Worldline Sa Ord

Thanks a lot. Good evening, everyone, and thank you for joining us for Worldline's H1 2026 results call. I'm joined by Srikanth Seshadri, our group CFO, and I will take you first to the key business highlights and strategic progress before Srikanth presents the financials in more detail. So I will start with the slide five. H1 marks an important step forward for our lines turnaround and transformation. Everything is not done yet, far from it, but we delivered what we committed for the first half and this period shows clear momentum across the organization. First, as you know, we have significantly strengthened the balance sheet. Together with the successful capital increase, and the closing of most of the M&A transactions including the super important METS and call, we have significantly reduced our net debt with a leverage which is now down to less than two times the EBITDA. Second, merchant services has regained traction with a second consecutive quarter of growth and even acceleration during Q2. Financial services remain impacted by contract termination, as planned, but also by a longer sales cycle than we would have liked. Still, the quality of recent important wins reinforces our confidence in our positioning and mid-term trajectory on this segment. Third, Northstar is working. and delivering tangible progress on the priority we laid out at the Capital Market Day across simplification, platform convergence, integration and commercial execution. And finally, our profitability is starting to improve, especially on merchant services, supported by disciplined cost management and the first benefits of our transformation program with reduction of headcount in Western Europe ahead of our 2030 trajectory. Turning to slide 6 and the key figures for H1. As you can see, our payment volume continues to grow steadily, probably in line with the market trends, with acquiring volumes more than 4% in the semester. For the full semester, external revenues were broadly stable year-on-year and flat in the second quarter. Net-net revenue remains negative, as anticipated at the capital market day, reflecting the mix and dynamics across our geographies and segments. Adjusted EBITDA reached €294 million, with EBITDA margin improving at net-net revenue level for the first time since H1 2023. Free cash flow remains negative, but it is better than anticipated, reflecting disciplined cost management and better capital allocation. On slide seven, you can see that Q2 showed encouraging improvements across all businesses. Merchant services, which represent 80% of our external revenue, continue to gain momentum, supported by stronger customer focus and improving satisfaction. We are seeing encouraging performance with high single-digit growth across several geographies and segments, including Greece, the Nordics, Central and Eastern Europe, Germany, mobility and self-service within enterprise, and in our global collect entity. Switzerland and Benelux are also moving in the right direction, with Switzerland close to flat in Q2 and Benelux still negative though. Financial Services, which represents 20% of our external revenue, is recovering more gradually. While performance continues to reflect anticipated contract termination as planned, it also reflects longer sales cycles due to our own context, Nevertheless, we managed to secure several important signings that reinforce our confidence in the positioning and the medium-term trajectory of this business. To highlight this, I would like to comment on two important commercial milestones for financial services. The first one is the signing of an outsourcing agreement with ICS, which is the ABN AMRO entity managing This selection is a confirmation of the attractiveness of our modern card issuing platform that does cover the full lifecycle of the card. It demonstrates the confidence of a leading European bank for a long-term partnership at scale with Worldline. It reinforces our position as a trusted infrastructure partner for the financial sector. and as a reminder, we serve as Worldline around 80% of the 20 top European banks. The second milestone I would like to comment is the selection of Worldline for the Digital Euro Pilot. We will operate in this case on both sides of the value chain, the bank of the consumer and the merchants, which is one of our differentiating strengths. This decision of the ECB confirms that Worldline is legitimate and well positioned on the payments rails of tomorrow. The slide nine shows that since CMD, we made tremendous progress in multiple areas, showing the breadth and the depth of our action. On the corporate and M&A side, we are reaching the final stage of the disposal program with most transactions now closed and Australia and India coming soon. On the business side, we have signed and implemented Several partnerships to enrich our offering, either to go beyond pure acquiring with Klarna and ULAND, or to position Worldline on the next generation rails, including Wiro, Sablecoins, and the digital euro. In parallel, we gain traction in deploying meaningful and innovative product features, click-to-pay for recurring payments, where we are the first one in Europe, and the Spanish Bezoom wallet in store, where again, we are the first one in Europe. On slide 10, we show that Nostar is clearly in motion and delivering. To pick up some particular highlights in this slide, platform convergence continues to advance With the Italian acquiring portfolio migrating to our target platform, we have 5,000 merchants migrated as we speak and things move smoothly. And the Ogon and CIPS portfolios are moving to GOPAY as planned and we reached in June 80% of the SME portfolio on GOPAY. At the same time, we continue to simplify and modernize our technical infrastructure and network Moving from 49 to 47 sites and closing our Madrid data center. In terms of integration, Launchpad has now entered in a pilot mode in line with the plan. This is again an important milestone in our recovery journey. As you certainly remember from our presentation at CMD, Launchpad is the backbone of a dramatic modernization in our SMB customer journey. with targeted onboarding in one day for low-risk merchants with full automation of the process. This version is the first step, available on the first segment of the market, but the foundations are now in place for a step deployment every quarter going forward. All those initiatives have enabled good progress on active workforce management, leveraging internal mobility to reduce headcount in Europe, while preserving critical skills and capabilities. But I would like to highlight three visible examples of North Star executions during the period. On Simplify, the Credit Agricole Partnership evolution is a good example of simplification. Here, we have demonstrated our ability to make tough and bold decisions to simplify and be more efficient. Together with Credit Agricole, we have agreed on a simpler and more efficient operating model that is better aligned with the future development of our partnership. No need to say that we are extremely proud of the successes of this partnership, which works extremely well on acceptance and brings innovation to the French market. Second illustration on Integrate, the global collective case. Global Collect is one of the hidden jewels of Worldline, making two-thirds of external revenue of the global commerce division. As a reminder, the rest of the division consists of pure acquiring activities for a portfolio of travel and digital customers. Over the last few months, we have successfully integrated Global Collect with Worldline acquiring platform, developed shared agentic commerce capability, while repositioning Global Collect within the group with a dedicated setup and operating model to focus on two attractive verticals, travel and digital, with complex cross-border requirements. Combining high-performance reinvested technology stack and deep integration into customers' ecosystems, Global Collect benefits of a differentiated value proposition. The revised operating model and the leverage on Worldline's shared capability is already translating into improved commercial traction and return to high single-digit growth in the last quarter. I clearly count on Global Collect to be one of the faster growth engines of Worldline going forward, leveraging on faster dynamics of cross-border payments. Finally, on the growth I would like to comment on the progress of Worldline in agent e-commerce. As you have seen from our recent announcements, Worldline is positioning itself at the forefront of agent e-commerce for the European market. First, we have built the technical foundation, what we call the MCP server, to expose worldline payment capability to AI agents and large language models platforms. Second, we have built the technical foundation and the infrastructure which is protocol agnostic to support the various Visa Intelligent Commerce, Mastercard Agent Pay, or Google-specific protocols. Third, we leverage on our unique positioning on the issuing and acquiring side to ease trust and adoption across the ecosystem. This was the objective of the real end-to-end transactions that we executed in the three geographies with two banks, ING and Crédit Agricole. At Worldline, we believe that Atlantic Commerce has the potential to reshape how consumers and businesses interact with payments. This is why it is important for Worldline to provide the banks and the merchants the infrastructure layer required to support this evolution with trust. On the following slide, we show how we are accelerating GenAI through a trusted AI operating model. We have seen over the last six months a significant acceleration of adoption of GenAI across the organization. Given the critical role Worldline plays in the economy, we have built all the foundations to deploy generative AI securely and at scale. Infrastructure, governance, financial impact measurement, risk management, and security. Those foundations are now in place. We are rolling out GenAI through a multi-model approach to avoid dependency on a single model. And as you can see here, the deployment is now becoming meaningful, with 83% of our developers using AI-assisted coding and testing tools, and 9,000 monthly active users of LibroChat, our internal agentic AI chat platform based on open source. More importantly, we are already seeing a ramp-up in impact, higher development velocity when using cloud code in software development, concrete business impact through use cases such as smart routing on e-commerce, and progressive agentification across several functions in the organization. At Worldline, we clearly consider generative and agentic AI as a vehicle of transformation and Customer Satisfaction. What is new at Worldline is not GNI itself, what is new is our ability to deploy it securely and at scale through a trusted operating model at the forefront of the European financial industry. With that, let me hand over to Srikanth who will take you through the financial performance in more detail.

Thank you Pierre-Antoine and good evening everyone. Before I go into the numbers, the financial section again reiterates the four messages that has been mentioned on our execution. H1 results were in line with our expectation on a fully proven basis. Merchant services showing improving momentum sequentially, while financial services remains impacted by the known contract terminations and timing effects of commercial rebound. Third, the inorganic balance sheet strengthening is complete. And fourth, our 2026 outlook confirms the adjusted ABDA and the leverage targets with an improved free cash flow trajectory and the leverage target has been achieved six months in advance than what we had said during the capital markets day. And you also recall what we anticipated at the capital markets day back in November on three points. The first loss of contracts, the business mix which we said would be adverse with more cross-border and within merchant services that will impact the net net revenue, and that the North Star will start providing early returns in our ABDA and we already see that. Now, on those messages, if you go down to the next slide, Pierre-Antoine has already taken you through the post-brew numbers and what you have also here is the published numbers and I will detail that in the coming slides with an elaboration in scope so that we are all clear on what each number means for what scope. Additionally, normalized net income was 65 million euro and a normalized diluted EPS at 2.04. The key point is that after pruning actions, the underlying business is stabilizing while profitability and balance sheet discipline is improving. Moving on to the next slide regarding the divestment update, the pruning program is complete substantially. Two deals still to close, Australia and India, and we expect that in Q3. We guided We have already received 580 million euro with 40 to 50 million euro additionally to come from India and Australia and that puts us in the high range of on the upper end of the range that was communicated earlier. This of course excludes the cash held in diversified entities which is addressed now in the liquidity section. Now moving on to scope. You recall that we provided quite a bit of pedagogy on the scope for the end of the year. This year is a step more in complexity. We said 2026 will be a year of transition, and it is, of course, with a transitory scope. At the bottom part is the green block, which is our fully pruned scope. It is the constant. It is the future perimeter of Worldline. After this year of closing, those transactions will be finished. Now, looking at the published scope, You all know now that the IFRS 5 governs the rules for discontinued operations as well as assets held for sale. METS, being the discontinued operations, has not been in our scope from day one. However, the assets held for sale, all of the other divestments that you see below, the P&L and cash flow, are in our published numbers until closing. Hence, North America and PaymentIQ, we closed end of February, so January and February is in our numbers. Citrel we closed end of April so Jan to April is in our numbers and so on and obviously India and Australia still not closed is still in our published scope so that's the purple part which is the published scope and then the green one is the fully pruned and we've even color coordinated that in the rest of the presentation now moving to the next one so applying the scope to the present numbers I wouldn't go into the detail but This slide has been presented just specifically to bring clarity and the full impact of scope changes for all of us to be on the same page. In white is the FY25 H1 published scope, so it's only without METS. And then in the purple H126 is with the progressive closing of the transactions that I've just explained. And we have done a pro forma for 2025 so that you have a light for light comparison. and then in the green is the post-prune scope that we are all on the same page on. So no need to go step by step but we've addressed the impact on revenue, adjusted EBDA and free cash flow but we'll of course deal with each one of these in the future slides. Now moving on to the next one please. Now on the post-prune scope we see for Q2 On Worldline level, we are flat at 904, with merchant services showing a plus 2%, so sequentially better in external revenue as compared to Q1, with acceleration across segments that I will explain in a second. Financial services is the dragon house, like Q1, with minus 6.9%. So at the end, we are flat in terms of our post-prune revenue. On a net revenue basis, merchant services is at minus 2% for Q2, and financial services at minus 6.8. If you move to the next slide, now drilling down into the specifics per segment, SMB is growing single digit, low single digit. Continued momentum in the Nordics, Germany, Italy, Greece, Central and Eastern Europe. Switzerland is further stabilizing, Benelux showing gradual recovery. Commercial traction is improving with partner and independent software vendors. Enterprise is also growing low single digit with continued strength in mobility and self-service, including petrol and transportation. OneCommerce is gaining traction in Germany, the UK, and Poland. In global commerce, travel remains strong and global collect is back to growth while the digital vertical is still affected by expected jumps. Now moving on to financial services, H1 remains the drag as we've been mentioning so far. The underlying commercial dynamic, however, is positive. In issuing an account payment, the decline reflects the legacy terminations while the ABN AMRO deal that Pierre-Antoine mentions Thank you very much. Thank you very much. Thank you very much. Thank you. financial services margin declined as expected due to the run contracts loss. Moving on to slide 24 on published P&L. While the fully pruned scope is the most relevant view for management, guidance, investor assessment and published scope is necessary for statutory reporting. This table shows H1 2025 excluding METS and H1 published scope as presented earlier. The scope column aims to make the like for like. So that's making the white bar purple, right? For like for like comparison and for each line item with the pruning program and effects. Key takeaways in two sections. First, operating expenses. Personal expenses decreased year on year, reflecting the reduced headcount in Western Europe. And strict control held by Strict cost control held to protect our adjusted EBITDA despite higher scheme fees. EBITDA is better year-on-year with a like-for-like scope by 40 million euro and you see that is the reduced rationalization and integration cost due to the end of spend on Power24. Second block is on the non-operating expense. Net financial expenses in 2026 absorb higher interest cost. but unlike 2025, there are no more exceptional items. Moving on to published free cash flow. Free cash flow remains a key area of focus and to improve the quality of the free cash flow. Three key pillars, the integration and the restructuring integration cost declined sharply as we just saw. Taxes are lower. We've done some fiscal consolidations and it has partly offset higher financial cost. Working capital. With the quality of cash flows generated, we are reinforcing working capital here with a reduced level of payables and also reflecting the smaller perimeter going forward. Now to net debt leverage and liquidity. We have halved the level of net debt in the first six months. We've gone from 2.2 billion to 1.1 billion. Result, leverage target is less than 2x. and that's been achieved six months earlier than announced and that's good. On the right we show the liquidity has been strengthened as a result as well of the pruning and equity infusion and this is sufficient in order to face the 2026-2027 bonds as well as the puts and also we have obtained the 80 million euro which is the cash and divested entities. You'll recall we had 186 million euros of cash and divested entities in December 25. We received 80 million. We have another 90 to go. So the 90 is in India and Australia and with the 40 to 50, we should have this crystallized as well in Q3. Finally, the second extension of the RCF has been obtained to go from July 30 to 31. for 900 million euro and until 2030 we are at 1.125 billion euro. So 80% of that has been extended on the same terms until 2030. Now I'll conclude with the outlook. We have already achieved our leverage targets as I mentioned. We confirm our adjusted EBDA of 630 to 650 million euro supported by cost discipline. Improve free cash flow guidance. Upgrade our free cash flow guidance with better capital allocation. And we are marginally revising the revenue, as mentioned, due to the timing effects on the commercial rebound on financial services, but with recent pipeline wins, contract wins and pipeline, we are confident this will recover. Merchant service is growing as planned. So with that, I will hand you back to Pierre-Antoine to conclude. Thank you very much. Thanks a lot, Srikanth. So four messages to conclude this presentation.

First one, by demonstrating progress, Worldline H1 performance are data points that strengthen conviction in our vision and in the success of our turnaround. Second message, we made the right choice in refocusing on Europe. The organization is clearly gaining momentum and discipline across the board and this is visible in those results. Third, while executing, Worldline positions itself with success on the future industry drivers while managing its capital allocation. Finally, we are demonstrating our ability to control our cash costs with discipline, which can help navigate the volatile macro context in which we operate. Thank you and happy to get your questions.