Payments firm Worldline's first half-results disappoint

By Bartosz Dabrowski and Juliette Portala

(Reuters) -French payments firm Worldline missed half-year operating earnings expectations on Tuesday, triggering a sharp drop in its share price as investors were disappointed it had not benefited more from shop reopenings after lockdowns.

The company, which also announced it was buying Handelsbanken's card-acquiring activities in the Nordic countries, said half-year sales totalled 2.27 billion euros ($2.67 billion). They were flat compared to a year earlier and matched the company's own guidance, but operating earnings before depreciation and amortisation (OMDA) were below a company-provided analysts' consensus, even though they improved by 5.6%.

Worldline shares were down 8% by 0850 GMT, wiping out a 7.3% rise since the start of this year.

"The stock has rallied into these results and though results are 'ok' they may cause some disappointment that they are not better," J.P. Morgan wrote in a note, saying OMDA came in 2.9% below consensus estimates.

Worldline's Chief Executive Gilles Grapinet said the outlook was improving.

"In addition to effective management of our operations and our cost base, our expectations of a strong recovery in volumes from the end of the first quarter have been fully confirmed," he said in a statement.

"The strong momentum recorded in the second quarter should continue throughout the rest of the year, supporting the growth trend of all our different businesses."

As Europe has grappled with successive waves of COVID-19 infections, the on-and-off closure of shops, restaurants and other businesses in lockdowns have hit in-store payment volumes, which only recently started to recover.

The company confirmed its 2021 outlook, including a minimum mid-single digit percentage rise in underlying revenues.

"We strongly believe in our guidance in the current context ... we have not seen any significant government measures that are restraining the reopening of economies of scale in our major markets," Grapinet told analysts in a call.

The company said its purchase of Handelsbanken's Nordic card-acquiring business would result in additional annual revenue of around 35 million euros and a double-digit organic growth rate over the next four years.

"We are extremely keen to pursue medium-size deals," Grapinet added.

The Handelsbanken deal follows Worldline's acquisitions of Cardlink in Greece and Axepta in Italy, both announced during the first half.

($1 = 0.8490 euros)

(Reporting by Bartosz Dabrowski and Juliette Portala in GdanskEditing by Clarence Fernandez, Ramakrishnan M. and Susan Fenton)