WORLDLINE SA : First Half 2018 results First Half

First Half 2018 results

Very good start of the year

Revenue: € 819 million, up +5.8% organically

OMDA: € 179 million, 21.9% of revenue and up +120 bp Free cash flow: € 103 million, +16.6%

Net income group share: € 57 million, up +12.6%

Major contract signed with Commerzbank on payment processing

Closing of the acquisition of SIX Payment Services well on track for the end of the year

All 2018 objectives confirmed

Bezons, July 23, 2018 - Worldline [Euronext: WLN], European leader in the payments and transactional services industry, today announces its 2018 first half results.

Gilles Grapinet, Worldline CEO, said:

" I am very pleased to report today an overall very good set of results for the first semester of 2018, perfectly in line with the objectives that were set for the year.

This first semester was also marked by the major transaction with SIX Group AG announced last May. Worldline and SIX have immediately launched the work-streams to close the transaction, which is well on track for the end of the year. In parallel, Worldline keeps monitoring various M&A opportunities, particularly in Europe.

I am particularly proud to announce a major financial processing contract signed with the German bank Commerzbank, for which Worldline will manage all SEPA and Instant Payments for the next 10 years.

This partnership is the first very large new organic development signed since the merger with Equens and illustrates perfectly the strong development of our pipeline of commercial opportunities over the last 12 months. In this regard, Worldline continues to make good progress on other large payment processing outsourcing deals, comforting the Group's medium term organic growth ambition."

2018 first half key figures

For the analysis of the Group's performance, revenue and operating margin before depreciation and amortization (OMDA) for the first semester of 2018 are compared with H1 2017 revenue and OMDA at constant scope and exchange rates and restated from IFRS15. Worldline's first-half 2018 performance, on a like-for-like basis compared with last year, was as follows:

* H1 2017 at constant scope and June 2018 YTD average exchange rates, and restated from IFRS 15 ** Adjusted for (Group share): staff reorganization, rationalization, integration and acquisition costs, equity based compensation and customer relationships and patents amortization, and other non-recurring items

At constant scope and exchange rates, Worldline H1 2018 revenue stood at € 818.6 million, representing an organic growth of +5.8% at the end of June 2018 compared with the first half of 2017. All three Global Business Lines contributed to the revenue growth.

The Group's Operating Margin before Depreciation and Amortization (OMDA) reached € 179.4 million or 21.9% of revenue, i.e. an increase of +120 basis points, positioning the company very well to achieve the objective set for the full year of between 22% and 23%.

Normalized net income ^[1] stood at € 77.0 million (9.4% of revenue), an increase of +14.2% .

Net income Group share stood at € 57.2 million , increasing by € 6.4 million (+12.6%) compared with the same period last year.

Normalized diluted earnings per share ^[2] was €0.58 in H1 2018, compared with €0.51 in H1 2017 (+13.7%).

First half 2018 free cash flow was € 102.6 million , representing a +16.6% increase compared to H1 2017.

Net cash reached € 414.1 million , increasing by €+105.0 million compared with the net cash position as at December 31, 2017.

New large contract: Commerzbank and equensWorldline form a strategic partnership for Payments Processing

equensWorldline today announces a strategic partnership and a very large contract with Commerzbank. The partnership will see equensWorldline process all SEPA, instant, multi-currency, and domestic payments for Commerzbank , over a period of ten years. equensWorldline will onboard and transition Commerzbank's applications to its newest platform technologies. After this migration, approximately 4 billion additional payment transactions will be processed per year by equensWorldline for Commerzbank.

In a separate contract signed earlier this year, Commerzbank has granted the outsourcing of its Financial Messaging SWIFT Infrastructure to equensWorldline.

For more information, please refer to the specific press release issued today.

Performance per Global Business Lines

* At constant scope and June 2018 YTD average exchange rates, and restated from IFRS 15

Merchant Services

* At constant scope and June 2018 YTD average exchange rates, and restated from IFRS 15

Merchant Services revenue at the end of H1 2018 reached € 287.4 million , improving organically by €+12.1 million or +4.4% compared to H1 last year:

• Growth in Merchant Payment Services was primarily fueled by Commercial Acquiring services, thanks notably to:
  • A strong revenue growth in Continental Europe, triggered by higher volumes on international card transactions in Belgium as well as positive developments in all other European countries ; and
  • A solid double digit growth in India.

This strong acceleration of Commercial Acquiring was nonetheless partly offset by the temporary slowdown of Payment Terminal Services . Indeed, despite the successful commercial development of newly launched products such as the unattended payment terminal VALINA, the volumes of payment terminals sold in 2018 do not reach the high level of 2017 sales. In H1 2018, the growth of Merchant Services without Payment Terminal Services would have been above +7.5%.

• Merchant Digital Servi ces grew as well, thanks mainly to Digital Retail project revenue in the United Kingdom.

Merchant Services' OMDA was up by +70 basis points at the end of June 2018 compared to last year (€+4.4 million) and reached € 61.9 million or 21.5% of revenue, thanks to:

• Good business trends in Commercial Acquiring;
• Contributive effect of MRL Posnet integration; and
• The impacts of transversal productivity improvement actions.

This good performance was partly offset by the lower revenue in payment terminals.

Financial Services

* At constant scope and June 2018 YTD average exchange rates, and restated from IFRS 15

Revenues in Financial Services reached € 371.7 million , improving organically by €+25.3 million or +7.3% compared to H1 2017. All four business divisions contributed to that growth:

• Acquiring Processing grew thanks to high project activity as well as to strong growth in authorization volumes, notably in France, Southern Europe and Germany;
• Account payments benefitted from good SEPA payment transaction volumes, strong volume growth on transactions on the Dutch iDeal scheme as well as from a strong project activity for Instant Payments and SWIFT payments. This division also benefited from the recognition of a software license revenue linked to a large outsourcing contract;
• Issuing Processing enjoyed a continuous increase in e-Payment strong authentication services and e-Wallet transactions. Worldline Baltics also contributed to growth beyond its acquisition business plan;
• Growth in Digital Banking was fueled by new projects in France in e-Brokerage and in digital banking platforms related to Access to Accounts (PSD2).

Financial Services reached an OMDA of € 109.5 million (29.4% of revenue) representing an organic increase of +280 basis points or €+17.0 million, compared to the same period in 2017. This performance was driven by savings in the cost base resulting from the implementation of the synergy plan that started with the integration of equensWorldline and by good business trends in all four business lines, supported by software license revenues and the specific revenue linked to contract renegotiations.

Mobility & e-Transactional Services

* At constant scope and June 2018 YTD average exchange rates, and restated from IFRS 15

Mobility & e-Transactional Services reached € 159.5 million , improving organically by €+7.2 million or +4.7% compared to last year:

• Trusted Digitization grew double digit, benefiting from a strong momentum with French government agencies following the good order entry recorded in 2017. In addition, business was robust in Latin America, both in healthcare transactional services and in tax collection services;
• Growth in e-Consumer & Mobility was fueled notably by Connected Living activities in Germany and in Iberia; and
• Despite good business growth in Latin America and the ramp-up of Tap-2-Use projects in France based on the new Open Payment technologies, revenue in e-Ticketing decreased impacted by lower project revenue in the United Kingdom.

Mobility & e-Transactional Services OMDA reached €16.4 million or 10.3% of revenue, decreasing by €-5.0 million or -380 basis points . The OMDA of the Global Business Line is indeed impacted by the investment phase linked to numerous recently won contracts. To cope with the challenges of fast resource ramp-up accentuated by tensions on the recruitment market, a strong productivity improvement plan has been launched for H2 2018 and 2019.

Corporate costs

Corporate costs have decreased by -2.9 million thanks the successful impact of TEAM² program.

Commercial activity and key achievements of the second quarter

Merchant Services

Good momentum and top line synergies with recently acquired companies

• Business in India remains strong and as of June 30, 2018, Worldline India manages over 1.3 million payment acceptance points (circa 1 million POS payment terminals as well as circa 300 thousand QR codes). Important contracts were renewed, in particular with Bank of Baroda, Yes Bank, Central Bank of India and Sodexo for a period of three years each. Last, revenue synergies with MRL Posnet, which was acquired in November last year, materialize fast with in particular already 5,000 MRL customized payment terminals sold to historical Worldline India customers.  
• Regarding online payments, the relevance of the acquisition of Digital River World Payments last year was demonstrated by a new contract signed with AvailPro , Europe's leading centralized hotel booking engine. 10.500 hotels are connected to AvailPro's Channel Manager which in turn is connected to all booking engines. Worldline will deliver an end-to-end solution in e-Commerce, helping the hotels via AvailPro to take payment directly. That solution relies on Worldline Online Payment Acceptance solution, covering gateway and commercial acquiring services for a period of 3 years.

Very solid growth in online acquiring

• After a specific commercial push, Worldline is experiencing a circa +20% revenue growth in e-acquiring services in Europe.  
• Also, a new European multi-country acquiring contract was concluded with a leading travel management company - BCD Travel - with a Nordic focus.

In store commercial acquiring & payment terminals

• Despite a more difficult market context in Europe, strong orders were recorded for Worldline's newest unattended payment terminal VALINA , with in particular circa 1000 units sold in the United Kingdom for London city shared bike infrastructure.  
• An multi-year innovation partnership was signed with Decathlon , to enrich the customer experience in store, coupled with the terminals and acquiring contract renewal.

Two new PSD2 licenses

• Worldline has obtained two new licenses, linked to the PSD2, from the National Bank of Belgium enabling the company to become a Payment Initiation Service Provider (PISP) and an Account Information Service Provider (AISP).

Financial Services

In the overall context of good transaction volumes , in particular in online and new services (iDeal, ACS, Trusted Authentication), Worldline signed, beyond the large Commerzbank deal, significant contract renewals, such as the payment processing contract with De Volksbank that was extended for another five years. That contract includes issuing services and iDeal services, together with the set-up of a new Instant Payment Engine for the back office and a multi-currency payments back office module.

In online and mobile payments:

• equensWorldline is supporting Commerzbank with technology based on its mobile payment platform for the launch of Google Pay , Google's mobile payment system. This project completes the long list of GAFAs, NATUs, BATX related projects; and  
• In May, Trusted Authentication transactions volumes exceeded  10 million , which represent a very strong increase against the average volume recorded in 2017, which was around 3.7 million transactions per month.

Regarding Account Payment processing and Instant Payment:

• The Group reaffirmed its technology leadership with the French bank BRED selecting Worldline's CRISTAL Instant Payments licensed software package for the implementation of its Instant Payment platform; and  
• The Mobile Proxi Forum, a body of the European Payment council (EPC), appointed equensWorldline as its preferred Standardised Proxy Lookup (SPL) service. This service is designed to allow and operate interoperability between participating mobile peer-to-peer payment solutions.

Mobility & e-Transactional Services

In e-Ticketing, after the success of Open Payment with Keolis in Dijon where after only 2 months the operator has reached half the objectives set for 2020, Worldline signed two new contracts:

• One in the French "Grand Est" Region, where Worldline will implement and operate a cross-border ticketing solution with Germany;
• The other with the metropolis of Amiens where Worldline will implement a multi-service platform allowing citizens to access with a single identifier (mobile, contactless card) to a wide variety of mobility, cultural and sports services.

Regarding Trusted Digitization :

• Worldline signed a new contract in France with the pension fund CNSA to build and run new services allowing handicapped and elderly people to remotely manage their payment benefits;
• Also, in Austria, Worldline renewed its contract with the city of Vienna for their mobile parking payment solution; and
• The very successful Go-to-Market of Worldline Track & Trace solution was demonstrated by further contracts this semester with tobacco manufacturers in the context of the EU directive to secure the proper tax payments in the various member states.

In e-Consumer and Mobility:

• Worldline enjoyed an excellent commercial performance for its WL Contact offer;
• A new contract was signed in Austria with Worldline Energy Security Suite, a solution to secure smart meters communications.

Backlog

Backlog remains high and increased to € 2.7 billion .

Operating Income and Net Income

Depreciation, amortization and other non-cash expenses was € 49.9 million, leading to an operating margin of € 129.5 million (15.8% of revenue).

Non-recurring items were a net expense of € 34.2 million and consisted mainly in:

• Integration and acquisition costs (€ 13.4 million), linked to Equens post-acquisition integration, post integration programs of companies acquired in 2017 and SIX transaction costs;
• Restructuring and rationalization costs (€ 4.5 million);
• IFRS 2 equity based compensation expenses (€ 6.9 million); and
• Purchase price allocation amortization (€ 8.2 million).

As a result , Operating income for the first half of the year was € 95.3 million (€ 85.6 million as at June 30, 2017).

Financial result was a gain of € 2.2 million , mainly due to the reevaluation of the Visa preferred share through P&L following the adoption of IFRS9 for € 3.3 million and the tax charge represented € 24.2 million ( effective tax rate of 24.8% ).

Non-controlling interests  amounted to € 16.1 million and were related to the minority shareholders in equensWorldline.

As the result of the items above, net income group share was € 57.2 million. Normalized net income ^[3] stood at € 77.0 million and progressed by +14.2% .

Free Cash Flow and net cash

First half 2018 free cash flow was € 102.6 million , representing a +16.6% increase compared to H1 2017, well in line with the objective set for the year of between € 200 million and € 210 million.

Net cash reached € 414.1 million , increasing by €+105.0 million compared with the net cash position as at December 31, 2017.

M&A activities

Acquisition of Six Payment Services

Worldline and SIX announced on May 15, 2018 that they have signed an agreement to enter into a strategic partnership where Worldline would acquire SIX Payment Services, the payment services division of SIX, for a consideration of € 2,303 million (CHF 2,750 million) as a consequence of which SIX will become a 27% shareholder of Worldline, with Atos retaining a majority stake of 51% in Worldline.

The parties are working towards swift completion of this acquisition, which is in particular subject to regulatory clearances in Austria, Belgium, Luxembourg, the Netherlands and Sweden. Competition clearances have already been obtained in Austria, Germany and Serbia and are progressing in Switzerland.

Respective clearances are expected to be obtained in due course, and as soon as all the conditions precedent are satisfied, Worldline's General Shareholders' Meeting will be convened in order to approve the contribution during the fourth quarter of 2018.

The closing process of the transaction is on track for a completion by the end of the year.

Promotion of Marc-Henri Desportes as Worldline's Deputy CEO (Directeur Général Délégué)

It is reminded that since April 30, 2014, Mr. Thierry Breton serves as Chairman of the Board of Directors, while Mr. Gilles Grapinet serves as Chief Executive Officer and Mr. Marc-Henri Desportes as General Manager.

In accordance with Article 24 of the Company's Bylaws, and upon proposal of the Chief Executive Officer, the Board of Directors decided on July 21, 2018 to promote Mr. Marc-Henri Desportes from General Manager to Deputy CEO ( Directeur Général Délégué ) with effect from August 1, 2018.

2018 Objectives fully confirmed

Worldline confirms all the objectives for 2018 as stated in the February 20, 2018 press release:

Revenue: The Group expects to achieve an organic growth of its revenue, at constant scope and exchange rates, of between 5% and 7% .

OMDA: The Group targets an OMDA margin between 22% and 23%.

Free cash flow: The Group has the ambition to generate a free cash flow of between € 200 million and € 210 million, including circa € 20 million of synergy implementation costs and excluding SIX transaction costs.

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Appendices

Statutory to constant scope and exchange rates reconciliation

For the analysis of the Group's performance, revenue and OMDA for H1 2018 is compared with H1 2017 revenue and OMDA at constant scope and foreign exchange rates and restated from IFRS15 impacts.

Reconciliation between the H1 2017 reported revenue and OMDA and the H1 2017 revenue and OMDA at constant scope and foreign exchange rates and restated from IFRS15 impacts are presented below (per Global Business Lines):

* At constant scope and June 2018 YTD average exchange rates, and restated from IFRS 15

* At constant scope and June 2018 YTD average exchange rates, and restated from IFRS 15

IFRS 15 accounting standard "Revenue from contracts with customers" is applicable from January 1, 2018 onwards and its impact on the H1 2017 revenue is -2.3%

Internal transfers correspond to transfer and refocus of some contracts between Merchant Services and Mobility & e-Transactional Services

Scope effects correspond to:

• In Merchant Services: addition of H1 2017 revenue of MRL Posnet and Digital River World Payments, deduction of H1 2017 revenue from Paysquare Belgium;
• In Financial Services: addition of H1 2017 revenue of First data Baltics and Diamis, and deduction of H1 2017 revenue from Cheque Service.

Exchange rate effects correspond mainly to the depreciation of the Argentinian Peso and of Asian currencies (mostly the Indian Rupee) versus the euro.

The H1 2017 figures presented in this press release are based on the constant scope and foreign exchange rates data.

Q2 2018 revenue performance by Global Business Line

* At constant scope and June 2018 YTD average exchange rates, and restated from IFRS 15

Conference call

The Management of Worldline invites you to an international conference call on the Group first half 2018 results, on Monday, July 23, 2018 at 7:00 am (CET - Paris).

You can join the webcast of the conference:

- on worldline.com , in the Investors section

- by smartphones or tablets through the scan of the QR code

or through this link : https://edge.media-server.com/m6/p/8rgyygrg

- by telephone with the dial-in:

France

Germany

United Kingdom

United States of America

Code:

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

Forthcoming event

October 22, 2018                     Q3 2018 revenue

Contacts

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

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

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 nearly 45 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 and Financial Services including equensWorldline. Worldline employs more than 9,400 people worldwide, with estimated revenue of € 1.6 billion in 2017. Worldline is an Atos company. 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 2017 Registration Document filed with the Autorité des Marchés Financiers (AMF) on March 21, 2018 under the filling number: D.18-0163. 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.

The review procedures on the interim financial information have been performed by the statutory auditors. Their review report is currently being issued.

Revenue organic growth and OMDA are presented at constant scope and exchange rates, and restated for the impacts of IFRS 15. 2018 objectives have been considered with exchange rates as of December 31, 2017.

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

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

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^[1] The normalized net income Group Share excludes unusual and infrequent items (Group share), net of tax.

^[2] EPS including the impacts of potentially dilutive instruments, calculated on the net income Group share normalized for unusual and infrequent items (Group share), net of tax

^[3] The normalized net income excludes unusual and infrequent items (net of tax).

Attachment

• Worldline - H1 2018 results- Press release.pdf