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Long-time CEO Gilles Grapinet to leave

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Cuts organic growth, earnings guidance

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Shares hit record low, down 92% from 2021 peak

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European payments firms suffer turn in fortunes

(Adds context in paragraphs 5-6 & 8, Bluebell comments in

paragraph 9, hedge fund positions in paragraph 13)

By Alban Kacher

Sept 13 (Reuters) - French payments group Worldline

said on Friday its long-time CEO Gilles Grapinet would

leave the company as it issued its third profit warning within a

year, sending its shares to a record low.

The shares were down 18% by 1030 GMT, and have now lost

about 92% from a high in July 2021 when investor enthusiasm for

European payments firms peaked.

The company said that Deputy CEO Marc-Henri Desportes

will replace Grapinet, who has been CEO for more than 11 years,

as of Sept. 30 for an interim period.

A Worldline spokesperson said the decision was aimed at

preparing "a new strategic step for the company".

Worldline shares soared during the pandemic when investors

piled into European payments companies, attracted by their rapid

growth as customers ditched cash and by consolidation in the

industry.

But since then investor sentiment towards companies in

Europe, including Worldline and Italy's Nexi, has

soured as results disappointed. Worldline shares lost more than

half their value in October last year after it cut its full-year

financial targets, sending shockwaves across the sector.

"The CEO change was motivated by the third profit warning

within a year with many investors calling for management

change," Jefferies analyst Hannes Leitner said, adding that

investors expected the new CEO to "ignite organic growth".

Last December activist investor Bluebell urged Worldline to

shake up its board to "restore trust" amid rumours of a

potential hostile takeover bid for the group. Reuters reported

in January that Worldline had appointed advisors for a defence

strategy to ward off any possible takeover.

Bluebell partner Giuseppe Bivona said on Friday it was

pleased Worldline had made management changes including removing

the CEO, but that it wished they had been made earlier "as we

would not be in the position we are today regarding operational

results and valuation."

Worldline said it now expected organic revenue growth of

about 1% for 2024, against a previous forecast of 2-3%. It sees

adjusted earnings before interest, tax and depreciation (EBITDA)

around 1.1 billion euros ($1.2 billion), down from 1.13

billion-1.17 billion euros previously.

The group, which earns a fee for processing digital payments

for clients ranging from businesses to government agencies, also

postponed its capital markets day planned for Nov. 26.

Hedge funds likely profited as Worldline shares plunged.

Funds and asset managers from Greenvale Capital, Blackrock ( BLK )

and Systematica all held short positions in the shares as of

Aug. 30, according to data platform Breakout Point. Greenvale

Capital had recently reduced the size of its short bet against

World Line, according to Breakout Point. The funds did not

immediately respond to requests for comment.

COST SAVINGS

Worldline said it saw weaker summer trading and "specific

performance issues" in its Pacific business and other markets.

It declined to give details when asked by Reuters.

The group said it would launch further cost saving measures.

Worldline previously cut its full-year guidance in August,

citing a sharp decline in domestic consumption trends across

Europe and uncertainty about a potential recovery.

($1 = 0.9024 euros)