow that would be stable for the full year if we reach the middle of the EBITDA guidance. To conclude, would make four remarks.

First, obviously, these are challenging times for wireline, and I want to praise our various stakeholders, especially our teams and customers for their engagement and loyalty while we are navigating in these troubled waters. Second, we are in full motion to fix our challenges, refocus, restore and build trust and lay a solid groundwork to put this company back on track of growth and robust free cash flow generation. The projected disposal of METS, the interim results of our audit of our merchant portfolios are two strategic milestones in this direction. While we are turning to defining our mid term roadmap that I will prepare with a narrowed, experienced and diverse executive team, all aligned on the same agenda, with the same level of energy and symptom urgency, we will aim at putting wireline back on track in terms of performance and meet our ambition of European leader in payments. Thank you very much for your attention.

And I’m now ready with Gregory to take your questions.

Conference Operator: Thank you, dear participants. And now we’re going to take our first question. And it comes from the line of Josh Levin from Autonomous Research. Your line is open. Please ask your question.

Josh Levin, Analyst, Autonomous Research: Good morning. Two questions from me. So you’re laying the groundwork for what seems like will be a multiyear turnaround plan. And for shareholders and debt holders, how do you balance the opportunity and risks of trying to execute that plan with just selling the company now and trying to get the value you can? I guess, I mean, I know you’re relatively new here, I guess why should investors be confident that the turnaround will create more value than just trying to sell the company today?

And then just one clarification on your strategy. It sounds to me like you intend to focus more on SMBs and less on medium to large businesses. Is that correct? Thank you.

Pierre Antoine Vacheron, Group CEO, Worldline: Thanks a lot for your question. I mean, the company has and I mean, after five months, the company has very strong assets. I mean, we have a pretty unique multi local positioning in Europe with very strong positions, not only on merchant services side, but also on financial services in very important countries from a demographic standpoint like Germany, France, but also the Benelux and also Switzerland, obviously. And quite promising position in more emerging countries for us like Southern Europe and Eastern Europe. And this multi local is a real asset.

The second point is that we have from an acquiring perspective, we have a massive presence. I mean, are processing EUR 500,000,000,000 acquiring. All these converging step by step on one single platform, which is already processing something like 60% of our volumes. In some geographies like France, are in terms of acceptance, we have more than 50% of the market through our Axis platform, which has processed, as you may have seen, 5,000,000,000 transactions in just the first half of this year. So, we have those assets.

And my take is that distribution today is challenging because of, I would say, because of the last two years, difficult times that the company hasn’t encountered from a management standpoint. But clearly, the light is not far away, so it will take time to have the right level of performance. But considering the assets that we have, I’m absolutely confident that we will make it. And so the upside is really significant for the shareholders, no doubt about that. On your second question, which is do we over prioritize SMB versus the rest?

No, the answer is no. We have clear strong position on global e commerce, especially in some verticals like travel, hospitality, digital, and we can do much more than what we are doing based on the better integration between our Global Collect product and our own merchant acquiring and our issuing processing capabilities. So, we can really have very strong USP in terms of performance, in terms of success of transaction and that can drive great growth. And in the rest of enterprise, which is regional commerce, this is an area where we’ve been probably not investing enough in the recent years. That’s also why we are changing the management on that front that will come September.

But so considering the size of wireline, we will address those three segments concurrently. While I’m insisting more today on SMB, it’s just because we have started the turnaround on SMB during the Q2 with the new management and that starts to pay and to give results.

Gregory Lombarty, Group CFO, Worldline: Thank you.

Conference Operator: Thank you. Now we’re going to take our next question. Just give us a moment. And the next question comes from the line of Justin Forsyth from UBS. Your line is open.

Please ask your question.

Justin Forsyth, Analyst, UBS: Thank you very much for letting me on. Really appreciate the time. Just a couple of questions from my end. I wanted to talk about cash flow and the liquidity position. So first, I believe you have, and Gregory, can you please explain this a little bit more so than is in the financials, an overdraft at the TopCo level of $1,600,000,000 and a consolidated of $250,000,000 ish.

Can you just help us understand the terms there, the dynamics at play? I think it implies there’s quite a bit of cash sitting at the subsidiary level. Can you just talk a little bit about the accounting nuance that underlies that policy and perhaps the interest rate associated and who holds the overdraft. Further on the liquidity position, I hear you saying frequently suggestions that you have sufficient liquidity. I mean, I think we heard this first back in 2023 when the Credit Agricole investment materialized.

It may have the opposite effect, people believing perhaps that you do not have sufficient liquidity. You have, it seems, more than a billion in cash post the repayment of the converts. Understood there are 400,000,000 in bonds coming due next year. Seems like you have cash coming in from the sale of METS. So is there something else that we should be considering when we think about the liquidity position going forward other than those items?

Because it would seem still you have quite a bit of liquidity to handle upcoming maturities? Thank you.

Gregory Lombarty, Group CFO, Worldline: Sure. So in terms of and thank you for your question, Justin. So in terms of our position at the June, was EUR 1,600,000,000.0. There is an overall cash pool that is held with BMG, Bank of America’s subsidiary of ING. The way it works is subsidiaries put their cash on a BMG account and the liquidity is being used at the HoldCo to effect.

So that’s the overdraft you’re seeing. And the HoldCo, Worldline SA, effectively defines the investment policy in short term deposits and so on. And if you look at the balance sheet of the HoldCo, you’ll have around about €1,000,000,000 that is invested in short term deposits. So effectively, what you have is a cash pooling that has roundabout €200,000,000 net amount with negative position at Holdco, positive positions in subsidiaries. And the rest of the liquidity is held through the short term deposits and some investments.

So the $1,000,000,000 short term deposits and the cash that we have in the subsidiaries. So that’s the setup. And indeed, you’re right, post the reimbursement of the ’25 convert, we have $1,100,000,000 ready to deploy. And that’s enough to meet the 26% maturity, especially with the proceeds from METS, as you rightly say.

Justin Forsyth, Analyst, UBS: Got it. Thank you very much for that. And just a quick one on the terminals in Belgium. Maybe Pierre Antoine, you could just articulate a little bit. Is this a supplier challenge?

Is it something with Worldline? Is there a design issue? Is there something down the supply chain as tariffs are hitting that are causing this? Maybe you just articulate what’s happening and how that’s now turning around. Thank you.

Pierre Antoine Vacheron, Group CEO, Worldline: Yes, sure. All the market in Europe is shifting to Android terminals or has been shifting to Android terminals. We’ve been relying on one partner that has been itself encountering challenges. You know that what matters is not the hardware but more the software that is on the terminal. That software is specific to each geography because in each geography, in each country in Europe, we still have specific standard, specific protocols.

And clearly, was delays on the supplier side, but also to be very transparent on wireline side. So, we’ve been managing that very, very tightly over this whole Q2. And step by step, terminal by terminal, we are fixing the issue. So, we still have some lags in Belgium for one terminal. We are still improving the transaction speed on some enterprise terminals, especially in Germany, but we are getting there.

Justin Forsyth, Analyst, UBS: Great. Thank you so much, both. Cheers.

Conference Operator: Thank you. Now we’re going to take our next question. And the question comes from the line of Gregoire Herman from Barclays. Your line is open. Please ask your question.

Gregoire Herman, Analyst, Barclays: Good morning, everyone. Three questions for me, please. The first one will be on guidance. Could you please give us some color on how you think about the phasing of growth in Q3 and Q4? Then on your third party audit outcome, I think you mentioned, so you were not expecting substantial terminations to come.

But can you tell us whether as part of your guidance, you embed any terminations at all? Because I guess we can find a new risk in what you mean by substantial. And then finally, on your disposal of METS, I think you said you would use part of the proceedings to redeploy that into the business. Can you expand a bit on how you think about reinvesting that money, please? Thank you.

Pierre Antoine Vacheron, Group CEO, Worldline: Okay. So on the first point, on the guidance, so we are effectively I mean, the idea is that Q4 will be should be better than Q3. So, are many actions underway. And I mean, I still need some time to have enough fine feeling of what’s happening to be too aggressive in the guidance. So, I prefer to be cautious.

And we did take into account some indirect implications of all these media campaign by potential loss of business, but that would be more indirect than the cleanup of the portfolio. All these goes then to the EBITDA and to the free cash flow. Obviously, as you noticed, the guidance is quite wide at this moment for H1. But considering all the uncertainty and all the actions which are underway, I prefer to be still conservative on the level of commitment. But obviously, we will narrow the guidance in Q3.

So on your second question, I think I already answered. So, we do not anticipate again material reporting going down the road. It’s more in the range of classical region of the portfolio management, so business as usual. We are, as I said, we are also extending our review on non regulated businesses, so especially the orchestration layer that the press made echo of. And we are assessing if all the merchants have the regular licenses they need to have to operate their gambling activities because we are talking of that.

I do not anticipate any significant impact again in 2025 and we’ll assess what we do with this business in the coming months. Regarding METs and the use of proceeds, so we have not existed yet the use of proceeds of our pruning strategy. We will have a systematic position, I would say, during the CMD.

Alexandre Ferre, Analyst, BNP Paribas: Okay. Thank you.

Conference Operator: Thank you. Now we’re going to take our next question. Just give us a moment. And the question comes from the line of Hannes Leyser from Jefferies. Your line is open.

Please ask your question.

Hannes Leyser, Analyst, Jefferies: Yes, good morning. I have also a couple of questions. The first one is on the METS sale. You, I think, talked about €450,000,000 of revenues in pro form a 2024. That would imply around €99,000,000 in Financial Services.

Maybe you can talk about the expected growth for the combined businesses, in particular with M and A coming to maybe a little bit of an Olympic headwind in Q3. So for the Financial Services stuff and how to get to that €100,000,000 EBITDA revenue? That’s the first question. The second question is around the divergence between the N and R performance and the organic growth. And then maybe just like two small ones on the Indian sale, any progress on that.

And then the preferred share has been reduced again, as you commented. Maybe you can talk about that a little bit more in detail. Is that now completely written off in this study because of the underlying performance of Ingenico? Thank you.

Pierre Antoine Vacheron, Group CEO, Worldline: Okay. Thanks, Hertz, for your questions. So on the first question, NNR versus external revenue, so you have two dimensions here. One is obviously linked to the fact that Q2 twenty twenty four was very strong in terms of hardware sales. And when we are in hardware sales, have I mean, a very strong congruence between NNR and external revenue.

And the second component is linked more to the mix of revenue in terms of services that has evolved and that was already the case in Q1 with this low performance that we’ve been encountering in SMB and higher performance in segments, especially like travel, airlines, so cross border, e commerce where the level of SkinP is pretty high and also in enterprise, in store enterprise where we’ve been more performing in segments where the use of international card schemes is high as compared to local schemes. So that’s really this question of mix. So this will be reversed. All this bad trend to some extent will be that you don’t see with our competitors because our competitors publish only on NNR. But this bad trend will be reversed with the improvement of the SMB business and that’s why we are insisting a lot on this effort on SMB, but also potentially improvement in the way we invoice the merchants.

Regarding India, I prefer not to comment on this. As I said in my introduction, we are working on various processes, very active. And obviously, as soon as we have some news and some good news, we will share them. Regarding the preferred shares of Ingenico, so we performed an assessment based on the trajectory of payment terminal in general, and also the fact that, as you know, it’s preferred shares where we are behind the proceeds of the private equity. And so we prefer to take a more conservative option in terms of valuation.

Hannes Leyser, Analyst, Jefferies: On M and TS, that was actually my original question. Sorry. Scope and what was last year in it, the part within Financial Services, which gets sold, what is the growth rate that we assume the similar FX margin in that business? Just a little bit more details, please.

Pierre Antoine Vacheron, Group CEO, Worldline: Yes. I mean, the FX part is more related to digital banking type of assets. So, it’s a bit specific and it’s quite linked to M and T. S. So, the profile is probably the same as the rest of M and T.

S. So, it’s low, but more constant growth. So, it’s a part of the business which is very consistent with what you knew of MTS.

Hannes Leyser, Analyst, Jefferies: So, we should assume the similar margin profile and similar growth for 2025? And maybe just last question. On MSV, you reported 2.6% organic growth in Q2. Now that has been seeing some tailwinds on the consolidation of Credem and another book, about EUR 20,000,000,000 TPV. Maybe you can talk there a little bit about the organic performance within that segment and any other particular items in Q2?

Thank you.

Pierre Antoine Vacheron, Group CEO, Worldline: Yes. So globally speaking, the MSV has been slowing down and probably quite in line with what you’ve seen from the publications of our competitors. So, we’ve been witnessing some slowdown at constant merchant base in the MSV in the last weeks. So, it linked to consumer behavior? It might be, but we see the same trend as what the competition has published recently.

Hannes Leyser, Analyst, Jefferies: Thank you.

Conference Operator: Thank you. Now we’re going to take another question and it comes from the line of Alexandre Ferre from BNP Paribas. Your line is open. Please ask your question.

Alexandre Ferre, Analyst, BNP Paribas: Hi, good morning. Thanks for squeezing me in. Could about three things. One is following up on something you just mentioned, Pianto, when you say that in the full year guidance, you incorporate some caution when it comes to your salespeople ability to close deals following those bad press articles at the June. Is this some extra caution or you’re already seeing some of that in July, some of those challenges including sales?

Second point would be on the METS perimeter that you’re divesting and you talked about EUR 100,000,000 of EBITDA in 2024. How much would that be in terms of free cash flow? That’d be helpful. And lastly, I wanted to double click a bit into that 0.3% decline in Merchant Services underlying net revenue growth that you call out in the press release. I suppose this includes the transfer of CCB merchants, right?

So could you remind us how much of an impact how much of a tailwind that was in Q2? And if there’s some further impact to come in Q3? And more broadly, maybe in that negative 0.3%, what are the benefits and drags that we should have in mind? Thank you very much.

Pierre Antoine Vacheron, Group CEO, Worldline: Sure. So, on the first question, obviously, we’ve been very active. The good news is that it has been the opportunity for me to enter and touch directly with some customers, but we’ve been very active in cooking our customers during the period. And at this time, our customers are loyal. Clearly they were clearly expecting the outcome of the audits and so on.

But we have a robust and loyal customer base, which is a good news. And also on the SMB front, we didn’t see any movement resulting from this campaign. Now speaking about none yet customers, but more prospects, it is obvious that we have had we have suffered some on hold decisions on a few RFPs and few decisions at the same time on FS side and on the MS side. So, that is impacting our expectation for the year as compared to what we had initially in our mind. And obviously, my objective is to resume those discussions as soon as we can with all of them.

On the second question, which is the free cash flow generated by METS, If I’m not mistaken, it’s something between 20,000,000 and €30,000,000 for this €100,000,000 of EBITDA. Regarding your last question, I mean, the impact of Credem migration is not significant at the scale of the group. Obviously, it’s boosting the Italian performance, but it’s not significant at the scale of the group.

Alexandre Ferre, Analyst, BNP Paribas: Got it. Thank you very much.

Conference Operator: Thank you. Now, I’m going to take our next question. And the question comes from the line of Manel Matto from ODDO BHF. Your line is open. Please ask your question.

Alexandre Ferre, Analyst, BNP Paribas: Good morning, Pierre Antoine. Good morning, Gregoris. Thank you for taking my questions. Three questions. First, can you explain the significant differences between your new 2025 guidance and that initially communicated in February from the previous top management?

What are the main new negative impacts taking into consideration? I understand there are some old decisions from prospects, but what else? Second, do you expect any capital gain or loss from the disposal of your nonpayment assets MTS? And third, Pierre Antoine, you have now been working at Twirlwind for five months as a CEO. You’re going to present your roadmap in November.

But do you believe that the group has a long term means to achieve financial performances comparable to your main competitor, Nexus? Or are the structural differences between the two companies too significant according to you? Thank you.

Pierre Antoine Vacheron, Group CEO, Worldline: So on the first question, I will not comment too much on the initial guidance. Probably, were some assumptions in terms of potential speed of rebound that we are not I mean, probably that we are a bit optimistic, but I don’t want to comment too much. I mean, I suspended the guidance when I joined, and this is my guidance. On the second question, capital gains. Yes, we are anticipating capital gains.

It’s too early to share them, but there is limited goodwill in this business. As you know, it’s a complex transaction because it’s a carve out that we need to execute and to deliver. So, need a bit of time to have complete visibility on the accounting, but it will be positive, no doubt about that. And on your third question, if I did not believe in it, I wouldn’t be there. But clearly, I mean, this company has the assets to be back to growth and to be cash flow generative.

There’s a lot to optimize. There’s a lot to streamline. And it’s not rocket science. It’s a very, I mean, methodic and determined approach that we need to enforce and that’s why I think I have the right management team coming in with me with the right skills for that. It would be a team effort.

It would take some few years, but a limited number of years. But considering our positioning, the technologies that we have, the expertise that we have in house, I mean, we will be clearly one of the champions in this industry in the coming three years.

Alexandre Ferre, Analyst, BNP Paribas: Thank you very much.

Conference Operator: Thank you. And now we’re going to take our last question for today, and it comes from the line of Craig McDowell from JPMorgan. Your line is open. Please ask your question.

Craig McDowell, Analyst, JPMorgan: Thank you. Good morning, gentlemen. Thanks for taking my question. Most have been taken, but just two further ones for me. Firstly, Gregory, wondering if you could give us a bit of a sense of the moving parts on the bridge from EBITDA to free cash flow, and that’d be helpful.

I know you mentioned tax, so you catch up on cash tax there and also got restructuring at $150,000,000 but other pieces would be helpful. And then secondly, on external audit by accuracy, can you give a sense of how the audit work is structured, which countries or businesses have already been reviewed? Just trying to get a sense of how far through the review is and what possibly could come with the full readout in Q3. Thank you.

Pierre Antoine Vacheron, Group CEO, Worldline: I’m sorry. So the first question was on the audit. Can you and I’m sorry.

Gregory Lombarty, Group CFO, Worldline: So there’s one on free cash flow bridge, the other is on accuracy. And we didn’t get the accuracy question, the audit question.

Craig McDowell, Analyst, JPMorgan: So on the audit question, just trying to get a sense of how the audit work is structured, what entities or countries have already been reviewed?

Pierre Antoine Vacheron, Group CEO, Worldline: Yes, okay.

Craig McDowell, Analyst, JPMorgan: What’s still to come? And what should we expect at the Q3 full readout?

Pierre Antoine Vacheron, Group CEO, Worldline: Okay. So, don’t want to be too specific, but it’s been it is a systematic review of all our regulated entities, which is performed, plus the orchestration layer that I already mentioned. And as you know, type of audit, you start with risk based approach and step by step you focus on the areas where you consider that you have more risk and more chances of finding things. And so, we are at this moment and we have an interim report from Accuracy linked to that. And I would say that the picture is clear enough, so that we can have the communication that I’m making today and be reassured on the situation of the portfolio, which is to us not surprised because it’s pretty consistent with what we said in terms of having cleaned up the portfolio over

Conference Operator: Excuse me, dear speakers. We cannot hear you. Dear participants, please stand by.

Pierre Antoine Vacheron, Group CEO, Worldline: Hello?

Conference Operator: We are resumed. Thank you. Please proceed.

Pierre Antoine Vacheron, Group CEO, Worldline: Okay. So we Okay. So sorry, it seems that we that the sun was off. So I will start from the beginning because I don’t know where I was when you lost us. So as I said, this type type of of audit starts with a risk based approach.

So, it has been done on the full scope of our regulated entity plus the orchestration layer that mentioned, which is not regulated where we don’t have the same obligations, but still. And it starts with an analysis of the overall portfolio behavior of the portfolio to identify zones of areas of potential questions and need for deep investigation. And then we move to deep investigations on those potential cases. Very classical way of performing an audit. And as I said, the good news that already at this stage, the picture is clear enough so that we do not anticipate any deviation from the communication that we’ve done when the campaign started.

Conference Operator: Dear participants, please stand by. We’re waiting for our speakers. You are back now. Thank you, speakers.

Pierre Antoine Vacheron, Group CEO, Worldline: Okay. So I don’t know if you’ve been heard or that’s the second time, it’s a bit painful.

Craig McDowell, Analyst, JPMorgan: No, understood. That’s helpful.

Pierre Antoine Vacheron, Group CEO, Worldline: You understood? Okay, okay, fine.

Gregory Lombarty, Group CFO, Worldline: I You had a question on free cash flow then. Just on the first half on the free cash flow, we dropped €42,000,000 versus last year. This is entirely explained by the €113,000,000 drop in adjusted EBITDA, partly compensated by change in working capital. And last year, we had €50,000,000 impact of the advances we get from banks and what we got from the bank that internalized their business in particular. And so this year, we don’t have that impact, and it’s therefore a better working capital performance.

So that’s for H1. For H2, as you know, we have EUR 50,000,000 delta between the low end and the top end of the guidance, which means being between EUR $420,000,000 plus to EUR $470,000,000 plus for H2. If you look at the various components of the free cash flow, I think CapEx should be in line with what you’ve seen generally. Same thing for leases. Working capital should be a slight drag.

Power24 should continue to cost us as we are finalizing the last exits. So it should be cost us around about 30,000,000 And then the taxes I mentioned, we have a lower SKU for H1 this year with roundabout $50,000,000 paid in H1 and we expect roundabout double that in H2. And finally, cost of debt is pretty mechanical, should be round about €40,000,000

Pierre Antoine Vacheron, Group CEO, Worldline: Okay. Thank you. So I think it’s the last question. Thanks a lot for this long call and for your interest. And I wish you a great day and a great summer if you have not taken the break yet.

Have a good day.

Conference Operator: This concludes today’s conference call. Thank you for participating. You may now all disconnect. Dear speakers, please stand by.

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