TIDMWPS
RNS Number : 6343L
Eurowag
07 September 2023
7 September 2023
W.A.G payment solutions plc ("Eurowag" or the "Group")
Interim results for the six months ended 30 June 2023
Robust growth despite macro pressures, large-scale digital
transformation continues
W.A.G payment solutions plc ("Eurowag" or the "Group"), today
announces its interim results for the six-month period ended 30
June 2023.
H1 financial highlights
-- Net revenue(1) up 36.9% year-on-year to EUR119.1m, with organic growth(2) of 14.4%.
- Payment solutions revenue(1) grew by 14.1% year-on-year to
EUR72.4m, with organic growth(2) of 12.5%. Economic headwinds have
impacted the Commercial Road Transport ("CRT") industry, with fewer
kilometres driven.
- Mobility solutions revenue(1) grew 98.6% year-on-year to
EUR46.7m, with organic growth(2) of 19.9%; reflecting strong sales
across all our mobility products.
-- Adjusted EBITDA(1) up 43.5% year-on-year to EUR50.2m, with
margin(1) of 42.2%, reflecting the impact of acquisitions. Organic
adjusted EBITDA(1) up 21.6% to EUR42.6m, with margins at 43.3% (H1
2022: 40.7%); Excluding the benefit from the foreign exchange gain
as a result of our prudent currency risk management(3) , organic
adjusted EBITDA was EUR36.6m.
-- Transformational capex of EUR11.7m and ordinary capex of
EUR12.9m, with our transformational programme on track to finish at
the end of the year, in-line with guidance.
-- On a statutory basis, profit before tax was EUR8.5m, a
decrease of 36.7% year-on-year; due to higher depreciation from our
transformational capital expenditure programme, the inclusion of
our new acquisitions, and higher interest costs following the
acquisition of Grupa Inelo S.A. ("Inelo").
-- Net debt position of EUR300.9m (H1 2022: cash position of
EUR28.7m); leverage increased as expected to 2.9x net debt to
adjusted EBITDA(4) .
Martin Vohánka, Founder and CEO, commented:
"We delivered strong double-digit organic growth in the first
half of the year. This was in spite of the macroeconomic headwinds
across Europe which are impacting the CRT industry through a
notable slowdown in freight demand, in turn delivering a reduction
in kilometres driven. Our performance against this backdrop
continues to demonstrate the resilience of our business model which
delivers significant growth through the cycle and that our products
are truly mission critical to our customers.
This year we have entered a new transformation phase. Our
priority is the integration of our newly acquired businesses to
ensure we fully capture the synergies and cross sell opportunities,
as well as deliver on our vision of providing the industry's first
end-to-end digital platform next year. Our transformational capex
programme, which remains on track to finish at the end of this
year, has allowed us to develop and expand our product and service
capabilities, strengthen our business operations, and build a
unique and scalable technology platform, which we look forward to
discussing further at our Capital Markets Day in October.
There is still a lot of work to do, but I am pleased with the
progress made so far this year. We have moved closer to the launch
of our integrated platform, which, together with the integration of
our acquisitions, gives me confidence that we can unlock further
value for both our customers and our shareholders."
H1 financials
Key statutory financials H1 2023 H1 2022 YoY growth
(%)
Revenue from contracts with
customers (EURm) 1,017.6 1,160.8 (12.3)%
-------- -------- -----------
Profit before tax (EURm) 8.5 13.4 (36.7)%
-------- -------- -----------
Basic EPS (cents/share) 0.76 1.29 (41.1)%
-------- -------- -----------
Alternative performance H1 2023 H1 2022 YoY growth H1 2023 Organic
measures (1) (%) organic YoY growth
(2) (%)
Net revenue (EURm) 119.1 87.0 36.9% 98.3 14.4%
-------- -------- ----------- --------- ------------
Payment solutions
revenue (EURm) 72.4 63.5 14.1% 71.4 12.5%
-------- -------- ----------- --------- ------------
Mobility solutions
revenue (EURm) 46.7 23.5 98.6% 26.9 19.9%
-------- -------- ----------- --------- ------------
Adjusted EBITDA (EURm) 50.2 35.0 43.5% 42.6 21.6%
-------- -------- ----------- --------- ------------
Adjusted EBITDA margin
(%) 42.2 40.2 +1.9pp 43.3 +2.5pp
-------- -------- ----------- --------- ------------
Adjusted basic EPS
(cents/share) 2.90 2.35 23.1% 1.80 (23.7)%
-------- -------- ----------- --------- ------------
H1 operational highlights
H1 2023 H1 2022 YoY growth
(%)
Average active payment solutions
customers(5) 18,053 16,523 9.3%
-------- -------- -----------
Average active payment solutions
trucks(5) 91,864 87,626 4.8%
-------- -------- -----------
Payment solutions transactions(6) 18.4m 17.7m 4.1%
-------- -------- -----------
H1 strategic highlights
-- M&A strategy adding key capabilities and services:
-- Completed the acquisition of Inelo in March;
-- JITpay GmbH's ("JITPay") call option exercised in July to buy
an additional 18.01%, taking total ownership to 28% once
completed.
-- Integration of WebEye Telematics Zrt. ("Webeye") and Inelo:
-- Webeye organisation integrated, including moving their sales
force into Eurowag as one agile sales team;
-- Inelo integration workstreams in place to ensure seamless
transition, focus on cross-sell initiatives.
-- Grow core services:
-- European Electronic Toll Service ("EETS") certification in the Czech Republic and Hungary.
-- Expand platform capability:
-- Improving customer self-care portal to support end-to-end digital user experience;
-- Continue to develop our financial platform capability, for e-wallet launch in FY 2024;
-- Good progress made on data lake to improve data analytics and reporting governance.
Outlook and update to medium term guidance
Eurowag entered 2023 in a strong position and continues to grow,
in spite of the macroeconomic environment currently impacting the
CRT industry across Europe. This includes high inflation and
interest rates, and a slowdown of product manufacturing which has
led to a notable slowdown in freight demand and therefore fewer
kilometres driven by our customers . Anticipated challenges have
arisen from our decision taken last year, following the Russian
invasion of Ukraine, to adapt our business operations to a level
beyond the restrictions the sanctions imposed and withdrew all
operations and fuel purchases with any exposure to Russia, which
has impacted fuel pricing in some of our markets. Our robust
results in the first half are therefore a reflection of the
strength of our business model in that we have a loyal and growing
customer base and provide truly mission-critical products and
services. With the combination of market headwinds and the
transformative programme we are undergoing, we expect in the
near-term net revenue percentage growth to be around mid-teens. In
the medium-term, we expect revenue percentage growth to return to
high-teens, reflecting the value creation from our platform through
the growth in customers, the cross-sell opportunities and the full
extraction of acquisition synergies.
In the first half, excluding a favourable foreign exchange gain,
organic adjusted EBITDA grew 4.6% with margins of 37.2%. Organic
adjusted EBITDA margins were impacted in the first half due to our
cost increases being ahead of net revenue growth, with net revenues
expected to be second half weighted due to our usual seasonality.
Along with the net revenue weighting in the second half and cost
actions already proactively taken through headcount reduction in
anticipation of integrating Webeye and Inelo into our
organisational structure, we expect margin levels to be in-line
with FY 2022, at around 43%. We still expect our margin in the
medium-term to move to high-forties as operational leverage and
acquisition synergies are realised.
We expect to finalise our transformational capex programme at
the end of the year, on time and in budget, having invested
significantly in the last few years in developing the industry's
first digitally integrated end-to-end platform. We will continue to
invest in the business through ordinary capex. Following the
acquisition of Inelo and Webeye, we expect ordinary capex to move
just above 10 percent of net revenues for the end of this financial
year. Inelo and Webeye have historically invested a higher
percentage of net revenues, with Inelo spending half of its capex
on hardware. As results of these acquisitions, we are updating our
medium-term ordinary capex guidance to be around 10 percent of net
revenues. We do anticipate reducing duplications across IT,
hardware, and technology over time through a combination of
integration and the transition to a single technology platform.
With the recent acquisition of Inelo, our leverage ratio at the
half year increased as expected to 2.9x net debt to adjusted
EBITDA. It is still a priority to return to within our targeted
leverage ratio range of 1.5x to 2.5x.
The next two years are important to us, with the delivery of the
integrated platform as well as the transformation of the business,
including the integration of those businesses we have acquired
recently. With further growth opportunities through cross-sell and
geographic expansion, and the value we see being unlocked for
customers through the new platform, we are confident that we can
continue to deliver strong growth for all stakeholders.
The Board's expectations for the full year remain unchanged.
Notes:
1. Please refer to the section Explanation of Alternative
Performance Measures for a definition and see note 9.
2. Organic growth excludes Webeye and Inelo performance and
recurring Inelo integration expenses.
3. We use forward currency contracts to mitigate any Euro foreign exchange fluctuations.
4. Net debt includes lease liabilities and derivative liabilities.
5. An active customer or truck is defined as using the Group's
payment solutions products at least once in a given month.
6. 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.
Investor and analyst presentation today
Martin Vohánka (CEO) and Oskar Zahn (CFO) will host a virtual
presentation and a Q&A session for investors and analysts
today, 07 September 2023, at 9.00am BST. 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/1f78cd93-d600-4b62-9427-d827694c8ded
Should you want to ask questions at the end of the presentation,
please use the following link:
https://services.choruscall.za.com/DiamondPassRegistration/register?confirmationNumber=7451850&linkSecurityString=1306449012
We are hosting our Capital Markets Day on 11 October 2023 from
8.30 to 13.00 in London. Please contact the investor relations team
( investors@eurowag.com ) if you would like to register to attend
in person, or for those who are not based in London, we can provide
a video link for the event. We would encourage investors and
analysts to attend in person, as you will have the opportunity to
meet the Executive team and you will be able to interact with some
of our colleagues who will be showcasing some of our products and
services.
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
Eurowag's purpose has always been about driving change within
the CRT industry, helping it to become clean, fair, and efficient.
The only way to achieve this is by digitising the industry through
a digitally integrated solution. Today, the industry is still
heavily reliant on analogue solutions and has a highly fragmented
product and services eco-system. Eurowag has been innovating for
three decades, evolving with its customers' needs and expanding its
suite of missional critical products and services to keep them on
the road. To help digitise the industry, Eurowag has more recently
acquired or developed data solutions which our customers rely on to
do their job. Innovation and M&A has accelerated Eurowag's
transformation from a domestic fuel card provider to a pan-European
integrated payments and mobility platform. Whilst Eurowag has
integrated its legacy solutions, such as fuel cards, tolls and VAT
refund solutions, its recent acquisitions still require
integration, including people, technology, and products. The
ambition of launching an integrated digital end-to-end platform has
evolved with every new acquisition, and the first application is
expected to launch in FY 2024. We will provide more details on our
Capital Markets Day, on 11 October.
With the evolution of the business and change of revenue mix, a
new strategic framework was set out at the start of the year, with
the following strategic priorities:
1) Be in every truck (attract)
-- We have signed our third OEM partnership, which will install
the Eurowag app in every new truck produced. The three OEM
partnerships cover around 45% of the European truck market
today;
-- Integration plans are on track, with Webeye sales teams integrated into agile sales teams.
2) Drive customer centricity (engage)
-- We have improved our customer self-care portal, further
supporting an end-to-end digital user experience;
-- Mobile payments roll-out doubled, and we now have 800
acceptance points ready for self-authorisation.
3) Grow core services (monetise)
-- We have expanded our EETS certification in the Czech Republic and Hungary;
-- We have maintained strong net average revenue retention , at over 110%.
4) Expand platform capability (retain)
-- We have continued to develop our financial platform
capability, in preparation of our e-wallet launch;
-- Our ERP implementation is on track for launch in the first
quarter of 2024; this will bring significant operational
efficiencies.
Operational Review
Payment solutions
The Payment solutions business segment currently represents the
largest part of our ecosystem, and in the first half of 2023,
contributed 61% of total net revenues, a figure we expect to reduce
to approximately 55% with the full annualisation of the Inelo
acquisition into our mobility segment. Payment solutions includes
energy payments through pre- or post-paid fuel cards and toll
payments. This is often the first introduction customers have to
our services.
Energy payments
During the first half of the year, we have added 1,030 locations
to our acceptance network ('POS'), taking our total active POS at
the end of June to 12,000 stations across 23 European countries.
During the first half, we have also completed the termination of a
co-branded card scheme with WEX, which provided access to 5,450
sites. This long-term strategic move enabled us to arrange direct
relationships with merchants, and streamline our network access to
core international routes, which many of these sites were not. As a
consequence, we maintain the strength and relevance of our network,
and managed to overall improve user experience and security. In the
first half, we also focused our efforts on opening more acceptance
points in Germany, following our expansion into the DACH region
last year, which supports our efforts to establish an important
presence in one of Europe's vital trucking markets as well as cover
the hotspots our customers' travel. In the second half of the year,
we are focused on POS rollouts in Portugal, where a recent
regulatory change to fuel prices facilitated expansion in this
market.
We continue to focus on reducing carbon emissions and supporting
our customers in the transition to alternative fuels; our liquefied
natural gas(1) (LNG) acceptance network currently comprises 398
contracted stations (representing more than 50% of the European
market), while our compressed natural gas(2) (CNG) acceptance
network has 212 contracted stations. We recently opened two
Eurowag-owned LNG bunkering stations in the Czech Republic, and we
have seen positive momentum in both: in June of this year, 11% of
our LNG sales were completed in these locations, compared to 2% in
January. The majority of customers fuelling through these stations
are from the Czech Republic and Slovakia, and more recently from
Poland.
Notes:
1. Liquefied natural gas (LNG) is natural gas that has been
cooled down to liquid form. Natural gas burns significantly
cleaner; produces lower emissions of sulphur, nitrogen, and carbon
dioxide into the atmosphere.
2. Compressed natural gas (CNG) is a natural gas under pressure
that remains odourless, clear, and non-corrosive. Therefore, it is
a greener, cheaper, and more efficient fuel.
Toll payments
Following the EETS certification received in the Czech Republic
at the beginning of the year, we have also expanded to Hungary,
where we now offer post-paid toll services. Both the Czech Republic
and Hungary provide us with a solid foundation to continue our
cross-selling efforts. As a consequence of this, in the first half
of the year, we have seen a 46% increase in EVA onboarding units
("OBUs") sold, compared to the first half of 2022. We are also
working on finalising the implementation of our direct relationship
with toll chargers in Spain and Portugal and expect to be
operational in these countries in the second half of the year.
We are in the final EETS certification phase in Slovakia, who
will eventually turn off their national toll system. This means
that Slovakia will be the first country in Europe to be serviced by
certified EETS providers. As Eurowag will be among the first
providers to be certified, we are well placed to sustain and
potentially grow our current market share.
We have additional tailwinds in our toll business, with more
European countries starting to implement mandatory CO(2) reduction
regulations, creating a favourable impact on our revenues.
Mobility solutions
The mobility solutions segment offers our customers Software as
a Service (SaaS) solutions, such as fleet management, work time
management, transport management, location-based products,
navigation apps and tax refund services. In the first half of 2023,
the mobility business segment represented 39% of total net revenue,
a figure we expect to grow to approximately 45% with the full
annualisation of the Inelo acquisition. Mobility solutions revenue
is largely subscription based, representing a resilient and
predictable revenue stream.
SaaS mobility solutions
Fleet management
Our fleet management services provide dispatchers and truck
drivers with an enhanced understanding of their vehicles, through
monitoring maintenance schedules, tracking fuel usage, driving
times, loads and other important metrics, resulting in efficiency
improvements and material cost and emissions reduction.
In the first half of the year, we have enhanced the Eurowag
mobile application and introduced Cold Chain monitoring. This
feature allows the safe transportation of fresh and frozen food
products, medicine, and cosmetics.
Work time management
Inelo's work time management is a proprietary software enabling
analysis and settlement of drivers' working time. Some of its key
functionalities include downloading, archiving, and analysing data
sourced from record sheets, driver cards, and digital tachographs.
This allows for preparation of driver work hours settlements, while
also detecting any potential manipulations.
Through work time management, enforcement authorities
responsible for checking drivers' time can ensure that users stay
up to date with any regulation. The software is used by over 4,500
inspectors in 25 EU countries.
Transport management
Inelo's transport management software is all about profitability
management, as it allows automation and control of profitability
over a single transport order. It covers transportation route
planning, delivery coordination and driver controlling, supporting
the entire order processing workflow. The software streamlines
end-to-end order management, through order acceptance, monitoring
delivery, and settlement and reporting, while also automating all
logistics processes by allowing users to store data on all
shippers, suppliers, carriers and end customers.
Location-based products and services
We offer smart navigation products, location-based services and
mobile navigation apps through our Sygic brand, one of the leaders
in providing smart routing worldwide for both individual truck
drivers and various vehicle sizes fleets.
During the first half of the year, we have continued to add
improvements and updates to our Sygic Navigation app: truck drivers
can now see fuel prices directly on the map, for ease of decision
making. Sygic GPS Navigation is now available on Visteon's AllGo
app store. Sygic's Road Lords application has been downloaded over
200,000 times in the first half of the year, with daily active
users of just over 27,000.
In the first half of 2023 we signed a third contract with a
European truck manufacturer; from next year, they will install
Eurowag's application into every new dashboard before sale.
Tax refund services
During the first half of the year, we expanded our array of
services to provide VAT refunds for Croatian customers and we have
enhanced the user interface to optimise the experience for our
customers.
Post-acquisition integrations
Following the acquisitions of Webeye (in mid-2022) and Inelo (in
early 2023), the first half of the year was focused on integrating
the new businesses both on an operational and personnel level
whilst pursuing the first level of cross-sell opportunities
stemming from the merged sales organisations.
At Webeye, several integration and consolidation workstreams
have been created, to ensure a seamless transition. The Webeye and
Eurowag sales teams are already working as one under agile,
multi-competency sales teams, with ongoing lead generation
campaigns, enabling cross-sell opportunities in both product
portfolios. Webeye's core functions have been integrated within
Eurowag's organisational structure, with further unification
required in IT and HR processes.
While Inelo was acquired more recently, integration workstreams
have been deployed. Inelo's management team are now reporting to
the Eurowag executive team. The sales teams have seen good momentum
on early cross-sell initiatives and continue to work on full
integration into Agile sales teams by January 2024. Further levers
for cross-sell are expected, following the introduction of the new
platform during FY 2024.
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.
Aligning to our internal targets of reducing emissions, in the
first half of 2023, we have switched the Prague office to renewable
energy, saving nearly 500 tonnes of CO(2) emissions.
As part of our ESG targets, our solutions also help our
customers to reduce their own emissions. Our SME customers are
often unaware of the CO(2) from their use of fuel, and as a result
we have launched a free CO(2) calculator to help them understand
their carbon footprint.
As a way to further support our drivers, our integration with
Inelo brings working time management capabilities, ensuring the
well-being of drivers and compliance of drivers' pay with labour
regulations across Europe. Together with the Inelo team, we drew on
their experience with road enforcement agencies to train and inform
our customers about changes in EU Transport legislation.
As the integration of Webeye and Inelo continues, we have gained
more data and more vehicles, and thus greater insights, helping our
customers understand the impact of driving behaviour and load
utilisation on fuel costs, emissions, and fleet maintenance.
At Eurowag, we recognise that diversity and inclusion are key
pillars of achieving a rich culture, where people from all
backgrounds are celebrated and together, they contribute to our
success. We have recently evolved our People and Culture
Ambassadors network, a community of Eurowag employees that is
helping to drive improvement in our culture and employee engagement
and experience. We have also launched our Women at Eurowag network,
fostering a supportive community for personal and professional
growth for our colleagues that identify as female.
We have also just concluded our 2023 Philanthropy & You
programme for employee-led charitable donations and have over 1,000
employees engaged, supporting over 200 causes in over 14
countries.
Financial Review
In the face of challenging market and macro-economic conditions
in Europe, Eurowag delivered a robust performance in the first half
of 2023, demonstrating once again the inherent resilience of our
business model and the mission critical nature of our services.
In the first half of 2023, at a headline level, net revenues
grew by 36.9%, with payment solutions up 14.1% and mobility
solutions up 98.6%. Adjusted EBITDA grew 43.5%. This strong growth
was driven by robust underlying growth and contribution from recent
acquisitions.
In the first half of 2023, organic net revenue growth was 14.4%,
with organic payment solutions net revenue up 12.5%, and organic
mobility solutions net revenue up 19.9%. Economic headwinds have
impacted the CRT industry, with fewer kilometres driven and a
slowdown in freight demand.
In the first half of 2023, our adjusted EBITDA increased by
43.5% to EUR50.2m (H1 2022: EUR35.0m) with adjusted EBITDA margin
of 42.2% (H1 2022: 40.2%). Organic adjusted EBITDA was up 21.6% to
EUR42.6m, with margins at 43.3% (H1 2022: 40.7%). Excluding the
benefit from our currency risk management, organic adjusted EBITDA
growth was 4.6%. The organic cost increases were mainly driven by
employee expenses, of which half was from salary inflation
increases, and technology expenses.
On a statutory basis, profit before tax decreased by 36.7%
year-on-year to EUR8.5m (H1 2022: EUR13.4m), mainly as a result of
higher adjusting items, depreciation and amortisation and interest.
Basic EPS decreased by 41.1% to 0.76 cents per share (H1 2022: 1.29
cents). Adjusted basic EPS increased year-on-year to 2.90 cents per
share (H1 2022: 2.35 cents) driven mainly by profit of Inelo
acquisition.
Net debt at the end of the reporting period was EUR300.9m (H1
2022: cash position of EUR28.7m). Our net leverage ratio, as
expected, increased to 2.9x net debt to adjusted EBITDA.
In the first half of 2023, our transformational capital
expenditure totalled EUR11.7m, while investments in our
subsidiaries, associates, and financial investments amounted to
EUR273.5m, which consists of the Inelo (EUR265.7m), Webeye
(EUR7.6m), and JITPay (EUR0.2m) 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
H1 2023 H1 2022 YoY (EURm) YoY %
(EURm) (EURm)
Segment revenue total 1,017.6 1,160.8 (143.2) (12.3)%
------- ------- ---------- -------
Payment solutions 970.9 1,137.3 (166.4) (14.6)%
------- ------- ---------- -------
Mobility solutions 46.7 23.5 23.2 98.7%
------- ------- ---------- -------
Net energy and services
sales total 119.1 87.0 32.1 36.9%
------- ------- ---------- -------
Payment solutions 72.4 63.5 8.9 14.1%
------- ------- ---------- -------
Mobility solutions 46.7 23.5 23.2 98.6%
------- ------- ---------- -------
Expenses included in Contribution 26.4 15.1 11.3 75.6%
------- ------- ---------- -------
Contribution total(1) 92.6 71.9 20.7 28.8%
------- ------- ---------- -------
Payment solutions 61.0 54.9 6.1 11.0%
------- ------- ---------- -------
Mobility solutions 31.6 17.0 14.6 86.3%
------- ------- ---------- -------
Contribution margin total(1) 78% 83%
------- ------- ---------- -------
Payment solutions 84% 87%
------- ------- ---------- -------
Mobility solutions 68% 72%
------- ------- ---------- -------
Corporate overhead and
indirect costs before adjusting
items (42.4) (36.9) 5.5 14.9%
------- ------- ---------- -------
Adjusted EBITDA 50.2 35.0 15.2 43.5%
------- ------- ---------- -------
Adjusting items affecting
Adjusted EBITDA (10.0) (5.5) 4.5 82.3%
------- ------- ---------- -------
EBITDA 40.2 29.5 10.7 36.3%
------- ------- ---------- -------
Depreciation and amortisation 25.7 12.4 13.3 106.8%
------- ------- ---------- -------
Operating profit 14.5 17.1 (2.6) (15.2%)
------- ------- ---------- -------
Note:
1. Please refer to the section Explanation of Alternative
Performance Measures for a definition and see note 9.
The Group's total revenues decreased by 12.3% year-on-year to
EUR1,017.6m, driven by lower energy prices compared to the
comparative period and lower volume of energy sales. Lower volumes
of energy sales were driven by overall economic headwinds and the
regulatory changes in Portugal. Despite the drop in energy sales
prices, overall energy margin levels enabled the Group to grow net
energy sales in the Payment solutions segment.
The Group delivered double-digit net revenue growth and strong
contribution margins in both segments. Growth in organic net
revenue was 14.4%, while the overall net revenue increased by 36.9%
year-on-year, which includes EUR7.4m contribution from Webeye and
EUR13.3m from Inelo.
Payment solutions net revenue grew by 14.1% year-on-year. This
increase reflects strong new customer and truck acquisitions,
underpinned by strong average net revenue retention. Our underlying
organic payments solution business was impacted by economic
headwinds and changes in fuel regulation in Portugal.
Mobility solutions net revenue grew by 98.6% year-on-year, and
organic mobility solutions net revenue was up 19.9%. This strong
growth is the result of effective cross-selling, as well as sales
to automotive partners and Webeye and Inelo consolidation.
Corporate expenses
H1 2023 H1 2022 YoY (EURm) YoY %
(EURm) (EURm)
Expenses included in Contribution 26.4 15.1 11.3 75.6%
------- ------- ---------- ------
Corporate overhead and
indirect costs before adjusting
items 42.4 36.9 5.5 14.9%
------- ------- ---------- ------
Adjusting items affecting
Adjusted EBITDA 10.0 5.5 4.5 82.3%
------- ------- ---------- ------
Depreciation and amortisation 25.7 12.4 13.3 106.8%
------- ------- ---------- ------
Total 104.5 69.9 34.6 49.5%
------- ------- ---------- ------
The table above is from the segmental review, while the table
below summarises corporate expenses based on statutory financial
categories.
H1 2023 H1 2022 YoY (EURm) YoY %
(EURm) (EURm)
Employee expenses 46.4 32.8 13.7 41.7%
------- ------- ---------- ------
Technology expenses 8.7 3.9 4.8 123.6%
------- ------- ---------- ------
Impairment losses of financial
assets 4.2 2.7 1.5 53.4%
------- ------- ---------- ------
Other operating income (6.8) (0.2) (6.6) 273.8%
------- ------- ---------- ------
Other operating expenses 26.4 18.3 8.0 44.3%
------- ------- ---------- ------
Depreciation and amortisation 25.7 12.4 13.3 106.8%
------- ------- ---------- ------
Total 104.5 69.9 34.6 49.5%
------- ------- ---------- ------
Employee expenses increased by 41.7% year-on-year to EUR46.4m;
excluding our acquisitions and adjusting items, organic employee
expenses increased by 18.9% This growth was driven by salary
increases communicated at the start of the year, as well as hiring
the right people to support the business through the next phase of
our transformation. Adjusting items included in employee expenses
amounted to EUR4.8m for H1 2023 (H1 2022: EUR4.2m) and included
pre-IPO share based remunerations (H1 2023: EUR3.7m and H1 2022:
EUR3.3m).
Technology expenses increased by 123.6% year-on-year to EUR8.7m
(H1 2022: EUR3.9m); excluding our acquisitions, organic technology
expenses increased by 58.4%. This increase reflects 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 EUR1.9m in H1 2023 (H1 2022:
EUR0.2m).
Impairment losses of financial assets amounted to EUR4.2m (H1
2022: EUR2.7m). The increase is connected primarily with our key
markets, such as Poland, Romania, and Portugal, where the credit
loss ratio increased slightly from 0.2% last year to 0.3% at the
end of June 2023. Nevertheless, our overall receivables portfolio
and cash collection remained robust.
Other operating expenses increased by 44.3% year-on-year to
EUR26.4m (H1 2022: EUR18.3m), mainly due to acquisition-related
expenses, with Webeye consolidation adding EUR1.4m and Inelo
acquisition adding EUR3.9m. Adjusting items included in other
operating expenses amounted to EUR3.3m for H1 2023 (H1 2022:
EUR1.1m) and included expenses related to acquisitions of EUR2.2m
(H1 2022: EUR0.5m) and strategic transformation costs of EUR1.1m
(H1 2022: EUR0.5m).
Other operating income increased by 273.8% year-on-year to
EUR6.8m (H1 2022: EUR0.2m), mainly driven by a favourable foreign
exchange gain of EUR6.0m, as a result of our prudent currency risk
management.
Depreciation and amortisation grew by 106.8% year-on-year to
EUR25.7m (H1 2022: EUR12.4m) primarily due to the amortisation of
acquired assets of Inelo and Webeye and partly due to
transformational technology being put into production. Adjusting
items included in depreciation and amortisation amounted to EUR6.8m
for H1 2023 (H1 2022: EUR3.4m).
Net finance expense
Net finance expense in the first half of 2023 amounted to
EUR5.7m (H1 2022: EUR3.3m). The increase mainly reflects higher
factoring fees related to higher average factoring limits
utilisation throughout the year, as well as higher interest costs
related to increased borrowings.
Taxation
The Group tax charge of EUR2.9m (H1 2022: EUR4.3m) represents an
effective tax rate of 34.2% (H1 2022: 31.7%). The tax charge in the
first half of 2023 was influenced positively by lower profit for
the six months period, lower taxes paid in respect of prior years
and negatively by tax non-deductibility of adjusting items (mainly
M&A related expenses and equity-settled share-based payments).
Adjusted effective tax rate decreased to 18.3% (2022: 24.4%)
largely due to lower taxes paid in respect of prior years. Adjusted
effective tax rate calculation is presented in Note 13 of the
condensed interim financial statements.
Corporate income tax for companies in the Czech Republic in
2022-2023 was 19%, in the UK the rate was 19% in 2022 and 25% in
2023, while in Spain it was set at 24%. These represent the major
tax regimes in which the Group operates.
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. There are outstanding tax audits in
Italy, Bulgaria, Poland, and Romania, where no significant issues
are expected.
EPS
Basic EPS for the first half of 2023 was 0.76 cents per share, a
41.1% year-on-year decrease. This was due to lower profit for the
six months' period, with increased EBITDA reduced by higher
depreciation and amortisation and increased finance expenses.
Adjusted basic EPS for the reporting period was 2.90 cents per
share, which is an increase relative to the corresponding period
last year. Weighted average number of ordinary shares in issue
amounted to 688,911,333 in both H1 2023 and H1 2022, while diluted
weighted average number of ordinary shares was 691,208,069 in H1
2023 (H1 2022: 689,429,273). After accounting for the impact of
PSP, adjusted diluted earnings per share was 2.89 cents per share.
Adjusting items are as described below in the Alternative
performance measures section.
Investments in subsidiaries and associates
Acquisition of Inelo
Further to the subsequent events described in the 2022 Annual
Report and Accounts, the acquisition of Inelo was completed on 15
March 2023.
The Group paid EUR215.3m in cash upon the acquisition of 100% of
the share capital of Inelo on 15 March 2023 and repaid Inelo's bank
borrowings of EUR53.6m on 16 March 2023. In addition, the Group
will pay an additional consideration of EUR8.4m related to the
final price adjustment to Inelo's acquisition of FireUp TMS
subsidiary and EUR2.1m related to other purchase price adjustments
identified at completion. There is also a contingent consideration,
based on Inelo's EBITDA performance for the year to 31 December
2022, capped at EUR12.5m, which will (if applicable) become payable
in the second half of 2023, following approval of the audited
consolidated financial statements of Inelo. Full amount of
contingent consideration was recognised as of 30 June 2023. The
Group will either pay EUR12.5m or no consideration is payable.
Given the short period of time between the acquisition and
preparation of the condensed interim financial statements, the
amounts recorded below for the acquisition are provisional.
Purchase price allocation activities are ongoing, and the
preliminary fair value of assets and liabilities will be further
revised.
The provisionally determined fair values of identifiable assets
and liabilities of subsidiaries of Inelo as at the date of
acquisition were:
EUR '000 Preliminary
fair value
recognised
on acquisition
of Inelo
Assets
---------------
Property, plant, and equipment 11,206
---------------
Identifiable intangible assets 102,066
---------------
Right of use assets 3,060
---------------
Trade receivables 8,540
---------------
Cash and cash equivalents 3,270
---------------
Inventories 1,674
---------------
Income tax receivables 943
---------------
Other non-current assets 124
---------------
Total assets 130,883
---------------
Liabilities
---------------
Interest-bearing loans and borrowings 59,136
---------------
Trade payables 13,138
---------------
Lease liabilities 3,146
---------------
Other non-current liabilities 418
---------------
Income tax liabilities 467
---------------
Deferred tax 18,063
---------------
Total liabilities 94,368
---------------
Total identifiable net assets
as fair value 36,515
---------------
Non-controlling interest measured
at % of net assets (3,343)
---------------
Goodwill arising on acquisition 205,123
---------------
Purchase consideration
---------------
Cash paid 215,288
---------------
Deferred and contingent consideration 23,006
---------------
Total purchase consideration 238,294
---------------
From the date of acquisition until 30 June 2023, Inelo's
subsidiaries contributed EUR13.3m of revenue and EUR3.5m profit
after tax.
If the acquisition had occurred on 1 January 2023, consolidated
revenue and consolidated profit after tax of Inelo's entities for
the half year ended 30 June 2023 would have been EUR21.0m and
EUR3.8m respectively. Excluding amortisation of acquired
intangibles and adjusting items, the adjusted profit after tax
would have been EUR7.1m.
Pay-out of deferred consideration
On 27 April 2023, the Group paid a contingent acquisition
consideration of EUR2.1m related to the acquisition of Webeye. The
consideration was subject to achievement of integration related
milestones.
Further, on 17 May 2023, the Group paid a deferred acquisition
consideration of EUR5.5m related to the acquisition of Webeye.
JITpay call option
On 4 July 2023, the Group announced it exercised its call option
to acquire an additional 18.01% stake in JITpay's share capital
from its founders, management, and Volksbank eG Braunschweig
Wolfsburg, on a pro rata basis. The proceeds from the primary
capital will be used to fund JITpay's further expansion.
The Group entered a strategic partnership with JITpay on 27
September 2022, when it acquired a 9.99% stake for an initial
consideration of EUR14.3m, of which EUR3.5m was used as primary
capital. As per the original agreement, the Group had a call option
to acquire an additional 18.01% share, which could be exercised by
3 July 2023 for a consideration of EUR25.7m, of which EUR6.5m will
be used as primary capital.
The purchase of the additional 18.01% stake in JITpay will be
funded from existing funds and the transaction is subject to
customary closing conditions, including clearance by the German
Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin), and is
expected to complete in the first half of 2024. The Transaction
constitutes a Class 2 transaction for the purposes of the UK
Financial Conduct Authority's Listing Rules. Following receipt of
the German authorities' clearance, the investment in JITpay would
change to an associate (28% equity interest).
The remaining 72% stake will continue to be held by existing
shareholders. There are Call and Put arrangements in place that
give the Group the option to acquire the remaining 72% stake of
JITpay's share capital from 2025 onwards. The price of the Put or
Call payable by the Group for the remainder of JITpay's share
capital will be based on a multiple of 10x of the average of
JITpay's profit before tax over the twelve-month period to 31
December 2024 and 31 December 2025 with the Put being subject to a
cap of EUR129.3m.
Pay-out of deferred consideration related to Inelo
On 31 August 2023, the Group paid a deferred acquisition
consideration of EUR8.4m related to the final price adjustment to
Inelo's acquisition of FireUp TMS subsidiary.
Balance sheet
Net assets of the Group increased by 3.4% to EUR327.4m, mainly
reflecting profit for 2023 and share-based payments impact.
Intangible assets of the Group excluding goodwill increased by
EUR105.9m to EUR236.9m in the reporting period, predominantly due
to the Inelo acquisition and investments in strategic technology
transformation.
Goodwill comprises mainly CGU Energy of EUR40.2m, CGU Navigation
of EUR34.6m and CGU Fleet management solutions (excluding Inelo) of
EUR59.4m. Provisionally determined goodwill arising on the
acquisition of Inelo is EUR205.1m. Goodwill is tested for
impairment on an annual basis; as at 30 June 2023, the Group
performed impairment test for the CGU Fleet management systems
(excluding Inelo) as the recoverable amount of this CGU was closer
to the carrying amount than all other CGUs as at 31 December 2022,
no impairment was posted in the first half of 2023 (H1 2022: no
impairment posted).
Inventories decreased by EUR1.3m to EUR19.0m, mainly due to
lower value of energy stock corresponding to lower energy
prices.
Trade and other receivables increased by EUR15.1m to EUR393.2m.
Out of this, EUR6.0m is attributable to the Inelo acquisition, and
the remaining increase is mainly due to seasonality, with December
being our quietest month.
Trade and other payables increased by EUR28.5m to EUR426.7m,
primarily due to deferred acquisition consideration either related
to a new transaction in the first half of 2023 or to previous
transactions which became payable in less than 12 months. There was
a further impact of consolidating Inelo as at 30 June 2023
(EUR16.9m).
Cash performance
H1 2023 H1 2022 YoY (EURm) YoY
(EURm) (EURm) Change
%
Net cash generated from
operating activities 1.5 16.4 (14.9) (90.9%)
-------- -------- ----------- -----------
Net cash used in investing
activities (297.0) (47.5) (249.5) 525.4%
-------- -------- ----------- -----------
Net cash used in financing
activities 200.0 (11.5) 211.5 (1,839.3%)
-------- -------- ----------- -----------
Net decrease in cash
and cash equivalents (95.5) (42.6) (52.9) 124.2%
-------- -------- ----------- -----------
Cash and cash equivalents
at beginning of period 146.0 224.2 (78.2) (34.9%)
-------- -------- ----------- -----------
Cash and cash equivalents
at end of period (presented
in statement of cash
flows) 50.5 181.5 (131.0) (72.2%)
-------- -------- ----------- -----------
Bank overdrafts 29.9 0.0 29.9
-------- -------- ----------- -----------
Cash and cash equivalents
at end of period (presented
in statement of financial
position) 80.4 181.5 (101.1) (55.7%)
-------- -------- ----------- -----------
Interest-bearing loans
and borrowings 381.3 152.8 228.5 149.5%
-------- -------- ----------- -----------
Net (debt)/ cash (300.9) 28.7 (329.6) (1,148.3%)
-------- -------- ----------- -----------
As at 30 June 2023, the Group's net debt position stood at
EUR300.9m, compared with net cash position of EUR28.7m as at 30
June 2022.
The decrease in the level of cash is due to the cash outflows
used in the acquisition of Inelo, in investing activities,
including technology transformation investments, as well as
repayments of borrowings.
Net cash flows from operating activities decreased to EUR1.5m
from EUR16.4m in H1 2023, primarily due to working capital
movement. The impact related to Adjusting items in the reporting
period amounted to an outflow of EUR7.4m (H1 2022: EUR7.7m) and
included EUR5.0m for acquisitions related expenses and EUR2.4m for
strategic transformation expenses.
Interest paid increased to EUR7.6m (H1 2022: EUR2.3m), driven by
a higher level of borrowings in the first half of 2023.
Tax paid increased to EUR4.0m (H1 2022: EUR3.2m), which also
includes an impact of the Inelo consolidation of EUR0.8m.
Net cash used in investing activities increased by EUR249.5m to
EUR297.0m, 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 inflow of
EUR200.0m in the reporting period, representing the drawdowns of
borrowings partially offset by borrowings repayments and lease
payments.
Capital expenditure
Capital expenditure in the first half of 2023 amounted to
EUR24.7m (H1 2022: EUR19.9m), of which EUR11.7m was spend relating
to our transformational capex programme and EUR5.6m relating to the
capital investment in Inelo and Webeye, which drove the
year-on-year increase.
The Group's ordinary capital expenditure was EUR12.9m (H1 2022:
EUR6.6m), including the EUR5.6m capex investment in Inelo and
Webeye. Both businesses have historically invested a higher
percentage of net revenues, with Inelo spending half of its capex
on hardware, and therefore our ordinary capital expenditure as a
percent of net revenue increased to 10.9%.
The Group's transformational investment programme was EUR11.7m
(H1 2022: EUR13.3m) 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.
This year we continued to improve our EETS product offering and
continue to enhance our financing capabilities, enabling further
automation and real-time finance management. We are also investing
in building a cloud-base data system, which will encapsulate the
large volumes of customer information we receive from all our
products and services, allowing us to better utilise this data for
both our business processes and customers.
With regards to our ERP implementation, which is being delivered
in stages, the first stage launched last year and included energy
billing, pricing, sales, and purchases, while the second stage is
still on track to launch in Q1 2024 and includes improving our
capabilities in our general ledger and group reporting
processes.
We expect to finalise our transformational capex programme at
the end of the year, on time and in budget. We will continue to
invest in the business through ordinary capex, which we expect to
be around 10 percent of net revenues, given the slightly higher
capex ratio Inelo operates at. Through a combination of integration
and the transition to a single technology platform, we expect to
reduce duplications across IT, hardware, and technology processes
over time.
Alternative performance measures
The Group has identified certain Alternative Performance
Measures ("APMs") that it believes provide additional useful
information to the readers of 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.
H1 2023 H1 2022 YoY (EURm) YoY
(EURm) (EURm) change %
Profit before tax 8.5 13.4 (4.9) (36.7)%
------- ------- ---------- ---------
Net finance expense and
share of net loss of associates 6.0 3.7 2.3 65.1%
------- ------- ---------- ---------
Depreciation and amortisation 25.7 12.4 13.3 106.8%
------- ------- ---------- ---------
EBITDA 40.2 29.5 10.7 36.3%
------- ------- ---------- ---------
M&A-related expenses 2.7 0.5 2.2 418.9%
------- ------- ---------- ---------
Strategic transformation
expenses 3.6 1.7 1.9 118.2%
------- ------- ---------- ---------
Share-based compensation 3.7 3.3 0.4 11.1%
------- ------- ---------- ---------
Adjusting items 10.0 5.5 4.5 82.3%
------- ------- ---------- ---------
Adjusted EBITDA 50.2 35.0 15.2 43.5%
------- ------- ---------- ---------
H1 2023 H1 2022 YoY (EURm) YoY
(EURm) (EURm) change
Profit for the year 5.6 9.2 (3.6) (39.1)%
------- ------- ---------- --------
Amortisation of acquired
intangibles 6.8 2.8 4.0 144.7%
------- ------- ---------- --------
Amortisation due to transformational
useful life changes 0 0.7 (0.7) (100.0)%
------- ------- ---------- --------
Adjusting items affecting
Adjusted EBITDA 10.0 5.5 4.5 82.3%
------- ------- ---------- --------
Tax effect (1.7) (1.3) (0.4) 44.5%
------- ------- ---------- --------
Adjusted earnings (net
profit) 20.7 16.9 3.8 22.2%
------- ------- ---------- --------
H1 2023 H1 2022 YoY YoY
change
Adjusted net profit attributable
to equity holders (EURm) 19.9 16.2 3.7 23.1%
----------- ----------- --- -------
Basic weighted average
number of shares 688,911,333 688,911,333 - -
----------- ----------- --- -------
Adjusted basic EPS (cents/share) 2.90 2.35 0.6 23.1%
----------- ----------- --- -------
Acquisition-related expenses are fees and other costs relating
to the Group's M&A activity. Acquisition-related expenses
differ every year based on the acquisition activity of the Group.
Exclusion of these costs allows for better comparability.
Strategic transformation expenses are costs relating to
broadening the skill bases of the Group's employees (including
executive search and recruiting costs, and were relevant for H1
2022), as well as costs relating to transformation of key IT
systems. In 2023, Inelo integration costs were also included.
In addition, adjustment has been made for the compensation
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
EUR2.0m in the first half of 2023 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, Webeye and Inelo). It is prone to movement 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. No such adjustment was
relevant for the first half of 2023.
Capital allocation
Our priority will continue to be organic and inorganic
investment to drive long term sustainable growth. Our
transformational capital expenditure of EUR50m, during 2022 and
2023, to develop our integrated end-to-end digital platform,
remains on track to complete at the end of this year. We will
continue to invest in the platform in parallel with integrating the
businesses we acquired, which will require ordinary capital
expenditure of around 10 percent of net revenues. With the delivery
of the platform next year, along with integrating the technologies
and products of our acquired businesses, we expect to reduce
duplications across IT, hardware, and technology processes over
time.
With the recent acquisition of Inelo, our leverage ratio, as
expected, has exceeded the top end of our medium-term guidance
range of 1.5x to 2.5x net debt to adjusted EBITDA, to 2.9x at the
end of the period. Our priority 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
As part of the refinancing project last September for our new
Multicurrency Term and Revolving Facilities Agreement, we have
agreed with the lenders to incorporate some of our medium term ESG
targets within the KPIs. These include reduction of GHG emissions
for us and our customers and increased female leadership in the
organisation. Under the terms of the agreement, applicable margin
adjustments relating to our committed facilities will be contingent
on meeting our ESG targets. The first applicable year will be from
FY 2024, based on FY 2023 results. This commitment will further
drive incentivisation across our organization to ensure we meet our
targets and shows our commitment to making the industry clean,
fair, and efficient.
In May 2023, the Group utilised EUR50m under the uncommitted
Incremental Facility, which was secured as part of the refinancing
last year, and supported capital expenditure initiatives.
The maturity period for all term loan facilities and for the
revolving credit facility is 5 years. Facility A of EUR150m and B
of EUR180m will amortise in quarterly repayments starting on 31
March 2023, with a EUR45m and EUR54m balloon respectively.
Incremental Facility I of EUR50m will amortise in quarterly
repayments, starting on 30 September 2023, with a EUR15m
balloon.
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.
Covenant Calculation Target Actual
30 June
2023
================ ================================= ============= =========
the ratio of adjusted EBITDA
Interest cover to finance charges Min 4.00 7.52
the ratio of total net debt
Net leverage to adjusted EBITDA Max 4.00(1) 2.87
Adjusted net the ratio of the adjusted total
leverage net debt to adjusted EBITDA Max 6.50 4.24
---------------- --------------------------------- ------------- ---------
1. The covenant shall not exceed 3.75 in 2024 and 3.50 in 2025 and onwards.
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 Facility A and Facility B coverage of 100%
in 2023 and 2024, 75% in 2025, 50% in 2026, and 25% in 2027.
Incremental Facility I has not been hedged. 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
for the amount of EUR120.0m (unamortised) 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 for the amount of
EUR30.0m (amortised) 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.
With respect to Facility B, interest rate swaps executed in 2023
for the amount of EUR173.0m (amortised) have an effective payable
fixed rate between 3.2% and 3.5% and are expected to expire by
2027.
Throughout 2023, the Group has effectively managed its working
capital needs through the use of uncommitted factoring facilities,
with average financing limits of EUR124m and average utilisation of
77.8% (H1 2022: EUR97.6m and 58.1% respectively). This demonstrates
the Group's proactive approach to maintaining a strong financial
position, and its ability to optimise working capital.
Directors' responsibility statement
We confirm that to the best of our knowledge:
The unaudited condensed consolidated financial statements have
been prepared in accordance with UK-adopted IAS 34 Interim
Financial Reporting.
The interim management report includes a fair review of the
information required by:
(a) DTR 4.2.7R of the Disclosure Guidance and Transparency
Rules, being an indication of important events that have occurred
during the first six months of the financial year and their impact
on the condensed set of financial statements; and a description of
the principal risks and uncertainties for the remaining six months
of the year; and
(b) DTR 4.2.8R of the Disclosure Guidance and Transparency
Rules, being related party transactions that have taken place in
the first six months of the current financial year and that have
materially affected the financial position or performance of the
entity during that period; and any changes in the related party
transactions described in the last annual report in the Financial
statements dated 16 March 2023 that could do so.
On behalf of the Board of Directors
Martin Vohánka
Chief Executive Officer
Financial statements
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(EUR '000)
Notes For the six months ended 30 June
===== ==================================
2023 2022
(unaudited) (unaudited)
=========================================================================== ===== ================ ================
Revenue from contracts with customers 7 1,017,586 1,160,815
Costs of energy sold (898,503) (1,073,837)
=========================================================================== ===== ================ ================
Net energy and services sales 7 119,083 86,978
Other operating income 8 6,781 221
Employee expenses 10 (46,423) (32,768)
Impairment losses of financial assets (4,171) (2,719)
Technology expenses (8,680) (3,882)
Other operating expenses (26,374) (18,325)
Operating profit before depreciation and amortisation (EBITDA) 40,216 29,505
Analysed as:
--------------------------------------------------------------------------- ----- ---------------- ----------------
Adjusting items 9 10,025 5,498
Adjusted EBITDA 9 50,241 35,003
--------------------------------------------------------------------------- ----- ---------------- ----------------
Depreciation and amortisation 9 (25,708) (12,431)
=========================================================================== ===== ================ ================
Operating profit 14,508 17,074
Finance income 12 5,262 1,275
Finance costs 11 (10,960) (4,553)
Share of net loss of associates (298) (353)
=========================================================================== ===== ================ ================
Profit before tax 8,512 13,443
Income tax expense 13 (2,914) (4,256)
=========================================================================== ===== ================ ================
PROFIT FOR THE YEAR 5,597 9,187
=========================================================================== ===== ================ ================
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 (92) 4,976
Exchange differences on translation of foreign operations 2,390 302
Deferred tax related to other comprehensive income - -
--------------------------------------------------------------------------- ----- ---------------- ----------------
TOTAL OTHER COMPREHENSIVE INCOME 2,298 5,278
=========================================================================== ===== ================ ================
TOTAL COMPREHENSIVE INCOME FOR THE YEAR 7,895 14,465
=========================================================================== ===== ================ ================
Total profit for the financial year attributable to equity holders of the
Company 5,245 8,902
Total profit for the financial year attributable to non-controlling
interests 353 285
Total comprehensive income for the financial year attributable to equity
holders of the Company 7,538 14,137
Total comprehensive income for the financial year attributable to
non-controlling interests 357 328
Earnings per share (in cents per share): 18
Basic earnings per share 0.76 1.29
Diluted earnings per share 0.76 1.29
=========================================================================== ===== ================ ================
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(EUR '000)
Notes As at
========================================= ====== ================================
30 June 31 December
2023 (unaudited) 2022
========================================= ====== ================== ============
ASSETS
Non-current assets
Intangible assets 14 579,605 268,171
Property, plant and equipment 14 52,217 39,826
Right-of-use assets 16,491 13,340
Investments in associates 11,925 12,223
Financial assets at fair value through
other comprehensive income 14,579 14,364
Deferred tax assets 10,748 10,505
Derivative assets 6 1,415 3,093
Other non-current assets 4,296 3,791
========================================= ====== ================== ============
Total non-current assets 691,276 365,313
========================================= ====== ================== ============
Current assets
Inventories 15 19,037 20,291
Trade and other receivables 16 393,207 378,152
Income tax receivables 2,591 1,800
Derivative assets 6 7,835 3,851
Cash and cash equivalents 17 80,444 146,003
========================================= ====== ================== ============
Total current assets 503,114 550,097
========================================= ====== ================== ============
TOTAL ASSETS 1,194,390 915,410
========================================= ====== ================== ============
SHAREHOLDERS' EQUITY AND LIABILITIES
Share capital 8,107 8,107
Share premium 2,958 2,958
Merger reserve (25,963) (25,963)
Other reserves 12,635 10,342
Business combinations equity adjustment (18,372) (12,526)
Retained earnings 340,094 329,362
Equity attributable to equity holders
of the Company 319,459 312,280
Non-controlling interests 7,983 4,283
================== ============
Total equity 327,442 316,563
========================================= ====== ================== ============
Non-current liabilities
Interest-bearing loans and borrowings 19 290,692 121,272
Lease liabilities 11,949 9,510
Deferred tax liabilities 27,009 8,677
Derivative liabilities 6 153 186
Other non-current liabilities 20 8,504 27,376
========================================= ====== ================== ============
Total non-current liabilities 338,307 167,021
========================================= ====== ================== ============
Current liabilities
Trade and other payables 20 426,725 398,235
Interest-bearing loans and borrowings 19 90,616 21,884
Lease liabilities 4,580 3,917
Provisions 2,131 2,124
Income tax liabilities 4,579 5,649
Derivative liabilities 6 10 17
========================================= ====== ================== ============
Total current liabilities 528,542 431,826
========================================= ====== ================== ============
TOTAL EQUITY AND LIABILITIES 1,194,390 915,410
========================================= ====== ================== ============
The accompanying notes form an integral part of these financial
statements.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(unaudited)
(EUR '000)
Notes Share Share Other Merger Business Retained Total equity Non-controlling Total
capital premium reserves reserve combinations earnings attributable interests equity
equity to equity
adjustment holders of
the parent
----------------- ------ --------- ---------- --------- --------- ------------- --------- ------------- ---------------- --------
At 1 January
2022 38,113 194,763 1,465 (25,963) (17,046) 84,526 275,858 8,889 284,747
================= ====== ========= ========== ========= ========= ============= ========= ============= ================ ========
Profit for the
year - - - - - 8,902 8,902 285 9,187
Other
comprehensive
income - - 5,235 - - - 5,235 43 5,278
=================
Total
comprehensive
income - - 5,235 - - 8,902 14,137 328 14,465
====== ========= ========== ========= ========= ============= ========= ============= ================ ========
Capital
reduction (30,006) (191,805) - - - 221,811 - - -
Dividends paid - - - - - - - (57) (57)
Share-based
payments - - - - - 3,618 3,618 - 3,618
Put options held
by
non-controlling
interests - - - - (174) - (174) - (174)
At 30 June 2022 8,107 2,958 6,700 (25,963) (17,220) 318,857 293,439 9,160 302,599
================= ====== ========= ========== ========= ========= ============= ========= ============= ================ ========
At 1 January
2023 8,107 2,958 10,342 (25,963) (12,526) 329,362 312,280 4,283 316,563
================= ====== ========= ========== ========= ========= ============= ========= ============= ================ ========
Profit for the
year - - - - - 5,245 5,245 352 5,597
Other
comprehensive
income - - 2,293 - - - 2,293 5 2,298
=================
Total
comprehensive
income - - 2,293 - - 5,245 7,538 357 7,895
====== ========= ========== ========= ========= ============= ========= ============= ================ ========
Acquisition of
subsidiaries 5 - - - - (5,809) - (5,809) 3,343 (2,466)
Share-based
payments 10 - - - - - 5,487 5,487 - 5,487
Put options held
by
non-controlling
interests - - - - (37) - (37) - (37)
At 30 June 2023 8,107 2,958 12,635 (25,963) (18,372) 340,094 319,459 7,983 327,442
================= ====== ========= ========== ========= ========= ============= ========= ============= ================ ========
CONSOLIDATED STATEMENT OF CASH FLOWS
(EUR '000)
Notes For the six months ended 30 June
====== ===================================
2023 2022
(unaudited) (unaudited)
==================================================================== ====== ================= ================
Cash flows from operating activities
Profit before tax for the period 8,512 13,443
Non-cash adjustments:
Depreciation and amortisation 14 25,708 12,431
Gain on disposal of non-current assets (200) (51)
Interest income (133) (79)
Interest expense 8,278 2,650
Movements in provisions 7 17
Impairment losses of financial assets 4,171 2,719
Movements in allowances for inventories 4 -
Foreign currency exchange rate differences (1,611) 39
Fair value revaluation of derivatives (1,745) 457
Share-based payments 5,487 3,618
Other non-cash items 462 423
Working capital adjustments:
(Increase)/decrease in trade and other receivables and prepayments (11,288) (134,596)
(Increase)/decrease in inventories 2,960 (9,302)
Increase in trade and other payables (27,684) 130,046
Interest received 133 79
Interest paid (7,555) (2,261)
Income tax paid (4,005) (3,207)
Net cash flows (used in)/generated from operating activities 1,501 16,417
==================================================================== ====== ================= ================
Cash flows from investing activities
Proceeds from sale of property, plant and equipment 1,442 144
Purchase of property, plant and equipment (5,681) (3,664)
Purchase of intangible assets (19,331) (18,104)
Purchase of financial instruments (215) -
Payments for acquisition of subsidiaries, net of cash acquired (273,259) (22,924)
Investment in associates - (3,000)
Net cash used in investing activities (297,044) (47,548)
==================================================================== ====== ================= ================
Cash flows from financing activities
Payment of principal elements of lease liabilities (2,381) (1,415)
Proceeds from borrowings 228,391 -
Repayment of borrowings (25,991) (10,012)
Dividend payments - (57)
Net cash (used in) / generated from financing activities 200,019 (11,484)
==================================================================== ====== ================= ================
Net (decrease)/increase in cash and cash equivalents (95,524) (42,614)
Effect of exchange rate changes on cash and cash equivalents - -
Cash and cash equivalents at beginning of period 146,001 224,154
Cash and cash equivalents at end of period 17 50,477 181,540
==================================================================== ====== ================= ================
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.
These condensed interim financial statements were approved for
issue on 7 September 2023 and have been neither reviewed nor
audited.
These condensed interim financial statements do not comprise
statutory accounts within the meaning of Section 434 of the
Companies Act 2006. Statutory accounts for the year ended 31
December 2022 were approved by the board of directors on 16 March
2023 and delivered to the Registrar of Companies. The report of the
auditors on those accounts was unqualified, did not contain an
emphasis of matter paragraph and did not contain any statement
under section 498 of the Companies Act 2006.
2. BASIS OF PREPARATION
The condensed interim financial statements for the six-months
ended 30 June 2023 have been prepared in accordance with UK-adopted
IAS 34 Interim Financial Reporting and the Disclosure and
Transparency Rules of the Financial Conduct Authority. The
condensed interim financial statements should be read in
conjunction with the Annual Report and Consolidated financial
statements for the year ended 31 December 2022, which have been
prepared in accordance with UK-adopted International Accounting
Standards (UK-adopted IFRS).
The condensed interim financial statements have been prepared on
a historical cost basis, except for derivative financial
instruments that have been measured at fair value. The interim
condensed financial statements are presented in EUR and all values
are rounded to the nearest thousand (EUR '000), except where
otherwise indicated.
These unaudited condensed interim financial statements have been
prepared on the going concern basis. The Board has considered the
financial prospects of the Company and Group for the foreseeable
future, over the period to 31 December 2024, 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 condensed interim
financial statements.
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 condensed interim financial statements.
The condensed interim financial statements are prepared for the
six months beginning on 1 January and ending on 30 June 2023.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies adopted, as well as significant
judgements and key estimates applied, are consistent with those in
the annual financial statements for the year ended 31 December
2022, as described in those financial statements, except as
described below:
-- Taxes on income in the interim periods are accrued using the
tax rate that would be applicable to expected total annual profit
or loss.
4. CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES, ADOPTION OF
NEW AND REVISED STANDARDS
4.1. Application of new IFRS - standards and interpretations
effective in the reporting period
The Group has applied the following standards and amendments for
the first time for their annual reporting period commencing 1
January 2023:
-- IFRS17 Insurance Contracts;
-- Amendments to IAS 8 - Definition of Accounting Estimates;
-- Amendments to IAS 12 - Deferred tax related to assets and
liabilities arising from a single transaction;
-- Amendments to IAS 1 and IFRS Practice Statement 2 - Disclosure of Accounting policies.
These Amendments did not have a significant impact on the
Group's condensed interim financial statements.
4.2. NEW IFRSs and IFRICs published by the IASB that are not yet
effective
Certain new accounting standards, amendments to accounting
standards and interpretations have been published that are not
mandatory for period commencing 1 January 2023 and have not been
early adopted by the Group. These new standards, amendments and
interpretations are not expected to have any significant impacts on
the Group's condensed interim financial statements.
5. BUSINESS COMBINATION
As of 30 June 2023, the following acquisitions took place:
Acquisition of Inelo
Further to the subsequent events described in the 2022 Annual
Report and Accounts, the acquisition of Inelo was completed on 15
March 2023.
The Group paid EUR 215.3m in cash upon the acquisition of 100%
of the share capital of Inelo on 15 March 2023 and repaid Inelo's
bank borrowings of EUR 53.6m on 16 March 2023. In addition, the
Group will pay an additional consideration of EUR 8.4m related to
the final price adjustment to Inelo's acquisition of FireUp TMS
subsidiary and EUR2.1m related to other purchase price adjustments
identified at completion. There is also a contingent consideration,
based on Inelo's EBITDA performance for the year to 31 December
2022, capped at EUR 12.5m, which will (if applicable) become
payable in the second half of 2023, following approval of the
audited consolidated financial statements of Inelo. Full amount of
contingent consideration was recognised as of 30 June 2023. The
Group will either pay EUR12.5m or no consideration is payable.
Given the short period of time between the acquisition and
preparation of these condensed interim financial statements, the
amounts recorded below for the acquisition are provisional.
Purchase price allocation activities are ongoing, and the
preliminary fair value of assets and liabilities will be further
revised.
The provisionally determined fair values of identifiable assets
and liabilities of subsidiaries of Inelo as at the date of
acquisition were:
Preliminary
fair value
recognized
on acquisition
EUR '000 of Inelo
======================================= ================
Assets
Property, plant and equipment 11,206
Identifiable intangible assets 102,066
Right of use assets 3,060
Other non-current assets 124
Trade receivables 8,540
Inventories 1,674
Income tax receivables 943
Cash and cash equivalents 3,270
Total Assets 130,883
Liabilities
Interest-bearing loans and borrowings 59,136
Trade payables 13,138
Lease liabilities 3,146
Other non-current liabilities 418
Income tax liabilities 467
Deferred tax 18,063
Total Liabilities 94,368
======================================= ================
Total identifiable net assets
at fair value 36,515
======================================= ================
Non-controlling interest measured
at % of net assets (3,343)
Goodwill arising on acquisition 205,123
======================================= ================
Purchase consideration:
--------------------------------------- ----------------
Cash paid 215,288
--------------------------------------- ----------------
Deferred and contingent consideration 23,006
--------------------------------------- ----------------
Total purchase consideration 238,294
--------------------------------------- ----------------
The goodwill is attributable to expected synergies from
combining operations, workforce and other unrecognisable intangible
assets. It will not be deductible for tax purposes.
The gross contractual receivables acquired amounted to EUR9,931
thousand. At acquisition date, there were EUR1,272 thousand of
contractual cash flows not expected to be collected.
From the date of acquisition until 30 June 2023, Inelo's
subsidiaries contributed EUR13,291 thousand of revenue and EUR3,500
thousand profit after tax.
If the acquisition had occurred on 1 January 2023, consolidated
revenue and consolidated profit after tax of Inelo's entities for
the half year ended 30 June 2023 would have been EUR20,965 thousand
and EUR3,811 thousand respectively. Excluding amortisation of
acquired intangibles and adjusting items the adjusted profit after
tax would have been EUR7,113 thousand.
As the deferred consideration is of short-term nature, no
discounting has been applied to the amount payable.
Transaction costs are disclosed at the end of this note.
Pay-out of deferred consideration
On 27 April 2023, the Group paid first part of deferred and
contingent acquisition consideration of EUR 2,064 thousand related
to acquisition of Webeye.
Further, on 17 May 2023, the Group paid second part of deferred
acquisition consideration of EUR 5,500 thousand related to
acquisition of Webeye.
Other disclosures
Net outflows of cash to acquire subsidiaries were as
follows:
EUR '000 30 June 30 June
2023 (unaudited) 2022 (unaudited)
========================= ================== ==================
Cash consideration paid 222,852 23,319
Repayment of acquiree's 53,676 -
debt
Cash acquired (3,270) (395)
================== ==================
Net outflow of cash
- investing activities 273,259 22,924
========================= ================== ==================
Cost of acquisition of subsidiaries recognised in other
operating expense:
EUR '000 For the six months
ended 30 June
=================== ====================================
2023 (unaudited) 2022 (unaudited)
=================== ================= =================
Acquisition costs 2,719 524
=================== ================= =================
6. FAIR VALUE MEASUREMENT
The following table provides the fair value measurement
hierarchy of the Group's assets and liabilities.
Fair value measurement hierarchy for assets and liabilities as
at 30 June 2023 (unaudited):
EUR '000 Note Date of valuation Fair value measurement
using
====================== ====== =================== =======
Quoted Significant Significant
prices observable unobservable
in active inputs inputs
markets (Level (Level
(Level 2) 3)
1) Total
====================== ====== =================== ============ ============ ============== =======
Assets measured
at fair value
Financial assets
at fair value
through other
comprehensive
income (FVTOCI) 30 June 2023 - - 14,579 14,579
Derivative financial
assets
Foreign currency
forwards 30 June 2023 - 2,329 - 2,329
Interest rate
swaps 30 June 2023 - 6,921 - 6,921
Liabilities measured
at fair value
Derivative financial
liabilities
Foreign currency
forwards 30 June 2023 - 5 - 5
Put options 30 June 2023 - - 153 153
Interest rate
swaps 30 June 2023 - 5 - 5
============================== =================== =========== ============ ============== =======
As of 30 June 2023, fair value measurement of financial assets
at FVTOCI was performed by an independent valuator. The carrying
value as of 31 December 2022 falls within the range of the
valuation as of 30 June 2023, with a midpoint being higher than the
carrying amount. Therefore, we decided to be prudent and keep the
value as it was as of 31 December 2022.
There have been no transfers between Level 1, Level 2 and Level
3 during the six months ended 30 June 2023.
Fair value measurement hierarchy for assets and liabilities as
at 31 December 2022:
EUR '000 Note Date of valuation Fair value measurement
using
====================== ====== =================== =======
Quoted Significant Significant
prices observable unobservable
in active inputs inputs
markets (Level (Level
(Level 2) 3)
1) Total
====================== ====== =================== ============ ============ ============== =======
Assets measured
at fair value
Financial assets
at fair value
through other
comprehensive 31 December
income (FVTOCI) 2022 - - 14,364 14,364
Derivative financial
assets
Foreign currency 31 December
forwards 2022 - 1 - 1
Interest rate 31 December
swaps 2022 - 6,943 - 6,943
Liabilities measured
at fair value
Derivative financial
liabilities
Foreign currency 31 December
forwards 2022 - 17 - 17
31 December
Put options 2022 - - 153 153
Interest rate 31 December
swaps 2022 - 33 - 33
============================== =================== =========== ============ ============== =======
There have been no transfers between Level 1, Level 2 and Level
3 during the year ended 31 December 2022.
Specific valuation techniques used to value financial
instruments include:
-- for interest rate swaps - the present value of the estimated
future cash flows based on observable yield curves;
-- for foreign currency forwards - the present value of future
cash flows based on the forward exchange rates at the balance sheet
date;
-- for put options - option pricing models (Monte Carlo); and
-- for other financial instruments - discounted cash flow analysis.
The Group engaged independent experts to perform valuation of
FVTOCI based on discounted cash-flows. The main level 3 inputs used
are:
-- discount rate;
-- revenue growth rate.
Reasonably possible change in the above inputs does not lead to
a significant change in the fair value of the financial asset.
Management assessed that the fair values of cash and cash
equivalents, trade and other receivables and trade and other
payables approximates their carrying amounts largely due to the
short-term maturities of these instruments. Interest-bearing loans
and borrowings are at floating rates with margin corresponding to
market margins and credit rating of the Company has not
significantly changed since refinancing in September 2022.
The fair value of the financial assets and liabilities is
included at the amount at which the instrument could be exchanged
in a current transaction between willing parties, other than in a
forced or liquidation sale.
7. 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
9.
The CODM does not review assets and liabilities at segment
level.
Six months ended Payment Mobility Total
30 June 2023 (unaudited) solutions solutions
EUR '000
--------------------------- ----------- ----------- ----------
Segment revenue 970,921 46,665 1,017,586
Net energy and services
sales 72,418 46,665 119,083
Contribution 61,004 31,621 92,624
Contribution margin 84% 68% 78%
Corporate overhead
and indirect costs
before adjusting
items (42,383)
Adjusting items
affecting Adjusted
EBITDA (10,025)
Depreciation and
amortisation (25,708)
Net finance costs
and share of net
loss of associates (5,996)
--------------------------- ----------- ----------- ----------
Profit before tax 8,512
--------------------------- ----------- ----------- ----------
Six months ended Payment Mobility Total
30 June 2022 (unaudited) solutions solutions
EUR '000
--------------------------- ----------- ----------- ----------
Segment revenue 1,137,314 23,501 1,160,815
Net energy and services
sales 63,477 23,501 86,978
Contribution 54,938 16,971 71,909
Contribution margin 87% 72% 83%
Corporate overhead
and indirect costs
before adjusting
items (36,906)
Adjusting items
affecting Adjusted
EBITDA (5,498)
Depreciation and
amortisation (12,431)
Net finance costs
and share of net
loss of associates (3,631)
--------------------------- ----------- ----------- ----------
Profit before tax 13,443
--------------------------- ----------- ----------- ----------
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 six months
ended 30 June
============================= ====================================
2023 (unaudited) 2022 (unaudited)
============================= ================= =================
Czech Republic ("CZ") 219,845 242,813
Poland ("PL") 180,975 199,284
Central Cluster (excluding
CZ and PL) 124,998 133,417
Portugal ("PT") 109,201 205,110
Western Cluster (excluding
PT) 50,003 38,117
Romania ("RO") 144,905 153,735
Southern Cluster (excluding
RO) 183,210 183,556
Not specified 4,449 4,783
Total 1,017,586 1,160,815
============================= ================= =================
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 six months
ended 30 June
============================= ====================================
2023 (unaudited) 2022 (unaudited)
============================= ================= =================
Czech Republic 18,928 15,861
Poland 25,554 15,323
Central Cluster (excluding
CZ and PL) 15,048 12,120
Portugal 5,576 8,638
Western Cluster (excluding
PT) 4,627 3,492
Romania 16,890 12,570
Southern Cluster (excluding
RO) 28,860 15,559
Not specified 3,600 3,415
Total 119,083 86,978
============================= ================= =================
Timing of revenue recognition was as follows:
EUR '000 For the six months
ended 30 June
================================ ====================================
2023 (unaudited) 2022 (unaudited)
================================ ================= =================
Payment solutions
Goods and services transferred
at a point in time 952,248 1,125,804
Services transferred over
time 18,672 11,510
-------------------------------- ----------------- -----------------
970,920 1,137,314
Mobility solutions
Goods and services transferred
at a point in time 8,242 6,357
Services transferred over
time 38,424 17,144
-------------------------------- ----------------- -----------------
46,666 23,501
Total segment revenue 1,017,586 1,160,815
================================ ================= =================
8. OTHER OPERATING INCOME
EUR '000 For the six
months ended
30 June
======================== ================
2023 2022
======================== ======== ======
Revaluation of foreign 5,953 -
currency forwards
Other income 828 221
Total 6,781 221
======================== ======== ======
9. 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, 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, as
explained in its accounting policies.
This measure also supports comparability of the Group's
performance with other entities, who have concluded that they act
as an agent in the sale of energy and, therefore, report revenues
net of energy purchased.
Contribution
Contribution is defined as net energy and services sales less
operating costs that can be directly attributed to or controlled by
the segments. Contribution does not include indirect costs and
allocations of shared costs that are managed at a group level and
hence shown separately under Indirect costs and corporate
overhead.
The CODM reviews net energy and services sales and contribution
to evaluate segment performance and allocate resources to the
overall business (Note 7).
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.
------------------------- --------------------------- ------------------------------------------
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 Inelo represents investments intended
integration costs to create a new product or service,
or significantly enhance an existing
one, in order to increase the
Group's revenue potential. This
also includes systems and processes
improvements to improve services
provided to customers. Transformational
expenditures, which cannot be
capitalised as they are mainly
related to research, were excluded
as the Group is executing its
strategic transformation programme
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
amounts to EUR4.1m in 2023 and
EUR3.3m in 2024. The Group does
not expect significant capitalisation
related to SAP in 2024.
Integration costs of Inelo
In 2023 and 2024, the Group expects
to adjust one-off costs related
to transformation and integration
of 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 EUR2m of integration
costs in 2023.
------------------------- --------------------------- ------------------------------------------
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 EUR20.7m, from which
EUR1.3m was a one-off in 2021
and EUR19.4m 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
EUR5.1m in 2021 and EUR5.3m in
2022 and anticipated expense
adjustment amounts to EUR6.5m
in 2023 and EUR2.5m 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 six months
ended 30 June
================================ ====================================
2023 (unaudited) 2022 (unaudited)
================================ ================= =================
Intangible assets amortisation
(Note 14) 19,310 8,830
Tangible assets depreciation
(Note 14) 3,949 2,176
Right of use depreciation 2,449 1,425
-------------------------------- ----------------- -----------------
Depreciation and amortization 25,708 12,431
Net finance costs and share
of net loss of associates 5,996 3,631
Profit before tax 8,512 13,443
-------------------------------- ----------------- -----------------
EBITDA 40,216 29,505
M&A-related expenses * 2,719 524
Strategic transformation
expenses 3,624 1,661
Share-based compensation 3,682 3,313
-------------------------------- ----------------- -----------------
Adjusting items 10,025 5,498
Adjusted EBITDA 50,241 35,003
================================ ================= =================
* Primarily related to Inelo acquisition .
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, Webeye and further acquisitions
Inelo) 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 software 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 six months
ended 30 June
====================================== ====================================
2023 (unaudited) 2022 (unaudited)
====================================== ================= =================
Profit for the year 5,597 9,187
Amortisation of acquired intangibles 6,756 2,761
Amortisation due to transformational
useful life changes - 651
Adjusting items affecting Adjusted
EBITDA 10,025 5,498
Tax effect (1,717) (1,188)
Adjusted earnings (net profit) 20,661 16,909
====================================== ================= =================
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 18 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 13 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.
10. EMPLOYEE EXPENSES
Employee expenses for the respective periods consist of the
following:
EUR '000 For the six months ended 30 June
======================== ======================================================================
2023 (unaudited) 2022 (unaudited)
======================== ================================== ==================================
Total personnel Key management* Total personnel Key management*
======================== ================ ================ ================ ================
Wages and salaries 39,114 3,360 27,034 2,408
Social security costs 9,107 593 6,797 349
Option plans 5,654 5,074 3,807 3,421
Own work capitalised (7,451) - (4,870) -
======================== ================ ================ ================ ================
Total employee expense 46,424 9,027 32,768 6,178
======================== ================ ================ ================ ================
*Includes the members of the Board and Executive Committee of
W.A.G payment solutions PLC.
Expenses arising from share-based payment transactions
EUR '000 For the six months
ended 30 June
====================================== ==============================
2023 2022
(unaudited) (unaudited)
====================================== ============== ==============
Equity-settled plans (pre-IPO option
plans) 3,518 3,124
Cash-settled plans (pre-IPO) 164 189
-------------------------------------- -------------- --------------
Total pre-IPO expenses (Note 9) 3,682 3,313
-------------------------------------- -------------- --------------
Equity-settled plans (PSP) 1,971 494
-------------------------------------- -------------- --------------
Total 5,653 3,807
-------------------------------------- -------------- --------------
11. FINANCE COSTS
Finance costs for the respective periods were as follows:
EUR '000 For the six months
ended 30 June
======================= ====================================
2023 (unaudited) 2022 (unaudited)
======================= ================= =================
Bank guarantees fee 673 430
Interest expense 8,257 2,729
Factoring fee 1,956 417
Foreign exchange loss - 975
Other 74 1
Total 10,960 4,553
======================= ================= =================
The Group manages its foreign currency risk by using foreign
currency forwards and swaps .
12. FINANCE INCOME
Finance income for the respective periods was as follows:
EUR '000 For the six
months ended
30 June
===================================== ============================
2023 2022
(unaudited) (unaudited)
===================================== ============= =============
Gain from foreign currency exchange 3,451 -
rate differences
Gain from the revaluation of
securities and derivatives 1,667 1,117
Interest income 133 81
Other 11 77
Total 5,262 1,275
===================================== ============= =============
13. INCOME TAX
The taxation charge for the interim period has been calculated
based on estimated e ective tax rate for the full year of 34.2%
(six months ended 30 June 2022: 31.7%).
The tax rate is higher in 2023 mainly due to equity-settled
share-based payments of EUR 5,489 thousand (six months ended 30
June 2022: EUR 3,618 thousand) and tax non-deductible M&A
expenses EUR 1,384 thousand (six months ended 30 June 2022: EUR 524
thousand) offset by positive impact of 2022 CIT assessment of EUR
404 thousand (six months ended 30 June 2022: negative impact of EUR
309 thousand). Related tax impact amounts to EUR 930 thousand in
the six months ended 30 June 2023, which represents 10.9 percentage
points of the effective tax rate (six months ended 30 June 2021:
EUR 1,096 thousand, which represented 8.1 percentage point of the
effective tax rate).
In May 2023, the government of the Czech Republic suggested
changes in the Czech tax system which include corporate income tax
rate increase from 19% to 21%. According to the government's
proposal, the new tax rate will be applicable for tax and
accounting periods starting in 2024. The changes have not yet been
enacted as of the date of preparation of these condensed interim
financial statements. If enacted, the impact on the deferred tax as
of 30 June 2023 would not be material (approx. EUR 677 thousand
increase of deferred tax asset and EUR 1 thousand increase of
deferred tax liability).
The Group is currently analysing impact of OECD Pillar II
legislation, which is effective from 1 January 2024. Although the
analysis has not yet been completed, the new legislation may have
an impact on the Group. The management is taking all necessary
actions to minimize the impact.
Adjusted effective tax rate is as follows:
EUR '000 For the six months ended 30 June
========================================================== ====================================
2023 (unaudited) 2022 (unaudited)
========================================================== ================= =================
Accounting profit before tax 8,512 13,443
Adjusting items affecting adjusted EBITDA 10,025 5,498
Amortisation of acquired intangibles 6,756 2,761
Amortisation due to transformational useful life changes - 651
---------------------------------------------------------- ----------------- -----------------
Adjusted profit before tax (A) 25,292 22,353
Accounting tax expense 2,914 4,256
Tax effect of above adjustments 1,717 1,188
---------------------------------------------------------- ----------------- -----------------
Adjusted tax expense (B) 4,632 5,444
Adjusted earnings (A-B) 20,661 16,909
Adjusted effective tax rate (B/A) 18.31% 24.35%
---------------------------------------------------------- ----------------- -----------------
14. INTANGIBLE ASSETS AND PROPERTY, PLANT AND EQUIPMENT
Property,
Intangible plant and
EUR '000 assets equipment
================================ =========== ===========
Cost
Opening balance as at
1 January 2023 342,614 69,555
Acquisition of a subsidiary 307,188 11,212
Additions 19,708 4,952
Disposals (347) (3,924)
Translation differences 5,219 2,099
Closing balance at 30
June 2023 (unaudited) 674,382 83,894
================================ =========== ===========
Accumulated amortisation
/ depreciation
Opening balance as at
1 January 2023 (74,444) (29,729)
Amortisation / depreciation (19,310) (3,949)
Impairment - (120)
Disposals 38 2,972
Translation differences (1,061) (851)
Closing balance at 30
June 2023 (unaudited) (94,777) (31,677)
================================ =========== ===========
Net book value
As at 1 January 2023 268,171 39,826
As at 30 June 2023 (unaudited) 579,605 52,217
================================ =========== ===========
Impairment testing
The Group has tested the intangible assets with an indefinite
useful life for impairment as at 31 December 2022. As at 30 June
2023, the Group performed impairment test for the CGU Fleet
management (FMS) (excluding Inelo) as the recoverable amount of
this CGU was closer to the carrying amount than all other CGUs as
at 31 December 2022.
Carrying amount of goodwill allocated to FMS CGU as at 30 June
2023 was EUR 59,408 thousand. The recoverable amount of the CGU has
been determined based on a value-in-use calculation using cash flow
projections from financial forecast covering a five-year period.
The Group has considered the potential impact of climate change in
impairment tests and a combination of revenue decrease and
operating and capital expenses increase was included in the FMS CGU
base model. Sensitivities of discounted cash-flows described below
directly include the expected climate change impact.
Discounted cash flow model is based on the following key
assumptions:
-- Discount rate;
-- Revenues;
-- Long-term revenue growth rate.
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 and was set at 13.0% as at 30 June
2023 (12.0% in year ended 31 December 2022).
The recoverable amount is estimated to exceed the carrying
amount of the CGU at 30 June 2023 by EUR 5,216 thousand.
Discount rate used in the value-in-use calculation would have to
increase to 13.4% for the recoverable amount to be equal to its
carrying amount.
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.
Long-term revenue growth rate would have to decrease to 2.1% for
the recoverable amount to be equal to its carrying amount.
15. INVENTORIES
EUR '000 30 June 2023 (unaudited) 31 December 2022
================================== ========================= =================
Raw materials* 7,028 6,652
Goods (excluding on-board units) 6,293 9,173
Finished products 181 197
On-board units 5,535 4,269
================================== ========================= =================
Total 19,037 20,291
================================== ========================= =================
*Represents primarily material for On-board units.
Goods recognised as an expense are presented in full under cost
of energy sold.
16. TRADE AND OTHER RECEIVABLES
EUR '000 30 June 31 December
2023 (unaudited) 2022
=========================== ================== ============
Trade receivables 268,313 240,788
Receivables from tax
authorities 22,378 24,528
Advances granted 12,432 12,059
Unbilled revenue 4,240 9,728
Miscellaneous receivables 65 4,798
Tax refund receivables 77,188 79,274
Prepaid expenses and
accrued income 4,745 3,976
Contract assets 3,846 3,001
=========================== ================== ============
Total 393,207 378,152
=========================== ================== ============
17. CASH AND CASH EQUIVALENTS
For the purpose of the statement of cash flows, cash and cash
equivalents comprise the following:
EUR '000 30 June (unaudited) 31 December 2022
============================================================================ ==================== =================
Cash at banks 80,382 145,938
Cash on hand 62 65
Cash and cash equivalents presented in the statement of financial position 80,444 146,003
============================================================================ ==================== =================
Bank overdrafts (29,967) (2)
============================================================================
Cash and cash equivalents presented in the statement of cash flows 50,477 146,001
============================================================================ ==================== =================
18. 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 six
months ended
30 June
========================================== ============================
2023 2022
(unaudited) (unaudited)
========================================== ============= =============
Net profit attributable to equity
holders (EUR '000) 5,245 8,902
========================================== ============= =============
Basic weighted average number of
shares 688,911,333 688,911,333
Effects of dilution from share options 2,296,736 517,940
Total number of shares used in computing
dilutive earnings per share 691,208,069 689,429,273
------------------------------------------ ------------- -------------
Basic earnings per share (cents/share) 0.76 1.29
Diluted earnings per share (cents/share) 0.76 1.29
========================================== ============= =============
Adjusted earnings per share measures:
For the six
months ended
30 June
======================================= ============================
2023 2022
(unaudited) (unaudited)
======================================= ============= =============
Net profit attributable to equity
holders (EUR '000) 5,245 8,902
======================================= ============= =============
Adjusting items affecting Adjusted
EBITDA (Note 9) 10,025 5,498
Amortisation of acquired intangibles* 6,310 2,229
Amortisation due to transformational
useful life changes - 651
Tax impact of above adjustments* (1,633) (1,080)
======================================= ============= =============
Adjusted net profit attributable
to equity holders (EUR '000) 19,948 16,200
======================================= ============= =============
Basic weighted average number of
shares 688,911,333 688,911,333
======================================= ============= =============
Adjusted basic earnings per share
(cents/share) 2.90 2.35
======================================= ============= =============
Diluted weighted average number
of shares 691,208,069 689,429,273
======================================= ============= =============
Adjusted dilutive earnings per
share (cents/share) 2.89 2.35
======================================= ============= =============
*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.
19. INTEREST BEARING LOANS AND BORROWINGS
30 June 2023 (unaudited) 31 December 2022
============== ======== =========== =========== ================================= ===============================
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
Multicurrency
term and
revolving
facilities 3M EURIBOR
agreement** EUR 2027/09 + margin 45,000 40,733 40,733 45,000 42,941 42,941
Multicurrency
term and
revolving
facilities 3M EURIBOR
agreement** EUR 2027/09 + margin 68,000 59,687 59,687 68,000 64,889 64,889
Multicurrency
term and
revolving
facilities 3M EURIBOR
agreement** EUR 2027/09 + margin 37,000 35,308 35,308 37,000 35,307 35,307
Multicurrency
term and
revolving
facilities 3M EURIBOR
agreement** EUR 2027/09 + margin 120,000 108,566 108,566 - - -
Multicurrency
term and
revolving
facilities 3M EURIBOR
agreement** EUR 2027/09 + margin 60,000 54,283 54,283 - - -
Multicurrency
term and
revolving
facilities 3M EURIBOR
agreement** EUR 2027/09 + margin 50,000 49,051 49,051 - - -
Other loans CZK fixed rate 271 271 11 393 393 17
============== ======== =========== =========== ========= ========= =========== ========= ========= =========
36 months
Financial from the Fixed rate
liabilities REPO -
to telecoms PLN transaction 6.29-16.86% 15,512 15,512 3,486 - - -
============== ======== =========== =========== ========= ========= =========== ========= ========= =========
Other non-bank 3M WIBOR +
loans PLN, EUR 2% - - 216 - - -
============== ======== =========== =========== ========= ========= =========== ========= ========= =========
Revolving
facilities
and
overdrafts - - - 55,000 29,967 29,967 - 2 2
============== ======== =========== =========== ========= ========= =========== ========= ========= =========
Total EUR 381,308 143,156
============== ======== =========== =========== ========= ========= =========== ========= ========= =========
Current EUR 90,616 21,884
============== ======== =========== =========== ========= ========= =========== ========= ========= =========
Non-current EUR 290,692 121,272
============== ======== =========== =========== ========= ========= =========== ========= ========= =========
*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 EUR60m was available for the Group
for revolving facilities and overdraft accounts, and up to EUR113m
for bank guarantees.
**On 22 September 2022, the Group signed a new multicurrency
term and revolving facilities agreement ("new club financing
agreement") with the 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:
-- EUR150m committed facility A for the refinancing of all existing term loan indebtedness;
-- EUR180m committed facility B for permitted acquisitions and capital expenditure;
-- EUR235m committed auxiliary credit facility, of which EUR85m
may be utilised by way of revolving loans, and EUR150m may be
utilised by way of ancillary facilities in the form of bank
guarantees, letters of credit, or an overdraft up to EUR25m;
and
-- EUR150m uncommitted incremental facility for permitted
acquisitions, capital expenditure, and auxiliary credit facilities
up to EUR50m of which not more than EUR25m 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 interest expense relating to bank loans and borrowings is
presented in Note 11 .
Interest bearing loans and borrowings are non-derivative
financial liabilities carried at amortised cost.
On 10 March 2023, the Group received EUR 180m through facility B
of the new club financing. The new loan was used to finance the
Inelo acquisition above. Interest rate risk was managed by
concluding new interest rate swaps.
On 25 May 2023, the Group received EUR 50m through Incremental
Facility I of the new club financing. The purpose of the new
drawdown is financing of the capital expenditures incurred or to be
incurred.
20. TRADE AND OTHER PAYABLES, OTHER LIABILITIES
EUR '000 30 June 31 December
2023 (unaudited) 2022
============================== ================== ============
Current
Trade payables 305,972 332,676
Employee related liabilities 10,048 9,243
Advances received 13,849 15,325
Miscellaneous payables 10,821 9,790
Payables to tax authorities 19,904 12,734
Contract liabilities 7,928 4,439
Refund liabilities 3,928 2,822
Put option redemption 4,473 -
liability
Deferred acquisition
consideration 49,801 11,206
------------------------------ ------------------ ------------
Total Trade and other
payables 426,725 398,235
------------------------------ ------------------ ------------
Non-current
Put option redemption
liability 1,182 4,435
Contract liabilities 3,044 2,276
Employee related liabilities 72 765
Deferred acquisition
consideration 4,204 19,898
Other liabilities 2 2
============================== ================== ============
Total Other non-current
liabilities 8,504 27,376
============================== ================== ============
21. FINANCIAL RISK MANAGEMENT
The Group is exposed to a variety of nancial risks including
foreign currency risk, fair value interest rate risk, credit risk
and liquidity risk. The condensed interim nancial statements do not
include all nancial risk management information and disclosures
required in the annual nancial statements; they should be read in
conjunction with the Group's annual nancial statements as at 31
December 2022. There have been no changes in any risk management
policies since the year end.
22. RELATED PARTY DISCLOSURES
Company
The Company controlling the Group is disclosed in Note 1.
Subsidiaries
As at 30 June 2023, there were the following changes in the
Group's subsidiaries:
Name Principal Country of Registered address Effective economic interest
activities incorporation
================== ================== ================== ==========================
2023 2022
=================================================================================== ================== ==========
AL IRIJA SPA CVS Mobility Algeria 30 Rue Hassen Benamane - -
Mobile Algerie solutions les Vergers Bir Mourad
(acquired and Rais-Algiers
liquidated in
2023)
CVS Mobile d.o.o. Mobility Bosnia and Ulica Petrovdanska bb 85.56% -
solutions Herzegovina 79240, Kozarska Dubica,
Bosnia-Herzegovina
CVS Mobile d.o.o. Mobility Croatia Jankomir 25 10090 Zagreb, 85.56% -
solutions Croatia
FireTMS.com GmbH Mobility Germany Geschäftsanschrift: 81.00% -
solutions Stresemannstraße
123, 10963 Berlin,
Germany
CVS Mobile GmbH Mobility Germany Sckellstraße 1/II, 85.56% -
solutions 81667 München,
Germany
CVS Mobile s.r.l. Mobility Italy Via Battisti 2, 34125 85.56% -
solutions Trieste, Italy
CVS Mobile MK Mobility North Macedonia 16-ta Makedonska brigada 85.56% -
dooel solutions 13b, 1000 Skopje, North
Macedonia
Grupa Inelo S.A. Mobility Poland 43-300 Bielsko-Bia a, ul. 100.00% -
solutions Kaprapcka 24/B13, Poland
INELO Polska Sp. Mobility Poland 43-300 Bielsko-Bia a, ul. 100.00% -
z o.o. solutions Kaprapcka 24/U2b, Poland
Marcos Bis Sp. z Mobility Poland ul. Powstańców 100.00% -
o.o. solutions 19, 40 - 039 Katowice,
Poland
FIRETMS.COM Sp. z Mobility Poland 44-200 Rybnik, ul. 3 Maja 81.00% -
o.o. solutions 30, Poland
CVS Mobile d.o.o. Mobility Serbia Ulica panskih boraca 24V, 85.56% -
solutions 11070 Novi Beograd,
Serbia
Napredna Mobility Slovenia Ulica Gradnikove brigade 89.30% -
telematika solutions 11, 1000 Ljubljana,
d.o.o. Slovenia
CVS Mobile d.d. Mobility Slovenia Ulica Gradnikove brigade 85.56% -
solutions 11, 1000 Ljubljana,
Slovenia
Infotrans d.o.o.* Mobility Slovenia Ljubljanska cesta 24C, 43.63% -
solutions 4000 Kranj, Slovenia
================== ================== ================== ========================== ================== ==========
* The Company, through its subsidiary W.A.G. payment solutions,
a.s., has the same percentage voting rights as effective economic
interest, directly or indirectly, in all listed above subsidiaries
except for Infotrans d.o.o. W.A.G. payment solutions, a.s. is
controlling Infotrans d.o.o. through a chain of subsidiaries where
it holds majority of voting rights.
Further, for the following entities liquidation process has been
ongoing as of 30 June 2023:
-- Klub investorov T&G SK, s. r. o.;
-- W.A.G. AT GmbH;
-- W.A.G. payment solutions IE Limited.
Key management personnel compensation
Key management personnel compensation is disclosed in Note
10.
Paid dividends
Paid dividends are disclosed in Consolidated Statement of
Changes in Shareholders' Equity.
Transactions with other related parties
EUR '000 For the six months ended 30 June
================================================================================ ====================================
2023 (unaudited) 2022 (unaudited)
================================================================================ ================= =================
Sale of fixed assets (vehicles) to key management personnel 1 -
Sale of property to key management personnel 28
Purchases of various goods and services from entities controlled by the
Company's Shareholders - 11
Purchases of various goods and services from entities controlled by key 16 -
management personnel*
Purchases of various goods and services from associates 6 -
================================================================================ ================= =================
* The Group acquired the following goods and services from
entities that are controlled by members of the Group's key
management personnel: marketing research, consultancy, taxi
services, rent of commercial property
23. SUBSEQUENT EVENTS
JITPay call option
On 4 July 2023, the Group announced it exercised its call option
to acquire an additional 18.01% stake in JITpay's share capital
from its founders, management and Volksbank eG Braunschweig
Wolfsburg on a pro rata basis. The proceeds from the primary
capital will be used to fund JITpay's further expansion. The Group
entered a strategic partnership with JITpay on 27 September 2022,
when it acquired a 9.99% stake for an initial consideration of
EUR14.3m, of which EUR3.5m was used as primary capital. As per the
original agreement, the Group had a call option to acquire an
additional 18.01% share, which could be exercised by 3 July 2023
for a consideration of EUR25.7m, of which EUR6.5m will be used as
primary capital.
The purchase of the additional 18.01% stake in JITpay will be
funded from existing funds and the transaction is subject to
customary closing conditions, including clearance by the German
Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin), and is
expected to complete in the first half of 2024. The Transaction
constitutes a Class 2 transaction for the purposes of the UK
Financial Conduct Authority's Listing Rules. Following receipt of
the German authorities' clearance, the investment in JITpay would
change to an associate (28% equity interest).
The remaining 72% stake will continue to be held by existing
shareholders. There are Call and Put arrangements in place that
give the Group the option to acquire the remaining 72% stake of
JITpay's share capital from 2025 onwards. The price of the Put or
Call payable by the Group for the remainder of JITpay's share
capital will be based on a multiple of 10x of the average of
JITpay's profit before tax over the twelve-month period to 31
December 2024 and 31 December 2025 with the Put being subject to a
cap of EUR129.3m.
Issued shares
On 15 August 2023, 560 204 new ordinary shares of the Company
were issued in relation to exercised option plan. The nominal value
of the shares was GBP0.01 per share resulting in EUR5 thousand
share capital increase.
Pay-out of deferred consideration
On 31 August 2023, the Group paid a deferred acquisition
consideration of EUR8,377 thousand related to the final price
adjustment to Inelo's acquisition of FireUp TMS subsidiary.
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END
IR SSAFAMEDSELU
(END) Dow Jones Newswires
September 07, 2023 02:00 ET (06:00 GMT)
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