Why Europe Must End Its 30-Year Digital Winter to Ensure Its Long-Run Future

Worldline Projects Cooling Growth After ‘Consumption Slowdown’

Worldline app

French payments firm Worldline is projecting slower growth this year as European consumers reduce spending.

“With a strong focus on the execution of the transformation plan in a macro environment, we expect to remain challenging in our main markets in Europe,” CEO Gilles Grapinet said during an earnings call Wednesday (Feb. 28). “Consequently, we expect to deliver in ‘24, a top line organic growth of at least 3%.”

In a news release accompanying the earnings announcement, Grapient noted that the second half of last year saw Worldline impacted by “a gradual overall macroeconomic and consumption slowdown in our core geographies, as well as by the impact of the termination of some of our online merchants, based on tighter regulatory framework.”

As noted here earlier this month, consumers in Europe are living through the harshest cost-of-living crisis in decades, with the price of goods climbing even as inflation dips. While the worldwide value of retail sales in the consumer products space climbed by 10% on average last year, 95% of that growth in Europe came from price increases.

The last few months have been tumultuous ones for Worldline, which began February by announcing plans to lay off 8% of its workforce, or about 1,400 employees.

The company has said it aims to reduce costs by around $215 million and “support stronger future growth and cash generation.”

In October, Worldline slashed its sales outlook amid a rocky economic climate in Europe, a move that caused its stock to plunge 57%, erasing close to $4 billion in market value.

“In effect, consumers have started to allocate more of their spending to non-discretionary verticals rather than discretionary ones, impacting our growth and profitability,” Worldline said at the time.

In November, reports emerged that the company could be the target of a private equity takeover, driving its price up once more.

And last month Credit Agricole, a French lender, announced that it had acquired a 7% stake in Worldline, expanding on an existing partnership between the two companies. That partnership is expected to become final next year, and could help boost sales growth by 5% to 10%, the company says.

“We intend to create together a new major player in the merchant services and the acquiring business in the French payment market, leveraging the highly global technological performance and innovation capabilities of wireline combined with the commercial strength and exceptional knowledge of the French market,” said Grapinet.