TIDMWPS

RNS Number : 1476T

Eurowag

16 March 2023

16 March 2023

W.A.G payment solutions plc ("Eurowag" or the "Group")

Preliminary results for the year ended 31 December 2022

CONTINUED STRONG AND RESILIENT GROWTH

W.A.G payment solutions plc ("Eurowag" or the "Group"), a leading pan-European integrated payments and mobility platform focused on the Commercial Road Transport ("CRT") industry, today announces its preliminary results for the year ended 31 December 2022.

Martin Vohánka, Founder and CEO, commented:

"I am very pleased with our strong performance this year despite the macro-economic challenges we faced across Europe. This is testament to the hard work and commitment of our team, and once again demonstrates not just the resilience of Eurowag, but the vital role our services play in keeping the Commercial Road Transport industry in Europe moving.

Our strategy over the last few years has been focused on accumulating and building our product and technology capabilities, as well as expanding our customer footprint across Europe, as we work towards achieving our goal of delivering the CRT industry's first truly integrated, end-to-end digital platform. We made significant progress towards achieving this ambition last year. Key strategic highlights include the acquisition of Webeye, entering into a new strategic partnership with JITpay and the acquisition of Inelo, which is now complete. We continue to make good progress on our transformational technology programme, which revolutionises the customer experience by piecing together our product capabilities into one seamless platform.

There is still much work to do as we approach a new phase of Eurowag's journey. However, we have entered into 2023 with strong momentum and I am more confident than ever that our integrated, end-to-end digital platform will unlock further value for both our customers and shareholders."

The Group achieved strong full-year results with growth in line with medium-term financial guidance.

-- Net energy and services sales(1) up 24.6% year-on-year to EUR190.9m, with organic growth(2) of 19.4% year-on-year;

-- Payment solutions(1) grew by 19.2% year-on-year to EUR134.8m with organic growth of 18.3% year-on-year;

-- Mobility solutions(1) grew 39.8% year-on-year to EUR56.0m, with organic growth of 22.3% year-on-year;

-- Adjusted EBITDA(1) up 17.0% year-on-year to EUR81.6m resulting in adjusted EBITDA margin(1) of 42.8% including incremental PLC costs and Webeye consolidation(3) ;

   --      Adjusted EBITDA margin excluding incremental PLC costs and Webeye consolidation is 45.6%; 
   --      On a statutory basis, profit before tax was EUR28.0m, a 58.3% increase year-on-year; 
   --      Transformational capital expenditure(1) programme on track, EUR25.5m spent in 2022; 

-- Net cash(1) position of EUR2.8m (gross cash of EUR146.0m) as at 31 December 2022, providing leverage headroom ahead of completing Grupa Inelo S.A. ("Inelo") acquisition in Q1 2023.

 
 Key statutory financials                 FY 2022   FY 2021   YoY 
 Revenue from contracts with customers 
  (EURm)                                  2,368.3   1,646.1   43.9% 
                                         --------  --------  ------ 
 Profit before tax (EURm)                 28.0      17.7      58.3% 
                                         --------  --------  ------ 
 Basic EPS (cents/share)                  2.41      1.54      57.2% 
                                         --------  --------  ------ 
 
 
 Alternative performance measures        FY 2022   FY 2021   YoY 
  (1) 
 Net energy and services sales (EURm)    190.9     153.1     24.6% 
                                        --------  --------  --------- 
 Adjusted EBITDA (EURm)                  81.6      69.7      17.0% 
                                        --------  --------  --------- 
 Adjusted EBITDA margin (%)              42.8      45.5      (2.7 pp) 
                                        --------  --------  --------- 
 Adjusted basic EPS(4) (cents/share)     5.75      5.77      (0.3%) 
                                        --------  --------  --------- 
 

Operational and strategic highlights

-- Positive performance against non-financial KPIs, demonstrating customer loyalty and the mission critical nature of Eurowag's products:

   --      Average active payment solutions customers(5) up 12.9% year-on-year to 16,950; 
   --      Average active payment solutions trucks(6) up 6.7% year-on-year to 88,189; 
   --      Payment solutions transactions(7) up 8.4% year-on-year to 35.2m; 
   --      Average net revenue retention(8) for the last five years was over 110%. 

-- Continued successful execution of M&A strategy, with key capabilities and services added to Eurowag:

-- Completed the acquisition of substantially all of the assets of Webeye Telematics Zrt. ("Webeye");

   --      Launched a strategic partnership with JITpay Group; 
   --      Entered into agreement with Sygic to take full control of its resources, and 
   --      Completed the acquisition of Inelo. 

Outlook

Eurowag enters 2023 in a strong position. We have a loyal and growing customer base and truly mission critical products and services. As we expand both our geographic footprint and the range of services we offer, we have a great opportunity to drive growth by acquiring new customers and selling additional products to existing customers.

This coming year, our focus will be on integrating the businesses we acquired in 2022, so we can unlock the expected synergies and capitalise on our cross-sell opportunities. We expect to finalise our transformational capex programme at the end of the year, having invested in the last few years towards developing the industry's first digitally integrated end-to-end platform. With the recent acquisition of Inelo, our leverage ratio is expected to exceed the top end of our medium-term guidance range of 1.5x to 2.5x net debt to adjusted EBITDA, therefore, our priority in the near-term is to return to within the target range as we remain disciplined and want to maintain a robust balance sheet.

As we enter our integration phase and continue to focus on the delivery of our platform, we can unlock the scale of opportunity whilst driving value for Eurowag's customers and shareholders. As a result, we continue to be confident that we will deliver strong growth in line with our expectations, and our medium-term financial guidance remains unchanged.

Medium-term guidance reiterated

   --      Organic net revenue growth between high teens and low twenties. 

-- Adjusted EBITDA margin expansion from mid-forties to high-forties. The acquisition of Inelo changes the revenue mix of the Group, with an increase of revenue contribution to the mobility segment. Inelo's revenues are majority subscription based and naturally more recurring, however it generates lower operational gearing. Consequently, the change in revenue mix may impact the pace of margin expansion to high-forties over the medium-term.

   --      Ordinary capex at around high single digit percent of net revenue. 
   --      Transformational capex programme of EUR50m cumulative for 2022 and 2023. 

-- Leverage target of 1.5x to 2.5x net debt to adjusted EBITDA. Our leverage ratio is expected to exceed the top end of the range by around half a turn of adjusted EBITDA on completion of Inelo and we anticipate returning to within the target range in the near-term.

Notes:

1. Please refer to section Explanation of Alternative Performance Measures for a definition and see note 5.

2. Growth in Net energy and services sales excluding the net sales of the Group's acquisitions in the current period. In 2022, organic growth includes an adjustment related to Webeye acquisition to enhance year-on-year comparability.

   3.     Webeye consolidation includes integration expenses related to acquisitions. 

4. Remained flat due to higher number of weighted average number of shares in 2022 at 688.9m (2021: 595.6m).

5. Average active payment 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.

6. Average active payment 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.

7. Number of payment solutions transactions represents the number of payment solutions transactions (fuel and toll transactions) processed by the Group for customers in that period.

8. Average net revenue retention represents, for Eurowag only (i.e., excluding ADS, Sygic and Webeye), 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.

Investor and analyst presentation today

Martin Vohánka (CEO) and Magdalena Bartoś (CFO) will host a virtual presentation and a Q&A session for investors and analysts today, 16 March 2023, at 9.00am GMT. The presentation and webcast details are available on the Group's website at https://investors.eurowag.com

Please register to attend the investor presentation via the following link: https://www.lsegissuerservices.com/spark/WAGPAYMENTSOLUTIONS/events/de660150-4425-4888-9948-1e677a52c810

Should you want to ask questions at the end of the presentation, please use the following link:

https://cossprereg.btci.com/prereg/key.process?key=PHQXJ3C8P

ENQUIRIES

Eurowag

Carla Bloom

Head of Investor Relations and Communications

+44 (0) 789 109 4542

investors@eurowag.com

Instinctif Partners

Tim McCall, Galyna Kulachek, Bryn Woodward

IR and international media

+44 (0)20 7457 2020

eurowag@instinctif.com

About Eurowag

Eurowag was founded in 1995 and is a leading pan-European integrated payments and mobility platform focused on the CRT industry. Eurowag's innovative solutions makes life simpler for small and medium businesses in the CRT industry across Europe through its unique combination of payments solutions, seamless technology, a data-driven digital ecosystem and high-quality customer service. https://investors.eurowag.com

Chief Executive Officer's Review

Last year we set out our ambition to make the CRT industry clean, fair, and efficient. We can achieve this by evolving and adding to the services that we offer to our customers, through innovation and M&A, as well as developing our digital capabilities. This will not only transform our business, but also the industry as a whole, which is lacking in digital solutions. Our overarching strategic goal is to deliver the CRT industry's first truly integrated, digital end-to-end platform.

Our five strategic pillars underpin our day-to-day operations, driving organic and inorganic growth, and represent the foundations for how we will achieve our long-term objectives. Key achievements delivered against each pillar in the year include:

1. Growing our existing customer base. 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 meet their evolving needs. Progress in 2022 includes:

-- Successful certification of our EETS platform received in Germany and more recently in the Czech Republic, as well as relevant bridges in Denmark and Sweden; now compatible with Poland's tolling system.

-- Extended our card acceptance network for both traditional and alternative fuels by an additional 1,005 locations across 15 European countries.

-- Added new acceptance points to our LNG and HVO100 network, which now represents more than 50% of the European market.

-- Driven by customer demand, we introduced more flexible financing options for VAT refund customers, such as hybrid financing or financing on demand, offering customers a prefinancing option.

   --      Maintained strong average net revenue retention above 110% over the last five years. 

2. Geographic expansion and market penetration. We apply our scalable business model to new markets serving both existing and new customers, thus expanding market share. Progress in 2022 includes:

-- Increased the number of active payment solutions customers by 12.9% with the majority of the growth coming from already established markets in the Southern and Central regions.

-- Expanded into the DACH region (Germany, Austria, Switzerland), establishing a new experienced sales team in Germany.

3. Go-to-market channel expansion. We acquire new customers through our marketing strategy based on geographic clusters and three sales channels (direct, indirect, and digital). Progress in 2022 includes:

-- Launched an end-to-end, fully automated digital customer acquisition, credit scoring and onboarding channel in 5 countries.

-- Migrated our ADS customers onto our Eurowag card network, including the onboarding and contractual processes.

-- Built an extensive base of digital leads and achieved strong conversion rates during our marketing campaigns.

-- Through our indirect channel, we signed two leading European OEM contracts, placing Eurowag's application in every new dashboard from 2027. Sygic also signed an agreement with koda Auto Volkswagen India Private Ltd. to integrate its GPS Navigation in their India 2.0 cars and future models until 2029.

4. Digital platform development. We are developing our end-to-end platform as a conduit for intermediate payments and data exchange between parties, connecting digital services, and physical assets, to create a fully connected marketplace. Progress in 2022 includes:

-- Added Eurowag Pay feature to our mobile app, allowing our customers to unlock fuel pumps remotely.

-- Activated mobile payments on bunkering locations and in the acceptance network across 10 countries, resulting in 424 POS ready for mobile payment as at the year end.

-- Implemented phase one of our SAP Enterprise Resource Planning ("ERP") software focused on processes relating to energy payment transactions.

-- Our Sygic application Road Lords reached around 632,000 drivers as at 31 December 2022, with average monthly downloads of c.106,000.

5. Accretive M&A. We have a strong track record of identifying and executing strategic M&A. We continue to screen acquisition targets that will create cross-sell and up-sell opportunities, generate cost and revenue synergies, and further develop our product and technology capabilities. Progress in 2022 includes:

-- Completed the acquisition of Webeye in July 2022, a leading fleet management solutions provider in Central and Eastern Europe, broadening the Group's customer base.

-- Launched a strategic partnership with JITpay Group in September 2022, a leading provider of digitalised billing, receivables management and financing solutions, including invoice discounting.

-- Entered into an agreement with Sygic in December 2022 to take full control of its resources, with the consideration for the remaining 30% equity interest to be payable and transferred in April 2024, in line with the original option agreement.

-- Completed the acquisition of Inelo in March 2023, a leading fleet management solutions and work time management software provider.

Updated strategic framework

It is clear that following the significant progress Eurowag has made in both expanding its geographic footprint and its range of services in recent years, it is now entering a new phase in its journey. As a result, we are updating our strategic framework to enable enhanced focus on key strategic priorities in order to achieve our goal of delivering an integrated, end-to-end digital platform.

Our key goals for 2023 and the medium-term are driving growth through cross-selling to existing customers and growing our customer base in existing and new European territories, integrating the businesses and capabilities acquired over the last few years and building on our end-to-end digital platform.

Taking these into consideration and to reflect the progress the business has made to date, we have evolved our strategic framework to focus on the following strategic priorities:

   1)   Be in every truck (attract) 
   2)   Drive customer centricity (engage) 
   3)   Grow core services (monetise) 
   4)   Expand platform capability (retain) 

With the appointment of a new CFO, Eurowag has decided to move its Capital Markets Day to after its half year results, giving them more time to become fully embedded into the business. Therefore, the new strategic priorities will be discussed in more detail during the CMD later in the year.

Operational review

Payment solutions

Payment solutions currently represent the largest part of our ecosystem and include secure means of making energy payments through pre- or post-paid fuel cards and toll payments. This is often the first introduction customers have to our services. In 2022, the payment solutions segment grew by 19.2% year-on-year to EUR134.8m (2021: EUR113.1m), representing 70.7% of total net energy and services sales.

Energy payments

During the year, we activated mobile payments at bunkering locations and on our acceptance network in 10 countries and will continue to roll out mobile activation into 2023 across our business. In addition, we extended our card acceptance network for both traditional and alternative fuels by an additional 1,005 locations across 15 European countries.

As the world moves towards more sustainable alternative fuels, we are focused on supporting the transition to a low-carbon future. In 2022, we opened our first Eurowag owned LNG bunkering stations in the Czech Republic, added new POS to our LNG acceptance network, including entering a new country, Hungary, and added POS where our customers can refuel with hydrotreated vegetable oil (HVO100). HVO100 can reduce CO2 emissions by up to 90%, compared with diesel fuel. At the end of the year, we had 302 active LNG and CNG stations, which represents more than 50% of the European market. With a focus on reducing emissions from bunkering locations, we are also installing photovoltaic panels in our truck parks.

At the outbreak of the Russian war in Ukraine, we reacted quickly and shut down the entire acceptance network in Russia immediately. Before Europe-wide sanctions were introduced, we ended co-operation with a Russian-related wholesale suppliers and POS partners. This resulted in the closure of around 1,000 card acceptance points. Where possible, we added new, alternative acceptance network partners and advised our customers to refuel prior to entering areas with closed acceptance networks.

Toll payments

Our toll payment services, like our energy payment services, allow customers to pre-pay or post-pay for their toll payments on European tolled road networks. During 2022, we received certification in Germany for our EETS platform; this is the single biggest toll volume domain in Europe, located at the intersection of major European international transport routes and this consequently represents an important milestone for Eurowag. We have also been certified on relevant bridges in Denmark and Sweden and are now compatible with the tolling system in Poland. More recently we were awarded certification from the Czech authority.

The nature of tolling requires not only continuous tracking of geolocation data, but also collection and storage of relevant vehicle attributes. Via our tolling solution, we not only feed the data platform with real-time location of vehicles, but also allow the matching of vehicle "master data" attributes, such as engine type, number of axles, weight class, and others. Therefore, our EETS solution not only supports the growth of our core business and is an enabler for the development and growth of Eurowag's broader business.

Mobility solutions

The mobility solutions segment offers our customers tax refund services, fleet management services, location-based products and services, and other adjacent services. In 2022, the segment grew by 39.8% year-on-year to EUR56.0m (2021: EUR40.0m), representing 29.3% of total net energy and services sales. Mobility solutions revenue is largely subscription based, and consequently, in the long-term, represents a more resilient and predictable revenue stream. Following completion of the proposed acquisition of Inelo, mobility solutions is estimated to represent around 45% of Eurowag's total net revenue.

Tax refund services

During the year, we introduced more flexible financing options for our customers, such as hybrid financing, financing on demand or advanced payment. Advanced payment speeds up not only the excise duty refund process but also the VAT refund process, allowing customers to receive their funds as soon as they submit their claims. Additionally, we increased the range of services in Croatia, Bulgaria, and Romania, and continue to review our markets to see where we can add further tax support solutions for our customers. A redesign of the current IT solution for tax refund has enabled the scalability of the business model and increased the speed and quality of the tax refund submissions. The use of AI has enabled us to streamline our processes further, enabling operational efficiencies.

As a tax refund provider, we get full insight into customers' journeys. This allows us to identify the times and locations where customers deviate from our solutions and opt for others, contributing important data analytics to our central data lake, which we can use to help us understand our customers better, cross-sell more effectively and drive the development of our integrated platform.

Fleet management services

Fleet management services allow dispatchers and truckers to better understand their trucks. It can check maintenance, tracks fuel consumption, driving time, load, and other metrics.

During the year, we added a Maintenance module, which allows our users to have all their maintenance tasks in one place. Dispatchers can record vehicle servicing, regular inspections, and expenses for their operations. The system is configured to notify users in advance if any maintenance is required on the truck. Dispatchers can now also download tachograph data remotely at any time. We have also started to implement new features that enable our telematics services to be used in hydrogen-powered vehicles.

In 2022, we acquired Webeye, a leader in CRT fleet management solutions. Webeye supports the carriers' road activities on several levels: route planning and fleet tracking support for operators and analysis of driving habits, style, and performance, either aggregated or on a driver-by-driver level. By combining Eurowag's payment and mobility services with Webeye's solutions, we can provide further optimisation to fleet operators and wider control over fleets, which increases efficiency and profitability. Data from connected trucks offers insights and enables the continuous development of new and improved solutions.

Location-based products and services

We offer smart navigation products and location-based services through our brand Sygic, one of the leaders in providing smart routing worldwide for both individual truck drivers and various size fleets. Sygic uses a Connected Operations Cloud to optimise fleet operations and enhance the driver experience. Sygic continues to invest in improving its app to enhance customer experience. During the year, app functionality has had updates such as quick and easy sign-in, provided more technical details and availability of the charging points, smart routing, and better-arranged payment process. Sygic's Road Lords application, which links drivers with each other to share unique trucking information when on the road, has been installed on more than 3 million mobile devices across Europe, whilst the active installation base reached 632,000 drivers at the year end. Road Lords is downloaded on average 106,000 times a month, and currently gets 4.6 stars out of 5 from customer reviews. Sygic is now listed on the Samsara App Marketplace . The Samsara app has 2 million IoT connected devices, which can easily connect their solution to Sygic Professional Navigation and guide their drivers as scheduled by fleet managers.

Putting our customers first

Our business has grown and developed because we have listened to and understood our customers' needs and pain points as the commercial transport industry becomes more complex and regulatory requirements increase. As we evolve and expand our services, we need to ensure our Net Promoter Score (NPS) and customer churn are moving in the right direction. During the year we embarked on two customer experience projects: one was to understand why our customers in Poland were struggling to implement our e-Toll solutions and another was to survey customers on our new digital platform. We mapped our customers' journeys in Poland and were able to understand the challenges our customers were facing with the installation of our toll products. We were then able to solve the issues in Poland, which in turn stabilised churn and improved our NPS by 50 points. The survey on our digital platform confirmed that our new product development reflected the needs of our customers, no matter their size or complexity of their journey. As a result, we were able to improve Eurowag's brand NPS in the year by 8.2 points to +40.7 points, showcasing our strong brand advocacy and brand loyalty across our markets.

Building our people capabilities

None of our achievements in the year would have been possible without our people. We continued to invest in our people leaders in 2022, building on a strong foundation of skills and capabilities.

As our operating model moves towards being a digitally enabled platform, expanding on our core competencies is essential to scaling our business and succeeding in developing our digital capabilities. With this in mind, we strengthened our Senior Leadership Team, including our Executive Committee, through changes to organization structures, personnel, and changes of roles. Within the year we added new roles such as a Chief Product Officer and Chief Information Officer. Changes like this naturally lead to attrition, and we had senior leavers in the year, including the Chief Commercial Officer, Chief HR Officer and Chief Technology Officer. The roles were filled promptly by individuals that have had previous experience with the business and have significant experience in their field.

To help us maintain our recent strong performance and drive sustained growth, we grew our employee base by 20% last year through both talent acquisition and acquisition of businesses, such as Webeye.

In a services-based business, we recognise that engaging our colleagues and ensuring they remain motivated, driven, and rewarded is crucial. In 2022, we re-ran our pulse survey with 82% of our employees participated in the survey and our engagement score was 66% (2021: 75%). In the future we plan to introduce more frequent short 'mood' check surveys to promptly address any feedback.

Following the end of the reporting period, we appointed a new Chief Financial Officer who will take over from Magdalena Bartoś , with effect from 17 April 2023. The new CFO will also be appointed as an Executive Director of the Board on 12 May 2023. I would like to thank Magdalena for her contribution to Eurowag over the past three years. She has played an important role and her knowledge and expertise has been invaluable. Her many achievements include leading us through the IPO and recent refinancing, and further building Eurowag's strong track record of delivering strategically important partnerships and acquisitions. I wish her all the best in her future endeavours.

Sustainability

Our sustainability plan underpins our strategy and is focused on four areas, climate action, customer success and well-being, company governance and culture and community impact. Eurowag's purpose is to make the CRT industry clean, fair, and efficient. We have committed to being a Net Zero company by 2050 and have established a decarbonisation roadmap to help us achieve our objective. We have accelerated our ambition to reduce greenhouse gas emissions (GHG) from our own operations and become a zero emissions operation by 2040. We have also set targets to help our customers reduce GHG and accelerate the energy transition to low-carbon commercial transport. Our target is to reach 80,000 active alternative fuel trucks using our products by 2030 and achieve 20% carbon intensity reduction per tkm by 2030.

In order to meet these targets, in 2022, we introduced HVO100 as an alternative fuel and opened two Eurowag owned LNG sites. We also introduced new services for electric vehicles, and our telematics products now support hydrogen-powered vehicles. Our driving behaviour tools and telematics data enables our customers to become safer and more efficient drivers. We installed photovoltaic panels on two truck parks in Spain and we continue to increase the proportion of energy we purchase from renewable sources for our own assets.

Through our community impact, we aim to donate at least 1.5% of annual EBIT to charities from 2023. In 2022, we made donations to support the Truck HELP foundation, which aids children who have lost a family member on the road, and we provided financial support to employees impacted by the war in Ukraine.

Financial Review

In the face of what were exceptionally challenging market conditions, Eurowag delivered a strong performance last year, demonstrating once again the inherent resilience of our business model and the mission critical nature of our services. At a headline level, net energy and services sales were up 24.6% with adjusted EBITDA up 17.0%, and pleasingly mobility solutions delivered organic growth of 22.3%, outpacing our payment solutions division, which itself saw double digit growth. This represents a strong platform from which to build as we enter 2023 and beyond.

These positive results were delivered in the context of unprecedented geo-political turmoil as a result of the Russian invasion of Ukraine, which led to significant increases in energy prices, inflation, and interest rates, as well as a deterioration in consumer and business confidence. On top of that, along with responding swiftly to sanctions and other operational challenges, on a personal level many of our team had family members and friends caught up in the conflict, which is taking place next to Poland, one of the largest and most important CRT markets in Europe. To deliver such a strong performance in this context represents a significant achievement and highlights the commitment and resilience of our team.

The business made significant strides in 2022 towards achieving our objective of delivering the CRT industry's first truly integrated, digital, end-to-end platform. As a result of our strategic M&A programme and investment in digital transformation, Eurowag has added both new geographies and additional products to our services, including, following the completion of Inelo transaction, mission critical Working Time Management software, and we have done so while maintaining financial discipline. However, as we enter the next phase of our journey there remains much to do in terms of integrating all our operations into one, seamless platform, to ensure we benefit from the significant opportunities we see in the market.

In terms of detail, last year our Adjusted EBITDA increased to EUR81.6 million (2021: EUR69.7 million) with Adjusted EBITDA margin of 42.8% (2021: 45.5%). This year-on-year profitability decrease reflects EUR3.4 million incremental PLC related costs (total PLC-related costs in 2022: EUR4.8 million, 2021: EUR1.5 million) and impact of Webeye consolidation. Adjusted EBITDA margin on a comparable basis, excluding incremental PLC costs and Webeye consolidation, would be 45.6%. An increase in operating costs due to a lower Covid-19 impacted base and inflation of EUR1.9 million, as well as EUR1.1 million severance payments and EUR0.8 million share-based payment (PSP) further impacted Adjusted EBITDA margin for the year.

On a statutory basis, profit before tax grew by 58.3% year-on-year to EUR28.0 million (2021: EUR17.7 million) as a result of an increase in the underlying business results supported by lower adjusting items (due to IPO-related expenses in 2021 not applicable in 2022, the drop was partially offset by higher M&A-related expenses in 2022) and net finance expense. Basic EPS increased by 57.2% to 2.41 cents per share (2021: 1.54 cents). Adjusted basic EPS remained flat year-on-year at 5.75 cents per share (2021: 5.77 cents) driven by higher basic weighted average number of shares in 2022 as a result of new shares issued in Eurowag's IPO in 2021.

Our overall financial position remains strong with reported EUR2.8 million of net cash as of 31 December 2022.

In line with the strategy announced at the IPO in October 2021, we continued investing in our digital transformation and inorganic growth. In 2022, our transformational capital expenditure totaled EUR25.5 million, while investments in our subsidiaries, associates and financial investments reached EUR60.1 million, which consists of the Webeye (EUR42.7 million), Last Mile Solutions (EUR3.0 million), and JITpay (EUR14.4 million) acquisitions.

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

 
                                  FY 2022   FY 2021   YoY (EURm)     YoY % 
                                   (EURm)    (EURm) 
 Segment revenue total            2,368.3   1,646.1        722.2     43.9% 
                                 --------  --------  -----------  -------- 
         Payment solutions        2,312.3   1,606.1        706.2     44.0% 
                                 --------  --------  -----------  -------- 
         Mobility solutions          56.0      40.0         16.0     39.8% 
                                 --------  --------  -----------  -------- 
 Net energy and services 
  sales total                       190.9     153.1         37.7     24.6% 
                                 --------  --------  -----------  -------- 
         Payment solutions          134.8     113.1         21.8     19.2% 
                                 --------  --------  -----------  -------- 
         Mobility solutions          56.0      40.0         16.0     39.8% 
                                 --------  --------  -----------  -------- 
 Expenses included in 
  Contribution                     (31.9)    (24.6)        (7.3)     29.6% 
                                 --------  --------  -----------  -------- 
 Contribution total(1)              159.0     128.5         30.4     23.7% 
                                 --------  --------  -----------  -------- 
         Payment solutions          118.2      99.6         18.6     18.6% 
                                 --------  --------  -----------  -------- 
         Mobility solutions          40.8      28.9         11.9     41.1% 
                                 --------  --------  -----------  -------- 
 Contribution margin 
  total(1)                            83%       84%      (1.0)pp       N/A 
                                 --------  --------  -----------  -------- 
         Payment solutions            88%       88%         0 pp       N/A 
                                 --------  --------  -----------  -------- 
         Mobility solutions           73%       72%       1.0 pp       N/A 
                                 --------  --------  -----------  -------- 
 Corporate overhead and 
  indirect costs before 
  adjusting items                  (77.4)    (58.8)       (18.6)     31.6% 
                                 --------  --------  -----------  -------- 
 Adjusted EBITDA                     81.6      69.7         11.9     17.0% 
                                 --------  --------  -----------  -------- 
 Adjusting items affecting 
  Adjusted EBITDA                  (18.5)    (22.8)        (4.3)   (19.0)% 
                                 --------  --------  -----------  -------- 
 EBITDA                              63.1      46.9         16.2     34.5% 
                                 --------  --------  -----------  -------- 
 Depreciation and amortisation     (30.4)    (21.9)          8.5     39.0% 
                                 --------  --------  -----------  -------- 
 Operating profit                    32.7      25.1          7.7     30.6% 
                                 --------  --------  -----------  -------- 
 

Note:

1. Please refer to section Explanation of Alternative Performance Measures for a definition and see note 5.

The Group's total revenues increased by 43.9% year-on-year to EUR2,368.3 million driven by higher energy prices (a corresponding growth was reported for costs of energy sold) and as a result of the growing scale of our payment solutions.

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 19.4%, while the overall net energy and services sales increased by 24.6% year-on-year, given the incremental EUR8.1 million from our Webeye acquisition.

Payment solutions net energy and services sales grew by 19.2% year-on-year. This increase reflects strong new customers and trucks acquisitions underpinned by strong average net revenue retention.

Mobility solutions net energy and services sales grew by 39.8% year-on-year, mainly as a result of effective cross-selling, as well as sales to automotive partners and Webeye consolidation.

In terms of geographic breakdown, the Central cluster remains the largest segment with nearly 50% share of total net energy and services sales (2022: EUR92.4 million; 2021: EUR74.0 million). All markets in the Central cluster delivered strong double-digit growth. The Southern cluster has kept the momentum from 2021 and remains the fastest growing area with 44.2% year-on-year increase (2022: EUR66.6 million; 2021: EUR46.2 million). On an organic basis, the Southern cluster delivered 32.5% growth year-on-year. A 9.4% decline in the Western cluster's net energy and services sales (2022: EUR24.2 million; 2021: EUR26.6 million) was mainly driven by a 9.6% decrease in the average number of active payment solutions customers (2022: 1,998 customers, 2021: 2,211 customers). Customer churn was driven by business closures reflecting the challenging market environment and ADS client base migration to the Eurowag platform. The vast majority of ADS customers were migrated in 2022.

Corporate expenses

 
                                    FY 2022  FY 2021  YoY (EURm)    YoY % 
                                     (EURm)   (EURm) 
Expenses included in Contribution      31.9     24.6         7.3    29.6% 
                                    -------  -------  ----------  ------- 
Corporate overhead and 
 indirect costs before adjusting 
 items                                 71.3     57.0        14.3    25.3% 
                                    -------  -------  ----------  ------- 
PLC related costs and PSP               6.0      1.8         4.2   227.6% 
                                    -------  -------  ----------  ------- 
Adjusting items affecting 
 Adjusted EBITDA                       18.5     22.8       (4.3)  (19.0)% 
                                    -------  -------  ----------  ------- 
Depreciation and amortisation          30.4     21.9         8.5    39.0% 
                                    -------  -------  ----------  ------- 
Total                                 158.1    128.1        30.0    23.5% 
                                    -------  -------  ----------  ------- 
 

The table above is from the segmental review, while the table below summarises corporate expenses based on statutory financial categories.

 
                                 FY 2022  FY 2021  YoY (EURm)  YoY % 
                                  (EURm)   (EURm) 
Employee expenses                   67.2     55.7        11.5  20.7% 
                                 -------  -------  ----------  ----- 
Impairment losses of financial 
 assets                              3.9      3.1         0.8  25.5% 
                                 -------  -------  ----------  ----- 
Technology expenses                  9.8      6.8         3.0  44.5% 
                                 -------  -------  ----------  ----- 
Other operating income             (0.4)    (0.7)         0.3  31.5% 
                                 -------  -------  ----------  ----- 
Other operating expenses            47.2     41.3         5.9  14.4% 
                                 -------  -------  ----------  ----- 
Depreciation and amortisation       30.4     21.9         8.5  39.0% 
                                 -------  -------  ----------  ----- 
Total                              158.1    128.1        30.0  23.5% 
                                 -------  -------  ----------  ----- 
 

Employee expenses increased by 20.7% year-on-year to EUR67.2 million as the Group focused on priority hires, talent retention, strengthening the structure, and implementing remuneration schemes appropriate for a listed company. Adjusting items included in employee expenses amounted to EUR7.4 million for the full year of 2022 (2021: EUR8.6 million) and included pre-IPO share based remunerations (2022: EUR5.3 million and 2021: EUR6.4 million) and costs related to senior management transformation (2022: EUR1.9 million and 2021: EUR0.7 million).

Impairment losses of financial assets amounted to EUR3.9 million (2021: EUR3.1 million). While throughout the year we managed increased credit losses risk due to higher notional credit exposure reflecting higher energy prices, our full year credit losses ratio remained flat (2022: 0.1% and 2021: 0.1%). Our expertise in managing credit risk and cash collections resulted in a strong and stable ageing performance of our receivables portfolio with approximately 80% balances current as of the end of December 2022.

Technology expenses increased by 44.5% year-on-year to EUR9.8 million (2021: EUR6.8 million), reflecting the Group's focus on technology transformation, cloud transition, and expenses related to the new generation ERP system. Adjusting items included in technology expenses amounted to EUR0.3 million in 2022 (2021: EUR0.6 million).

Other operating expenses increased by 14.4% year-on-year to EUR47.2 million (2021: EUR41.3 million), mainly due to a full year of PLC-related costs of professional services (incremental EUR2.4 million), return of travel and other costs post Covid-19, as well as inflation, resulting in an increase of EUR1.9 million and Webeye consolidation adding EUR1.7 million. Adjusting items included in other operating expenses amounted to EUR10.7 million for the year (2021: EUR13.9 million) and included expenses related to acquisitions of EUR7.1 million (2021: EUR0.4 million) and strategic transformation costs of EUR3.6 million (2021: EUR1.8 million).

Depreciation and amortisation grew by 39.0% year-on-year to EUR30.4 million (2021: EUR21.9 million) primarily as a result of transformational technology being put into production. Additional increase came from amortization of acquired assets of Webeye and one-off impact due to change of useful life of technology being replaced as a result of transformation. Adjusting items included in depreciation and amortisation amounted to EUR8.4 million for the year (2021: EUR7.1 million).

Net finance expense

Net finance expense in 2022 amounted to EUR4.1 million (2021: EUR6.7 million). The decrease mainly reflects the result on revaluation of derivatives and lower foreign exchange losses, partially offset by higher factoring fees related to higher average factoring limits utilisation throughout the year, as well as transaction fees reflecting the refinancing of existing debt announced in September 2022.

Taxation

The Group tax charge of EUR10.3 million (2021: EUR8.0 million) represents an effective tax rate of 36.8% in 2022 (2021: 45.4%). Corporate income tax for companies in the Czech Republic and the UK for 2021- 2022 was 19%, while in Spain it was set at 24%. These represent the major tax regimes in which the Group operates.

The Group's effective tax rate was 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 before tax for the year decreased to 24.3% (2021: 24.8%), largely due to higher profits in 2022.

   --      The effective tax rate for Adjusting items was 11.3% (2021: 12.7%) and was driven mainly by equity-settled, share-based payments and acquisition expenses in 2022. 

We adopted a prudent approach to our tax affairs, aligned with 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 with the exception of Italy, Bulgaria and Slovenia where no significant issues are expected.

On 29 November 2022 we approved and published the Group tax strategy. Our Group tax strategy is underpinned by our Code of Conduct and values. We believe that payment of an appropriate amount of tax is a key requirement for all businesses, and that tax payments enable wider society to benefit from business success. The Group manages its tax affairs according to local legal requirements.

EPS

Basic EPS for 2022 was 2.41 cents per share, a 57.2% year-on-year increase. This was predominantly due to higher profit for the year.

Adjusted basic EPS for 2022 was 5.75 cents per share which is flat relative to 2021. Weighted average number of ordinary shares in issue during 2022 amounted to 688,911,333 impacting the calculation (2021: 595,582,785). After accounting for the impact of PSP, adjusted diluted earnings per share was 5.75 cents per share. Adjusting items are as described below in the Alternative performance measures section.

Investments in subsidiaries and associates

Acquisition of Webeye Group

Further to the subsequent events discussed in the 2021 Annual Report and Accounts, the Group signed a novated agreement on 16 May 2022 to acquire substantially all of the assets of WebEye Telematics Zrt. ("Webeye") , a leading fleet management solutions provider in Central and Eastern Europe. The Group paid EUR23.3 million in cash upon the acquisition of 100% of the share capital of the non-Hungarian subsidiaries and a further EUR19.9 million was paid upon completion of the acquisition of the Hungarian subsidiaries on 1 July 2022. In addition, the Group will pay a deferred settlement component within three years of closing, a portion of which is contingent upon the achievement of certain KPIs. The maximum amount, including the deferred amount of the purchase price, is capped at EUR60.6 million.

The transaction has expanded the Group's customer base and Webeye's customers have gained access to Eurowag's unrivalled range of integrated end-to-end payment and mobility solutions leading to incremental revenue opportunities. Furthermore, data from the connected trucks will provide insights and enable the continual development of new and improved solutions to address customers' needs.

The provisionally determined fair values of identifiable assets and liabilities of subsidiaries of Webeye as at the date of acquisition were:

 
                                         EURm 
 Total assets                            35.1 
                                       ------ 
 Total liabilities                      (6.3) 
                                       ------ 
 Total identifiable net assets 
  at fair value                          28.7 
                                       ------ 
 Goodwill arising on acquisition         31.3 
                                       ------ 
 Purchase consideration: 
                                       ------ 
 Cash paid                               43.2 
                                       ------ 
 Deferred consideration (discounted)     16.8 
                                       ------ 
 Total purchase consideration            60.0 
                                       ------ 
 

From the date of acquisition until 31 December 2022, subsidiaries of Webeye contributed EUR8.1 million of revenue and EUR0.9 million loss after tax (mainly driven by amortisation of acquired intangibles and M&A related adjusting items). Excluding amortisation of acquired intangibles and adjusting items the adjusted profit after tax would have been EUR0.7 million. If the acquisition had occurred on 1 January 2022, consolidated revenue and consolidated loss after tax of combined Hungarian and non-Hungarian Webeye entities for the year ended 31 December 2022 would have been EUR15.4 million and EUR0.9 million, respectively. Excluding amortisation of acquired intangibles and adjusting items, the adjusted profit after tax would have been EUR1.6 million.

Acquisition of 9.99% share in JITpay

On 27 September 2022, Eurowag entered into a strategic partnership with JITpay, a German-based payment service provider specialising in the logistics industry. The transaction expands the Group's product portfolio by adding invoice discounting, digitalised billing, and receivables management solutions and strengthens its presence in Germany, one of the most strategically important trucking markets in Europe. As part of the strategic partnership, Eurowag acquired a 9.99% stake in JITpay for an initial consideration of EUR14.3 million, with the flexibility for a potential increase in its ownership over time, subject to regulatory approvals. The investment is considered to be a strategic investment and is not held for trading.

The Group has call options to acquire an additional 18.01% share, which can be exercised either by 3 July 2023 for a consideration of EUR25.7 million or by 1 January 2024 for EUR35.0 million. The first call option reflects the original valuation, which is not expected to change over a short period. In the case that neither of the call options is exercised, JITpay has the right to buy back the acquired 9.99% share for EUR1.

Acquisition of non-controlling interest in Sygic

On 20 December 2022, the Group signed an agreement with the non-controlling shareholders of Sygic a.s., which will enable the Group to acquire the remaining 30% equity interest in Sygic. Consideration for the 30% equity interest of EUR14.4 million is payable in April 2024, in line with the original option agreement. Ownership of the shares remains with the non-controlling shareholders until April 2024. However, following the fixed-price agreement, they are no longer exposed to variable returns from the investment.

Under the previous shareholders' agreement, the minority shareholders had certain rights pertaining to the application of Sygic's resources within the Group. Having full control of Sygic will provide the Group with unrestricted access to Sygic's resources and allow it to fully utilise Sygic's digital expertise and people capabilities. This, in turn, will enable the Group to accelerate its digital sales channel and integrated product initiatives by utilising Sygic's capabilities more effectively across Eurowag's whole range of mobility solutions.

Pay-out of deferred consideration related to Last Mile Solutions (LMS)

On 31 January 2022, the Group paid deferred acquisition consideration of EUR3.0 million, related to the acquisition of Threeforce B.V. (Last Mile Solutions).

Balance sheet

Net assets of the Group increased by 11.2% to EUR316.6 million, mainly reflecting profit for 2022 and positive revaluation of cash-flow hedges.

Intangible assets of the Group excluding goodwill increased by EUR42.7 million to EUR131.0 million in the reporting period, predominantly due to the Webeye acquisition and investments in strategic technology transformation.

Goodwill comprises mainly CGU Energy of EUR40.2 million, CGU Navigation of EUR34.6 million and CGU Fleet management solutions of EUR58.0 million. Goodwill is tested for impairment on an annual basis; there were no impairment indicators identified in 2022 (2021: no impairment posted).

Inventories increased by EUR10.7 million to EUR20.3 million, mainly due to a higher stock of on-board units and materials resulting from the Group's decision to secure stock levels in response to market chip shortages and shifting production to an alternative supplier as we cancelled co-operation with a manufacturer owned by Russian individuals. The remaining growth is mainly due to the Webeye consolidation and higher value of the fuel inventory, reflecting increased volumes and higher energy prices in the reporting year.

Trade and other receivables increased by EUR77.6 million to EUR378.2 million, mainly due to higher volume of transactions and increased energy prices.

Trade and other payables increased by EUR83.7 million to EUR398.2 million as a result of the factors mentioned above.

Cash performance

 
                                 FY2022 (EURm)   FY2021 (EURm)   YoY (EURm)       YoY 
                                                                               change 
 Net cash generated from 
  operating activities                    44.2           (9.6)         53.8    (562)% 
                                --------------  --------------  -----------  -------- 
 Net cash used in investing 
  activities                           (104.3)          (43.1)       (61.2)      142% 
                                --------------  --------------  -----------  -------- 
 Net cash used in financing 
  activities                            (18.2)           187.8      (206.0)    (110)% 
                                --------------  --------------  -----------  -------- 
 Net decrease in cash 
  and cash equivalents                  (78.2)           135.1      (213.4)    (158)% 
                                --------------  --------------  -----------  -------- 
 Cash and cash equivalents 
  at beginning of period                 224.2            88.9        135.3      152% 
                                --------------  --------------  -----------  -------- 
 Cash and cash equivalents 
  at end of period (presented 
  in statement of cash 
  flows)                                 146.0           224.2       (78.2)     (35)% 
                                --------------  --------------  -----------  -------- 
 Bank overdrafts                             -               -            -         - 
                                --------------  --------------  -----------  -------- 
 Cash and cash equivalents 
  at end of period (presented 
  in statement of financial 
  position)                              146.0           224.2       (78.2)     (35)% 
                                --------------  --------------  -----------  -------- 
 Interest-bearing loans 
  and borrowings                       (143.2)         (162.5)         19.3     (12)% 
                                --------------  --------------  -----------  -------- 
 Net cash/(debt)                           2.8            61.7       (58.8)     (95)% 
                                --------------  --------------  -----------  -------- 
 

As at 31 December 2022, the Group's net cash position stood at EUR2.8 million compared with EUR61.7 million as at 31 December 2021.

The decrease in the level of cash is due to the cash outflows used in investing activities, including technology transformation investments, the acquisition of Webeye and JITpay, deferred consideration due on LMS, as well as repayments of borrowing compensated by underlying cash generation.

Net cash flows from operating activities increased from (EUR9.6 million) in 2021 to EUR44.2 million, primarily due to business performance supported by stable working capital movements. Impact related to Adjusting items in the reporting period amounted to an outflow of EUR13.9 million (2021: EUR15.4 million) and included EUR2.1 million for acquisitions related expenses, EUR5.1 million for strategic transformation expenses, EUR5.4 million for non-recurring IPO-related expenses, and EUR1.3 million for share-based compensation.

Interest paid increased to EUR10.1 million (2021: EUR4.5 million) driven by one off cash outflow in the amount of EUR4.9 million related to refinancing transaction fees.

Tax paid decreased from EUR10.2 million in 2021 to EUR7.8 million due to the collection of prior-year income tax advances in 2022.

Net cash used in investing activities increased by EUR61.2 million to EUR104.3 million, largely due to the outflows in connection with investment in acquisitions and investments in transformational technology and asset base.

Net cash from financing activities amounted to an outflow of EUR18.2 million in the reporting period, representing the repayments of borrowings due to bank loans amortisation and lease payments.

Capital expenditure

Capital expenditure in 2022 amounted to EUR43.2 million compared with EUR33.8 million for the previous year. This increase relates to investments in the Group's technology platform and existing asset base.

The Group's ordinary capital expenditure of EUR17.7 million (2021: EUR10.4 million) represents reinvestment into the platform and assets base and amounted to 9.3% of net energy and services sales compared with 6.8% in the corresponding period of the previous year.

The Group's transformational investment programme was EUR25.5 million (2021: EUR23.3 million) and continued to focus on enhancing our sales and customer touchpoint channels, expanding our product capabilities and building a cloud-based data system for the Group.

As part of enhancing our sales channels, this year we focused on improving our customer digital journey and continued to invest in the implementation of our new generation ERP software supplied by SAP. The ERP implementation is delivered in stages, the first launched in April 2022, and focused on energy billing, pricing, sales and purchases. As a consequence of the development of the overall technology roadmap and in order to enable smooth integration of acquisitions, the technology team had to revise the architecture for the subsequent phases of implementation, in line with our current product and technology capabilities, ensuring we are building a SAP system fit for purpose. The second phase includes general ledger and group reporting processes, and due to the architecture redesign, the implementation was pushed back into 2024.

Part of our transformational capital expenditure was also invested into expanding our product capabilities, with most of the investment going into improving our EETS product offering and enhancing our financing capabilities, enabling further automation and real-time finance management. This year, we continued to invest in building a cloud-base data system. With the volume of customer information, we receive from all our products and services, we are starting to consolidate the data in a data lake and have started to build customer data insight tools to support our sales channels.

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.

 
                                    FY 2022   FY 2021   YoY (EURm)       YoY 
                                     (EURm) 
                                               (EURm)                 change 
Profit before tax                      28.0      17.7         10.3     58.3% 
                                   --------  --------  -----------  -------- 
Net finance expense and 
 share of net loss of associates        4.8       7.4        (2.6)   (35.6)% 
                                   --------  --------  -----------  -------- 
Depreciation and amortisation          30.4      21.9          8.5     39.0% 
                                   --------  --------  -----------  -------- 
EBITDA                                 63.1      46.9         16.2     34.5% 
                                   --------  --------  -----------  -------- 
M&A-related expenses                    8.0       0.8          7.2    907.3% 
                                   --------  --------  -----------  -------- 
Non-recurring IPO-related 
 expenses                                 -      12.9       (12.9)  (100.0)% 
                                   --------  --------  -----------  -------- 
Strategic transformation 
 expenses                               5.2       2.7          2.5     93.8% 
                                   --------  --------  -----------  -------- 
Share-based compensation                5.3       6.4        (1.1)   (16.7)% 
                                   --------  --------  -----------  -------- 
Adjusting items                        18.5      22.8        (4.3)   (19.0)% 
                                   --------  --------  -----------  -------- 
Adjusted EBITDA                        81.6      69.7         11.9     17.0% 
                                   --------  --------  -----------  -------- 
 
 
                                         FY 2022   FY 2021       YoY       YoY 
                                          (EURm)    (EURm)    (EURm)    change 
 Profit for the year                        17.7       9.7       8.0     83.4% 
                                        --------  --------  --------  -------- 
 Amortisation of acquired 
  intangibles                                6.6       5.4       1.1     21.1% 
                                        --------  --------  --------  -------- 
 Amortisation due to transformational 
  useful life changes                        1.8       1.7       0.1      8.6% 
                                        --------  --------  --------  -------- 
 Adjusting items affecting 
  Adjusted EBITDA                           18.5      22.8     (4.3)   (19.0)% 
                                        --------  --------  --------  -------- 
 Tax effect                                (3.0)     (3.8)       0.8   (20.3)% 
                                        --------  --------  --------  -------- 
 Adjusted earnings (net 
  profit)                                   41.6      35.8       5.8     16.1% 
                                        --------  --------  --------  -------- 
 
 
                                         FY 2022       FY 2021   YoY       YoY 
                                                                        change 
 Adjusted net profit attributable 
  to equity holders (EURm)                  39.6          34.4   5.4     15.3% 
                                    ------------  ------------  ----  -------- 
 Basic weighted average 
  number of shares                   688,911,333   595,582,785           15.7% 
                                    ------------  ------------  ----  -------- 
 Adjusted basic EPS (cents/share)           5.75          5.77          (0.3)% 
                                    ------------  ------------  ----  -------- 
 

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 expenses were incurred in 2021 and had no impact on expenses in 2022.

Acquisitions related expenses are fees and other costs relating to the Group's M&A activity. Acquisitions related expenses differ every year based on the acquisition activity of the Group. Exclusion of these costs allows for better results 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 relating to transformation of key IT systems. As previously announced, strategic transformation is due to be completed in 2023.

In addition, adjustment has been made for the compensations provided to the Group's management before the 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 has applied 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 a non-cash element of the annual remuneration package. This includes costs of EUR1.1 million in 2022 relating to grants in connection with the awards vesting in 2024 and 2025.

Amortisation of acquired intangibles represents amortisation of assets recognised at the time of an acquisition (primarily ADS, Sygic and Webeye). The item is prone to volatility from period-to-period depending on the level of M&A activity.

Amortisation due to transformational useful-life changes represents accelerated amortisation of assets being replaced by the 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 communicated, the Group will incur aggregated transformational capital expenditures of EUR50 million 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 capital expenditure is on track to complete at the end of 2023, by which point we will have an integrated, modern technology stack and product offering.

This coming year, our focus will be on integrating the businesses we acquired in 2022, aligning our products and people capabilities across the organisation, to unlock both revenue and cost synergies. With the recent acquisition of Inelo, our leverage ratio is expected to exceed the top end of our medium-term guidance range of 1.5x to 2.5x net debt to adjusted EBITDA. Therefore, our priority in the near term is to return to within the target range. M&A is still important to us, and we will continue to consider value-accretive M&A opportunities in our current and adjacent markets, and in product and technologies that will accelerate growth. However, we remain disciplined and want to maintain our strong and 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 maintaining a net debt to adjusted EBITDA leverage ratio of 1.5-2.5 times over the medium-term. Our leverage ratio may temporarily exceed the top end of the range depending on the quantum and timing of potential acquisitions.

In September 2022, the Group signed a new Multicurrency Term and Revolving Facilities Agreement to refinance and expand the Group's existing credit facilities (new club financing agreement). The new club financing agreement secured favourable terms on a strengthened debt package, extended maturities for all facilities, and expanded the Group's club of financing banks.

The new club financing agreement consists of four tranches:

(i) EUR150 million committed Facility A for the refinancing of all existing term loan indebtedness;

   (ii)    EUR180 million committed Facility B for permitted acquisitions and capital expenditure; 

(iii) EUR235 million committed Revolving Credit Facility, of which EUR85 million may be utilised by way of revolving loans, and EUR150 million may be utilised by way of ancillary facilities in the form of bank guarantees, letters of credit, or an overdraft up to EUR25 million;

(iv) EUR150 million uncommitted Incremental Facility for permitted acquisitions, capital expenditure, and revolving credit facilities up to EUR50 million of which not more than EUR25 million can be utilised as revolving loans.

The transaction provided more flexibility with respect to certain financial covenants, security packages, and other provisions than the Group's existing credit facilities.

The new maturity date for all term loan facilities and for the revolving credit facility is 30 September 2027. Facility A will amortise in quarterly repayments starting on 31 March 2023, with a EUR45 million balloon. Facility B will amortise in quarterly repayments starting on the later of the date falling 3 months from the end of the 24-month availability period, or the end of the first financial quarter after the full utilisation of the facility, with a EUR54 million balloon. Eurowag completed refinancing on 17 October 2022.

The new club financing agreement contains financial covenants at the Group level . Financial covenants are governed by financial definitions under the agreement . Financial covenants are tested semi-annually based on announced financials. As part of our testing under the viability statement, it has been concluded that the acquisition of Inelo does not impact our compliance with financial covenants.

 
 Covenant          Calculation                        Target             Actual 
                                                                    31 December 
                                                                           2022 
================  =================================  ===========  ============= 
                   the ratio of adjusted EBITDA 
 Interest cover     to finance charges                Min 4.00            11.20 
                   the ratio of total net debt 
 Net leverage       to adjusted EBITDA                Max 4.00*            0.13 
 Adjusted net      the ratio of the adjusted total 
  leverage          net debt to adjusted EBITDA       Max 6.50             1.95 
----------------  ---------------------------------  -----------  ------------- 
 

*The covenant shall not exceed 3.75 in 2024 and 3.50 in 2025 and onwards

The Group concentrates cash in bank accounts held with financial institutions that participate in the new club financing agreement. Balances may be held in bank accounts with other financial institutions to fund outgoing payments, especially in countries outside of the Economic and Monetary Union.

The Group has effectively managed its floating EURIBOR interest rate exposure on existing term loans through the execution of zero floor interest rate swaps. The swaps were structured with varying hedge ratios, providing coverage of 100% in 2023 and 2024, 75% in 2025, 50% in 2026, and 25% in 2027. This strategic approach demonstrates the Group's proactive risk management practices and commitment to financial stability.

With respect to Facility A, interest rate swaps executed in 2019 in the amount of EUR120.0 million (unamortized) have an effective payable fixed rate of 0.1% and are expected to expire in 2024. Interest rate swaps executed in 2022 but effective in 2023 in the amount of EUR30.0 million (amortized) have an effective payable fixed rate of 2.7% and are expected to expire in 2027. The latter have a complementary amortizing profile in order to achieve the above-mentioned hedge ratio.

Throughout 2022, the Group has effectively managed its working capital needs through the use of uncommitted factoring facilities, with average financing limits of EUR101 million and average utilization of 66.1% (2021: EUR96 million and 56.5% respectively). This demonstrates the Group's proactive approach to maintaining a strong financial position, and its ability to optimize working capital.

Risk management

Managing risk plays an important role in the Group achieving its strategic objectives and in adding sustainable value to all our activities.

Principal risks register

The list below provides further details on our identified principal risks, trends of their exposure and the mitigation measures implemented.

   1.   Product demand decline risk 

Our operating results are dependent on the conditions in the European economy and its cycles. The volume of customer payment transactions and customer demand for the products and services provided by the Group correlate with current and prospective economic conditions across Europe. Economic downturns are generally characterised by reduced commercial activity and trade, resulting in reduced demand and use of our products and services by customers.

As a result of COVID-19 and the Russian invasion of Ukraine, the economy in the EEA is already experiencing indications of recession. These are expressed by persisting disruptions in supply chains, high inflation, increasing of nominal interest rates, currency weakening, and reduced customer demand. Together with a possible recession there are high uncertainties regarding energy supplies across the region, which places additional pressures on the supply chains in the region and underlying demand for the Group's products and services. Eventual decline in demand would adversely affect the Group's current and prospective business and financial condition.

The Group considers the trend of the risk as increasing due to the continued Russian invasion of Ukraine and a possible economic recession. The current managed risk rating is above the Group's approved risk appetite.

Mitigation measures:

   --      Reducing dependency on a single economy 
   --      Reducing dependency on non-Euro currency 

-- Diversification of products and services offering and through new M&A activities and implementation of the subscription-based revenues

   --      Geographical expansions - EU and non-EU countries 

-- Strategy positioning flexibility - due to wider portfolio of products, capability to adjust our offer for customers to meet their needs

   2.   Fuel supplies risk 

The Group recognises a high risk of insufficient fuel at its energy payment network and payments drying up across our network as a consequence of the emerging energy crisis and imposed sanctions due to the Russian invasion of Ukraine. The situation could be aggravated by local government intervention (e.g. price capping, export embargo), unpredictable price development, potential sabotage of the crude pipelines from Russia and disruption of oil refinery production, with the Group experiencing higher risks in securing sufficient fuel supplies at its energy payment network, at favourable financial and operational terms. These risks have an adverse impact on the Group's financial position, operations, and business.

The Group considers the trend of the risk as increasing due to significant uncertainties on the energy markets caused by the Russian invasion of Ukraine, threats of further conflict escalation, potential sabotage of energy infrastructure and local government interventions. The current managed risk rating is above the Group's approved risk appetite.

Mitigation measures:

-- Our fuel procurement strategy is fully compliant with EU legislation and sanctions and in 2023, we will focus on local fuel procurement rather than cross-border deliveries. We are confident that we can provide high quality, EU origin and competitive diesel, LNG, and AdBlue to our customers

   --      Centralised procurement team for energy supplies and logistics 
   --      Continuous monitoring and reporting on the situation development of fuel supplies crisis 
   --      Scenarios analysis of potential future 

-- development and a preparation of preventive and mitigation actions in case of different scenario materialisation

   --      Diversification of different types of energies (eMobility, LNG) 
   3.   Interest rate risk 

Economic recession can be accompanied by an increase in nominal interest rates. We are utilising various forms of financing, some of which are subject to changes in interest rates. The acquisition of Inelo will result in an increase in debt for the enlarged organisation, since existing facilities will be utilised to acquire equity and refinance the acquired company's debt. We will be required to make interest payments on the increased debt. There is no guarantee that we will be able to refinance existing arrangements or that the cost or availability of financing will not negatively impact the Group's business, financial condition, and future prospects. Any increase in the cost, or lack of availability, of finance could have a material adverse effect on the Group's business, financial condition, results of operations, and future prospects.

The Group considers the trend of the risk as increasing due to current economic outlooks. The Group implements its hedging strategy to mitigate risk to the level of its risk appetite.

Mitigation measures:

   --      The management of interest rate risk is the responsibility of the Treasury department 

-- The Group has refinanced and expanded its existing credit facilities. The new maturity date for all term loan facilities and for the revolving credit facility will be 30 September 2027

-- The Group has implemented a hedging strategy using interest rate swaps on the existing senior term loans with 100% hedge ratio in 2023 and 2024, 75% hedge ratio in 2025, 50% hedge ratio in 2026, and 25% hedge ratio in 2027

-- As part of the integration process for the acquisition of Inelo, the incremental debt is expected to align to the hedging policy as stated above

   4.   Sanctions risk 

The Group continuously monitors its compliance with various sanctions regimes. Currently, one of the consequences of the Russian invasion of Ukraine is the sanctions imposed by the EU, UK, US, and the United Nations.

The Group's policies and procedures, which are designed to ensure that it, its employees, agents, and intermediaries comply with applicable sanctions, may fail to always comply effectively. Any violation of the sanctions regime could result in significant expenses or reputational harm, divert management attention, and otherwise have a negative impact on the Group.

Given the nature of Group's business, the sanctions are also exposing us to the risk of adverse business and operational impacts. The 6th sanctions package, imposed by the European Commission, has introduced prohibitions related to crude oil and petroleum products, mainly in terms of their purchase, import, and transfer. Due to the 6th sanctions package, the Group is exposed to the risk of balancing product disruption in central Europe caused by the ban on the export of products produced from crude oil originating in Russia and delivered via the Druzba pipeline. Disrupted product balancing in central Europe (Austria, Czech Republic, Slovakia, Hungary) could lead to a lack of products in certain markets during certain periods . In addition to those sanctions already issued (an 8th package of sanctions has currently been issued), the Group recognises a risk of new sanctions significantly impacting the current and prospective business model.

The Group considers the trend of the risk as stable due to proven ability of the Group to comply with all issued sanctions. The current managed risk rating is above the Group's approved risk appetite.

Mitigation measures:

-- Group uses a system for partner screening with an automatically updating sanctions database. Any new sanctions are also monitored by an external law firm within legislative monitoring and by the internal team, which dedicates capacity to screening subscribed notifications from respective authorities and press releases

-- The internal team thoroughly analyse any new sanctions and their impacts on the Group's business and operations. In complex matters, the team co-operates with specialist external advisors

-- New sanction legislation relevant for the Group's business is regularly reported to the Executive Committee together with scenario planning and impact assessment

   --      Manual screening of new partners and customers against sanctions lists 

-- Self-sanctioning scheme - application of stricter rules on partners, going beyond valid sanctions. It is used also as a prevention against impacts of newly issued sanctions

   5.   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. Moreover, the windfall tax scheme is being used by some competitors (large wholesellers) to decrease prices in their retail businesses and, in terms of pricing, the Group cannot compete with this. 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.

The Group considers the trend of the risk as increasing due to potential impacts on the markets from geopolitical, economical, and legislative uncertainties. The current managed risk rating is in line with the Group's approved risk appetite.

Mitigation measures:

   --      Reducing dependency on a single economy, single market, or single revenue stream 
   --      Geographical diversification and products or services offering diversification 

-- Membership in a number of industry associations and trade bodies to ensure that we are aware of market competition activity and trends

   --      Fast inorganic growth through M&A activities 
   --      M&A activities in 2022 - JITpay, Webeye and Inelo 
   6.   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. In addition, the Group has also started the process of setting up an internal authorisation centre for its fuel cards transactions. This service is currently provided by an external authorisation centre - AEVI. Realising the project is significantly dependent on the current external provider and an inability to complete the set up of an internal authorisation centre of acceptable quality and in the expected timeframe would expose the Group to additional costs and potential business disruptions.

The Group considers the trend of the risk as decreasing due to positive progress having been made with setting up an internal authorisation centre. The current managed risk rating is above the Group's approved risk appetite.

Mitigation measures :

-- IT vendors management policy - setting the standards for vendors selection, contracts reviews and signature and vendors monitoring

   --      Centralised vendors management role 
   --      Centralised procurement team for energy supplies and logistics 
   --      Centralised development and maintenance role for acceptance network 
   --      Contract management rules and attestation rules 
   --      Centralised legal counsel - aids contracts elaboration and reviews 
   --      New IT system on orders and invoices management - Coupa 

-- Continuous implementation of improvements, which are result of human rights risk assessment - human rights training, Code of Conduct for Suppliers and Suppliers onboarding process

-- Project on setting up an internal authorisation centre is progressing with the highest priority

   7.   Technology security and resilience risk 

The Group's business relies on technology and data confidentiality, integrity, and availability. As with other businesses, we are subject to the risk of external security and privacy breaches, such as cyber-attacks. In the last year, these attacks have increased in number and sophistication, particularly those coming from the Russian Federation. If we cannot adequately protect our information systems, including the data we collect on customers, it could result in a liability and damage to our reputation. The Group's outsourced Internal Audit has identified deficiencies in the area of IT security and our inability to close the gaps in a timely manner in accordance with the approved mitigation plan could expose the Group to a further increase in risk. Moreover, the Group is active in its M&A activities and, where a newly acquired company does not have IT security standards at the same level as the Group, the enlarged Group is exposing itself to an increased risk. Also, if the technology we use to operate the business and interact with customers fails, does not operate to expectations, or is not available, then this could adversely affect our business and results.

Despite the risk increasing from new acquisitions, as described above, the Group considers the trend of the risk as stable due to overall improvement in the IT security level of the Group and further standardisation of post-merger integration processes. The current managed risk rating is above the Group's approved risk appetite.

Mitigation measures:

-- The Group prevents itself against cyber-attacks by continuous implementation and improvement of the cyber security standards, in line with the ISO27001

-- The Group has established a central project on continuous improvement in information security that comprises key security functions from Technology and Risk departments

-- The Group, as part of crisis management, which was activated as a response to the Russian invasion of Ukraine, additionally funded and assigned highest priority to the immediate improvement cyber security tools to achieve better prevention against the increasing number of cyber-attacks

-- The Group has established 3 lines of defence system with clear responsibilities regarding cyber security

-- The Group has a standardised post-mergers integration process that considers the IT security level of newly acquired companies, setting priorities, and integration milestones

   8.   Personnel dependency risk 

The Group's success depends, in part, on its Executive Committee members 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 October 2022, the Group announced the planned departure of its CFO. An inability to find an adequate replacement would expose the Group to additional risk. Moreover, the current economic environment and competition in the job market are increasing the risk of retaining key personnel and acquiring new talents.

We also depend on our founder and CEO. The inability to secure a ready successor could reduce our ability to achieve our strategic goals and an adverse reaction from stakeholders.

The current managed risk rating is above the Group's approved risk appetite. The Group considers the trend of the risk as decreasing due to the successful hiring of a new CFO and Senior Finance expert to help with the transition.

Mitigation measures:

   --      The Group has hired a new CFO and secured sufficient transition plans from the current CFO 

-- The Group has hired a Senior Finance expert, with PLC experience to help with the transition

-- Establishing and nurturing a talent pool to maintain the required skills level within the Group

-- Annual salary review process in place to reflect inflation, market salary levels, and performance ratings

   --      Long-term retention plans for the talent pool 
   --      Elaboration of the succession plans, providing adequate training for chosen successors 
   --      Eurowag Group commitment to greater diversity, equity, and inclusion 
   --      Key personnel rotation for selected functions 
   9.   Climate change risk 

Climate change and 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. Our business generates a significant proportion of revenue from fees through selling energy to the CRT sector, which currently uses predominantly diesel fuel. We are aware 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 well-being of our workforce and customers. The Group already recognises the impact of weather changes in delays and the decrease in transactions linked to seasonal transportation in some regions. In addition, we recognise that we are responsible for reducing our own carbon footprint, as well as contributing to solutions to help customers make the transition to a low-carbon future.

The Group considers the trend of the risk as increasing due to science predictions and upcoming actions of regulators, countries, and community leaders. The Group has a strategy in place to mitigate the risk to the risk appetite level. The current managed risk rating is above the Group's approved risk appetite.

Mitigation measures:

-- Investing in a portfolio of alternative fuels and technologies, including eMobility (investment in Last Mile Solutions), to support the transition to a low-carbon future in the CRT sector

-- Investment in digitalisation and technologies to help our customers improve efficiency in CRT road transport and reduce energy intensity per-kilometre of transported goods

-- Formalisation of the Group's ESG strategy, including carbon reduction targets for our operations as well as the development of targets and actions to reduce Scope 3 emissions across our value chain

-- Engagement with OEM manufacturers to help with developing lower-carbon-intensive vehicles with greater tracking and monitoring of environmental impacts

-- Review of business continuity plans to take into account the potential impacts of extreme weather events driven by climate change and the impact on both people and physical assets

-- Increased reporting transparency of carbon emissions and related actions to reduce emissions

-- Formal, structured scenario analysis to assess the physical and transition risks for Eurowag and its assets and inform ongoing risk assessment and mitigation measures as well as reporting in line with TCFD

   --      M&A activities focus on non-energy businesses 

10. Physical security risk

The Group operates a number of truck parks and offices, and these are exposed to security threats. A security threat materialising as a result of insufficient protection or natural disasters would result in danger to the health of our employees and customers, and significant business disruptions. This risk increased this year with the Russian invasion of Ukraine and potential escalation of the conflict to other countries, including those where the Group has its employees and assets. Moreover, there is an increasing risk of security threats as a result of the war impacts. These are not limited to energy crisis and fuel shortages at Group' petrol stations. In addition, the recent earthquakes in Turkey and Syria have had a catastrophic impact on the lives and health of tens of thousands of people and represent an increasing risk factor for the Group in terms of protecting the lives and health of its employees and customers in these and other natural disaster-prone regions.

The Group considers the trend of the risk as increasing due to the Russian invasion of Ukraine and its potential further development.

Mitigation measures:

-- Implementation of health and safety plans at the Group's truck parks to avoid security threats materialising

   --      Having emergency plans in place and staff trained to act in an emergency situation 

-- Petrol stations security rules and system for the prevention of physical security threats and their regular control and revision

   --      Business continuity plans in place and their regular testing and revision 

11. Regulatory and licensing risk

The Group relies on numerous 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 a number of countries, electronic money institution licence required for the provision of financial services, and an insurance distribution licence. As a consequence of holding these licences and certifications, the Group is subject to strict regulatory requirements (Governance, Products, IT security and Operational) of regulatory bodies in respective jurisdictions. Non-compliance with these can result in fines, suspension of business or loss of licences. Key regulatory requirements are undertaken by governance and compliance with UK 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 are accompanied with the cost of implementation and may well adversely affect our products, services and markets.

The current managed risk rating is above the Group's approved risk appetite. The Group considers the trend of the risk as increasing due to potential future legislative changes (see emerging risks) and further expansion of Group's business activities within highly regulated markets. The Group focuses on delivering the technology roadmap and has strengthened its Senior Leadership Team with the focus on technology and operations, to address the gap between risk appetite and risk rating.

Mitigation measures:

-- Dedicated legal and compliance business partners for all business units, with regulation watch implied

-- Continuous improvement of the risk management control framework, specifically in terms of regulatory and licensing risks mitigation

   --      Involving legal and compliance counsels in new-markets entry process 
   --      Implementing Group-wide AML policy, partner screening directive, and detailed AML directive 
   --      Regular AML re-screening of customers who use regulated financial services 
   --      Annual AML audit with sufficient results 
   --      Group-wide personal-data protection policy and detailed GDPR directive 

12. 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, particularly for customers in our payment solutions segment, who we finance through post-payment of their energy consumption and toll balances. 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 Group considers the trend of the risk as stable due to proven credibility and efficiency of the Group's credit risk management. The current managed risk rating is in line with the Group's approved risk appetite.

Mitigation measures:

-- Credit assessment at onboarding (scoring) - in determining the credit risk of its customers, the Group performs a credit assessment, which consists of a financial analysis of recent results and development as well as a business analysis and verification using available databases

-- The Group's credit risk department conducts ongoing credit exposure monitoring, revising credit limits in regular intervals and upon utilisation of available limits, and updating collateral from customers as needed

-- The ageing of receivables is regularly monitored by the Group Management to assess credit risk, based on expected loss calculations, which evaluate probability of default, exposure at default, and loss given default

-- The Group has credit insurance subject to first-loss policies on both individual and aggregate bases to ensure against the risk of default from customers on its trade and other receivables

-- Collateral (guarantees, pledge of receivables, pledge of physical assets) - the Group accepts cash deposits and advance payments from customers to secure credit exposure. The Group also accepts other types of security (such as pledges of assets or promissory notes) to mitigate credit risk

13. Processes execution risk

The Group operates in a very complex and diversified environment. The Group's entities are in different stages of processes, IT systems, and governance maturity. Lower maturity of processes results in non-co-ordinated actions and unintended mistakes, as a consequence of manual controls. The outcomes of these mistakes could materialise in non-keeping of contractual obligations towards third parties (e.g. change management notification obligations towards EETS providers), late payments to third parties (fines received), mistakes in reporting creation, and lower quality of service provided to our clients.

Moreover, the Group is very active in the M&A field. Every completed M&A initiative is accompanied by an increase of the overall complexity in the Group's processes and demands on systems, data, and people. Where there is an inadequate post-mergers integration process and insufficient predispositions for a successful integration (IT systems maturity, data management maturity and processes, and their governance maturity), the Group exposes itself to an additional processes risk and a risk of unrealised M&A benefits. Additionally, the Group is currently in the process of transforming its operational model, accompanied with the changes in the Senior Leadership Team, which may bring temporary unclarity in accountabilities.

The current managed risk rating is above the Group's approved risk appetite. The Group considers the trend of the risk to be increasing due to the increased complexity brought by recent acquisitions, which increase the demands on finance processes in particular. The Group expects to mitigate this risk in the coming periods through the integration of our acquisitions and the implementation of ERP software.

Mitigation measures:

-- The Group has established post-mergers integration processes with clear governance and senior leadership

-- The Group engages well-established consulting firms to assist in the post-merger integration process, when needed

-- The Group has designed its processes model, which is continuously maintained and updated. Moreover, the Group has a processes design department, which in its activities focuses on improvement of the maturity of processes

-- The Group has established an internal controls risk management framework. Regular reporting and testing of the internal controls ensures continuous improvement of the effectiveness of operational controls

-- Operational model transformation introduces new focus and disciplines in product and technology capabilities

Viability statement

In accordance with provision 31 of the UK Corporate Governance Code 2018 (the Code), the Board has assessed the Company and Group's prospects and viability, considering the business model, the Group's current financial position, and principal risks over a period longer than the 12 months required by the Going Concern statement.

Viability timeframe

The Board has determined that a three-year period to 31 December 2025 is the appropriate timeframe to assess viability.

The choice of this timeframe is based on the following rationale:

-- This period is reviewed by the Board in the long-term planning and detailed annual budgeting process and allows financial modelling to be supported by the budget and growth factors in business plan approved by the Board

-- This time horizon is captured as the relevant period for evaluation and stress testing of principal risks (primarily those of an operational nature), which typically occur within this timeframe

-- The innovative nature of the Group and the disruptive nature of the market make it difficult to predict with sufficient confidence how competition and other risks will impact the business beyond a three-year timeframe

-- Considering the continuous changes of macroeconomic and political environment over a period of longer than a three-year timeframe would bring greater uncertainty to forecasting assumptions

While the Board has no reason to believe that the Company and Group will not be viable over a longer period, they consider three financial years to be an appropriate planning time horizon to assess viability and to determine the probability and impact of principal risks.

Assessment of budget and financial forecast

The Company's and Group's financial forecast is assessed primarily through the financial planning process (annual operating budget) and the strategic planning (long-term strategic plan). This process is managed by the Chief Executive Officer, Chief Strategy Officer and Chief Financial Officer, in co-operation with divisional and functional management teams.

The Board participates fully in the annual process to review, challenge, and approve the annual operating budget for the new financial year. The output of the financial planning process provides a clear explanation and overview of key assumptions and risks to be considered when agreeing the annual operating budget as a detailed set of one-year financial forecasts.

The Group also has a long-term strategy in place in the form of a long-term strategic plan. The strategy is reviewed and updated on a periodic basis and is based on detailed financial forecasts.

The long-term financial forecasts are prepared with financial forecasts for the first year based on the Group's annual operating budget and for subsequent years based on the strategic plan.

The latest updates to the strategic plan were finalised in September 2022 following the annual strategic away-days with the participation of the Board. This considered the Group's current position and the development of the business as a whole, focusing on our path to expanding the number of active trucks whilst using our industry expertise, technology solutions, scale and data insight to help our customers prosper in the digital, low carbon future.

Thanks to digitizing the way we work, becoming data-driven company and growing organisation capabilities, we aim to build platform business and serve "every truck". At the same time, commitments to helping the industry become clean, fair, and efficient were made in order to contribute to sustainable future.

Both the annual operating budget and the strategic plan are updated further through a rolling forecast process. The annual operating budget is updated on a quarterly basis and the strategic plan is reviewed on an annual basis. Should the occurrence of any risk be identified through actual trading performance or through the rolling forecast process, mitigating actions can be applied by the Senior Leadership Team.

The latest annual operating budget for the year ending 31 December 2023 was reviewed and approved by the Board in March 2023, and this budget is based on the Company and Group's current financial position, and its prospects over the forthcoming year and in line with the Group's stated strategy.

Assumptions used in financial forecast

The key assumptions within the Company's and Group's financial forecasts are as follows:

-- Organic net revenue development is expected to be driven by both payment and mobility solutions, growing on average at a similar pace over the projected period.

-- Organic net revenue growth, of both payment and mobility solutions, is primarily driven by increasing the number of customers, which is positively influenced by:

- Continuous enhancement of sales channels (digital and telesales)

- Additional penetration of the markets where the Group has an already established position

- Cross-sell of Eurowag's core services into the Webeye customer base

- New markets entries; and

- sustained up-sell/cross-sell activities of our products into the customer base.

   --      We expect to keep average net revenue retention at a minimum level of 110%. 

-- Mobility solutions are positively supported by continuous up-selling and cross-selling of products, due to:

- Enhancement and additional automation of up-sell capabilities

- Strong cross-selling of tax refund services into the payment solutions customer base

- Expansion of our fleet management solution

- Continuous growth in financial services

- Development of smart navigation products and mobile applications (Road Lords and Eurowag App) and continuous growth in OEM cooperation

   --      Credit losses reflect an increase of turnover; there is no change in credit risk assumed 

-- The operational costs (opex) plan in both the budgeted and forecasted period is based on the following assumptions:

- To keep costs under control, opex in the budgeted period is based on 2022 run rates increased by additional costs related to:

- Annual salary reviews and changes in management bonus schemes

- Planed commitment to increase charity donations - Expenses required for achieving synergies

- Inelo integration expenses

- SAP implementation expenses

-- M&A investments - both budget and financial plan assume all committed transactions, including the acquisition of Inelo, investment in LMS, JITpay, KomTes, and payment for the remaining 30% stake in Sygic as well as deferred settlement component for 100% stake in Webeye.

-- External financing - both budget and financial plan assume the following tranches from the committed financing announced on 22 September 2022:

- EUR150 million committed Facility A for the refinancing of all existing term loan indebtedness

- EUR180 million committed Facility B for permitted acquisitions and capital expenditure

- EUR235 million committed Revolving Credit Facility, of which EUR85 million may be utilised by way of revolving loans, and EUR150 million may be utilised by way of ancillary facilities in the form of bank guarantees, letters of credit, or an overdraft up to EUR25 million

-- Interest costs expectations for each loan are based on margin depending on net leverage covenant and facility type and on a floating base rate of 3.0% p.a. for the period 2023-2024 and 2.0% p.a. in 2025, while also considering existing interest rate swaps executed in 2019 in the amount of EUR120 million with an effective fixed rate of 0.1% p.a. and expiration in 2024.

   --      The capital expenditure (capex) plan is based on the following assumptions: 

- Ordinary capex of high single digit % of net revenues for period 2023-2025

- Transformational capex expected at a level of EUR24.5 million for the year ending 31 December 2023. There is no transformational capex planned for 2024

Assessment of viability

The key assumptions within the projections were stress tested with reference to risks set out in the Risk Management section of the Annual Report and Accounts.

In 2022, the Board considered the application of the following risks:

   --      Impact of ongoing macroeconomic crisis. Principal risk: Product demand decline risk 
   --      Impact of any form of geopolitical risk. Principal risk: Product demand decline risk 

-- International fuel supply crisis resulting in lower sales volume and higher fuel prices due to fuel supply shortage. Principal risk: Fuel supplies risk

-- Impact of potential problems after cyberattacks on on-board units, which may cause problems with product functionality and data loss, and primarily result in penalties from toll providers. Principal risk: Technology security and resilience risk

-- Impact of potential project failure, related to EETS shielding strategy. Principal risk: External parties dependency risk

-- Given the geographical location of the Spanish subsidiary, we considered the potential risk of flooding at one of our truck parks. Principal risk: Physical security risk

-- Impact of climate changes which could result in an increase in: opex - we could expect increases in people costs, consultancy costs, marketing and PR, technology costs, engineering cost, and costs related to truck park management; increases of capex - additional investments in technology projects related to climate change. Principal risk: Climate change risk

-- Impact of base rate increase, which may affect our expenses. Principal risk: Interest rate risk

-- Impact of regulatory changes for technology requirements which may affect our existing on-board units in inventory. Principal risk: Regulatory and licensing risk.

Applied risks and their effect were stress tested via 4 types of downside scenarios:

First scenario focuses on product demand decline risk, in combination with technology and resilience risk, external parties' dependency risk, climate change risk, regulatory and licensing risk, and interest rate risk.

Second scenario focuses on supply risk, in combination with technology and resilience risk, external parties' dependency risk, climate change risk, regulatory and licensing risk, and interest rate risk.

The risks applied in the first and second scenario were estimated to create severe but plausible downside scenarios covered in the first and the second scenario, and considered the development of net revenues, level of opex, and levels of capex. The scenarios were also modelled to test potential occurrence of any liquidity issue of the Group; both scenarios have proven that the Group operates with sufficient level of liquidity headroom and ability to meet financial covenants. The above mentioned scenarios have been taken into account as a whole, but they were not modeled because the probability of both occurring simultaneously is very low, hence they are not considered to represent a risk to our long term viability.

Specifically, neither of the two scenarios outlined above resulted in a breach of financial covenants (please refer to the Treasury management section in the Financial review) , nor was the allowed spike in Net leverage and Adjusted Net leverage covenant utilized. Moreover, even during the year with the most stress on liquidity, more than 50% of committed EUR85 million Revolving Credit Facility remained undrawn and not committed debt (please refer to the Treasury management section in the Financial review) nor not committed factoring facilities were not considered in the assessment.

The Board also considered potential mitigating actions that the Group could take to preserve liquidity and ensure compliance with the Group's financial covenants.

Reverse stress test scenarios

Along with this analysis, the Board has considered a reverse stress tests scenario (Third and Fourth scenario) to further assess the Company's and the Group's viability.

A reverse stress test scenario is a risk management approach used to assess the resilience of a company or financial institution to a specific event or risk. Unlike traditional stress testing, which assumes a base case scenario and evaluates the impact of adverse events on the Company's financial performance, a reverse stress test starts with a hypothetical worst-case scenario and works backwards to identify the events that could lead to that scenario.

In order to assess the resilience of the Company and the Group, the Board has performed a reverse stress test to determine the potential consequences of a liquidity crisis and to approach the threshold of covenant breach.

The Board then assessed the likelihood and severity of these risks and evaluated whether the Company has sufficient resources and contingency plans in place to manage them.

By conducting a reverse stress test, the Board is taking a proactive approach to risk management and demonstrating a commitment to ensuring the long-term viability of the Company and the Group. The results of the test can inform strategic decision-making, help identify areas where additional risk mitigation measures may be needed, and provide stakeholders with greater confidence in the Company's ability to navigate challenging market conditions.

Third scenario applies risks from the First scenario with an even more severe impact on our business model.

Fourth scenario applies risks from the Second scenario with a severe impact on our business model, adding additional supply risks linked to the potential impact of geopolitical changes related to ongoing Russian invasion of Ukraine, which may cause oil supply disruptions in the CEE region.

The above mentioned scenarios have been considered as a whole, but they were not modeled because the probability of both occurring simultaneously is extremely very low.

The Board also considered potential mitigating actions that the Group could take to preserve liquidity and ensure compliance with the Group's financial covenants. In doing so, judgement has been applied in determining whether such actions would be reasonably possible to execute as well as the financial impact of taking such actions. In terms of mitigating actions, the Board is confident that they would be able to take similar actions to those taken during previous economic downturns.

Considering the high severity and low plausibility of the reverse stress test scenarios, the Board has no reason to believe that the Company and Group will not be viable over the long-term period.

Application of the presented risks in the above-mentioned scenarios were examined via four different effects on Group's business, overview of these effects and their application for the particular risk and scenario is outlined in the table below.

 
                            Downside    Effect     Effect     Effect         Effect          Effect 
 Risk applications           scenario    1          2          3              4               5 
                                                   Data 
                                                    breach 
                                        Market      / Cyber   Loss           Technological   Finance 
 Principal risk                          decline    attack     of business    disruption      costs 
-------------------------  ----------  ---------  ---------  -------------  --------------  -------- 
 Product demand decline 
  risk                      1,3         x                     x 
 Fuel supplies risk         2,4         x                     x 
 Technology security 
  and resilience risk       1,2,3,4                x                         x 
 External parties' 
  dependency risk           1,2,3,4                x          x              x 
 Physical security 
  risk                      1,2,3,4                           x              x 
 Climate change risk        1,2,3,4                           x 
 Regulatory and licensing 
  risk                      1,2,3,4                           x              x 
 Interest rate risk         1,2,3,4                                                          x 
                           ----------  ---------  ---------  -------------  --------------  -------- 
 

Viability statement

Based on the above described assessment of the principal risks facing the Company and Group, stress testing and reverse stress testing undertaken to assess the Company's and Group's prospects, the Board has a reasonable expectation that the Company and Group will be able to continue in operation and retain sufficient available cash to meet its liabilities as they fall due over the period to 31 December 2025 and, consequently, the Group proved it will remain relevant and solvent in the medium to long term taking into consideration the technological, social, and environmental changes expected to happen in the medium-to long-term period.

Going concern

The Board has considered the financial prospects of the Company and Group for the foreseeable future, which is at least the next 12 months from this date, and made an assessment of the Company's and Group's ability to continue as a going concern. The Board's assessment included consideration of the availability of the Company's and 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 is satisfied that the Company and Group have the resources to continue operating the business for the foreseeable future, and furthermore are not aware of any material uncertainties that may cast significant doubt upon the Company's and Group's ability to continue as a going concern and the Board considers it is appropriate to adopt the going concern basis of accounting in preparing the annual financial statements.

Financial statements

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(EUR '000)

 
                                                                                       For the year ended 31 December 
                                                                               =====  ================================ 
                                                                               Notes       2022             2021 
=============================================================================  =====  ===============  =============== 
Revenue from contracts with customers                                            4          2,368,252        1,646,102 
Costs of energy sold                                                                      (2,177,395)      (1,492,970) 
=============================================================================  =====  ===============  =============== 
Net energy and services sales                                                    5            190,857          153,132 
 
Other operating income                                                                            449              655 
Employee expenses                                                                            (67,212)         (55,665) 
Impairment losses of financial assets                                                         (3,912)          (3,116) 
Technology expenses                                                                           (9,823)          (6,797) 
Other operating expenses                                                                     (47,227)         (41,282) 
Operating profit before depreciation and amortisation (EBITDA)                                 63,132           46,927 
Analysed as: 
-----------------------------------------------------------------------------  -----  ---------------  --------------- 
Adjusting items                                                                  5             18,461           22,793 
Adjusted EBITDA                                                                  5             81,593           69,720 
-----------------------------------------------------------------------------  -----  ---------------  --------------- 
 
Depreciation and amortisation                                                    5           (30,393)         (21,867) 
=============================================================================  =====  ===============  =============== 
Operating profit                                                                               32,739           25,060 
Finance income                                                                                  4,750            2,234 
Finance costs                                                                    6            (8,802)          (8,943) 
Share of net loss of associates                                                                 (711)            (682) 
=============================================================================  =====  ===============  =============== 
Profit before tax                                                                              27,976           17,669 
Income tax expense                                                               7           (10,280)          (8,019) 
=============================================================================  =====  ===============  =============== 
PROFIT FOR THE YEAR                                                                            17,696            9,650 
=============================================================================  =====  ===============  =============== 
 
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                                    7,602            3,683 
Exchange differences on translation of foreign operations                                       1,303            1,458 
Deferred tax related to other comprehensive income                                                  -                - 
-----------------------------------------------------------------------------  -----  ---------------  --------------- 
TOTAL OTHER COMPREHENSIVE INCOME                                                                8,905            5,141 
=============================================================================  =====  ===============  =============== 
TOTAL COMPREHENSIVE INCOME FOR THE YEAR                                                        26,601           14,791 
=============================================================================  =====  ===============  =============== 
Total profit for the financial year attributable to equity holders of the 
 Company                                                                                       16,630            9,148 
Total profit for the financial year attributable to non-controlling interests                   1,066              502 
Total comprehensive income for the financial year attributable to equity 
 holders of the Company                                                                        25,507           14,259 
Total comprehensive income for the financial year attributable to 
 non-controlling interests                                                                      1,094              532 
 
Earnings per share (in cents per share):                                        10 
Basic earnings per share                                                                         2.41             1.54 
Diluted earnings per share                                                                       2.41             1.53 
=============================================================================  =====  ===============  =============== 
 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

(EUR '000)

 
                                                     As at 31 December 
=========================================  ======  ==================== 
                                            Notes       2022       2021 
=========================================  ======  =========  ========= 
 ASSETS 
 Non-current assets 
 Intangible assets                            8      268,171    193,453 
 Property, plant and equipment                9       39,826     34,763 
 Right-of-use assets                                  13,340      8,112 
 Investments in associates                            12,223     12,934 
 Financial assets at fair value through               14,364          - 
  other comprehensive income 
 Deferred tax assets                          7       10,505      7,642 
 Derivative assets                                     3,093        252 
 Other non-current assets                              3,791      3,591 
=========================================  ======  =========  ========= 
 Total non-current assets                            365,313    260,747 
=========================================  ======  =========  ========= 
 Current assets 
 Inventories                                          20,291      9,557 
 Trade and other receivables                         378,152    300,601 
 Income tax receivables                                1,800      5,095 
 Derivative assets                                     3,851      2,694 
 Cash and cash equivalents                           146,003    224,164 
=========================================  ======  =========  ========= 
 Total current assets                                550,097    542,111 
=========================================  ======  =========  ========= 
 TOTAL ASSETS                                        915,410    802,858 
=========================================  ======  =========  ========= 
 SHAREHOLDERS' EQUITY AND LIABILITIES 
 Share capital                                         8,107     38,113 
 Share premium                                         2,958    194,763 
 Merger reserve                                     (25,963)   (25,963) 
 Other reserves                                       10,342      1,465 
 Business combinations equity adjustment            (12,526)   (17,046) 
 Retained earnings                                   329,362     84,526 
 Equity attributable to equity holders 
  of the Company                                     312,280    275,858 
 Non-controlling interests                             4,283      8,889 
                                                   =========  ========= 
 Total equity                                        316,563    284,747 
=========================================  ======  =========  ========= 
 Non-current liabilities 
 Interest-bearing loans and borrowings       11      121,272    143,579 
 Lease liabilities                                     9,510      5,973 
 Deferred tax liabilities                     7        8,677      5,495 
 Derivative liabilities                                  186        657 
 Other non-current liabilities                        27,376     20,281 
=========================================  ======  =========  ========= 
 Total non-current liabilities                       167,021    175,985 
=========================================  ======  =========  ========= 
 Current liabilities 
 Trade and other payables                            398,235    314,522 
 Interest-bearing loans and borrowings       11       21,884     18,894 
 Lease liabilities                                     3,917      2,601 
 Provisions                                            2,124      1,545 
 Income tax liabilities                                5,649      4,208 
 Derivative liabilities                                   17        356 
=========================================  ======  =========  ========= 
 Total current liabilities                           431,826    342,126 
=========================================  ======  =========  ========= 
 TOTAL EQUITY AND LIABILITIES                        915,410    802,858 
=========================================  ======  =========  ========= 
 

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

(EUR '000)

 
                            Notes       Share       Share     Merger      Other       Business   Retained   Total equity   Non-controlling     Total 
                                      capital     premium    reserve   reserves   combinations   earnings   attributable         interests    equity 
                                                                                        equity                 to equity 
                                                                                    adjustment                holders of 
                                                                                                              the parent 
------------------------  --------  ---------  ----------  ---------  ---------  -------------  ---------  -------------  ----------------  -------- 
 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 
----------------------------------  ---------  ----------  ---------  ---------  -------------  ---------  -------------  ----------------  -------- 
 Total transactions with owners 
  recognised directly in equity        33,955     191,836   (25,963)      (383)         28,963      3,201        231,609          (25,758)   205,851 
----------------------------------  ---------  ----------  ---------  ---------  -------------  ---------  -------------  ----------------  -------- 
 At 31 December 2021                   38,113     194,763   (25,963)      1,465       (17,046)     84,526        275,858             8,889   284,747 
----------------------------------  ---------  ----------  ---------  ---------  -------------  ---------  -------------  ----------------  -------- 
 Profit for the year                        -           -          -          -              -     16,630         16,630             1,066    17,696 
 Other comprehensive income                 -           -          -      8,877              -          -          8,877                28     8,905 
----------------------------------  ---------  ----------             ---------  -------------  ---------  -------------  ----------------  -------- 
 Total comprehensive income                 -           -          -      8,877              -     16,630         25,507             1,094    26,601 
----------------------------------  ---------  ----------  =========  ---------  -------------  ---------  -------------  ----------------  -------- 
 
 Capital reduction                   (30,006)   (191,805)          -          -              -    221,811              -                 -         - 
 Dividends paid                             -           -          -          -              -          -              -              (56)      (56) 
 Share-based payments                       -           -          -          -              -      6,395          6,395                 -     6,395 
 Acquisition of a non-controlling 
  interests                                 -           -          -          -          5,644          -          5,644           (5,644)         - 
 Put options held by 
  non-controlling interests                 -           -          -          -        (1,124)          -        (1,124)                 -   (1,124) 
----------------------------------  ---------  ----------  ---------  ---------  -------------  ---------  -------------  ----------------  -------- 
 Total transactions with owners 
  recognised directly in equity      (30,006)   (191,805)          -          -          4,520    228,206         10,915           (5,700)     5,215 
----------------------------------  ---------  ----------  ---------  ---------  -------------  ---------  -------------  ----------------  -------- 
 At 31 December 2022                    8,107       2,958   (25,963)     10,342       (12,526)    329,362        312,280             4,283   316,563 
==================================  =========  ==========  =========  =========  =============  =========  =============  ================  ======== 
 
 

CONSOLIDATED STATEMENT OF CASH FLOWS

(EUR '000)

 
                                                                                For the year ended 31 December 
                                                                              ================================= 
                                                                       Notes        2022              2021 
====================================================================          ================  =============== 
 Cash flows from operating activities 
 Profit before tax for the period                                                       27,976           17,669 
 Non-cash adjustments: 
 Depreciation and amortisation                                           5              30,393           21,867 
 Gain on disposal of non-current assets                                                  (114)             (29) 
 Interest income                                                                         (234)             (44) 
 Interest expense                                                                        5,815            4,913 
 Movements in provisions                                                                   541              153 
 Impairment losses of financial assets                                                   3,912            3,116 
 Movements in allowances for inventories                                                   183             (64) 
 Foreign currency exchange rate differences                                            (1,838)            (784) 
 Fair value revaluation of derivatives                                                   2,769          (1,472) 
 Share-based payments                                                                    6,395            3,736 
 Other non-cash items                                                                      709              792 
 Working capital adjustments: 
 (Increase)/decrease in trade and other receivables and prepayments                   (79,507)         (69,445) 
 (Increase)/decrease in inventories                                                   (10,156)          (4,108) 
 Increase in trade and other payables                                                   75,087           28,774 
 
 Interest received                                                                         234               44 
 Interest paid                                                                        (10,123)          (4,498) 
 Income tax paid                                                                       (7,799)         (10,193) 
 Net cash flows (used in)/generated from operating activities                           44,243          (9,573) 
====================================================================  ======  ================  =============== 
 
 Cash flows from investing activities 
 Proceeds from sale of property, plant and equipment                                       289              225 
 Proceeds from sale of financial instruments                                                56                - 
 Purchase of property, plant and equipment                                             (7,271)          (5,221) 
 Purchase of intangible assets                                                        (37,290)         (26,230) 
 Purchase of financial instruments                                                    (14,364)                - 
 Payments for acquisition of subsidiaries, net of cash acquired                       (42,712)          (1,166) 
 Investment in associates                                                              (3,000)         (10,685) 
 Net cash used in investing activities                                               (104,292)         (43,077) 
====================================================================  ======  ================  =============== 
 
 Cash flows from financing activities 
 Payment of principal elements of lease liabilities                                    (3,112)          (2,382) 
 Proceeds from borrowings                                                                    -           39,519 
 Repayment of borrowings                                                              (15,014)         (18,773) 
 Acquisition of non-controlling interests                                                    -         (27,003) 
 Dividend payments                                                                        (56)          (3,480) 
 Proceeds from issued share capital (net of expenses)                                        -          199,879 
 Proceeds from sale of own shares                                                            -               20 
 Net cash (used in) / generated from financing activities                             (18,182)          187,780 
====================================================================  ======  ================  =============== 
 
 Net (decrease)/increase in cash and cash equivalents                                 (78,231)          135,130 
 Effect of exchange rate changes on cash and cash equivalents                               79               63 
 Cash and cash equivalents at beginning of period                                      224,154           88,961 
 Cash and cash equivalents at end of period                                            146,001          224,154 
====================================================================  ======  ================  =============== 
 

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 were admitted to the premium listing segment of the Official List of the UK Financial Conduct Authority and have traded 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 truck parks 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 was 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 2022 were approved by the Board of Directors on 16 March 2023 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 2022 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") and with the requirements of the Companies Act 2006 as applicable to companies reporting under these standards.

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 was 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 certain financial assets and liabilities (including 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 has considered the financial prospects of the Company and Group for the foreseeable future, which is at least the next 12 months, and made an assessment of the Company's and Group's ability to continue as a going concern. The Board's assessment included consideration of the availability of the Company's and Group's credit facilities, cash flow forecasts and stress test scenarios. Stress test scenarios applied in the Going Concern statement are in line with scenarios covered in the Viability statement. The Board is satisfied that the Company and Group have the resources to continue operating the business for the foreseeable future, and furthermore are not aware of any material uncertainties that may cast significant doubt upon the Company's and Group's ability to continue as a going concern and the Board considers it is appropriate to adopt the going concern basis of accounting in preparing the annual financial statements.

3. BUSINESS COMBINATION

The following acquisitions took place in 2022:

Acquisition of WebEye Group

Further to the subsequent events described in the 2021 Annual Report and Accounts, the Group signed a novated agreement on 16 May 2022 to acquire substantially all of the assets of Webeye Telematics Zrt. ("Webeye"), a leading Fleet Management Solution provider in Central and Eastern Europe. The Group paid EUR 23.3 million in cash upon the acquisition of 100% of the share capital of the non-Hungarian subsidiaries on 16 May 2022 and a further EUR 19.9 million was paid upon completion of the acquisition of the Hungarian subsidiaries on 1 July 2022. In addition, the Company will pay a deferred settlement component within three years of closing, a portion of which is contingent upon the achievement of certain KPIs. The maximum amount, including the deferred amount of the purchase price, is capped at EUR 60.6 million.

The transaction has expanded the Group's customer base, and Webeye's customers will gain access to Eurowag's unrivalled range of integrated end-to-end payment and mobility solutions leading to incremental revenue opportunities. Furthermore, data from the connected trucks will provide insights and enable the continual development of new and improved solutions to address customers' needs.

The provisionally determined fair values of identifiable assets and liabilities of subsidiaries of Webeye as at the date of acquisition were:

 
 EUR '000                                     Fair value          Fair value    Total 
                                              recognised       recognised on 
                                          on acquisition         acquisition 
                                           non-Hungarian    Hungarian Webeye 
                                     Webeye subsidiaries        subsidiaries 
=================================  =====================  ==================  ======= 
 Assets 
 Identifiable intangible 
  assets                                          16,256              11,077   27,333 
 Property, plant and equipment                     1,411                 729    2,140 
 Right-of-use assets                                 357               1,598    1,955 
 Inventories                                         263                 497      760 
 Trade receivables                                 1,308               1,058    2,366 
 Cash and cash equivalents                           395                 103      498 
 Other assets                                         10                   -       10 
 Total Assets                                     20,000              15,062   35,062 
 
 Deferred tax                                      1,810                 986    2,796 
 Trade payables                                      714                 883    1,597 
 Lease liabilities                                   357               1,598    1,955 
 Total Liabilities                                 2,881               3,467    6,348 
=================================  =====================  ==================  ======= 
 Total identifiable net 
  assets at fair value                            17,119              11,595   28,714 
=================================  =====================  ==================  ======= 
 Goodwill arising on acquisition                  19,793              11,512   31,305 
---------------------------------  ---------------------  ------------------  ------- 
 
 Purchase consideration: 
---------------------------------  ---------------------  ------------------  ------- 
 Cash paid                                        23,319              19,891   43,210 
---------------------------------  ---------------------  ------------------  ------- 
 Deferred and contingent 
  consideration (discounted)                      13,593               3,216   16,809 
---------------------------------  ---------------------  ------------------  ------- 
 Total purchase consideration                     36,912              23,107   60,019 
---------------------------------  ---------------------  ------------------  ------- 
 

The goodwill is attributable to expected synergies from combining operations. It will not be deductible for tax purposes.

The gross contractual receivables acquired amounted to EUR 3,002 thousand. At acquisition date, there were EUR 636 thousand of contractual cash flows not expected to be collected.

From the date of acquisition until 31 December 2022, Webeye entities contributed EUR 8,057 thousand of revenue and EUR 887 thousand loss after tax (mainly driven by amortisation of acquired intangibles and M&A related adjusting items). Excluding amortisation of acquired intangibles and adjusting items the adjusted profit after tax would have been EUR 734 thousand.

If the acquisition had occurred on 1 January 2022, consolidated revenue and consolidated loss after tax of Webeye entities for the year ended 31 December 2022 would have been EUR 15,429 thousand and EUR 865 thousand respectively. Excluding amortisation of acquired intangibles and adjusting items the adjusted profit after tax would have been EUR 1,557 thousand. Transaction costs are disclosed at the end of this note.

As at the date of acquisition, discount rate of 2.00% was used to determine the present value of deferred and contingent consideration. As at 31 December 2022, the discount rate was increased to 3.90%. Reasonably possible change in the discount rate does not lead to a significant change in the present value of deferred and contingent consideration.

Contingent consideration is subject to achievement of integration related milestones. Reasonably possible change in milestones achievement does not lead to a significant change in the fair value of contingent consideration.

Acquisition of 9.99% share in JITpay

On 27 September 2022, Eurowag entered into a strategic partnership with JITpay Group, a German-based payment service provider specialising in the logistics industry. The transaction expands the Group's product portfolio by adding invoice discounting, digitalised billing and receivables management solutions and strengthens its presence in Germany, one of the most strategically important trucking markets in Europe. As part of the strategic partnership, Eurowag has acquired a 9.99% stake in JITpay for an initial consideration of EUR 14.3 million, with the flexibility for a potential increase in its ownership over time subject to regulatory approvals. The investment was classified as financial asset at fair value through other comprehensive income. The investment is considered to be a strategic investment and is not held for trading.

The Group has call options to acquire an additional 18.01% share which can be exercised either by 3 July 2023 for a consideration of EUR 25.7 million or later by 1 January 2024 for EUR 35 million. First call option reflects original valuation, which is not expected to change during a short period.

In case neither of the call options is exercised, JITpay has the right to buy back acquired 9.99% share for EUR 1.

Acquisition of non-controlling interest in Sygic

On 20 December 2022, the Group signed an agreement with Non-controlling Shareholders of Sygic, a.s., which will enable the Group to take full control of Sygic's resources. Consideration for the 30% equity interest of EUR 14.4 million is payable in April 2024, in line with the original option agreement. Ownership of the shares remains with Non-controlling Shareholders until April 2024, however following the agreement with fixed price they are no longer exposed to variable returns from the investment.

Under the previous shareholders agreement, the minority shareholders had certain rights pertaining to the application of Sygic's resources within the Group. Having full control of Sygic has provided the Group with unrestricted access to Sygic's resources and allowed it to fully utilise Sygic's digital expertise and people capabilities. This, in turn, will enable the Group to accelerate its digital sales channel and integrated product initiatives by utilising Sygic's capabilities more effectively across Eurowag's whole range of mobility solutions.

Pay-out of deferred consideration

On 31 January 2022, the Group paid deferred acquisition consideration of EUR 3 million related to acquisition of company Threeforce B.V. (Last Mile Solutions).

The following acquisitions took place in 2021:

Acquisition of 51% share in KomTeS

On 1 January 2021, the Group acquired 51% of the share capital in KomTeS, a value-added reseller of the Group's Webdispečink product (Fleet management solutions). The transaction will ensure the highest level of support, service, and value to Group and KomTeS customers in both the Czech Republic and Slovakia.

The remaining 49% non-controlling interest is subject to put/call option rights of the parties, where the Group is entitled to exercise the call option at any time after 1 January 2022 and the minority Shareholders are entitled to exercise the put option at any time after 18 December 2023 (if the call option has not been exercised).

The fair values of identifiable assets and liabilities of KomTeS as at the date of acquisition were:

 
 EUR '000                            Fair value recognised 
                                     on acquisition KomTeS 
                                                     Group 
=================================  ======================= 
 Assets 
 Identifiable intangible 
  assets                                             4,981 
 Property, plant and equipment                         109 
 Inventories                                            96 
 Trade receivables                                     772 
 Accruals                                               10 
 Cash and cash equivalents                           1,610 
 Total Assets                                        7,578 
 
 Deferred tax                                          946 
 Trade payables                                      1,989 
 Accruals                                               29 
 Total Liabilities                                   2,964 
=================================  ======================= 
 Total identifiable net 
  assets at fair value                               4,614 
=================================  ======================= 
 Non-controlling interest 
  measured at fair value                             2,259 
 Goodwill arising on acquisition                         - 
---------------------------------  ----------------------- 
 

No adjustments were made to opening balance sheet in 2022 and the fair value of acquired asset is finalised.

The gross contractual receivables acquired amounted to EUR 772 thousand. At acquisition date, there were no contractual cash flows not expected to be collected.

Associate investment in Last Mile Solutions

On 16 February 2021, the Group acquired 28% non-controlling interest in Dutch-based Threeforce B.V., operating under brand Last Mile Solutions, a fast growing eMobility platform in Europe. The deal supports the Group's position in the eMobility market and confirms its focus on sustainable transportation solutions. Through this partnership, both companies will combine efforts to provide industry-leading eMobility services to their customers throughout Europe.

Additional 62% shares are subject to a put option, which may require the Group to acquire shares of Last Mile Solutions. The put option is measured as a derivative instrument and it might be exercised between February 2025 and February 2026.

Associate investment in Drivitty

On 1 April 2021, the Group acquired a 20% non-controlling interest in the Lithuanian company Tankita UAB, operating under the brand Drivitty, 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 for its customers.

Although the Group has a call option to acquire the remaining shares of Drivitty, it concluded that the call option does not provide control over the entity.

Acquisition of 25% non-controlling interest in ADS Group

On 4 March 2021, the Group acquired the remaining 25% of shares of ADS companies, a top commercial road transport services provider in Spain and Portugal. The transaction is a key part of the Group's long-term strategy to strengthen its presence in the Iberian Peninsula and Western Europe.

As the remaining 25% non-controlling interest was subject to put/call option rights of the parties, the Group recognised a financial liability at the present value of the amount payable on exercise of the NCI put in accordance with IFRS 9 at 31 December 2020.

Pay-out of deferred acquisition consideration

On 24 November 2021, the Group paid first deferred acquisition consideration of EUR 421 thousand related to acquisition of Aldobec technologies, s.r.o.

Other disclosures

Net outflows of cash to acquire subsidiaries were as follows:

 
 EUR '000                   31 December   31 December 
                                   2022          2021 
=========================  ============  ============ 
 Cash consideration paid         43,210         2,776 
 Cash acquired                    (498)       (1,610) 
                           ============  ============ 
 Net outflow of cash 
  - investing activities         42,712         1,166 
=========================  ============  ============ 
 

Cost of acquisition of subsidiaries recognised in other operating expense and cash flows from operating activities:

 
 EUR '000              For the year ended 
                           31 December 
===================  ===================== 
                            2022      2021 
===================  ===========  ======== 
 Acquisition costs         7,941       789 
===================  ===========  ======== 
 

Acquisition costs incurred in 2022 mostly relate to acquisition of Grupa Inelo.

4. 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 of W.A.G. payments solutions, a.s. 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 Group's revenues, which are based on recurring and frequent transactional payments. The segment includes Energy and Toll payments, which are a typical first choice of a new customer. Mobility solutions represent a number of services, which are either subscription based or subsequently sold to customers using Payment solutions products. The segment includes Tax refund, Fleet management solutions, Navigation, and other service offerings.

Net energy and services sales, contribution, contribution margin, EBITDA, and Adjusted EBITDA are non-GAAP measures, see Note 5.

The CODM does not review assets and liabilities at segment level.

 
 Year ended 31 December        Payment     Mobility       Total 
  2022 EUR '000              solutions    solutions 
-------------------------  -----------  -----------  ---------- 
 Segment revenue             2,312,242       56,010   2,368,252 
 Net energy and services 
  sales                        134,847       56,010     190,857 
 
 Contribution                  118,157       40,807     158,964 
 Contribution margin               88%          73%         83% 
 Corporate overhead 
  and indirect costs 
  before adjusting 
  items                                                (77,371) 
 Adjusting items 
  affecting Adjusted 
  EBITDA                                               (18,461) 
 Depreciation and 
  amortisation                                         (30,393) 
 Net finance costs 
  and share of net 
  loss of associates                                    (4,763) 
-------------------------  -----------  -----------  ---------- 
 Profit before tax                                       27,976 
-------------------------  -----------  -----------  ---------- 
 
 
 Year ended 31           Payment      Mobility      Total 
  December 2021          solutions    solutions 
  EUR '000 
---------------------  -----------  -----------  ---------- 
 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 
---------------------  -----------  -----------  ---------- 
 

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 
=============================  ====================== 
                                     2022        2021 
=============================  ==========  ========== 
 Czech Republic ("CZ")            484,055     316,707 
 Poland ("PL")                    401,528     290,499 
 Central Cluster (excluding 
  CZ and PL)                      275,000     189,439 
 Portugal ("PT")                  397,052     334,069 
 Western Cluster (excluding 
  PT)                              92,192      36,381 
 Romania ("RO")                   317,518     192,742 
 Southern Cluster (excluding 
  RO)                             391,515     278,125 
 Not specified                      9,392       8,140 
 Total                          2,368,252   1,646,102 
=============================  ==========  ========== 
 

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 
=============================  ===================== 
                                     2022       2021 
=============================  ==========  ========= 
 Czech Republic                    35,179     26,347 
 Poland                            30,485     27,037 
 Central Cluster (excluding 
  CZ and PL)                       26,715     20,566 
 Portugal                          16,362     21,058 
 Western Cluster (excluding 
  PT)                               7,787      5,590 
 Romania                           28,252     19,676 
 Southern Cluster (excluding 
  RO)                              38,339     26,495 
 Not specified                      7,738      6,363 
 Total                            190,857    153,132 
=============================  ==========  ========= 
 

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, financial assets and other non-current assets (excluding deferred tax assets and derivative assets).

 
 EUR '000           For the year ended 
                        31 December 
================  ===================== 
                        2022       2021 
================  ==========  ========= 
 Czech Republic      152,155    126,427 
 Spain                61,898     63,238 
 Slovakia             55,799     53,882 
 United Kingdom        1,552        541 
 Other                80,311      8,765 
----------------  ----------  --------- 
 Total               351,715    252,853 
----------------  ----------  --------- 
 

Timing of revenue recognition was as follows:

 
 EUR '000                           For the year ended 
                                        31 December 
================================  ====================== 
                                        2022        2021 
================================  ==========  ========== 
 Payment solutions 
 Goods and services transferred 
  at a point in time               2,286,450   1,585,701 
 Services transferred over 
  time                                25,792      20,350 
--------------------------------  ----------  ---------- 
                                   2,312,242   1,606,051 
 
 Mobility solutions 
 Goods and services transferred 
  at a point in time                  15,700      12,753 
 Services transferred over 
  time                                40,310      27,298 
--------------------------------  ----------  ---------- 
                                      56,010      40,051 
 
 Total segment revenue             2,368,252   1,646,102 
================================  ==========  ========== 
 

5. Alternative performance measures

To supplement its consolidated financial statements, which are prepared and presented in accordance with IFRS, the Group uses the following non-GAAP financial measures that are not defined or recognised under IFRS: Net energy and services sales, Contribution, Contribution margin, EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted earnings, Adjusted earnings per share, and Adjusted effective tax rate, Net debt/cash and Transformational capital expenditure.

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 allocations 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 4).

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.

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), the extent to which intangible assets are identifiable (affecting relative amortisation expense) and share of loss of associates.

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 no 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 not expected to be adjusted 
                             costs), costs                in 2023. 
                             related to transformation    Transformation of key IT systems 
                             of key IT systems            Transformational expenditure 
                             as well as Grupa             represents investments intended 
                             Inelo integration            to create a new product or service, 
                             costs                        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 
                                                          and due to the fact that annual 
                                                          investments compared to Group's 
                                                          Net sales are significantly higher 
                                                          than regular investments of a 
                                                          technology company. Strategic 
                                                          transformation programme is expected 
                                                          to end in 2023 except for SAP 
                                                          implementation, which is expected 
                                                          to end in 2024. Anticipated IT 
                                                          transformation expense adjustment 
                                                          in 2023 amounts to EUR 4.1 million 
                                                          in 2023 and EUR 3.3 million in 
                                                          2024. The Group does not expect 
                                                          significant capitalisation related 
                                                          to SAP in 2024. 
                                                          Integration costs of Grupa Inelo 
                                                          In 2023 and 2024, the Group expects 
                                                          to adjust one-off costs related 
                                                          to transformation and integration 
                                                          of Grupa Inelo. While the Group 
                                                          did not adjust integration costs 
                                                          in the past, the related activities 
                                                          and one-off costs are expected 
                                                          to be significantly higher than 
                                                          for previously completed acquisitions. 
                                                          Exclusion of these costs will 
                                                          allow better result comparability. 
                                                          The Group currently estimates 
                                                          approximately EUR 2 million of 
                                                          integration costs in 2023. The 
                                                          Group is in very early stage 
                                                          of integration, the management 
                                                          will evaluate integration progress 
                                                          and update the expected amount 
                                                          in 2023 interim financial statements. 
-------------------------  ---------------------------  ------------------------------------------ 
 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 20.7 million, 
                                                          from which EUR 1.3 million was 
                                                          a one-off in 2021 and EUR 19.4 
                                                          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. Amortised 
                                                          expenses amounted to EUR 5.1 
                                                          million in 2021 and 5.3 million 
                                                          in 2022 and anticipated expense 
                                                          adjustment amounts to EUR 6.5 
                                                          million in 2023 and EUR 2.5 million 
                                                          in 2024. 
                                                          Share awards provided post-IPO 
                                                          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 
================================  ===================== 
                                        2022       2021 
================================  ==========  ========= 
 Intangible assets amortisation 
  (Note 8)                            22,234     15,303 
 Tangible assets depreciation 
  (Note 9)                             4,790      4,129 
 Right of use depreciation             3,369      2,435 
--------------------------------  ----------  --------- 
 Depreciation and amortization        30,393     21,867 
 Net finance costs and share 
  of net loss of associates            4,763      7,391 
 Profit before tax                    27,976     17,669 
--------------------------------  ----------  --------- 
 EBITDA                               63,132     46,927 
 
 M&A-related expenses (Note 
  5)                                   7,941        789 
 Non-recurring IPO-related 
  expenses                                 -     12,943 
 Strategic transformation 
  expenses                             5,209      2,688 
 Share-based compensation              5,311      6,373 
--------------------------------  ----------  --------- 
 Adjusting items                      18,461     22,793 
 
 Adjusted EBITDA                      81,593     69,720 
================================  ==========  ========= 
 

Adjusted EBITDA margin

Adjusted EBITDA margin represents Adjusted EBITDA for the period divided by Net energy and services sales.

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, Sygic and Webeye)          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. 
                                                              The item adjusted in 
                                                              2020-2022 represents 
                                                              assets replaced by 
                                                              strategic IT transformation 
                                                              by the end of 2022, 
                                                              however, decisions 
                                                              may be taken as the 
                                                              Group continues with 
                                                              its strategic IT transformation 
                                                              in 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, although, 
                                                              no significant costs 
                                                              are currently expected 
                                                              to be adjusted in 2023 
                                                              and 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 
======================================  ===================== 
                                              2022       2021 
======================================  ==========  ========= 
 Profit for the year                        17,696      9,650 
 Amortisation of acquired intangibles        6,562      5,419 
 Amortisation due to transformational 
  useful life changes                        1,864      1,717 
 Adjusting items affecting Adjusted 
  EBITDA                                    18,461     22,793 
 Tax effect                                (3,029)    (3,801) 
 Adjusted earnings (net profit)             41,554     35,778 
======================================  ==========  ========= 
 

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 7 for further information.

Net debt/cash

Net debt/cash is calculated as cash and cash equivalents less interest-bearing loans and borrowings.

Transformational capital expenditure

Transformational capital expenditure represents investments intended to create a new product or service, or significantly enhance an existing one, in order to increase Group's revenue potential. This also includes systems and processed improvements to improve services provided to customers.

6. Finance Costs

Finance costs for the respective periods were as follows:

 
 EUR '000                  For the year ended 
                               31 December 
=======================  ===================== 
                               2022       2021 
=======================  ==========  ========= 
 Bank guarantees fee            899        616 
 Interest expense             5,815      5,188 
 Factoring fee                1,348        698 
 Foreign exchange loss          692      2,380 
 Other                           48         61 
 Total                        8,802      8,943 
=======================  ==========  ========= 
 

The Group manages its foreign currency risk by using foreign currency forwards and swaps .

7. Income Tax

Corporate income tax for companies in the Czech Republic and United Kingdom for the years 2021 and 2022 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% (2021: 24%).

Structure of the income tax for the respective periods is as follows:

 
 EUR '000                                                        For the year ended 31 December 
=============================================================  ================================= 
                                                                             2022           2021 
=============================================================  ==================  ============= 
 Current income tax charge                                                 12,148          7,679 
 Adjustments in respect of current income tax of prior years                  495            112 
 Deferred tax                                                             (2,363)            228 
 Total                                                                     10,280          8,019 
=============================================================  ==================  ============= 
 

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 
===================================================================================  ================================= 
                                                                                                 2022             2021 
===================================================================================  ================  =============== 
 Accounting profit before tax                                                                  27,976           17,669 
===================================================================================  ================  =============== 
 At UK's statutory income tax rate of 19% (2021: 19%)                                           5,316            3,357 
 Adjustments in respect of current income tax of prior years                                      495              112 
 Effect of different tax rates in other countries of the Group                                     30              507 
 Non-deductible expenses (M&A related)                                                          1,350               84 
 Non-deductible expenses (IPO related)                                                              -            1,368 
 Non-deductible expenses (other)                                                                1,857            1,314 
 Share-based payments                                                                           1,020              700 
 Net investment hedge                                                                             260              468 
 Effect of accumulated tax loss claimed in the current period                                    (68)             (36) 
 Effect of unrecognised deferred tax assets relating to tax losses of current 
  period                                                                                           20              145 
 At the effective income tax rate of                                                           36.75%           45.38% 
 Income tax expense reported in the statement of profit or loss                                10,280            8,019 
-----------------------------------------------------------------------------------  ----------------  --------------- 
 

Adjusted effective tax rate is as follows:

 
 EUR '000                                                     For the year ended 31 December 
==========================================================  ================================= 
                                                                        2022             2021 
==========================================================  ================  =============== 
 Accounting profit before tax                                         27,976           17,669 
 Adjusting items affecting adjusted EBITDA                            18,461           22,793 
 Amortisation of acquired intangibles                                  6,562            5,419 
 Amortisation due to transformational useful life changes              1,864            1,717 
----------------------------------------------------------  ----------------  --------------- 
 Adjusted profit before tax (A)                                       54,863           47,598 
 
 Accounting tax expense                                               10,280            8,019 
 Tax effect of above adjustments                                       3,029            3,801 
----------------------------------------------------------  ----------------  --------------- 
 Adjusted tax expense (B)                                             13,309           11,820 
 
 Adjusted earnings (A-B)                                              41,554           35,778 
 Adjusted effective tax rate (B/A)                                    24.26%           24.83% 
----------------------------------------------------------  ----------------  --------------- 
 

Unused tax losses, for which no deferred tax asset has been recognised were as follows:

 
 EUR '000                       31 December   31 December 
                                    2022          2021 
=============================  ============  ============ 
 Unrecognised tax losses 
  expiring by the end of: 
  31 December 2022                        -           210 
  31 December 2023                      210           279 
  31 December 2024 and after          1,240           813 
  No expiry date                        444           942 
-----------------------------  ------------  ------------ 
 Total unrecognised tax 
  losses                              1,894         2,244 
 Potential tax benefit                  360           426 
-----------------------------  ------------  ------------ 
 

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 2022         Business       (Charged)       Charged to      Translation      31 December 
                                       combinations     credited to           equity      differences             2022 
                                                     profit or loss 
==================  ==============  ===============  ==============  ===============  ===============  =============== 
Difference between 
 net book value of 
 fixed assets for 
 accounting and 
 tax purposes              (7,522)          (2,747)           (243)                -               10         (10,502) 
Allowances to 
 receivables                 1,638                -           1,273                -               65            2,976 
Provisions for 
 liabilities and 
 charges                     1,454                -              94                -               37            1,585 
Tax losses                     148                -             193                -                4              345 
Tax benefit from 
 pre-acquisition 
 reserves                    6,423                -           (480)                -                -            5,943 
Other                            6             (49)           1,526                -              (2)            1,481 
------------------  --------------  ---------------  --------------  ---------------  ---------------  --------------- 
Net deferred tax 
 asset/(liability)           2,147          (2,796)           2,363                -              114            1,828 
==================  ==============  ===============  ==============  ===============  ===============  =============== 
Recognised 
 deferred tax 
 asset                       7,642                -           2,757                -              106           10,505 
==================  ==============  ===============  ==============  ===============  ===============  =============== 
Recognised 
 deferred tax 
 liability                 (5,495)          (2,796)           (394)                -                8          (8,677) 
==================  ==============  ===============  ==============  ===============  ===============  =============== 
 
 
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) 
==================  ==============  ===============  ==============  ===============  ===============  =============== 
 

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 subsidiaries of the Company, W.A.G. payment solutions, a.s. and its subsidiaries, have undistributed earnings of EUR 195,685 thousand (2021: EUR 154,840 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.

8. 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 
 2021          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 
============  ========  =============  ===========  ==========  ==========  ==========  =========  ==========  ======= 
Additions            -              -       21,592           -       2,398           -      8,302       3,291   35,583 
Acquisition 
 of a 
 subsidiary     31,305         21,080        5,898         105         298           -          -           -   58,686 
Transfer             -              -       17,149           -           -           -   (16,972)       (177)        - 
Disposals            -              -         (69)           -        (24)           -       (35)           -    (128) 
Translation 
 differences       712          (102)        2,579           -         269           -        430         (4)    3,884 
============  ========  =============  ===========  ==========  ==========  ==========  =========  ==========  ======= 
31 December 
 2022          137,215         50,223      108,038       5,570      27,186          31     10,783       3,569  342,615 
============  ========  =============  ===========  ==========  ==========  ==========  =========  ==========  ======= 
 

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 
  2021                   -         (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) 
==============  ==========  ==============  ============  ==========  ===========  ===========  ==========  ========== 
 Amortisation            -         (4,024)      (14,512)        (28)      (3,668)          (2)           -    (22,234) 
 Disposals               -               -            69           -           10            -           -          79 
 Translation 
  differences            -               -         (974)         (2)        (176)            -           -     (1,152) 
==============  ==========  ==============  ============  ==========  ===========  ===========  ==========  ========== 
 31 December 
  2022                   -        (15,711)      (39,384)     (2,767)     (16,554)         (28)           -    (74,444) 
==============  ==========  ==============  ============  ==========  ===========  ===========  ==========  ========== 
 

Net book value:

 
 EUR '000    Goodwill          Client      Internal    Patents   External        Other   Internal   External     Total 
                        relationships      software        and   software   intangible     assets     assets 
                                        development     rights                  assets         in         in 
                                                                                         progress   progress 
==========  =========  ==============  ============  =========  =========  ===========  ---------  =========  ======== 
 Net book 
  value 
 at 31 
  December 
  2021        105,198          17,558        36,922      2,728     11,525            5     19,058        459   193,453 
 Net book 
  value 
            =========  ==============  ============  =========  =========  ===========  =========  =========  ======== 
 at 31 
  December 
  2022        137,215          34,512        68,654      2,803     10,632            3     10,783      3,569   268,171 
==========  =========  ==============  ============  =========  =========  ===========  =========  =========  ======== 
 

The table below presents carrying amount and remaining amortisation period of individual intangible assets that are considered material to the Group 's consolidated financial statements:

 
                               As at 31 December       As at 31 December 
                                            2022                    2021 
======================== 
                            Net book   Remaining    Net book   Remaining 
                               value      useful       value      useful 
 Individual asset           (in '000    life (in    (in '000    life (in 
  name                          EUR)     months)        EUR)     months) 
========================  ==========  ==========  ==========  ========== 
 Customer relationships 
  - ADS                        7,306          60       8,767          72 
 Customer relationships 
  - Webeye                    19,794         113           -           - 
 Internal software 
  - EETS toll platform        15,046          62       4,896          74 
 Internal software 
  - SAP                        6,658          83       3,780          95 
 Internal software 
  - Webeye platform            6,265          55           -           - 
========================  ==========  ==========  ==========  ========== 
 

EETS stands for European Electronic Toll Service, an initiative from the European Union to create a simpler framework for paying toll in Europe by use of single on-board unit for all toll systems within EU. The Group developed a platform enabling its EETS-certified OBUs to make toll payments in multiple countries.

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 
=======================  ===================== 
                               2022       2021 
=======================  ==========  ========= 
 Expensed research and 
  development costs           3,331      5,024 
-----------------------  ----------  --------- 
 

Impairment testing

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 
                         2022          2021 
==================  ============  ============ 
 Energy                   40,180        40,180 
 Navigation               34,610        34,579 
 Fleet management 
  solutions               57,963        25,996 
 Tax refund                2,401         2,382 
 Toll                      2,061         2,061 
------------------  ------------  ------------ 
 Total                   137,215       105,198 
------------------  ------------  ------------ 
 

The recoverable amount of CGUs has been determined based on a value-in-use calculation using cash flow projections from financial budgets and forecast approved by the Board 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, Fleet management solutions and Tax refund CGUs

   --      Long-term revenue growth rate 

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. The discount rate used 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 
                                   2022          2021 
============================  ============  ============ 
 Energy CGU 
 Pre-tax discount rate                9.5%         10.0% 
 Net energy and services 
  sales growth rate*                  1.9%          0.1% 
 Long-term growth rate                1.8%          1.8% 
 
 Navigation CGU 
 Pre-tax discount rate               12.0%         12.0% 
 Revenue growth rate*                20.0%         25.2% 
 Long-term growth rate                3.0%          2.0% 
 
 Fleet management solutions 
  CGU 
 Pre-tax discount rate               12.0%         11.0% 
 Net energy and services 
  sales growth rate*                 17.0%         18.9% 
 Long-term growth rate                3.0%          2.0% 
 
 Tax refund CGU 
 Pre-tax discount rate               10.0%         10.0% 
 Revenue growth rate*                10.1%          2.0% 
 Long-term growth rate                1.8%          1.8% 
============================  ============  ============ 
 

* Average over 5-year period.

Toll CGU was not significant.

The Group has considered the potential impact of climate change in impairment tests. For all CGUs except Fleet management solutions, 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, climate change impact on recoverable amounts and useful life of non-financial assets is thus not considered to be significant for these CGUs.

Fleet management solutions recoverable amount is closer to the carrying amount than all other CGUs. A combination of revenue decrease and operating and capital expenses increase was therefore included in Fleet management solutions CGU base model. Sensitivities of discounted cash-flows described below directly include the expected climate change impact, which would either lead to breakeven or to a significant impairment.

Energy

The recoverable amount is estimated to exceed the carrying amount of the CGU at 31 December 2022 by EUR 28,140 thousand.

Discount rate used in the value-in-use calculation would have to increase to 12.3% 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 26.0% for the recoverable amount to be equal to its carrying amount.

Long-term revenue growth rate would have to decrease to -4.5% for the recoverable amount to be equal to its carrying amount.

Navigation

The recoverable amount is estimated to exceed the carrying amount of the CGU at 31 December 2022 by EUR 78,405 thousand.

Discount rate used in the value-in-use calculation would have to increase to 22.1% for the recoverable amount to be equal to its carrying amount.

Revenue used in the value-in-use calculation would have to decrease by 28.2% for the recoverable amount to be equal to its carrying amount.

Long-term revenue growth rate would have to decrease to -33.4% for the recoverable amount to be equal to its carrying amount.

Fleet management solutions

The recoverable amount is estimated to exceed the carrying amount of the CGU at 31 December 2022 by EUR 5,845 thousand.

Discount rate used in the value-in-use calculation would have to increase to 12.4% for the recoverable amount to be equal to its carrying amount and to 12.7% for a significant impairment to occur.

Revenue used in the value-in-use calculation would have to decrease by 1.7% for the recoverable amount to be equal to its carrying amount and by 3.0% for a significant impairment to occur.

Long-term revenue growth rate would have to decrease to 2.1% for the recoverable amount to be equal to its carrying amount and to 1.3% for a significant impairment to occur.

Tax refund

The recoverable amount is estimated to exceed the carrying amount of the CGU at 31 December 2022 by EUR 9,547 thousand.

Discount rate used in the value-in-use calculation would have to increase to 25.5% for the recoverable amount to be equal to its carrying amount.

Revenue used in the value-in-use calculation would have to decrease by 27.0% 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.

9. 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 2021                     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 
=========================  ===============  ==============  ===============  ==============  =============  ======== 
 Additions                           1,551             380            3,413             184          2,073     7,601 
 Acquisition of 
  a subsidiary                          14               -            1,998             128              -     2,140 
 Disposals                               -             (7)            (641)           (895)            (4)   (1,547) 
 Translation differences               238              99              367             135           (61)       778 
=========================  ===============  ==============  ===============  ==============  =============  ======== 
 31 December 
  2022                              28,194           4,637           27,995           5,147          3,581    69,554 
=========================  ===============  ==============  ===============  ==============  =============  ======== 
 

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 2021                    (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) 
=========================  ===============  ==============  ===============  ==============  =============  ========== 
 Depreciation 
  charge                             (834)           (724)          (2,496)           (735)              -     (4,789) 
 Disposals                               -               2              626             729              -       1,357 
 Translation differences              (77)            (71)            (237)            (92)              -       (477) 
=========================  ===============  ==============  ===============  ==============  =============  ========== 
 31 December 
  2022                             (5,943)         (2,898)         (16,782)         (4,105)              -    (29,728) 
=========================  ===============  ==============  ===============  ==============  =============  ========== 
 

Net book value of property, plant and equipment:

 
 EUR '000                   Lands       Leasehold        Machinery       Vehicles,      Tangibles    Total 
                    and Buildings    improvements    and equipment       Furniture    in progress 
                                                                      and fixtures 
================  ===============  ==============  ===============  ==============  =============  ======= 
 Net book value 
 at 31 December 
  2021                     21,359           2,060            8,183           1,588          1,573   34,763 
 Net book value 
                  ===============  ==============  ===============  ==============  =============  ======= 
 at 31 December 
  2022                     22,251           1,739           11,213           1,042          3,581   39,826 
================  ===============  ==============  ===============  ==============  =============  ======= 
 

Land, buildings and machinery and equipment are subject to pledge in respect of bank loans:

 
 EUR '000                31 December   31 December 
                             2022          2021 
======================  ============  ============ 
 Pledged property, 
  plant and equipment         39,467        34,544 
----------------------  ------------  ------------ 
 

10. Earnings Per Share

All ordinary shares have the same rights. Class B share was excluded from earnings per share ("EPS") calculation as it had 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 basic 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 
==========================================  ========================== 
                                                    2022          2021 
==========================================  ============  ============ 
 Net profit attributable to equity 
  holders (EUR '000)                              16,630         9,148 
==========================================  ============  ============ 
 Basic weighted average number of 
  shares                                     688,911,333   595,582,785 
 Effects of dilution from share options          816,306     1,483,248 
 Total number of shares used in computing 
  dilutive earnings per share                689,727,639   597,066,033 
------------------------------------------  ------------  ------------ 
 Basic earnings per share (cents/share)             2.41          1.54 
 Diluted earnings per share (cents/share)           2.41          1.53 
==========================================  ============  ============ 
 

Adjusted earnings per share measures:

 
                                                For the year 
                                              ended 31 December 
=======================================  ========================== 
                                                 2022          2021 
=======================================  ============  ============ 
 Net profit attributable to equity 
  holders (EUR '000)                           16,630         9,148 
=======================================  ============  ============ 
 Adjusting items affecting Adjusted 
  EBITDA (Note 5)                              18,461        22,793 
 Amortisation of acquired intangibles*          5,499         4,297 
 Amortisation due to transformational 
  useful life changes                           1,864         1,717 
 Tax impact of above adjustments*             (2,813)       (3,573) 
=======================================  ============  ============ 
 Adjusted net profit attributable 
  to equity holders (EUR '000)                 39,641        34,382 
=======================================  ============  ============ 
 Basic weighted average number of 
  shares                                  688,911,333   595,582,785 
=======================================  ============  ============ 
 Adjusted basic earnings per share 
  (cents/share)                                  5.75          5.77 
=======================================  ============  ============ 
 Diluted weighted average number 
  of shares                               689,727,639   597,066,033 
=======================================  ============  ============ 
 Adjusted dilutive earnings per 
  share (cents/share)                            5.75          5.76 
=======================================  ============  ============ 
 

*non-controlling interests impact was excluded

Options

Options granted to employees under Share-based payments are considered to be potential ordinary shares. They have been included in the determination of diluted earnings per share if the required performance criteria would have been met based on the Group's performance up to the reporting date, and to the extent to which they are dilutive. The options have not been included in the determination of basic earnings per share as their performance conditions have not been met.

11. Interest Bearing Loans And Borrowings

 
                                                           31 December 2022                  31 December 2021 
==============  =========  =========  ===========  ================================  ================================= 
                 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 
Senior 
 multicurrency 
 term and 
 revolving 
 facilities                           3M EURIBOR 
 agreement*     EUR        2025/05     + margin            -          -           -      47,500     46,843      46,843 
Senior 
 multicurrency 
 term and 
 revolving 
 facilities                           3M EURIBOR 
 agreement*     EUR        2025/05     + margin            -          -           -      95,000     84,510      84,510 
Multicurrency 
 term and 
 revolving 
 facilities                           3M EURIBOR 
 agreement**    EUR        2027/09     + margin       45,000     42,941      42,941           -          -           - 
Multicurrency 
 term and 
 revolving 
 facilities                           3M EURIBOR 
 agreement**    EUR        2027/09     + margin       68,000     64,889      64,889           -          -           - 
Multicurrency 
 term and 
 revolving 
 facilities                           3M EURIBOR 
 agreement**    EUR        2027/09     + margin       37,000     35,307      35,307           -          -           - 
Other loans     CZK                    fixed rate        393        393          17       5,277      5,277         212 
==============  ====================   ==========  =========  =========  ==========  ==========  =========  ========== 
Revolving facilities and overdrafts                        -          2           2           -         10          10 
-------------------------------------------------  ---------  ---------  ----------  ----------  ---------  ---------- 
Total           EUR                                                         143,156                            162,473 
==============  =================================  =========  =========  ==========  ==========  =========  ========== 
Current         EUR                                                          21,884                             18,894 
==============  =================================  =========  =========  ==========  ==========  =========  ========== 
Non-current     EUR                                                         121,272                            143,579 
==============  =================================  =========  =========  ==========  ==========  =========  ========== 
 

*On 27 May 2019, the Group signed senior multicurrency term and revolving facilities agreements ("old club financing agreement") 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 financing, up to EUR 60 million was available for the Group for revolving facilities and overdraft accounts, and up to EUR 113 million for bank guarantees.

**On 22 September 2022, the Group signed new multicurrency term and revolving facilities agreement ("new club financing agreement") 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.   Komerční banka, a.s., 
   f.    Raiffeisenbank a.s., 
   g.   UniCredit Bank Czech Republic and Slovakia, a.s. 

h. Powszechna Kasa Oszczednosci Bank Polski Spolka Akcyjna acting through PKO BP S.A., Czech branch

   i.    Česká exportní banka, a.s. 

The new club financing agreement consists of four tranches:

-- EUR 150 million committed facility A for the refinancing of all existing term loan indebtedness;

   --      EUR 180 million committed facility B for permitted acquisitions and capital expenditure; 

-- EUR 235 million committed auxiliary credit facility, of which EUR 85 million may be utilised by way of revolving loans, and EUR 150 million may be utilised by way of ancillary facilities in the form of bank guarantees, letters of credit, or an overdraft up to EUR 25 million; and

-- EUR 150 million uncommitted incremental facility for permitted acquisitions, capital expenditure, and auxiliary credit facilities up to EUR 50 million of which not more than EUR 25 million can be utilised as revolving loans.

The applicable interest rate margin for the new club financing shall be determined according to the following margin grid:

 
 Net leverage   Facility 
                 A and B 
=============  =========== 
 > 3.25         2.30% p.a. 
 <= 3.25 >=     2.10% p.a. 
  2.50 
 < 2.50         1.90% p.a. 
-------------  ----------- 
 

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 6.

Interest bearing loans and borrowings are non-derivative financial liabilities carried at amortised cost.

As at 31 December 2022, the following pledges have been made as a security for aforementioned loans:

   --      pledge of shares (mainly W.A.G payment solution, a.s.); 
   --      pledge of receivables; 
   --      pledge of bank accounts; 
   --      pledge of trademarks. 

As at 31 December 2021, the following pledges had 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 9); 
   --      pledge of movable assets (Note 9); and 
   --      pledge of trademarks. 

The Group complied with all financial covenants under the old and new club financing agreements as of 31 December 2022 and 31 December 2021, and forecasts compliance for the going concern period.

Financial covenant terms of the new club financing facilities were as follows:

 
 Covenant          Calculation                        Target             Actual 
                                                                    31 December 
                                                                           2022 
================  =================================  ===========  ============= 
                   the ratio of adjusted EBITDA 
 Interest cover     to finance charges                Min 4.00            11.20 
                   the ratio of total net debt 
 Net leverage       to adjusted EBITDA                Max 4.00*            0.13 
 Adjusted net      the ratio of the adjusted total 
  leverage          net debt to adjusted EBITDA       Max 6.50             1.95 
----------------  ---------------------------------  -----------  ------------- 
 

*the covenant shall not exceed 3.75 in 2024 and 3.50 in 2025 and onwards

Under the old club financing facilities, the Group was required to comply with the following financial covenants:

   --      interest cover (the ratio of adjusted EBITDA to interest payable) shall not be less than 5; 

-- net leverage (the ratio of total net debt to Adjusted EBITDA) shall not exceed 3.75 in 2021 and 3.5 in 2022;

-- 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 1.00; and

-- adjusted net leverage (the ratio of the adjusted total net debt to Adjusted EBITDA) shall not exceed 6.50.

For the purposes of covenants calculation, alternative performance measures are defined differently by the new club financing agreement:

-- adjusted EBITDA represents full year adjusted EBITDA of companies acquired during the period;

   --      net debt includes lease liabilities and derivative liabilities, and 

-- adjusted net debt includes face amount of guarantees, bonds, standby or documentary letter of credit or any other instrument issued by a bank or financial institution in respect of any liability of the Group.

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          Adjusted basic EPS is calculated by 
                earnings per share      dividing 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          Net debt / Net cash is calculated as 
                debt                    Cash and cash equivalents less Interest-bearing 
                                        loans and borrowings. 
              ----------------------  -------------------------------------------------- 
 Financial     Net energy and          Net energy and services sales represents 
                services 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 2022, organic growth includes an 
                                        adjustment related to WebEye acquisition 
                                        to enhance year-on-year comparability. 
              ----------------------  -------------------------------------------------- 
 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          Average active payment solutions customers 
                payment solutions       represents the number of customers who 
                customers               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          Average active payment solutions trucks 
                payment solutions       represents the number of customer vehicles 
                trucks                  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, 
                                        Sygic and WebEye) , 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. 
              ----------------------  -------------------------------------------------- 
 

Directors' Responsibility Statement Required under the Disclosure and Transparency Rules

The responsibility statement below has been prepared in connection with the Company's full Annual Report and Accounts for the year ended 31 December 2022. Certain parts of that Report are not included within this announcement. We confirm to the best of our knowledge:

-- the Group Financial Statements, which have been prepared in accordance with UK-adopted international accounting standards, give a true and fair view of the assets, liabilities, financial position and profit of the Group;

-- the Company Financial Statements, which have been prepared in accordance with United Kingdom Accounting Standards, comprising FRS 101, give a true and fair view of the assets, liabilities and financial position of the Company; and

-- the Strategic Report includes a fair review of the development and performance of the business and the position of the Group and Company, together with a description of the principal risks and uncertainties that it faces.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

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END

FR FZGMFFKNGFZZ

(END) Dow Jones Newswires

March 16, 2023 03:00 ET (07:00 GMT)

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