Worldline Sa Ord

Good day and thank you for standing by. Welcome to the Worldline Q1 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 the session, you will need to press star 1 to 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 is being recorded. I would now like to hand the conference over to your speaker today, Pierre-Antoine Vacheron, Worldline Group CEO. Please go ahead.

Thanks a lot and good evening to all of you. Thanks a lot for joining us for this Q&A release at Worldline. and I am obviously with Shadri, our CFO. So let me start with a few snapshots on Q1. So overall, as you will see, Q1 reflects a business that is now stabilized, refocused, and shifting from repair to execution. After the capital increase and the exit of Australia that we announced this evening, we have renewed foundations from a scope and financial perspective. A quarterly revenue which is in line with expectations and which gives us some confidence on the full year trajectory. Finally, a company that is fully focused on operational performance and cash flow trajectory. So first on the scope and financial foundations. So with New Zealand and Australia announced this evening, we have now completed our geographic refocus, and portfolio pruning. Those two businesses were far away from our core geographies. They needed further investment and were sources of distraction. And I'm extremely happy to have found a deal with ANZ, our partner. At the end, in total, this is seven disposals announced in 10 months, two of which already closed. and that enables us to focus now on our mandate, payments excellence and leadership in Europe. At the same time, we successfully executed a 500 million capital increase with a 121% take rate on the right issue, underscoring strong market support in a fairly adverse environment. Importantly, Our shareholder base has been reinforced with long-term European and core investors who now represent around 37% of the share capital. Taken together, these actions give us a much stronger financial foundation and remove key uncertainties that have weighed on the group over the past two years. This allows us to move forward with North Star 2030 while maintaining a clear focus and balance sheet discipline. In terms of business dynamics, slide 7 illustrates the underlying operating dynamics. On a fully pruned basis, which is what matters, group revenue came in at €831 million, down 0.5% organically, in line with expectations. Merchant services have turned positive. with revenue up 1.6% organically. Although it has been boosted by non-recurring positive items, this is the first quarter of growth since Q4 2024, driven by volume momentum across in-store and online channels. SMB churn is stabilizing, although performance remains uneven across geographies, with Switzerland and Benelux still in recovery phase. Enterprise is growing, driven by mobility and self-service. Global commerce decline as expected, impacted by deliberate credit derisking and churn, while travel and hospitality remain solid. Our focus is now to reboost our presence in digital, on the back of product innovation, and change in sales management for this segment. Financial services declined by 7.4%, reflecting previously lost and decommissioned contracts. This drag will continue through 2026, but we are rebuilding the growth potential. Q1 has seen, and Stricount will come back on that, several contract renewals and extensions, and we have a strengthening commercial pipeline that will build revenue back-end loaded. We do see concrete product traction and shift in client behavior getting more reassured after the capital increase. Let me hand over to Srikanth now, who will provide more color on the Q1 performance.

Thank you, Pierre-Antoine, and good evening to you all. Pleasure to be with you. So on the next slide, we see the status of the pruning program. Glad to say that this is over. So we had the non-core payments with METS Citrel divested, non-synergetic payments with North America Payment IQ, India, Australia, and New Zealand. And we have closed North America and Payment IQ with cash proceeds of 225 million euro received in Q1. And we expect, as Perantwan mentioned, that sum total to be 590 to 640 million euro, all of them to be closed over 2026. and with India and the Australian JV to be closed in H2 of 2026. Moving on to the next slide to explain a little bit more the divestments in the Pacific. So Australia, we had 107 million euro of EV with a net proceeds of 30 million euro coming in to us subject to closing adjustments. And on New Zealand, as announced already earlier, 17 million of EV with 20 million Euro of net proceeds subject to closing adjustments. The financial implications that you see at the bottom is the revenues for the combined entity in excess of 200 million, adjusted EBITDA of 30 million. And you'd recall that we had said that these were a cash drain on our company. So along with India, Australia, and New Zealand, they were essentially draining the cash generated from PaymentIQ, so net zero in terms of free cash. Moving on to the next one, now in terms of revenues, Q1 is in line. As you know, we detailed that a little bit more during the full year regarding the IFRS 5 for a perimeter change. So we have two perimeters here. The one that we've guided the market on is the fully pruned scope, i.e. it excludes all the entities that you've seen in the previous slide. And then we have the published revenue, which only removes the discontinued operations of METS, as well as those which have been closed, which is North America and PaymentIQ since March. So those are the two scopes. So on the fully pruned scope, we came in at €831 million, which is a slight organic decline of 0.5%. In merchant services, we generated €652 million of revenue, with an organic growth of 1.6% on external revenue, the first time we've seen a positive since Q4 of 2024, and a slight decline of 0.7% in net revenue terms. On financial services, sales came in at €182 million, down 7.4% year-on-year. So as you can see, merchant services is clearly showing some signs of stabilization and growth, while FS is still impacted by client terminations from the past, as anticipated during our previous communication. On the published revenue, €924 million with an organic decline of 1.5. Merchant services generated €742 million, flat in organic terms and down 1.4% on net-net revenue basis. Financial services contributed to €182 million, down 7.4% year-on-year. Going on to merchant services on the next slide, looking deeper on the fully pruned basis, Our SMB business had contrasting dynamics within it. Acquiring grew, whereas the GoPay migration induced a churn on acceptance. And regarding the geos, Nordics and Germany grew well above the rest, whereas the Southern Europe with Italy, Greece, and our Central and Eastern Europe continued underlying growth, and Switzerland and Benelux still in recovery phase and progressively showing stabilization. We are seeing increased traction on ISVs and partners across Europe and as a strategic axis of our growth as highlighted during our capital markets day. In enterprise segment, growth is driven by mobility and self-service verticals. We continue to see positive commercial momentum and it offsets some churn in the retail sector. Globally in enterprise, we see a mid single digit growth in merchant sales value and a number of transactions as well in online and in-store, which shows a healthy underlying evolution. Finally, on global commerce, sales were lower driven by some expected remediation actions and softer flows, notably in digital. We have initiated a turnaround plan on that. We've also seen good growth in travel and hospitality, leveraging our leading product expertise in that segment. Moving on to financial services, As I said previously, the revenue decline is linked to our legacy contract terminations. Our pipeline in FS remains strong, boosted by a number of recent wins and upselling in Q1, notably the PSA in Austria, with whom we are enhancing the Wiro end-to-end solution, the renewal of issuing and acquiring processing contracts with the Tier 1 bank that we announced earlier, as well as renewal of several digital services contracts with La Banque Postale. Moving on to the next slide regarding the balance sheet strengthening, now we've completed that. With our pruning program, as outlined earlier, the successful capital raise that we have done have paved the way for a stronger balance sheet and liquidity profile. The net proceeds arising from the reserve capital increase and the rights issue came in at 470 million euro received in April, and regarding divestments, I have already outlined that earlier. With these, we confirm our expectation to reach our leverage target, i.e., the net debt over EBITDA of 2X by the end of the year. Moving on to the last slide on the outlook, we confirm our 2026 outlook on a fully pruned scope, low single-digit organic growth in terms of revenue, adjusted EBITDA between 630 and 650 million euro, free cash flow target of minus 80 to minus 70 million euro. And as of today, we have not seen a material impact on the geopolitical context, and we'll continue to monitor them closely. As Piyantwan mentioned, Q1 was boosted by some non-recurring items. We expect Q2 to be softer on a year-on-year comparison, resulting in a slight negative H1. MS will continue to show further signs of turnaround and underlying growth more pronounced in H2. FS momentum will be progressively seen more in H2 due to the recognition of build milestones from the new contract wins. Thank you for listening, and I'll now hand you back to Pierre Antoine to conclude.