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9
Operation and financial review
Overview
86
Worldline
2016 Registration Document
Summary Description of Principal Income Statement Line Items
9.1.3
Revenue
9.1.3.1
lines as described above. See Section
9.1.2.3, “Composition of
Global Business Line Revenue”.
The Group generates revenue from its three global business
Personnel Expenses
9.1.3.2
41.0% in 2016 and 40.8% in 2015.
remained relatively consistent as a percentage of revenue at
The Group’s personnel expenses primarily consist of wages and
salaries, social security charges, taxes, training and profit sharing
expense and differences between pension contributions and net
pension expenses. These charges are generally driven by the
average number of employees and average compensation
levels. Over the period under review, these charges have
indicated in the Note “Basis of preparation of consolidated
financial statements”.
Please note that equity based compensation expense is now
represented in Other operational income and expenses. This
change in presentation has been applied retroactively in 2015, as
Operating Expenses
9.1.3.3
categories of expenses:
The Group’s operating expenses include the following
of the Group’s time & materials subcontracting costs in 2016
was related to outsourced services provided by Atos to the
Group;
outsource rather than handle in-house, and customer
volumes, which drive costs that are dependent on volume,
such as printing, mailing and statement activity. Roughly half
mailing and other statement preparation activity and ATM
services. The level of these expenses in any given period is
mainly driven by the number of projects in the project
phase, some aspects of which the Group may decide to
of the cost for subcontracted services, roughly half of which
is typically IT subcontracting, mostly on a time & materials
basis. The other half comes from other outsourced services,
which mainly include non-IT services such as printing,
Subcontracting costs direct.
Subcontracting costs consist
●
sold as part of integration projects. The primary driver of
these costs is the number and mix of terminals sold and the
average cost of components per terminal;
primarily consist of the cost of components used to
manufacture the Group’s terminals, hardware security
modules and other devices, and to a lesser extent hardware
Purchases of hardware and software.
These expenses
●
expenses for the maintenance of the Group’s software,
equipment and facilities;
Maintenance.
Maintenance costs relate primarily to
●
scheme royalties. Rental costs for facilities are generally a
function of the size of the relevant facility and average rental
Rent and lease expenses.
Rent and lease expenses consist
●
of facility rental costs, software rental fees and certain card
rates, which are generally driven by the location and nature
of the facility;
and average rates;
Telecommunications costs.
The group makes significant
●
use of postal services and communications bandwidth.
These costs are generally a function of the amount of usage
2016;
Travel expenses and company cars.
These expenses
●
consist of travel costs and the cost of company cars, which
have remained fairly constant as a percentage of sales in
Professional fees.
These fees include fees paid to
●
professionals such as consultants, accountants and lawyer;
Taxes and similar expenses (other than income tax).
These
●
charges include various taxes other than income taxes such
as non-recoverable VAT, and have remained fairly stable as
a percentage of sales over the period under review;
checks paid to check service customers;
Other expenses.
This line item includes a number of items,
●
including the allocation of Atos global management & global
support function cost to the Group, energy costs for the
Group’s data centers and the cost of indemnities for unpaid
Scheme fees
include the fees paid to Visa, MasterCard and
●
BCMC (Belgium debit card scheme) as part of the Group’s
Commercial Acquiring activities;
receivables and net change to provisions. Depreciation
charges are driven primarily by the size and the evolution of
the Group’s asset base;
Other operating expenses.
Other operating expenses
●
include depreciation charges as well as other charges such
as gains or losses on disposals of assets, write offs of trade
Capitalized production costs.
Operating expenses are
●
reported net of capitalized production costs. Costs of
specific application development for clients or technology
solutions made available to a group of clients with a useful
life of the underlying asset greater than one year are
capitalized. Their aggregate amount is offset in the profit
and loss statement through this line item.