WORLDLINE SA : Third quarter 2017 revenue

Third quarter 2017 revenue

Strong revenue growth in Q3

Revenue: € 386 million
+33.0% growth at constant exchange rates
Up +6.3% organically

Digital River World Payments and
First Data Baltics transactions closed

All 2017 objectives confirmed

Bezons, October 23 ^rd , 2017 - Worldline [Euronext: WLN], European leader in the payments and transactional services industry, today announced its revenue for the third quarter of 2017.

Gilles Grapinet, Worldline CEO said:

" Worldline reports today a strong revenue growth at +6.3%, in line with our full year ambitions, benefiting from solid payment transaction volume increase, significant project activity in processing for card and non card payments in equensWorldline, as well as from the ramp-up of recently signed contracts in Mobility & e-Transactional Services.

I am also pleased to report that Worldline has already closed the two acquisitions announced in July (Digital River World Payments and First Data Baltics) and that integration activities have already started as per Worldline and Atos proven Day-1 Readiness methodology. In addition, we also announced the acquisition of the Indian Service Provider MRL Posnet early October, which closing is planned in the days to come. After these three acquisitions, Worldline keeps intact its strong financial capacity to pursue its development strategy.

These transactions demonstrate the dedication of the company and its management team to keep playing, as part of its 2017-19 strategic plan, a pivotal role in the consolidation of the payment industry."

For the analysis of the Group's performance, revenue for the third quarter of 2017 is compared with the third quarter 2016 at constant scope and exchange rates. Performance for the third quarter and for the first nine months of 2017, on a like-for-like basis compared with last year, was as follows:

2017 third quarter and first nine months revenue

		Revenue Q3
In € million		Q3 2017	Q3 2016*	Var.	Organic Growth
Merchant Services		128.5	121.7	+6.8	+5.6%
Financial Services		171.0	159.5	+11.5	+7.2%
Mobility & e-Transactional Services		86.2	81.8	+4.4	+5.4%
Worldline		385.6	362.9	+22.7	+6.3%
* At September 2017 constant scope and YTD average exchange rates
		Revenue 9 months
In € million		Sep YTD 2017	Sep YTD 2016*	Var.	Organic
					Growth
Merchant Services		389.3	369.5	+19.8	+5.4%
Financial Services		516.1	486.1	+30.0	+6.2%
Mobility & e-Transactional Services		258.3	272.4	-14.1	-5.2%
Worldline		1,163.7	1,128.0	+35.7	+3.2%
* At September 2017 constant scope and YTD average exchange rates

During the third quarter of 2017 , Worldline's revenue was at € 385.6 million , increasing by +33.0% at constant exchange rates and +6.3% organically compared with the third quarter of 2016. Revenue growth accelerated sequentially as planned compared with the growth rate reported in H1 2017 (which was +1.7%), as the negative comparative effect arising from the termination of the RADAR contract in June 2016 ended in June 2017.

Over the first nine months of 2017 , Worldline's revenue was € 1,163.7 million , up +29.6% at constant exchange rates and +3.2% organically.

Merchant Services revenue stood at € 128.5 million during the third quarter of 2017, growing organically by €+6.8 million or +5.6% at constant scope and exchange rates.

• The growth mainly came from Merchant Payment Services , which benefitted from a strong momentum in India with the demonetization impact leading to higher volumes of transactions, and positive business trends in Belgium as well as at PaySquare (in the Netherlands and in Germany) and at KB SmartPay (in the Czech Republic).
• Merchant Digital Services was close to stability due to less project activity in the quarter, particularly in France.

Merchant Services revenue growth was +5.4% organically over the first nine months of 2017 , reaching € 389.3 million.

Q3 2017 revenue for Financial Services reached € 171.0 million , up +7.2% organically (€+11.5 million). All four business divisions contributed to that growth:

• Revenue in Issuing Processing grew, pulled by increased volume of card transactions as well as strong increase in authentication services ( ACS , 3D Secure);
• Acquiring Processing was also particularly dynamic during the period, thanks to more volume and projects;
• Digital Banking grew mainly thanks to continued development and good fertilization on project related business in France and in the United Kingdom; and
• Revenue in Accounts Payments increased thanks notably to more volumes on the iDeal payment scheme in the Netherlands and the start of revenue from the migration of new clients to the new "Payment 2.0" platform.

Over the first nine months of 2017 , revenue for Financial Services was € 516.1 million, up +6.2% organically .

Revenue in Mobility & e-Transactional Services was € 86.2 million , increasing by +5.4% or €+4.4 million. This performance could be achieved thanks:

• To a strong activity in Trusted Digitization, particularly with more revenue from various projects with French government agencies and in Latin America in healthcare transactional services and tax collection; and
• To strong sales recorded in e-Consumer & Mobility thanks to the ramp up of projects in France and in Germany; while
• e-Ticketing was temporarily affected by lower projects delivered in the United Kingdom for rail transport companies.

Over the first nine months of 2017 , revenue for Mobility & e-Transactional Services was € 258.3 million, -5.2% compared with the similar period last year.

Third quarter 2017 commercial activity and key achievements

Merchant Services

In Merchant Services, Worldline India has renewed contracts with two key clients: Axis Bank and Bobcards.

Also, the existing contract with Trinity Purchasing, a leading company specialized in hospitality purchasing services, was extended to the Nordics: through this new agreement, Worldline will have the opportunity to provide end-to-end payment acceptance services (commercial acquiring, payment terminals, DCC, connected hotel solutions) to 1,200 hotels throughout Europe.

Regarding online payment acceptance, Worldline implemented a P2P payment acceptance solution for a leading global customer. Also, significant contracts were renewed in Private Label Cards & Loyalty Services in Spain and in France.

Last, fast commercial development is recorded for the newly launched VALINA unattended payment terminal.

Financial Services

In addition to several key processing contract renewals and extensions, a new Issuing Processing contract was signed with a Belgium bank during the quarter.

Regarding the deployment of new payment means or form factors:

• A leading Finnish bank will implement equensWorldline HCE mobile payment solution;
• Issuer wallet (e.g. Paylib, Bancontact) transaction volumes reached an all-time high in July, with 3.5 times the 2016 volumes;
• Worldline provides iOS mobile banking services to a leading bank in France; and
• Worldline won a first significant contract with a major financial institution for PSD2 implementation and related services.

In terms of new products, Worldline new IBO (Issuing Back Office) module will be implemented for a Belgium and a German bank in 2018 and the new 3D Secure platform ( ACS 3.0) is now live with many migration projects from earlier versions to come.

Last, equensWorldline won two awards at the "Banque & Innovation Summit" in France for:

• Worldline Authentication Process Management , which manages the authentication process for electronic card payments, non-card payments, access to account and fully complies with the PSD2 RTS requirements for exemption management, risk based authentication, authentication workflow and enhanced reporting; and
• Worldline Trusted Interactions that allows banks and insurance companies to create a relationship of trust with their clients, based on electronic messaging and document sharing.

Mobility & e-Transactional Services

Order entry in Mobility & e-Transactional Services has been very healthy, with in particular:

• A contract signed end of Q2 2017 for the provision of a new highly secured real time and mutualized solution for the "SAMU", the French nationwide medical emergency call center organization, which will enable a better management and real time dispatch of incoming calls during sanitary crisis as well as secured traceability and archiving of all related transactions;
• The renewal of a secured Cloud Contact Center contract, Worldline's state of the art omni-channel customer interaction platform, for a large French e-Retailer; and
• The renewal of the contract for the secured management of the French Personal Medical Record.
• Last, Worldline has signed a 5 year contract renewal for the operation of a Digitized Tax Verification, Excise Warehouse Management and Track & Trace system. The renewal allows Swiss industry and authorities to intensify their fight against counterfeiting and smuggling. The system, which is based on Worldline's Track & Trace solution, protects the value chain of over 350 million products per year.

Backlog

Backlog remained high at € 2.6 billion .

Implementation of IFRS 15

IFRS 15 accounting standard "Revenue from contracts with customers" is applicable from January 1, 2018 onwards.

The Group has estimated the impact from the adoption of IFRS 15 at circa -2.5% on 2017 estimated revenue and circa +50 basis points on 2017 estimated OMDA rate. Obviously, no effect is anticipated on OMDA and on Free Cash Flow amounts.

Final effect on 2017 figures linked to the adoption of IFRS 15 will be published together with the 2017 full year result publication in February next year .

2017 Objectives

Regarding the scope before the recent acquisitions (First Data Baltics, consolidated from October 1, 2017 and Digital River World Payments from November 1, 2017) the Group confirms its objectives for the full year 2017: revenue organic growth between +3.5% and +4%, OMDA rate above 20.5%, and Free Cash Flow generation above € 170 million including c.€20 million of synergy implementation costs.

The additional contribution from First Data Baltics and Digital River World Payments during Q4 2017 is expected as follows:

• Revenue: c. +€ 9 million
• OMDA: c. +€ 2 million
• Positive net contribution to the free cash flow

2017 - 2019 Objectives (reminder)

During its last Investor Day hold on October 3 ^rd , 2017, Worldline raised all its objectives for the 2017-2019 period as follows:

• Revenue organic growth: after 3.5% to 4% for 2017, 5% to 7% for 2018 and 6% to 8% for 2019;
• OMDA margin: Above 22.5% in 2019, which corresponds to an improvement of above +400 basis points compared with 2016 ^[1] ;
• Free cash flow: € 230 million to € 245 million in 2019.

Appendix:

Statutory revenue to revenue constant scope and exchange rates reconciliation

		Revenue
In € million		Q3 2017	Q3 2016	Change
Statutory revenue		385.6	294.3	+31.0%
Exchange rates effect			-  4.3
Revenue at constant exchange rates		385.6	290.0	+33.0%
Scope effect			72.9
Exchange rates effect on acquired/disposed scope			-
Revenue at constant scope and exchange rates		385.6	362.9	+6.3%
		Revenue
In € million		Sept YTD  2017	Sept YTD 2016	Change
Statutory revenue		1,163.7	909.1	+28.0%
Exchange rates effect			-  10.8
Revenue at constant exchange rates		1,163.7	898.2	+29.6%
Scope effect			229.7
Exchange rates effect on acquired/disposed scope			-
Revenue at constant scope and exchange rates		1,163.7	1,128.0	+3.2%

Q3 2016 statutory revenue to revenue constant scope and exchange rates reconciliation by Global Business Line

		Revenue
In € million		Q3 2016	Scope effect	Internal Transfers	Exchange rates effect	Q3 2016*
Merchant Services		101.6	+15.8	+4.8	-0.5	121.7
Financial Services		107.6	+57.6	-4.8	-0.9	159.5
Mobility & e-Transactional Services		85.1	-0.5		-2.9	81.8
Worldline		294.3	+72.9	0	-4.3	362.9
* At constant scope and Sep 2017 YTD exchange rates

Q3 2016 YTD statutory revenue to revenue constant scope and exchange rates reconciliation by Global Business Line

	Revenue
In € million	Sept YTD 2016	Scope effect	Internal Transfers	Exchange rates effect	Sept YTD 2016*
Merchant Services	311.7	+46.6	+13.5	-2.3	369.5
Financial Services	315.7	+184.6	-13.5	-0.6	486.1
Mobility & e-Transactional Services	281.7	-1.4		-7.9	272.4
Worldline	909.1	+229.7	0	-10.8	1,128.0
* At constant scope and Sep 2017 YTD exchange rates

Scope effects refer mainly to:

• The acquisitions of Equens, PaySquare and KB SmartPay on September 30, 2016. Hence, Equens, PaySquare and KB SmartPay revenue for the third quarter of 2016 (and the Q3 YTD) are included in the Q3 2016 (and Q3 2016 YTD) revenue at constant scope and exchange rates, for a like-for-like comparison with Q3 2017 (and Q3 YTD 2017); and
• The disposal of the Cheque Service business on July 1, 2017. Hence, revenue from Cheque Service has been excluded from the 2016 comparative basis.

Internal transfers correspond to the reclassification in Merchant Services of the part of revenue from Worldline India that was previously classified in Financial Services, as this revenue relates primarily to business done directly or indirectly (through banks) with merchants. Exchange rate effects reflect mostly the depreciation of the British Pound and the Argentina Peso versus the Euro.

Conference call

Worldline's CEO Gilles Grapinet, along with General Manager Marc-Henri Desportes and Chief Financial Officer Eric Heurtaux, will comment on the Group revenue for the third quarter of 2017 on Monday, October 23, 2017 at 6:15pm (CET- Paris).

You can join the webcast of the conference:

- at worldline.com , in the Investors section
- by smartphones or tablets through the scan of :

Webcast direct link: https://edge.media-server.com/m6/p/mfxkobgh

- by telephone with the following dial-in:

United Kingdom:	+44(0)20 3427 1914
United States of America:	+1 646 254 3388
France:	+33(0)1 76 77 22 30
Germany:	+49(0)69 2222 10622
Code:	3106218

After the conference, a replay of the webcast will be available at worldline.com , in the Investors section.

Forthcoming event

February 20, 2018    Full year 2017 annual results

Contacts

Worldline Investor Relations Contact
David Pierre-Kahn
Email: David.pierre-kahn@worldline.com

Worldline Communication Contact
Sandrine van der Ghinst
Email: sandrine.vanderghinst@worldline.com

Worldline Press Contact
Teamfluence : Tiphaine Hecketsweiler
Email: th@teamfluence.eu

About Worldline

Worldline [Euronext: WLN] is the European leader in the payments and transactional services industry. Worldline delivers new-generation services, enabling its customers to offer smooth and innovative solutions to the end consumer. Key actor for B2B2C industries, with over 40 years of experience, Worldline supports and contributes to the success of all businesses and administrative services in a perpetually evolving market. Worldline offers a unique and flexible business model built around a global and growing portfolio, thus enabling end-to-end support. Worldline activities are organized around three axes: Merchant Services, Mobility & e-Transactional Services, Financial Services including equensWorldline. Worldline employs more than 8,700 people worldwide, with estimated pro forma revenue of more than € 1.5 billion on a yearly basis. Worldline is an Atos company. www.worldline.com

Disclaimer

This document contains forward-looking statements that involve risks and uncertainties, including references, concerning the Group's expected growth and profitability in the future which may significantly impact the expected performance indicated in the forward-looking statements. These risks and uncertainties are linked to factors out of the control of the Company and not precisely estimated, such as market conditions or competitors behaviors. Any forward-looking statements made in this document are statements about Worldline' beliefs and expectations and should be evaluated as such. Forward-looking statements include statements that may relate to Worldline' plans, objectives, strategies, goals, future events, future revenues or synergies, or performance, and other information that is not historical information. Actual events or results may differ from those described in this document due to a number of risks and uncertainties that are described within the 2016 Registration Document filed with the Autorité des Marchés Financiers (AMF) on April 28, 2017 under the registration number: R.17-032 and its update filed with the Autorité des Marchés Financiers (AMF) on August 3, 2017 under the registration number: D.17-0407-A01. Worldline does not undertake, and specifically disclaims, any obligation or responsibility to update or amend any of the information above except as otherwise required by law.

This document does not contain or constitute an offer of Worldline' shares for sale or an invitation or inducement to invest in Worldline' shares in France, the United States of America or any other jurisdiction.

Revenue organic growth is presented at constant scope and exchange rates. Operating margin before amortization and depreciation (OMDA) is presented as defined in the 2016 Registration Document.

Global Business Lines include Merchant Services (in Belgium, Czech Republic, France, Germany, India, Luxembourg, Poland, Spain, The Netherlands, Slovakia, Sweden and United Kingdom), Financial Services (in Belgium, China, Estonia, France, Germany, Latvia, Lithuania, Finland, Hong Kong, Indonesia, Italy, Malaysia, Singapore, Spain, The Netherlands and Taiwan), and Mobility & e-Transactional Services (in Argentina, Austria, Belgium, Chile, France, Germany, Spain, and the United Kingdom).

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