Worldline Sa Ord

and thank you for standing by. Welcome to the Worldline Q1 2024 revenue conference call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Gilles Grappinet, Worldline Group CEO. Please go ahead.

Thank you, Operator. Ladies and gentlemen, good morning. Let me start with today's agenda and what we will cover in this presentation. After my introduction on the key highlights of this first quarter 2024, I will come back specifically on the evolution of Worldline Governance that the Group announced a few weeks ago. I will then give you an update on our business and commercial dynamics throughout the quarter. Hereafter, Grégory, our Group CFO, will present you in detail our first quarter revenue performance before a wrap-up from myself for the conclusion before opening the Q&A session that we will handle as well with Marc-Henri Deporte, our group deputy CEO. Let's have a look now at the three main highlights of Q1 2024. First highlight, as planned, we delivered the first quarter fully in line with our full year 24 outlook, with a Q1 organic growth at group level of 2.5%. Gregory will give you the details later, but this performance was mostly driven by merchant services, posting an organic growth close to 4%, in line with its anticipated full year trajectory, and benefiting from several commercial successes all along the quarter. This was achieved while absorbing the impact of our merchant termination process, Excluding this effect, the underlying growth of merchant services came at 6.5%, despite the macro and consumption momentum which stayed soft during Q1, as anticipated. Financial services and MTS are delivering in Q1 as per their anticipated 24 trajectory too. Second highlight. In the meantime, we are in execution mode to deliver all the immediate priority actions announced end of 2023. Regarding the merchant portfolio termination process, it is now fully behind us, with all merchants concerned having been notified. Thus, our €130 million revenue impact announced is clearly reconfirmed as a maximum. Regarding Power24, its implementation is in full road-out mode in all targeted countries, and I confirm our objective to deliver 200 million euros run rate cash cost savings minimum in 2025. Third, we have finalized the creation of our strategic joint venture with the Credit Agricole Group in France, which will offer soon the best of our two groups to merchants and retailers operating in France. We have received all the necessary approval. The management team is now in place, and the brand has been launched under the name of C.A.W.L. Now we are in the process to obtain the payment institution license from the French regulator, and this process is also fully on track, and we confirm the objective to have the joint venture fully live early 2025, starting to generate revenue for our group. Finally, Worldline has also announced, as planned, a renewed board of directors to be approved at Worldline Next AGM in June 2020. In line with the group commitment, the board composition would be reduced from 15 to 12 board members plus two employee directors, with a new chairman and three new directors entering. As announced, Mr. Wilfried Verstraete has recently been co-opted as a director and the Board intends to appoint him as a chairman following the General Meeting to be held on June 13, 2024, at which it will be proposed to ratify his appointment. Mr. Georges Poget will remain interim chairman until Mr. Wilfried Verstratte is elected chairman in order to facilitate a smooth transition. He will then resign from the Board of Directors. In addition, three new directors are expected to join the Board as of the upcoming AGM. Two independent directors, Ms. Agnes Park and Ms. Sylvia Steinman, with strong international executive background, including, respectively, in human resources, IT, transformation, and finance. One non-independent director, Mr. Olivier Gavalda, deputy CEO of Credit Agricole, with extensive financial and banking expertise. As part of the proposed changes, three current board members, Ms. Agnès Odier, Mr. Laurence von Hasburg-Lantringen, and Ms. Danielle Lagarde, have decided not to renew their mandate. And two other board members, Ms. Caroline Parot and Mr. Gilles Ardetti, will resign from their current mandate. This recomposed board will offer a balanced representation of skills and expertise and the diversity of its members adapted to the next strategic development phase of World War. Coming now to the Q1 business and commercial dynamics, I will start as usual with our commercial acquiring MSV development. In Q1 2024, Warline acquiring MSV is up 4%, reaching €110 billion. This development is in line with the trend shown last February, reflecting the current unchanged soft macro context in Europe. MSV was up plus 3% in store and plus 10% in online. Looking at the beginning of the second quarter, the trend observed in Q1 continues, with an MSV in the same range of growth as you can see. In this environment, while line commercial activity remains dynamic, as shown in the next slide. Starting with merchant services and first with small and medium businesses go to market, This entity has performed well this quarter in numerous countries, in particular Switzerland, Germany, and Italy. I would like to focus on Italy, where we have made a significant development through the new organic win during Q1 24 of an important strategic partnership with Casa Centrale Banca. We are particularly pleased and honored to have been selected by a major group like CCB through a competitive standard. It will be a very meaningful step forward for consolidating the world-wide presence in the Italian market and accelerating our commercial momentum in the country. This is also a recognition of our distinctive ability to perform in Italy with competitive and cutting-edge offerings, but as importantly, with a proven and successful business support and assistance model for our local partnering banks. The partnership with CCB involves a full end-to-end offering for international card networks to circa 60,000 net new merchants, generating incremental transacted volumes of circa 6 billion euros. From 2025, it will allow us to strongly increase our Italian footprint, growing our regional MSV by circa 20%, and our number of merchant locations in the country by close to 40%. These deals add to the numerous existing distribution partnerships already built in Italy since 2021 with major local financial institutions, including BNP Paribas Group, Banco Dezio, and Banca del Fucino. Now turning to our enterprise go-to-market. During the quarter, we have secured several wins and signed a number of partnerships relying on our product differentiation and dedicated vertical offerings. Starting first with the enrichment of our online geographical value proposition. We have signed a partnership with the FinTech Lidio in Turkey. It has been approved by Turkey Central Bank, making us the first online payment service authorized by TCB for international payments. The joint Wall-Line and Lidio solution streamlines the process of accepting Turkish payments optimizing time, cost, and payment performance of up to plus 25% in approval rate increase compared to a customer previous connection, while ensuring full compliance with the local Turkish regulations. This solution includes the acceptance of the domestic Troika for international businesses, which represents a breakthrough entry for global e-com players willing to expand their activities in this $72 billion market. On the verticalization and ISV-related distribution front, we have developed our ISV channel partnering with Tabesto, a major actor in order-taking and payment solutions within the restaurant industry. Together, we will deliver a unique customer experience planned for 36 countries. We will jointly launch the first all-in-one Fox ordering and payment Kiosk system using one of our key products, SoftPos Worldline Tap-on Mobile technology. During the quarter, we also signed in MS a number of other important names, as you can see on the slide, and we continued to extend the use of our solutions to existing customers to offer new products. Two points that I would like to highlight here. The dedicated solution for EV charging players continues to have a strong traction with the signing of names such as Electra, Rode, or ChemPower. allowing us to capture this fast-growing market thanks to our dedicated vertical solution and specific features. And we've extended our 16-year partnership with ASDA, the UK's third-largest supermarket group, to deliver now a full omni-channel payment solution combining POS, acquiring services, and smart transaction routing through the wall-line payment orchestration engine to enhance the customer experience and operational efficiency for approximately 800,000 weekly deliveries. To conclude on this part, and as said during our full year publication, Worldline Merchant Services is currently developing successfully its strong growth engines with regular opening of new geographic corridors for Global Ecom as illustrated today with Turkey, growing its ISV partnership distribution as seen with Tabesto, or reinforcing its vertical value proposition, as, for example, with the EV charging winds. In combination with our strong and growing distribution network, this product-centric strategy is a core pillar of our next development phase and will be much more detailed during our next capital market day. Regarding our two other business units, Q1 was dynamic in terms of commercial development led by Worldline core products NOA. Starting with FS and talking indeed about next-gen core product and value proposition, I would like to highlight the successful go-live of our new target card issuing platform on the German market. We have indeed successfully completed the migration of Consorzbank Visa Card portfolio from the existing mainframe solution to our cutting-edge, customer-centric new issuing processing solution. This is the first successful migration of a scale portfolio toward our new product generation on the German market. following its already successful rollout in the Belgian market. This new card issuing product will bring numerous new features and added value services, like, for example, instant card issuing. It also provides, for example, to Consorzbank here, access to a pan-European economies of scale, and ensure compliance with future market requirements and regulations. In parallel, we've extended several contracts on the issuing side, with so in Asia-Pacific, or BKM in Italy. Regarding METS, our dedicated product for the eHealth vertical has been key in the partnership signed with SecuNet. This product offers a simplified, secure, and digitized access to digital medicine and health services for doctors, nurses, pharmacists, and all health professionals in Germany, leveraging our secured pneumatic infrastructure gateway. We have a proven track record in this field with more than 350,000 acceptance points already managed. We have as well deployed our payment orchestration and messaging offering, with the signing of a contract with a major nationwide rail operator, while leveraging our offering for fleet management with a large integrated energy company. Let me now hand over to Gregory to walk you through our GTI Q1 revenue platform.

Thank you, Gilles, and good morning, everyone. Let me start with an overview of Q1 revenue performance. First quarter revenues came in at 1.1 billion euros, representing organic growth of 2.5%, in line with the expected four-year phasing. Restated from merchant terminations, Group Q1 growth stood at 4.4%. GBL by GBL, Q1 performance is as follows. MS is up 3.9%. or 2.9% on a net-net revenue basis, i.e. excluding scheme fees and partners' fees. And excluding merchant terminations, underlying growth is at 6.5%, thanks to strong commercial dynamics and good traction on select verticals. Financial services was down 1.4%, impacted by lower volumes in account payment division, despite a good dynamic in card processing. Finally, METS revenue was up 0.7%, in line with expectations. On a net revenue basis, group growth stood at 1.7% organically. Let me now zoom in on performance by business line. Looking at MS in more detail, revenues reached 787 million euros, up 3.9%. In commercial acquiring, Underlying growth improved versus Q4, driven by strong commercial momentum in Italy, as explained by Gilles earlier, as well as good winds in Switzerland, one of our core markets. Payment acceptance posted healthy growth, led by increased online travel and gaming volumes, which benefited from the ramp-up of contracts like Turkish Airlines, that signed last year, and of an increase in the share of wallet with Vizit. and digital services, performance was solid in key countries like Germany and Turkey. Looking forward, MS growth profile should continue to improve with a progressive growth reacceleration in H2. Turning to FS revenues, they reached 225 million euros in Q1. FS saw increased trends on the card processing front in Belgium and in the Netherlands, more than offset by lower volumes in account payments, while digital banking was stable. Looking forward, after a stabilization in H1, FH would slow down in the second half with lower volumes on existing contracts and some re-insourcing, only partially offset by improving commercial dynamics. Moving on to METS, revenues stood at 85 million euros with good underlying growth in our trusted and transport and mobility services, both benefiting from new projects and increased ticketing volumes. This was slightly offset by some project delays in France. Looking forward, METS is expected to improve through 2024 in terms of growth. Overall, group growth in the first quarter came in line with expectations, with good momentum in MS, And just as a reminder, in terms of phasing, we assume softer growth in H124, mainly due to merchant terminations, in an overall unchanged macro environment. Now let me hand over to Gilles to conclude.