REG - Eurowag - W.A.G payment solutions plc Interim results 2024
05/09/2024 07:00
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RNS Number : 9691C Eurowag 05 September 2024
LEI: 213800HU63CWV5J8YK95
5
September 2024
W.A.G payment solutions plc ("Eurowag" or the "Group")
Interim results for the six months ended 30 June 2024
Strong growth, on-track for Q4 phased rollout of integrated platform
W.A.G payment solutions plc ("Eurowag" or the "Group"), today announces its
interim results for the six-month period ended 30 June 2024.
H1 financial highlights
Continued strong growth from our business-critical products and services
· Total net revenue(1) +18.4% to €141.0m (H1 2023: €119.1m).
- Payment solutions revenue(1) +10.2% to €79.8m, supported by growth from
toll revenues and 11.8% growth in active payment solutions trucks .
- Mobility solutions revenue(1) +31.3% to €61.3m, as a result of the
annualisation of Inelo and continued growth across all our products.
· Adjusted EBITDA(1) +18.2% to €59.4m (H1 2023: €50.2m), with a
margin(1) of 42.1% (H1 2023: 42.2%).
· Adjusted profit before tax(1) €21.6m (H1 2023: €25.3m).
Statutory profit before tax of €4.2m (H1 2023: €8.5m), a result of higher
amortisation from acquired intangibles and interest costs relating to
increased leverage, as well as higher depreciation as a result of our
transformational capital expenditure programme, which is now complete.
· Capital expenditure spend of €20.5m (H1 2023: €24.7m), including
the final €3.0m from our transformational programme.
· Net debt(1) position of €302.4m (FY 2023: €316.8m); a marked
improvement with Net leverage(2) at 2.6x. Renegotiated credit facilities;
extended maturity to 2029 reducing annual amortisation payments and extended
revolving facility.
Early adopters already onboarded; on-track for phased rollout of
industry-first integrated platform in Q4 2024
· New platform unifies all Eurowag brands and services into a single
data ecosystem, providing a one-stop-shop to deliver increased growth and
efficiencies for customers.
· Early adopters already onboarded; phased migration of existing
customers onto the Eurowag Office application for live-user testing. The
platform will be ready for new customers in Q4 2024.
Outlook
· While the Board is mindful of macroeconomic challenges across the
industry, Eurowag is well positioned and trading in-line with the Board's
expectations.
· Furthermore, the Board remains confident in the value creation
from the new integrated platform and therefore our medium-term guidance
remains unchanged.
Martin Vohánka, Founder and CEO, commented:
"We continue to deliver strong double-digit growth, despite the economic
headwinds impacting the Commercial Road Transport ("CRT") industry across
Europe. Our resolute focus on providing mission-critical products to our
customers has allowed us to create a highly resilient business model, giving
us the capacity to enhance our services, scale and innovate.
I am pleased with our strong performance and progress in the first half of
2024, having successfully integrated certain functions of our recently
acquired businesses - bringing together new colleagues and teams - and laid
the groundwork for the phased rollout of our industry's first integrated
digital platform in Q4 this year.
The new digital one-stop-shop will be transformational. For the first time,
the industry will have access to a single data-driven ecosystem, solving the
complexity and fragmentation challenge that has held the sector back for far
too long. For us, the new platform will deepen customer relationships and
unlock further opportunities, and this gives me real confidence in our near
and medium term guidance."
H1 financials
Key statutory financials H1 2024 H1 2023 YoY growth (%)
Revenue from contracts with customers (€m) 1,149.7 1,017.6 13.0%
Profit before tax (€m) 4.2 8.5 (50.6)%
Basic EPS (cents/share) 0.35 0.76 (53.9)%
Alternative performance measures (1) H1 2024 H1 2023 YoY growth (%)
Net revenue (€m) 141.0 119.1 18.4%
Payment solutions revenue (€m) 79.8 72.4 10.2%
Mobility solutions revenue (€m) 61.3 46.7 31.3%
Adjusted EBITDA (€m) 59.4 50.2 18.2%
Adjusted EBITDA margin (%) 42.1% 42.2% (0.1)pp
Adjusted basic EPS (cents/share) 2.51 2.90 (13.4)%
H1 operational highlights
H1 2024 H1 2023 YoY growth (%)
Average active payment solutions customers(3) 19,723 18,053 9.3%
Average active payment solutions trucks(3) 102,667 91,864 11.8%
Payment solutions transactions(4) 22.4m 18.4m 21.5%
Notes:
1. Please refer to the section Alternative Performance Measures for a
definition and see Note 6 of the condensed interim financial statements.
2. Net debt includes lease liabilities and derivative liabilities.
3. An active customer or truck is defined as using the Group's payment
solutions products at least once in a given month.
4. Number of payment solutions transactions represents the number of
payment solutions transactions (fuel and toll transactions) processed by the
Group for customers in that period.
Outlook, near and medium-term guidance unchanged
Eurowag continues to see pressures in the CRT industry, impacting loads and
kilometres driven which places higher pressures on the financial stability of
smaller businesses, evidenced by a higher rate of insolvencies across some of
our markets. Looking ahead, we are starting to see some signs of economic
recovery with the load spot market improving, which will benefit small to
medium size trucking companies with increased revenues and cash flows. These
early indications in the load spot market gives us confidence in delivering
in-line with near-term expectations.
With our transformational capital expenditure programme completed, we still
expect our ordinary capex to move to around 10% of net revenues. As a result
of several deferred consideration payments of circa €35m from past
acquisitions to payout in FY 2024, we expect our net debt to adjusted EBITDA
to be moderately above our target range of 1.5x -2.5x, with a priority to
return within the range in FY 2025.
The delivery of our platform underpins the Group's confidence in delivering
mid-teens net revenue growth in the near and medium-term. With further
integration work still to take place in respect of recent acquisitions,
Adjusted EBITDA margins are expected to grow over the medium-term. The Board
is confident in delivering strong growth in-line with expectations, and
medium-term financial guidance remains unchanged.
Investor and analyst presentation today
Martin Vohánka (CEO) and Oskar Zahn (CFO) will host a virtual presentation
and a Q&A session for investors and analysts today, 05 September 2024, at
9.00am BST. The presentation and webcast details are available on the Group's
website at https://investors.eurowag.com (https://investors.eurowag.com/)
Please register to attend the investor presentation via the following link:
https://sparklive.lseg.com/WAGPAYMENTSOLUTIONS/events/7ecd3467-86d9-4cc9-9403-3534849bd8b0/eurowag-2024-half-year-results-announcement-w-a-g-payments-solutions-plc
(https://sparklive.lseg.com/WAGPAYMENTSOLUTIONS/events/7ecd3467-86d9-4cc9-9403-3534849bd8b0/eurowag-2024-half-year-results-announcement-w-a-g-payments-solutions-plc)
To view the webcast, you will need to register with SparkLive, which should
only take a moment.
Should you want to ask questions at the end of the presentation, please use
the following link:
https://eurowag-2024-half-year-results-announcement-september2024.open-exchange.net/registration
(https://eurowag-2024-half-year-results-announcement-september2024.open-exchange.net/registration)
ENQUIRIES
Eurowag
Carla Bloom
VP Investor Relations and Communications
+44 (0) 789 109 4542
investors@eurowag.com (mailto:investors@eurowag.com)
Sodali & Co
Justin Griffiths, Gilly Lock
IR and international media
+44 (0)20 7250 1446
eurowag@sodali.com (mailto:eurowag@sodali.com)
About Eurowag
Eurowag was founded in 1995 and is a leading technology company and an
important partner to
Europe's CRT industry, with a purpose to make it clean, fair and efficient.
Eurowag enables trucking companies to successfully transition to a low carbon,
digital future by harnessing all mission critical data, insights and payment
and financing transactions into a single ecosystem and connects their
operations seamless before a journey, on the road and post-delivery.
https://investors.eurowag.com (https://investors.eurowag.com)
Chief Executive Officer's Review
The first half of 2024 has been a dynamic period for the European CRT
industry, marked by regulatory changes, persisting macroeconomic volatility,
including fluctuating fuel prices, and a continued shift towards
digitalisation.
We have remained focused on our strategic priorities, with significant
progress made in each area, as we prepare for the phased rollout of our
digital platform in Q4 2024. Progress in the first half of the year includes:
1) Be in every truck (attract)
• 11.8% increase in the number of active payment solutions trucks,
to 102,667.
• Launched Eurowag Prime - a collection of 70 strategically placed fuel
stations along the major transit corridors in 16 countries, that offer
optimised prices, superior service standards and infrastructure.
• Launched sales omnichannel pilot in Poland, end-to-end digital sales
and onboarding process with a bundled offer.
• Investment in digital sales, growth in converted digital leads
+37% year on year.
2) Drive customer centricity (engage)
• Eurowag app evolving as part of the new platform, monthly active
users +12% to c.36k (FY 2023: c.32k)
• Increased the number of mobile acceptance points to 1,500 (FY
2023: 800).
3) Grow core services (monetise)
• Total number of acceptance points now 13,900 (FY 2023: 13,000), in
23 countries.
• Received European Electronic Toll System ("EETS") certification in
Slovakia, and we are now certified in 11 countries across Europe. Toll domains
ordered on EVA tripled compared to H1 2023.
• Year-on-year more than doubled the number of OBU devices sold.
• Continued development of Decarbonisation-as-a-Service ("DaaS"),
established the first HVO corridor in Central and Eastern Europe, connecting
Austria, Slovakia and Czech Republic.
• Became the first eMobility Service Provider for the CRT sector.
4) Expand platform capability (retain)
• Ongoing implementation of ERP system with next phase focussing on
billing.
• E-wallet development continued, on track to launch in FY 2024.
• Development of our new digital integrated platform on track, with
groups of users already migrated; on track for the phased rollout to new
customers in Q4 2024.
Integration and transformation of our core products and services
Eurowag has been focused on growing both organically and inorganically and is
currently navigating through a heavy transformation phase. After starting out
as a local fuel card provider, it is now close to delivering an industry-first
integrated digital platform.
Before the phased rollout of the digital platform to new customers, we are
starting to migrate existing customers onto the platform so we can pilot and
test their user experience. The RoadLords users were the first customers to be
migrated to the new application, with around 200,000 monthly active users
already migrated, and we are currently focused on migrating our Eurowag Fleet
Management solution and Eurowag Fuel card users, of which around 7,000 Fleet
Management users are already migrated. Migrated customers will benefit from
new functionalities and user dashboards. We are still on track to offer new
customers access to the platform in Q4 this year.
Alongside working on the digital platform delivery, we continue to expand and
improve our core suite of products. In the first half of the year, we expanded
our acceptance network to 13,900 points, compared to 13,000 at the end of
2023, of which over 700 in our HVO and LNG networks, supporting our
sustainability action plan to improve our customers' access to non-fossil
fuel. Our mobile payments application is now available at around 1,500
acceptance points across Europe, almost doubling the acceptance points in the
first half of the year. When it comes to toll services, following the
successful activation of EETS in Slovakia at the beginning of the year, we saw
the number of toll domains ordered through our EVA device triple. We have also
added new functionalities, where users can now transfer an OBU between
vehicles, improving customer experience. From the beginning of July, Germany
has extended toll duty for all vehicles weighting over 3.5 tonnes (as opposed
to 7.5 tonnes previously). Together with the new toll regulation in Hungary,
which applies toll duty to buses and coaches over 3.5 tonnes, this opens a
whole new segment of vehicles to the market and represents a significant
revenue opportunity.
People and Board
The Board continue to evolve to reflect the Group's strategy, in particular
with focus on supporting the development of the integrated platform. During
the period, the appointments of Kevin Li Ying and Sophie Krishnan as
non-executive directors were announced, effective from 1 March 2024. In
conjunction, Susan Hooper retired from the Board at the conclusion of the AGM.
The Group would like to thank Susan for all her commitment and contribution
since the Group's IPO.
Furthermore, as the Group progresses into the next phase of its integrated
platform phased rollout, it also seeks to strengthen its Executive team to
ensure it has the right mix of skills and capabilities to deliver its
ambitions. In June, the Group made two new appointments: Felipe Alves joined
us as Chief Operating Officer, overseeing all aspects of customer operations,
and Francesco Nazzarri joined us as Chief Commercial Officer.
Sustainability and decarbonisation
In the first half of 2024, we have continued to work on our sustainability
action plan, which focuses on climate action, customer success and wellbeing,
community impact and responsible business.
As we continue to explore opportunities and partnerships in eMobility, we have
become the first eMobility Service Provider for the CRT sector, in
collaboration with Last Mile Solutions, the largest eMobility platform in
Europe.
Our LNG network has expanded to over 420 stations, of which c.12% offer
bioLNG. Our HVO acceptance network has expanded to over 310 locations in the
Europe (including our own truck parks in Austria, Slovakia and the Czech
Republic), helping to establish the first HVO corridor in Central and Eastern
Europe, with 48% of HVO sales volumes coming from our own truck parks. The
volume of LNG sold in the first half of 2024 has more than doubled, compared
to the first six months of 2023.
Financial review
The Group continued to excel in the first half, with growth delivered both
organically and from the acquisition made in 2023, demonstrating the strength
in its strategic and financial transformations. The Group achieved net
revenue growth of 18.4%, with payment solutions up 10.2% and mobility
solutions up 31.3%.
Our Adjusted EBITDA increased by 18.2% to €59.4m (H1 2023: €50.2m),
in-line with revenue growth. On a like-for-like basis, if you include the
annualisation of Inelo of €4.4m and exclude the €6.0m FX forward gain last
year and the commercial settlement this year of €2.2m, EBITDA grew by 17.6%.
The Adjusted EBITDA margin decreased slightly to 42.1% from 42.2%. Despite
strong growth in revenues and higher than expected credit losses, we were able
to manage our operating costs to keep margins stable year-on-year.
On a statutory basis, profit before tax decreased by 50.6% year-on-year to
€4.2m (H1 2023: €8.5m), mainly as a result of higher depreciation,
amortisation and interest. Basic EPS decreased by 53.9% to 0.35 cents per
share (H1 2022: 0.76 cents). Adjusted basic EPS decreased year-on-year to 2.51
cents per share (H1 2023: 2.90 cents) driven by lower profit before tax.
The Group's term debt and committed facility, including a multi-currency
syndicated revolving credit facility, was amended in the period, now expiring
March 2029, with a change to the amortisation but with no change to the
related covenants. Net debt at the end of the reporting period was €302.4m
(FY 2023: €316.8m). Our net leverage ratio improved to 2.6x net debt to
adjusted EBITDA.
In the first half of 2024, investments in our subsidiaries, associates, and
financial investments amounted to €8.2m, which consists of deferred
acquisition payments for WebEye (€5.0m), deferred acquisition payments for
Aldobec (€0.7m) and an acquisition of non-controlling interest within Inelo
(€2.5m).
Performance review
Below is a summary of the segmental performance and explanatory notes relating
to corporate expenses, adjusting items, taxation, interest, investments and
cash flow generation. As in prior years, adjusted and other performance
measures are used in this announcement to describe the Group's results.
Adjustments are items included within our statutory results that are deemed by
the Board to be unusual by virtue of their size and/or nature. Our adjusted
measures are calculated by removing such adjustments from our statutory
results. Note 6 of the condensed interim financial statements includes
reconciliations.
Segments
H1 2024 H1 2023 YoY YoY
(€m) (€m) (€m) change (%)
Gross revenue 1,149.7 1,017.6 132.1 13.0%
Payment solutions 1,088.4 970.9 117.5 12.1%
Mobility solutions 61.3 46.7 14.6 31.3%
Net revenue 141.0 119.1 21.9 18.4%
Payment solutions 79.8 72.4 7.4 10.2%
Mobility solutions 61.3 46.7 14.6 31.3%
Expenses included in Contribution 33.9 26.4 7.5 28.4%
Contribution total(1) 107.1 92.6 14.5 15.7%
Payment solutions 65.1 61.0 4.1 6.8%
Mobility solutions 42.0 31.6 10.4 32.9%
Contribution margin total(1) 76% 78%
Payment solutions 82% 84%
Mobility solutions 69% 68%
Note:
1. Please refer to the section Alternative Performance Measures for a
definition and see Note 6 of the condensed interim financial statements.
The Group's gross revenues increased by 13.0% year-on-year to €1,149.7m,
driven mainly by higher average energy prices (a corresponding increase was
reported for costs of energy sold).
The Group delivered double-digit net revenue growth and strong contribution
margins in both segments. The overall net revenue increased by 18.4%
year-on-year, which includes €25.7m contribution from Inelo.
Payment solutions net revenue grew by 10.2% year-on-year. This increase
reflects strong growth in Toll revenues as a result of new CO(2) charges in
Germany and Austria, as well as strong EVA sales and double-digit growth in
new truck acquisitions, although the growth is partially offset by lower
energy unit prices compared to prior year.
Mobility solutions net revenue grew by 31.3% year-on-year. This strong growth
is the result of effective cross-selling, Inelo consolidation, and strong
growth in tax refund and transport management system.
Total contribution increased by €14.5m to €107.1m (H1 2023: €92.6m),
driven by higher net revenues, although increased expenses particularly from
credit losses, reduced the contribution margin performance by 2pp to 76%. (H1
2023: 78%).
Corporate expenses
Statutory operating expenses increased by €17.2m to €121.7m (H1 2023:
€104.5m), largely due to increased depreciation and amortisation and higher
impairment losses of financial assets, with further details provided later on
in this Financial review.
Adjusted (€m) Adjusting items (€m) H1 2024 (€m) Adjusted (€m) Adjusting items (€m) H1 2023
(€m)
Employee expenses 44.0 2.4 46.4 41.6 4.8 46.4
Impairment losses of financial assets 7.8 0.0 7.8 4.2 0.0 4.2
Technology expenses 7.3 2.6 9.9 6.8 1.9 8.7
Other operating expenses 25.6 2.4 28.0 23.1 3.3 26.4
Other operating income (3.1) 0.0 (3.1) (6.8) 0.0 (6.8)
Total operating expenses 81.6 7.4 89.0 68.9 10.0 78.9
Depreciation and amortisation 22.7 10.0 32.7 18.9 6.8 25.7
Total 104.3 17.4 121.7 87.7 16.8 104.5
Adjusted Total operating expenses increased by €12.7m to €81.6m, of which
€5.2m related to the annualisation of Inelo. The increase comprised mainly
of the following:
Adjusted employee expenses increased by 5.8% year-on-year to €44.0m. This
growth was driven by salary increases communicated at the start of the year,
as well as hiring the right people to support the business through the next
phase of our transformation.
Impairment losses of financial assets amounted to €7.8m (H1 2023: €4.2m).
The additional charge relates to higher than expected credit losses arising in
markets such as Poland, Romania, Hungary and Portugal, where a high number of
insolvencies have been observed across the transport industry, in particular
with small and medium-sized providers. As a consequence, the Group saw its
overall credit loss ratio increase slightly to 0.4% from 0.3%. Nevertheless,
the Group's overall receivables portfolio and cash collection process remains
robust.
Adjusted technology expenses increased by 8.9% year-on-year to €7.3m (H1
2023: €6.8m). This increase reflects the Group's focus on technology
transformation and cloud transition.
Adjusted other operating expenses, comprising consultancy, facilities
maintenance and cost of services provided, increased by 10.8% year-on-year to
€25.6m (H1 2023: €23.1m), mainly due to the Inelo acquisition.
Other operating income decreased by 54.2% year-on-year to €3.1m (H1 2023:
€6.8m); last year's balance included a favourable FX forward gain of
€6.0m, while this year's balance of €3.1m relates mainly to a legal
settlement of a dispute following an acquisition.
Adjusted depreciation and amortisation grew by 19.6% year-on-year to €22.7m
(H1 2023: €18.9m), primarily due to the amortisation of acquired assets of
Inelo.
Adjusting items
In H1 2024, the Group incurred costs of €17.4m (H1 2023: €16.8m), which
were considered to be Adjusting items and have therefore been excluded when
calculating Adjusted EBITDA and Adjusted profit before tax. These are
summarised below:
H1 2024 (€m) H1 2023 (€m)
M&A related expenses 2.2 2.7
ERP implementation and integration expenses 3.0 -
Strategic transformation expenses - 3.6
Share-based compensation 2.2 3.7
Adjusting items in operating expenses 7.4 10.0
Adjusting Items in depreciation and amortisation 10.0 6.8
Total Adjusting items 17.4 16.8
The Group has incurred acquisition related costs which are primarily
professional fees of €2.2m (H1 2023: €2.7m) in relation to M&A
activities, predominantly the Inelo acquisition.
ERP implementation and integration expenses are costs relating to key IT
systems and the integration of Inelo. Around €2.8m is related to the
implementation of our ERP system, which successfully went live in January
2024. A further €12-16m expense is anticipated until the end of 2026.
Integration costs of €0.2m were incurred in H1 2024 and approximately €1m
is expected to be adjusted in 2024.
Expenses are no longer categorised as Strategic transformation expenses, as
the Group considers the transformational programme was concluded at the end of
2023.
Share-based compensation primarily relates to compensation provided to
previous management, prior to the IPO. These legacy incentives comprise a
combination of cash and share-based payments and will vest during this year.
No further share-based compensation adjusting expenses are expected in the
future. For clarity, post-IPO share-based payment charges are not treated as
Adjusting items.
Amortisation charges of €10.0m relate to the amortisation of acquired
intangibles in H1 2024 (H1 2023: €6.8m); the significant increase is due to
the annualization of Inelo.
Net finance expense
Net finance expense in the first half of 2024 amounted to €14.8m (H1 2023:
€5.7m). The increase mainly reflects higher interest costs related to
increased borrowings as well as higher factoring fees related to higher
average utilisation throughout the year.
Taxation
The Group's adjusted effective tax rate increased to H1 2024: 19.6% (H1 2023:
18.3%) in-line with expectation, as a result of the increased rates in key tax
regimes in which the Group operates and lower statutory profitability.
Corporate income tax in the Czech Republic increased from 19% in 2023 to 21%
in 2024, in the UK the rate increased from 23% in 2023 to 25% in 2024, and in
Slovenia the rate increased from 19% in 2023 to 22% in 2024, while in Spain
the rate remains at 24%. Further details can be found in Note 6 of the
condensed interim financial statements.
EPS
Adjusted basic EPS decreased by 13.4% to 2.51 cents per share (H1 2023: 2.90).
Despite achieving an increased EBITDA, higher depreciation and amortisation
together with increased finance expenses led to an overall decrease. Basic
EPS for the first half of 2024 was 0.35 cents per share, a 53.9% year-on-year
decrease.
Pay-out of deferred consideration and acquisition of non-controlling interests
In H1 2024, the Group paid deferred acquisition considerations of €5.7m and
acquired non-controlling interests for a consideration of €2.5m. Refer to
Note 13 of the condensed interim financial statements.
Cash performance
During the period, the Group reported a cash inflow of €14.4m (H1 2023:
outflow of €303.7m). The basis of deriving this net debt movement is set out
below:
Management free cash flow H1 2024 FY 2023 H1 2023
(€m) (€m) (€m)
Adjusted EBITDA 59.4 108.7 50.2
Non-cash items in Adjusted EBITDA 8.9 10.6 6.2
Tax (6.8) (9.3) (4.0)
Net interest (11.4) (17.2) (7.4)
Working capital (0.1) (44.4) (36.0)
Free cash 50.0 48.4 9.0
Adjusting items - cash (3.2) (18.0) (7.4)
Capital expenditure(1) (19.5) (48.5) (23.6)
Payments related to previous acquisitions (8.2) (297.7) (279.0)
Repayment of lease obligations (2.5) (5.4) (2.4)
Other (2.2) 1.5 (0.4)
Movement in Net debt inflow / (outflow) 14.4 (319.6) (303.7)
Opening net debt / cash(2) (316.8) 2.8 2.8
Closing net debt / cash(2) (302.4) (316.8) (300.9)
Note:
1. Includes proceeds from sale of assets.
2. Excludes lease and derivative liabilities.
As at 30 June 2024, the Group's net debt position stood at €302.4m, compared
with €300.9m as at 30 June 2023.
Tax paid increased to €6.8m (H1 2023: €4.0m), primarily impacted by higher
H1 2024 tax advances in the Czech Republic (€0.5m) and higher tax payments
in Hungary (€0.5m). A refund of overpaid tax in Spain in H1 2023 (€1.1m)
also decreased the comparative figure.
Interest paid increased to €11.4m (H1 2023: €7.4m), driven by a higher
level of borrowings in the first half of 2024 as a result of the Inelo
acquisition in Q1 2023.
Non-cash items in Adjusted EBITDA primarily include the add back of share
awards issued post IPO and provision movements relating to credit losses of
€7.8m (H1 2023: €4.2m).
Net working capital increased by €0.1m (H1 2023: €36.0m) reflecting
relatively flat inventory levels and offsetting increases in both trade
receivables and payables.
Adjusting items of €3.2m consists predominantly of the ERP implementation
costs and Other items mainly relates to bank guarantee and factoring fees.
Capital expenditure
Capital expenditure in the first half of 2024 amounted to €20.5m (H1 2023:
€24.7m), which included €3m of spend, completing the transformational
programme. Net capital expenditure of €19.5m (H1 2023: €23.6m) included
proceeds from the sale of equipment of €1.0m (H1 2023: €1.1m). €6.3m of
this capital investment focused on maintaining and enhancing existing
products. A further €8.8m is represented by the development and
implementation of technology and data systems, including the development of
our new Eurowag Office. The target remains to reduce capex spend to around 10
per cent of net revenue through the transition to a single technology
platform, and reducing duplications across IT, hardware, and technology
processes over time.
Alternative performance measures
The Group has identified certain Alternative Performance Measures ("APMs")
that it believes provide additional useful information to the readers of the
condensed interim financial statements and enhance the understanding of the
Group's performance. These APMs are not defined within IFRS and are not
considered to be a substitute for, or superior to, IFRS measures. These APMs
may not be necessarily comparable to similarly titled measures used by other
companies. Directors and management use these APMs alongside IFRS measures
when budgeting and planning, and when reviewing business performance.
Executive management bonus targets include an adjusted EBITDA measure and
long-term incentive plans include an adjusted basic EPS measure.
Adjusted Adjusting items H1 2024 Adjusted Adjusting H1 2023
Items
(€m) (€m) (€m) (€m) (€m) (€m)
Net revenue 141.0 0.0 141.0 119.1 0.0 119.1
EBITDA 59.4 7.4 52.0 50.2 10.0 40.2
EBITDA margin (%) 42.1% 5.2% 36.9% 42.1% 8.4% 33.7%
Depreciation, amortisation and impairments 22.7 10.0 32.7 18.9 6.8 25.7
Operating profit 36.7 17.4 19.3 31.1 16.8 14.5
Finance income 1.9 0.0 1.9 5.3 0.0 5.3
Finance costs and share of net loss of associates (17.0) 0.0 (17.0) (11.3) 0.0 (11.3)
Profit before tax 21.6 17.4 4.2 (8.3) 16.8 8.5
Income tax (4.2) (2.5) (1.7) (4.6) (1.7) (2.9)
Profit after tax 17.4 14.9 2.5 20.7 15.1 5.6
Basic earnings per share (cents) 2.51 2.16 0.35 2.90 2.14 0.76
APMs are reconciled to the statutory equivalent, where applicable, in Note 6
of the accompanying condensed interim financial statements.
Capital allocation
Our priority continues to focus around investment in the platform together
with integrating the technologies and products of our acquired businesses. We
expect to reduce duplications across IT, hardware, and technology processes.
M&A is important and we will continue to consider value-accretive M&A
opportunities, however we are mindful of our current leverage position. We
remain disciplined and want to maintain our strong and robust balance sheet,
therefore the Group does not intend to pay dividends, as we continue to
prioritise investment in growth.
Financing facility and covenants
On 14 March 2024, the Group signed an amendment to the Club Finance facility,
which increased the share of revolving loans within the uncommitted
incremental facility up to €40 million (previously up to €25 million). The
total amount of uncommitted incremental facility remains unchanged. The
amendment also removed the requirement to calculate the interest cover
covenant for the six months ended 30 June 2024.
On 6 June 2024, the Group signed another amendment to the Club Finance
facility, which changed the maturity date to 31 March 2029 and decreased
quarterly instalments.
Covenant Calculation Target Actual
30 June 2024
Interest cover the ratio of Adjusted EBITDA to finance charges Min 4.00 n/a(1)
Net leverage the ratio of total net debt to Adjusted EBITDA Max 3.75(2) 2.64
Adjusted net leverage the ratio of the adjusted total net debt to Adjusted EBITDA Max 6.50 4.12
1. The Group is not required to report on the Interest
cover covenant as at 30 June 2024.
2. The covenant shall not exceed 3.75 in 2024 and 3.50
in 2025 and onwards.
The Group also manages its working capital needs through the use of
uncommitted factoring facilities, with average financing limits of €138.7m
and average utilisation of 74.0% (H1 2023: €124.1m and 71.8% respectively).
This demonstrates the Group's proactive approach to maintaining a strong
financial position, and its ability to optimise working capital.
Directors' responsibility statement
We confirm that to the best of our knowledge: The unaudited condensed
consolidated financial statements have been prepared in accordance with
UK-adopted IAS 34 Interim Financial Reporting.
The interim management report includes a fair review of the information
required by:
(a) DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an
indication of important events that have occurred during the first six months
of the financial year and their impact on the condensed set of financial
statements; and
(b) DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being
related party transactions that have taken place in the first six months of
the current financial year and that have materially affected the financial
position or performance of the entity during that period; and any changes in
the related party transactions described in the last annual report in the
Financial statements dated 26 March 2024 that could do so.
On behalf of the Board of Directors,
Martin Vohánka
Chief Executive Officer
Financial statements
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(EUR '000)
For the six months ended 30 June
Notes
2024 2023
(unaudited) (unaudited)
Revenue from contracts with customers 5 1,149,705 1,017,586
Costs of energy sold (1,008,674) (898,503)
Net energy and services sales 5 141,031 119,083
Other operating income 9 3,117 6,781
Employee expenses (46,400) (46,423)
Impairment losses of financial assets (7,793) (4,171)
Technology expenses (9,942) (8,680)
Other operating expenses (28,006) (26,374)
Operating profit before depreciation and amortisation (EBITDA) 52,007 40,216
Analysed as:
Adjusting items 6 7,358 10,025
Adjusted EBITDA 6 59,365 50,241
Depreciation and amortisation 6 (32,667) (25,708)
Operating profit 19,339 14,508
Finance income 8 1,887 5,262
Finance costs 7 (16,694) (10,960)
Share of net loss of associates (284) (298)
Profit before tax 4,249 8,512
Income tax expense (1,733) (2,914)
PROFIT FOR THE YEAR 2,516 5,597
OTHER COMPREHENSIVE INCOME
Other comprehensive income to be reclassified to profit or loss in subsequent
periods
Change in fair value of cash flow hedge recognised in equity (148) (92)
Exchange differences on translation of foreign operations (361) 2,390
Deferred tax related to other comprehensive income (166) -
TOTAL OTHER COMPREHENSIVE INCOME (675) 2,298
TOTAL COMPREHENSIVE INCOME FOR THE YEAR 1,841 7,895
Total profit for the financial year attributable to equity holders of the 2,425 5,245
Company
Total profit for the financial year attributable to non-controlling interests 92 353
Total comprehensive income for the financial year attributable to equity 1,749 7,538
holders of the Company
Total comprehensive income for the financial year attributable to 93 357
non-controlling interests
Earnings per share (in cents per share):
Basic earnings per share 11 0.35 0.76
Diluted earnings per share 11 0.35 0.76
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(EUR '000)
As at
Notes
30 June 2024 (unaudited) 31 December 2023
ASSETS
Non-current assets
Intangible assets 14 524,847 532,404
Property, plant and equipment 14 53,530 55,760
Right-of-use assets 19,630 22,226
Investments in associates 11,435 11,719
Deferred tax assets 9,114 9,564
Other non-current assets 6,080 4,845
Total non-current assets 624,636 636,518
Current assets
Inventories 14,816 14,903
Trade and other receivables 15 460,040 396,943
Income tax receivables 4,832 2,205
Derivative assets 12 1,830 3,425
Cash and cash equivalents 96,409 90,343
Total current assets 577,927 507,819
TOTAL ASSETS 1,202,563 1,144,337
SHAREHOLDERS' EQUITY AND LIABILITIES
Share capital 8,120 8,113
Share premium 2,958 2,958
Merger reserve (25,963) (25,963)
Other reserves 3,751 4,427
Business combinations equity adjustment (22,776) (22,460)
Retained earnings 293,538 289,380
Equity attributable to equity holders of the Company 259,628 256,455
Non-controlling interests 5,459 6,381
Total equity 265,087 262,836
Non-current liabilities
Interest-bearing loans and borrowings 17 286,760 293,822
Lease liabilities 14,332 17,417
Provisions 1,324 1,324
Deferred tax liabilities 27,277 28,878
Derivative liabilities 12 858 3,140
Other non-current liabilities 16 8,866 9,236
Total non-current liabilities 339,417 353,817
Current liabilities
Trade and other payables 16 473,517 402,834
Interest-bearing loans and borrowings 17 112,069 113,297
Lease liabilities 5,325 4,909
Provisions 2,793 2,529
Income tax liabilities 3,359 3,927
Derivative liabilities 12 996 188
Total current liabilities 598,059 527,684
TOTAL EQUITY AND LIABILITIES 1,202,563 1,144,337
The accompanying notes form an integral part of these financial statements.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited)
(EUR '000)
Notes Share capital Share premium Other reserves Merger reserve Retained earnings Total equity attributable to equity holders of the parent Non-controlling interests Total equity
Business combinations equity adjustment
At 1 January 2023 8,107 2,958 10,342 (25,963) (12,526) 329,362 312,280 4,283 316,563
Profit for the year - - - - - 5,245 5,245 352 5,597
Other comprehensive income - - 2,293 - - - 2,293 5 2,298
Total comprehensive income - - 2,293 - - 5,245 7,538 357 7,895
Acquisition of subsidiaries - - - - (5,809) - (5,809) 3,343 (2,466)
Share-based payments - - - - - 5,487 5,487 - 5,487
Put options held by non-controlling interests - - - - (37) - (37) - (37)
At 30 June 2023 8,107 2,958 12,635 (25,963) (18,372) 340,094 319,459 7,983 327,442
At 1 January 2024 8,113 2,958 4,427 (25,963) (22,460) 289,380 256,455 6,381 262,836
Profit for the year - - - - - 2,425 2,425 92 2,517
Other comprehensive income - - (676) - - - (676) 1 (675)
Total comprehensive income - - (676) - - 2,425 1,749 93 1,841
Share options exercised 7 - - - - - 7 - 7
Share-based payments - - - - - 3,198 3,198 - 3,198
Acquisition of a non-controlling interest 13 - - - - 1,164 (1,465) (301) (1,015) (1,316)
Put options held by non-controlling interests - - - - (1,480) - (1,480) - (1,480)
At 30 June 2024 8,120 2,958 3,751 (25,963) (22,776) 293,538 259,628 5,459 265,087
CONSOLIDATED STATEMENT OF CASH FLOWS
(EUR '000)
For the six months ended 30 June
Notes
2024 2023
(unaudited) (unaudited)
Cash flows from operating activities
Profit before tax for the period 4,249 8,512
Non-cash adjustments:
Depreciation and amortisation 6 32,667 25,708
Gain on disposal of non-current assets (144) (200)
Interest income (279) (133)
Interest expense 12,982 8,278
Movements in provisions 264 7
Impairment losses of financial assets 7,793 4,171
Movements in allowances for inventories - 4
Foreign currency exchange rate differences (366) (1,611)
Fair value revaluation of derivatives (26) (1,745)
Share-based payments 3,198 5,487
Other non-cash items 2,283 462
Working capital adjustments:
Increase in trade and other receivables and prepayments (71,830) (11,288)
Decrease in inventories 88 2,960
Increase/(decrease) in trade and other payables 71,673 (27,684)
Interest received 279 133
Interest paid (11,649) (7,555)
Income tax paid (6,801) (4,005)
Net cash flows generated from operating activities 44,382 1,501
Cash flows from investing activities
Proceeds from sale of property, plant and equipment 377 1,442
Purchase of property, plant and equipment (3,262) (5,681)
Purchase of intangible assets (16,612) (19,331)
Purchase of financial instruments - (215)
Payments for acquisition of subsidiaries, net of cash acquired (5,700) (273,259)
Net cash used in investing activities (25,197) (297,044)
Cash flows from financing activities
Payment of principal elements of lease liabilities (2,460) (2,381)
Proceeds from borrowings 35,000 228,391
Repayment of borrowings (46,811) (25,991)
Acquisition of non-controlling interests (2,471) -
Proceeds from issued share capital (net of expenses) 7 -
Net cash (used in) / generated from financing activities (16,735) 200,019
Net (decrease)/increase in cash and cash equivalents 2,450 (95,524)
Effect of exchange rate changes on cash and cash equivalents - -
Cash and cash equivalents at beginning of period 90,342 146,001
Cash and cash equivalents at end of period 92,792 50,477
1. Corporate information
W.A.G payment solutions plc (the "Company" or the "Parent") is a public
limited company incorporated and domiciled in the United Kingdom and
registered under the laws of England & Wales under company number
13544823, with its registered address at Third Floor (East), Albemarle House,
1 Albemarle Street, London W1S 4HA.
2. Basis of preparation
The condensed interim financial statements for the six-months ended 30 June
2024 have been prepared in accordance with UK-adopted IAS 34 Interim Financial
Reporting and the Disclosure and Transparency Rules of the Financial Conduct
Authority. The condensed interim financial statements should be read in
conjunction with the Annual Report and Consolidated financial statements for
the year ended 31 December 2023, which have been prepared in accordance with
UK-adopted International Accounting Standards (UK-adopted IFRS).
The condensed interim financial statements have been prepared on a historical
cost basis, except for derivative financial instruments that have been
measured at fair value. The interim condensed financial statements are
presented in EUR and all values are rounded to the nearest thousand (EUR
'000), except where otherwise indicated.
These condensed interim financial statements do not comprise statutory
accounts within the meaning of Section 434 of the Companies Act 2006.
Statutory accounts for the year ended 31 December 2023 were approved by the
Board of directors on 26 March 2024 and delivered to the Registrar of
Companies. The report of the auditors on those accounts was unqualified, did
not contain an emphasis of matter paragraph and did not contain any statement
under section 498 of the Companies Act 2006.
These condensed interim financial statements for the half year period (from 1
January 2024 to 30 June 2024) were approved for issue on 5 September 2024 and
have been neither reviewed nor audited by the auditors. There is no
significant seasonality of Group's operations.
Going concern
The financial statements have been prepared on a going concern basis. Having
considered the ability of the Company and the Group to operate within its
existing facilities and meet its debt covenants, the Directors have a
reasonable expectation that the Company and the Group have adequate resources
to continue in operational existence for the foreseeable future. The adoption
of the going concern basis is based on an expectation that the Group will have
adequate resources to continue in operational existence for at least twelve
months from the signing of the consolidated full year financial statements.
The Directors considered the Group's business activities, together with the
principal risks and uncertainties, likely to affect its future performance and
position. For the purpose of this going concern assessment, the Directors have
considered the Group's forecasts for the period to September 2025. The review
also included the financial position of the Group, its cash flows and
adherence to its banking covenants.
The Group has access to a Club Finance facility which matures in March 2029
comprising of the following:
· Facility A: €150m amortising facility with quarterly repayments
plus a €57.5m balloon;
· Facility B: €180m committed facility with quarterly repayments plus
a €69m balloon;
· Revolving Credit Facility ("RCF") of €235m for revolving loans (up to
€85m) and ancillary facilities (up to €150m); and
· €150m uncommitted Incremental Facility for acquisitions, capital
expenditure and revolving credit facilities up to €50m of which not more
than €40m for revolving loans.
The Group's Club Finance facility requires the Group to comply with the
following three financial covenants which are tested semi-annually:
· Net leverage: total net debt of no more than 3.75 times Adjusted
EBITDA in 2024 and 3.5 times in 2025 and onwards;
· Interest cover: Adjusted EBITDA is not less than 4.0 times finance
charges; and
· Adjusted net leverage: Adjusted net debt (including guarantees) of no
more than 6.5 times Adjusted EBITDA.
The Directors have reviewed the financial forecasts across a range of
scenarios and prepared both a base case and severe but plausible downside
case. The severe downside case assumes a deterioration in trading performance
relating to a decline in product demand, as well as supply chain risks. These
downsides would be partly offset by the application of mitigating actions to
the extent they are under management's control, including deferrals of capital
and other discretionary expenditure.
The Directors have also considered the impact of climate-related matters on
the Group's going concern assessment, and do not expect this to have a
significant impact on the going concern assessment throughout the forecast
period.
On consideration of the above, the Directors believe that the Group has
adequate resources to continue in operation existence for the forecast period
to December 2025 and the Directors therefore consider it appropriate to
continue to adopt the going concern basis in preparing the 2024 interim
financial statements.
3. Summary of significant accounting policies
The accounting policies adopted, as well as significant judgements and key
estimates applied, are consistent with those in the annual financial
statements for the year ended 31 December 2023, as described in those
financial statements, except for tax. Income Taxes for the interim period is
accrued using the tax rate that would be applicable to expected total annual
profit or loss.
4. Changes in accounting policies and disclosures, adoption of new and revised standards
4.1. Application of new IFRS - standards and interpretations effective in the reporting period
The Group has applied the following standards and amendments for the first
time for their annual reporting period commencing 1 January 2024:
· Amendments to IFRS 16 - Lease liability in sale and leaseback.
· Amendments to IAS 7 and IFRS 7 - Supplier Finance Arrangements.
· Amendments to IAS 1 - Classification of Liabilities as Current or
Non-current and Non-current liabilities with covenants.
These Amendments did not have a significant impact on the Group's condensed
interim financial statements.
4.2. New IFRSs and IFRICs published by the IASB that are not yet effective
Certain new accounting standards, amendments to accounting standards and
interpretations have been published that are not mandatory for period
commencing 1 January 2024 and have not been early adopted by the Group. These
new standards, amendments and interpretations are not expected to have any
significant impacts on the Group's condensed interim financial statements.
5. Segmental analysis
In accordance with IFRS 8, The Group has determined its operating segment
based on the information reported to the Chief Operating Decision Maker
("CODM"). The Group considers the Executive Committee to be the CODM who
evaluate segment performance. The Group is organised in two operating
segments: Payment solutions and Mobility solutions. Payment solutions
represent Group's revenues, which are based on recurring and frequent
transactional payments. The segment includes Energy and Toll payments, which
are a typical first choice of a new customer. Mobility solutions represent a
number of services, which are either subscription based or subsequently sold
to customers using Payment solutions products. The segment includes Tax
refund, Fleet management solutions, Navigation, and other service offerings.
Net energy and services sales, contribution, contribution margin, EBITDA, and
Adjusted EBITDA are non-GAAP measures, see Note 6.
The CODM does not review assets and liabilities at segment level.
30 June 2024 30 June 2023
Six months ended (unaudited) Payment solutions Mobility solutions Total Payment solutions Mobility solutions Total
EUR '000
Segment revenue 1,088,449 61,256 1,149,705 970,921 46,665 1,017,586
Net energy and services sales 79,775 61,256 141,031 72,418 46,665 119,083
Contribution 65,140 41,984 107,125 61,004 31,621 92,624
Contribution margin 82% 69% 76% 84% 68% 78%
Corporate overhead and indirect costs before adjusting items (47,760) (42,383)
Adjusting items affecting Adjusted EBITDA (7,358) (10,025)
Depreciation and amortisation (32,667) (25,708)
Net finance costs and share of net loss of associates (15,090) (5,996)
Profit before tax 4,249 8,512
Geographical split
The geographical analysis is derived from the base location of responsible
sales teams, rather than reflecting the geographical location of the actual
transaction.
EUR '000 Net energy and
services sales
For the six months ended 30 June
Segment revenue
2024 2023 2024 2023
(unaudited) (unaudited) (unaudited) (unaudited)
Czech Republic ("CZ") 282,361 219,845 19,812 18,928
Poland ("PL") 202,223 180,975 39,400 25,554
Central Cluster (excluding CZ and PL) 138,472 124,998 15,148 15,048
Portugal ("PT") 92,842 109,201 6,195 5,576
Western Cluster (excluding PT) 64,283 50,003 5,863 4,627
Romania ("RO") 136,056 144,905 17,980 16,890
Southern Cluster (excluding RO) 228,182 183,210 32,501 28,860
Not specified 5,286 4,449 4,132 3,600
Total 1,149,705 1,017,586 141,031 119,083
There were no individually significant customers, which would represent 10% of
revenue or more.
6. Alternative performance measures
To supplement its consolidated financial statements, which are prepared and
presented in accordance with IFRS, the Group uses the following non-GAAP
financial measures that are not defined or recognised under IFRS: Net energy
and services sales, Contribution, Contribution margin, EBITDA, Adjusted
EBITDA, Adjusted EBITDA margin, Adjusted earnings, Adjusted basic earnings per
share, Adjusted effective tax rate and Net debt/cash.
The Group uses APMs to provide additional information to investors and to
enhance their understanding of its results. The APMs should be viewed as
complementary to, rather than a substitute for, the figures determined
according to IFRS. Moreover, these metrics may be defined or calculated
differently by other companies, and, as a result, they may not be comparable
to similar metrics calculated by the Group's peers.
Net energy and services sales ("Net revenue")
Net energy and services sales is calculated as total revenues from contracts
with customers, less cost of energy sold. The Group believes this subtotal is
relevant to an understanding of its financial performance on the basis that it
adjusts for the volatility in underlying energy prices. The Group has
discretion in establishing final energy price independent from the prices of
its suppliers, as explained in its accounting policies. This measure also
supports comparability of the Group's performance with other entities, who
have concluded that they act as an agent in the sale of energy and, therefore,
report revenues net of energy purchased.
Contribution
Contribution is defined as net energy and services sales less operating costs
that can be directly attributed to or controlled by the segments. Contribution
does not include indirect costs and allocations of shared costs that are
managed at a group level and hence shown separately under Indirect costs and
corporate overhead.
Contribution margin
Contribution margin is the Contribution as a percentage of Net energy and
services sales.
Adjusted EBITDA
Adjusted EBITDA is defined as EBITDA before Adjusting items:
Definition Exclusion justification
Adjusting item
M&A-related expenses M&A-related expenses differ every year based on the acquisition activity
of the Group. Exclusion of these costs allows better result comparability.
Fees and other costs relating to the Group's acquisitions activity
ERP implementation expenses Costs relating to the implementation of SAP
One-off costs relating to implementation of SAP in FY2023 were previously
disclosed as strategic transformational expenses however this programme
concluded at the end of 2023.
The SAP implementation expense adjustment amounted to EUR 5.2m in 2023 , and
the Group anticipates EUR 15-19m to be adjusted on SAP implementation in
2024-2026.The Group does not expect significant capitalisation related to SAP
in 2024-2026.
Integration costs Costs relating to the integration of Inelo One-off costs relating to transformation and integration of Inelo have been
excluded for better result comparability. While the Group did not adjust
integration costs in the past, the related activities and one-off costs are
significantly higher than for previously completed acquisitions.
The Group incurred EUR 1.8m of integration costs in 2023 (presented under
strategic transformation expenses) and expects to incur approximately EUR 1m
of integration costs in 2024.
Share-based compensation Equity-settled and cash-settled compensation provided to the Group's
management before IPO
Share options and cash-settled compensation were provided to management and
certain employees in connection with the IPO. Although these costs were
amortised over three years based on accounting policies, they were excluded as
they relate to a one-off event.
Share awards provided post-IPO were not excluded as they represent non-cash
element of annual remuneration package.
Adjusted EBITDA margin
Adjusted EBITDA margin represents Adjusted EBITDA for the period divided by
Net energy and services sales.
Adjusted profit before tax
Adjusted profit before tax is calculated by adding back the Adjusting items
affecting Adjusted EBITDA and amortisation of acquired intangibles.
Adjusted earnings (net profit)
Adjusted earnings are defined as profit after tax before Adjusting items:
Adjusting item Definition Exclusion justification
Amortisation of acquired intangibles Amortisation of assets recognised at the time of an acquisition (primarily
ADS, Sygic, Webeye and Inelo)
The Group acquired a number of companies in the past. The item is prone to
volatility from period to period depending on the level of M&A.
Adjusting items affecting Adjusted EBITDA Justifications for each item are listed in the preceding table.
Items recognised in the preceding table, which reconciles EBITDA to Adjusted
EBITDA
Tax effect Decrease in tax expense as a result of above adjustments
Tax effect of above adjustments is excluded to adjust the impact on after tax
profit.
Net debt/cash
Net debt/cash is calculated as cash and cash equivalents less interest-bearing
loans and borrowings.
Where not presented and reconciled on the face of the interim condensed
consolidated income statement, balance sheet or cash flow statement, the
adjusted measures are reconciled to the IFRS statutory numbers below:
Adjusted EBITDA
EUR '000
For the six months ended 30 June
2024 (unaudited) 2023 (unaudited)
Intangible assets amortisation (Note 14) 24,604 19,310
Tangible assets depreciation (Note 14) 5,248 3,949
Right of use depreciation 2,816 2,449
Depreciation and amortization 32,667 25,708
Net finance costs and share of net loss of associates 15,090 5,996
Profit before tax 4,249 8,512
EBITDA 52,007 40,216
M&A-related expenses * 2,184 2,719
ERP implementation expenses** 2,737 -
Integration costs** 224 -
Strategic transformation expenses - 3,624
Share-based compensation 2,214 3,682
Adjusting items 7,358 10,025
Adjusted EBITDA 59,365 50,241
* Primarily related to Inelo acquisition.
** In 2023 presented within strategic transformation expenses.
Like-for-Like ("LFL") underlying EBITDA
EUR '000
For the six months ended 30 June
2024 (unaudited) 2023 (unaudited) YOY growth (%)
Adjusted EBITDA 59,365 50,241 18.2
Annualisation of Inelo - 4,351
Other operating income
- Revaluation of foreign currency forwards - (5,953)
- Commercial settlement (2,213) -
LFL underlying EBITDA 57,152 48,639 17.6
Adjusted earnings
EUR '000
For the six months ended 30 June
2024 (unaudited) 2023 (unaudited)
Profit for the year 2,516 5,597
Amortisation of acquired intangibles 10,018 6,756
Adjusting items affecting Adjusted EBITDA 7,358 10,025
Tax effect (2,509) (1,717)
Adjusted earnings (net profit) 17,383 20,661
Adjusted basic earnings per share
Adjusted basic earnings per share is calculated by dividing the adjusted net
profit for the period attributable to equity holders by the weighted average
number of ordinary shares outstanding during the period.
For the six months ended 30 June
2024 (unaudited) 2023 (unaudited)
Net profit attributable to equity holders (EUR '000) 2,425 5,245
Adjusting items affecting Adjusted EBITDA (Note 6) 7,358 10,025
Amortisation of acquired intangibles* 10,005 6,310
Tax impact of above adjustments* (2,506) (1,633)
Adjusted net profit attributable to equity holders (EUR '000) 17,281 19,948
Basic weighted average number of shares 689,705,468 688,911,333
Adjusted basic earnings per share (cents/share) 2.51 2.90
Diluted weighted average number of shares 692,513,136 691,208,069
Adjusted dilutive earnings per share (cents/share) 2.50 2.89
*non-controlling interests impact was excluded.
Adjusted effective tax rate
Adjusted effective tax rate is calculated by dividing the adjusted tax expense
by the adjusted profit before tax. The adjustments represent adjusting items
affecting adjusted earnings.
EUR '000 For the six months ended 30 June
2024 (unaudited) 2023 (unaudited)
Accounting profit before tax 4,249 8,512
Adjusting items affecting adjusted EBITDA 7,358 10,025
Amortisation of acquired intangibles 10,018 6,756
Adjusted profit before tax (A) 21,625 25,292
Accounting tax expense 1,733 2,914
Tax effect of above adjustments 2,509 1,717
Adjusted tax expense (B) 4,241 4,632
Adjusted earnings (A-B) 17,384 20,661
Adjusted effective tax rate (B/A) 19.61% 18.31%
7. Finance costs
Finance costs for the respective periods were as follows:
EUR '000 For the six months ended 30 June
2024 (unaudited) 2023 (unaudited)
Bank guarantees fee 845 673
Interest expense 12,982 8,257
Factoring fee 2,668 1,956
Other 199 74
Total 16,694 10,960
8. Finance income
Finance income for the respective periods was as follows:
EUR '000 For the six months ended 30 June
2024 (unaudited) 2023 (unaudited)
Gain from foreign currency exchange rate differences 1,587 3,451
Gain from the revaluation of securities and derivatives - 1,667
Interest income 279 133
Other 21 11
Total 1,887 5,262
9. Other operating income
EUR '000 For the six months ended
30 June
2024 2023
(unaudited) (unaudited)
Revaluation of foreign currency forwards - 5,953
Other income 3,117 828
Total 3,117 6,781
10. Income tax
The taxation charge for the interim period has been calculated based on
estimated effective tax rate for the full year of 40.8% (six months ended 30
June 2023: 34.2%). The rate increased as a result of the increased rates in
key tax regimes in which the Group operates and lower statutory profitability.
Corporate income tax in the Czech Republic increased from 19% in 2023 to 21%
in 2024, in the UK the rate increased from 23% in 2023 to 25% in 2024, and in
Slovenia the rate increased from 19% in 2023 to 22% in 2024, while in Spain
the rate remains at 24%.
Adjusted effective tax rate increased from 18.31% to 19.61%. Further details
are provided in Note 6 of the accompanying condensed interim financial
statements.
The Group has reviewed impact of OECD Pillar 2 legislation, which is effective
in most countries as of 1 January 2024. Based on the analysis of the OECD
model rules and modelling performed on the data for the year ending 31
December 2022, the Group should benefit in most countries from safe harbours
as defined by OECD (de minimis, simplified effective tax rate) on the
assumption that our Country by Country report for the year ending 31 December
2024 is qualifying. For the other most material countries, there might be
additional top-up tax in Slovakia and Spain, but this is not expected to be
material. Our assessment of substantively enacted legislation, including
qualifying domestic minimum taxes, is ongoing. Management will further monitor
OECD Pillar 2 tax position of the Group and implement all necessary steps for
proper reporting in individual countries.
11. Earnings per share
All ordinary shares have the same rights.
Basic EPS is calculated by dividing net profit for the period attributable to
equity holders of the Group by the weighted average number of ordinary shares
outstanding during the year.
Diluted EPS is calculated by dividing net profit for the period attributable
to equity holders of the Group by the weighted average number of ordinary
shares outstanding during the period, plus the weighted average number of
shares that would be issued if all dilutive potential ordinary shares were
converted into ordinary shares.
The following reflects the income and share data used in calculating EPS:
For the six months ended 30 June
2024 (unaudited) 2023 (unaudited)
Net profit attributable to equity holders (EUR '000) 2,425 5,245
Basic weighted average number of shares 689,705,468 688,911,333
Effects of dilution from share options 2,807,668 2,296,736
Total number of shares used in computing dilutive earnings per share 692,513,136 691,208,069
Basic earnings per share (cents/share) 0.35 0.76
Diluted earnings per share (cents/share) 0.35 0.76
Options
Options granted to employees under Share-based payments are considered to be
potential ordinary shares. They have been included in the determination of
diluted earnings per share if the required performance criteria would have
been met based on the Group's performance up to the reporting date, and to the
extent to which they are dilutive. The options have not been included in the
determination of basic earnings per share as their performance conditions have
not been met.
12. Fair value measurement
The following table provides the fair value measurement hierarchy of the
Group's assets and liabilities.
Fair value measurement hierarchy for assets and liabilities as at 30 June 2024
(unaudited):
EUR '000 Note Date of valuation Fair value measurement using Total
Quoted prices in active markets (Level 1) Significant observable inputs Significant unobservable inputs
(Level 2)
(Level 3)
Assets measured at fair value
Derivative financial assets
Foreign currency forwards 30 June 2024 - 236 - 236
Interest rate swaps 30 June 2024 - 1,594 - 1,594
Liabilities measured at fair value
Derivative financial liabilities
Foreign currency forwards 30 June 2024 - 996 - 996
Put options 30 June 2024 - - 127 127
Interest rate swaps 30 June 2024 - 731 - 731
There have been no transfers between Level 1, Level 2 and Level 3 during the
six months ended 30 June 2024.
Fair value measurement hierarchy for assets and liabilities as at 31 December
2023:
EUR '000 Note Date of valuation Fair value measurement using Total
Quoted prices in active markets (Level 1) Significant observable inputs Significant unobservable inputs
(Level 2) (Level 3)
Assets measured at fair value
Derivative financial assets
Interest rate swaps 31 December 2023 - 3,425 - 3,425
Liabilities measured at fair value
Derivative financial liabilities
Put options 31 December 2023 - - 127 127
Interest rate swaps 31 December 2023 - 3,201 - 3,201
There have been no transfers between Level 1, Level 2 and Level 3 during the
year ended 31 December 2023.
Specific valuation techniques used to value financial instruments include:
· for interest rate swaps - the present value of the estimated future
cash flows based on observable yield curves;
· for foreign currency forwards - the present value of future cash
flows based on the forward exchange rates at the balance sheet date;
· for put options - option pricing models (Monte Carlo); and
· for other financial instruments - discounted cash flow analysis.
Management assessed that the fair values of cash and cash equivalents, trade
and other receivables and trade and other payables approximates their carrying
amounts largely due to the short-term maturities of these instruments.
Interest-bearing loans and borrowings are at floating rates, with margin
corresponding to market margins, and the credit rating of the Company has not
significantly changed since refinancing in September 2022.
The fair value of the financial assets and liabilities is included at the
amount at which the instrument could be exchanged in a current transaction
between willing parties, other than in a forced or liquidation sale.
13. Business combination
There were no new acquisitions in 2024.
Investments in subsidiaries and associates
Pay-out of deferred consideration
On 2 January 2024, the Group paid deferred acquisition consideration of
€5.0m related to the acquisition of WebEye.
On 22 January 2024, the Group paid deferred acquisition consideration of
€0.7m related to the Aldobec acquisition.
Acquisition of non-controlling interests
On 7 February 2024, the Group acquired the remaining 4.19% interest in CVS for
a consideration of €0.8m.
On 25 April 2024 the Group restructured an option to accelerate the
acquisition of its remaining shareholding in FireTMS. The maximum option price
and final option timing remains the same, however the payment dates and terms
were amended. The Group agreed to acquire a further 7.6% of the equity
shareholding for €3.4m, paid in two equal instalments in April (€1.7m) and
July 2024 (€1.7m). The final 11.4% equity shareholding remains subject to an
option mechanism exercisable in H1 2026 and the price is subject to certain
financial and KPI targets met by FireTMS.
Inelo contingent consideration
On 4 July 2024, the Group signed a settlement agreement with former
shareholders of Grupa Inelo S.A. The final contingent consideration was agreed
at €2.0m and is payable by 30 June 2025. Deferred acquisition consideration
estimate was revised as at 30 June 2024, the charge was recognised within
other operating expenses and considered as an Adjusting item (M&A-related
expenses).
14. Intangible assets and property, plant and equipment
2024 2023
EUR '000 Intangible assets Property, plant and equipment Intangible assets Property, plant and equipment
Cost
Opening balance as at 1 January 703,051 90,536 342,615 69,554
Additions 17,030 3,496 37,967 12,975
Acquisition of a subsidiary - - 301,030 11,932
Disposals (76) (1,526) - (6,322)
Translation differences (1,943) (670) 28,525 2,396
Closing balance at 30 June (unaudited) / 31 December 718,062 91,836 703,051 90,536
Accumulated amortisation / depreciation
Opening balance as at 1 January (170,647) (34,776) (74,444) (29,728)
Amortisation / depreciation (24,120) (5,248) (43,398) (8,851)
Impairment - - (56,663) -
Disposals 76 1,135 5,949 4,693
Translation differences 1,476 583 (2,091) (890)
Closing balance at 30 June (unaudited) / 31 December (193,215) (38,306) (170,647) (34,776)
Net book value
As at 1 January 2024 / 2023 532,404 55,760 268,171 39,826
As at 30 June 2024 (unaudited) / 524,847 53,530 532,404 55,760
31 December 2023
Impairment testing
At 31 December 2023 the Group tested intangible assets with an indefinite
useful life for impairment and recognised an impairment charge of €56,663
thousand. As at 30 June 2024, the Group did not identify any indicators of
impairment.
The key assumptions used to determine the recoverable amount for the different
CGUs are disclosed and further explained in the annual consolidated financial
statements for the year ended on 31 December 2023.
15. Trade and other receivables
EUR '000 30 June 2024 (unaudited) 31 December 2023
Trade receivables 348,615 278,466
Receivables from tax authorities 14,469 18,716
Advances granted 13,076 14,346
Unbilled revenue 10,187 4,027
Miscellaneous receivables 59 5,879
Tax refund receivables 63,023 66,953
Prepaid expenses and accrued income 5,744 4,671
Contract assets 4,867 3,885
Total 460,040 396,943
16. Trade and other payables, other liabilities
EUR '000 30 June 2024 (unaudited) 31 December 2023
Current
Trade payables 377,385 303,165
Employee related liabilities 18,692 15,388
Advances received 12,494 12,911
Miscellaneous payables 3,375 8,644
Payables to tax authorities 20,622 18,562
Contract liabilities 7,705 6,971
Refund liabilities 1,138 4,461
Deferred acquisition consideration 32,107 32,732
Total Trade and other payables 473,517 402,834
Non-current
Put option redemption liability 4,423 5,825
Contract liabilities 3,962 3,353
Other liabilities 482 58
Total Other non-current liabilities 8,866 9,236
Present value of deferred acquisition consideration relates to the following
acquisitions:
EUR '000 30 June 2024 (unaudited) 31 December 2023
Sygic, a.s. 15,573 14,216
Webeye Group 4,128 9,128
KomTes Group 8,706 8,688
Grupa Inelo S.A.* 3,700 -
Aldobec technologies, s.r.o. - 700
Total 32,107 32,732
*includes FIRETMS.COM transferred from put option redemption liability as at
30 June 2024 (Note 13)
17. Interest bearing loans and borrowings
On 14 March 2024, the Group signed an amendment to the Club Finance facility,
which increased share of revolving loans within uncommitted incremental
facility up to €40 million (previously up to €25 million). Total amount of
uncommitted incremental facility remains unchanged. The amendment also removed
the interest cover covenant for the six months ended 30 June 2024.
On 6 June 2024, the Group signed another amendment to the Club Finance
facility, which changed maturity date to 31 March 2029 and decreased quarterly
instalments.
On 20 June 2024, the Group signed an incremental facility III notice, which
committed additional €40 millions of revolving loans and €10 million of
bank guarantees.
18. Financial risk management
The Group is exposed to a variety of financial risks including foreign
currency risk, fair value interest rate risk, credit risk and liquidity risk.
The condensed interim financial statements do not include all financial risk
management information and disclosures required in the annual financial
statements; they should be read in conjunction with the Group's annual
financial statements as at 31 December 2023. There have been no changes in
any risk management policies since the year end.
19. Related party disclosures
Company
The Company controlling the Group is disclosed in Note 1.
Subsidiaries
As at 30 June 2024, there were the following changes in the Group's
subsidiaries:
Name Principal activities Country of incorporation Registered address
Effective economic interest
2024 2023
Klub Investorov T&G SK, s.r.o. (liquidated in 2024) Payment solutions Slovakia Hlavná 18, 90066 Vysoká pri Morave, Slovakia - 100,00%
CVS Mobile d.o.o. Mobility solutions Bosnia and Herzegovina Ulica Petrovdanska bb 79240, Kozarska Dubica, Bosnia-Herzegovina 100.00% 95.81%
CVS Mobile d.o.o. Mobility solutions Croatia Jankomir 25 10090 Zagreb, Croatia 100.00% 95.81%
CVS Mobile GmbH Mobility solutions Germany Sckellstraße 1/II, 81667 München, Germany 100.00% 95.81%
CVS Mobile s.r.l. Mobility solutions Italy Via Battisti 2, 34125 Trieste, Italy 100.00% 95.81%
CVS Mobile MK dooel Mobility solutions North Macedonia 16-ta Makedonska brigada 13b, 1000 Skopje, North Macedonia 100.00% 95.81%
CVS Mobile d.o.o. Mobility solutions Serbia Ulica Španskih boraca 24V, 11070 Novi Beograd, Serbia 100.00% 95.81%
CVS Mobile d.d. Mobility solutions Slovenia Ulica Gradnikove brigade 11, 1000 Ljubljana, Slovenia 100.00% 95.81%
Infotrans d.o.o. Mobility solutions Slovenia Ljubljanska cesta 24C, 4000 Kranj, Slovenia 51.00% 48.86%
KomTeS Chrudim s.r.o. Mobility solutions Czech Republic Malecká 273, Chrudim IV, 53705 Chrudim, Czech Republic 100.00% 51.00%
KomTeS SK s.r.o. Mobility solutions Slovakia Dopravná 7, 92101 Piešany, Slovakia 100.00% 51.00%
FireTMS.com GmbH Mobility solutions Germany Geschäftsanschrift: Stresemannstraße 123, 10963 Berlin, Germany 84.80% 81.00%
FIRETMS.COM Sp. z o.o. Mobility solutions Poland 44-200 Rybnik, ul. 3 Maja 30, Poland 84.80% 81.00%
Key management personnel compensation
Key management personnel compensation is disclosed in the table below.
EUR '000 For the six months ended 30 June
2024 (unaudited) 2023 (unaudited)
Key management* Key management*
Wages and salaries 3 168 3 360
Social security and health insurance 529 593
Option plans 3 383 5 074
Total employee expense 7 080 9 027
*Includes the members of the Board and Executive Committee of W.A.G payment
solutions PLC.
Ultimate controlling party
The Company is the ultimate parent entity of the Group and it is considered that there is no ultimate controlling party. Decision making is made collectively by the Board of Directors or by Board sub-committees on behalf of the Board. The Board is the first to approve many of the items brought to vote at the Annual General Meeting (e.g. Directors' appointments and resignations, authority to allot shares, annual accounts approval, appointment of auditors). Mr Vohánka does not control either the Board of Directors or its sub-committees.
Paid dividends
Paid dividends are disclosed in the Consolidated Statement of Changes in
Shareholders' Equity.
Transactions with other related parties
EUR '000 For the six months ended 30 June
2024 (unaudited) 2023 (unaudited)
Sale of goods to key management personnel - 1
Sale of fixed assets (vehicles) to key management personnel 37 28
Purchases of various goods and services from entities controlled by key 538 16
management personnel*
Purchases of various goods and services from associates 12 6
Sale of W.A.G Payment solutions PLC shares to key management personnel 7 -
* The Group acquired the following goods and services from entities
that are controlled by members of the Group's key management personnel:
software development, consultancy.
EUR '000 30 June 2024 31 December 2023
Trade payables to entities controlled by key management personnel 3 -
20. Subsequent events
Acquisition of non-controlling interests
On 3 July 2024, the Group acquired remaining 30% interest in Sygic, a.s. for a
consideration of €15.6m.
On 15 July 2024, the Group acquired 3.8% interest in FIRETMS.COM Sp. z o.o.
through its subsidiary Grupa Inelo S.A. for a consideration of €1.7m.
Pay-out of deferred consideration
On 2 August 2024, the Group paid deferred acquisition consideration of €4.1m
related to the acquisition of WebEye.
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