Worldline Sa · EURONEXT:WLN
Worldline Sa — Investor Presentation (January 2016)
56 slides from Worldline Sa's investor presentation, January 2016
Slide 1: Presentation to Investors January 2016
‘Worldline Presentation to Investors January 2016
Slide 2: Disclaimer
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 tha
Slide 3: @00COS 8S ©0808 © © OOOSSS SOSOSS FOSSSSS 808888888
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Slide 4: Worldline at a glance: 40 years of expertise in payment systems
Worldline at a glance: 40 years of expertise in payment systems 2015 Transaction with Equens (closing in H1 2016) 4 | CONFIDENTIAL © Worldline
Slide 5: Group Snapshot
Group Snapshot 5 | CONFIDENTIAL © Worldline
Slide 6: We are
We are A payment service company, which builds and operates real-time transactional payment systems to allow merchants, banks, governments and other organizations: • to issue, accept and settle payment means in various forms and; • to manage all types of digital transactions with their customers bey
Slide 7: Typical Industry payment four-party card chain
Typical Industry payment four-party card chain Network Visa, MasterCard, …. Card Scheme fee Scheme fee incentive Card issuer Card acquirer Interchange fee variable depending on country Cardholder Cardholder and payment mean Merchant incentive fee Service Charge Payment acceptor Surcharge Cardholder
Slide 8: Three integrated Global Business Lines
Three integrated Global Business Lines 2014 Revenue: € 374m 2014 Revenue: € 396m 2014 Revenue: € 380m (+2.0%) (+1.4%) (+5.1%) Leveraging the customer Transforming cashless Enabling strategic digital engagement payments transformation 2014 OMDA (*) margin 21.6% 25.2% 13.7% (*): Operating Margin befor
Slide 9: Worldline is a leading player in Europe with expanding emerging markets footprint
Worldline is a leading player in Europe with expanding emerging markets footprint Payment Service Provider (PSP) ranking in European Union 2014 European turnover, in € million Worldline** #1 NETS Issuing Why scale matters: WorldPay (Net) Processor First Data in Germany • Outsourcing opportunities SI
Slide 10: Worldline has a comprehensive positioning across the extended payments value chain
Worldline has a comprehensive positioning across the extended payments value chain Issuing Services to Credit/Debit Acquiring Acceptance Services to Services to Commercial Card payment transaction cardholders ACH¹ transfers transaction POS new digital merchants acquiring Services in Europe processin
Slide 11: A Tier 1 diversified client base
A Tier 1 diversified client base High quality customer portfolio, low client concentration Merchant Services Financial Processing & Mobility & & Terminals Software Licensing e-Transactional Services Over 86,000 Merchants contracts 200+ banks 150+ customers Over 45,000 e-Merchants managed and financi
Slide 12: Worldline's environment positively impacted by changes in regulations and digital transformation
Worldline’s environment positively impacted by changes in regulations and digital transformation IMPACT OF THE CHANGE IN PAYMENT MARKET VOLUME GROWTH EUROPEAN REGULATIONS • Ubiquitous penetration of electronic payments through mobility and Internet of Things • Growing 3x faster than total consumer s
Slide 13: Non-cash payment growth penetration potential in Europe
Non-cash payment growth penetration potential in Europe Number of Non cash Payment Transactions per Capita in Europe (2013) Number of Non-cash Payment Transactions per Capita in Europe (2013) 500 450 400 P 350 P P P 300 P P P 250 200 150 P P 100 50 0 Source : ECB Payment statistics – data as of 24 A
Slide 14: Growth supported by volume increase, innovation and international cross-selling
Growth supported by volume increase, innovation and international cross-selling m-payment Innovation HCE solution Internet acquiring bundle International Connected cross selling Living M-to-m and data analytics 2014 Volumes Value added +11% +6% services Fraud Management Issuing transactions commerci
Slide 15: Worldline strategy to take advantage of regulatory and digital changes
Worldline strategy to take advantage of regulatory and digital changes Banks (FPL) • Capture new outsourcing opportunities • Upsell with new innovative products on existing customers (strong authentication, payment data analytics,…) • Consolidate the leadership in new payment means M&A (Mobile payme
Slide 16: Examples of concrete digital transformation programs supported by Worldline
Examples of concrete digital transformation programs supported by Worldline Barcelona McDonald’s Mobile Ready Large cosmetic company adidas Experience Digital Platform Unattended Digital Store Interactive …to know better the Retail kiosks … to reduce the size Signage McDo’s customers …to improve the
Slide 17: An undisputed EU leader of Wallet Solution Providers for banks
An undisputed EU leader of Wallet Solution Providers for banks BCMC Mobile 17 | CONFIDENTIAL © Worldline
Slide 18: Award and industry recognition
Award and industry recognition Worldline ranked by Ovum as one of the 5 world leaders in Card Management Ovum Services. Ovum Decision Matrix Selecting a Card Management System Platform, 2015–16 Recognition of the technological advance and functional richness of “…all of Worldline's CMS platforms b
Slide 19: 2014 financial highlights
2014 financial highlights Key P&L items 2014 2013* Key Observations In € million OMDA% in line with mid-term guidance Revenue 1149.3 1135.1 Growth %** 2.8% 4.1% Top line growth accelerating along 2014 FCF progressing by 14% excluding one-off items OMDA 215.1 203.2 As % of revenue 18.7% 17.9%**
Slide 20: H1 2015 key figures
H1 2015 key figures €595.0m €108.7m +4.1% organic 18.3% +56 bp €64.2m €264.5m €48.7m +11.8% +6.8% vs H1 2014 vs H1 2014 (*): Operating Margin before Depreciation and Amortization 20 | CONFIDENTIAL © Worldline
Slide 21: H1 2015 Performance per Global Business Line
H1 2015 Performance per Global Business Line Revenue OMDA OMDA % In € million H1 2015 H1 2014* % Growth H1 2015 H1 2014* H1 2015 H1 2014* Merchant Services & Terminals 193.5 184.9 +4.6% 33.9 37.6 17.5% 20.3% Financial Processing & Softw are Licensing 200.5 197.2 +1.7% 48.7 46.9 24.3% 23.8% Mobility
Slide 22: Q3 2015 key figures
Q3 2015 key figures € 305.6m € 1.7bn € 40.2m 1.4 years +10.0% € 303.2m + 5.0% organic of revenue vs Q3 2014 22 | CONFIDENTIAL © Worldline
Slide 23: Q3 2015 revenue per Global Business Line
Q3 2015 revenue per Global Business Line Revenue Q3 In € million Q3 2015 Q3 2014* % Growth Merchant Services & Terminals 98.6 92.0 +7.2% Financial Processing & Software Licensing 103.5 100.4 +3.0% Mobility & e-Transactional Services 103.5 98.5 +5.0% Worldline 305.6 291.0 +5.0% * At September 2015 co
Slide 24: September 2015 YTD revenue per Global Business Line
September 2015 YTD revenue per Global Business Line Revenue 9 months Sep YTD Sep YTD In € million % Growth 2015 2014* Merchant Services & Terminals 292.1 276.9 +5.5% Financial Processing & Software Licensing 304.0 297.6 +2.1% Mobility & e-Transactional Services 304.5 287.9 +5.8% Worldline 900.6 862.
Slide 25: 9M 2015 Free cash flow growth
9M 2015 Free cash flow growth, in € million 110 105 100 +11.1% 95 90 85 €93.9m €104.4m 80 75 70 9M 2014 9M 2015 25 | CONFIDENTIAL © Worldline
Slide 26: 2015 and mid term guidance
2015 and mid term guidance 2015 GUIDANCE MEDIUM-TERM OBJECTIVES 5 to 7% 2014-2017 organic revenue CAGR Revenue 4 to 5% organic growth Sales growth to progressively increase over the period OMDA +c.50 bp vs. 2014 +c.250 bps margin for 2017 vs. 2013 FCF €120m to €125m c.€180m by 2017 26 | CONFIDENTIAL
Slide 27: Slide 27
Slide 28: Disclaimer
Disclaimer This document contains further 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.
Slide 29: Agenda
Agenda 1. Executive Summary 2. Business benefits & industrial ambition 3. Transaction structure & value creation 4. Key deal takeaways 5. Q&A 29 | CONFIDENTIAL © Worldline
Slide 30: Executive summary
e-payment services worldline Gilles Grapinet Chief Executive Officer Executive summary @@@@@@ an atos company
Slide 31: The project: a major transaction between Worldline and Equens, structured in two components
The project: a major transaction between Worldline and Equens, structured in two components Contemplated acquisition of Equens’ commercial Contemplated merger of financial processing activities acquiring activities in cash • A new “Equens Worldline Company” • Acquisition of 100% of PaySquare (fully
Slide 32: Transaction structure
Transaction structure Equens Worldline Company shareholding 32 | CONFIDENTIAL © Worldline
Slide 33: Equens Group overview (2015 unaudited pro forma figures)
Equens Group overview (2015 unaudited pro forma figures) c. € 75m gross revenue c. € 266m Excl. PaySquare Commercial Acquiring Revenue** subsidiary of c. c. € 305m revenue* € 39m net revenue c. € 31m OMDA** c. € 37m OMDA** c. € 6m OMDA 6 countries 5 countries 4 c. 1,300 employees countries c. 1,200
Slide 34: Creating a unique pan-European platform with a diversified revenue base
Creating a unique pan-European platform with a diversified revenue base • C.100 million of cards under management c. 8,600 > € 1.5 bn Experts 2015e • c. 10 billion SEPA worldwide revenue payment transactions processed annually • 6 billion ATM and POS transactions processed • c.250,000 merchants serv
Slide 35: Building an industrial pan-European champion in payment services
Building an industrial pan-European champion in payment services Payment service providers ranking in European Union 2014 European turnover, in € million Industrial leader in 5 major European countries Worldline** & Equens Worldline** NETS WorldPay (Net) Large economies of scale First Data and very
Slide 36: Low execution risk and high visibility
Low execution risk and high visibility Additional c. € 1 billion • Commitment to renew commercial contracts with Equens shareholders for backlog over the next a 5-year period at closing 5 years • Michael Steinbach, current Equens CEO, will lead the new Equens Worldline Onboarding of a strong Company
Slide 37: A compelling deal rationale
A compelling deal rationale Contemplated merger Contemplated acquisition of financial processing activities of Equens’ commercial acquiring activities By 2018, generate synergies from cost optimization in infrastructure, procurement, rent & lease, other operational topics, G&A as well as revenue s
Slide 38: Business benefits & industrial ambition
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Slide 39: Overview of Equens' financial processing activities
Overview of Equens’ financial processing activities 2015e Revenue* Business description** Major Clients Transaction benefits for Worldline Full service portfolio: Cards • Volumes x2 € 139m • Acquiring Gain of critical scale services processing • Issuing processing • Bank-specific • Brings Automate
Slide 40: Equens Worldline Company: A major industrial combination in Financial Processing (1/2)
Equens Worldline Company: A major industrial combination in Financial Processing (1/2) 2016e revenue: c. € 700 million c. 3,000 payment experts, of which: 30% in Germany, 26% in France, 23% in the Netherlands, 12% in Belgium, 8% in Italy, 1% in rest of the world Leading positions in the Netherlands,
Slide 41: Equens Worldline Company: A major industrial combination in Financial Processing (2/2)
Equens Worldline Company A major industrial combination in Financial Processing (2/2) A strong management team led by Equens current CEO Michael Steinbach • TOP 5 managers already identified • COO / Deputy CEO and CFO appointed by Worldline A large potential of synergies in infrastructure, applicati
Slide 42: Overview of Equens' Merchant Acquiring activities
Overview of Equens’ Merchant Acquiring activities 2015e Revenue* Business description Key markets Transaction benefits for Worldline • Processes a total of 276 million • +25% revenue increase debit and credit Total of in Commercial Acquiring card transactions 120,000 Merchant customers • Reinforced
Slide 43: A combination of assets and expertise to generate synergies
A combination of assets and expertise to generate synergies • Leadership in card • Considerable processing processing leveraging WIPE scale with significant Cost Synergies in: platform and proprietary number of transactions Infrastructure, rent, software procurement, • Experienced in delivering • A
Slide 44: Synergy plan (1/2): Strong and secured short term benefits
Synergy plan (1/2): Strong and secured short term benefits Impact of cost and revenue synergies on 2018e OMDA • c. € 40 million OMDA savings expected from 2018, c. 50% of which as soon as in 2017 • Synergy implementation costs estimated at c. € 40 million from 2016 to 2018 Based on a joint plan for
Slide 45: Synergy plan (2/2)
Synergy plan (2/2): Additional cost saving opportunities through a 5 year application platforms convergence roadmap Application platform convergence program targeting the progressive replacement of many applications by Worldline IP-owned solutions, to be phased with client migration decision Build o
Slide 46: Transaction structure & value creation
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Slide 47: Key transaction terms
Key transaction terms • Equens and Worldline financial processing assets valued at comparable 2016 OMDA multiples with a control premium around 15% Valuation • PaySquare valued at c.12.5 x 2015e OMDA and fully paid with terms available cash for € 72 million • Usual reps & warranties and post-closing
Slide 48: Contemplated timeline
Contemplated timeline Signing & Expected closing Communication 2015 2016 Fourth quarter First quarter Second quarter Legal reorganization of Worldline financial processing Merger completion. Worldline to receive 63.6% of Equens Regulatory (DNB, BNB) and antitrust approvals Worldline Company Informat
Slide 49: New Worldline Group profile
New Worldline Group profile * 2015 unaudited pro forma figure, net of interchange fees and adjusted for renewed contract terms with key Equens shareholders 49 | CONFIDENTIAL © Worldline
Slide 50: Two synergy streams on two different time horizons
Two synergy streams on two different time horizons: By 2018, infrastructure, procurement, rent & lease, other operational topics, G&A and revenue synergies: • A robust optimization plan on infrastructure leading to an annual run-rate target of c. € 40 million in 2018, half of which as soon as 2017 •
Slide 51: Impacts on Revenue, OMDA and EPS
Impacts on Revenue, OMDA and EPS Closing expected in Q2 2016 Impact on revenue • Neutral on FPL short-term growth profile, positive in the medium term growth through revenue synergies • Pro forma 2016 OMDA generation of Equens Worldline Company of around € 120 million, in addition to € 20 million of
Slide 52: Balance sheet impacts
Balance sheet impacts PaySquare acquisition cash out of € 72 million Transaction and reorganization costs of c. € 12 million Liabilities (pensions in particular) in Equens Worldline at closing to be fully funded Transaction structure leading to increased financial flexibility 52 | CONFIDENTIAL © Wor
Slide 53: Key deal takeaways
Key deal takeaways Gilles Grapinet Chef Broce Officer
Slide 54: A transaction in line with Worldline's strategy stated at the IPO
A transaction in line with Worldline’s strategy stated at the IPO Take Focus on Extend Leveraging advantage of processing geographies Worldline financial the European businesses and portfolio flexibility with consolidation for scale and of merchants transactions trends efficiency in commercial struc
Slide 55: Key deal takeaways
Key deal takeaways Creation of Equens Worldline Company, the largest pan-European financial processor with unique geographical reach and innovation capabilities, targeting 2016 revenue of € 700 million and OMDA of € 120 million Significant step-up for Worldline Commercial Acquiring (+25% revenue inc
Slide 56: Thank you
Thank you For more information, please contact: David Pierre-Kahn Head of Investor Relations T+3313434 9066 M+336 285145 96 david.pierre-kahn@worldline.com werldline @@@@@@ anatos company e-payment services