Worldline's shares slip as guidance confirmation signals slowdown

A logo of payments company Worldline is seen in the illustration picture taken February 3, 2020. REUTERS/Christian Hartmann/Illustration

Oct 25 (Reuters) - French payments company Worldline (WLN.PA) maintained its full-year outlook on Tuesday despite caution over a slowdown in consumer transactions.

Worldline shares fell around 2% at the Paris stock exchange, with analysts pointing to investor disappointment at the unchanged guidance.

The company, which operates digital payment and transactional solutions, confirmed its full-year guidance for organic revenue growth between 8% and 10%.

It said third-quarter revenue was 1.16 billion euros ($1.14 billion), driven by volume growth and market share gains in its merchant services business.

The result marked a 10% increase organically and was slightly ahead of the 1.14 billion euros forecast on average in a company-compiled poll.

Worldline, whose clients range from merchants to government agencies, is seeing consumption holding up across all its segments despite the tense economic context, said Chief Executive Officer Gilles Grapinet. The group has not observed any slowdown in travel so far and booking levels "remain good," he said.

"We know that we've been performing well, that we will end up probably in any case at the top end of the guidance," deputy chief executive Marc-Henri Desportes said.

"We plan for the worst and we hope for the best," he added. The group is seeing "pretty solid" domestic consumption in Europe so far, he said, which they measure through transaction volumes.

Payments processing firms have seen a surge in business as more people switched to digital transactions during the pandemic, but analysts had anticipated that the squeeze on discretionary and e-commerce spending due to rising costs this year could weigh on the sector's revenues.

Based on the revenue growth of the past three quarters, analysts calculate around 5% growth in the fourth quarter compared to 7.5% estimated in a company-compiled consensus.

"Over the past quarters, Worldline has been guiding analysts quite low repeatedly and we would expect a beat on the FY guidance," said AlphaValue analyst Grégoire Hermann.

($1 = 1.0121 euros)

Reporting by Elena Vardon; Editing by Jacqueline Wong, Kim Coghill and Mike Harrison

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