TIDMWPS
RNS Number : 8323F
Eurowag
24 March 2022
24 March 2022
W.A.G payment solutions plc ("Eurowag", or the "Group")
Preliminary Results for the year ended 31 December 2021
STRONG GROWTH IN LINE WITH IPO GUIDANCE
Financial highlights
The Group achieved key financial objectives on its medium-term
financial guidance.
-- Net energy and services(1) sales up by 19.1% at EUR153.1m,
with organic growth(1) of 17.1% year-on-year
-- Payment solutions(1) segment up by 20.2% at EUR113.1m and
mobility solutions(1) segment up by 15.9% at EUR40.0m
-- Adjusted EBITDA(1) up by 18.9% at EUR69.7m resulting in adjusted EBITDA margin(1) at 45.5%
-- Strong progress on transformational capital expenditure(1) plan with EUR23.3m spent
-- Net cash(1) position of EUR61.7m as at 31 December 2021
providing for significant leverage headroom to take advantage of
strategic opportunities
Growing scale and network within a high quality
payments-oriented business model and highly diversified revenue
base underpinned strong net energy and services sales growth.
-- Average active payment solutions customers(1) up by 13.9% at 15,020
-- Average active payment solutions trucks(1) up by 13.4% at 82,640
-- Payment solutions transactions(1) up by 11.7% at 32.5m
-- Net revenue retention(1) for 2017-2021 over 110%
Key statutory financials 2021 2020 YoY %
Revenue from contracts with customers
(EURm) 1 646.1 1 253.0 31.4%
-------- -------- --------
Profit before tax (EURm) 17.7 28.8 (38.5%)
-------- -------- --------
Basic EPS (cents/share) 1.54 3.76 (59.0%)
-------- -------- --------
Alternative performance measures 2021 2020 YoY %
Net energy and services sales (EURm) 153.1 128.6 19.1%
------ ------ ------
Adjusted EBITDA (EURm) 69.7 58.6 18.9%
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Adjusted basic EPS (1) (cents/share) 5.77 4.83 19.5%
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Operational and strategic highlights
-- Listed on the London Stock Exchange, raised EUR200m in equity
capital to support inorganic growth and technology transformation,
and improved company profile to attract talent
-- Strengthened the management team and established a Board of
Directors with UK plc experience
-- Completed the acquisition of ADS and commenced customer portfolio integration
-- Acquired stakes in KomTeS, Drivitty and Last Mile Solutions,
and announced the intended acquisition of WebEye
-- Launched mobile payments pilot and enabled payments for
charging stations on Sygic GPS Navigation
-- Launched EETS operations in Austria and Belgium in 2021,
followed by a pilot in Germany in 2022
-- Expanded the acceptance network for roadside service payments
-- Expanded the Road Lords application for use in the office and
on the road, and introduced the Eurowag mobile application for easy
access to customer account
-- Deployed telematics features for fleet management to the
on-board unit for toll payments, with anti-fraud protection for
energy payments
-- Rolled out digital onboarding and the Automated Credit Approval System
-- Offered new supply-chain financing solutions via third
parties and hybrid financing for tax refunds
-- Introduced methodical approach to ESG, established baseline
for reporting and set future goals for carbon reduction, Diversity,
Equity, and Inclusion, and employee engagement
-- Expanded the indirect sales channel to provide navigation systems to automotive OEMs
Paul Manduca, Independent Non-Executive Director and Chair
said:
"I am pleased to be introducing Eurowag's first set of annual
results as a company listed on the London Stock Exchange. Despite
macro-economic challenges the Group has delivered growth in line
with guidance. The Company is in a good position to continue to
broaden its technological foundations and capabilities. With its
accelerated growth plans, the Company is committed to its mandate
from shareholders to make select strategic acquisitions and expand
our market offering. Despite the volatile geopolitical situation
which may have a negative impact on the European economy, Eurowag
continues to be a fast growing, profitable, cash generative
business. The Board will continue to monitor the humanitarian
tragedy in Ukraine and our thoughts are with the Ukrainian people
at this time. "
Martin Vohánka, CEO and Founder said:
"We delivered strong organic growth in 2021 and enter 2022 with
clear momentum, and confidence in the business. Eurowag has built a
large payments acceptance network in Europe integrated with
complementary mobility services putting it at the forefront of
digital transformation of the Commercial Road Transportation
industry. The shocking act of unprovoked and unjustified aggression
from the Russian Federation against Ukraine is unfolding as we
publish this report. Following the invasion the Group took
immediate steps to comply with sanctions and suspend all services
we provided in Russia. Notwithstanding the uncertain operating
environment, the management remains focused on strategic
priorities, drawing on the strength of our business model and its
resilience proven over previous economic cycles."
Outlook
In 2021 we delivered a strong performance with all key financial
metrics in line with our mid-term financial guidance. As we move
into 2022, we expect to continue to increase penetration in our
existing markets supported by effective go-to-market strategies
which will be enhanced by our digital sales channel.
Early in the current financial year the Group has delivered
growth in line with management expectations, and is focused on
executing our strategy investing into technology transformation. We
estimate net energy and services sales for Q1 2022 of at least
EUR39m with strong LTM growth at 19% YoY. Q1 2022 growth of 12% YoY
has been affected by changing seasonality, resulting in a very
strong comparator. We expect our growth rate to accelerate in H2
2022 as comparators soften.
The Group has limited exposure to Russia and Ukraine, which
together accounted for less than 0.1% of group net energy and
services sales in 2021. We discontinued our payments network in
Russia and we continue our operations in Ukraine to the extent
supplies are available. Direct impact of discontinued or disrupted
operations is immaterial to the Group's revenues.
Current trading is demonstrating the resilience of our business
despite headwinds such as continuing Covid-related supply chain
disruptions, occasional fuel shortages in some regions of Eastern
Europe caused by the war in Ukraine, and the price cap on retail
fuel sales in Hungary. Eurowag has been able to respond
pro-actively to emerging risks and opportunities given our strong
pan-European network, long-standing relationships with suppliers,
the mission-critical nature of products and services we provide to
our customers, and management with experience proven throughout the
cycle.
Based on current trading, and assuming no worsening of the
current environment, our expectations for 2022 are unchanged, and
we anticipate delivering results in line with our mid-term
financial guidance. However, the economic outlook in our key
regions is uncertain and the management continues to monitor and
evaluate the potential impact of the Russian invasion of Ukraine on
the out-turn for the full year.
A virtual presentation and Q&A session for investors and
analysts will be held at 9.00am GMT on 24 March 2022. The
presentation and webcast details are available on the Group's
website at https://investors.eurowag.com/
Please register to attend the investor presentation (full link
below).
https://www.lsegissuerservices.com/spark/WAGPAYMENTSOLUTIONS/events/a50b3cb7-49df-4992-9c74-0159557213eb
ENQUIRIES
Eurowag
Tomáš Novotný (Head of Investor Relations)
investors@eurowag.com
Michal Malysa (Head of Group Communications)
michal.malysa@eurowag.com
+420 775 70 80 86
About Eurowag
Eurowag was founded in 1995 and is a leading pan-European
integrated payments & mobility platform focused on the
commercial road transportation industry. Eurowag's innovative
solutions makes life simpler for small and medium businesses in the
Commercial Road Transportation industry across Europe through its
unique combination of payments solutions, seamless technology, a
data-driven digital eco-system and high-quality customer service.
www.eurowag.com
Operational and strategic review
We are delighted to have achieved very strong results this year,
in line with guidance we presented during our IPO on the London
Stock Exchange in October 2021. We delivered strong revenue and
adjusted profits growth from our two segments of payment and
mobility solutions. Operating in an economic environment that is
still dealing with the headwinds of the pandemic and supply-chain
disruptions, this demonstrates the resilience of our business
model, and the mission-critical nature of our customer value
proposition. Throughout the year, we have also continued to invest
in our future by building the skills within our organisation, and
through strategic investments such as accelerating the development
of our digital platform through Road Lords and Eurowag
applications, or completing the acquisition of ADS and executing
new M&A transactions.
True to our purpose, we continued to innovate the Road
Transportation Industry and enable energy transition in Europe, by
introducing mobile payments and enabling payments for charging
stations on the Sygic GPS Navigation. To build-out the integrated
nature of our offering, we deployed new telematics features for
fleet management on our On Board Unit for toll payments and
improved anti-fraud protection for fuel card payments through
geolocation. To further expand our platform, we added payments for
roadside services to the acceptance network, enabled hybrid
financing of tax refunds and introduced a new solution for supply
chain financing via third parties.
From a geographic perspective, core markets in our Central
Cluster continue to account for nearly 50% of net energy and
services sales. The Southern Cluster grew the fastest in 2021, now
accounting for 30% of net energy and services sales, driven
predominantly by successful market penetration in Romania. We
continue to see opportunity for growth in the Western Cluster,
especially in cross-sell and up-sell to ADS customers during the
integration phase, supported by investment into direct, indirect
and digital sales channels. To accelerate customer onboarding and
complete their digital journey, we launched a pilot of the
Automated Credit Approval System for small exposures in France.
The IPO was a significant milestone in the company's development
enabling us to take advantage of the benefits of listing in a
number of ways. First, the capital raise will enable us to
accelerate the execution of our strategic objectives. Second, our
status as a publicly listed company provides a clear signal of our
ambitions and confidence in our prospects. And third, it will help
us attract the talented people we need to maintain our growth
trajectory.
Sustainability, which was already at the heart of how we run our
business, has also benefitted. Strengthening our governance
credentials means even greater transparency and rigour in our
reporting and controls. We have further formalised our ESG strategy
and made sure it involves all relevant stakeholders, collected
baseline data for more detailed reporting and have set ourselves
specific targets within areas where we can produce the greatest
potential impact. The ESG-related KPIs commit us to a 50% reduction
of Scope 1 and Scope 2 emissions from our operations by 2030, on a
2019 baseline. We have also set a target to achieve 40% female
representation in leadership roles by 2025, and reach the top 25%
of European technology companies for employee engagement in the
same timeframe.
We can now state three distinctive ambitions for our business
each benefiting broader society. The first is to help predominantly
small and medium commercial road transport companies prosper and
improve the wellbeing of their people. The second is to contribute
to making our industry cleaner by promoting decarbonisation and
enabling efficiency gains, such as truck utilisation, better
routing and driver performance. The third is to grow the value of
our business for investors, while helping our employees develop as
professionals with fulfilling roles, ensuring both groups benefit
from a productive journey with Eurowag.
The Culture Manifesto we presented in 2020 contains four
fundamental values that inspire us to achieve success, happiness
and personal growth in our work and private lives. We encourage
employees at every step of their journey with us, from the
interview process through to day-to-day operations. We are also
investing to ensure our culture becomes the 'tone from the top',
and have appointed a new Board of Directors and strengthened the
Executive Committee. We have introduced programmes to make Eurowag
a great place to work and have accordingly been able to recruit
very talented people.
We are set up to succeed by supporting many current industry
trends and aligning to new regulations. The most notable of these
is the transition to clean mobility, promoted by the Renewables
Energy Directive II and Alternative-Fuels Infrastructure Regulation
among others. This stimulates better industry cooperation with
greater potential for alliances and partnerships, with substantial
funding being channelled into new low-carbon powertrain solutions
and the related infrastructure. The accelerating digitalisation of
payments is extending the transformation from cash-to-card to
card-to-virtual and increasing the penetration of alternative
payment methods. Implementation of the European Electronic Toll
Service (EETS) also progressed with pilot launches in Austria and
Belgium in 2021, and Germany launching in 2022. Finally, we are
expanding and developing our relationships with vehicle
manufacturers as they shift their business models towards the
concept of Transportation-as-a-Service.
Our strategy remains focused on five key areas:
1. Growth from existing customers. Through further innovation in
core payment services, and integration and cross-selling with
mobility services, we can retain and expand our existing customer
relationships by continuing to solve their evolving needs.
2. Geographic expansion and penetration. We apply our scalable
business model to new markets serving both existing and new
customers, thus expanding market share.
3. Go-to-market channel expansion. We continue to acquire new
customers through a marketing strategy based on geographic clusters
and three sales channels - digital, telesales and field - with an
increasing focus on digital sales.
4. Digital platform development. We continue to develop our
end-to-end platform to be a conduit for intermediating payments and
data exchange between all parties, thereby connecting digital
services and physical assets. This allows us to expand our client
base to include shippers and freight forwarders, and to integrate
third-party providers and financiers seamlessly into our platform,
thereby facilitating frictionless interactions among industry
participants to create a fully connected marketplace.
5. Accretive M&A. We continue to seek acquisition targets
that will create cross-sell and up-sell opportunities, generate
cost and revenue synergies, and develop our product and technology
capabilities.
At the outset of 2021, we acquired the remaining minority stake
in ADS, allowing for the full migration of the ADS portfolio onto
our platform. This means ADS customers now have access to our
broader portfolio of services. We have also strengthened our
critical skillset by acquiring a minority stake in the Lithuanian
firm Drivitty. This brings in-house expertise of digital payments,
allowing customers to execute transactions using mobile devices and
On Board Units and accelerates our progress towards providing fully
integrated payments and mobility solutions. With Last Mile
Solutions, the rapidly growing leader in e-mobility, we are
expanding our platform by offering EV charging and smart energy
management services for e-mobility businesses in Europe. We also
announced the intended acquisition of WebEye, a leading provider of
fleet management solutions in Hungary and Romania. Although the
transaction was not approved by the Hungarian Ministry of Interior
in March 2022, we are looking for ways how to facilitate the
acquisition to expand our customer base, generate cross-sell and
up-sell opportunities, and obtain data from the connected trucks
which will provide more insights for optimising the development of
new and improved solutions.
Response to the war in Ukraine
The shocking act of unprovoked and unjustified aggression from
the Russian Federation against Ukraine is unfolding as we publish
this report. Following the invasion the Group took immediate steps
to comply with sanctions and suspend all services we provided in
Russia. Our response to the humanitarian aspect of this crisis
benefited from strong support of all our employees. We offered help
to colleagues with origins or family members from the affected
regions and have created a Ukraine Aid fund on their behalf. The
Group is matching charitable donations made by our employees, over
and above our ongoing commitment to distribute 1% of EBIT each year
to charitable causes. We are also providing fuelling for
humanitarian convoys.
Although the Group has limited exposure to Russia and Ukraine,
which together account for less than 0.1% of Group net revenue, the
economic outlook in our key regions is uncertain and we continue to
monitor and evaluate the potential impacts as the situation
evolves. Should the conflict escalate and materially affect
European economies, we may observe lower demand for our products
and services. The impacts of recent events on global supply chain
disruptions are not yet over, and the Group could be affected by
energy-supply shortages in the region hindering industrial
production and mobility. Additional risks to the business include a
potential shortage of drivers and regulatory measures such as
retail fuel price caps that may have an impact on margins.
We therefore continue to diligently monitor the areas we can
control and mitigate. Primarily, this is by further diversifying
energy-supply partnerships, while acknowledging the dependency on
Russian-originated sources across Central and Eastern Europe and
the Balkan region. To mitigate the impacts of a potential economic
downturn, we can apply cost-saving measures and implement actions
to stimulate revenue growth learnt and used during the last two
global economic crises. These include actions to promote customer
loyalty, readiness of our customers to pay a premium for
mission-critical products and services, and increased interest of
our customers in efficiency gains and cost-saving solutions which
the Group provides.
Financial review
It has been a year of rapid growth and change for Eurowag. We
are proud of the way the business has dealt with the challenges
arising from continued Covid pandemic restrictions and its agility
in responding to the opportunities presented. We have delivered a
strong set of results in a truly exceptional year, listed the Group
on the London Stock Exchange, completed several business
acquisitions and are delivering on our technology transformation
plans.
Throughout the year, the business executed at pace against the
strategy that we set out at the time of the IPO. We delivered
strong performance with all key financial metrics on a positive
trajectory, reflecting the resilience and strength of our business.
Group Net energy and services sales growth of 19.1% year-on-year
was delivered through further expanding our customer base in the
payment solutions segment (average number of active customers up by
13.9%), enhanced by effective cross selling of our mobility
solutions. Resilience and strength of our business is supported by
average number of services per customer of 2.83 (2020: 2.82)(2) .
Our growth through these turbulent times is a testimony to the
essential nature of the CRT industry, the efficiencies that our
products and services deliver to our customers, the strength of our
revenue retention and the geographic and product revenue diversity
of our business enhanced by strong customer relationships.
Adjusted EBITDA increased 18.9% year-on-year to EUR69.7m (2020:
EUR58.6m). Adjusted EBITDA margin was unchanged year on year at
45.5% (2020: 45.6%) in line with our mid-term guidance. Adjusted
EBITDA performance reflects strong operating leverage inherent in
the business while we continue to invest in the organisation
focusing on priority hires, upskilling the organisation and
technology related spend. Adjusted basic EPS increased 19.5%
year-on year to 5.77 (2020: 4.83) cents per share in line with
adjusted EBITDA growth.
On a statutory basis, profit before tax decreased by 38.5% to
EUR17.7m (2020: EUR28.8m) and basic EPS decreased by 59.0% to 1.54
(2020: 3.76) cents per share due to a significant amount of
adjusting items including non-recurring IPO-related expenses,
pre-IPO share-based compensation schemes and strategic
transformation costs. Basic EPS has reduced more than profit before
tax due to a higher effective tax rate in 2021 which is further
discussed in Taxation section.
Due to our IPO equity raise and supported by our underlying
highly cash generative business model, our overall financial
position has significantly strengthened, and we closed the year
with a net cash position of EUR61.7m. Our absolute focus on credit
risk management and cash collection contributed to improvement in
credit losses ratio from 0.2% to 0.1%(3) . Against the backdrop of
business performance and strong cash generation we continued to
invest into our digital transformation (with transformational
capital expenditure reaching EUR23.3m) and inorganic growth (with
investments in subsidiaries, associates and acquisition of
non-controlling interests reaching EUR38.9m).
As we embark on the next year of implementing the Group's
strategy, our robust financial position and disciplined approach to
capital allocation will ensure that the business is well positioned
to leverage the benefits of industry digital disruption and many
opportunities that lie ahead. We have strong conviction around our
purpose to create sustainable financial and technological solutions
for the benefit of our industry, society and the environment.
Performance review
Below is a summary of the segmental performance and explanatory
notes related to items including corporate expenses, alternative
performance measures, taxation, interest, investment and cash flow
generation.
Segments
2021 (EURm) 2020 (EURm) YoY (EURm) YoY %
Segment revenue total 1 646.1 1 253.0 393.1 31.4%
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Payment solutions 1 606.1 1 218.5 387.6 31.8%
------------ ------------ ----------- --------
Mobility solutions 40.0 34.5 5.5 15.9%
------------ ------------ ----------- --------
Net energy and services
sales total 153.1 128.6 24.5 19.1%
------------ ------------ ----------- --------
Payment solutions 113.1 94.1 19.0 20.2%
------------ ------------ ----------- --------
Mobility solutions 40.0 34.5 5.5 15.9%
------------ ------------ ----------- --------
Expenses included in
Contribution(1) (24.6) (23.8) (0.8) 3.4%
------------ ------------ ----------- --------
Contribution total 128.5 104.8 23.7 22.6%
------------ ------------ ----------- --------
Payment solutions 99.6 79.8 19.8 24.8%
------------ ------------ ----------- --------
Mobility solutions 28.9 25.0 3.9 15.6%
------------ ------------ ----------- --------
Contribution margin(1)
total 84% 81% 2.5 pp n/a
------------ ------------ ----------- --------
Payment solutions 88% 85% 3.3 pp n/a
------------ ------------ ----------- --------
Mobility solutions 72% 73% (0.3 pp) n/a
------------ ------------ ----------- --------
Corporate overhead and
indirect costs before
adjusting items (58.8) (46.2) (12.6) 27.3%
------------ ------------ ----------- --------
Adjusted EBITDA 69.7 58.6 11.1 18.9%
------------ ------------ ----------- --------
Adjusting items affecting
Adjusted EBITDA (22.8) (3.2) (19.6) 612.5%
------------ ------------ ----------- --------
EBITDA(1) 46.9 55.4 (8.5) (15.3%)
------------ ------------ ----------- --------
Depreciation and amortisation (21.9) (18.2) (3.7) 20.3%
------------ ------------ ----------- --------
Operating profit 25.1 37.2 (12.1) (32.5%)
------------ ------------ ----------- --------
The Group's total revenues increased by 31.4% year-on-year to
EUR1 646.1m driven by growing scale of our payment solutions
complemented by higher energy prices (a corresponding growth was
reported for costs of energy sold).
The Group delivered double-digit Net energy and services sales
growth and strong Contribution margins in both segments. Growth in
organic Net energy and services sales was 17.1% and overall Net
energy and services sales were up by 19.1%.
Payment solutions Net energy and services sales grew by 20.2%
year-on-year, driven by strong new customer and truck acquisitions
complemented by Net revenue retention.
The Group saw growth in new customer acquisition across all
geographic clusters, as the strength of the Group's payments
network and effectiveness of the go-to-market strategy enabled us
to increase market penetration. The Group also expanded into new
sales channels including digital and enabled fully online customers
onboarding.
Mobility solutions Net energy and services sales grew by 15.9%
year-on-year, driven by effective cross sell supported by inorganic
growth of telematics Net energy and services sales.
On 1 January 2021, the Group acquired 51% of the share capital
in KomTeS, a value-added reseller of the Group's telematics
solutions. The transaction will ensure the highest level of
support, service, and value to the Group and KomTeS customers in
the Czech Republic and Slovakia.
Corporate expenses
2021 (EURm) 2020 (EURm) YoY (EURm) YoY %
Expenses included in
Contribution (24.6) (23.8) (0.8) 3.4%
------------ ------------ ----------- -------
Corporate overhead and
indirect costs before
adjusting items (58.8) (46.2) (12.6) 27.3%
------------ ------------ ----------- -------
Adjusting items affecting
Adjusted EBITDA (22.8) (3.2) (19.6) 612.5%
------------ ------------ ----------- -------
Depreciation and amortisation (21.9) (18.2) (3.7) 20.3%
------------ ------------ ----------- -------
Total (128.1) (91.4) (36.7) 40.2%
------------ ------------ ----------- -------
The above table is relevant for segmental review while below
table summarises corporate expenses based on statutory financials
categories:
2021 (EURm) 2020 (EURm) YoY (EURm) YoY %
Employee expenses (55.7) (41.4) (14.3) 34.5%
------------ ------------ ----------- --------
Impairment losses of
financial assets (3.1) (4.1) 1.0 (24.4%)
------------ ------------ ----------- --------
Technology expenses (6.8) (4.0) (2.8) 70.0%
------------ ------------ ----------- --------
Other operating income 0.7 0.9 (0.2) (22.2%)
------------ ------------ ----------- --------
Other operating expenses (41.3) (24.6) (16.7) 67.9%
------------ ------------ ----------- --------
Depreciation and amortisation (21.9) (18.2) (3.7) 20.3%
------------ ------------ ----------- --------
Total (128.1) (91.4) (36.7) 40.2%
------------ ------------ ----------- --------
Employee expenses increased by 34.5% to EUR55.7m as the Group
focused on priority hires, talent retention, strengthening the
structure and remuneration schemes appropriate for a listed
company. Adjusting items included in employee expenses amounted to
EUR8.6m in 2021.
Impairment losses of financial assets decreased by 24.4% to
EUR3.1m thanks to a focus on credit risk management and cash
collection.
Technology expenses increased by 70.0% to EUR6.8m as a
consequence of the Group's focus on cloud transition and expenses
related to the new generation ERP system. Adjusting items included
in technology expenses amounted to EUR0.6m in 2021.
Other operating expenses increased by 67.9% to EUR41.3m mainly
due to non-recurring IPO costs.
Depreciation and amortisation increased by 20.3% to EUR21.9m
primarily as a result of increased transformational technology
being put into production. Adjusting items included in depreciation
and amortisation amounted to EUR7.1m in 2021.
Net finance expense
Net finance expense in 2021 was EUR6.7m (2020: EUR8.3m). The
decrease in 2021 reflects the lower interest charge on Senior
Facilities Agreement (weighted average interest rate in 2021 2.4%
compared to 3.3% in 2020) and improved result on revaluation of
derivatives partially offset by higher factoring fees related to
higher average factoring limits utilization throughout the
year.
Taxation
The Group tax charge of EUR8.0m (2020: EUR5.9m) represents an
effective tax rate of 45.4% in 2021 (2020: 20.4%). Corporate income
tax for companies in the Czech Republic and United Kingdom for the
years 2020 and 2021 was 19%, corporate income tax in Spain for the
years 2020 and 2021 was 24%. They represent the major tax regimes
in which the Group operates.
The Group's effective tax rate is impacted by the tax impact of
Adjusting items. It is therefore helpful to consider the underlying
and adjusting items affecting tax rates separately:
-- The effective tax rate on Adjusted earnings(1) before tax for
the year increased to 24.8% (2020: 20.2%) largely due to the fact
that 2020 effective tax rate was influenced by newly recognized
deferred tax assets in the year.
-- The effective tax rate for Adjusting items was 12.7% (2020: 20.4%) and was driven mainly by non-deductible IPO-related expenses and share-based payments.
We adopt a prudent approach to our tax affairs, aligned to
business transactions and economic activity. We have a constructive
and good working relationship with the tax authorities in the
countries in which we operate and there are no outstanding tax
audits except for France.
EPS
Basic EPS for 2021 was 1.54 cents per share (a decrease of 59.0%
relative to 2020) due to a significant amount of Adjusting items
including non-recurring IPO-related expenses and pre-IPO
share-based compensations.
Adjusted basic EPS(1) for 2021 was 5.77 cents per share (an
increase of 19.5% relative to 2020) based on the weighted average
number of ordinary shares in issue during the year of 595,582,785.
After accounting for the impact of PSP, adjusted diluted earnings
per share was 5.76 cents per share. Adjusting items are as
described above.
Investments in associates
In 2021, the Group acquired 28% interest in Threeforce BV (Last
Mile Solutions) and 20% interest in UAB "Tankita" (Drivitty).
Last Mile Solutions is a fast growing eMobility platform in
Europe and the investment supports the Group's position in the
eMobility market and confirms our focus on sustainable
transportation solutions. Key financials for 2021 were as
follows:
Threeforce B.V. 2021 (EURm)
(Last Mile Solutions)
Net assets 11.3
------------
Revenue 29.6
------------
Total comprehensive income (2.2)
------------
Impact on Group profit
for the year (0.6)
------------
Drivitty is a mobile services integration leader in the
commercial transportation market. With this strategic partnership
the Group aims to accelerate its path towards providing fully
seamless mobile payments experience to its customers. Drivitty
financials are currently immaterial to the Group.
Balance sheet
Net assets of the Group increased by 344.2% to EUR284.7m mainly
reflecting the IPO proceeds of EUR196.1m, retained earnings
increase of EUR12.3m, other comprehensive income increase of
EUR5.1m and exercised share options impact of EUR3.8m.
Intangible assets of the Group excluding goodwill increased by
EUR20.7m to EUR88.3m in 2021 predominantly due to investments into
the strategic IT transformation.
Goodwill comprises mainly CGU(1) Energy of EUR40.2m, CGU
Navigation of EUR34.6m and CGU Telematics of EUR26.0m. Goodwill is
tested for impairment on an annual basis, no impairment loss was
identified in 2021.
Trade and other receivables increased by EUR64.2m to EUR300.6m
mainly due to changes to phasing of tax refund receivables
collection (year-on-year impact of EUR29.9m), higher volume of
transactions and increased energy prices in 2021.
Trade and other payables increased by EUR8.6m to EUR314.5m
mainly due to higher volume of transactions and increased energy
prices in 2021.
Cash performance
2021 (EURm) 2020 (EURm) YoY (EURm) YoY %
Net cash (used in)/generated
from operating activities (9.6) 86.7 (96.3) (111.1%)
------------ ------------ ----------- ---------
Net cash used in investing
activities (43.1) (23.2) (19.9) 85.8%
------------ ------------ ----------- ---------
Net cash generated from
financing activities 187.8 5.4 182.4 3377.8%
------------ ------------ ----------- ---------
Net increase in cash
and cash equivalents 135.1 68.9 66.2 96.1%
------------ ------------ ----------- ---------
Effect of exchange rate
changes on cash and cash
equivalents 0.1 (0.2) 0.3 (150.0%)
------------ ------------ ----------- ---------
Cash and cash equivalents
at beginning of period 89.0 20.3 68.7 338.4%
------------ ------------ ----------- ---------
Cash and cash equivalents
at end of period (presented
in statement of cash
flows) 224.2 89.0 135.2 151.9%
------------ ------------ ----------- ---------
Bank overdrafts - 29.1 (29.1) (100.0%)
------------ ------------ ----------- ---------
Cash and cash equivalents
at end of period (presented
in statement of financial
position) 224.2 118.1 106.1 89.8%
------------ ------------ ----------- ---------
Interest-bearing loans
and borrowings (162.5) (171.2) 8.7 (5.1%)
------------ ------------ ----------- ---------
Net cash/(debt) 61.7 (53.1) 114.8 (216.2%)
------------ ------------ ----------- ---------
At 31 December 2021, the Group had net cash of EUR61.7m compared
to net debt of EUR53.1m as of 31 December 2020.
The increase in the level of cash is due to the proceeds from
new shares issued and strong underlying cash generation offset by
IPO related expenses, acquisition of subsidiaries and associates
and transformational capital expenditure.
Net cash flows from operating activities decreased from EUR86.7m
in 2020 to EUR(9.6)m primarily due to adverse working capital
movements related to phasing of tax refund receivables collection
EUR(29.9)m and overall higher volume of transactions and increased
fuel prices affecting 2021 receivables, there was further impact of
EUR15.4m related to Adjusting items in 2021.
Interest paid decreased to EUR4.5m reflecting lower cost of
debt.
Tax paid increased by EUR2.9m due to higher tax advances
paid.
Net cash used in investing activities increased by EUR19.9m in
2021 to EUR43.1m largely due to the outflows in connection with
capital expenditure related to investment in the development of
technology (increase of EUR6.3m) and outflows related to
investments in subsidiaries and associates (increase of
EUR11.9m).
Net cash from financing activities amounted to an inflow of
EUR187.8m in 2021 (2020: EUR5.4m), largely driven by the proceeds
from new shares issued and the net movement in borrowings offset by
an outflow related to the acquisition of the remaining minority
interest of ADS (EUR27.0m).
The cash impact of Adjusting items was EUR7.6m for IPO-related
expenses, EUR0.8m for M&A-related expenses and EUR2.7m for
strategic transformation expenses.
Capital expenditure
Capital expenditure in the year amounted to EUR33.8m compared
with EUR22.0m for the year ended 31 December 2020. The marked
increase reflects the transformational investment into our
technology platform.
The Group's transformational investment programme totaling
EUR23.3m (2020: EUR16.4m) continued to focus on expanding the
customer and products capabilities for the Group, including the
digital customer journey, new generation ERP, EETS Toll and OBU,
Telematics and the integrated offering.
The Group's ordinary capital expenditure in 2021 was EUR10.4m
(2020: EUR5.1m) representing reinvestment into the platform and
assets base and amounted to 6.8% of Net energy and services sales
compared to 4.0% in the previous year.
Alternative performance measures
The Group has identified certain Alternative Performance
Measures ("APMs") that it believes provide additional useful
information to the readers of Consolidated 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.
2021 (EURm) 2020 (EURm) YoY (EURm) YoY %
Profit before tax 17.7 28.8 (11.1) (38.5%)
------------ ------------ ----------- --------
Net finance expense and
share of net loss of
associates 7.3 8.4 (1.1) (13.1%)
------------ ------------ ----------- --------
Depreciation and amortisation 21.9 18.2 3.7 20.3%
------------ ------------ ----------- --------
EBITDA 46.9 55.4 (8.5) (15.3%)
------------ ------------ ----------- --------
M&A-related expenses 0.8 0.4 0.4 100.0%
------------ ------------ ----------- --------
Non-recurring IPO-related
expenses 12.9 0.3 12.6 4200.0%
------------ ------------ ----------- --------
Strategic transformation
expenses 2.7 1.2 1.5 125.0%
------------ ------------ ----------- --------
Share-based compensation 6.4 1.2 5.2 433.3%
------------ ------------ ----------- --------
Adjusting items 22.8 3.2 19.6 612.5%
------------ ------------ ----------- --------
Adjusted EBITDA 69.7 58.6 11.1 18.9%
------------ ------------ ----------- --------
2021 (EURm) 2020 (EURm) YoY (EURm) YoY %
Profit for the year 9.7 23.0 (13.3) (57.8%)
------------ ------------ ----------- ---------
Amortisation of acquired
intangibles 5.4 5.5 (0.1) (1.8%)
------------ ------------ ----------- ---------
Amortisation due to transformational
useful life changes 1.7 0.2 1.5 750.0%
------------ ------------ ----------- ---------
Adjusting items affecting
Adjusted EBITDA 22.8 3.2 19.6 612.5%
------------ ------------ ----------- ---------
Tax effect (3.8) (1.8) (2.0) (111.1%)
------------ ------------ ----------- ---------
Adjusted earnings (net
profit) 35.8 30.1 5.7 18.9%
------------ ------------ ----------- ---------
2021 2020 YoY YoY %
Adjusted net profit attributable
to equity holders (EURm) 34.4 27.3 7.1 26.0%
------------ ------------ ----------- ------
Basic weighted average
number of shares 595,582,785 564,857,081 30,725,704 5.4%
------------ ------------ ----------- ------
Adjusted basic EPS (cents/share) 5.77 4.83 0.94 19.5%
------------ ------------ ----------- ------
Costs arising in connection with the IPO have been separately
identified in recognition of the nature, infrequency and
materiality of this capital markets transaction. IPO had very
limited impact on expenses in 2020 and will not have any impact on
expenses in 2022.
M&A-related expenses are fees and other costs relating to
the Group's acquisitions activity. M&A-related expenses differ
every year based on acquisition activity of the Group. Exclusion of
these costs allow better result comparability.
Strategic transformation expenses are costs relating to
broadening the skill bases of the Group's employees (including
executive search and recruiting costs) as well as costs related to
transformation of key IT systems. As previously announced, the
strategic transformation is expected to complete in 2023.
In addition, adjustment has been made for the compensations
provided to the Group's management before IPO. These legacy
incentives comprise a combination of cash and share-based payments
and those that have not yet vested will vest across each of the
subsequent financial years ending 31 December 2024. The Group
believes that it is appropriate to treat these costs as an
adjusting item as they relate to a one-off award, designed and
implemented whilst the Group was under private ownership (and are
reasonably typical of that market and appropriate in that context).
The Group now operates in a new environment and the Remuneration
Committee will apply the Remuneration Policy in a listed company
context, hence similar awards are not expected in future. For
clarity, where share-based payment charges arise as a consequence
of the operation of the Group's post-IPO Remuneration Policy, these
are not treated as adjusting items as they represent non-cash
element of annual remuneration package. This includes costs of
EUR0.4m in 2021 relating to a grant in connection with the 2024
PSP.
Amortisation of acquired intangibles represents amortisation of
assets recognized at the time of an acquisition (primarily ADS and
Sygic). The item is prone to volatility from period to period
depending on the level of M&A.
Amortisation due to transformational useful life changes
represents accelerated amortisation of assets being replaced by
strategic transformation of the Group. The Group expects this
adjustment to be relevant until 2024.
Capital allocation
Our priority will continue to be organic and inorganic
investment to drive long term sustainable growth. As previously
advised, the Group will incur aggregated transformational capital
expenditures of EUR50m during 2022 and 2023 to develop our
integrated end to end digital platform and invest in the quality of
our integrated product and service offering. Our transformational
capex is firmly on track to complete in 2023, by which point we
will have the most modern, complete and modular tech stack and
product offering in the industry. We will continue to consider
value-accretive M&A opportunities in our current and adjacent
markets and in product and technology areas that will accelerate
growth. We will only look to make acquisitions where the
acquisition is complementary to our strategy and in line with our
acquisition criteria. We will also maintain a robust balance sheet.
As set out in our financial guidance the Group does not intend to
pay dividends as we continue to prioritise investment in
growth.
Treasury management
The Group maintains a disciplined approach to its financing and
is committed to maintain a net debt to EBITDA leverage ratio of
1.5-2.5 times over the medium term.
The Group holds financial debt under the Senior Multicurrency
Term and Revolving Facilities Agreement ("Syndicated Facilities
Agreement"), which consists of the following tranches:
-- Amortizing EUR term loan facility for a maximum amount of EUR47.5m
-- Non-amortizing EUR term loan facility for a maximum amount of EUR47.5m
-- Amortizing EUR term loan facility for a maximum amount of EUR95.0m (Acquisition/CAPEX)
-- Multicurrency revolving credit facility for a maximum amount of EUR120.0m, split as
o EUR45.0m Revolving Credit Facility
o EUR15.0m Multicurrency Overdraft Facility
o EUR60.0m Bank Guarantee Facilities
Subject to certain conditions, the Group can request to raise
additional debt under the Syndicated Facilities Agreement up to an
amount of EUR100.0m, of which up to EUR50.0m can be used to finance
certain acquisitions which are specifically permitted under the
Syndicated Facilities Agreement and the remaining EUR50.0m can be
used to finance or refinance working capital of companies,
businesses or undertakings acquired as a result of such permitted
acquisition or utilized by way of a guarantee, documentary or
stand-by letter of credit. As of 31 December 2021, EUR29m has been
drawn to establish limits for Bank Guarantees, with the remainder
of EUR21m to be drawn in Q1 2022 for the same purpose. The
Incremental Facility is not committed.
The Syndicated Facilities Agreement contains financial covenants
at the level of W.A.G. payment solutions, a.s. some of which were
amended at IPO:
-- Interest Cover (the ratio of Adjusted EBITDA to finance
charges), which replaced the previous cashflow cover (the ratio of
cashflow to debt service), is not less than 5.00:1 for each
twelve-month period ending on the last day of each financial
quarter. As at 31 December 2021, Interest Cover was at 11.81.
-- Net Leverage (measured quarterly on the basis of Total Net
Debt on the measurement date and rolling twelve months Adjusted
EBITDA) does not exceed 3.75:1 for each twelve-month period ending
on the last day of each financial quarter in 2021. As at 31
December 2021, Net Leverage was at 2.12.
-- Adjusted Net Leverage (measured quarterly on the basis of
Adjusted Total Net Debt on the measurement date and rolling twelve
months Adjusted EBITDA) does not exceed 6.50:1 for each
twelve-month period ending on the last day of each financial
quarter. As at 31 December 2021, Adjusted Net Leverage was at
3.49.
-- Borrowing Base (the ratio of the sum of outstanding amount of
revolving facility less cash and cash equivalents, to trade
receivables) which was amended to exclude the outstanding bank
guarantees and must not exceed 1:1 in relation to any three-month
period ending on the last day of each financial quarter. As at 31
December 2021, Borrowing Base was at 0.46.
During 2021 the Group repaid EUR18.4m of the Syndicated
Facilities Agreement borrowings and drew down EUR39.5m to finance
acquisitions and capital expenditures resulting in a notional debt
of EUR165m outstanding under the SFA as of 31 December 2021.
The Group concentrates cash on bank accounts held with financial
institutions that participate in the Syndicated Facilities
Agreement. Balances may be held on bank accounts with other
financial institutions to fund outgoing payments especially in
countries outside of the Economic and Monetary Union.
Sustainability
In 2021, Eurowag introduced its ESG strategy to support the
Group's purpose to create sustainable financial and technological
solutions for the benefit of the Commercial Road Transportation
Industry, society and the environment.
While ESG principles have always been at the core of Eurowag
purpose, we have formalized our approach to help our customers
prosper, make road transport cleaner, more efficient and safer, and
help our employees and communities thrive in a healthy
environment.
Highlights of progress in 2021
-- Formalised a new sustainability strategy including
commitments that focus on helping our customers compete and grow in
a low-carbon, digital future.
-- Established a sustainability function and strengthened
sustainability governance, including the appointment of Susan
Hooper as the Board-level champion.
-- Set new targets including:
o A carbon reduction target to reduce emissions from our own
operations (Scope 1 and Scope 2) by 50% by 2030 on a 2019 baseline;
with a scope 3 target under development
o A Diversity, Equity, and Inclusion target to have 40% female
representation in managerial roles by 2025 on a 2021 baseline.
o Achievement of a top 25% of employee engagement score as
compared to EU Tech companies benchmark by 2025.
-- Expanded the scope of reporting in line with TCFD requirements.
We continue to embed sustainability into our core business as
well as enhance and create a successful, resilient, sustainable
future for the CRT industry, our customers, as well as our
colleagues, communities and company.
Financial statements
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(EUR '000)
For the year ended 31 December
===== ================================
Notes 2021 2020
============================================================================= ===== =============== ===============
Revenue from contracts with customers 3 1,646,102 1,252,954
Costs of energy sold (1,492,970) (1,124,348)
============================================================================= ===== =============== ===============
Net energy and services sales 4 153,132 128,606
Other operating income 655 942
Employee expenses (55,665) (41,407)
Impairment losses of financial assets (3,116) (4,061)
Technology expenses (6,797) (4,049)
Other operating expenses (41,282) (24,600)
Operating profit before depreciation and amortisation (EBITDA) 46,927 55,431
Analysed as:
Adjusting items 4 22,793 3,168
----------------------------------------------------------------------------- ----- --------------- ---------------
Adjusted EBITDA 4 69,720 58,599
Depreciation and amortisation 4 (21,867) (18,246)
============================================================================= ===== =============== ===============
Operating profit 25,060 37,185
Finance income 2,234 141
Finance costs 5 (8,943) (8,488)
Share of net loss of associates (682) -
============================================================================= ===== =============== ===============
Profit before tax 17,669 28,838
Income tax expense 6 (8,019) (5,886)
============================================================================= ===== =============== ===============
PROFIT FOR THE YEAR 9,650 22,952
============================================================================= ===== =============== ===============
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 3,683 (4,002)
Exchange differences on translation of foreign operations 1,458 (835)
Deferred tax related to other comprehensive income - 46
----------------------------------------------------------------------------- ----- --------------- ---------------
TOTAL OTHER COMPREHENSIVE INCOME 5,141 (4,791)
============================================================================= ===== =============== ===============
TOTAL COMPREHENSIVE INCOME FOR THE YEAR 14,791 18,161
============================================================================= ===== =============== ===============
Total profit for the financial year attributable to equity holders of the
Company 9,148 21,239
Total profit for the financial year attributable to non-controlling interests 502 1,713
Total comprehensive income for the financial year attributable to equity
holders of the Company 14,259 16,468
Total comprehensive income for the financial year attributable to
non-controlling interests 532 1,693
Earnings per share (in cents per share): 10
Basic earnings per share 1.54 3.76
Diluted earnings per share 1.53 3.73
============================================================================= ===== =============== ===============
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(EUR '000)
As at 31 December
========================================== ====== =====================
Notes 2021 2020
========================================== ====== ========= ==========
ASSETS
Non-current assets
Intangible assets 7 193,453 171,364
Property, plant and equipment 8 34,763 32,975
Right-of-use assets 9 8,112 8,644
Investments in associates 12,934 -
Financial assets 37 258
Deferred tax assets 6 7,642 7,057
Derivative assets 252 -
Other non-current assets 3,554 4,395
========================================== ====== ========= ==========
Total non-current assets 260,747 224,693
========================================== ====== ========= ==========
Current assets
Inventories 9,557 5,289
Trade and other receivables 300,601 236,432
Income tax receivables 5,095 1,212
Derivative assets 2,694 526
Cash and cash equivalents 224,164 118,105
========================================== ====== ========= ==========
Total current assets 542,111 361,564
========================================== ====== ========= ==========
TOTAL ASSETS 802,858 586,257
========================================== ====== ========= ==========
SHAREHOLDERS' EQUITY AND LIABILITIES
Share capital 38,113 4,158
Share premium 194,763 2,927
Merger reserve (25,963) -
Other reserves 1,465 (3,263)
Business combinations equity adjustment (17,046) (46,009)
Retained earnings 84,526 72,177
Equity attributable to equity holders of
the Company 275,858 29,990
Non-controlling interests 8,889 34,115
========= ==========
Total equity 284,747 64,105
========================================== ====== ========= ==========
Non-current liabilities
Interest-bearing loans and borrowings 11 143,579 128,965
Lease liabilities 9 5,973 7,155
Deferred tax liabilities 6 5,495 3,858
Derivative liabilities 657 2,691
Other non-current liabilities 20,281 22,273
========================================== ====== ========= ==========
Total non-current liabilities 175,985 164,942
========================================== ====== ========= ==========
Current liabilities
Trade and other payables 314,522 305,957
Interest-bearing loans and borrowings 11 18,894 42,274
Lease liabilities 9 2,601 2,208
Provisions 1,545 1,380
Income tax liabilities 4,208 4,332
Derivative liabilities 356 1,059
========================================== ====== ========= ==========
Total current liabilities 342,126 357,210
========================================== ====== ========= ==========
TOTAL EQUITY AND LIABILITIES 802,858 586,257
========================================== ====== ========= ==========
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(EUR '000)
Notes Share Share Other Merger Business Retained Total equity Non-controlling Total
capital premium reserves reserve combinations earnings attributable interests equity
equity to equity
adjustment holders of
the parent
------------------------ ------- -------- -------- --------- --------- ------------- --------- ------------- ---------------- ---------
At 31 December 2019 4,158 2,927 1,499 - (41,745) 50,258 17,097 32,487 49,584
================================= ======== ======== ========= ========= ============= ========= ============= ================ =========
Profit for the year - - - - - 21,239 21,239 1,713 22,952
Other comprehensive income - - (4,771) - - - (4,771) (20) (4,791)
=================================
Total comprehensive income - - (4,771) - - 21,239 16,468 1,693 18,161
======== ======== ========= ========= ============= ========= ============= ================ =========
Dividends paid - - - - - - - (65) (65)
Share-based payments - - - - - 689 689 - 689
Contribution to reserve fund - - 9 - - (9) - - -
Put options held by
non-controlling interests - - - - (4,264) - (4,264) - (4,264)
At 31 December 2020 4,158 2,927 (3,263) - (46,009) 72,177 29,990 34,115 64,105
================================= ======== ======== ========= ========= ============= ========= ============= ================ =========
Profit for the year - - - - - 9,148 9,148 502 9,650
Other comprehensive income - - 5,111 - - - 5,111 30 5,141
=================================
Total comprehensive income - - 5,111 - - 9,148 14,259 532 14,791
======== ======== ========= ========= ============= ========= ============= ================ =========
Share options exercised 84 3,698 - - - - 3,782 - 3,782
Transactions with own shares - - - - - (10) (10) - (10)
Group reorganisation 2,582 (6,625) - 4,043 - - - - -
Pre-IPO bonus (share-based
payments) 7 - - - - - 7 - 7
Primary proceeds (net of
expenses) 1,334 194,763 - - - - 196,097 - 196,097
Cancellation of shares (58) - - - - 58 - - -
Allotment of class B share 30,006 - - (30,006) - - - - -
Dividends paid - - - - - - - (1,980) (1,980)
Transfer of reserves - - (383) - - 383 - - -
Share-based payments - - - - - 3,736 3,736 - 3,736
Acquisition of subsidiaries - - - - - - - 2,259 2,259
Acquisition of non-controlling
interests - - - - 27,003 (966) 26,037 (26,037) -
Put options held by
non-controlling interests - - - - 1,960 - 1,960 - 1,960
At 31 December 2021 38,113 194,763 1,465 (25,963) (17,046) 84,526 275,858 8,889 284,747
================================= ======== ======== ========= ========= ============= ========= ============= ================ =========
CONSOLIDATED STATEMENT OF CASH FLOWS
(EUR '000)
For the year ended 31 December
====== =================================
Notes 2021 2020
==================================================================== ====== ================ ===============
Cash flows from operating activities
Profit before tax for the period 17,669 28,838
Non-cash adjustments:
Depreciation and amortisation 4 21,867 18,246
Gain on disposal of non-current assets (29) (48)
Interest income (44) (50)
Interest expense 4,913 5,469
Movements in provisions 153 1,883
Impairment losses of financial assets 3,116 4,061
Movements in allowances for inventories (64) 89
Foreign currency exchange rate differences (784) 1,372
Fair value revaluation of derivatives (1,472) (1,057)
Share-based payments 3,736 689
Other non-cash items 792 (124)
Working capital adjustments:
(Increase)/decrease in trade and other receivables and prepayments (69,445) (7,279)
(Increase)/decrease in inventories (4,108) 1,855
Increase in trade and other payables 28,774 45,024
Interest received 44 50
Interest paid (4,498) (5,086)
Income tax paid (10,193) (7,273)
Net cash flows (used in)/generated from operating activities (9,573) 86,659
==================================================================== ====== ================ ===============
Cash flows from investing activities
Proceeds from sale of property, plant and equipment 225 89
Purchase of property, plant and equipment (5,221) (3,221)
Purchase of intangible assets (26,230) (19,954)
Purchase of financial instruments - (127)
Payments for acquisition of subsidiaries, net of cash acquired (1,166) -
Investment in associates (10,685) -
Net cash used in investing activities (43,077) (23,213)
==================================================================== ====== ================ ===============
Cash flows from financing activities
Payment of principal elements of lease liabilities (2,382) (2,145)
Proceeds from borrowings 39,519 12,147
Repayment of borrowings (18,773) (4,494)
Acquisition of non-controlling interests (27,003) -
Dividend payments (3,480) (65)
Proceeds from issued share capital (net of expenses) 199,879 -
Proceeds from sale of own shares 20 -
Net cash generated from financing activities 187,780 5,443
==================================================================== ====== ================ ===============
Net increase in cash and cash equivalents 135,130 68,889
Effect of exchange rate changes on cash and cash equivalents 63 (217)
Cash and cash equivalents at beginning of period 88,961 20,289
Cash and cash equivalents at end of period 224,154 88,961
==================================================================== ====== ================ ===============
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. The
ordinary shares of the Company are admitted to the premium listing
segment of the Official List of the UK Financial Conduct Authority
and trade on the London Stock Exchange plc's main market for listed
securities on 13 October 2021.
The Parent and its subsidiaries (together the "Group") are
principally engaged in:
-- Providing payment solutions for fleets of professional
transport and forwarding companies, as well as running a network of
petrol stations for commercial road transportation;
-- Providing unified way of electronic toll payments on a number
of European road networks for fleets of professional transport and
forwarding companies;
-- Recovery of VAT refunds and excise duty from European countries;
-- Creating an automated journey book and optimising traffic
with the use of integrated digital maps;
-- Combine advanced solutions in the field of electronics,
software engineering and applied mathematics;
-- Sale of navigation licenses; and
-- Other services.
Prior to the Initial Public Offering ("IPO"), W.A.G. payments
solutions, a.s. was the parent company of the Group for which
consolidated financial statements were produced. On 7 October 2021,
the Shareholders of W.A.G. payments solutions, a.s. transferred all
of their shares in W.A.G. payments solutions, a.s. to W.A.G payment
solutions plc in exchange for ordinary shares of equal value in
W.A.G payment solutions plc ("Group reorganisation"). This resulted
in W.A.G payment solutions plc becoming the new Parent Company of
the Group. On 8 October 2021, the IPO was completed, with 13
October 2021 representing admission to trading on the London Stock
Exchange ("Admission").
The financial information for the year ended 31 December 2021
(and comparative information for the year ended 31 December 2020)
is presented as a continuation of W.A.G. payments solutions,
a.s.
2. BASIS OF PREPARATION
The annual report and financial statements for the period ended
31 December 2021 were approved by the Board of Directors on 24
March 2022 along with this preliminary announcement, but have not
yet been delivered to the Registrar of Companies.
The financial information contained in this preliminary
announcement does not constitute the Group's statutory accounts
within the meaning of Section 434 of the Companies Act 2006.
The auditor's report on the statutory accounts for the period
ended 31 December 2021 was unqualified and did not contain a
statement under section 498 of the Companies Act 2006.
The consolidated financial statements of the Group have been
prepared in accordance with UK adopted international accounting
standards ("IFRS") in conformity with the requirements of the
Companies Act 2006.
As there was no change in control with the Group reorganisation
(see Note 1) involving the Company becoming the new holding company
of the Group in a share for share exchange, the financial
information for the year ended 31 December 2021 (and comparative
information for the year ended 31 December 2020) is presented as a
continuation of W.A.G. payment solutions, a.s. A movement in share
capital, share premium and merger reserve is reflected in the
statement of changes in equity at the date of Group
reorganisation.
The consolidated financial statements have been prepared on a
historical cost basis, except for derivative financial instruments
that have been measured at fair value. The consolidated financial
statements are presented in EUR and all values are rounded to the
nearest thousand (EUR '000), except where otherwise indicated.
The Board of Directors have considered the financial prospects
of the Company and the Group for the foreseeable future, which is
at least the next 12 months and made an assessment of the Company's
and the Group's ability to continue as a going concern. The
Directors' assessment included consideration of the availability of
the Company's and the Group's credit facilities, cash flow
forecasts and stress scenarios. Stress test scenarios applied in
the Going Concern statement are in line with scenarios covered in
the Viability statement. The Board of Directors are satisfied that
the Company and the Group has the resources to continue business
for the foreseeable future, in particular given the level of cash
balances available following the IPO, and furthermore are not aware
of any material uncertainties that may cast significant doubt upon
the Company's and the Group's ability to continue as a going
concern and the Board of Directors considers it is appropriate to
adopt the going concern basis of accounting in preparing the annual
financial statements.
The Group's fiscal year begins on 1 January and ends on 31
December.
3. SEGMENTAL ANALYSIS
Operating segments are reported in a manner consistent with the
internal reporting provided to the Chief Operating Decision Maker
("CODM"). The Group considers the Executive Committee to be the
CODM effective from July 2021. The Board of Directors was
considered as CODM prior to that date. The CODM reviews net energy
and services sales and contribution to evaluate segment performance
and allocate resources to the overall business.
For management purposes and based on internal reporting
information, the Group is organised in two operating segments;
Payment solutions and Mobility solutions. Payment solutions
represent the core of the 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 subsequently sold to customers using Payment solutions
products. The segment includes Tax refund, Telematics, Navigation,
and other service offerings.
Net energy and services sales, contribution, EBITDA, and
Adjusted EBITDA are non-GAAP measures, see Note 4.
The CODM does not review assets and liabilities at segment
level.
Year ended 31 December Payment Mobility Total
2021 EUR '000 solutions solutions
------------------------- ----------- ----------- ----------
Segment revenue 1,606,051 40,051 1,646,102
Net energy and services
sales 113,081 40,051 153,132
Contribution 99,594 28,926 128,520
Contribution margin 88% 72% 84%
Corporate overhead
and indirect costs
before adjusting
items (58,800)
Adjusting items
affecting Adjusted
EBITDA (22,793)
Depreciation and
amortisation (21,867)
Net finance costs
and share of net
loss of associates (7,391)
------------------------- ----------- ----------- ----------
Profit before tax 17,669
------------------------- ----------- ----------- ----------
Year ended 31 December Payment solutions Mobility Total
2020 solutions
EUR '000
------------------------ ------------------ ----------- ----------
Segment revenue 1,218,438 34,516 1,252,954
Net energy and
services sales 94,090 34,516 128,606
Contribution 79,726 25,040 104,766
Contribution margin 85% 73% 81%
Corporate overhead
and indirect costs
before adjusting
items (46,167)
Adjusting items
affecting Adjusted
EBITDA (3,168)
Depreciation and
amortisation (18,246)
Net finance costs
and share of net
loss of associates (8,347)
------------------------ ------------------ ----------- ----------
Profit before tax 28,838
------------------------ ------------------ ----------- ----------
Geographical split - segment revenue from contracts with
customers
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 For the year ended
31 December
============================= ======================
2021 2020
============================= ========== ==========
Czech Republic ("CZ") 316,707 253,724
Poland ("PL") 290,499 231,133
Central Cluster (excluding
CZ and PL) 189,439 142,540
Portugal ("PT") 334,069 267,637
Western Cluster (excluding
PT) 36,381 39,340
Romania ("RO") 192,742 109,854
Southern Cluster (excluding
RO) 278,125 201,494
Not specified 8,140 7,232
Total 1,646,102 1,252,954
============================= ========== ==========
There were no individually significant customers, which would
represent 10% of revenue or more.
Geographical split - net energy and services sales
EUR '000 For the year ended
31 December
============================= =====================
2021 2020
============================= ========== =========
Czech Republic 26,347 24,863
Poland 27,037 24,130
Central Cluster (excluding
CZ and PL) 20,566 14,932
Portugal 21,058 19,639
Western Cluster (excluding
PT) 5,590 6,251
Romania 19,676 12,102
Southern Cluster (excluding
RO) 26,495 20,769
Not specified 6,363 5,920
Total 153,132 128,606
============================= ========== =========
The following table presents the Group's non-current assets, net
of accumulated depreciation and amortisation, by country.
Non-current assets for this purpose consist of property and
equipment, right-of-use assets, intangible assets, investments in
associates and other non-current assets.
EUR '000 For the year ended
31 December
================ =====================
2021 2020
================ ========== =========
Czech Republic 126,427 88,143
Spain 63,238 65,589
Slovakia 53,882 55,200
United Kingdom 541 -
Other 8,729 8,446
---------------- ---------- ---------
Total 252,817 217,378
---------------- ---------- ---------
Timing of revenue recognition was as follows:
EUR '000 For the year ended
31 December
================================ ======================
2021 2020
================================ ========== ==========
Payment solutions
Goods and services transferred
at a point in time 1,585,701 1,198,768
Services transferred over
time 20,350 19,670
-------------------------------- ---------- ----------
1,606,051 1,218,438
Mobility solutions
Goods and services transferred
at a point in time 12,753 10,392
Services transferred over
time 27,298 24,124
-------------------------------- ---------- ----------
40,051 34,516
Total segment revenue 1,646,102 1,252,954
================================ ========== ==========
4. 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,
EBITDA, Adjusted EBITDA, Adjusted earnings, Adjusted earnings per
share and Adjusted effective tax rate.
The Group uses Alternative Performance Measures ("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 energy and services sales is an alternative performance
measure, which 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.
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
allocation of shared costs that are managed at a group level and
hence shown separately under Indirect costs and corporate
overhead.
The CODM reviews net energy and services sales and contribution
to evaluate segment performance and allocate resources to the
overall business (Note 3).
EBITDA
EBITDA is defined as operating profit before depreciation and
amortisation.
The Group presents EBITDA because it is widely used by
securities analysts, investors, and other interested parties to
evaluate the profitability of companies. EBITDA eliminates
potential differences in performance caused by variations in
capital structures (affecting net finance costs), tax positions
(such as the availability of net operating losses, against which to
relieve taxable profits), the cost and age of tangible assets
(affecting relative depreciation expense) and the extent to which
intangible assets are identifiable (affecting relative amortisation
expense).
Adjusted EBITDA
Adjusted EBITDA is defined as EBITDA before adjusting items:
Adjusting item Definition Exclusion justification
========================= ======================= ==========================================
M&A-related Fees and other M&A-related expenses differ every
expenses costs relating year based on acquisition activity
to the Group's of the Group. Exclusion of these
acquisitions activity costs allow better result comparability.
------------------------- ----------------------- ------------------------------------------
Non-recurring Non-recurring IPO costs are related to a one-off
IPO-related advisory and other event, which has significant
expenses expenses relating impact on 2021 profitability.
to the Admission IPO had very limited impact on
expenses in 2020 and will not
have any impact on expenses in
2022.
------------------------- ----------------------- ------------------------------------------
Strategic transformation Costs relating Broadening the skill base
expenses to broadening IPO and IT strategic transformation
the skill bases requires different skill base
of the Group's of the Group's employees. Expenses
employees (including related to these strategic events
in respect of were excluded as otherwise they
executive search would not be incurred. The expenses
and recruiting are expected to end in 2022.
costs), as well Transformation of key IT systems
as costs related Transformational expenditure
to transformation represents investments intended
of key IT systems to create a new product or service,
or significantly enhance an existing
one, in order to increase the
Group's revenue potential. This
also includes systems and processes
improvements to improve services
provided to customers. Transformational
expenditures, which cannot be
capitalised as they are mainly
related to research, were excluded
as the Group is executing its
strategic transformation programme,
which is expected to end in 2023
and due to the fact that annual
investments compared to Group's
Net sales are significantly higher
than regular investments of a
technology company.
------------------------- ----------------------- ------------------------------------------
Share-based Equity-settled Share options and cash-settled
compensation and cash-settled compensation have been provided
compensation provided to management and certain employees
to the Group's in connection with the IPO. Total
management before share-based payment charge to
IPO be excluded in period 2021-2024
amounts to EUR 21.9 million,
from which EUR 1.3 million is
a one-off and EUR 20.6 million
is amortised over three years.
Although these costs will be
amortised over the next three
years based on accounting policies,
they were excluded as they relate
to a one-off event. Anticipated
expense adjustment amounts to
EUR 6.9 million in 2022, EUR
6.1 million in 2023 and EUR 2.6
million in 2024.
Share awards provided post-IPO
(Performance share plan) were
not excluded as they represent
non-cash element of annual remuneration
package.
========================= ======================= ==========================================
Management believes that Adjusted EBITDA is a useful measure for
investors because it is a measure closely tracked by management to
evaluate the Group's operating performance and to make financial,
strategic, and operating decisions. It may help investors to
understand and evaluate, in the same manner as management, the
underlying trends in the Group's operational performance on a
comparable basis, period on period.
Adjusted EBITDA reconciliation
EUR '000 For the year ended
31 December
================================== =====================
2021 2020
================================== ========== =========
Intangible assets amortisation
(Note 7) 15,303 12,005
Tangible assets depreciation
(Note 8) 4,129 4,134
Right of use depreciation
(Note 9) 2,435 2,107
---------------------------------- ---------- ---------
Depreciation and amortisation 21,867 18,246
Net finance costs and
share of net loss of associates 7,391 8,347
Profit before tax 17,669 28,838
---------------------------------- ---------- ---------
EBITDA 46,927 55,431
M&A-related expenses (Note
4) 789 376
Non-recurring IPO-related
expenses 12,943 330
Strategic transformation
expenses 2,688 1,238
Share-based compensation 6,373 1,224
---------------------------------- ---------- ---------
Adjusting items 22,793 3,168
Adjusted EBITDA 69,720 58,599
================================== ========== =========
Adjusted earnings (net profit)
Adjusted earnings are defined as profit after tax before
adjusting items:
Adjusting item Definition Exclusion justification
========================== ============================== =================================
Amortisation of acquired Amortisation of assets The Group acquired
intangibles recognised at the time a number of companies
of an acquisition (primarily in the past and plans
ADS and Sygic) further acquisitions
in the future. The
item is prone to volatility
from period to period
depending on the level
of M&A.
-------------------------- ------------------------------ ---------------------------------
Amortisation due Accelerated amortisation Strategic IT transformation
to transformational of assets being replaced programme of the Group
useful life changes by strategic transformation is replacing selected
of the Group softwares before their
originally estimated
useful life. This may
also include early
fixed asset write-offs.
Amortisation of such
assets has been accelerated
and abnormally high
difference between
original and accelerated
depreciation was excluded
to allow period on
period result comparability.
Total expected amortisation
charge to be excluded
in period 2020-2022
amounts to EUR 4.1
million, from which
EUR 2.1 million is
expected to be excluded
in 2022. The amount
represents assets replaced
by strategic IT transformation
at the end of 2021,
however, decisions
may be taken as the
Group continues with
its strategic IT transformation
in 2022 and 2023, which
may lead to new assets
being replaced and
either accelerated
or written-off. The
Group expects this
adjustment to be relevant
until 2024.
-------------------------- ------------------------------ ---------------------------------
Adjusting items affecting Items recognised in Justifications for
Adjusted EBITDA the preceding table, each item are listed
which reconciles EBITDA in the preceding table.
to Adjusted EBITDA
-------------------------- ------------------------------ ---------------------------------
Tax effect Decrease in tax expense Tax effect of above
as a result of above adjustments is excluded
adjustments to adjust the impact
on after tax profit.
-------------------------- ------------------------------ ---------------------------------
The Group believes this measure is relevant to an understanding
of its financial performance absent the impact of abnormally high
levels of amortisation resulting from acquisitions and from
technology transformation programmes.
Adjusted earnings reconciliation
EUR '000 For the year ended
31 December
====================================== =====================
2021 2020
====================================== ========== =========
Profit for the year 9,650 22,952
Amortisation of acquired intangibles 5,419 5,577
Amortisation due to transformational
useful life changes 1,717 261
Adjusting items affecting Adjusted
EBITDA 22,793 3,168
Tax effect (3,801) (1,838)
Adjusted earnings (net profit) 35,778 30,120
====================================== ========== =========
Adjusted earnings per share
Adjusted 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. See Note 10 for further information.
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.
See Note 6 for further information.
5. FINANCE COSTS
Finance costs for the respective periods were as follows:
EUR '000 For the year ended
31 December
=========================== =====================
2021 2020
=========================== ========== =========
Bank guarantees fee 616 518
Interest expense 5,188 6,217
Factoring fee 698 366
Loss from the revaluation
of derivatives - 878
Foreign exchange loss 2,380 289
Other 61 220
Total 8,943 8,488
=========================== ========== =========
Net loss from the revaluation of derivatives relates to
contracts that did not qualify for hedge accounting.
In 2021, foreign exchange loss is mostly compensated by EUR
2,122 thousand gain from the revaluation of derivatives, which is
presented under finance income.
6. INCOME TAX
Corporate income tax for companies in the Czech Republic and
United Kingdom for the years 2020 and 2021 was 19%.
WAG Iberia, together with all the Alava tax resident companies
of ADS sub-group (Reivalsa, Trofa, Arraia Oil, Arraia Autopistas
and Liserteco 24h), formed a consolidation tax group for CIT
purposes beginning on 1 April 2019. Spanish corporate income tax is
24%.
Structure of the income tax for the respective periods is as
follows:
EUR '000 For the year ended 31 December
============================================================= =================================
2021 2020
============================================================= ============== =================
Current income tax charge 7,679 7,383
Adjustments in respect of current income tax of prior years 112 873
Deferred tax 228 (2,370)
Total 8,019 5,886
============================================================= ============== =================
Reconciliation of tax expense and the accounting profit
multiplied by the Company domestic tax rate for the below
periods:
EUR '000 For the year ended 31 December
=================================================================================== =================================
2021 2020
=================================================================================== ================ ===============
Accounting profit before tax 17,669 28,838
=================================================================================== ================ ===============
At UK's statutory income tax rate of 19% 3,357 5,479
Adjustments in respect of current income tax of prior years 112 873
Effect of certain income subject to a special tax rate - (1)
Effect of different tax rates in other countries of the Group 507 127
Change in unrecognised deferred tax assets - (503)
Non-deductible expenses (non-IPO) 1,398 1,153
Non-deductible expenses (IPO related) 1,368 -
Share-based payments 700 131
Net investment hedge 468 (263)
Tax credits - (432)
Effect of accumulated tax loss claimed in the current period (36) (133)
Effect of non-taxable income - (675)
Effect of unrecognised deferred tax assets relating to tax losses of current
period 145 130
At the effective income tax rate of 45.38% 20.41%
Income tax expense reported in the statement of profit or loss 8,019 5,886
----------------------------------------------------------------------------------- ---------------- ---------------
Adjusted effective tax rate is as follows:
EUR '000 For the year ended 31 December
========================================================== =================================
2021 2020
========================================================== ================ ===============
Accounting profit before tax 17,669 28,838
========================================================== ================ ===============
Adjusting items affecting adjusted EBITDA 22,793 3,618
Amortisation of acquired intangibles 5,419 5,577
Amortisation due to transformational useful life changes 1,717 261
---------------------------------------------------------- ---------------- ---------------
Adjusted profit before tax (A) 47,598 38,294
Accounting tax expense 8,019 5,886
Tax effect of above adjustments 3,801 1,838
---------------------------------------------------------- ---------------- ---------------
Adjusted tax expense (B) 11,820 7,724
Adjusted earnings (A-B) 35,778 30,570
Adjusted effective tax rate (B/A) 24.83% 20.17%
---------------------------------------------------------- ---------------- ---------------
Unused tax losses, for which no deferred tax asset has been
recognised were as follows:
EUR '000 31 December 31 December
2021 2020
============================== ============ ============
Unrecognised tax losses
expiring by the end of:
31 December 2021 - 113
31 December 2022 210 195
31 December 2023 279 283
31 December 2024 and after 813 852
No expiry date 942 239
------------------------------ ------------ ------------
Total unrecognised tax
losses 2,244 1,683
Potential tax benefit 426 320
------------------------------ ------------ ------------
The unused tax losses were incurred by dormant subsidiaries that
are not likely to generate taxable income in the foreseeable
future.
Deferred tax balances and movements:
EUR '000 1 January 2021 Business (Charged) Charged to Translation 31 December
combinations credited to equity differences 2021
profit or loss
================== ============== =============== ============== =============== =============== ===============
Difference between
net book value of
fixed assets for
accounting and
tax purposes (6,499) (946) (63) - (14) (7,522)
Allowances to
receivables 1,994 - (443) - 87 1,638
Provisions for
liabilities and
charges 1,276 - 119 - 59 1,454
Tax losses 157 - (15) - 6 148
Tax benefit from
pre-acquisition
reserves 6,995 - (572) - - 6,423
Other (724) - 746 - (16) 6
Net deferred tax
asset/(liability) 3,199 (946) (228) - 122 2,147
================== ============== =============== ============== =============== =============== ===============
Recognised
deferred tax
asset 7,057 - 463 - 122 7,642
================== ============== =============== ============== =============== =============== ===============
Recognised
deferred tax
liability (3,858) (946) (691) - - (5,495)
================== ============== =============== ============== =============== =============== ===============
EUR '000 1 January 2020 Business (Charged) Charged to Translation 31 December
combinations credited to equity differences 2020
profit or loss
================== ============== =============== ============== =============== =============== ===============
Difference between
net book value of
fixed assets for
accounting and
tax purposes (6,967) - 464 - 4 (6,499)
Allowances to
receivables 593 - 1,419 - (18) 1,994
Provisions for
liabilities and
charges - - 1,298 - (22) 1,276
Accruals tax
deductible in
different period 331 - (322) - 5 14
Tax losses - - 155 - 2 157
Tax benefit from
pre-acquisition
reserves 6,995 - - - - 6,995
Other (154) - (626) 46 (4) (738)
Net deferred tax
asset/(liability) 798 - 2,388 46 (33) 3,199
================== ============== =============== ============== =============== =============== ===============
Recognised
deferred tax
asset 5,636 - 1,408 46 (33) 7,057
================== ============== =============== ============== =============== =============== ===============
Recognised
deferred tax
liability (4,838) - 980 - - (3,858)
================== ============== =============== ============== =============== =============== ===============
The Group offsets tax assets and liabilities if and only if it
has a legally enforceable right to set off current tax assets and
current tax liabilities and the deferred tax assets and deferred
tax liabilities relate to income taxes levied by the same tax
authority.
Direct subsidiary of the Company W.A.G. payment solutions, a.s.
and its subsidiaries have undistributed earnings of EUR 154,840
thousand (2020: EUR 138,635 thousand) which, if paid out as
dividends to the Company, would be subject to 5% withholding tax.
An assessable temporary difference exists, but no deferred tax
liability has been recognised as the Group is able to control the
timing of distributions from this subsidiary and is not expected to
distribute these profits in the foreseeable future.
7. INTANGIBLE ASSETS
Cost of intangible assets subject to amortisation:
EUR '000 Goodwill Client Internal Patents External Other Internal External Total
relationships software and rights software intangible assets in assets in
development assets progress progress
============ ======== ============= =========== ========== ========== ========== ========= ========= ========
1 January
2020 104,654 23,657 22,437 5,460 20,488 155 10,765 933 188,549
============ ======== ============= =========== ========== ========== ========== ========= ========= ========
Additions - 510 18,120 2 52 - 365 409 19,458
Transfer - - - - 119 (119) - - -
Disposals - - - - (8) - - - (8)
Translation
differences (866) - (704) (2) (39) (5) (342) (4) (1,962)
============ ======== ============= =========== ========== ========== ========== ========= ========= ========
31 December
2020 103,788 24,167 39,853 5,460 20,612 31 10,788 1,338 206,037
============ ======== ============= =========== ========== ========== ========== ========= ========= ========
Additions - 113 18,738 - 2,077 - 7,647 - 28,575
Acquisition
of a
subsidiary - 4,965 - - 77 - - - 5,042
Transfer - - - - 915 - - (915) -
Disposals - - - - (155) - (124) - (279)
Translation
differences 1,410 - 2,298 5 719 - 747 36 5,215
============ ======== ============= =========== ========== ========== ========== ========= ========= ========
31 December
2021 105,198 29,245 60,889 5,465 24,245 31 19,058 459 244,590
============ ======== ============= =========== ========== ========== ========== ========= ========= ========
Accumulated amortisation and impairment of intangible assets
subject to amortisation:
EUR '000 Goodwill Client Internal Patents External Other Assets in Total
relationships software and software intangible progress
development rights assets
============== ========== ============== ============ ========== =========== =========== ========== ==========
1 January
2020 - (7,675) (8,207) (1,511) (5,641) (41) - (23,075)
============== ========== ============== ============ ========== =========== =========== ========== ==========
Amortisation - (1,236) (5,791) (1,221) (3,757) - - (12,005)
Transfer - - - - (14) 14 - -
Disposals - - - - 6 - - 6
Translation
differences - 74 258 3 63 3 - 401
============== ========== ============== ============ ========== =========== =========== ========== ==========
31 December
2020 - (8,837) (13,740) (2,729) (9,343) (24) - (34,673)
============== ========== ============== ============ ========== =========== =========== ========== ==========
Amortisation - (2,850) (9,246) (5) (3,200) (2) - (15,303)
Acquisition
of a
subsidiary - - - - (61) - - (61)
Disposals - - - - 155 - - 155
Translation
differences - - (981) (3) (271) - - (1,255)
============== ========== ============== ============ ========== =========== =========== ========== ==========
31 December
2021 - (11,687) (23,967) (2,737) (12,720) (26) - (51,137)
============== ========== ============== ============ ========== =========== =========== ========== ==========
Net book value:
EUR '000 Goodwill Client Internal Patents External Other Assets in Total
relationships software and rights software intangible progress
development assets
============ ========= ============== ============ =========== ============ =========== =========== ========
Net book
value
at 31
December
2020 103,788 15,330 26,113 2,731 11,269 7 12,126 171,364
Net book
value
========= ============== ============ =========== ============ =========== =========== ========
at 31
December
2021 105,198 17,558 36,922 2,728 11,525 5 19,517 193,453
============ ========= ============== ============ =========== ============ =========== =========== ========
Internal assets in progress consist of assets where the
development phase has not yet been completed.
The Group capitalised employee expenses and cost of materials
and services used or consumed in generating the intangible
asset.
Research and development costs that were not capitalised and
are, therefore, recognised expenses are as follows:
EUR '000 For the year ended
31 December
======================= =====================
2021 2020
======================= ========== =========
Expensed research and
development costs 5,024 5,003
----------------------- ---------- ---------
Impairment testing
Impairment exists when the carrying value of an asset or
cash-generating unit ("CGU") exceeds its recoverable amount, which
is the higher of its fair value less costs of disposal and its
value in use. The fair value less costs of disposal calculation is
based on available data from binding sales transactions, conducted
at arm's length, for similar assets or observable market prices,
less incremental costs for disposing of the asset. The value-in-use
calculation is based on a DCF model. The cash flows are derived
from the budget for the next five years and do not include
restructuring activities that the Group is not yet committed to or
significant future investments that will enhance the asset's
performance of the CGU being tested. Climate change impact on
recoverable amounts and useful life of non-financial assets is not
considered to be significant in the next five years. The
recoverable amount is sensitive to the discount rate used for the
DCF model, as well as the expected future cash-inflows and the
growth rate used for extrapolation purposes. These estimates are
most relevant to goodwill. The key assumptions used to determine
the recoverable amount for the different CGUs are disclosed and
further explained below.
Goodwill acquired through business combinations is allocated to
the respective CGUs for impairment testing.
Carrying amount of the goodwill allocated to each of the
CGUs:
EUR '000 31 December 31 December
2021 2020
============ ============ ============
Energy 40,180 40,180
Navigation 34,579 34,527
Telematics 25,996 24,673
Tax refund 2,382 2,347
Toll 2,061 2,061
------------ ------------ ------------
Total 105,198 103,788
------------ ------------ ------------
The recoverable amount of CGUs has been determined based on a
value-in-use calculation using cash flow projections from financial
budgets approved by senior management covering a five-year period,
which shows growth in revenues.
Key assumptions used for impairment testing
Discounted cash flow model is based on the following key
assumptions:
-- Discount rate
-- Net energy and services sales for Energy CGU; revenues for Navigation and Telematics CGUs
-- Revenue growth
Net energy and services sales and revenue growth were determined
by management separately for each CGU. They are based on the
knowledge of each particular market, taking into account the
historical development of revenues, estimated macroeconomic
developments in individual regions and the Group's plans regarding
new products development, growth opportunities and market share
expansion. Estimated net energy and services sales and revenue
growth represent the best possible assumption of the Group's
management considering the future development as at the end of the
period.
Discount rate reflects specific risks relating to the industry
in which the Group operates. Used discount rate is based on the
weighted average cost of capital ("WACC") of the Group as presumed
by Capital Asset Pricing Model.
The table below shows key assumptions used in the value-in-use
calculations for material CGUs:
31 December 31 December
2021 2020
======================= ============ ============
Energy CGU
Pre-tax discount rate 10.0% 10.5%
Long-term growth rate 1.8% 1.8%
Navigation CGU
Pre-tax discount rate 12.0% 12.0%
Long-term growth rate 2.0% 2.0%
Telematics CGU
Pre-tax discount rate 11.0% 11.0%
Long-term growth rate 2.0% 2.0%
======================= ============ ============
Tax refund and Toll CGUs were not significant.
The Group has considered the potential impact of climate change
in impairment tests. Additional sensitivities of discounted
cash-flows were modelled to determine break-even increase in
operating and capital expenses and a combination of revenue
decrease and expense increase. Reasonably possible change in
operating and capital expenses does not lead to any impairment.
Energy
The recoverable amount is estimated to exceed the carrying
amount of the CGU at 31 December 2021 by EUR 39,162 thousand.
Discount rate used in the value-in-use calculation would have to
increase to 15.56% for the recoverable amount to be equal to its
carrying amount.
Net energy and services sales used in the value-in-use
calculation would have to decrease by 34.74% for the recoverable
amount to be equal to its carrying amount.
Reasonably possible change in long-term revenue growth rate of
1.80% does not lead to any impairment.
Reasonably possible change in operating and capital expenses
does not lead to any impairment.
Reasonably possible change in revenue decrease and expenses
increase does not lead to any impairment.
Navigation
The recoverable amount is estimated to exceed the carrying
amount of the CGU at 31 December 2021 by EUR 44,375 thousand.
Discount rate used in the value-in-use calculation would have to
increase to 19.88% for the recoverable amount to be equal to its
carrying amount.
Revenue used in the value-in-use calculation would have to
decrease by 23.43% for the recoverable amount to be equal to its
carrying amount.
Reasonably possible change in long-term revenue growth rate of
2.00% does not lead to any impairment.
Reasonably possible change in operating and capital expenses
does not lead to any impairment.
Reasonably possible change in revenue decrease and expenses
increase does not lead to any impairment.
Telematics
The recoverable amount is estimated to exceed the carrying
amount of the CGU at 31 December 2021 by EUR 36,504 thousand.
Discount rate used in the value-in-use calculation would have to
increase to 19.32% for the recoverable amount to be equal to its
carrying amount.
Revenue used in the value-in-use calculation would have to
decrease by 16.74% for the recoverable amount to be equal to its
carrying amount.
Reasonably possible change in long-term revenue growth rate of
2.00% does not lead to any impairment.
Reasonably possible change in operating and capital expenses
does not lead to any impairment.
Reasonably possible change in revenue decrease and expenses
increase does not lead to any impairment.
8. PROPERTY, PLANT AND EQUIPMENT
Cost of property, plant and equipment:
EUR '000 Lands Leasehold Machinery Vehicles, Tangibles Total
and Buildings improvements and equipment Furniture in progress
and fixtures
========================= =============== ============== =============== ============== ============= =========
1 January 2020 23,178 3,207 18,575 5,798 3,713 54,471
========================= =============== ============== =============== ============== ============= =========
Additions - - 493 9 2,049 2,551
Transfer 1,499 457 1,373 483 (3,812) -
Disposals - - (476) (340) (268) (1,084)
Translation differences (685) (63) (455) (204) (127) (1,534)
=========================
31 December 2020 23,992 3,601 19,510 5,746 1,555 54,404
========================= =============== ============== =============== ============== ============= =========
Additions 1,768 432 2,762 213 5 5,180
Acquisition of
a subsidiary - - - 557 - 557
Disposals - (41) (119) (1,212) (10) (1,382)
Translation differences 631 173 705 291 23 1,823
========================= =============== ============== =============== ============== ============= =========
31 December 2021 26,391 4,165 22,858 5,595 1,573 60,582
========================= =============== ============== =============== ============== ============= =========
Accumulated depreciation and impairment of property, plant and
equipment:
EUR '000 Lands Leasehold Machinery Vehicles, Tangibles Total
and Buildings improvements and equipment Furniture in progress
and fixtures
========================= =============== ============== =============== ============== ============= ==========
1 January 2020 (3,885) (1,009) (10,668) (3,020) - (18,582)
========================= =============== ============== =============== ============== ============= ==========
Depreciation
charge (514) (435) (2,247) (938) - (4,134)
Disposals - - 433 350 - 783
Translation differences 117 27 267 93 - 504
========================= =============== ============== =============== ============== ============= ==========
31 December 2020 (4,282) (1,417) (12,215) (3,515) - (21,429)
========================= =============== ============== =============== ============== ============= ==========
Depreciation
charge (569) (590) (2,126) (844) - (4,129)
Acquisition of
a subsidiary - - - (448) - (448)
Disposals - 10 113 1,056 - 1,179
Translation differences (181) (108) (447) (256) - (992)
========================= =============== ============== =============== ============== ============= ==========
31 December 2021 (5,032) (2,105) (14,675) (4,007) - (25,819)
========================= =============== ============== =============== ============== ============= ==========
Net book value of property, plant and equipment:
EUR '000 Lands and Leasehold Machinery Vehicles, Tangibles Total
Buildings improvements and equipment Furniture in progress
and fixtures
================ =========== ============== =============== ============== ============= =======
Net book value
at 31 December
2020 19,710 2,184 7,295 2,231 1,555 32,975
Net book value
=========== ============== =============== ============== ============= =======
at 31 December
2021 21,359 2,060 8,183 1,588 1,573 34,763
================ =========== ============== =============== ============== ============= =======
Land, buildings and machinery and equipment are subject to
pledge in respect of bank loans:
EUR '000 31 December 31 December
2021 2020
====================== ============ ============
Pledged property,
plant and equipment 34,544 24,440
---------------------- ------------ ------------
Increase in pledged assets is mainly driven by fully pledged
shares of W.A.G payment solutions, a.s. after the Admission and
Group reorganisation.
9. LEASES (GROUP AS A LEASEE)
The Group leases assets including buildings, land and motor
vehicles. The average lease term is four years. Leases comprise a
larger number of various diversified lease contracts in different
locations.
Right-of-use assets
EUR '000 31 December 31 December
2021 2020
======================== ============ ============
Buildings 7,005 8,002
Lands 486 513
Vehicles and machinery 621 129
======================== ============ ============
Total 8,112 8,644
------------------------ ------------ ------------
Additions to the
right-of-use assets 1,509 498
======================== ============ ============
Depreciation charge of right-of-use assets
EUR '000 For the year ended
31 December
============== =====================
2021 2020
============== ========= ==========
Buildings (2,244) (2,021)
Lands (53) (52)
Vehicles and
machinery (138) (34)
============== ========= ==========
Total (2,435) (2,107)
============== ========= ==========
Lease liabilities
EUR '000 31 December 31 December
2021 2020
============================== ============ ============
Long-term lease liabilities 5,973 7,155
Short-term lease liabilities 2,601 2,208
============================== ============ ============
Total lease liabilities 8,574 9,363
============================== ============ ============
EUR '000 31 December 31 December
2021 2020
========================= ============ ============
Within one year 2,601 2,208
After one year but not
more than five years 4,289 5,369
More than five years 1,684 1,786
========================= ============ ============
Total lease liabilities 8,574 9,363
========================= ============ ============
Discount rate used was in the range 1.10%-3.25%.
Leases in the Income statement
Leases are shown as follows in the income statement:
EUR '000 For the year ended 31 December
========================================================== =================================
2021 2020
========================================================== ================ ===============
Other operating expense
Short-term lease expenses 547 981
Low-value lease expenses 53 27
Other lease expenses (additional costs) 38 34
========================================================== ================ ===============
Depreciation and impairment losses
Depreciation of right-of-use assets 2,435 2,107
================ ===============
Net finance costs
Interest expense on lease liabilities 229 229
Currency translation (gains)/losses on lease liabilities (107) 5
---------------------------------------------------------- ---------------- ---------------
10. EARNINGS PER SHARE
All ordinary shares have the same rights. Class B share was
excluded from earnings per share ("EPS") calculation as it has no
voting rights, rights to distributions or rights to the return of
capital on winding up.
Basic EPS is calculated by dividing the 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 the 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.
Adjusted EPS is calculated by dividing the Adjusted earnings
(net profit) for the period attributable to equity holders by the
weighted average number of ordinary shares outstanding during the
period.
The following reflects the income and share data used in
calculating EPS:
For the year
ended 31 December
========================================== ==========================
2021 2020
========================================== ============ ============
Net profit attributable to equity
holders (EUR '000) 9,148 21,239
========================================== ============ ============
Basic weighted average number of
shares 595,582,785 564,857,081
Effects of dilution from share options 1,483,248 4,852,427
Total number of shares used in computing
dilutive earnings per share 597,066,033 569,709,508
------------------------------------------ ------------ ------------
Basic earnings per share (cents/share) 1.54 3.76
Diluted earnings per share (cents/share) 1.53 3.73
========================================== ============ ============
The weighted average number of shares for the year ended 31
December 2020 of 564,857,081 has been determined based on the
number of shares of W.A.G. payment solutions, a.s. multiplied by
the ratio at which these shares were exchanged for shares in the
Company on 7 October 2021.
Adjusted earnings per share measures:
For the year
ended 31 December
======================================= ==========================
2021 2020
======================================= ============ ============
Net profit attributable to equity
holders (EUR '000) 9,148 21,239
======================================= ============ ============
Adjusting items affecting Adjusted
EBITDA (Note 4) 22,793 3,168
Amortisation of acquired intangibles* 4,297 4,107
Amortisation due to transformational
useful life changes 1,717 261
Tax impact of above adjustments* (3,573) (1,514)
======================================= ============ ============
Adjusted net profit attributable
to equity holders (EUR '000) 34,382 27,261
======================================= ============ ============
Basic weighted average number of
shares 595,582,785 564,857,081
======================================= ============ ============
Adjusted basic earnings per share
(cents/share) 5.77 4.83
======================================= ============ ============
Diluted weighted average number
of shares 597,066,033 569,709,508
======================================= ============ ============
Adjusted dilutive earnings per share
(cents/share) 5.76 4.79
======================================= ============ ============
*non-controlling interests impact was excluded
Options
Options granted to employees under Share-based Option Plans 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.
11. INTEREST BEARING LOANS AND BORROWINGS
31 December 2021 31 December 2020
============== ========= ========= =========== ================================ =================================
Currency Maturity Interest Total Amount in Amount in Total Amount in Amount in
rate limit in original EUR'000 limit in original EUR'000
currency currency currency currency
============== ========= ========= =========== ========= ========= ========== ========== ========= ==========
Bank loans
Senior
multicurrency
term and
revolving
facilities 3M EURIBOR
agreement* EUR 2025/05 + margin 47,500 30,898 30,898 47,500 38,815 38,815
Senior
multicurrency
term and
revolving
facilities 3M EURIBOR
agreement* EUR 2025/05 + margin 47,500 46,843 46,843 47,500 46,702 46,702
Senior
multicurrency
term and
revolving
facilities 3M EURIBOR
agreement* EUR 2025/05 + margin 95,000 84,510 84,510 95,000 55,967 55,967
Other loans CZK fixed rate 5,277 5,277 212 16,037 16,037 611
============== ==================== ========== ========= ========= ========== ========== ========= ==========
Revolving facilities and overdrafts 10 10 29,144 29,144
------------------------------------------------- --------- --------- ---------- ---------- --------- ----------
Total EUR 162,473 171,239
============== ================================= ========= ========= ========== ========== ========= ==========
Current EUR 18,894 42,274
============== ================================= ========= ========= ========== ========== ========= ==========
Non-current EUR 143,579 128,965
============== ================================= ========= ========= ========== ========== ========= ==========
*On 27 May 2019, the Group signed senior multicurrency term and
revolving facilities agreements ("club financing facilities") with
following banks:
a. BNP Paribas S.A. acting through its branch BNP Paribas S.A.,
pobočka Česká republika,
b. Citibank Europe plc acting through its branch Citibank Europe
plc, organizační slo ka,
c. Česká spořitelna, a.s.,
d. Československá obchodní banka, a. s.,
e. HSBC Bank plc acting through its branch HSBC Bank plc - pobočka Praha,
f. Komerční banka, a.s.,
g. Raiffeisenbank a.s.,
h. UniCredit Bank Czech Republic and Slovakia, a.s.
Under this club financing, up to EUR 60 million is available for
the Group for revolving facilities and overdraft accounts, and up
to EUR 92 million for bank guarantees.
The Group has not drawn any loans from a non-bank entity.
The interest expense relating to bank loans and borrowings is
presented in Note 5.
Interest bearing loans and borrowings are non-derivative
financial liabilities carried at amortised cost.
As at 31 December 2021 and 31 December 2020, the following
pledges have been made as a security for aforementioned loans:
-- pledge of shares (W.A.G payment solution, a.s. shares were fully pledged after Admission);
-- pledge of receivables;
-- pledge of bank accounts;
-- pledge of real estate (Note 8);
-- pledge of movable assets (Note 8); and
-- pledge of trademarks.
Under the old terms of the club financing facilities (until 27
August 2021), the Group was required to comply with the following
financial covenants:
-- cashflow cover (the ratio of cashflow to debt service) shall not be less than 1.10;
-- net leverage (the ratio of total net debt to Adjusted EBITDA) shall not exceed 4.25;
-- the borrowing base covenant (the ratio of the sum of
outstanding amount of revolving facility, outstanding bank
guarantees less cash and cash equivalents, to trade receivables)
shall not exceed 0.90; and
-- adjusted net leverage (the ratio of the adjusted total net
debt to Adjusted EBITDA) shall not exceed 6.50.
The Group complied with all financial covenants under the Senior
Facilities Agreement as of 31 December 2021 and 31 December 2020,
and forecasts compliance for the going concern period. The Group
did not comply with the cashflow cover covenant as of 31 March 2020
and 30 June 2020 due to adverse changes in working capital related
to lockdown restrictions during the COVID-19 pandemic. The Group
received waivers from the banks on both covenant breaches and
complied with all financial covenants as of 30 September 2020 and
31 December 2020. The Group replaced the cashflow cover covenant
with a less sensitive interest cover covenant in an amendment to
the Senior Facilities Agreement dated 27 August 2021.
After 27 August 2021, new financial covenant terms of the club
financing facilities were as follows:
Covenant Calculation Target Actual
31 December
2021
================ ===================================== =========== =============
the ratio of adjusted EBITDA
Interest cover to interest payable Min 5.00 11.81
the ratio of total net debt
Net leverage to adjusted EBITDA Max 3.75* 2.12
the ratio of the sum of outstanding
amount of revolving facility,
outstanding bank guarantees
Borrowing base less cash and cash equivalents,
covenant to trade receivables Max 1.00 0.46
Adjusted net the ratio of the adjusted total
leverage net debt to adjusted EBITDA Max 6.50 3.49
---------------- ------------------------------------- ----------- -------------
*the covenant shall not exceed 3.5 in 2022, 3.25 in 2023 and
3.00 from 2024 onwards
Principal risks
1 Product demand decline risk
Our operating results are materially affected by general
conditions in the economy. The volume of customer payment
transactions we process, and customer demand for the products and
services we provide, correlates with general economic conditions.
Economic downturns are generally characterised by reduced
commercial activity and trade, resulting in reduced demand and use
of our products and services by customers. Decline in general
economic conditions thus could result in a decline in demand for
fuel and toll payments, tax-refund services, telematics, or other
adjacent services we provide. Decline in demand would adversely
affect the Group's business, financial condition, results of
operation and prospects.
2 Growth strategy implementation risk
Our growth strategy is to build an integrated end-to-end digital
platform around the needs of our customers in the CRT industry. Its
implementation relies significantly on technology development and
increased power to analyse and utilise data. Inability to
successfully achieve the necessary technology developments, or not
completing strategic acquisition targets (as a result of
unavailability of targets or insufficient funding), would expose
the Group to an inability to achieve its growth objectives. This
would result in a decline in revenue and more difficult position to
recover from.
3 Competitors risk
The Group faces competition in each of its product lines from
many companies offering similar capabilities and services,
including international oil companies, single-product providers of
fuel cards, and other services. In addition, markets where we
operate are characterised as oligopolistic or monopolistic, and are
burdened by heavy regulation and restrictions for entering or
expanding. These factors could cause an adverse impact on revenues
and prospects if we cannot compete or expand our business
activities effectively.
4 External parties dependency risk
The Group's business is dependent on several key strategic
relationships with third parties, the loss of which could adversely
affect our results. Key partners mainly fall into the following
categories - fuel suppliers, acceptance network, toll chargers,
authorisation centres and technology service providers.
Furthermore, the Group has also initialized an internalization of
the authorization centre. The project is significantly dependent on
the current external provider of the authorization centre and an
inability to complete the internalization in an expected quality
and time-frame, would expose Group to additional costs and
potential business disruptions.
5 Technology security and resilience risk
The Group's business is reliant on technology and data
confidentiality, integrity and availability. Compared to other
businesses the Group is subject to the risk of external security
and privacy breaches, such as cyberattacks. If the Group is not be
able to adequately protect its information systems, including the
data it collects on its customers, it could result to a liability
and a damage to its reputation. Moreover, if the technology the
Group uses in operating its business and interacting with its
customers fails, does not operate to expectations or is not
available, then its business and results of operations could be
adversely impacted.
6 Personal dependency risk
The Group's success depends, in part, on its executive officers
and other key personnel, and our ability to secure the capabilities
to achieve our strategic objectives. Lack of capability and the
loss of key personnel could adversely affect our business. In
addition, we depend on our founder and CEO. Inability to secure a
ready successor could reduce our ability to achieve our strategic
goals and an adverse reaction from stakeholders.
7 Climate change risk
Climate change and the energy transition represent both a risk
and opportunity for the Group. Our reputation, operating and
compliance costs, and diversification of revenue, may be influenced
by our pace of action, the pace of the energy transition in the CRT
sector and by our customers in the short, medium and long term. We
currently derive a significant portion of our revenues from fees
for fossil fuels transactions. We note that changes in
road-transport policy and regulations, the cost of carbon, carbon
taxation, changes in market demand for alternative fuel and clean
mobility solutions, and pace of adoption of low-carbon powertrains
by our customers, can all influence the level of risk and
opportunity for the business. We also recognise that
extreme-weather events could pose a risk to business continuity for
our physical assets, as well as the health, safety and wellbeing of
our workforce and customers. In addition, we recognise we are
responsible for reducing our own carbon footprint, as well as for
contributing to solutions to help customers make the transition to
a low-carbon future.
8 Physical security risk
The Group operates a number of truck parks and these are exposed
to security threats. A security threat materialising as a result of
insufficient protection would result in danger to the health of our
employees and customers, and significant business disruptions.
9 Regulatory and licensing risk
The Group relies on numerous of licences for the provision of
its on-road mobility products, these include wholesale and retail
permits required for the provision of fuel products, as well as
fuel station operating licences for its truck parks, EETS licence
and EETS certifications in number of countries, Electronic money
institution license required for the provision of financial
services and insurance distribution licenses. As a consequence of
holding the licenses and certifications, the Group is subject to
strict regulatory requirements (Governance, Products, IT security,
Operational) of regulatory bodies in respective jurisdictions.
Non-compliance with these can result in fines, suspension of
business or loss of licenses. Key regulatory requirements are
operationalised by governance and compliance with UK plc listing
rules, anti-money laundering (AML) and sanction laws,
personal-data-protection laws, Czech national bank regulation,
fuel-reselling legislation and EETS regulation. In addition,
changes in laws, regulations and enforcement activities may
adversely affect our products, services and markets.
10 Clients default risk
The Group is subject to the credit risk of its customers, many
of whom are small and mid-sized CRT businesses. We are exposed to
customer credit risk, for particularly customers in our payment
solutions segment who we finance through post-payment of their
energy consumption and toll balances and also for customers with
invoices on 30- day payment terms. If we fail to assess and monitor
adequately the credit risks posed by counterparties, we could
experience an increase in credit losses and other adverse
effects.
The following risks are emerging due to the war in Ukraine:
1 Product demand decline risk - the volume of customer payment
transactions we process, and customer demand for the products and
services we provide, correlates with general economic conditions,
which may deteriorate due to the ongoing conflict.
5 Technology security and resilience risk - the Group is subject
to the risk of external security and privacy breaches, such as
cyberattacks. Increase of the risk is caused by an increased
frequency and severity of cyber-attacks due to the ongoing conflict
that is expected to impact countries where the Group operates.
8 Physical security risk - the Group's truck parks, office
buildings and employees are exposed to higher security threats,
especially if the conflict escalates.
Explanation of Alternative Performance Measures
Category Name Definition
Financial Adjusted EBITDA Adjusted EBITDA represents profit before
tax, finance income and costs, depreciation,
amortisation, M&A-related expenses, non-recurring
IPO-related expenses, strategic transformation
expenses and pre-IPO share-based compensation.
----------------------- -----------------------------------------------------
Financial Adjusted EBITDA Adjusted EBITDA margin represents Adjusted
margin EBITDA for the period divided by Net
energy and services sales
----------------------- -----------------------------------------------------
Financial Adjusted effective Adjusted effective tax rate is calculated
tax rate by dividing the adjusted tax expense
by the adjusted profit before tax. The
adjustments represent adjusting items
affecting Adjusted earnings.
----------------------- -----------------------------------------------------
Financial Adjusted earnings Adjusted earnings represents profit for
the year, before adjusting items affecting
adjusted EBITDA, amortisation of acquired
intangibles and amortisation due to transformational
useful life changes and related tax effects
----------------------- -----------------------------------------------------
Financial Adjusted basic earnings Adjusted basic EPS is calculated by dividing
per share the adjusted earnings by the weighted
average number of ordinary shares during
the period.
----------------------- -----------------------------------------------------
Financial CGU CGU (Cash generating unit) is the smallest
identifiable group of assets that generates
cash inflows that are largely independent
of the cash inflows from other assets
or group of assets.
----------------------- -----------------------------------------------------
Financial Contribution Contribution represents 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 allocation
of shared costs that are managed at group
level and hence shown separately under
Indirect costs and Corporate overhead.
Contribution is before Adjusting items.
----------------------- -----------------------------------------------------
Financial Contribution margin Contribution margin represents, for each
of the Group's two operating segments,
that segment's contribution as a proportion
of that segment's Net energy and services
sales.
----------------------- -----------------------------------------------------
Financial EBITDA EBITDA is calculated as profit before
tax, finance income and costs, depreciation
and amortisation.
----------------------- -----------------------------------------------------
Financial Net cash / Net debt Net debt / Net cash is calculated as
Cash and cash equivalents less Interest-bearing
loans and borrowings.
----------------------- -----------------------------------------------------
Financial Net energy and services Net energy and services sales represents
sales revenues from contracts with customers,
less cost of energy resold to customers.
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 some discretion
in establishing final energy price independent
from the prices of its suppliers.
----------------------- -----------------------------------------------------
Financial Organic Net energy Growth in Net energy and services sales
and services sales excluding the net sales of the Group's
growth acquisitions in the current period. In
2021, organic growth includes an adjustment
related to KomTeS acquisition to enhance
year-on-year comparability, Group net
sales to KomTeS are included as if KomTeS
was an external party in 2021 because
there were external sales to them in
prior period. Remaining net sales of
KomTeS are excluded in the calculation.
----------------------- -----------------------------------------------------
Financial Transformational Transformational capital expenditure
capital expenditure represents investments intended to create
a new product or service, or significantly
enhance an existing one, in order to
increase the Group's revenue potential.
This also includes systems and processes
improvements to improve services provided
to customers.
----------------------- -----------------------------------------------------
Operational Average active payment Average active payment solutions customers
solutions customers represents the number of customers who
have used the Group's payment solutions
services in a given period, calculated
as the average of the number of active
customers for each month in the period.
A customer is considered an active customer
if it uses the Group's payment solutions
products at least once in a given month.
----------------------- -----------------------------------------------------
Operational Average active payment Average active payment solutions trucks
solutions trucks represents the number of customer vehicles
that have used the Group's payment solutions
services in a given period, calculated
as the average of the number of active
customer vehicles for each month in the
period. A customer vehicle is considered
an active truck if it uses the Group's
payment solutions products at least once
in a given month.
----------------------- -----------------------------------------------------
Operational Payment solutions Payment solutions transactions represents
transactions the number of payment solutions transactions
(fuel and toll transactions) processed
by the Group for customers in that period.
A fuel transaction is defined as one
completed (i.e. not cancelled or otherwise
terminated) fuelling transaction. AdBlue
transactions are not counted as stand-alone
fuel transactions. A toll transaction
is defined as one truck passing through
a given toll gateway per day and per
merchant country (meaning multiple passages
by the same truck through any toll gateway
in one merchant country in a given day
is still counted as one transaction).
----------------------- -----------------------------------------------------
Operational Mobility solutions Mobility solutions segment represents
segment number of services, which are subsequently
sold to customers using Payment solutions
products. The segment includes Tax refund,
Telematics, Navigation and other service
offerings.
----------------------- -----------------------------------------------------
Operational Payment solutions Payment solutions segment represents
segment core of Group's revenues, which are based
on re-occurring and frequent transactional
payments. The segment includes Energy
and Toll payments, which are typical
first choice of a new customer.
----------------------- -----------------------------------------------------
Operational Net revenue retention Average net revenue retention represents,
for Eurowag only (i.e., excluding ADS
and Sygic), the average retained proportion
of the Group's net revenues derived from
its payment solutions and tax refund
customers during the entirety of the
previous years.
----------------------- -----------------------------------------------------
Notes:
1) Please refer to section Explanation of Alternative Performance Measures for a definition.
2) Presented measure excludes telematics and includes post-paid as a separate service
3) Calculated as impairment losses of financial assets to total
revenue increased by toll payment solutions turnover
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END
FR SEWEFDEESEFD
(END) Dow Jones Newswires
March 24, 2022 03:00 ET (07:00 GMT)
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