(Bloomberg) -- Worldline SA’s shares sank after the firm posted its first yearly loss in its history as a public company, adding pressure on Chief Executive Officer Gilles Grapinet as he races to restore investor confidence in the payments company. 

The company posted a surprise loss of €817 million ($883 million) for 2023 after recording a €1.15 billion impairment charge in order to reflect the change in valuation of its merchant business, according to a statement Wednesday. That compares with the €208.6 million in profit that analysts in a Bloomberg survey were expecting.   

Worldline’s shares slumped 8.9% at 10:55 a.m. in Paris after earlier sinking as much as 17%. The stock, which lost more than half of its value in 2023, is already down almost 30% this year.

Grapinet is trying to recover from a string of bad news that started in October, when Worldline lowered its sales outlook, saying consumers are growing more cautious and spending less, hurting the company’s growth and profitability. The company also warned that it was terminating relationships with certain online merchants as part of a wide-ranging review of its risk-management policies.   

“Worldline’s second half was materially impacted by a gradual overall macroeconomic and consumption slowdown in our core geographies,” Grapinet said in the statement, which noted the company observed “further deterioration” of demand in the fourth quarter. 

The company on Wednesday shuffled responsibilities for some of its top managers in response to the risk-management review. The company is also searching for a new chairman of its board of directors following the sudden death of Bernard Bourigeaud last year and is aiming to make a decision on that role by the end of March, according to the statement.  

Struggling for Growth

In the fourth quarter, the Paris-based firm posted revenue of €1.19 billion. That was slightly lower than the €1.2 billion average of analyst estimates compiled by Bloomberg. Worldline’s merchant services, the main contributor to the firm’s revenue, posted €849 million in revenue, a 3.2% gain from a year earlier.  

For 2024, Worldline vowed to increase revenue by at least 3%, while adjusted earnings before interest, taxes, depreciation and amortization is expected to be at least €1.17 billion. 

What Bloomberg Intelligence Says:

Worldline’s guidance — for at least 3% organic revenue growth (6% in 2023) and €1.17 billion Ebitda this year — while largely in line with consensus, underlines the company’s struggle to spur growth amid subdued consumer spending. The goodwill impairment hit of €1.15 billion in 2023 adds pain, reflecting a more conservative valuation of merchant services vs. the previous ambitious view.

— Mar’Yana Vartsaba, BI banking analyst

Earlier this month, Worldline said it will cut around 8% of its global workforce, or about 1,400 employees, as part of a plan to reduce its cost-base by roughly €200 million starting next year. As part of the moves, the firm expects to incur about €250 million of implementation costs.

Read more: Payments Stocks Wipeout Hits $80 Billion on Worldline Shock

The company has completed its risk-management review of online merchants, Worldline said in the statement on Wednesday. Those merchants being terminated as a result of that process represent about €130 million worth of revenue, the company said. 

The company’s risk-management divisions will now report directly to Grapinet “for a regular monitoring of the roadmap for strengthening the processes and risk policies across the entire group,” according to the statement. Marc-Henri Desportes, deputy chief executive officer, was also put in charge of the firm’s merchant services business.

The firm said it is planning to hold a capital markets day in the second half of the year.

(Updates with information about net loss starting in first paragraph.)

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