Worldline - 2019 Universal Registration Document

FINANCIALS Main factors affecting the Group’s revenue and profitability

E.1.4

Contract renewal cycles

The Group’s revenue and profitability can be significantly affected by contract renewal cycles. The Group’s contracts question, a significant impact on the revenue and profitability generally range from three to five years in length, with some of the Group or a Global Business Line in any given period. private sector contracts in Latin America having a length of up Although the Group’s business is spread across a large number to ten years. When an agreement reaches the end of its term, of agreements and no single client represented more than a client may seek to renew it or renegotiate the terms of the c.4% of the Group’s revenue in 2019, the relative weighting of agreement or may decide not to renew the agreement. The a particular contract can be higher within a business division or terms of a contract renewal, or failure to renew a contract, can Global Business Line. have, depending on the relative size of the agreement in

E.1.5

General economic conditions

The Group generates the majority of its revenue from the during downturns, many consumers may make smaller but processing of payment transactions on either a per transaction more frequent transactions. Because a majority of the Group’s or percentage of transaction value basis. During economic revenue is generated on the basis of the number of downturns, consumers typically reduce spending, and card transactions that take place, this helps reduce the effect of issuers often reduce credit limits and tighten their card overall spending declines. In addition, a significant portion of issuance rates, which can have a negative effect on the overall the Group’s merchant services business is earned from value of transactions generated by consumers and number of retailers that are in non-discretionary spending categories cards managed. Although this effect exists, it has been far such as groceries or fuel, the sales of which are less volatile, outweighed in recent years by the secular shift from cash to which further insulates the Group from the full effect of non-cash payments. Also, while consumers reduce spending economic downturns.

E.1.6

Services mix

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The Group’s revenue and profitability are also affected by the because the Group’s Mobility & e-Transactional Services mix and stage of maturity of the services it sells. As noted in division tends to generate a proportionately higher portion of Section Contract Structure , while the highest revenue under a its revenue from projects in the build and ramp phase, it build to run contract is typically earned during the "build” achieves higher revenue growth but lower margins (OMDA phase, the most profitable stage of such contracts is typically margin of 12.2% in 2018). Similarly, the Group earns higher the “maturity” phase of the “run” period. Each of the Group’s average fees on credit card transactions than it does on debit, three Global Business Lines has a mix of some services that OBeP and certain electronic wallet transactions. To the extent have reached scale and others that are still in the build or ramp that these categories of non-cash payments experience up phase. From a Global Business Line profitability significant growth in future periods, the Group’s profitability perspective, the Group’s Financial Services Global Business would be affected by the extent to which the new volumes Line and Merchant Services Global Business Line have a higher generated by these payment methods outweigh the lower per proportion of services that have reached full scale, allowing it transaction fees and the Group’s success in building scalable to generate OMDA margins of 30.5% and 21.2% respectively platforms to process these volumes profitably. for these two Global Business Lines in 2019. Conversely,

E.1.7

Geographic footprint

Although the Group provides services across the extended to gradually expand the geographic footprint of its services payment services ecosystem, it currently does not generate throughout the markets where it operates, leveraging its new revenue from its full range of services across each of its Global Business Lines structure and its increasingly integrated principal jurisdictions. As part of its strategy, the Group intends and standardized IT platforms.

213 Universal Registration Document 2019