Worldline SA · EURONEXT:WLN
Worldline SA — Q3 2019 Earnings Presentation
49 slides from Worldline SA's earnings presentation, 2019
Slide 1: Worldline Q3 2019 Results
| Worldline Q3 2019 Results| © Worldline
Slide 2: Disclaimer
Disclaimer This document contains forward-looking statements that involve risks and uncertainties, including references, concerning the Group's expected growth and profitability in the future which may significantly impact the expected performance indicated in the forward-looking statements. These r
Slide 3: Third Quarter 2019 - Gilles Grapinet, CEO
THIRD QUARTER 2019 Gilles Grapinet CEO Worldline
Slide 4: Very solid third quarter
Very solid third quarter Very solid +7.1% Strong performance Closing of the acquisition SIX Payment organic growth in in all Business Lines of equensWorldline Services integration Q3 2019 fully in with notably an minority interests: fully on plan line with the acceleration of anticipated growth Merc
Slide 5: All 2019 objectives confirmed
All 2019 objectives confirmed REVENUE 6% to 8% organic growth OMDA Between 24.8% and 25.8%* FREE CASH Between €275 million and €290 million FLOW including synergy implementation costs *: Corresponding to an initial guidance of 23% to 24% pre IFRS 16 impact estimated at c.+180 basis points on OMDA. 5
Slide 6: Third Quarter 2019 - Eric Heurtaux, CFO
THIRD QUARTER 2019 Eric Heurtaux CFO Worldline
Slide 7: Constant scope and exchange rate figures reconciliation
Constant scope and exchange rate figures reconciliation Revenue Reclassific Exchange Scope In € million Q3 2018 ation in rates Q3 2018* effects** Pro forma effects Merchant Services 142.4 +0.1 +116.9 +3.4 262.8 Financial Services 188.5 -0.1 +23.4 +0.8 212.6 Mobility & e-Transactional Services 79.8 0
Slide 8: Q3 2019 Revenue performance by Global Business Line
Q3 2019 Revenue performance by Global Business Line Revenue % Organic In € million Q3 2019 Q3 2018* Growth Merchant Services 283.8 262.8 +8.0% Financial Services 225.6 212.6 +6.1% Mobility & e-Transactional Services 79.9 74.8 +6.8% Worldline 589.3 550.2 +7.1% * At constant scope and Sept 2019 YTD av
Slide 9: Q3 2019 Revenue performance by Global Business Line
Q3 2019 Revenue performance by Global Business Line Mobility Merchant Financial & e-Transactional +8.0%* Services +6.1%* Services +6.8%* Services Merchant Payment Services • Double digit growth in Account • High single digit growth in Payments fueled by SEPA • e-Ticketing double digit growth Commerc
Slide 10: September 2019 YTD revenue by Global Business Line
September 2019 YTD revenue by Global Business Line Revenue Sep YTD Sep YTD % Organic In € million 2019 2018* Growth Merchant Services 819.0 772.6 +6.0% Financial Services 669.8 633.1 +5.8% Mobility & e-Transactional Services 252.5 226.6 +11.4% Worldline 1,741.3 1,632.3 +6.7% * At constant scope and
Slide 11: September YTD 2019 Revenue performance by GBL
September YTD 2019 Revenue performance by GBL Mobility Merchant Financial & e-Transactional +6.0%* Services +5.8%* Services +11.4%*Services Merchant Payment Services • Issuing Processing supported by • Double digit growth in e-Ticketing: • Double digit growth in volume growth, increase of 3D- Tap2Us
Slide 12: Completion of the acquisition of the 36.4% minority stake in equensWorldline
Completion of the acquisition of the 36.4% minority stake in equensWorldline Completion on September 30, 2019 ahead of the initial Timing • Efficient management of the closing process • Trust established with regulators over time • c.€ 1,070 million for the remaining 36.4% stake Valuation • Implied
Slide 13: Third Quarter 2019 - Marc-Henri Desportes, Deputy CEO
THIRD QUARTER 2019 Marc-Henri Desportes Deputy CEO Worldline
Slide 14: Observations on latest business trends
OBSERVATIONS ON LATEST BUSINESS TRENDS Commercial acquiring Financial processing • Issuing processing • Confirmed • +18% order entry • Excellent and acquiring success growth within our customer processing of payment Vertical markets satisfaction volumes growing security offers (digital, hospitality,
Slide 15: Main Q3 2019 signings
MAIN Q3 2019 SIGNINGS Mobility Merchant Financial & e-Transactional Services Services Services Key achievements & business update Key achievements & business update Key achievements & business update e-Commerce: signature of numerous Several large contract renewals, notably: new customers in Europe
Slide 16: 48H to co-create the future of payments
48H TO CO-CREATE THE FUTURE OF PAYMENTS 25 FINTECHS 8 WORLDLINE’S ASSETS COMPETING Online payment gateway New generation terminals 15 CHALLENGES Commercial Acquiring PROPOSED BY WL Merchant Wallet 11 CLIENTS WL Instant payments Open Banking 15 COUNTRIES WL Trusted Authentication REPRESENTED 17-19 Se
Slide 17: Third Quarter 2019 - Gilles Grapinet, CEO
THIRD QUARTER 2019 Gilles Grapinet CEO Worldline
Slide 18: Q3 2019 key takeaways
Q3 2019 KEY TAKEAWAYS A VERY SOLID THIRD QUARTER Fast closing and excellent Very solid Q3 2019 Very successful developments on financing condition of revenue growth SPS integration equensWorldline 36.4 % buy-back VERY DEEP TRANSFORMATION OF WORLDLINE PROFILE IN 9 MONTHS Stronger line Clear market In
Slide 19: Third Quarter 2019 - Gilles Grapinet, CEO
THIRD QUARTER 2019 Gilles Grapinet CEO Worldline
Slide 20: Presentation to investors - ID card
tH “sh ws 9 a PRESENTATION TO INVESTORS © ID CARD 1 gh a < , 3 . ey » © S « © s FINANCIAL COMMUNICATION Worldline
Slide 21: Worldline: empowering the cashless society
WORLDLINE: EMPOWERING THE CASHLESS SOCIETY c. €2.2 bn * c. 11,500 32 ANNUAL REVENUE EMPLOYEES COUNTRIES MERCHANT FINANCIAL MOBILITY SERVICES SERVICES & E-TRANSACTIONAL SERVICES • Commercial • Issuing Processing Acquiring • Acquiring • Trusted Digitization • Omnichannel Processing • eConsumer & Mobil
Slide 22: A best-in-class execution since IPO
A best-in-class execution since IPO consolidating and strengthening Worldline leadership in Europe
Slide 23: Powerful transformation of Worldline's financial profile since IPO
Powerful transformation of Worldline’s financial profile since IPO thanks to the combination of organic growth and M&A REVENUE OMDA FREE CASH FLOW EXPANSION (€ m) (€ m) 470 (€ bn) 2.2€ 500 m 27,00 207 391 € 400 m 25,00 176 1.6 1.7 335 140 1.3 € 300 m 258 23,00 129 1.1 1.2 235 21.2% 114 215 € 200 m 2
Slide 24: Solid execution of a visionary consolidation strategy since IPO
Solid execution of a visionary consolidation strategy since IPO MERCHANT SERVICES FINANCIAL SERVICES Reach Portfolio Scale Scale Portfolio Reach Baltics Anchored M&A strategy in Successful integration of 8 Selective approach with limited Worldline DNA fueling growth, acquisitions in a record time am
Slide 25: Worldline today: a unique pan-European payment champion
Worldline today: a unique pan-European payment champion, with an unrivalled industrial scale, reach… PSP ranking in the EU (European revenue in €m) European leadership at scale + Leadership Merchant services + #1 c.2.2m c.3.4 bn Payment Card In the DACH region, in terminals Benelux, in France and in
Slide 26: A full coverage of the payment value chain
…and a full coverage of the payment value chain Financial Services Merchant services MetS Source: Best estimates from the company based on available public information - ¹ Clearing and Settlement Mechanism. 26 | Worldline Q3 2019 Results| © Worldline
Slide 27: A growing and resilient environment with attractive fundamentals
A growing and resilient environment with attractive fundamentals
Slide 28: Our addressable market is structurally growing and highly resilient
Our addressable market is structurally growing and highly resilient thanks to regulation, societal macro trends and technology 2016 +c. 7% CAGR in Europe 2021 108 Bn non cash 151.1 Bn non cash Transactions in Europe (1) Transactions in Europe (1) Growth of digital commerce Regulatory push towards el
Slide 29: The number of cashless transactions has constantly increased
The number of cashless transactions has constantly increased between 2007 and 2016, with low correlation to global GDP growth 500 483 8.5% Number of worldwide non-cash transactions (bn) 98,000 Non-cash transactions 450 Global Gross Domestic Product ($bn) 93,000 CAGR over the period 88,000 400 83,000
Slide 30: The European payment market in need of a lead consolidator
The European Payment market in need of a lead consolidator with Worldline’s solid track record, financial flexibility and ambition Consolidation has mostly taken place in the US VS Europe is initiating the 2nd consolidation wave Top 10 US Payment players (Ranking based on 2017 revenues) Top 10 Europ
Slide 31: An ambitious and recognized CSR program
An ambitious and recognized Corporate & Social Responsibility program
Slide 32: A premium brand with sustainability at the core of its business model
A premium brand with sustainability at the core of its business model Worldline Contribution to the United Nations SDGs EXTERNAL Products Building clients’ trust with fully & services available & secured platforms INTERNAL Reinforcing value for clients Programs through sustainable & & policies innov
Slide 33: Worldline corporate and CSR governance (1/2)
Worldline corporate and CSR governance (1/2) • As at June 30, 2019: • Atos: 27.3% • SIX Group AG: 26.9% Shareholding • Employees & management: 0.3% structure • Treasury stock: 0.3% • Free Float: 45.2% Note: Capital Group of Companies disclosed in July 2019 an upward 5% threshold crossing with a 5.9%
Slide 34: Worldline corporate and CSR governance (2/2)
Worldline corporate and CSR governance (2/2) • Audit Committee • Compensation/Nomination com: • Investment Committee: 4 members, incl. 1 independent director – 6 members, out of which – 5 members, out of which Board • Strategy & Innovation – 4 independent directors – 3 independent directors Committe
Slide 35: A well balanced governance structure
A well balanced governance structure Parity Independence 50% 58% 42% Independent members + Men Women 1 employee representative Competences Nationalities Italy-USA Payment services USA 1 1 Bank and finance Norway 1 42%* 58% 1 7 French Management Germany 1 Engineering Belgium-Austria * Non-French dire
Slide 36: New 2019-2021 roadmap: More of the same but stronger
New 2019-2021 roadmap: “More of the same but stronger”
Slide 37: Key strategic axis of the 3 year roadmap
Key strategic axis of the 3 year roadmap: Accelerating the company based on demonstrated track record SCALE & REACH Fully leverage Worldline Pan-European competitive advantage LARGE DEALS Maintain commercial focus on large outsourcing deals and new bank EXPERTISE alliances Grow above market Worldlin
Slide 38: Adapting corporate governance and preparing for full standalone status
Adapting corporate governance and preparing for the full standalone status Adapting the corporate Improving corporate structures governance • Increase from 4 to 6 independent • Disentanglement from Atos IT systems board members (out of 12) and mutualized support functions • Reduction from 5 to 3 of
Slide 39: Taking advantage of the projected stand-alone status
Taking advantage of the projected stand-alone status: 3 new strategic levers for a rejuvenated M&A potential Renewed ability to welcome new banking Proposed communities in Worldline through further capital distribution by increase Atos of 23.5% of Worldline’s shares Standalone computation of Worldli
Slide 40: Reload firepower to proceed with new M&A
Reload firepower to proceed with new M&A in the background of next consolidation wave Largest EU Bank-friendly Rejuvenated countries still strategy Strategic flexibility to participate & recognized to adapt to each in Payment track-record specific situation industry Consolidation of value-creative a
Slide 41: 2019-21 ambition
2019-21 ambition Previous New 2017-19 2019-21 - 3 year plan - - 3 year plan - After H1 2017 at a slight positive growth REVENUE 7% to 8% organic CAGR 5% to 7% organic CAGR over the 2018-2021 period +350bp to +400bp +400 to 500 bp* OMDA Organic margin improvement Organic margin improvement in 2019 vs
Slide 42: 2019-2021 3 year Financial Ambition
2019-2021 3 year Financial Ambition
Slide 43: Worldline + SIX Payment Services 2018 pro forma revenue and OMDA
Worldline + SIX Payment Services 2018 pro forma revenue and OMDA Worldline 2018 Worldline 2018 Pro forma revenue Pro forma OMDA% c. € 560m c.22.7% c.21.2% c. € c.17% c. € 2.2 bn 1.7 bn Worldline SPS 2018 pro Worldline 2018 pro standalone 2018 forma revenue (1) forma revenue (1) Worldline standalone
Slide 44: Main 2019-2021 revenue growth drivers
Main 2019 – 2021 revenue growth drivers TRENDS REVENUE • Improved geographical mix • Favorable product mix (more online, less terminals) • Strong trends in commercial acquiring and launch of new • High single digit growth rate generation of payment terminals MS • Top-line synergies with SPS • Strong
Slide 45: Main 2019-2021 OMDA improvement drivers
Main 2019 – 2021 OMDA improvement drivers TRENDS REVENUE • Scale effect • From low twenties in 2018 PF • Expansion in online SPS synergies payments • To high twenties in 2021 TEAM² efficiency program MS • Operating leverage • equensWorldline: • From high twenties in 2018 PF €15m phase2 • To low thir
Slide 46: Free cash flow main assumptions
Free cash flow main assumptions Capex Acquisition costs and synergy implementation costs Between 5% to 6% of revenue Yearly synergy implementation over the period costs in line with incremental OMDA synergy benefit Change in working capital Tax rate Assumption: slight contribution Tax rate based on
Slide 47: Cash and Profitability: the way to continue to grow
Cash and Profitability: the way to continue to grow Mid-term leverage target of 1.5x to 2.5x net debt/OMDA Financing capacity available Additional financing in 2018 capacity over 2019-21 c.€1.4bn c.€1.7bn Worldline 2018 2.5 2.5 (max Immediate 2019-21e FCF net treasury (max leverage) leverage) availa
Slide 48: Our latest terminal: YUMi
Our latest terminal: YUMi 48 | Worldline H1 2019 Results | © Worldline
Slide 49: | Worldline Q3 2019 Results| © Worldline
| Worldline Q3 2019 Results| © Worldline