Wirecard Raises 2019 Profit Outlook on Surging Web Payments

(Bloomberg) -- Wirecard AG raised its profit outlook for the year after transactions surged in the second quarter, as the German payment firms continues to win new deals following its backing from SoftBank Group Corp.

Wirecard now expects earnings stripping out interest, taxes, depreciation and amortization of at least 765 million euros ($857 million), compared with the previous forecast of 760 million euros.

A series of Financial Times reports on suspicions of fraud at some units in Asia caused the payment firm's shares to whipsaw earlier this year. Wirecard found accounting quality issues at a software license business and is bolstering compliance procedures by conducting more audits, tightening payments processes and improving training.

“In the first half year our growth accelerated,” Chief Executive Officer Markus Braun said in a statement Wednesday. “We are looking extremely optimistic towards the second half of 2019.”

Key Figures

• Sales rose 37% to 643 million euros in the second quarter, beating analyst estimates.
• Ebitda increased to 184 million euros, in line with analyst estimates.
• Wirecard is growing faster outside Europe than in its home markets.
• The company now employs 5,743 people after hiring about 700 in the past year.

Wirecard in recent weeks won clients for its payments business including home improvement retailer Leroy Merlin in Brazil, and African airline Royal Air Maroc. The company's also developing new finance products with Auto1 Group GmbH, the used car sales platform backed by Japan's SoftBank.

In April SoftBank said it would invest $1 billion via convertible bonds into Wirecard, opening up its portfolio of startups to pen their own payment deals with SoftBank. Wirecard plans to issue the bond next month, after shareholders approved the plan at the company's annual general meeting in June.

Wirecard has gained about 12% this year, giving the company a market value of 18.3 billion euros.

--With assistance from Jan-Patrick Barnert.

To contact the reporter on this story: Stefan Nicola in Berlin at snicola2@bloomberg.net

To contact the editors responsible for this story: Giles Turner at gturner35@bloomberg.net, Chad Thomas

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