Worldline SA · EURONEXT:WLN
Worldline SA — H1 2019 Earnings Presentation
55 slides from Worldline SA's earnings presentation, 2019
Slide 1: Worldline H1 2019 Results
| Worldline H1 2019 Results | © Worldline
Slide 2: Disclaimer
Disclaimer This document contains forward-looking statements that involve risks and uncertainties, including references, concerning the Group's expected growth and profitability in the future which may significantly impact the expected performance indicated in the forward-looking statements. These r
Slide 3: First Half 2019
FIRST HALF 2019 Gilles Grapinet CEO Worldline
Slide 4: Very solid semester
Very solid semester ● Very good set ● Very strong ● Finalization of Equens’ ● Fast progress of of results commercial acquisition the integration perfectly in line activity: and synergy with the • Exercise of the call option on plan with SIX objectives set for • Numerous new equensWorldline at €1,070
Slide 5: A very good set of results
A very good set of results €1,152.0m €278.5m +6.5% organic 24.2%* +200bp REVENUE OMDA €145.5m €141.5m +41.8% Vs €57.2m in H1 2018 vs H1 2018 FREE CASH NET INCOME FLOW** GROUP *: including IFRS16 impact of 1.7pt SHARE*** **: Including a collection related to a VISA receivable for €11.5 m ***: includi
Slide 6: Exercise of the call option on equensWorldline's minority interests
Exercise of the call option on equensWorldline’s minority interests Perfect execution of the industrial joint business plan and synergies exceeding equensWorldline: a initial expectations remarkably successful industrial Very successful commercial expansion notably for large outsourcing contracts an
Slide 7: More strategic flexibility than ever to pursue the European payment consolidation
More strategic flexibility than ever to pursue the European payment consolidation equensWorldline: A perfect proof point of the processing JV Industrial, Full ownership of model managerial and equensWorldline financial track record Strenghten strategic flexibility Headroom Deconsolidation available
Slide 8: First Half 2019 - CFO
FIRST HALF 2019 Eric Heurtaux CFO Worldline
Slide 9: Constant scope and exchange rate figures reconciliation
Constant scope and exchange rate figures reconciliation Revenue Scope Exchange In € million H1 2018 effects rates H1 2018* ** effects Revenue 818.6 +265.3 -1.8 1,082.1 OMDA 179.5 +41.7 -0.2 220.9 OMDA % 21.9% 20.4% *At constant scope and June 2019 YTD average exchange rates ** At December 2018 YTD a
Slide 10: H1 2019 Financial performance overview
H1 2019 Financial performance overview 15% Revenue Mobility % & e-Transactional 46% Services In € million H1 2019 H1 2018* Organic Growth Merchant Services Merchant Services 535.2 509.8 +5.0% Financial Services 444.3 420.5 +5.7% 39% Mobility & e-Transac.Serv. 172.6 151.8 +13.7% Financial Services Wo
Slide 11: Merchant Services
MERCHANT SERVICES Merchant Services H1 2019 H1 2019 IFRS 16 % Organic In € million post IFRS before H1 2018* impact growth 16 IFRS 16 Revenue 535.2 535.2 509.8 +5.0% OMDA 119.8 9.3 110.5 86.1 % OMDA 22.4% +1.7 pt 20.6% 16.9% +3.8 pt REVENUE: +5.0% OMDA: +380 bps • Good business trends in Commercial
Slide 12: Financial Services
FINANCIAL SERVICES Financial Services H1 2019 H1 2019 IFRS 16 % Organic In € million post IFRS before H1 2018* impact growth 16 IFRS 16 Revenue 444.3 444.3 420.5 +5.7% OMDA 144.6 7.7 136.9 126.7 % OMDA 32.5% +1.7 pt 30.8% 30.1% +0.7 pt REVENUE: +5.7% OMDA: +70 bps • Issuing Processing supported by g
Slide 13: Mobility & e-Transactional Services
MOBILITY & E-TRANSACTIONAL SERVICES Mobility & e-Transactional Services H1 2019 H1 2019 IFRS 16 % Organic In € million post IFRS before H1 2018* impact growth 16 IFRS 16 Revenue 172.6 172.6 151.8 +13.7% OMDA 24.9 3.2 21.7 16.5 % OMDA 14.4% +1.8 pt 12.6% 10.9% +1.7 pt REVENUE: +13.7% OMDA: +170 bps A
Slide 14: Statutory income statement
Statutory income Statement Key Observations • Staff reorganization, rationalization & associated costs: 6 months 6 months mainly restructuring cost in recently (In € million) ended ended acquired companies and administrative 30 June 2019 30 June 2018 back office transformation OMDA 278.5 179.4 • Int
Slide 15: Very strong increase of net income
Very strong increase of net income • SPS acquisition slightly accretive on diluted EPS (+2.3%) as soon as H1 2019 +56% c.X2.5 H1 18 €77m H1 18 €57m 15 | Worldline H1 2019 Results | © Worldline
Slide 16: Cash flow statement
Cash flow statement 6 months 6 months Key Observations (In € million) ended ended 30 June 2019 30 June 2018 • Free cash flow up +42% Operating Margin before Depreciation and Amortization (OMDA) 278.5 179.4 • Capex remain stable thanks to Capital expenditures (46.9) (45.8) capex synergies with SIX Pa
Slide 17: Summarized balance sheet
Summarized balance sheet (In € million) As at June 30, As at December Key Observations 2019 31, 2018 ASSETS Goodwill 3,091.3 3,013.0 Intangible assets 1,068.5 1,094.6 Tangible assets 142.0 146.0 Right-of-use 206.5 - • Change in goodwill mostly due to Non-current financial assets 92.1 112.0 adjustmen
Slide 18: Efficient management of Atos distribution of Worldline shares
Efficient management during H1 of Atos distribution of Worldline shares consolidating the shareholder base As a consequence of the Atos distribution of 2 Worldline shares for every 5 Atos shares owned on May 7th 2019, Worldline free float doubled Intense investor relation activities supported by 3 s
Slide 19: Exercise of the call option on equensWorldline's minority interests
Exercise of the call option on equensWorldline’s minority interests The backbone of the processing business of Worldline • As the operator and originator of most of Worldline’s processing business in Europe, equensWorldline is the core engine of Worldline’s processing business equens • Leadership po
Slide 20: Exercise of the call option on equensWorldline's minority interests
Exercise of the call option on equensWorldline’s minority interests Payment of the entire consideration secured through a bridge financing provided by a pool of banks, to be refinanced through debt capital market, in a view to: ● Optimize Worldline financing conditions ● Maintain a large financing f
Slide 21: First Half 2019 - Deputy CEO
FIRST HALF 2019 Marc-Henri Desportes Deputy CEO Worldline
Slide 22: Integration of SIX Payment Services progressing very well
Integration of SIX Payment Services progressing very well, starting slightly ahead of plan Quality and cultural fit of teams enable very fast and good progresses, slightly ahead of plan All integration tracks currently above target for 2019 in terms of synergies ● Project portfolio and roadmap de-du
Slide 23: Focus on Merchant Services
FOCUS ON MERCHANT SERVICES Key Q2 2019 signings & major achievements Worldline’s Pan-european reach in Commercial New successes in omni channel solutions acquiring further supporting growth ● End to end service (including payment terminals, ● Full e-commerce acquiring and acceptance contract acquiri
Slide 24: Focus on Financial Services
FOCUS ON FINANCIAL SERVICES Key Q2 2019 signings & major achievements Large outsourcing opportunities Strong market appetite for PSD2 related offerings ● Good progress reached with some European Tier 1 banks on large outsourcing opportunities ● 25 banks in seven European countries have reached the f
Slide 25: Focus on Mobility & e-Transactional Services
FOCUS ON MOBILITY & E-TRANSACTIONAL SERVICES Key Q2 2019 signings & major achievements New wins in e-Ticketing demonstrating the WL Customer engagement platform Contact relevance of WLTap2use and @Station continues to attract interest from major financial solutions institutions ● WL Contact selected
Slide 26: Major enabler of new and innovative payment methods across Europe
Worldline & equensWorldline: major enabler of new & innovative payment methods across Europe Major acquirer in Europe for QR code based payment Biggest cross-border acquirer in Europe for Union Pay methods and JCB by transactions volume providing acceptance in • One of the earliest & most important
Slide 27: First Half 2019 - CEO
FIRST HALF 2019 Gilles Grapinet CEO Worldline
Slide 28: Very strong start of the 2019-2021 3 year plan
Very strong start of the 2019-2021 3 year plan Very good organic developments ● Demonstrated benefits of our enhanced leadership positions in Merchant Services and Financial Services ● Visible impacts of the SIX payment services integration, starting ahead of the plan ● Very satisfying commercial ac
Slide 29: All 2019 objectives confirmed
All 2019 objectives confirmed REVENUE 6% to 8% organic growth OMDA Between 24.8% and 25.8%* FREE CASH Between €275 million and €290 million FLOW including synergy implementation costs *: Corresponding to an initial guidance of 23% to 24% pre IFRS 16 impact estimated at c.+180 basis points on OMDA. 2
Slide 30: | Worldline H1 2019 Results | © Worldline
| Worldline H1 2019 Results | © Worldline
Slide 31: Worldline: Empowering the cashless society
WORLDLINE: EMPOWERING THE CASHLESS SOCIETY c. €2.2 bn * c. 11,500 32 ANNUAL REVENUE EMPLOYEES COUNTRIES MERCHANT FINANCIAL MOBILITY SERVICES SERVICES & E-TRANSACTIONAL SERVICES • Commercial • Issuing Processing Acquiring • Acquiring • Trusted Digitization • Omnichannel Processing • eConsumer & Mobil
Slide 32: A best-in-class execution since IPO
A best-in-class execution since IPO consolidating and strengthening Worldline leadership in Europe
Slide 33: Powerful transformation of Worldline's financial profile since IPO
Powerful transformation of Worldline’s financial profile since IPO thanks to the combination of organic growth and M&A REVENUE OMDA FREE CASH FLOW EXPANSION (€ m) (€ m) 470 (€ bn) 2.2€ 500 m 27.00 207 391 € 400 m 25.00 176 1.6 1.7 335 140 1.3 € 300 m 258 23.00 129 1.1 1.2 235 21.2% 114 215 € 200 m 2
Slide 34: Solid execution of a visionary consolidation strategy since IPO
Solid execution of a visionary consolidation strategy since IPO MERCHANT SERVICES FINANCIAL SERVICES Reach Portfolio Scale Scale Portfolio Reach Baltics Anchored M&A strategy in Successful integration of 8 Selective approach with limited Worldline DNA fueling growth, acquisitions in a record time am
Slide 35: A unique pan-European payment champion
Worldline today: a unique pan-European payment champion, with an unrivalled industrial scale and reach PSP ranking in the EU (European revenue in €m) European leadership at scale + Leadership Merchant services + #1 c.2.2m c.3.4bn Payment Card In the DACH region, in terminals Benelux, in France and i
Slide 36: Present along the entire value chain
Worldline is present along the entire value chain resulting in an unrivalled positioning in the payment ecosystem Full coverage of the payment value chain Payment Service Issuing Service to Credit / Acquiring Acceptance Services to Full Suite of Agnostic Payments Solutions for Clients Processing Tra
Slide 37: A premium brand with sustainability at the core of its business model
A premium brand with sustainability at the core of its business model Worldline Contribution to the United Nations SDGs EXTERNAL Products Building clients’ trust with fully & services available & secured platforms INTERNAL Reinforcing value for clients Programs through sustainable & & policies innov
Slide 38: A growing and resilient environment with attractive fundamentals
A growing and resilient environment with attractive fundamentals
Slide 39: Addressable market structurally growing and highly resilient
Our addressable market is structurally growing and highly resilient thanks to regulation, societal macro trends and technology 2016 +c. 7% CAGR in Europe 2021 108 Bn non cash 151.1 Bn non cash Transactions in Europe (1) Transactions in Europe (1) Growth of digital commerce Regulatory push towards el
Slide 40: The European payment market in need of a lead consolidator
The European Payment market in need of a lead consolidator with Worldline’s solid track record, financial flexibility and ambition Consolidation has mostly taken place in the US VS Europe is initiating the 2nd consolidation wave Top 10 US Payment players (Ranking based on 2017 revenues) Top 10 Europ
Slide 41: New 2019-2021 roadmap: More of the same but stronger
New 2019-2021 roadmap: “More of the same but stronger”
Slide 42: Key strategic axes of the 3 year roadmap
Key strategic axis of the 3 year roadmap: Accelerating the company based on demonstrated track record SCALE & REACH Fully leverage Worldline Pan-European competitive advantage LARGE DEALS Maintain commercial focus on large outsourcing deals and new bank EXPERTISE alliances Grow above market Worldlin
Slide 43: Adapting corporate governance and preparing for standalone status
Adapting corporate governance and preparing for the full standalone status Adapting the corporate Improving corporate structures governance • Increase from 4 to 6 independent • Disentanglement from Atos IT systems board members (out of 12) and mutualized support functions • Reduction from 5 to 3 of
Slide 44: 3 new strategic levers for a rejuvenated M&A potential
Taking advantage of the projected stand-alone status: 3 new strategic levers for a rejuvenated M&A potential Renewed ability to welcome new banking Proposed communities in Worldline through further capital distribution by increase Atos of 23.5% of Worldline’s shares Standalone computation of Worldli
Slide 45: Reload firepower to proceed with new M&A
Reload firepower to proceed with new M&A in the background of next consolidation wave Largest EU Bank-friendly Rejuvenated countries still strategy Strategic flexibility to participate & recognized to adapt to each in Payment track-record specific situation industry Consolidation of value-creative a
Slide 46: 2019-21 ambition
2019-21 ambition Previous New 2017-19 2019-21 - 3 year plan - - 3 year plan - After H1 2017 at a slight positive growth REVENUE 7% to 8% organic CAGR 5% to 7% organic CAGR over the 2018-2021 period +350bp to +400bp +400 to 500 bp* OMDA Organic margin improvement Organic margin improvement in 2019 vs
Slide 47: 2019 objectives
2019 objectives REVENUE 6% to 8% organic growth OMDA Between 24.8% and 25.8%* FREE CASH Between €275 million and €290 million FLOW including synergy implementation costs *: Corresponding to an initial guidance of 23% to 24% pre IFRS 16 impact estimated at c.+180 basis points on OMDA. 47 | Worldline
Slide 48: 2019-2021 3 year Financial Ambition
2019-2021 3 year Financial Ambition
Slide 49: Worldline + SIX Payment Services 2018 pro forma revenue and OMDA
Worldline + SIX Payment Services 2018 pro forma revenue and OMDA Worldline 2018 Worldline 2018 Pro forma revenue Pro forma OMDA% c. € 560m c.22.7% c.21.2% c. € c.17% c. € 2.2 bn 1.7 bn Worldline SPS 2018 pro Worldline 2018 pro standalone 2018 forma revenue (1) forma revenue (1) Worldline standalone
Slide 50: Main 2019-2021 revenue growth drivers
Main 2019 – 2021 revenue growth drivers TRENDS REVENUE • Improved geographical mix • Favorable product mix (more online, less terminals) • Strong trends in commercial acquiring and launch of new • High single digit growth rate generation of payment terminals MS • Top-line synergies with SPS • Strong
Slide 51: Main 2019-2021 OMDA improvement drivers
Main 2019 – 2021 OMDA improvement drivers TRENDS REVENUE • Scale effect • From low twenties in 2018 PF • Expansion in online SPS synergies payments • To high twenties in 2021 TEAM² efficiency program MS • Operating leverage • equensWorldline: • From high twenties in 2018 PF €15m phase2 • To low thir
Slide 52: Free cash flow main assumptions
Free cash flow main assumptions Capex Acquisition costs and synergy implementation costs Between 5% to 6% of revenue Yearly synergy implementation over the period costs in line with incremental OMDA synergy benefit Change in working capital Tax rate Assumption: slight contribution Tax rate based on
Slide 53: Cash and Profitability: the way to continue to grow
Cash and Profitability: the way to continue to grow Mid-term leverage target of 1.5x to 2.5x net debt/OMDA Financing capacity available Additional financing in 2018 capacity over 2019-21 c.€1.4bn c.€1.7bn Worldline 2018 2.5 2.5 (max Immediate 2019-21e FCF net treasury (max leverage) leverage) availa
Slide 54: Our latest terminal: YUMi
Our latest terminal: YUMi 54 | Worldline H1 2019 Results | © Worldline
Slide 55: | Worldline H1 2019 Results | © Worldline
| Worldline H1 2019 Results | © Worldline