Worldline seeks more tech M&A as it beats Q4 sales estimates

(Reuters) -French payment services company Worldline will keep looking for technology acquisition opportunities in Europe, it said on Tuesday after it beat fourth-quarter sales expectations.

Payments processors have seen in-store volumes recover since the easing of COVID-19 restrictions, but the inflation-driven squeeze on discretionary and e-commerce spending poses a risk to their revenues.

The group, which processes digital payments for clients from merchants to government agencies, produced organic sales growth of 10.7% in 2022 and forecast 2023 organic sales growth of between 8% and 10% for 2023.

JPMorgan analysts said: "Overall we see the results as good, the guidance at best in-line but not better than market expectations."

Worldline's shares were down 1% by 0830 GMT.

Its fourth-quarter organic sales growth of 8.3% beat an analysts' consensus estimate of 7.7% provided by the company, which was driven by market share gains and volume growth in its Merchant Services business.

Chief Executive Gilles Grapinet told reporters Worldline would continue to participate in the European market consolidation and to expand Merchant Services, its largest global business line, in attractive geographies.

The payments sector has seen several big takeover deals as growing use of e-commerce platforms and smartphones has spurred competition to develop new systems.

Worldline bought French rival Ingenico in 2020 for around 7.8 billion euros. In 2022, the company purchased a 40% stake in Online Payment Platform, 55% in Poland's SoftPos.eu, and the merchant-acquiring activities of Italy's Banco Desio.

Grapinet said the group would again refrain from distributing a dividend in 2023 to promote investments especially in Europe which remains its geographic focus.

"We are looking more and more at technology companies that allow us to accelerate the building of the Worldline portfolio and bring it to the best state at any given time in terms of technological performance and innovation," he said.

Worldline reaffirmed its 2024 ambitions, including the goal of becoming leading consolidator of the European payment industry.

($1 = 0.9374 euros)

(Reporting by Izabela Niemiec and Dagmarah Mackos in Gdansk; Editing by Milla Nissi and Jane Merriman)