Worldline Sa U/Adr

Good day and thank you for standing by. Welcome to the Worldline Q3 2026 Revenue Conference Call. At this time all participants are in a listen only mode. After the speaker's presentation there will be a question and answer session. To ask a question during this session you will need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference call is being recorded. I would now like to hand the conference over to your speaker today, Pierre-Antoine Vacheron, CEO of the group. Please go ahead.

Thanks a lot. Good evening everyone and thank you for joining us. I'm very happy to be here tonight with Srikanth Seshadri for this Q3 2020. This is a revenue that comes close to one year after our CMD, November 6th last year. So let's move directly to slide 4. Now that the balance sheet is repaired and the pruning program fully executed, we have been focused during this quarter purely on operational execution, executing on what we had committed with discipline. There are four highlights I would like you to take from our performance this quarter. First, our discipline execution is translating now into better customer satisfaction, I will come back to that, and improved operating results. Second, our North Star 2030 is on track and we are delivering against the commitment we made one year ago across simplification, convergence, integration and growth. Third, commercial momentum is building across the group, although depending on the markets, it will take more or less time for booking to translate into revenue. And fourth, we are confirming our full year guidance on the three items, the external revenue, the adjusted EBITDA, and the free cash flow. These are important milestones. Step by step, we are restoring the potential of this company and getting increasing confidence in our 2030 trajectory. On a fully proven basis, third quarter revenue reached €946 million, representing organic growth of 2.5%. Merchant services delivered solid growth at 4.3% and NMR is flat for the first time since Q2 2024. We are delivering an improving momentum across the three businesses. Customer satisfaction is improving on all businesses and churn continues to decline at SMB. In enterprise, mobility and self-service continues to perform strongly, supported by our vertical expertise and geographic expansion. And in Global Commerce, which is back to growth in Q3, Global Collect is demonstrating strong growth, double digit, following its repositioning and a successful platform modernization. Financial Services is recovering more gradually, as expected, at minus 3.3% this quarter, supported by non-recurring items. We obviously continue to absorb the impact of legacy contract terminations. The good news there is that underlying processing activity remains resilient and commercial momentum is strengthening, with a significant increase in bookings year-to-date, boosted by the signing of the major contract with ABN AMRO ICS announced in July. One year ago, North Star was a plan. Today, it is an operating transformation under execution. Let me illustrate the progress we have achieved during the quarter. On Simplify, we continue to reduce complexity across the organization and our processes. In the quarter, we closed three entities and returned one additional license. This is creating a simpler organization with clearer accountability and faster execution. On Converge, platform migrations are progressing according to plan. We have decommissioned three acceptance platforms in Germany. If you remember, we started from 26 in 25, where at 23 in November, remains today 20 with a target of 12 at the end of the plan. As part of this, we are coming to the end of the Ogun SMB portfolio to group A. and moved approximately one third of our Italian merchants to the target acquiring platform without disruption. On Integrate, we are bringing our capabilities and operations together more effectively across the group. We've made significant progress in our infrastructure integrated strategy, transitioning step by step from our 44 fragmented landscape to deliberate domains, sovereign cloud, public cloud, and proprietary data centers. This will take time, as planned, but we have demonstrated over the period that we were in control to make it happen without hiccups. And on Grow, we have made step change in optimizing authorization rates across the value chain with tangible results, including increased shares of wallets with some strategic clients. I will come back to the other illustrations in the following slides. Bottom line, regarding North Star, we are already ahead of plan on workforce reduction in Europe, where we expect headcount to be down by around 4% over the year, close to 500 positions. We are also beginning to see the financial benefits of North Star that we will comment in detail at Q4. The next stage is to accelerate the convergence. The conversion also of this operational improvement into sustainable net-net revenue growth, profitability and cash generation. This is why Northstar is a four-year journey. We are changing platforms, processes, skills and ways of working that were built over many years and that we acquired through several M&A. We are increasingly confident in the past while remaining fully aware of the execution still ahead of us. As I said in the introduction, customer satisfaction is one of the clearest indicators that our operating model is improving. Our annual net promoter score has increased to 40 year-to-date, 10 points above 2025, with improvement across most of our markets, particularly in enterprise and global collect. And this matters for three reasons. First, it is evident that the work we have undertaken on service quality, platform stability, and customer engagement is being recognized by our clients. Second, improved customer satisfaction is supporting the reduction in churn that we are seeing across the group. And third, better customer relationship creates opportunities to increase our wallet share and expand the services that we provide. Obviously, we still have variability across countries and businesses and we are not satisfied with every customer outcome, but the group level direction is clear and encouraging. Global Collect is another important illustration of the turnaround and the growth initiative. The business grew by more than 10% in Q3. offsetting the impact of anticipated churn and de-risking in the acquiring portfolio, which is the second component of the global commerce division. This performance follows a repositioning of the business and a significant program of platform modernization. The platform migration is now in its final phase, with the new portal fully deployed to connect API migration virtually complete. We are using this modernized platform to improve authorization rates and customer experience, including through the deployment of GenAI, with measurable operational improvements already in place. The focus for Global Collect is now on sustaining the growth trajectory while improving the business economic contribution over time, meaning NNR contribution over ER. We are notably extending Global Collect's geographic reach into Latin America through a strategic partnership with a leading local acquirer. So as you can see, Global Collect is a concrete illustration of what Northstar is designed to achieve. Modernizing and simplifying the platform, strengthening the customer proposition, and creating the conditions for sustainable, profitable growth. Mobility and self-service is another good example of a business where one line has a clear right to win. Revenue grew by around 10% year over year in Q3, with bookings up 15% year to date. We have successfully launched in the UK and Ireland, and we are seeing strong traction in Italy, and regarding EV charging operators, we now serve three of the top ten European operators. Our strength comes from combining a broad payment proposition with deep vertical expertise across transportation, parking, vending, EV charging and fuel retail. These are environments in which payments have to be deeply integrated into physical infrastructure. operate at scale and deliver very high availability. And this fits perfectly Worldline technical and technological capabilities and European footprint. Mobility and self-service illustrates how we intend to grow, focusing on areas where Worldline has genuine differentiation, combining payments with deep vertical expertise, and scaling those capabilities across Europe. Finally, I would like to comment on TapOnMobile. Innovation remains fundamental to our North Star ambition. TapOnMobile is a good example on how innovation investments made over the past few years are now translating into growth. The solution is now live across 24 countries, with merchant sales value reaching 1 billion euros since the beginning of the year, doubling versus 2025, nine months. We are scaling it across new use cases, customer segments, geographies, and partner ecosystems. We are deploying it directly for SMBs and enterprise customers, embedding it into partner propositions, and extending now to unattended environments. The Minipos Cube is a good illustration of this approach. Building on our proprietary tap-on mobile technology, we have extended the same software-led capability to address the needs of macro-merchants with a simple, stand-alone and cost-effective entry point into digital payments. Already live in Germany, the Mini Postcube is now available in Switzerland and in Belgium. We believe at Worldline that payments will increasingly be software-led, embedded, and distributed through partner ecosystems. Worldline is well positioned to capture this trend combining proprietary technology, acquiring capabilities and European reach. Our focus is to invest behind innovations where Worldline has a clear right to win and a credible path to economic value. With that, let me hand over to Srikanth who will take you through the Q3 revenue performance and our outlook in more detail.

Srikanth, over to you. Thank you, Pierre-Antoine, and good evening, everyone. I will focus on three things today. The revenue performance across the various business lines, how that translates into net-net revenue, and our outlook. Moving on. On the table below is the published group revenue, which is at €967 million, up 2% organically. For the rest of my remarks, I will use the table above, the fully pruned perimeter. This is also the basis of our full year outlook and guidance. On that basis, revenue was €946 million compared with €922 million a year ago, a growth of 2.5% organic. All organic comparisons are at constant scope and exchange rate. Merchant services generated €759 million, up 4%, while financial services generated €186 million, down 3.3%. External revenue in merchant services caps off a sequential growth year-on-year after Q1 at 1.6%, Q2 at 2%, and Q3 at 4%, and captures the recovery in activity across the portfolio. At NNR level, though, merchant services was flat organically, However, this reverses a negative trend, as Pierre-Antoine mentioned, for the first time over the last eight quarters. The next two slides explain the commercial and mixed effects between this performance in merchant services. Moving on to the next one. Delving deeper on merchant services, SMB grew at a low single-digit rate. Momentum continued across Southern Europe with Greece and Italy performing, Northern Europe with the Nordics, and Central and Eastern Europe In Western Europe, though, it's a little bit more split. Germany grew, Switzerland stabilized, Benelux lags. For Benelux, the turnaround plan is fully activated. Our focus remains on developing value-added services as well, deepening the services we provide to existing customers in this important part of improving our NNR growth. On enterprise, accelerated to a high single-digit growth, geographical expansion as Pierre-Antoine elaborated earlier on mobility and self-service, and as well as in retail, which is growing. The retail pipeline and order entry is also expanding. Alongside that progress, the quarter benefited from churn materializing later than expected. We continue to expect that churn to normalize in the fourth quarter, consistent with what we believed at half-year. Moving on to global commerce which covers acquiring only portfolio on one side and the full service of global collective acceptance and acquiring on the other side return to a low single digit growth. And global collect within that group more than 10% of setting anticipated churn in the acquiring portfolio. Travel delivered double digit growth through market share gains and we'll discuss some of the labels on the right. and Digital Return to Growth through Increased Wallet Share. The wins and upsells on this slide include Emirates, Wizz Air, Blizzard Entertainment and Global Commerce and SBB in Enterprise. These examples show the breadth of our commercial activity across the customer base. Now moving on to the next slide regarding mixed impact within our NNR. We explained why external revenue growth is not yet translating into net-net revenue growth. First again, as we said, net-net revenue is stable after Q2 2024. And the take rate on external revenue is also stable. When we say take rate, it's external revenue divided by merchant sales value. The unfavorable business mix as anticipated during the capital markets day that some of you will remember actually has three components. One which is the customer segment. We did anticipate the FS being lower. That's materializing with the commercial rebound being slower that we elaborated last quarter. Second is on verticals. Growth is higher in the fast-moving consumer goods, which is in fact a volume game, while the travel and digital is scheme-free intensive, and we've seen that as part of our global collect portfolio. Finally, on the geo. The markets with indirect sales channels with partners and banks such as Nordics and Italy respectively have been growing and these have an impact on the NNR dilution more globally. And they're not so different from the questions we answered in the last quarter and NNR is an area for us to watch for us to reverse the mix. So in SMB value added services is one of the areas we will work on to rebound on the NNR. Now moving on to financial services, the revenue. was 186 million euro, lower 3.3% organically, excluding non-recurring items, revenue was down 5.1%. The legacy contract terminations we've been mentioning through the year continue to weigh on our revenue, while recurring processing activity remains resilient across most markets, issuing, acquiring, account and instant payment, as we elaborate on the slide. Digital services grew through fraud detection and trusted authentication. We continue to position ourselves on digital euro and on FIDO, our passwordless authentication, and digital identity is also supporting the opportunity pipeline. Financial services bookings increased 91% year-to-date. We need to continue to sign those large deals that Pierre-Antoine mentioned earlier while harvesting on the installed base for the value-added services. Wins and upsells include BSI, Transactors, Credit Agricole, Payment Services, the labels you see on the right. Now as regards SIX, we have recently agreed to extend and augment our ATM services partnership, including fraud management capabilities. As part of SIX's multi-vendor strategy, certain scopes will be diversified across other suppliers, hence certain scopes that we had could not be renewed This development does not anyway have a material impact on our revenue outlook until 2029. We continue to work closely with SIX across a range of critical payment services and remain committed to supporting the Swiss payments ecosystem through our leading technology, our operational resilience, and innovation capabilities. Now moving on to my final slide is on the outlook, very simply put, We are confirming our outlook in line with the guidance we presented to you in the last call on revenue, on adjusted EBITDA, and on free cash. Reported net leverage that we confirmed was achieved at H1 we will sustain for full year. And with that, I hand you back to Pierre-Antoine to conclude.