Worldline (WLN) Q2 2024 earnings summary

Executive summary

• H1 2024 revenue reached €2,289m, up 2.1% organically, with Merchant Services underlying growth at 6.2% despite macroeconomic headwinds and a softer Q2.

• Adjusted EBITDA was €514m (22.5% margin), broadly stable year-over-year; free cash flow was €82m (16% conversion), or €124m (24.1%) before Power24 costs.

• Power24 transformation plan advanced, with cost savings target raised to €220m by 2025 (+10% vs. initial target); new operating model and governance changes implemented.

• Strategic growth initiatives included new products, partnerships, and geographic expansion, notably the Crédit Agricole JV and commercial expansion in Italy.

• Management remains cautious due to macroeconomic volatility and European consumer softness, especially after a weak Q2.

Financial highlights

• H1 revenue: €2,289m (+2.1% YoY), underlying group growth at 4.2% excluding merchant terminations.

• Adjusted EBITDA: €514m (22.5% margin), normalized net income: €211m (9.2% of revenue), normalized EPS: €0.74.

• Reported net income: -€29m, impacted by €174m non-cash Power24 provision.

• Free cash flow: €82m (16% conversion), €124m (24.1%) before Power24 costs.

• Net debt: €1.7bn (1.5x adjusted EBITDA LTM); new €1.125bn revolving credit facility maturing July 2029.

Outlook and guidance

• FY 2024 organic revenue growth expected at 2–3%, adjusted EBITDA guidance: €1.13–1.17bn, free cash flow target: €230m.

• Merchant Services underlying growth expected at 6–7%+ in H2, depending on macro recovery.

• Guidance reflects continued European consumption uncertainty; high end assumes macro improvement in H2.

• Power24 cost savings target raised to €220m by 2025 (+10% vs. initial target).

• Mid- to high-single-digit organic growth and ~50% free cash flow conversion targeted medium term.