French payment technology group Worldline cut its 2024 outlook on Thursday, citing a sharp decline in domestic consumption trends across Europe in the second quarter and uncertainty about a potential recovery, knocking its shares.

The payments industry is under pressure as the post-pandemic boom wanes and competition intensifies. Worldline, which earns commissions on merchant sales for its electronic payment services, has been hit by reduced consumer spending amid Europe's economic downturn and slower business after cutting ties with high-risk merchants to curb crime risks.

"The Group has observed a softer macroeconomic and consumption environment in the second quarter with a progressive slowdown of the merchant services volumes growth across all the geographies in Europe," it said in the earnings statement.

The Worldline shares were down 12% by 0708 GMT, the biggest faller on Europe's benchmark STOXX 600 index.

The company, which processes digital transactions for clients ranging from merchants to government agencies, forecast organic revenue growth of around 2-3% and an adjusted core profit (EBITDA) of 1.13 billion to 1.17 billion euros ($1.22 billion to $1.26 billion) for the full year.

It had previously expected revenue growth at minimum of 3% and an adjusted EBITDA of at least 1.17 billion euros.

Worldline said it had taken extra measures to protect its annual cash flow target of 230 million euros, in particular on rationalisation and integration costs, capital expenditure and working capital discipline.

"We have seen an improvement in volumes since the start of the month compared with the low point in June, which is rather encouraging," CEO Gilles Grapinet said in a call with journalists.

The group said its partnerships and restructuring programme, known as Power24, was progressing well, and raised its cost savings target from 2025 by 10% to around 220 million euros.

But the implementation of the first big-scale restructuring programme since its listing in Paris 10 years ago cost Worldline 174 million euros in non-cash provision in the first half of 2024, resulting in a net loss of 29 million euros over the period.

  - Reuters