(Reuters) -Shares in Worldline shed more than half of their value on Wednesday after the French payment company cut its full-year targets as the economic slowdown hurt its business in key markets including Germany.
The group also said it had severed ties with some of its merchants to reduce risks “in light of an increase in cybercrime”, without naming them.
“Our assessment of the second half of 2023 is that both in Q3 and looking forward to Q4, we face now more challenges than we anticipated even until very recently,” CEO Gilles Grapinet told analysts in a conference call.
He said the economic downturn in Europe was reducing discretionary spending by shoppers, while increased regulatory scrutiny had an impact on its merchant risk policies.
“We have taken the decision to terminate merchant services activities as soon as this quarter for some, but that will also impact primarily in the next period,” Grapinet said.
In slides distributed with third-quarter results, the group said the termination of contracts would continue until the first half of 2024.
The company’s shares, which failed to open at first on the Paris stock exchange because of excessive volatility, plunged 54% to a record low by 0843 GMT. The fall dragged down Italian rival Nexi, which dropped 14%, and Dutch peer Adyen, which was down almost 10%.
Worldline said it now sees organic sales growth in 2023 of between 6% and 7%, compared with 8% to 10% previously. It also forecast a 150-basis-point drop in its operating margin before depreciation and amortization for 2023, compared with a previous forecast for a 100-basis-point increase.
“Worldline missed sales estimates in every division … These results are a disappointment in terms of the full-year miss and also that long-term targets have been discarded,” JPMorgan analysts said.
(Reporting by Lina GolovnyaEditing by Silvia Aloisi and Helen Popper)
