Worldline on a quest for M&A after sales beat, shares shoot up

5:42 am Tuesday, February 22nd, 2022

By Juliette Portala

(Reuters) -Worldline’s fourth-quarter sales surpassed market expectations, prompting the French payments company to herald a new year of “conquest” in Europe, with shares rising more than 9%.

The group, which processes transactions for clients from merchants to government agencies, seeks to give priority to acquisitions in regionwide efforts to consolidate.

The payments sector has seen several big takeover deals in recent years as the growing use of e-commerce platforms and smartphones has sparked competition to develop new systems.

In a call, Chief Executive Gilles Grapinet told analysts he had never seen, in his ten years at the head of Worldline, so many banks, some significant ones among them, undertaking very deep strategic reviews of their payment activities.

He called 2021 a tipping point that had “moved the thinking” of some of the largest European banks, which now look to answer the question ‘What should I do with my payment activities?’.

“It is unprecedented,” he added.

A SIGH OF RELIEF

“This is a year of perfect execution of our plans on all fronts,” Grapinet told journalists in a call reviewing last year’s performance, pointing to a group he described as being “in movement and in conquest”.

Worldline posted sales of 1.04 billion euros ($1.17 billion) in the fourth quarter, which J.P. Morgan said was 2.6% ahead of consensus, fuelled by strong growth in merchant services.

Although Europe is still in the grip of the coronavirus pandemic, leading more people to switch to digital transactions, in-store volumes of payment processing firms have begun to recover.

“The results should be seen as a relief by the market since, given the Omicron variant in Q4, there were concerns that there would be revenue impact due to Worldline’s DACH exposure, where there were issues,” JPM wrote in a note.

Company shares were up 9.8% by 0903 GMT, among the best performers on the pan-European STOXX 600 index.

($1=0.8853 euros)

(Reporting by Juliette Portala, editing by Christopher Cushing, Simon Cameron-Moore and Clarence Fernandez)