(Bloomberg) -- Worldline SA tumbled to a record low after the French payments processor reduced full-year guidance, citing weak consumption in Europe.
The stock fell as much as 20% on Thursday to the lowest since being listed a decade earlier. Down 45% this year, it’s one of the worst performers within the Stoxx Europe 600 Index.
“The European domestic consumption trends have slowed down during the second quarter and the speed of a potential recovery remains uncertain at this stage,” said Worldline Chief Executive Officer Gilles Grapinet.
Organic sales growth will likely reach 2% to 3% this year, down from a previous target of at least 3% growth, the company said in a statement. Profit guidance was also lowered.
Worldline has struggled to recover since hitting a low point in October last year, when the company warned that an effort to cut ties with some merchants due to cybercrime risks would hit sales.
These terminations still weighed on Worldline’s performance in the second quarter. Merchant services, which contributed to three quarters of the company’s sales, grew by 2.6% from a year earlier. The segment would have achieved 6% growth without contract terminations, the company said.
“We remain concerned of Worldline’s broader competitive positioning, especially with large merchants,” Jefferies analyst Hannes Leitner said in a note. The new guidance indicates “no material acceleration” for the merchant services arm, he added.
Worldline has been going through a restructuring that will cut 8% of its global workforce. The program is now expected to reduce the cost-base by about €220 million ($237 million) next year, up from a previous forecast of €200 million, the company said.
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