The economic slowdown in Europe causes Worldline shares to collapse, dragging with it other payment service companies such as Nexi and beyond. All the details
Worldline, a French payment services company, lost 55.6 percent today on the Paris stock exchange after lowering its revenue forecasts.
According to Reuters calculations, the sell-off caused Worldline to lose about $4 billion in market value.
WORLDLINE ALSO DRAGNS NEXI DOWN
In its collapse, Worldline dragged the rest of the sector with it: the Italian Nexi – of which Cassa Depositi e Prestiti owns 13.5 percent – fell for example by 20 percent, to 5 euros. The company has reached a new historic low and has burned, writes Ansa , "the increases achieved in recent sessions in the wake of rumors of an interest from some funds". ( Here is Startmag 's in-depth analysis of CVC Capital Partners' interest in Nexi)
HOW DO OTHER EUROPEAN PAYMENT SERVICE COMPANIES DO?
Another rival of Worldline and Nexi, Britain's CAB Payments, lost 9.5 percent but had already fallen more than 70 percent on Wednesday as it lowered its 2023 revenue forecast. Netherlands' Ayden dropped l '11 percent on the Amsterdam stock exchange.
WHAT HAPPENS TO WORLDLINE
Worldline closed the third quarter of 2023 with revenue of $1.1 billion, up 4.8 percent. However, it cut the growth outlook for the full year from +8-10 percent to +6-7 percent: blame the economic slowdown in some European countries, such as Germany.
The company said that in the July-September period some of its key markets – starting with Germany – showed signs of a slowdown, with consumers turning more towards goods such as food, bills and rent, neglecting the so-called "discretionary expenses", those that are not strictly necessary (but fundamental, however, for the growth of a financial services company).
Worldline also said it had tightened its risk policies and closed some electronic payments relationships that no longer aligned with the new policy .
EXTRACT FROM A MEDIOBANCA REPORT ON THE POSSIBLE EFFECTS OF THE DIGITAL EURO
Also indirectly impacting the recent stock market performance of the Nexi stock are the scenarios linked to the introduction of the digital euro by the ECB. A scenario that will affect the accounts of payment companies like Nexi, according to a recent report by Mediobanca: “Our conclusion – we read in the report read by Start Magazine – underlines the significant variability of the impact of card payment transactions, which can range from €0.7 billion (~0.3% of European bank-level profits) to €3.4 billion (~1.3% of European bank-level profits) for European banks. It is important to underline that this result depends on the transition from the traditional system to the digital euro platform. To ensure rapid and effective adoption by a broad customer base, the d€ platform should introduce new and exciting features. Furthermore, we recognize that banks' development of front-end capabilities and engagement in product cross-selling could, on the one hand, lead to increased adoption and retention; but, on the other hand, it could partially compensate for losses through the sale of value-added products. losses through the sale of additional value-added services”.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/worldline-crollo-borsa-conseguenze-nexi/ on Wed, 25 Oct 2023 14:27:44 +0000.