Worldline Sa Ord

Good day and thank you for standing by. Welcome to the Worldline H1 2023 results 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 the session, you will need to press star one and one on your telephone. You will then hear an automated message advising your hand is raised. And to withdraw your question, please press star one and one again. Please be advised today's conference is being recorded. Now I'd like to hand the conference over to your speaker today, Gilles Grappinet, CEO. Please go ahead.

Gilles Grappinet Many thanks. Ladies and gentlemen, good morning. This is Gilles Grappinet speaking. And thank you for attending today's Worldline conference call on our first 2023 results. I will start this presentation providing you with some key highlights of our first semester. Then Marc-Henri, our Deputy CEO, will make a deeper dive on merchant services dynamics And as we regularly do, we'll update you on some innovation topics today with a focus on artificial intelligence in Worldline. Hereafter, Gregory, our group CFO, will present you in detail our first half results before a wrap-up from myself for the conclusion before opening the Q&A session. Well, let me start by stating that I believe that Worldline did deliver a good first half 2023. completely in line with our full year guidance. Indeed, after our solid full year 22 and Q1 23, our second quarter is showing again a good organic growth with 9.4%, bringing the first half at 9.3%. This performance has been fueled again by our merchant services activities, up 13.1% in each one, of which plus 13.5% in Q2. It reflects the good commercial dynamic achieved during the semester in terms of acquiring volume development, merchant count growth, and several new large merchant wins. This overall growth could translate into 80 basis points improvement of our OMDA margin, while our OMDA conversion rate free cash flow reached a high level, close to 45%. Now, regarding the strategic initiatives of the group, during the first half, as you know, we've been very active with the entry into exclusive discussions mid-April with Credit Agricole to create together a new major player in merchant services in the French payment market. Since then, we have reached some first important milestones, in our roadmap to close. In parallel, we have completed the closing of Banco Dezio in Italy and are now in the integration and migration process that I will update. All this taken into consideration. We believe this H123 has been a positive semester for our group. It is paving the way to a successful execution of our full year 2023 guidelines and our mid-term trajectory that we, of course, will both confirm today. Regarding our key H1 figures now, revenues stood at 2.24 billion euros, representing an organic growth of plus 9.3%. Regarding profitability, our NDA stood at 519 million euros, representing a 23.1% of revenue of 80 basis points improvement. This margin improvement highlights our ability to deliver the expected 2023 synergies, to take advantage of our operating leverage, and to start to benefit from our repricing efforts and cost containment actions. All this allowed us to overcome the inflationary pressures waiting on our cost base and deliver an H1O MDA in line with the anticipated 2023 trajectory. Free cash flow was 232 million euros, representing a very good conversion ratio close to 45% of our MTA. Normalized net income group share reached 243 million euros, representing 10.8% of our revenues. Normalized diluted EPS reached 0.84 euro per share, up 10.5%. On the strategic initiative side, As said, we've been very busy and we believe very successful too. First and fully in line with our well-known strategic roadmap to expand our distribution network through bank partnerships, the announcement made in April of our entry into exclusive discussions with Credit Agricole is a very important achievement. Together, we target indeed to create a new major player in merchant services in the French payment market, which is the largest European acquiring market where, so far, Worldline was not operating as an acquirer, as you know. Doing so, we will also get access to the local domestic scheme, CarbonCare, one of the very few that was not in our portfolio of local European domestic schemes. It will be also, doing so, creating for Worldline a new and strong long-term organic growth engine that will actually be visible in our figures primarily from 2025 onwards. And as it has been structured as a contribution in kind for both parties, it is preserving our balance sheet for other potential M&A on which we work. Since the announcement, we have quite well executed the roadmap to closing and in hand with Credit Agricole and already reached timely important first milestone with the finalization of the social processes and the antitrust filing process which is now officially initiated. This allows me to confirm the target signing in the course of Q3 2023 and the closing in Q4 2023. Talking about strategic development, we have also completed earlier this semester, the closing of Banco Dezio and we have actually started our integration and migration process right away. The main important point here is that the merchant migration on our targeted platform of the Banco Dezio portfolio is executed very efficiently, and we target to finalize this process in the course of the current quarter as per plan. And this asset represents a very nice add-on to our existing Italian activities, leveraging the banking network of Dezio and its distribution. I will now give the floor to Marc-Henri to guide you through the commercial dynamics in our Merchant Services Division.

Thank you, Gilles, and good morning to you all. I'm very pleased to take the floor and to get you through this part of today's presentation, zooming on our merchant acquiring business market performance in the first half. I will commit three types of business information and KPIs as we now regularly do. Regarding the merchant services mass market segment, I will share with you the evolution of our net number of small merchants over the period. Then I will share with you the main wins and upsells of Q2 on the large merchants and the new partnership sign, allowing us to further accelerate our monetization strategy. And I will conclude by sharing some updates on Warland acquiring MSV growth. To end this part of my presentation, I will update you on the innovation strategy of Warland with a focus, this time, on artificial intelligence, as it has been a topic of interest for many of you in our latest interaction. Now, deep diving on merchant services dynamics with merchant KPIs. In H1 2023, we have onboarded circa 40,000 new merchants, pushing our merchant base at the end of June 2023 at more than 39 million merchants. It represents a very satisfactory growth of world and acquiring merchant base. This is 2022. It is fully in line with our midterm objectives. It's a great achievement since the acquisition of Ingenico and fully illustrates what we have built through our strategic approach based on distribution partnership with banks and direct sales channel. It is also noticeable that we have delivered these good numbers despite some repricing actions in the current inflationary context. Since 2021, we have grown our merchant base by circa 120,000 merchants on a net monthly average growth of 7,000 merchants in both in-store and online. Commenting now on some big names. Let us start with the development of existing customers. In the online space with Blizzard Entertainment and Valve on the gaming industry, we have strongly expanded the scope of services offering them access to new geographies using specific domestic corridors such as LATAM or Turkey. In the in-store, with Arias, one of the world's leading providers for travel, food, and retail services, we have extended our geographical scope. Still on the in-store, in the in-store domain, with SNCB, the National Railway Company of Belgium, we have expanded our global one-stop-shop payment solution, coupling acceptance and acquiring, offering a seamless interface for all channels, such as web or online, while covering all payment means from domestic schemes to alternative payment methods. Last, with a large airline in the top 10 worldwide, we have extended our product offering with an Apple-based solution increasing our share of wallet. Now coming to new wins on full-service and omni-channel solution on the electronic vehicle charging space, electric vehicle charging space, all right. We made the difference again for Evoniti, a Belgian manufacturer of fast chargers for electric vehicles. This is one of many examples in this successful vertical. Regarding camping vision, especially in the campsite bookings, where an ability to manage complexity on a full service offering has been key. And in the online space, a full service offering including multi-countries and multi-currencies coupled with value-added services allowed us to gain Amazing Talker, a one-to-one learning native teacher's platform. Regarding the partnerships, our scale reached a single entry point of circa 15% of the European retail, giving us a key advantage and strong attractivity in the payment ecosystem. This position allowed us to pursue the momentum in numerous partnership signings during the second quarter with fintechs and digital native players. On this slide, you can see VTEX, with whom we made available a plug-in payment solution embedded into the enterprise digital commerce platform and enhancing authorization and conversion rates. And with Travel Plan Booker, an all-in-one planning and booking platform, we have integrated our full cross-border acquiring and payment services, improving efficiency and performance. Last, as announced by Apple in May and July, we have been selected among Overs players as a partner in Australia and in the UK to introduce tap-to-pay solution on iPhone. Overall, a very successful quarter with a sustained commercial momentum. Now, let's look at another building blocks of our revenue growth, the MSV. During the first half, it was up circa 10% in H1 2023 to reach a level of 220 billion euros. After a Q1 still supported by some favorable comparison effect, we enter in Q2 on a more normalized dynamic, i.e. with no more post-COVID effects, translating into a mid-to-high single-digit growth as expected. Then, we continue to see this dynamic at the beginning of Q3 2023 with a steady trend in MSV expansion in line with the Q2 developments, fueled by both in-store and online volumes. Now, regarding innovation, as I said, I will share with you a focus on artificial intelligence in online. Coming to this topic of AI, as a tech company, We did not discover it with the new attention for generative AI, and we are already an intense user of the previous generation of tools. But we fully recognize generative AI comes with new promises that we are exploring without delay to get the maximum benefit of its potential. So let me first start with what we already have in terms of standard AI in our live offerings and services to improve merchant performance and internal efficiency. Globally, artificial intelligence is embedded in our fraud detection offering, in our customer retention tools, in our anomaly detection and monitoring services. Then we offer to our most demanding customer a dynamic routing of transactions based on AI, able to predict where transactions are more likely to be accepted and thus increasing their authorization rates. We leverage our data set from multiple merchants to derive insights internally to determine patterns across different merchant verticals, currency, cardholder, origin, as an example. We use this combined data set to optimize pricing strategy and assess the probability of success for upselling or cross-selling campaigns based on the past behavior changes of our customers. Part of our payment performance optimization strategy uses those combined data sets to best determine the likely behavior of schemes and help our customers present payments with a greater likelihood of approval. Combining customer data sets is also obviously instrumental in our ability to combat fraud and money laundering and provide our customers with better products to address those. Okay, now regarding the new generative AI opportunities, we secured very early a widespread but controlled access to the latest tools, the first of which naturally charged GPT-4. We launched in parallel dedicated task force and encouraged experimentation to access the potential impact and benefits of generative AI. We already have several live proof of concepts to determine potential use cases that we could develop at scale. Main topics of investigations today are the merchant onboarding to assess potential faster onboarding through assisted KYC procedure, evolutive dashboard for the merchant, enriching our value proposition for topics such as dispute management handling, efficiency improvement on the coding side, supporting our teams to go faster with go-to-market. For a faster go-to-market, we've already 100 of internal users in this domain, software coders. and increase user experience on the customer service front with upgraded self-service tools. As these are still proof of concepts, we have no doubt that we will be able to boost our productivity and quality of service leveraging this technology, and we do believe that our tech DNA will be key to be a front-runner in this domain. I will now give the floor to Gregory to present you our financial performance.

Thank you, Marc-Henri, and good morning, everyone. Glad to be presenting another set of strong results. During H1 2023, Worldline posted $2.2 billion in revenues, up 9.3% versus last year, mainly driven by the strong growth of our MS engine. In H1 2023, the main highlights are as follows. MS is up 13.1% for H1, supported by very good 13.5% growth in Q2. This performance is good in all business segments, driven by both payment volume growth and repricing actions. Also, our pure-play enterprise online business, Digital Commerce, is now strongly accretive to MS growth. After this very strong start of the year, we anticipate to remain in double-digit territory with Q4 better than Q3. FS was up 1.2% with good transaction volume dynamics. Q2 was softer, as expected, mainly due to the lengthening of sales cycle on our bank prospect side. For H2, we expect FS to remain soft across the semester. MTS came in flattish as in Q1, with healthy underlying growth and solid commercial successes, but still impacted by a tackle contract means sourcing at the end of H1 2022 in France. For H2, we expect growth to reaccelerate along the semester. Overall, a good start of the year, in particular in MS. Now moving to the next slide regarding OMDA performance. During H1 2022-3, Worldline's OMDA reached 519 million euros, representing a 23.1% OMDA margin, or 80 basis point improvement versus last year. In more detail, MS margin is up 100 basis points at 24.8%, benefiting from good growth and solid operating leverage, as well as the on-track execution of Ingenico synergies. FS margin is down 70 basis points to 27.4% as expected, absorbing the majority of cost inflation on a mostly fixed price structure, thanks to mitigation measures put in place in Q2. MTS profitability is up 50 basis points to 13.1%, as mitigation measures are slightly ahead. Finally, on the corporate side, our corporate costs have reached €30 million in H1 versus €32 million in H1-22 as a result of the full implementation of our corporate business model and the cost mitigation actions also put in place. Overall, as for revenues, a good performance in H1. This expected evolution is fully in line with our expectations for 23. given business seasonality and the headwinds we faced. Now moving to the other elements of the income statement. Non-recurring items reached 245 million euros and consisted mostly of purchase price allocation amortization on past acquisitions for 133 million euros and integration and post-acquisition costs of 70 million euros corresponding to the Ingenico integration costs on the one hand, and costs related to the new scopes acquired, in particular ANZ, Accepta, Eurobank, and Banco d'Asio. As a result, operating income for the first half of 2023 was €120 million. Net financial expense amounted to €15 million, showing a decrease versus last year, mainly due to an increase in interest income and our cash balances, for €7 million, as well as an €11 million positive one-off effect related to the €385 million bond repurchases executed during the semester. The tax charge was €25 million, with an effective tax rate of 23.5% in H1, stable versus last year, and consistent with our objective to remain around 24% for the year. As a result of the items above, consolidated net income group share stood at 81 million euros. Finally, on a normalized basis, net income stood at 243 million euros, or 10.8% of total revenue. Our normal diluted earnings stood at 84 cents per share, an 11% improvement versus last year. On the cash flow statement, we have CapEx at 7.8% of revenue, or 176 million euros, in line with H222 level, and consistent with our four-year trajectory at around 7%. Changing working cap brings a positive contribution of 77 million euros, reflecting seasonality effect, as well as M&A and integration impact. Integration costs were fully in line with expectations and mostly relate to Ingenico, as well as more recent scopes. Overall, H1 free cash flow stood at $232 million, representing 44.7% cash conversion, supporting a four-year trajectory. Finally, looking at net debt evolution, we delivered strongly throughout the semester, and group net debt decreased to 1.8 billion euros versus 2.2 billion euros at the beginning of the year. The main drivers for this evolution are the solid free cash flow generation of 232 million euros we just mentioned, and the positive last cash-in coming from the successful disposal of TSS, net of cash outflow related to Banco Dejo and OPP acquisition in H1. Overall, we're fully in line with the plan, and on an LTM OMDA basis, Our current leverage ratio stands at 1.6 times at the end of June and reflects a strong deleveraging versus the 3.4 times LTM ratio at the end of H1 last year. Based on this very good H123, we confirm our 23 guidance with 8 to 10% organic revenue growth, an OMDA margin improvement above 100 basis points, and finally, an UMDA conversion rate into free cash flow between 46% to 48%. This four-year guidance remains based on unchanged macroeconomic conditions. Now let me hand over to Gilles to conclude.

Many thanks, Grégory. And now moving to some key takeaways of this first half. The four key messages that I would like you to keep in mind following this publication are the following ones. First, Warline did a good first half in terms of revenues with a very solid growth in merchant services, fueled by continuous commercial developments, market share gains, and a very strong dynamic at work for large merchant wins. And this is more than compensating the anticipated post-COVID normalization of payment volume dynamics. Second, on top of this solid growth that generates operating leverage, we could fully execute all our actions to improve profitability, synergies extraction, first wave of repricing, cost containment actions. This is allowing us to stay fully on track in terms of margin expansion while absorbing, as any other companies, wage inflation and other headwinds we must face in 2023. Third, we believe that the payment market in Europe still offers meaningful M&A opportunities to expand our distribution network and enhance our market position in certain countries or certain market segments. The Credit Agricole Deal is, from that standpoint, an important strategic development for worldwide, even if its financial contribution will only start to be visible in circa 18 months, once the GV will be fully up and ready. Thanks to the disposal of TSS and good cash flow generation, we keep a very strong financial flexibility and stay committed to pursue other potential value-creative acquisitions. As a conclusion, I want to share with you that as a management team, we feel that H1 2023 has been a semester of real and fundamental progress for Worldline, not only from a financial standpoint, but as well on many other key dimensions of our transformation journey since the acquisition of Ingenico. Every semester, indeed, we reach new milestones on our integration roadmap, and we improve both our technology stack and product portfolio. Thank you very much for your attention, and I am now ready with Marc-André and Greg to take your questions.

Thank you. So to ask a question, you need to press star 1 and 1 on your telephone and wait for your name to be announced. And to withdraw your question, you can press star 1 and 1 again.

Thank you.

We'll now take our first question. Please stand by. Your first question is from the line of Frederic Boulan from Bank of America. Please go ahead.

Hi, good morning, Gilles, Marc-Henri and Gregory. Two questions, please. First of all, on the margin side, if you can maybe share a little bit of elements on the main moving parts into the second half and 2024 around headcount and other items and in general, what drives the confidence you have in the ability to accelerate margin development this year and next year? And then following up, Gilles, on your last comments around M&A opportunities, as you pointed out, I mean, the credit-agricultural deal structure does not consume much balance sheet. So we have that contracting quite quickly. But, you know, can you share a little bit with us a framework to think about further M&A or potentially eventually return cash to shareholders in the medium term if that balance sheet remains very much under control. Thank you.

Hello, Frédéric. I'd like to take the first one, and we'll come back in the second.

Indeed. Thank you. Good morning, Fred. On your first question regarding margin outlook for H2, what we expect is progress for the three GBLs, MS should remain the main contributor fueled by operating leverage and synergies. On FS, we should stabilize the margin in H2 in percentage terms thanks to several ongoing cost mitigation actions of which we start to see the effect at the end of H1. And on MTS, we expect to continue the margin increase trajectory thanks to growth acceleration in H2 and new organization put in place at the end of 2022. As you know from our history, we've always delivered our margin development, and that's what we're going to do in H2.

Thank you, Greg. And, Federic, regarding your second question, indeed, that's true. Credit Agricole is a very smart deal from a balance sheet standpoint, on top of being certainly a very strong gross performer once it will be up and running from 2025 onwards. So, personally, I can't wait being there. But coming back to your question, that is allowing the balance sheet to remain quite strong, and indeed, we will deliver it fast. Which is good news, because number one, there are still a significant number of opportunities in our M&A radar screen as we speak, particularly still in Europe. have many banks that are driving strategic reviews of their payment portfolios particularly in the merchant services space fully cognizant that the market has been transforming and they need really to do serious things to adapt to this new reality so the form it may take of course may vary in certain cases they are actually cash consideration still significantly in play in such discussions so it's why I believe we may use a part of the balance sheet definitely to get there and it is also why at this point in time M&A remains the priority focus for capital allocation on top of CAPEX and R&D where we want to pursue investing and for the time being the board has still considered that M&A offers a better value creation for shareholders. Of course you can be sure that it is a topic that is regularly discussed at board level And, of course, this may change over time. For the time being, at least, let's say, for the next 17 months' time, it is what we believe is appropriate. And, of course, any change here will be actively communicated to the investor base. But so far, I think we will stay focused. And we can't work in Europe in particular.

Perfect. Thank you very much.

Thank you. We'll now take our next question. Please stand by. This is from the line of Alistair Nolan from Morgan Stanley. Please go ahead.

Great. Thank you. Morning, everyone. Can we just dig in a little on the volume dynamics? I think you mentioned they slowed in the second quarter. Can you maybe talk a little bit more about what you're seeing there, what drove that slowdown, how that is looking as we enter the third quarter, and then also the dynamics between volume and price? into the second half and then maybe even beyond into 24, just to get a better understanding of how you're thinking about that and what's been baked in in terms of internal plants. Thank you.

Thanks, Alistair. I will take that one. Marc-André speaking. So it's a fact that we saw that MSV evolution was a bit softer in Q2 versus Q1. We are not interpreting it as a clear evidence of an economic slowdown. We are rather at this stage considering that we are what we expected, a post-COVID rather normalization when you had this acceleration of travel also throughout 2022 that is now well established. Still, the MSV momentum remains strongly positive, and as we said, we continue to see this dynamic as the beginning of Q3, even slightly better. This being said, we are in a position to maintain a very strong growth on this basis. You may have it in mind, but the MSV we are publishing is only for the acquiring business. Only 50% of our revenue in the merchant services is directly pure commercial acquiring. And when we grow, we grow not only in volume, we grow also in terms of service, in terms of cross-selling, and in terms of pricing. In this inflationary context, we mentioned it, we are to reprice. We did it in a very sustainable way without a significant impact on churn. We were able to continue handling a positive evolution of the number of net merchants. We are very much in the range of price inflation, so we think that this is sustainable and this is also something we can push throughout 2024, as you were mentioning, the next coming year. And for the overall dynamics in terms of cross-selling, adding new products, developing overall activities, also something on which we are seeing the integration of engineering co-managing, the combination of offers, enriching the portfolio, investing quite a lot, as you could see also in our numbers. And we feel confident that this is a momentum that we sustain and we will sustain also in the coming months.

Very helpful. Thank you.

Thank you. I'll now take our next question. Please stand by. This is from the line of Hannes Leitner from Jefferies. Please go ahead.

Yes, thank you for letting me on. And there was a couple of questions. The first one is also on merchant services. Could you talk about the impact of scheme fees? We are expecting to each one report, I guess, in a couple of days. And then just like philosophically, can you maybe zoom out looking at the medium term ambition? Financial services and METS is substantially underperforming your target, your set targets there. So maybe you can elaborate what really changed compared to October 2021. And then maybe I have a follow up. Thank you.

Thank you, Hannes. This is Gregory speaking. On scheme fees, as we discussed last publication, there is indeed a difference between the reported growth with scheme fees and without scheme fees. For us, it's always a similar impact at roundabout 2%, and this is mainly due to the fact that we have a mixed impact with our commercial activity growing.

Regarding METS, as you mentioned, we had a flattish H1, but it's very identified in terms of one single contract impact with the rest of the business still on a very strong path. Also noticeable that we reworked the profitability of this business and its profitability, despite the flat margin, has improved. We have a good visibility on continuing to improve this profitability. And Gregory mentioned it, but the level of signature in this business, new business signature, was exceptionally high in H1. And so it sustains visibility on re-accelerating and coming back to the growth we are targeting progressively throughout H2. So given this overall situation of back to the growth we ambition when we mentioned October 21 or CMD and the improvement of profitability, it's not the time for a change of philosophy as we speak. And Hannes, just one point on the scheme fees.

The 2%, as I mentioned, is at MS level, just to be clear.

That's very helpful. I meant actually on financial services. METS is clearly a very small segment. So on financial services, you seem to track behind and you clearly initiated cost initiatives. Your offshore headcount increased substantially last year. So where do you see this phase? Because if you look at IT service cycle, IT services seems to go into a much tougher comparatives. So what is your expectation for financial services into second half and then into next year?

Yeah, on financial services, it's a fact that we have a good underlying growth in terms of run activity, but we lack a new signature in a context where the decision cycle at the bank side is getting longer. We still observe and have a good pipe quality, and the size of this pipe is satisfactory, but its maturity is still back-end loaded. So that gives us clearly an H2 that will be soft as well. We have accelerated the action of cost management throughout the semester, as you referred to. In particular, if you look at our people equation or people number in one line, you will see that all the growth is now in offshore resource, and that's particularly true even more so for FS. So we are acting and that gives us the confidence to restore the profitability of this business. But in terms of top line, we are in a situation where for H2, it still remains soft. So too soon to tell about further revision. That would be a topic we will come back to in the future. Thank you.

Thank you. We'll now take our next question. please stand by. This is from the line of James Goodman from Barclays. Please go ahead.

Morning. Thanks very much. I'll add a couple of questions around the cash flow, please. And firstly, just on the working capital, strong inflow in the first half. I think you mentioned that will normalise in the second. But just looking back, we had 100 million or so inflow last year, I think 60 million or so the year before that. I wondered if you could Just help us on the sort of underlying structural working cap dynamics of the business, how you've been able to generate such a strong inflow from working cap and how we should sort of think about that into the future. And then the other one was just on the CapEx. How comfortable are you there to get that down to the 7% for the year? What's going to help you to lower the CapEx ratio and Presumably, the Credit Agricole CapEx is outside of that. Thank you.

So, in terms of working capital, what we've seen is an inflow this year, as was the case last year in H1. This is still the effect of aligning a number of TNCs from our acquisitions with the Worldline way of trading. of purchasing effectively. There's a singularity effect in H1, and finally the impact of M&A integration. So that's what we're seeing should normalize and neutralize in the medium term. In terms of the CapEx, we've continued to significantly invest in our products. We are pushing for the rapid integrations in our more recent JVs. And for H2, capex intensity and percentage of revenue should be lower, and we intend to be back into the 7% range.

Okay, thank you. Thank you. We'll now take our next question. Please stand by. This is from the line of Antoine Ocher from UBS. Please go ahead.

Hello, good morning. I was wondering if you could come back on the pricing actions you said you are taking in merchant services. Is it something that you already went through completely in Q2 and did it help materially as a revenue growth number? And my second question is on the impact of inflation. I think you mentioned the tailwind of 130 pips last year. Could you give some color on what was the tailwind from inflation in H1? Thank you.

Thank you, Antoine. Marco speaking. On the repricing, it's not something that started in Q2. It's something we started... also already at the end of 2022 and accelerated. But we are not talking about something huge. We are still in the low single percentage in terms of impact on our growth, so impact on our price as well, as you can understand. It remains reasonable and in the range of the inflation we are experiencing, and we are going to accelerate it in H2 in also still reasonable terms. That's what we intend to do. It's just to factor the current environment in which we are. It's also, by the way, reflects our ability in this market and given our customer base to have a price maker dimension for activity.

On inflation, we indeed communicated last year about a headwind that we've been facing of around about 130 basis points at group level. This is something that we are still facing in a similar level of magnitude. That's the extra inflation that we're facing. And that's why we are putting in place, on the one hand, the cost mitigation, including offshoring that Marco mentioned, and on the other, repricing to which we just alluded to.

Thank you very much. Thank you. And we'll now take our last question today. Please stand by. Last question is from a line of Antonin Baudry from HSBC. Please go ahead.

Yes, good morning, everyone. Thank you for taking my questions. The first one is on merchant services. You have this price increase. When do you expect to have the full impact of the price increase on the revenues? And I mean that the basis of comparison is more favorable in H2, especially Q4. Should we expect merchant services revenues growth to remain stable at H1 level? This is my first question. The second question is about financial results, good results in H1. How should we see the evolution of financial costs in H2 on going forward? after the bond refinancing on what is a normalized level for financial costs. Thank you.

Thanks, Antoine. Coming back on repricing and top-line momentum for merchant services. So, as I said, it's something on which we already got a significant impact in each one, but we are continuing this action and we'll get even further impact in H2, and that, as we are adding some action, will materialize a bit more in Q4. So take it that we intend to remain at a low double-digit growth on merchant services in H2. We have a Q4 that will be better than the Q3. That would be the big picture, talking about top line and talking about merchant services. Now on financial results.

Yeah, so as I mentioned versus last year, we benefited from a couple of elements. First, the fact that we are managing, we're taking advantage of the inverted interest rate curve and therefore benefiting from a good yield on our cash. And that had an impact of 7 million euros positive in H1. absent any major change in the yield curve shape, we should benefit from the same impact in H2. In terms of the bond repurchase, this was a one-off. It helped us for $11 million. That's something that should... I mean, there's no plan at this stage for H2. So I would say that a normalized level for H2 is at around 30-plus million versus the 41 we had last year and the 15 we have in this first semester.

Yes, thank you, Greg. And Antonin, to expand a bit to Marc-André's answer regarding, indeed, MS dynamic, I think what is really, indeed, important in the repricing is that As importantly, it will pursue having its full effect in 2024, and it will be, of course, an important contributor also to the 2024 MS growth dynamics, because, of course, this is ramping up progressively, as Marc-Henri said, when it started. The first wave started end of 2022. And depending on market reality and inflationary context, of course, we don't exclude to pursue it. And clearly... We are, as Marc-Henri said, somehow having a real pricing power that we are mobilizing here, and we will pursue using it, of course, where appropriate and in the proper magnitude. And on top of that, of course, the business model that we've been building in MS is working extremely well, as you could see in Marc-Henri's report. I mean, there is a continuous merchant account expansion. We continuously add new names into the large merchants that we have. And of course, on top of that, we enjoy also this ability to observe added value services down the road. So I think what we can see this semester is the engine a couple of years after the start of the integration of Ingenico at full speed. Of course, many things we anticipated by then. What is a bit new indeed is the repricing impact. That was not factored as such, but that's been allowed somehow by the inflationary context. the real pricing power that we start really to have as a really quite prominent payment brand that is appreciated by customers. Of course, all that needs to be managed in the proper magnitude, but I think it's exactly what we did over the last quarter very successfully. Thank you very much. Thank you, Antoine. And I think we come now to the end of this meeting. I would like to really thank you very much. Looking forward to interact with some of you and many of you most probably in the coming weeks and in between for the ones that are going, I guess, to take a very well-deserved summer break. Enjoy. Talk to you soon, guys.

Thank you. This does conclude the conference for today. Thank you for participating and you may now disconnect.