REG - Eurowag - Half-year Report
07/09/2023 07:00
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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 €119.1m, with organic
growth(2) of 14.4%.
- Payment solutions revenue(1) grew by 14.1% year-on-year to €72.4m, 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 €46.7m, 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 €50.2m, with margin(1)
of 42.2%, reflecting the impact of acquisitions. Organic adjusted EBITDA(1) up
21.6% to €42.6m, 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 €36.6m.
· Transformational capex of €11.7m and ordinary capex of €12.9m,
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 €8.5m, 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 €300.9m (H1 2022: cash position of €28.7m);
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 (€m) 1,017.6 1,160.8 (12.3)%
Profit before tax (€m) 8.5 13.4 (36.7)%
Basic EPS (cents/share) 0.76 1.29 (41.1)%
Alternative performance measures (1) H1 2023 H1 2022 YoY growth H1 2023 organic(2) Organic YoY growth (%)
(%)
Net revenue (€m) 119.1 87.0 36.9% 98.3 14.4%
Payment solutions revenue (€m) 72.4 63.5 14.1% 71.4 12.5%
Mobility solutions revenue (€m) 46.7 23.5 98.6% 26.9 19.9%
Adjusted EBITDA (€m) 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 (https://investors.eurowag.com/)
Please register to attend the investor presentation via the following link:
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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
(mailto: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 (mailto:investors@eurowag.com)
Instinctif Partners
Tim McCall, Galyna Kulachek, Bryn Woodward
IR and international media
+44 (0)20 7457 2020
eurowag@instinctif.com (mailto: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 (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 €50.2m
(H1 2022: €35.0m) with adjusted EBITDA margin of 42.2% (H1 2022: 40.2%).
Organic adjusted EBITDA was up 21.6% to €42.6m, 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
€8.5m (H1 2022: €13.4m), 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 €300.9m (H1 2022: cash
position of €28.7m). 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
€11.7m, while investments in our subsidiaries, associates, and financial
investments amounted to €273.5m, which consists of the Inelo (€265.7m),
Webeye (€7.6m), and JITPay (€0.2m) 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 (€m) H1 2022 (€m) YoY (€m) YoY %
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 €1,017.6m,
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 €7.4m
contribution from Webeye and €13.3m 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 (€m) H1 2022 (€m) YoY (€m) YoY %
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 (€m) H1 2022 (€m) YoY (€m) YoY %
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 €46.4m; 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 €4.8m for H1 2023 (H1 2022: €4.2m) and included
pre-IPO share based remunerations (H1 2023: €3.7m and H1 2022: €3.3m).
Technology expenses increased by 123.6% year-on-year to €8.7m (H1 2022:
€3.9m); 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 €1.9m in H1 2023
(H1 2022: €0.2m).
Impairment losses of financial assets amounted to €4.2m (H1 2022: €2.7m).
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 €26.4m (H1 2022:
€18.3m), mainly due to acquisition-related expenses, with Webeye
consolidation adding €1.4m and Inelo acquisition adding €3.9m. Adjusting
items included in other operating expenses amounted to €3.3m for H1 2023 (H1
2022: €1.1m) and included expenses related to acquisitions of €2.2m (H1
2022: €0.5m) and strategic transformation costs of €1.1m (H1 2022:
€0.5m).
Other operating income increased by 273.8% year-on-year to €6.8m (H1 2022:
€0.2m), mainly driven by a favourable foreign exchange gain of €6.0m, as a
result of our prudent currency risk management.
Depreciation and amortisation grew by 106.8% year-on-year to €25.7m (H1
2022: €12.4m) 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 €6.8m for H1 2023 (H1 2022: €3.4m).
Net finance expense
Net finance expense in the first half of 2023 amounted to €5.7m (H1 2022:
€3.3m). 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 €2.9m (H1 2022: €4.3m) 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 €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
€53.6m on 16 March 2023. In addition, the Group will pay an additional
consideration of €8.4m related to the final price adjustment to Inelo's
acquisition of FireUp TMS subsidiary and €2.1m 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 €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 €12.5m 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 €13.3m of revenue and €3.5m 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 €21.0m and €3.8m respectively. Excluding
amortisation of acquired intangibles and adjusting items, the adjusted profit
after tax would have been €7.1m.
Pay-out of deferred consideration
On 27 April 2023, the Group paid a contingent acquisition consideration of
€2.1m 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 €5.5m 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 €14.3m, of
which €3.5m 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 €25.7m, of which €6.5m
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 €129.3m.
Pay-out of deferred consideration related to Inelo
On 31 August 2023, the Group paid a deferred acquisition consideration of
€8.4m 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 €327.4m, mainly reflecting
profit for 2023 and share-based payments impact.
Intangible assets of the Group excluding goodwill increased by €105.9m to
€236.9m in the reporting period, predominantly due to the Inelo acquisition
and investments in strategic technology transformation.
Goodwill comprises mainly CGU Energy of €40.2m, CGU Navigation of €34.6m
and CGU Fleet management solutions (excluding Inelo) of €59.4m.
Provisionally determined goodwill arising on the acquisition of Inelo is
€205.1m. 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 €1.3m to €19.0m, mainly due to lower value of
energy stock corresponding to lower energy prices.
Trade and other receivables increased by €15.1m to €393.2m. Out of this,
€6.0m 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 €28.5m to €426.7m, 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 (€16.9m).
Cash performance
H1 2023 (€m) H1 2022 (€m) YoY (€m) YoY
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 50.5 181.5 (131.0) (72.2%)
flows)
Bank overdrafts 29.9 0.0 29.9
Cash and cash equivalents at end of period (presented in statement of 80.4 181.5 (101.1) (55.7%)
financial position)
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 €300.9m, compared
with net cash position of €28.7m 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 €1.5m from €16.4m in
H1 2023, primarily due to working capital movement. The impact related to
Adjusting items in the reporting period amounted to an outflow of €7.4m (H1
2022: €7.7m) and included €5.0m for acquisitions related expenses and
€2.4m for strategic transformation expenses.
Interest paid increased to €7.6m (H1 2022: €2.3m), driven by a higher
level of borrowings in the first half of 2023.
Tax paid increased to €4.0m (H1 2022: €3.2m), which also includes an
impact of the Inelo consolidation of €0.8m.
Net cash used in investing activities increased by €249.5m to €297.0m,
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 €200.0m 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 €24.7m (H1 2022:
€19.9m), of which €11.7m was spend relating to our transformational capex
programme and €5.6m relating to the capital investment in Inelo and Webeye,
which drove the year-on-year increase.
The Group's ordinary capital expenditure was €12.9m (H1 2022: €6.6m),
including the €5.6m 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 €11.7m (H1 2022:
€13.3m) 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 (€m) H1 2022 (€m) YoY (€m) YoY
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 (€m) H1 2022 (€m) YoY (€m) YoY
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 (€m) 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 €2.0m 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
€50m, 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 €50m 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 €150m and B of €180m will amortise in
quarterly repayments starting on 31 March 2023, with a €45m and €54m
balloon respectively. Incremental Facility I of €50m will amortise in
quarterly repayments, starting on 30 September 2023, with a €15m 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
Interest cover the ratio of adjusted EBITDA to finance charges Min 4.00 7.52
Net leverage the ratio of total net debt to adjusted EBITDA Max 4.00¹ 2.87
Adjusted net leverage the ratio of the adjusted total 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 €120.0m (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 €30.0m (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 €173.0m (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 €124m and average utilisation of 77.8% (H1 2022: €97.6m 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 5,245 8,902
Company
Total profit for the financial year attributable to non-controlling interests 353 285
Total comprehensive income for the financial year attributable to equity 7,538 14,137
holders of the Company
Total comprehensive income for the financial year attributable to 357 328
non-controlling interests
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 2023 (unaudited) 31 December 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 capital Share premium Other reserves Merger reserve Business combinations equity adjustment Retained earnings Total equity attributable to equity holders of the parent Non-controlling interests Total equity
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 €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
€53.6m on 16 March 2023. In addition, the Group will pay an additional
consideration of €8.4m related to the final price adjustment to Inelo's
acquisition of FireUp TMS subsidiary and €2.1m 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 €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 €12.5m 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:
EUR '000 Preliminary fair value recognized on acquisition 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 €9,931 thousand. At
acquisition date, there were €1,272 thousand of contractual cash flows not
expected to be collected.
From the date of acquisition until 30 June 2023, Inelo's subsidiaries
contributed €13,291 thousand of revenue and €3,500 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 €20,965 thousand and €3,811 thousand
respectively. Excluding amortisation of acquired intangibles and adjusting
items the adjusted profit after tax would have been €7,113 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 €2,064 thousand related to acquisition of
Webeye.
Further, on 17 May 2023, the Group paid second part of deferred acquisition
consideration of €5,500 thousand related to acquisition of Webeye.
Other disclosures
Net outflows of cash to acquire subsidiaries were as follows:
EUR '000 30 June 2023 (unaudited) 30 June 2022 (unaudited)
Cash consideration paid 222,852 23,319
Repayment of acquiree's debt 53,676 -
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 Total
Quoted prices in active markets (Level 1) Significant observable inputs Significant unobservable inputs
(Level 2)
(Level 3)
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 Total
Quoted prices in active markets (Level 1) Significant observable inputs Significant unobservable inputs
(Level 2)
(Level 3)
Assets measured at fair value
Financial assets at fair value through other comprehensive income (FVTOCI) 31 December 2022 - - 14,364 14,364
Derivative financial assets
Foreign currency forwards 31 December 2022 - 1 - 1
Interest rate swaps 31 December 2022 - 6,943 - 6,943
Liabilities measured at fair value
Derivative financial liabilities
Foreign currency forwards 31 December 2022 - 17 - 17
Put options 31 December 2022 - - 153 153
Interest rate swaps 31 December 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 30 June 2023 (unaudited) Payment solutions Mobility solutions Total
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 30 June 2022 (unaudited) Payment solutions Mobility solutions Total
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 currency forwards 5,953 -
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 expenses Fees and other costs relating to the Group's acquisitions activity M&A-related expenses differ every year based on acquisition activity of
the Group. Exclusion of these costs allow better result comparability.
Strategic transformation expenses Costs relating to broadening the skill bases of the Group's employees Broadening the skill base
(including in respect of executive search and recruiting costs), costs related
to transformation of key IT systems as well as Inelo integration costs IPO and IT strategic transformation requires different skill base of the
Group's employees. Expenses related to these strategic events were excluded as
otherwise they would not be incurred. The expenses are not expected to be
adjusted in 2023.
Transformation of key IT systems
Transformational expenditure represents investments intended to create a new
product or service, or significantly enhance an existing one, in order to
increase the Group's revenue potential. This also includes systems and
processes improvements to improve services provided to customers.
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 €4.1m in 2023
and €3.3m 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 €2m of integration costs in
2023.
Share-based compensation Equity-settled and cash-settled compensation provided to the Group's Share options and cash-settled compensation have been provided to management
management before IPO and certain employees in connection with the IPO. Total share-based payment
charge to be excluded in period 2021-2024 amounts to €20.7m, from which
€1.3m was a one-off in 2021 and €19.4m 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 €5.1m in 2021 and €5.3m in 2022 and
anticipated expense adjustment amounts to €6.5m in 2023 and €2.5m 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 intangibles Amortisation of assets recognised at the time of an acquisition (primarily The Group acquired a number of companies in the past and plans further
ADS, Sygic, Webeye and Inelo) acquisitions in the future. The item is prone to volatility from period to
period depending on the level of M&A.
Amortisation due to transformational useful life changes Accelerated amortisation of assets being replaced by strategic transformation Strategic IT transformation programme of the Group 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 Adjusted EBITDA Items recognised in the preceding table, which reconciles EBITDA to Adjusted Justifications for each item are listed in the preceding table.
EBITDA
Tax effect Decrease in tax expense as a result of above adjustments Tax effect of above adjustments is excluded to adjust the impact on after tax
profit.
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) 20
22
(u
na
ud
it
ed
)
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 (unaudited) 2022 (unaudited)
Gain from foreign currency exchange rate differences 3,451 -
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 effective 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 €5,489 thousand (six months ended 30 June 2022: €3,618
thousand) and tax non-deductible M&A expenses €1,384 thousand (six
months ended 30 June 2022: €524 thousand) offset by positive impact of 2022
CIT assessment of €404 thousand (six months ended 30 June 2022: negative
impact of €309 thousand). Related tax impact amounts to €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: €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. €677 thousand increase of deferred tax
asset and €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
EUR '000 Intangible assets Property, plant and 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
€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 €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 2023 (unaudited) 31 December 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 (unaudited) 2022 (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 (unaudited) 2022 (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 rate Total limit in currency Amount in original currency Amount in EUR'000 Total limit in currency Amount in original currency Amount in EUR'000
Bank loans
Multicurrency term and revolving facilities agreement** EUR 2027/09 3M EURIBOR + margin 45,000 40,733 40,733 45,000 42,941 42,941
Multicurrency term and revolving facilities agreement** EUR 2027/09 3M EURIBOR + margin 68,000 59,687 59,687 68,000 64,889 64,889
Multicurrency term and revolving facilities agreement** EUR 2027/09 3M EURIBOR + margin 37,000 35,308 35,308 37,000 35,307 35,307
Multicurrency term and revolving facilities agreement** EUR 2027/09 3M EURIBOR + margin 120,000 108,566 108,566 - - -
Multicurrency term and revolving facilities agreement** EUR 2027/09 3M EURIBOR + margin 60,000 54,283 54,283 - - -
Multicurrency term and revolving facilities agreement** EUR 2027/09 3M EURIBOR + margin 50,000 49,051 49,051 - - -
Other loans CZK fixed rate 271 271 11 393 393 17
Financial liabilities to telecoms PLN 36 months from the REPO transaction Fixed rate - 15,512 15,512 3,486 - - -
6.29-16.86%
Other non-bank loans PLN, EUR 3M WIBOR + 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 složka,
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 €60m was available for the Group for revolving
facilities and overdraft accounts, and up to €113m 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 složka,
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:
· €150m committed facility A for the refinancing of all existing
term loan indebtedness;
· €180m committed facility B for permitted acquisitions and capital
expenditure;
· €235m committed auxiliary credit facility, of which €85m may be
utilised by way of revolving loans, and €150m may be utilised by way of
ancillary facilities in the form of bank guarantees, letters of credit, or an
overdraft up to €25m; and
· €150m uncommitted incremental facility for permitted
acquisitions, capital expenditure, and auxiliary credit facilities up to
€50m of which not more than €25m 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 ≥ 2.50 2.10% p.a.
< 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 €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 €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 2023 (unaudited) 31 December 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 liability 4,473 -
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 financial risks including foreign
currency risk, fair value interest rate risk, credit risk and liquidity risk.
The condensed interim financial statements do not include all financial risk
management information and disclosures required in the annual financial
statements; they should be read in conjunction with the Group's annual
financial statements as at 31 December 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 activities Country of incorporation Registered address Effective economic interest
2023 2022
ALŽIRIJA SPA CVS Mobile Algerie (acquired and liquidated in 2023) Mobility solutions Algeria 30 Rue Hassen Benamane les Vergers Bir Mourad Rais-Algiers - -
CVS Mobile d.o.o. Mobility solutions Bosnia and Herzegovina Ulica Petrovdanska bb 79240, Kozarska Dubica, Bosnia-Herzegovina 85.56% -
CVS Mobile d.o.o. Mobility solutions Croatia Jankomir 25 10090 Zagreb, Croatia 85.56% -
FireTMS.com GmbH Mobility solutions Germany Geschäftsanschrift: Stresemannstraße 123, 10963 Berlin, Germany 81.00% -
CVS Mobile GmbH Mobility solutions Germany Sckellstraße 1/II, 81667 München, Germany 85.56% -
CVS Mobile s.r.l. Mobility solutions Italy Via Battisti 2, 34125 Trieste, Italy 85.56% -
CVS Mobile MK dooel Mobility solutions North Macedonia 16-ta Makedonska brigada 13b, 1000 Skopje, North Macedonia 85.56% -
Grupa Inelo S.A. Mobility solutions Poland 43-300 Bielsko-Biała, ul. Kaprapcka 24/B13, Poland 100.00% -
INELO Polska Sp. z o.o. Mobility solutions Poland 43-300 Bielsko-Biała, ul. Kaprapcka 24/U2b, Poland 100.00% -
Marcos Bis Sp. z o.o. Mobility solutions Poland ul. Powstańców 19, 40 - 039 Katowice, Poland 100.00% -
FIRETMS.COM Sp. z o.o. Mobility solutions Poland 44-200 Rybnik, ul. 3 Maja 30, Poland 81.00% -
CVS Mobile d.o.o. Mobility solutions Serbia Ulica Španskih boraca 24V, 11070 Novi Beograd, Serbia 85.56% -
Napredna telematika d.o.o. Mobility solutions Slovenia Ulica Gradnikove brigade 11, 1000 Ljubljana, Slovenia 89.30% -
CVS Mobile d.d. Mobility solutions Slovenia Ulica Gradnikove brigade 11, 1000 Ljubljana, Slovenia 85.56% -
Infotrans d.o.o.* Mobility solutions Slovenia Ljubljanska cesta 24C, 4000 Kranj, Slovenia 43.63% -
* 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 - 11
Company's Shareholders
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
€14.3m, of which €3.5m 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 €25.7m, of
which €6.5m 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 €129.3m.
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 £0.01
per share resulting in €5 thousand share capital increase.
Pay-out of deferred consideration
On 31 August 2023, the Group paid a deferred acquisition consideration of
€8,377 thousand related to the final price adjustment to Inelo's acquisition
of FireUp TMS subsidiary.
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