Worldline Earnings: Operating Leverage and Good Growth in Merchant Services Drive Margin Expansion

Worldline WLN reported first-half adjusted operating profit of EUR 519 million, up 13.4% versus the same period last year, as the group continues to enjoy good traction in its largest segment merchant services. We maintain our EUR 91 per-share fair value estimate and narrow moat rating.

Worldline’s performance is within our expectations. Good growth of in-store and online transaction volumes in its merchant services segment, which saw revenue grow 13.1% on an organic basis as well as good cost controls, enabled the company to expand the adjusted EBITDA margin by 80 basis points to 23.1%. Guidance for the full year calls for another 20 basis points in margin improvement, which we believe is achievable given Worldline’s operating leverage profile and additional synergies to be achieved in the second half of this year.