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Worldline confirms targets despite Russia as merchant services boost Q1

·2-min read

By Olivier Sorgho and Diana Mandia

(Reuters) -French payment company Worldline SA on Wednesday confirmed its full-year targets despite the impact of the conflict in Ukraine, as growth in its merchant services business helped it beat analysts' average expectations for first-quarter revenue, sending its shares higher.

Worldline's shares were up around 5% as of 0945 GMT after the company posted first-quarter revenue of 939 million euros ($999.6 million), beating a company-provided average estimate of 926 million euros.

Pandemic-related restrictions, which encouraged a switch to digital transactions, have eased in most parts of the world, while in-store payment processing volumes are recovering.

Worldline said in March it had no business exposure in Ukraine, with "limited" exposure to Russia representing around 1.5% of 2021 revenue on continued operations.

The group said the bottom range of its 2022 objectives factored in localised and temporary COVID curbs, a limited recovery of international travel, and limited delays on point-of-sale (POS) terminals supply related to component shortages, but also "the impact along the year of international sanctions policies on Merchant Services online activities in Russia".

"We still miss a significant part of intercontinental travel," Chief Executive Gilles Grapinet told analysts in a call, adding that the company was still waiting for the return of travellers from Asia and the Middle East.

Analyst Grégoire Hermann from AlphaValue in a note said direct exposure to Russia and Ukraine was not as relevant as the "domino effect" impacting commodity prices and the economic slowdown, which it noted Worldline does not seem affected by.

"The reopening trade seems to be finally playing out in DACH (Germany, Austria and Switzerland region) and is helping company growth," JPMorgan said in a note, adding that Worldline's planned disposal of its TSS unit to U.S firm Apollo Funds should help it consolidate in the payments sector.

In a separate statement, the firm announced that Grégory Lambertie would replace departing finance chief Éric Heurtaux.

(Reporting by Diana Mandiá and Olivier Sorgho; Editing by Sherry Jacob-Phillip, Shounak Dasgupta and David Evans)