Gilles Grapinet, Worldline’s Chairman and CEO, said:

“Worldline publishes today its revenue for the third quarter, well in line with our expectations. The significant improvement of the revenue evolution during the third quarter reflects, in particular, a strong dynamic of domestic payments in all our key countries, supported by an accelerated penetration of cashless payments, and a still strong dynamic of e-commerce.

Beyond the current business activity, our main achievement over the last months was to bring to a successful closing, yesterday, our strategic and friendly acquisition of Ingenico. I would like to warmly thank the teams of the two groups for their exemplary cooperation which led to this outcome, in line with our overall transaction timeline. I am very pleased with the extremely high contribution rate to the tender offer of 89%, which demonstrates the massive support of Ingenico's shareholders for our project and the recognized industrial relevance of this combination. We are delighted to now count Ingenico's shareholders among our shareholders.

Worldline is more than ever ready to keep playing a central role in the ongoing consolidation of payments in Europe and beyond, and, as planned, we are launching the strategic review for the payment terminals business unit..

After the detailed preparation work performed by the teams since the announcement of the transaction, we are today ready to operate as a single company and to immediately implement the integration and synergy programs.

With the accelerated trend towards digital payments related to the pandemic and the significantly enhanced competitive repositioning of the new Group, we are fully confident in the company's very strong organic growth potential for 2021 and beyond.”


Q3 revenue performance per Global Business Line
Revenue

In € million Q3 2020 Q3 2019* Organic change

Merchant Services 270.4 283.8 -4.7%
Financial Services 224.1 225.1 -0.4%
Mobility & e-Transactional Services 78.2 79.8 -2.0%

Worldline 572.7 588.8 -2.7%

* at constant scope and exchange rates

During the third quarter of 2020, Worldline’s revenue reached € 572.7 million, with revenue trend strongly improving compared to the second quarter, as social distancing, confinement and store lock-down measures where progressively eased from mid-May in our key markets. Consequently, and as expected, organic revenue decline for the third quarter was limited to -2.7%, representing a strong improvement over the -13.1% revenue decline recorded in Q2.

Revenue for the first nine months of 2020 reached € 1,662.0 million. Since the start of the year, the activity of the Group was impacted by the COVID-19 related measures and their impact on the European economies, notably between March and June. Nonetheless, thanks to the resilience of Worldline’s diversified business model, revenue decline since the start of the year has been limited to -4.7%.

Merchant Services

Merchant Services’ revenue for the third quarter of 2020 recovered from the low point reached during the second quarter (-21.5%) and reached € 270.4 million, limiting its organic decline to -4.7% or €-13.4 million compared to same period last year.

Indeed, over the summer, transaction volumes continued to steadily recover, along with the progressive easing of the COVID-19 related measures, the reopening of the European economies and the higher domestic spent of European citizens during the summer season. As a result, the number of commercial acquiring transactions in Continental Europe increased by +13% during the quarter, with strong growth as showing early as July. Transaction volumes were supported by the wider card penetration, notably for domestic contactless payments, and by much stronger e-commerce transactions (+48%).

Nevertheless, in the quasi absence of international sport, business or cultural events, and as international, and in particular inter-continental travel, remained severely affected by restrictions, cross-border transactions on international credit cards and related value-added services (such as Dynamic Currency Conversion) remained significantly lower than during the same period last year. In addition, Worldline’s Merchant Services business remains affected in India, where store lock-down has been extended until October 31st, 2020. As a consequence, revenue in Commercial Acquiring and Payment Acceptance altogether decreased mid-single digit organically.

Revenue in Merchant Digital Services decreased as well, due to fewer volumes on Private Label Card programs in the UK in particular for cinema and hospitality chains.

Lastly, Payment Terminals’ revenue remained quasi stable during the quarter, thanks to good sales of newly launched products (the VALINA for unattended commerce and the new generation YUMI payment terminal), in a context of accelerated trends for unmanned retail and merchant digitization.


Over the first nine months of 2020, Merchant Services’ revenue was € 754.0 million, decreasing organically by -8.7% or €-71.7 million.

Financial Services

Financial Services’ revenue continued to show resilience and was nearly stable over the period, reaching €224.1 million, declining organically by -0.4% or €-1.0 million only. As in the first semester, performance of each division differs.

Notably, on the one hand:

Account Payments remained almost unaffected by the COVID-19 situation, as the division’s revenue grew high single digit, supported by increased volumes and ramp-up of contracts.
As a result of changes in consumer behavior triggered by COVID-19 , authentication volumes related to e-commerce payment transactions strongly increased. Higher transaction volumes were also processed on our e-brokerage platforms. Consequently, a strong double digit growth was recorded in Digital Services.

While on the other hand, revenue linked to card based payment processing activities (Issuing Processing and Acquiring Processing altogether), while recovering from the Q2 lowest point, decreased by a mid-single digit, as the Q3 transaction volume growth could not offset completely lower project activity and discretionary spending from banks.

Over the first nine months of 2020, Financial Services’ revenue was € 666.8 million, decreasing organically by -0.6% or €-4.3 million.

Mobility & e-Transactional Services

Revenue in Mobility & e-Transactional Services reached € 78.2 million, decreasing organically by €-1.6 million or -2.0% compared to the same period last year, with contrasted evolution between each of the three divisions as well.

Revenue in e-Consumer & Mobility grew strongly at a double digit percentage rate, thanks to existing and new Contact contracts in France, Belgium and Italy for secured omni-channel consumer interaction solutions, as well as to digital health solutions, notably in Germany.

This strong performance could not completely offset the revenue decline in Trusted Digitization, due to a lower project activity as some contracts are reaching the run phase, as well as in e-Ticketing, which remains severely impacted by the current health situation in the United Kingdom and in Latin America, with fewer rail ticketing volumes and a less projects.

Over the first nine months of 2020, Mobility & e-Transactional Services revenue was € 241.2 million, decreasing organically by -2.5% or €-6.3 million.


Very large success of the friendly tender offer on Ingenico securities

Results of the initial tender offer and closing of the acquisition

As a reminder, Worldline’s friendly tender offer on Ingenico was launched on July 30, 2020 and closed on October 15th, 2020. This offer was largely successful, with 88.64% of Ingenico shares tendered (representing at least 83.20% of the voting rights) and 99.57% of Ingenico OCEANEs tendered.

The settlement-delivery of the shares happened on October 28th, 2020, therefore enabling the full accounting consolidation of Ingenico with Worldline from November 1st, 2020.

Reopening of the tender offer until November 4th, 2020

In order to allow Ingenico’s shareholders and OCEANEs holders who did not bring their securities to the initial offer to do so under unchanged conditions, the offer has been reopened from October 22 until November 4, 2020 (inclusive).

Completion of Ingenico pre-integration work enabling immediate implementation of the Day-one readiness program and the go-live of the new combined organization

Thanks to Worldline’s Day-one readiness proven methodology, and the full mobilization of teams on both sides on preliminary activities to prepare integration, the Group is now ready to operate as a single company as soon as November 2nd, enabling the timely implementation of the detailed integration and synergy plans.

Launch of the payment terminals business strategic review

As already communicated on February 3rd, 2020, the Group is now launching the strategic review of its payment terminal business, now renamed as Terminal Solution & Services (TSS).

Indeed, in order to accelerate the transformation of this Global Business Line from a “Hardware + Service” to “Software-as-a-Service” business model, a review of the strategic alternatives available to TSS will be undertaken to secure the long term development perspectives for the business, in the best interest of its customers, employees and shareholders.

Worldline intends to have completed this strategic review in 2021.

New Group profile

Following the closing of the Ingenico acquisition, Worldline is now the world’s number four player in payment services with more than 20,000 employees across approximately 50 countries. The new combined group offers best-in-class payment services to nearly 1 million merchants and 1,200 financial institutions, with estimated pro forma revenue reaching c. € 5.3 billion in 2019, of which c. € 2.5 billion generated in merchant payment and transaction-related services.

Since the announcement, the transaction has been particularly well received by the customers and the key partners of the combined Group, highlighting its very compelling industrial and business rationale.


Commercial activity and key achievements of the third quarter

Merchant Services

The crisis triggered by the current COVID-19 situation has prompted many merchants in the world to accelerate their digitization plans.

In particular, in order to increase efficiency, retailers are implementing unified and standardized payment systems across their various European operations. In this respect:

Worldline is accompanying C&A in the roll-out of its standardized cash register solution, with expansion of our existing acquiring services to 4 additional countries (Poland, Czech Republic, Croatia & Italy); and
Worldline will implement a standardized-till connection in 4 European countries for the fashion company BRAX. The solution includes the deployment of new generation payment terminals as well as payment acquisition services.

Also, Worldline was able to accompany many of its hospitality customers in their accelerated transformation plans:

A partnership has been signed with NextGuest, a worldwide leader in personalized and automated guest communication and CRM for the hospitality industry, to apply PSD2 compliant secured e-payments to automated guest communications;
Another partnership was signed with Bookassist, a leading provider of booking and web design for hotels, in order to help hotels achieve more direct bookings through their own website, using Worldline’s payment technologies;
Worldline’s Saferpay online acceptance gateway has been integrated with HotelNetSolution, a provider of one-page booking and digitization products for the hospitality industry;
Worldline will deliver acquiring services to Wamos Benelux, an online travel agency; and
Worldline’s unattended payment terminal VALINA has been chosen by Myra, a check-in/out kiosk manufacturer for the European hospitality industry.

Significant commercial progress was also made in online and omni-channel solutions:

Worldline signed a partnership with iPayLinks, a leading online payment gateway, to propose Visa and MasterCard acquiring services to iPayLink’s existing and new merchants across Europe;
A partnership was signed with a UK based payment gateway in order to deploy Worldline’s Visa, MasterCard and Diners online acquiring solution to all restaurants across Europe of a global fast-food chain; and
Worldline’s business relationship with MUSIC STORE, one of the largest specialty stores for musical instruments, has been expanded from the existing e-commerce solution to in-store payment acceptance and acquiring.

Lastly, regarding automated and unmanned operations:

Worldline payment solutions, based in particular on the unattended payment terminal VALINA, were successfully sold to a growing number of customers, in particular to parking operators such as Qpark or Cegeka;
A partnership was also signed with Antenor, a large Belgium automated solution operator for parking, carwash, and hospitality self-check in/out; and
A new contact was also signed with a leader in access solutions for parkings, events and ski resorts, for unattended payment terminals and Pan-European acquiring services over 7 countries;
Lastly, the VALINA payment terminal was successfully sold for the first time in North America.


Financial Services

After the large contract signed with BPCE through Brinks earlier this year, Worldline signed a new contract with a group of four Belgian banks in order to process their ATM acquiring transactions, further consolidating the Group’s position on the ATM transaction management market, which is rapidly consolidating and for which numerous outsourcing opportunities in Europe are under discussion.

Also, based on the success of their partnership, PSA Payment Services Austria and Worldline have extended their existing contract for five years. PSA is responsible for the Bankomat® system on behalf the Austrian banks, managing approximately 10 million Bankomat® cards and a network of 7,350 Bankomaten® ATMs. In 2019, one billion transactions were processed by Worldline under the previous agreement, which has now been extended until 2025.

More globally, the COVID-19 crisis accelerated the e-commerce and digital trends:

As a result, Worldline’s Trusted Authentication transactions more than doubled in September 2020, compared with September 2019.
PSD2 account-based transactions (access to accounts information) processed on Worldline’s platforms increased sharply, from less than 200,000 in September 2019 to close to 5 million in September 2020.

Mobility & e-Transactional Services

As part of its 2025 strategic plan, INSEE (the French National Institute of Statistics and Economic Studies) wished to improve access to information for all audiences and chose Worldline’s highly secured and multi-channel WL Contact SaaS customer engagement platform, under a 5-year contract.

Also, through Horizon 2020 Framework Program, the European Commission has awarded two new research and innovation projects to consortiums lead by Worldline, with the objective to address new challenges in the media sector and take advantage of the most innovative technologies, including blockchain:

A first project is aimed at securing media content through a traceability solution based on blockchain technologies;
A second one to create a collaborative secured platform to enable live video. Blockchain technology will permit to deliver a decentralized live stream to individual paying subscribers.

Lastly, Worldline signed a strategic cooperation with Unwire, a Danish Fintech and Mobility as a Service company, to accelerate innovative digital payment technology in transportation. The partnership will broaden Worldline’s Mobility as a Service (MaaS) capabilities across the UK and Ireland as well as the rest of Europe and will enable an easier access and use of public transport through streamlined payment systems.

Backlog

Backlog remained high and almos stable at € 3.9 billion.


Combined set of 2020 objectives

Following the completion of the acquisition of Ingenico and its consolidation from November 1st, 2020, today , Worldline issues a combined set of 2020 objectives, including the 2-month financial contribution of Ingenico, fully consistent with previously communicated objectives.

This combined set of objectives is based on the macro-economic hypothesis outlined during Worldline’s Q1 2020 revenue publication, and in particular for the second semester, on the following trends:

Very gradual lift of government constraints with:
A general retail re-opening and increase of domestic payment flows allowing a progressive business recovery;
Very limited international travel, tourism and related businesses
Postponement of all key conventions and events (sporting, corporate, festivals, concerts & leisure, etc.) to 2021

For the fourth quarter of 2020, in particular to take into consideration the recent evolution of the COVID-19 evolution, the Group’s objectives are based on the following:

Stronger government targeted restrictions but no full lock-down of non-essential retail in our key acquiring countries until year end, and
Ingenico’s business performance within its full year guidance.

On this basis, the Group confirms it expects a full year 2020 financial performance broadly in line with 2019, as follows:

Revenue

The Group expects its 2020 full year revenue to be flat or decreasing by a low single-digit compared with 2019 at constant scope and foreign exchange rates.