REG - Eurowag - Preliminary results for the year ended 31 Dec 2023
26/03/2024 07:00
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RNS Number : 2357I Eurowag 26 March 2024
26 March 2024
LEI: 213800HU63CWV5J8YK95
W.A.G payment solutions plc ("Eurowag" or the "Group")
Preliminary results for the year ended 31 December 2023
Robust performance, in-line with guidance
W.A.G payment solutions plc ("Eurowag" or the "Group"), a leading pan-European
integrated payments and mobility platform focused on the commercial road
transport ("CRT") industry, today announces its preliminary results for the
year ended 31 December 2023.
Full year financial and operational highlights
Sustained strong growth from our business critical products and services
· FY 2023 performance in-line with expectations.
· Total net revenue(1) +34.4% to €256.5m (FY 2022: €190.9m), with
organic growth +14.5%(2)
- Payment solutions(1) +9.0% to €147.0m, driven by +8.4% increase in
active payment customers and growth from toll revenues.
- Mobility solutions(1) +95.6% to €109.5m, organic +28.3%(2), driven by
effective cross selling and strategic OEM partnerships, which are an important
new sales channel.
· Adjusted EBITDA(1) +33.2% to €108.7m (FY 2022: €81.6m), organic
growth +12.2%, and adjusted EBITDA margin(1) of 42.4% (FY 2022: 42.8%).
· Adjusted profit before tax(1) was €56.7m (FY 2022: €54.9m).
Statutory loss before tax of €39.3m (FY 2022: profit before tax €28.0m),
with the year-on-year reduction primarily relating to amortisation from
acquired intangibles, finance costs and a non-cash goodwill impairment of
€56.7m.
Completed intense investment phase; M&A and building the industry's first
digital app
· Completed significant acquisition of Grupa Inelo, S.A. ("Inelo"),
enhancing the Group's scale and product capability. As expected, net debt
increased to €316.8m, with net leverage(3) at 2.9x net debt to adjusted
EBITDA.
· Total capex spend of €50.9m (FY 2022: €43.2m). Transformational
programme largely completed and in-line with €50m guidance (FY 2022 €25.5m
and FY 2023 €21.7m).
· Development of industry-first digital platform on track, soft launch
still expected Q4 2024.
Outlook
· Despite macroeconomic challenges, the Group remains confident in the
medium-term value creation delivered from the platform and acquisition
synergies; guidance remains unchanged.
Martin Vohánka, Founder and CEO, commented:
2023 was a year of both significant strategic and financial transformation for
the Group, where we completed our largest ever acquisition and delivered
further organic growth, despite a range of macroeconomic headwinds across
Europe. Whilst these headwinds are expected to persist in 2024, I am confident
in the positive outlook for the Group, thanks to substantial investments we
have made in the business and in our market positioning.
Eurowag sits at the heart of the European CRT industry, providing a range of
critical services that drive increased efficiency and profitability for
customers who operate in a highly complicated, admin heavy sector. With only a
small proportion of road transport companies having embraced digitisation to
date, there is huge potential to grow our customer base. This will be
accelerated with the launch of our industry-first digital platform later this
year - a significant milestone for us, that will take our growth to the next
level. Consequently, we remain confident in the prospects for the Group and
re-iterate our near and medium-term financial guidance, as we unlock further
value for both our customers and shareholders."
FY 2023 financials
Key statutory financials FY 2023 FY 2022 YoY change (%)
Revenue from contracts with customers (€m) 2,088.1 2,368.3 (11.8)%
(Loss) /Profit before tax (€m) (39.3) 28.0 (240.5)%
Basic EPS (cents/share) (6.62) 2.41 (374.3)%
Alternative performance measures (1) FY 2023 FY 2022 YoY change FY 2023 organic(2) Organic YoY change (%)
(%)
Net revenue (€m) 256.5 190.9 34.4% 218.6 14.5%
Payment solutions revenue (€m) 147.0 134.8 9.0% 146.7 8.8%
Mobility solutions revenue (€m) 109.5 56.0 95.6% 71.8 28.3%
Adjusted EBITDA (€m) 108.7 81.6 33.2% 91.5 12.2%
Adjusted EBITDA margin (%) 42.4% 42.8% (0.4)pp 41.9% (0.9)pp
Adjusted basic EPS (cents/share) 6.49 5.75 12.8% 5.25 (6.8)%
FY 2023 operational highlights
FY 2023 FY 2022 YoY growth (%)
Average active payment solutions customers 18,379 16,950 8.4%
Average active payment solutions trucks 93,882 88,189 6.5%
Payment solutions transactions 37.4m 35.2m 6.3%
Outlook, near and medium-term guidance remains unchanged
Eurowag enters 2024 in a strong position, despite the macroeconomic
environment impacting the CRT industry across Europe. Many of the economic
pressures the industry faces are expected to continue into 2024, impacting
loads and therefore resulting in less kilometres driven.
Following its strategy, the Group is coming out of a heavy investment phase in
both technology and acquisitions to create an industry-first integrated
platform driving growth by offering new digital solutions to many of the CRT
industry's biggest challenges. Eurowag's investment in recent years has
delivered a mission-critical product suite to its customers, which underpins
the Group's confidence in delivering mid-teens organic net revenue growth in
the near and medium-term. With further integration work still to take place
in respect of recent acquisitions, Adjusted EBITDA margins in FY 2024 are
expected to remain in-line with FY 2023 at around 43%, and grow over the
medium-term.
Whilst the absolute amount of capital expenditure reduces this year and the
transformational programme (guidance to €50m) reaches completion, several
deferred consideration payments of circa €35m from past acquisitions are
subject to payout in FY 2024. As a result, the net debt to Adjusted EBITDA
ratio, at the end of FY 2024, is expected to be moderately above our target
range (1.5x-2.5x) with a priority to return within the range in FY 2025.
The launch of the much-anticipated digital platform in Q4 remains on track,
with expectations to unlock further opportunities whilst driving value for
Eurowag's customers and shareholders. The Group is confident this offering, an
industry first, will drive further cross selling and value for all
stakeholders. As a result, the Group is confident it will deliver strong
growth in-line with expectations, and medium-term financial guidance remains
unchanged.
Notes:
1. Net revenue, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted profit /
(loss) before tax, Adjusted earnings (net profit), Adjusted basic EPS are
non-statutory measures which provide readers of this announcement with a
balanced and comparable view of the Group's performance by excluding the
impact of Adjusting items, as disclosed in the section Alternative performance
measures below and Note 5.
2. Organic growth for the year represents Group growth, excluding Inelo and
related synergies and integration expenses.
3. Net leverage covenant calculation as per bank definition using Adjusted
EBITDA for the last twelve months. Net debt includes lease liabilities and
derivative liabilities.
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, 26 March 2024, at
9.00am GMT. The presentation and webcast details are available on the Group's
website at https://investors.eurowag.com (https://investors.eurowag.com/) .
Please register to attend the investor presentation via the following link:
https://www.lsegissuerservices.com/spark/WAGPAYMENTSOLUTIONS/events/d7d24c57-9b66-458d-b683-6b67c689c9d6
(https://www.lsegissuerservices.com/spark/WAGPAYMENTSOLUTIONS/events/d7d24c57-9b66-458d-b683-6b67c689c9d6)
Should you want to ask questions at the end of the presentation, please use
the following link:
https://registrations.events/direct/LON9066443
(https://registrations.events/direct/LON9066443)
ENQUIRIES
Eurowag
Carla Bloom
Head of Investor Relations and Communications
+44 (0) 789 109 4542
investors@eurowag.com (mailto:investors@eurowag.com)
Powerscourt
Justin Griffiths, Gilly Lock
IR and international media
+44 (0)20 7250 1446
eurowag@powerscourt-group.com (mailto:eurowag@powerscourt-group.com)
About Eurowag
Eurowag was founded in 1995 and is a leading technology company and an
important partner to the Europe's commercial road transport (CRT) industry,
with a purpose to make it clean, fair and efficient. Eurowag enables trucking
companies to successfully transition to a low carbon, digital future by
harnessing all mission critical data, insights and payment and financing
transactions into a single ecosystem and connects their operations seamless
before a journey, on the road and post-delivery. https://investors.eurowag.com
(https://investors.eurowag.com)
Chief Executive Officer's review
The European road transport industry supports 75% of the physical goods
economy(1); it represents 5% of GDP(2) and provides employment to 20 million
people. Despite the scale and importance of this industry in Europe, trucking
companies face many challenges today, and only a few companies make an effort
to resolve them. At Eurowag, we focus on nothing else but tackling these
challenges at their root cause and are fully committed to supporting the
transformation of the trucking industry into a resilient service for society
that contributes to Europe's journey to net zero by 2050. That is what drives
our passion and commitment to undertake truly pioneering ventures. Our vision
is about the digitisation of the industry, which will solve the ecosystem
fragmentation, decarbonisation and low profitability, and create a better
workforce environment.
Transforming the business
For almost 30 years, Eurowag has built a pan-European payment network for the
trucking industry, which is mainly made up of small and medium-sized
businesses. Five years ago, when we had around 900 employees, we changed the
strategy of the business and started to build or buy new product capabilities,
creating unique pieces of a jigsaw, which none of our competitors had
attempted before. We made a bold move and decided to bring multiple
sub-industries together, all serving the trucking industry, bringing products
under one roof to create a single independent ecosystem. Our ambition is to
create an end-to-end platform where we can bring together all our customers'
data, be it truck, driver, or company data, instilling transparency and
generating AI insights to drive efficiency through the ecosystem, reducing
human intervention, improving drivers' wellbeing and truck utilisation and
saving energy. As well as bringing data together, this platform will integrate
our payment solutions, which supports customers' cross-border foreign exchange
transactions, and where financing is at our customers' fingertips.
Today, with almost 1,900 employees working intensively towards our vision, I
am proud to report significant progress on all our strategic pillars, pivoting
towards a soft launch of our platform in Q4 2024, while delivering a strong
set of results against macro headwinds and industry volatility.
With the evolution of the business and change of revenue mix, we have set out
below the following strategic priorities:
1) Be in every truck (attract)
· Progress in 2023:
o Signed three out of six OEM partnerships in 2023, which cover around 45%
of the European truck market today.
o Integrated the Webeye sales team into one Eurowag agile sales team,
aligning sales targets across all markets.
o Through the acquisition of Inelo, we expanded our presence in Poland and
the Adriatic region.
o Expanded our energy network into Portugal and Croatia.
· Focus in 2024:
o Training the direct sales teams to become more advisory, including further
integration of Inelo's sales team.
o Start to bring together all our sales channels into a customer-centric
omni-channel.
o Deliver software to OEM partners for installation in all new truck
infotainment system.
o Expand customer base in new geographies.
o Integration of electric vehicle charging points into our closed-loop
network.
2) Drive customer centricity (engage)
· Progress in 2023:
o Improved our Eurowag app and client portal; number of monthly active users
on the Eurowag app increased by 58% year-on-year to almost 32,000.
o Rolled out our mobile payments application to 13 countries, and now have
over 800 acceptance points ready for drivers to unlock the fuel pump with the
app.
· Focus in 2024:
o Streamline customer digital touch points across all brands into a single
sign-on.
o Enhance customer user experience through simplification and development of
customer insight tools.
o Further develop our driver behaviour and emission tracking tools to help
customers with their carbon emission efficiencies.
3) Grow core services (monetise)
· Progress in 2023:
o Received European Electronic Toll System ("EETS") certification in the
Czech Republic, Hungary, Spain and Portugal, and now have licences in 10
countries across Europe, including Germany, which collects almost 50% of toll
revenues in Europe.
o Increased the number of toll domains ordered on our EVA device by six
times year-on-year, with toll coverage across 23 European countries.
o With the acquisition of Webeye and Inelo, our toll on-board unit ("OBU")
sales have grown almost four times year-on-year.
· Focus in 2024:
o Drive cross-sell across existing services and newly acquired businesses.
o Develop Decarbonisation as a Service to help customers access lower carbon
fuels.
o Expand core services through increased European coverage.
4) Expand platform capability (retain)
· Progress in 2023:
o Implemented new ERP system and on track with the second phase go live in
Q1 2024.
o Continued to develop our financial platform capability, in preparation of
our e-wallet launch in FY 2024.
o Made good progress on our digital platform, testing pricing models and
user journeys; on track for a soft launch in Q4 2024.
· Focus in 2024:
o Successful migration of data and simplification of processes in ERP; next
phase to be launched later in 2024.
o Successful soft launch of our new digital platform, Eurowag Office, in Q4
2024, along with our e-wallet solution.
o Introduce subscription pricing model through new platform.
Our financial and operational highlights
For the full year, total net revenues grew by 34.4%, to €256.5m, and
achieved organic growth of 14.5%. This sustained organic growth is supported
by mobility solutions which grew by 28.3% in the year and now contribute
almost 43% to total Group net revenues (from 29.3% in FY 2022), with the
inclusion of Inelo. Our Adjusted EBITDA margins were broadly flat with last
year at 42.4% (FY 2022: 42.8%), despite this year being our peak year for
transformational investments. These results showcase that our customer value
proposition is differentiated from the rest of the market represented by
single or limited product providers. Overall the Group delivered an Adjusted
profit before tax of €56.7m (FY 2022: €54.9m) with a statutory loss before
tax of €39.3m (FY 2022: profit before tax €28.0m), the year-on-year
reduction primarily relating to amortisation from acquired intangibles,
finance costs and a non-cash goodwill impairment of €56.7m.
This year, we saw slow growth in economies across Europe; there were headwinds
in the spot freight markets and less kilometres driven, and yet we were still
able to grow the number of active payment solutions trucks and active
customers by 6.5% and 8.4% respectively. At Eurowag, however, it is not
unusual to see accelerating demand for our solutions when customers are
struggling, as our solutions are mission critical for their businesses and
help improve their financial positions. These trends are not dissimilar to
what we saw in 2008, and more recently during the COVID-19 pandemic.
As communicated, our transformational capex programme is largely complete
however we will continue to invest and we expect our capex spend to be around
10% of net revenues annually.
People and culture are the foundation to Eurowag's success
In Q2 2023, we welcomed a new CFO, Oskar Zahn, who brings strong plc
experience, and we are pleased to see him set new standards for the finance
function, while adapting to the complex environment of Eurowag's operations.
We have continued to strengthen the Eurowag leadership team, especially
through our recent acquisitions of Inelo (including CVS Mobile ("CVS")) and
Webeye, moving senior talent into Group roles, to promote and align our
culture across the organisation. As a result of our growing organisation, we
have also continued our efforts to improve and strengthen internal
communications, as so many people with different backgrounds and cultures come
together. We have introduced new communication formats, such as Town Halls and
All Hands meetings, where employees have exposure to the Senior Leadership
Team and our Chairman, as well as different parts of the business. Our focus
on two-way communication supports our aim of having an inclusive and open
culture. We have also launched a People and Culture Ambassadors Network
whereby 40 colleagues representing different parts of our organisation are
helping us to embed our culture, help employees understand our purpose, live
our values and understand our strategy and the part they play in making us
successful.
We have continued to improve diversity in the workplace, with a key pillar of
our strategy focusing on hiring and promoting practices. Attention has been
given to improve the training of our hiring managers in areas such as
unconscious bias. We have also focused on our Women's Network and supporting
women in leadership roles, for example launching a women's mentoring scheme.
Similarly, we have focused on creating an inclusive learning environment
where employees have access to a wide range of opportunities to develop
personal and professional skills.
During the year, there were several changes to the Board. Caroline Brown, who
chaired our Audit and Risk Committee, stepped down as Independent
Non-Executive Director and Steve Dryden joined us as Independent Non-Executive
Director, taking on the responsibility of chairing the Audit and Risk
Committee.
Subsequent to the year end, we welcomed Sophie Krishnan and Kevin Li Ying to
the Board, as Independent Non-Executive Directors. Susan Hooper is stepping
down from the Board at the Annual General Meeting in May 2024.
Acquiring product capabilities to support our customers and new platform
In March 2023, we completed the acquisition of Inelo, which represented a
significant milestone for the Group. Firstly, it was the largest acquisition
for Eurowag and gave us market leadership in Poland, which is the biggest
transport market in Europe, allowing us to grow our footprint in the Adriatic
region under the CVS brand. Secondly, the solutions we acquired, work time
management and transport management, have completed the list of mission
critical services Eurowag set out to build or acquire five years ago, to
become a key part of our future platform.
During the year, we continued to work on a phased integration of Webeye, which
we acquired in 2022. As of 1 January 2024, all our acquired businesses have
been working under one Eurowag operating model, so we can start to generate
both cost and revenue synergies, driven through cross-sell opportunities. Both
the Inelo and Webeye acquisitions have already contributed to strong OBU
sales, which grew almost four times in the year. This is a great example of
where our ability to capture data from both vehicles and drivers gives us
customer insights to cross-sell a number of our other value-added services.
Building the industry's first digital platform, with a soft launch in Q4 2024
During 2023, we focused on expanding our sales channels. In preparation for
our platform launch, we invested heavily in our digital channel capabilities
and continued to expand our partnerships with the truck manufacturers,
resulting in three of the six European OEMs signing with us to further develop
our platform so they can install it within their infotainment systems. These
three OEMs represent around 45% of the European truck market and this presents
a unique opportunity for truck manufacturers to offer advanced digital
services at the point of sales; customers have immediate access to solutions
enabling operational efficiency and decarbonisation. These deals provide
Eurowag with limitless access to new customers across Europe, endorsed by
partnerships with strong brands of truck manufacturers.
As Eurowag moves to more of a technology enabled business, away from a pure
card payment business, we expect to shift our marketing strategy from a pure
direct sales customer model to a digital and indirect sales customer model. As
part of this process, we have become a proud partner of leading industry
influencer and truck business owner Ms Iwona Blecharczyk. Iwona is a
passionate promoter of Eurowag and a great ambassador for all truck operators
and drivers in the public eye, but most importantly she is helping shape
respective legislation with European authorities.
Although we are well on our way to becoming more technologically focused, we
continue to invest in our core suite of products. In 2023, we expanded our
energy network to Portugal and Croatia, whilst continuing to focus on
supporting our customers' transition to alternative fuels; our LNG stations'
coverage represents more than 50% of the European network. Our mobile payments
application is now available in 13 countries across Europe, helping to enhance
our customers' digital experience. The number of monthly active drivers on the
Eurowag app increased by 58%, compared to last year, as a result of better
user experience and increased communication efforts with our customers. We
look forward to migrating the Road Lords drivers' community to our new
platform. In the year we expanded our EETS network to the Czech Republic,
Hungary, Spain and Portugal, while our European coverage for toll services is
23 countries.
Our technology investment also includes the implementation of ERP, which is a
critical part of our technology platform, enabling us to improve internal
processes and scale our business. We are pleased to report we completed the
second phase of the implementation at the beginning of 2024, which included
general ledger and Group reporting processes. At the same time, we continue to
develop our financial platform capability, in preparation of our e-wallet
solution, as both technologies are an important part of the new platform.
Sustainability
We are committed to helping the CRT industry become clean, fair and efficient.
Our sustainability plan contains four focus areas: climate action, customer
success and wellbeing, community impact and responsible business. We have set
objectives and targets for each focus area, and in 2023 we have made good
progress against them.
We are committed to playing a role in enabling the CRT industry to achieve
decarbonisation goals. This means helping customers be more efficient and make
the transition from fossil fuels to alternative energy solutions, as well as
reducing our own emissions. In 2023, we reduced our direct emissions (Scope 1
& 2, market-based) by 11% compared to the baseline year 2019(3), and
almost doubled our on-site renewable energy generation by installing solar
panels. We have also seen a 0.5% decrease in GHG emissions per tkm across
Eurowag's customer fleet, compared to the baseline year 2019 and have seen a
121% increase in the number of active alternatively fuelled commercial
vehicles(4), which reached 780. We have begun offering lower carbon fuel on
our own truck parks and have continued adding to our acceptance network of
HVO, bringing the total to 165 in seven countries, which represents a six
times increase.
The future belongs to those who learn and collaborate
At Eurowag, our success story has been built by people with open minds, those
who are eager to learn from every step of our journey. We have innovative
teams and skillsets to create valuable products and services for our
customers. In all our efforts we are mindful of all our stakeholders, be it
our shareholders, customers and employees, or our environment, suppliers,
communities, local governments or even future generations. Despite the macro
and industry pressures we face, we will continue to pursue our dream of
revolutionising the CRT industry and lead the way to a digital, low-carbon
future. We are confident we have all necessary ingredients to achieve this,
and I want to thank you for the support.
Notes:
1. Source: CVDD, page 40, issued 5/2021, BSG.
2. Source: Eurostat.
3. Baseline year recalculated to include Webeye and Inelo.
4. Commercial vehicles using fuels or power sources which serve, at least
partly, as a substitute for fossil oil sources.
Financial review
Eurowag delivered a robust performance last year, despite the challenging
macroeconomic pressures, demonstrating once again the inherent resilience of
our business model and the mission critical nature of our services.
At a headline level, net revenue grew 34.4% to €256.5m (FY 2022: €190.9m)
with Adjusted EBITDA up 33.2% to €108.7m (FY 2022 €81.6m), supported by
acquisitions and strong organic growth. Adjusted EBITDA margins remained
broadly flat at 42.4% (FY 2022: 42.8%), demonstrating the strong profitability
of the business.
Similarly, Adjusted profit before tax grew 3.3% to €56.7m (FY 2022:
€54.9m). Statutory loss before tax was €39.3m (FY 2022 Profit before tax
€28.0m), impacted by amortisation from acquired intangibles, finance costs,
a non-cash goodwill impairment of €56.7m and other Adjusting items.
Adjusted basic EPS increased to 6.49 cents per share (FY 2022: 5.75 cents),
driven by higher Adjusted earnings (net profit) attributable to equity
holders. Basic EPS was (6.62) cents per share (FY 2022 2.41 cents).
Performance review
Below is a summary of the segmental performance and explanatory notes relating
to corporate expenses, adjusting items, taxation, interest, investments and
cash flow generation. As in prior years, adjusted and other performance
measures are used in this announcement to describe the Group's results.
Adjustments are items included within our statutory results that are deemed by
the Board to be unusual by virtue of their size and/or nature. Our adjusted
measures are calculated by removing such adjustments from our statutory
results. Note 5 includes reconciliations.
Segments
FY 2023 FY 2022 YoY YoY
(€m) (€m) (€m) change (%)
Gross revenue 2,088.1 2,368.3 (280.2) (11.8)%
Payment solutions 1,978.6 2,312.3 (333.7) (14.4)%
Mobility solutions 109.5 56.0 53.5 95.6%
Net revenue 256.5 190.9 65.6 34.4%
Payment solutions 147.0 134.8 12.2 9.0%
Mobility solutions 109.5 56.0 53.5 95.6%
Expenses included in Contribution (55.9) (31.9) (24.0) 75.4%
Contribution total(1) 200.6 159.0 41.6 26.2%
Payment solutions 124.1 118.2 5.9 5.1%
Mobility solutions 76.5 40.8 35.7 87.4%
Contribution margin total(1) 78% 83% (5) pp N/A
Payment solutions 84% 88% (4) pp N/A
Mobility solutions 70% 73% (3) pp N/A
Note:
1. Please refer to the section Alternative performance measures below
for a definition and Note 5.
The Group's gross revenues decreased by 11.8% year-on-year to €2,088.1m,
driven by lower average energy prices of around 13.5% (a corresponding
decrease was reported for costs of energy sold). Despite this, the Group
delivered strong net revenue growth as net revenues grew by 34.4% to
€256.5m, of which €37.9m was from our Inelo acquisition and includes
synergies. Excluding acquisitions, organic net revenues grew 14.5%, driven by
strong growth in mobility solutions and almost double-digit growth in payment
solutions revenues. If we had acquired Inelo at the beginning of 2023, net
revenue would have increased by €47.3m for the year.
Payment solutions net revenues grew by 9.0% year-on-year, supported by 8.4%
net growth in average active payment solutions customers, to 18,379 (FY 2022:
16,950), and 6.5% growth in average active payment solutions trucks, to 93,882
(FY 2022: 88,189).
Mobility solutions net revenues grew by 95.6% year-on-year, mainly as a result
of the Inelo acquisition, with organic revenue growth of 28.3%, as a result of
effective cross-selling, expanding our automotive partnerships and Webeye
full-year consolidation.
Total contribution increased by €41.6m to €200.6m (FY 2022: €159.0m),
driven by higher net revenues although increased expenses reduced the
contribution margin performance by 5pp to 78%. (FY 2022: 83%).
In terms of geographic breakdown, the Central cluster remains the largest
segment with around 50% contribution of total net revenues (FY 2023:
€128.6m; FY 2022: €92.4m). The majority of the countries in the Central
cluster delivered strong double-digit growth. The Southern cluster has kept
the momentum from 2022 and remains the fastest growing area with net revenue
growth of 44.2% (FY 2023: €96.0m; FY 2022: €66.6m). On an organic basis,
the Southern cluster delivered 29.7% growth year-on-year. A 2.7% decline in
the Western cluster's net revenues (FY 2023: €23.5m; FY 2022: €24.1m) was
mainly driven by a 3.5% decrease in the average number of active payment
solutions customers (FY 2023: 2,227 customers; FY 2022: 2,308 customers).
Corporate expenses
Statutory operating expenses increased by €126.1m to €284.2m (FY 2022:
€158.1m), largely due to increased depreciation, amortisation and impairment
losses which have been treated as an Adjusting item, with further details
provided later on in this Financial review.
Adjusted (€m) Adjusting items (€m) FY 2023 (€m) Adjusted (€m) Adjusting items (€m) FY 2022
(€m)
Employee expenses 85.1 11.7 96.8 59.8 7.4 67.2
Impairment losses of financial assets 8.9 - 8.9 3.9 0.0 3.9
Impairment losses of non-financial assets 0.0 56.7 56.7 0.0 0.0 0.0
Technology expenses 13.9 5.0 18.9 9.5 0.3 9.8
Other operating expenses 50.0 5.5 55.5 36.4 10.8 47.2
Other operating income (10.1) - (10.1) (0.4) 0.0 (0.4)
Total operating expenses 147.8 78.9 226.7 109.2 18.5 127.7
Depreciation and amortisation 40.4 17.1 57.5 22.0 8.4 30.4
Total 188.2 96.0 284.2 131.2 26.9 158.1
Adjusted Total operating expenses increased by €38.6m to €147.8m. The
increase comprised mainly of the following:
Adjusted employee expenses increased by 42.4% year-on-year to €85.1m (FY
2022: €59.8m), of which €12.6m was from the inclusion of Inelo into the
Group and the remainder was mostly due to inflationary pay rises, Webeye
remuneration and senior hires.
Impairment losses of financial assets amounted to €8.9m (FY 2022: €3.9m),
with the majority of the increase relating to credit losses from more
customers going into bankruptcy, mainly in Poland, Portugal, Hungary and
Romania. The full year credit loss ratio increased slightly to 0.3% of gross
revenues (FY 2022: 0.1%) as a result of macro pressures and higher interest
rates. The Group continues to apply rigorous credit loss controls to manage
this risk and, as a result, approximately 74% of its receivables portfolio
balance was current as of the end of December 2023.
Adjusted technology expenses increased by 46.3% year-on-year to €13.9m (FY
2022: €9.5m). This was the result of the Group's decision to focus on
technology transformation of which €9.7m is related to software support and
licenses, €1.6m to data services and the rest is other IT services. Together
with the consolidation of Inelo, this resulted in a €1.1m year-on-year
increase.
Adjusted other operating expenses increased by 37.3% year-on-year to €50.0m
(FY 2022: €36.4m), in part due to the impact of Inelo consolidation of
€7.9m. Other operating expenses include costs such as travel, market
research, professional services such as consultancy, legal and accounting
services.
Other operating income increased to €10.1m (FY 2022: €0.4m), mainly driven
by a favourable foreign currency forwards revaluation of €8.0m, as a result
of our prudent currency risk management.
Adjusted depreciation and amortisation grew by 83.7% year-on-year to €40.4m
(FY 2022: €22.0m) primarily as a result of transformational technology being
put into use and the Inelo acquisition.
Adjusting items
In 2023, the Group incurred costs of €96.0m (FY 2022: €26.9m), which were
considered to be Adjusting items and have therefore been excluded when
calculating Adjusted EBITDA and Adjusted profit before tax. These are
summarised below:
FY 2023 (€m) FY 2022 (€m)
M&A related expenses 4.4 8.0
Strategic transformation expenses 7.1 5.2
Share-based compensation 6.5 5.3
Impairment losses of non-financial assets 56.7 -
Restructuring costs 4.2 -
Adjusting items in operating expenses 78.9 18.5
Adjusting Items in depreciation and amortisation 17.1 8.4
Total Adjusting items 96.0 26.9
The Group has incurred acquisition related costs which are primarily
professional fees of €4.4m (FY 2022: €8.0m) in relation to M&A
activities, predominantly the Inelo acquisition.
Strategic transformation expenses are costs relating to transformation of key
IT systems and the integration of Inelo. Around €5.0m is related to the
implementation of our ERP system which successfully went live in January 2024.
A further €8m expense is anticipated over the next two years. This new
financial system is a core technology for our new integrated platform and will
enable us to scale quickly and efficiently. Integration costs of €1.8m were
incurred in 2023 and a further €1.0m is expected in 2024.
Share-based compensation primarily relates to adjustments for the compensation
provided to the Group's previous management prior to the IPO. These legacy
incentives comprise a combination of cash and share-based payments, and those
that have not yet vested will vest during the year ending 31 December 2024. A
further €2.4m is expected in 2024. These were one-off awards, designed and
implemented whilst the Group was under private ownership. For clarity,
post-IPO share-based payment charges are not treated as Adjusting items.
Impairment losses of non-financial assets is the charge recognised for the
impairment of goodwill. This non-cash charge is an accounting assessment
primarily related to the fleet management solutions Cash Generating Unit ("FMS
CGU"). Due to challenging macroeconomic conditions, delayed integration and
lower revenue growth rates, the Group has reduced future cashflows when
undertaking this accounting assessment. As a result of these updated
assumptions, there was a €52.2m goodwill impairment recognised in the year
for the FMS CGU. There was also an impairment charge of €4.5m to the tax
refund and toll CGU, which related mainly to our ADS acquisition in 2019.
Following the acquisition of Inelo, the Group began and completed a major
restructuring programme in 2023 to right size the business at a cost of
€4.2m, at the same time as integrating people from new acquisitions.
Amortisation charges of €17.1m relate to the amortisation of acquired
intangibles. FY 2022 charges of €8.4m also included amortisation due to
changes in the useful life. The significant increase is due to the acquisition
of Inelo.
Net finance expense
Net finance expense grew to €11.1m (FY 2022: €4.1m). The increase
primarily reflects the higher interest expense of €19.8m (FY 2022: €5.8m),
as a result of higher debt following the Inelo acquisition, and partly due to
higher factoring fees related to higher average factoring utilisation
throughout the year. Interest expense was partially offset by finance income
of €14.7m (FY 2022: €4.8m) which included a favourable foreign exchange
gain due to the change in functional currency of our payment solutions (Czech
Holding Company), from Czech Koruna in 2022 to Euros in 2023.
Taxation
The statutory Group tax charge of €4.2m (FY 2022: €10.3m) represents an
effective tax rate ("ETR") of (10.8)% in 2023 (FY 2022: 36.8%). The Group's
ETR was primarily impacted by Adjusting items.
The Group's Adjusted ETR for the year decreased to 17.6% (FY 2022: 24.3%),
largely due to a functional currency change during 2023. The ongoing Adjusted
ETR is expected to increase closer to the statutory rate.
Further details on tax are set out in Note 9.
Earnings per share ("EPS")
Basic EPS for 2023 was a loss of 6.62 cents per share (FY 2022: earnings of
2.41 cents per share). This decrease was predominantly due the Group reporting
a loss for the full year 2023 related to a non-cash goodwill impairment,
higher finance costs and amortisation from acquired intangibles.
Adjusted basic EPS for 2023 was 6.49 cents per share, which is a 12.8%
increase compared to 2022. The weighted average number of ordinary shares in
issue during 2023 amounted to 689,126,206 (FY 2022: 688,911,333). After
accounting for the impact of the Long-Term Incentive Plan, Adjusted diluted
earnings per share was 6.46 cents per share.
Acquisitions and investments in subsidiaries and associates
The Group completed a new acquisition in 2023, with further investment in
previous acquisitions which together support the Group's strategy to create a
platform of multiple products. The new acquisition was a 100% interest in
Inelo.
Inelo was purchased on 15 March 2023 for €215.3m in cash and on 16 March
2023, the Group repaid Inelo's bank borrowings of €53.6m. On 31 August 2023,
the Group paid an additional consideration of €8.4m relating to the final
price adjustment to Inelo's acquisition of the FIRETMS.COM subsidiary.
Finally, on 3 October 2023, the Group paid €2.0m related to other purchase
price adjustments identified at completion.
In December 2023, the Group entered into an agreement to acquire the remaining
49% equity interest in KomTeS Chrudim s.r.o ("KomTeS"), in-line with the
original option agreement. The remaining shares were transferred as of 1
January 2024, with the consideration to be determined based on the FY 2023
results and paid in the second half of 2024. The agreement will enable the
Group to accelerate the full integration of KomTeS.
In December 2023, the Group sold its 51% equity interest in Tripomatic.
Tripomatic was a non-core investment of Sygic, with its business based on
consumer travel planning application.
For further information, please refer to Note 10.
Cash performance
FY 2023 FY 2022 YoY YoY
(€m) (€m) (€m) change (%)
Net cash generated from operating activities 30.9 44.2 (13.3) (30.1)%
Net cash used in investing activities (333.7) (104.3) (229.4) 220.0%
Net cash used in financing activities 247.1 (18.2) 265.3 (1,459.2)%
Net decrease in cash and cash equivalents (55.7) (78.2) 22.5 39.0%
Cash and cash equivalents at beginning of period 146.0 224.2 (78.2) (34.9)%
Cash and cash equivalents at end of period 90.3 146.0 (55.7) (74.4)%
Interest-bearing loans and borrowings (407.1) (143.2) (263.9) 184.4%
Net cash/(debt) (316.8) 2.8 (319.6) (11,226.7)%
As at 31 December 2023, the Group's net debt position stood at €316.8m,
compared to net cash of €2.8m as at 31 December 2022.
The decrease in the level of cash is due to the cash outflows used in
investing activities, including the acquisition of Inelo and technology
transformation investments.
Net cash flows from operating activities decreased from €44.2m in 2022 to
€30.9m, primarily due to working capital movements and higher interest
payments. Working capital as at 31 December 2023 had a negative swing of
€29.8m, mainly related to lower trade payables due to different payment
timings as of the end of 2022 and changes to payment terms in Spain, where we
saw competitive pricing from smaller fuel suppliers with shorter payment
terms. The impact related to adjusting items in the reporting period amounted
to an outflow of €18.0m (FY 2022: €13.9m) and included €9.1m for
acquisitions related expenses, €8.8m for strategic transformation expenses
and €0.1m for share-based compensation.
Interest paid increased to €17.4m (FY 2022: €10.1m) driven by higher debt
following the Inelo acquisition as well as higher interest rates relating to
our Euribor exposure from factoring of receivables.
Tax paid increased from €7.8m in 2022 to €9.3m; prior year payments were
decreased by a collection of 2021 income tax advances. The impact of Inelo
consolidation was €0.5m.
Net cash used in investing activities increased by €229.4m to €333.7m,
largely due to the outflows in connection with investment in acquisitions and
capital expenditure.
Net cash from financing activities amounted to an inflow of €247.1m in the
reporting period, representing the proceeds from borrowings of €356.9m,
repayments of borrowings (€97.3m), acquisition of non-controlling interest
in CVS (€7.0m) and lease payments (€5.4m).
Capital expenditure
Capital expenditure in 2023 amounted to €50.9m, compared with €43.2m for
the previous year. This increase is primarily as a result of the inclusion of
Inelo into the Group.
The Group's ordinary capital expenditure of €29.2m (FY 2022: €17.7m)
includes investment into existing products, technology and infrastructure as
well as hardware which represents on-board units ("OBU"). Ordinary capital
expenditure grew year-on-year as a percent of net revenues from 9% to 11%, as
a result of a higher capital investment ratio at Webeye and Inelo, which
invest a larger proportion of their capital into OBUs.
Transformational capital expenditure is now largely complete and in-line with
previous guidance of €50m, with €21.7m spend in 2023 and €25.5m in 2022.
The programme was initiated at the end of 2021 and focused on building and
implementing modern technology, preparing the Group for the platform launch in
2024 by enhancing sales and customer touchpoint channels; expanding product
capabilities, particularly the development of our EETS technology and EVA OBU;
and building a cloud-based data system to capture customers' data on one
platform, enabling the Group to draw on AI and digital insight tools.
Capital allocation
The priority remains to drive long-term sustainable growth via both organic
and inorganic investment. The Group will continue to focus on integrating the
businesses acquired in 2022 and 2023, aligning products and people
capabilities across the organisation and unlocking both revenue and cost
synergies. With the recent acquisition of Inelo, our debt leverage ratio has
as guided moved to 2.9x net debt to Adjusted EBITDA, which is above our
medium-term guidance range of 1.5x to 2.5x. Therefore, our priority in the
near-term is to return to within the target range. In the medium-term M&A
remains important, especially value accretive opportunities in current and
adjacent markets, and in product and technologies that will accelerate growth.
The Group is underpinned by a robust balance sheet and, therefore at this
stage, the Group does not intend to pay dividends; instead it intends to
prioritise investment in growth.
Financing facilities and net debt
The multicurrency term and revolving facilities ("Club Finance") agreement
contains financial covenants at the Group level. The financial covenants are
tested semi-annually, based on announced reported financials.
Following the acquisition of Inelo, the leverage ratio moved to 2.9x net debt
to Adjusted EBITDA, which is above the Group's medium-term guidance range of
1.5x to 2.5x. Therefore, our near-term priority is to return to within the
target range.
Covenant Calculation Target Actual
31 December 2023
Interest cover the ratio of Adjusted EBITDA to finance charges Min 4.00 4.82
Net leverage the ratio of total net debt to Adjusted EBITDA Max 4.00¹ 2.90
Adjusted net leverage the ratio of the adjusted total net debt to Adjusted EBITDA Max 6.50 4.22
1. The covenant shall not exceed 3.75 in 2024 and 3.50 in
2025 and onwards.
The Club Finance facilities which mature in September 2027 comprise the
following:
- Facility A: €150m amortising facility with quarterly repayments plus a
€45m balloon;
- Facility B: €180m committed facility with quarterly repayments plus a
€45m balloon;
- Revolving Credit Facility ("RCF") of €235m for revolving loans (up to
€85m) and ancillary facilities (up to €150m); and
- €150m uncommitted Incremental Facility for acquisitions, capital
expenditure and revolving credit facilities up to €50m of which not more
than €25m for revolving loans.
During the year, the Group borrowed €180m under Facility B to finance the
Inelo acquisition and utilised €83.5m (initially €50m and a further
€33.5m) under the uncommitted Incremental Facility to finance capex and
acquisition related payments. Further details are outlined in Note 16.
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. The Incremental Facilities have not been hedged.
With respect to Facility A, interest rate swaps for the amount of €120.0m
(unamortised) have an effective payable fixed rate of 0.1% and expire in 2024.
Additional interest rate swaps effective from 2023 for €30.0m (amortised)
have an effective payable fixed rate of 2.7% and expire in 2027. The latter
have a complementary amortising 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 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 €130.0m and average utilisation of 70.2% (FY 2022: €101.8m and
65.5% respectively). This demonstrates the Group's proactive approach to
maintaining a strong financial position, and its ability to optimise working
capital.
Risk management
Risk identification, assessment and management are central to the Group's
internal control environment. A risk management framework enables the Group to
identify, evaluate, address, monitor, and report effectively the risks faced
and achieve a balance between risks and opportunities.
The principal risks, together with details on trends, exposure and the
mitigation measures implemented will be included in the 2023 Annual Report and
Accounts.
Subsequent events
Pay-out of deferred consideration
On 2 January 2024, the Group paid a deferred acquisition consideration of
€5.0m related to acquisition of WebEye.
Acquisition of 4.19% interest in CVS Mobile d.d.
On 7 February 2024, the Group acquired the remaining 4.19% interest in CVS
mobile d.d. through its subsidiary Napredna telematika d.o.o. for a
consideration of €0.8m.
Amendment to the Club Financing agreement
On 14 March 2024, the Group signed an amendment to its Club Finance agreement
specifically in relation to the uncommitted Incremental Facility, increasing
the amount that can be used for revolving loans from €25m to €40m. The
total amount of the uncommitted Incremental Facility remains unchanged at
€150m (with €83.5m committed as at the year-end). An amendment was also
agreed to remove the requirement to calculate the interest cover covenant as
at 30 June 2024.
JITpay GmbH insolvency
On 22 March 2024, the District Court of Braunschweig appointed provisional
insolvency administrator of JITpay GmbH, a holding company of JITpay group.
The Group continues discussions with the other stakeholders to determine the
impact on our investment, which had a valuation of nil as at 31 December 2023
(Note 13).
Alternative performance measures ("APMs")
The Group has identified certain APMs that it believes provide additional
useful information to the readers of the 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.
Adjusted Adjusting items FY 2023 Adjusted Adjusting FY 2022
(€m) Items
(€m) (€m) (€m) (€m) (€m)
Net revenue 256.5 - 256.5 190.9 - 190.9
EBITDA 108.7 78.9 29.8 81.6 18.5 63.1
EBITDA margin (%) 42.4% - - 42.8% - -
Depreciation, amortisation and impairments (40.4) 17.1 (57.5) (22.0) 8.4 (30.4)
Operating profit/(loss) 68.3 96.0 (27.7) 59.6 26.9 32.7
Finance income 14.7 - 14.7 4.8 - 4.8
Finance costs and share of net loss of associates (26.3) - (26.3) (9.5) - (9.5)
Profit/(Loss) before tax 56.7 96.0 (39.3) 54.9 26.9 28.0
Income tax (10.0) (5.8) (4.2) (13.3) (3.0) (10.3)
Loss from discontinued operations - 0.5 (0.5) - - -
Profit/(Loss) after tax 46.7 90.7 (44.0) 41.6 23.9 17.7
Basic earnings per share (cents) 6.49 (6.62) 5.75 2.41
APMs are reconciled to the statutory equivalent, where applicable, in Note 5
of the accompanying financial statements.
Financial statements
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(EUR '000)
Notes For the year ended 31 December
2023 2022
Revenue from contracts with customers 2,088,107 2,368,252
Costs of energy sold (1,831,577) (2,177,395)
Net energy and services sales 256,530 190,857
Other operating income 6 10,089 449
Employee expenses (96,793) (67,212)
Impairment losses of financial assets (8,884) (3,912)
Impairment losses of non-financial assets 11 (56,663) -
Technology expenses (18,931) (9,823)
Other operating expenses (55,510) (47,227)
Operating profit before depreciation and amortisation (EBITDA) 29,838 63,132
Analysed as:
Adjusting items 5 78,862 18,461
Adjusted EBITDA 5 108,700 81,593
Depreciation and amortisation (57,529) (30,393)
Operating (loss)/profit (27,691) 32,739
Finance income 7 14,682 4,750
Finance costs 8 (25,794) (8,802)
Share of net loss of associates accounted for using the equity method (504) (711)
(Loss)/profit before income tax (39,307) 27,976
Income tax expense 9 (4,241) (10,280)
(Loss)/profit from continuing operations (43,548) 17,696
Loss after tax for the year from discontinued operations (489) -
(LOSS)/PROFIT FOR THE YEAR (44,037) 17,696
OTHER COMPREHENSIVE INCOME
Items that may be reclassified to profit or loss
Change in fair value of cash flow hedge recognised in equity (7,139) 7,602
Exchange differences on translation of foreign operations 16,539 1,303
Deferred tax related to other comprehensive income 154 -
Items that will not be reclassified to profit or loss
Changes in fair value of equity investments at fair value through other 13 (15,475) -
comprehensive income
TOTAL OTHER COMPREHENSIVE (EXPENSE)/INCOME (5,921) 8,905
TOTAL COMPREHENSIVE (EXPENSE)/INCOME FOR THE YEAR (49,958) 26,601
Total (loss)/profit for the financial year attributable to equity holders of (45,637) 16,630
the Company
Total profit for the financial year attributable to non-controlling interests 1,600 1,066
Total comprehensive (expense)/income for the financial year attributable to (51,552) 25,507
equity holders of the Company
Total comprehensive income for the financial year attributable to 1,594 1,094
non-controlling interests
Earnings per share (in cents per share): 15
Basic earnings per share (6.62) 2.41
Diluted earnings per share (6.62) 2.41
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(EUR '000)
Notes As at 31 December
2023 2022
ASSETS
Non-current assets
Intangible assets 11 532,404 268,171
Property, plant and equipment 55,760 39,826
Right-of-use assets 22,226 13,340
Investments in associates 11,719 12,223
Financial assets at fair value through other comprehensive income 13 - 14,364
Deferred tax assets 9,564 10,505
Derivative assets - 3,093
Other non-current assets 4,845 3,791
Total non-current assets 636,518 365,313
Current assets
Inventories 14,903 20,291
Trade and other receivables 18 396,943 378,152
Income tax receivables 2,205 1,800
Derivative assets 3,425 3,851
Cash and cash equivalents 90,343 146,003
Total current assets 507,819 550,097
TOTAL ASSETS 1,144,337 915,410
SHAREHOLDERS' EQUITY AND LIABILITIES
Share capital 8,113 8,107
Share premium 2,958 2,958
Merger reserve (25,963) (25,963)
Other reserves 4,427 10,342
Business combinations equity adjustment (22,460) (12,526)
Retained earnings 289,380 329,362
Equity attributable to equity holders of the Company 256,455 312,280
Non-controlling interests 14 6,381 4,283
Total equity 262,836 316,563
Non-current liabilities
Interest-bearing loans and borrowings 293,822 121,272
Lease liabilities 17,417 9,510
Provisions 1,324 -
Deferred tax liabilities 28,878 8,677
Derivative liabilities 3,140 186
Other non-current liabilities 17 9,236 27,376
Total non-current liabilities 353,817 167,021
Current liabilities
Trade and other payables 17 402,834 398,235
Interest-bearing loans and borrowings 113,297 21,884
Lease liabilities 4,909 3,917
Provisions 2,529 2,124
Income tax liabilities 3,927 5,649
Derivative liabilities 188 17
Total current liabilities 527,684 431,826
TOTAL EQUITY AND LIABILITIES 1,144,337 915,410
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(EUR '000)
Notes Share capital Share premium Merger reserve Other reserves 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 (25,963) 1,465 (17,046) 84,526 275,858 8,889 284,747
Profit for the year - - - - - 16,630 16,630 1,066 17,696
Other comprehensive income - - - 8,877 - - 8,877 28 8,905
Total comprehensive income - - - 8,877 - 16,630 25,507 1,094 26,601
(25,963)
Capital reduction (30,006) (191,805) - - - 221,811 - - -
Dividends paid - - - - - - - (56) (56)
Share-based payments - - - - - 6,395 6,395 - 6,395
Acquisition of a non-controlling interests 14 - - - - 5,644 - 5,644 (5,644) -
Put options held by non-controlling interests 17 - - - - (1,124) - (1,124) - (1,124)
Total transactions with owners recognised directly in equity (30,006) (191,805) - - 4,520 228,206 10,915 (5,700) 5,215
At 31 December 2022 8,107 2,958 (25,963) 10,342 (12,526) 329,362 312,280 4,283 316,563
(Loss)/profit for the year - - - - - (45,637) (45,637) 1,600 (44,037)
Other comprehensive (expense)/income - - - (5,915) - - (5,915) (6) (5,921)
Total comprehensive (expense)/income - - - (5,915) - (45,637) (51,552) 1,594 (49,958)
Share options exercised 6 - - - - - 6 - 6
Dividends paid - - - - - - - (142) (142)
Share-based payments - - - - - 7,604 7,604 - 7,604
Acquisition of subsidiaries 10 - - - - (10,401) - (10,401) 3,683 (6,718)
Sale of subsidiaries 14 - - - - - - - (525) (525)
Acquisition of a non-controlling interests - - - - 4,461 (1,949) 2,512 (2,512) -
Put options held by non-controlling interests 10 - - - - (3,994) - (3,994) - (3,994)
Total transactions with owners recognised directly in equity 6 - - - (9,934) 5,655 (4,273) 504 (3,769)
At 31 December 2023 8,113 2,958 (25,963) 4,427 (22,460) 289,380 256,455 6,381 262,836
CONSOLIDATED STATEMENT OF CASH FLOWS
(EUR '000)
Notes For the year ended 31 December
2023 2022
Cash flows from operating activities
(Loss)/profit before tax for the year (39,796) 27,976
Non-cash adjustments:
Depreciation and amortisation 57,529 30,393
Gain on disposal of non-current assets (209) (114)
Interest income 7 (219) (234)
Interest expense 8 19,787 5,815
Movements in provisions 405 541
Impairment losses of financial assets 8,884 3,912
Movements in allowances for inventories 3 183
Impairment of goodwill 11 56,663 -
Foreign currency exchange rate differences (7,264) (1,838)
Fair value revaluation of derivatives and securities (2,114) 2,769
Share-based payments 7,604 6,395
Other non-cash items 477 709
Working capital adjustments:
(Increase) in trade and other receivables and prepayments (19,401) (79,507)
Decrease/(increase) in inventories 7,058 (10,156)
(Decrease)/increase in trade and other payables (32,027) 75,087
Interest received 219 234
Interest paid (17,417) (10,123)
Income tax paid (9,266) (7,799)
Net cash inflow from operating activities 30,916 44,243
Cash flows from investing activities
Proceeds from sale of property, plant and equipment 1,534 289
Proceeds from sale of financial instruments - 56
Proceeds from sale of subsidiaries 10 150 -
Purchase of property, plant and equipment (12,582) (7,271)
Purchase of intangible assets (37,437) (37,290)
Purchase of financial instruments (1,112) (14,364)
Payments for acquisition of subsidiaries, net of cash acquired (284,277) (42,712)
Investment in associates - (3,000)
Net cash (outflow) from investing activities (333,724) (104,292)
Cash flows from financing activities
Payment of principal elements of lease liabilities (5,352) (3,112)
Proceeds from borrowings 356,886 -
Repayment of borrowings (97,283) (15,014)
Acquisition of non-controlling interests (6,976) -
Dividend payments (142) (56)
Proceeds from issued share capital 6 -
Net cash inflow/(outflow) from financing activities 247,139 (18,182)
Net decrease in cash and cash equivalents (55,669) (78,231)
Cash and cash equivalents at beginning of the financial year 146,001 224,154
Effect of exchange rate changes on cash and cash equivalents 10 78
Cash and cash equivalents at the end of year (net of bank overdrafts) 90,342 146,001
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.
2. Basis of preparation
The Group's financial information has been prepared in accordance with the
recognition and measurement requirements of UK adopted international
accounting standards. It has been prepared on a basis consistent with that
adopted in the previous year. The Financial statements have been prepared
under the historical cost convention except for derivative financial
instruments and unquoted investments which are stated at their fair value.
Whilst the financial information included in this Preliminary Results
Announcement has been prepared in accordance with the recognition and
measurement criteria of IFRS, this announcement does not itself contain
sufficient information to comply with IFRS.
The Preliminary Results Announcement does not constitute the Company's
statutory accounts for the years ended 31 December 2023 and 31 December 2022
within the meaning of Section 435 of the Companies Act 2006 but is derived
from those statutory accounts. The Group's statutory accounts for the year
ended 31 December 2022 have been filed with the Registrar of Companies, and
those for 2023 will be delivered following the Company's Annual General
Meeting.
The Auditor has reported on the statutory accounts for 2023 and 2022. Their
report for 2023 and 2022 was (i) unqualified, (ii) included no matters to
which the auditor drew attention by way of emphasis and (iii) did not contain
statements under Sections 498 (2) or 498 (3) of the Companies Act 2006 in
relation to the financial statements.
Going concern
The financial statements have been prepared on a going concern basis. Having
considered the ability of the Company and the Group to operate within its
existing facilities and meet its debt covenants, the Directors have a
reasonable expectation that the Company and the Group have adequate resources
to continue in operational existence for the foreseeable future. The adoption
of the going concern basis is based on an expectation that the Group will have
adequate resources to continue in operational existence for at least twelve
months from the signing of the consolidated full year financial statements.
The Directors considered the Group's business activities, together with the
principal risks and uncertainties, likely to affect its future performance and
position.
For the purpose of this going concern assessment, the Directors have
considered the Group's FY 2024 budget together with extended forecasts for the
period to September 2025. The review also included the financial position of
the Group, its cash flows and adherence to its banking covenants.
The Group has access to a Club Finance facility which matures in September
2027 comprising of the following:
· Facility A: €150m amortising facility with quarterly repayments plus
a €45m balloon;
· Facility B: €180m committed facility with quarterly repayments plus
a €45m balloon;
· Revolving Credit Facility ("RCF") of €235m for revolving loans (up
to €85m) and ancillary facilities (up to €150m); and
· €150m uncommitted Incremental Facility for acquisitions, capital
expenditure and revolving credit facilities up to €50m of which not
more than €25m for revolving loans.
The Group's Club Finance facility requires the Group to comply with the
following three financial covenants which are tested semi-annually:
· Net leverage: total net debt of no more than 3.75 times Adjusted
EBITDA in 2024 and 3.5 times in 2025 and onwards;
· Interest cover: Adjusted EBITDA is not less than 4.0 times finance
charges; and
· Adjusted net leverage: Adjusted net debt (including guarantees) of no
more than 6.5 times Adjusted EBITDA.
Noting that on 14 March 2024, the Group signed an amendment to its Club
Finance facility removing the requirement to calculate the interest cover
covenant at 30 June 2024. Furthermore, the Group also increased the amount
that can be used for revolving loans from €25m to €40m under the
uncommitted Incremental Facility. The total amount of the uncommitted
Incremental Facility remains unchanged at €150m (with €83.5m committed as
at the year-end). See Note 16 for the covenant assessment as at 31 December
2023.
Throughout the period to September 2025, the Group has available liquidity and
on the basis of current forecasts is expected to remain in compliance with all
banking covenants.
In arriving at the conclusion on going concern, the Directors have given due
consideration to whether the funding and liquidity resources above are
sufficient to accommodate the principal risks and uncertainties faced by the
Group. The Directors have reviewed the financial forecasts across a range of
scenarios and prepared both a base case and severe but plausible downside
case. The severe downside case assumes a deterioration in trading performance
relating to a decline in product demand, as well as supply chain risks. These
downsides would be partly offset by the application of mitigating actions to
the extent they are under management's control, including deferrals of capital
and other discretionary expenditure. The most extreme downside scenario
incorporating an aggregation of all risks considered, showed a year-on-year
decline in net revenue by 4% and an EBITDA margin of 41.5% in comparison to
the base case of net revenue growth of 15% and a EBITDA margin of 42.4% These
adjusted projections do not show a breach of covenants in respect of available
funding facilities or any liquidity shortfall.
In all scenarios, the Group has sufficient liquidity and adequate headroom in
the Club Finance facility to meet its liabilities as they fall due and the
Group complies with the financial covenants at 30 June and 31 December
throughout the forecast period. The Group has also carried out reverse stress
tests against the downside case to determine the performance levels that would
result in a breach of covenants and the Directors do not consider such a
scenario to be plausible. The Directors have also considered the impact of
climate-related matters on the Group's going concern assessment, and do not
expect this to have a significant impact on the going concern assessment
throughout the forecast period. Since performing their assessment, there have
been no subsequent changes in facts and circumstances relevant to the
Directors' assessment of going concern.
3. Basis of consolidation
The consolidated financial statements comprise the financial statements of the
Company and its subsidiaries undertakings to 31 December each year. Control is
achieved when the Group is exposed, or has rights, to variable returns from
its involvement with the investee and has the ability to affect those returns
through its power over the investee.
4. Summary of significant accounting policies information
The significant accounting policies used in preparing the consolidated
financial statements are set out in the Annual Report and Accounts. These
accounting policies have been consistently applied in all material respects to
all periods presented.
5. Alternative performance measures ("APM")
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, Adjusted EBITDA,
Adjusted EBITDA margin, Adjusted basic 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.
Adjusted EBITDA
Adjusted EBITDA is defined as EBITDA before Adjusting items.
Adjusted EBITDA reconciliation
EUR '000 For the year ended 31 December
2023 2022
Intangible assets amortisation (Note 11) 43,398 22,234
Tangible assets depreciation 8,851 4,790
Right-of-use depreciation 5,280 3,369
Depreciation and amortisation 57,529 30,393
Net finance costs and share of net loss of associates 11,616 4,763
(Loss)/profit before income tax (39,307) 27,976
EBITDA 29,838 63,132
Adjusting items 78,862 18,461
Adjusted EBITDA 108,700 81,593
Adjusted profit before tax
Adjusted profit before tax is calculated by adding back the Adjusting items
affecting Adjusted EBITDA, amortisation of acquired intangibles and
amortisation due to transformational useful life changes. See Note 9 for
further information.
Adjusted earnings (net profit)
Adjusted earnings reconciliation
EUR '000 For the year ended 31 December
2023 2022
(Loss)/profit for the year from continuing operations (43,548) 17,696
Amortisation of acquired intangibles 17,166 6,562
Amortisation due to transformational useful life changes - 1,864
Adjusting items affecting Adjusted EBITDA 78,862 18,461
Tax effect (5,747) (3,029)
Adjusted earnings (net profit) 46,733 41,554
Adjusted basic earnings per share
Adjusted basic earnings per share 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. See
Note 15 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 (net profit). See Note 9 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 process
improvements to improve services provided to customers.
6. Other operating income
EUR '000 For the year ended 31 December
2023 2022
Gains from revaluation of foreign currency forwards 7,970 -
Other 2,119 449
Total 10,089 449
7. Finance income
Finance income for the respective periods was as follows:
EUR '000 For the year ended 31 December
2023 2022
Gains from revaluation of interest rate swaps 545 3,315
Gains from revaluation of foreign currency forwards and swaps - 1,179
Total gains from revaluation of derivatives 545 4,494
Foreign exchange gain 12,225 -
Gain from the revaluation of securities 1,646 -
Interest income 219 234
Other 47 22
Total 14,682 4,750
Foreign exchange gain includes €4.0 million gain impacted by change of
functional currency of W.A.G. payment solutions, a.s.
8. Finance costs
Finance costs for the respective periods were as follows:
EUR '000 For the year ended 31 December
2023 2022
Bank guarantees fee 1,533 899
Interest expense 19,787 5,815
Factoring fee 4,451 1,348
Foreign exchange loss - 692
Other 23 48
Total 25,794 8,802
9. Income tax
Corporate income tax for companies in the United Kingdom for the year 2023 was
23.4% (changed on 5 April 2023 from 19.0% to 25.0%), and in the Czech Republic
it was 19.0% (2022: 19.0%).
Structure of the income tax for the respective periods is as follows:
EUR '000 For the year ended 31 December
2023 2022
Current income tax charge 8,206 12,148
Adjustments in respect of current income tax of prior years (195) 495
Deferred tax charge (3,520) (2,363)
Deferred tax emerged from the change of tax rate (250) -
Total 4,241 10,280
Reconciliation of tax expense and the accounting (loss)/profit multiplied by
the Company domestic tax rate for the below periods:
EUR '000 For the year ended 31 December
2023 2022
Accounting (loss)/profit before tax (39,307) 27,976
At UK's statutory income tax rate of 23.44% (2022: 19%) (9,214) 5,316
Adjustments in respect of current income tax of prior years (195) 495
Change of deferred tax rate impact (250) -
Effect of different tax rates in other countries of the Group (449) 30
Non-deductible expenses (M&A related) 960 1,350
Non-deductible expenses (goodwill impairment) 13,282 -
Non-deductible expenses (other) 4,340 1,857
Share-based payments 1,284 1,020
Net investment hedge - 260
Functional currency change impact (4,172) -
Tax credits (1,511) -
Effect of accumulated tax loss claimed in the current period - (68)
Effect of unrecognised deferred tax assets relating to tax losses of current 166 20
period
At the effective income tax rate of (10.79%) 36.75%
Income tax expense reported in the statement of profit or loss 4,241 10,280
Adjusted effective tax rate is as follows:
EUR '000 For the year ended 31 December
2023 2022
Accounting (loss)/profit before tax (39,307) 27,976
Adjusting items affecting Adjusted EBITDA 78,862 18,461
Amortisation of acquired intangibles 17,166 6,562
Amortisation due to transformational useful life changes - 1,864
Adjusted profit before tax (A) 56,721 54,863
Accounting tax expense 4,241 10,280
Tax effect of above adjustments 5,747 3,029
Adjusted tax expense (B) 9,988 13,309
Adjusted earnings (A-B) 46,733 41,554
Adjusted effective tax rate (B/A) 17.6*% 24.3%
* Adjusted effective tax rate in 2023 is mainly impacted by functional
currency change. Excluding this item, the 2023 Adjusted effective tax rate
would have been 25.0%.
10. Business combinations
The following acquisitions took place in 2023:
Acquisition of Grupa Inelo S.A. ("Inelo")
The acquisition of Inelo was completed on 15 March 2023.
The Group paid €215.3 million in cash upon the acquisition of 100% of the
share capital of Inelo and repaid Inelo's bank borrowings of €53.6 million
on 16 March 2023. In addition, on 31 August 2023 the Group paid an additional
consideration of €8.4 million related to the final price adjustment to
Inelo's acquisition of FIRETMS.COM subsidiary. Finally on 3 October 2023, the
Group paid €2.0 million 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 €12.5 million. The Group has
assessed the performance conditions based on 2022 EBITDA and concluded it to
be below the required target level. As at 31 December 2023, the Group
estimates the contingent consideration to be nil.
The acquisition included FIRETMS.COM put option redemption liability and
forward contract to acquire NCI in Napredna telematika d.o.o. in the future
(disclosed below).
The determined fair values of identifiable assets and liabilities of
subsidiaries of Inelo as at the date of acquisition were:
EUR '000 Fair value recognised on acquisition of Inelo
Assets
Property, plant and equipment 11,932
Identifiable intangible assets 129,215
Right of use assets 3,060
Other non-current assets 786
Trade receivables 8,543
Inventories 1,674
Income tax receivables 943
Cash and cash equivalents 3,271
Total Assets 159,424
Liabilities
Interest-bearing loans and borrowings 59,152
Trade payables 13,142
Lease liabilities 3,146
Other non-current liabilities 1,203
Provisions 1,324
Income tax liabilities 625
Deferred tax 23,345
Total Liabilities 101,937
Total identifiable net assets at fair value 57,487
Non-controlling interest measured at % of net assets (3,683)
Goodwill arising on acquisition 171,815
Purchase consideration:
Cash paid 225,619
Deferred and contingent consideration -
Total purchase consideration 225,619
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 31 December 2023, Inelo's subsidiaries contributed
€37,680 thousand of revenue and €7,883 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 year ended 31
December 2023 would have been €47,260 thousand and €9,846 thousand
respectively. Excluding amortisation of acquired intangibles and Adjusting
items the Adjusted profit after tax would have been €18,785 thousand. As
deferred considerations paid were of short-term nature, no discounting has
been applied to the amount payable.
Pay-out of deferred consideration
On 27 April 2023, the Group paid the first part of deferred and contingent
consideration of €2,064 thousand related to the of WebEye. On 17 May 2023,
the Group paid the second part of deferred consideration of €5,500 thousand
related to acquisition of WebEye. On 11 August 2023, the Group paid third part
of deferred acquisition consideration of €688 thousand related to
acquisition of WebEye.
JITpay call option
As per the original agreement, the Group had a call option to acquire an
additional 18.01% share, which was exercised on 4 July 2023 and was subject to
approval by German Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin),
expected to complete in the first half of 2024. The Group entered a strategic
partnership with JITpay on 27 September 2022, when it acquired a 9.99% stake
for an initial consideration of €14.3 million, of which €3.5 million was
used as primary capital. The investment was classified as a financial asset at
fair value through other comprehensive income, see Note 13 for further
information. The investment is considered to be a strategic investment and is
not held for trading.
On 20 February 2024, the Group terminated the call option on account of
certain financial status conditions relating to JITpay not having been
satisfied, which had been experienced before 31 December 2023. All other
contractual commitments in relation to the original acquisition were also
considered to be terminated at this point. The Group continues discussions
with the other stakeholders of JITpay and will evaluate opportunities for
future cooperation regarding JITpay and within the sector.
Acquisition of 10.7% interest in Napredna telematika d.o.o.
As a result of the Inelo acquisition, the Group owned 89.3% interest in
Napredna telematika d.o.o. and had a forward contract to acquire the remaining
interest. On 7 September 2023, the Group acquired remaining 10.7% share in
Napredna telematika d.o.o. for €6,976 thousand.
Acquisition of 49% interest in KomTeS Chrudim, s.r.o.
On 15 December 2023, the Group signed a share purchase agreement to acquire
the remaining 49% interest in subsidiary KomTes Chrudim, s.r.o., which had
100% interest in KomTes SK, s.r.o ("KomTes Group"). The Group acquired 100%
ownership of the subsidiaries on 1 January 2024. The acquisition price is
based on the original put option calculation and is payable in 2024 following
preparation and audit of 2023 financial statements of the subsidiaries. The
Group recognised deferred acquisition consideration of €8,688 thousand as at
31 December 2023 (2022: €4,435 thousand as put option redemption liability).
The liability increase relates to 2021-2023 dividends being included in the
expected acquisition price, previously the Group expected distribution prior
to 100% interest acquisition.
Sale of subsidiary Tripomatic, s.r.o.
On 15 December 2023, the Group sold its subsidiary Tripomatic s.r.o. for
€150 thousand to non-controlling shareholders. Tripomatic was a subsidiary
of Sygic, a.s., which represented a non-core business of the Group. The
transaction was realised to avoid necessary investments or liquidation of the
subsidiary and the result from the transaction is presented as net loss after
tax from discontinued operations.
The following acquisitions took place in 2022:
Acquisition of WebEye Group
Further to the subsequent events described in the 2021 Annual Report and
Accounts, the Group signed a novated agreement on 16 May 2022 to acquire
substantially all of the assets of Webeye Telematics Zrt. ("Webeye"), a
leading Fleet Management Solution provider in Central and Eastern Europe. The
Group paid €23.3 million in cash upon the acquisition of 100% of the share
capital of the non-Hungarian subsidiaries on 16 May 2022 and a further €19.9
million was paid upon completion of the acquisition of the Hungarian
subsidiaries on 1 July 2022. In addition, the Company will pay a deferred
settlement component within three years of closing, a portion of which is
contingent upon the achievement of certain KPIs. The maximum amount, including
the deferred amount of the purchase price, is capped at €60.6 million.
The transaction has expanded the Group's customer base, and Webeye's customers
will gain access to Eurowag's unrivalled range of integrated end-to-end
payment and mobility solutions leading to incremental revenue
opportunities. Furthermore, data from the connected trucks will provide
insights and enable the continual development of new and improved solutions to
address customers' needs.
The provisionally determined fair values of identifiable net assets of
subsidiaries of Webeye as at the date of acquisition were €17.1m for the
non-Hungarian Webeye subsidiaries and €11.6m for the Hungarian Webeye
subsidiaries.
The goodwill arising on acquisition was €31.3m and is attributable to
expected synergies from combining operations. It will not be deductible for
tax purposes.
The gross contractual receivables acquired amounted to €3,002 thousand. At
acquisition date, there were €636 thousand of contractual cash flows not
expected to be collected.
From the date of acquisition until 31 December 2022, Webeye entities
contributed €8,057 thousand of revenue and €887 thousand loss after tax
(mainly driven by amortisation of acquired intangibles and M&A related
Adjusting items). Excluding amortisation of acquired intangibles and Adjusting
items the Adjusted profit after tax would have been €734 thousand.
If the acquisition had occurred on 1 January 2022, consolidated revenue and
consolidated loss after tax of Webeye entities for the year ended 31 December
2022 would have been €15,429 thousand and €865 thousand respectively.
Excluding amortisation of acquired intangibles and Adjusting items the
Adjusted profit after tax would have been €1,557 thousand.
As at the date of acquisition, discount rate of 2.0% was used to determine the
present value of deferred and contingent consideration. As at 31 December
2022, the discount rate was increased to 3.9%. Reasonably possible change in
the discount rate does not lead to a significant change in the present value
of deferred and contingent consideration.
Contingent consideration is subject to achievement of integration related
milestones. Reasonably possible change in milestones achievement does not lead
to a significant change in the fair value of contingent consideration.
Acquisition of non-controlling interest in Sygic
On 20 December 2022, the Group signed an agreement with non-controlling
shareholders of Sygic, a.s.("Sygic"), which will enable the Group to take full
control of Sygic's resources. Consideration for the 30% equity interest of
€14.4 million is payable in April 2024, in line with the original option
agreement. Ownership of the shares remains with non-controlling shareholders
until April 2024, however following the agreement with fixed price they are no
longer exposed to variable returns from the investment (Note 14).
Under the previous shareholders agreement, the minority shareholders had
certain rights pertaining to the application of Sygic's resources within the
Group. Having full control of Sygic has provided the Group with unrestricted
access to Sygic's resources and allowed it to fully utilise Sygic's digital
expertise and people capabilities. This, in turn, will enable the Group to
accelerate its digital sales channel and integrated product initiatives by
utilising Sygic's capabilities more effectively across Eurowag's whole range
of mobility solutions.
Pay-out of deferred consideration
On 31 January 2022, the Group paid deferred consideration of €3 million
related to acquisition of company Threeforce B.V. (Last Mile Solutions).
11. Intangible assets
Cost of intangible assets subject to amortisation:
EUR '000 Goodwill Client relationships Internal software development Patents and rights External software Other intangible assets Internal assets in progress External assets in progress Total
1 January 2022 105,198 29,245 60,889 5,465 24,245 31 19,058 459 244,590
Additions - - 21,592 - 2,398 - 8,302 3,291 35,583
Acquisition of a subsidiary 31,305 21,080 5,898 105 298 - - - 58,686
Transfer - - 17,149 - - - (16,972) (177) -
Disposals - - (69) - (24) - (35) - (128)
Translation differences 712 (102) 2,579 - 269 - 430 (4) 3,884
31 December 2022 137,215 50,223 108,038 5,570 27,186 31 10,783 3,569 342,615
Additions - - 22,422 52 2,293 - 13,200 - 37,967
Acquisition of a subsidiary 171,815 94,676 26,893 2,255 755 2 4,634 - 301,030
Transfer - - 11,018 - - - (10,861) (157) -
Disposals (1,018) - (7) (2,674) (3,294) (6) (87) - (7,086)
Translation differences 14,712 7,355 5,357 376 (79) - 796 8 28,525
31 December 2023 322,724 152,254 173,721 5,579 26,861 27 18,465 3,420 703,051
Accumulated amortisation and impairment of intangible assets subject to
amortisation:
EUR '000 Goodwill Client relationships Internal software development Patents and rights External software Other intangible assets Assets in progress Total
1 January 2022 - (11,687) (23,967) (2,737) (12,720) (26) - (51,137)
Amortisation - (4,024) (14,512) (28) (3,668) (2) - (22,234)
Disposals - - 69 - 10 - - 79
Translation differences - - (974) (2) (176) - - (1,152)
31 December 2022 - (15,711) (39,384) (2,767) (16,554) (28) - (74,444)
Amortisation - (10,081) (27,947) (1,389) (3,979) (2) - (43,398)
Disposals - - 7 2,643 3,294 5 - 5,949
Impairment (56,663) - - - - - - (56,663)
Translation differences - (174) (1,732) (253) 68 - - (2,091)
31 December 2023 (56,663) (25,966) (69,056) (1,766) (17,171) (25) - (170,647)
Net book value:
EUR '000 Goodwill Client relationships Internal software development Patents and rights External software Other intangible assets Internal assets in progress External assets in progress Total
137,215 34,512 68,654 2,803 10,632 3 10,783 3,569 268,171
31/12/ 2022
266,061 126,288 104,665 3,813 9,690 2 18,465 3,420 532,404
31/12/ 2023
Impairment testing
Goodwill acquired through business combinations is allocated to the respective
CGUs for impairment testing.
Carrying amount of the goodwill allocated to each of the CGUs:
EUR '000 31 December 2023 31 December 2022
Energy 93,951 40,180
Navigation 33,592 34,610
Fleet management solutions 138,518 57,963
Tax refund - 2,401
Toll - 2,061
Total 266,061 137,215
The recoverable amount of CGUs has been determined based on a value-in-use
calculation using cash flow projections from financial budgets and forecast
approved by the Board covering a five-year period.
Key assumptions used for impairment testing
Discounted cash flow model is based on the following key assumptions:
31 December 2023 31 December 2022
Energy CGU
Pre-tax discount rate 8.5% 9.5%
Net energy and services sales growth rate* 3.8% 1.9%
Long-term growth rate 2.0% 1.8%
Navigation CGU
Pre-tax discount rate 11.0% 12.0%
Revenue growth rate* 9.2% 20.0%
Long-term growth rate 2.0% 3.0%
Fleet management solutions CGU
Pre-tax discount rate 12.0% 12.0%
Revenue growth rate* 9.9% 17.0%
Long-term growth rate 2.5% 3.0%
* Average over 5-year period
Net energy and services sales and revenue growth were determined by management
separately for each CGU. They are based on the knowledge of each particular
market, taking into account the historical development of revenues, estimated
macroeconomic developments in individual regions and the Group's plans
regarding new products development, growth opportunities and market share
expansion. Estimated net energy and services sales and revenue growth
represent the best possible assumption of the Group's management considering
the future development as at the end of the period.
Discount rate reflects specific risks relating to the industry in which the
Group operates. The discount rate used is based on the weighted average cost
of capital ("WACC") of the Group as presumed by Capital Asset Pricing Model.
Decrease in pre-tax discount rate of Energy and Navigation CGUs and stable
discount rate of Fleet management solutions CGU are driven by change of
company size premium. Previously, the Group applied mid-cap premium, however
following acquisition of Inelo, the Group became large enough to decrease the
size risk premium as at 31 December 2023.
Impairment charge of €52,217 thousand was recognised in the Fleet management
solutions CGU based on value-in-use model. This was a result of an adjustment
to the revenue growth assumption for the Fleet management solution CGU,
including Inelo, reflecting the impact of macro conditions on near-term
revenue growth. The test was also adjusted for our cost synergies assumptions
anticipated from the integration of Inelo, which is now lower due to the
higher investment in systems and related costs. No class of assets other than
goodwill was impaired.
As at 31 December 2023, the recoverable amount of the entire CGU was
€314,309 thousand determined based on value-in-use.
An impairment charge of €4,446 thousand was recognised in the Tax refund and
Toll CGU's with minor amounts of goodwill, which were mostly resulting from
2019 ADS Group acquisition. In December 2023, the Group engaged independent
experts to perform a valuation of the toll and tax refund ADS businesses and
concluded that their carrying amounts exceeds recoverable amounts. No class of
assets other than goodwill was impaired.
12. Investments in associates
Commitments and contingent liabilities in respect of associates
The remaining shares of Last Mile Solutions are subject to a put option, which
may require the Group to acquire additional 62% shares of the associate. The
put option is measured as a derivative instrument and it will be settled at
gross margin multiple in case it is exercised. As of 31 December 2023, the
fair value of the put option is €127 thousand (31 December 2022: €153
thousand).
13. Financial assets at fair value through other comprehensive income
("FVOCI")
Equity investments at FVOCI comprise the following individual investments:
EUR '000 31 December 2023 31 December 2022
Unlisted securities
JITpay GmbH - 14,364
Total - 14,364
As at 31 December 2023, fair value of the equity investment in Jitpay was
decreased by €15,475 thousand through other comprehensive income (2022: €0
thousand). JITpay performance in second half of 2023 was significantly below
expectations, which impacts overall valuation of the investment.
14. Equity
Non-controlling interests ("NCI")
In 2021, the Group acquired KomTes Group. As of 31 December 2023, the NCI
related to KomTes Group amounts to €4,993 thousand (31 December 2022:
€3,605 thousand). On 15 December 2023, the Group signed an agreement to
acquire the NCI in 2024 (see Note 10).
Following the agreement with Sygic non-controlling shareholders in December
2022 (Note 10), NCI of €5,644 thousand was transferred to business
combination equity adjustment. In 2023, controlling shareholders have all the
risks and rewards associated with ownership, therefore no profit was
attributed to NCI from Sygic.
Following the agreement with Tripomatic s.r.o. non-controlling shareholders in
December 2023 (Note 10), the controlling interest of 51% (31 December 2022:
51%) was sold to the non-controlling shareholders for a consideration of
€150 thousand. The value of NCI as of the date of the transaction was €525
thousand (31 December 2022: €678 thousand).
In 2023, the Group acquired CVS Group and two FIRETMS.COM subsidiaries with
NCI as part of Grupa Inelo acquisition (see Note 10). As of 31 December 2023,
the NCI relating to CVS Group amounts to €1,053 thousand and the NCI related
to FIRETMS.COM amounts to €335 thousand.
15. Earnings per share
All ordinary shares have the same rights.
Basic EPS is calculated by dividing the net profit / (loss) 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 / (loss) 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.
Adjusted diluted EPS is calculated by dividing the Adjusted earnings (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.
In periods where a net loss is recognised, the impact of potentially dilutive
outstanding share-based awards is excluded from the calculation of diluted
loss per share as their inclusion would have an antidilutive effect.
The following reflects the income and share data used in calculating EPS:
For the year ended 31 December
2023 2022
Net (loss)/profit attributable to equity holders (EUR '000) (45,637) 16,630
Basic weighted average number of shares 689,126,206 688,911,333
Effects of dilution from share options - 816,306
Total number of shares used in computing dilutive earnings per share 689,126,206 689,727,639
Basic (loss)/earnings per share (cents/share) (6.62) 2.41
Diluted (loss)/earnings per share (cents/share) (6.62) 2.41
Adjusted earnings per share measures:
For the year ended 31 December
2023 2022
Net (loss)/profit attributable to equity holders (EUR '000) (45,637) 16,630
Loss after tax for the year from discontinued operations 489 -
Adjusting items affecting Adjusted EBITDA (Note 5) 78,862 18,461
Amortisation of acquired intangibles* 16,653 5,499
Amortisation due to transformational useful life changes - 1,864
Tax impact of above adjustments* (5,650) (2,813)
Adjusted net profit attributable to equity holders (EUR '000) 44,717 39,641
Basic weighted average number of shares 689,126,206 688,911,333
Adjusted basic earnings per share (cents/share) 6.49 5.75
Effects of dilution from share options 2,629,512 816,306
Diluted weighted average number of shares 691,755,718 689,727,639
Adjusted diluted earnings per share (cents/share) 6.46 5.75
*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.
16. Interest-bearing loans and borrowings
On 10 March 2023, the Group received €180 million through Facility B of the
Club Finance facility. The new loan was used to finance the Inelo acquisition.
On 26 May 2023, the Group received €50 million through Incremental Facility
I of the Club Finance facility. The purpose of the new drawdown is financing
of the capital expenditures incurred or to be incurred. On 15 November 2023,
the Group received €33.5 million through Incremental Facility II of the Club
Finance facility. The purpose of the new drawdown was financing of the
acquisition related payments incurred or to be incurred.
On 17 May 2023, the Group signed an amendment to the new Club Financing
facility which incorporates ESG key performance indicators into margin
calculation (ESG adjustment) since 31 December 2023 with overall impact on
margin in the range of (0.05 p.p.)-0.05 p.p. If all three sustainability KPI
targets are met, the base margin is reduced by 0.05 percentage points. If none
of the KPIs is met, the base margin is increased by 0.05 p.p. If one of the
KPIs is not met, the base margin is reduced by 0.025 p.p. If two of the KPIs
are not met, the base margin is increased by 0.025 p.p.
The Group complied with all financial covenants under the Club Financing
facility as of 31 December 2023 and 31 December 2022, and forecasts compliance
for the going concern period.
Financial covenant terms of the Club Financing facility are as follows:
Covenant Calculation Target Actual Actual
31 December 2023 31 December 2022
Interest cover the ratio of Adjusted EBITDA to finance charges Min 4.00 4.82 11.20
Net leverage the ratio of total net debt to Adjusted EBITDA Max 4.00* 2.90 0.13
Adjusted net leverage the ratio of the adjusted total net debt to Adjusted EBITDA Max 6.50 4.22 1.95
*the covenant shall not exceed 3.50 in 2025 and onwards
For the purposes of covenants calculation, alternative performance measures
are defined differently by the Club Financing facility:
· Adjusted EBITDA represents full year Adjusted EBITDA of companies
acquired during the period;
· net debt includes lease liabilities and derivative liabilities, and
· adjusted net debt includes face amount of guarantees, bonds, standby
or documentary letter of credit or any other instrument issued
by a bank or financial institution in respect of any liability of the
Group.
17. Trade and other payables, other liabilities
EUR '000 31 December 2023 31 December 2022
Current
Trade payables 303,165 332,676
Employee related liabilities 15,388 9,243
Advances received 12,911 15,325
Miscellaneous payables 8,644 9,790
Payables to tax authorities 18,562 12,734
Contract liabilities 6,971 4,439
Refund liabilities 4,461 2,822
Deferred acquisition consideration 32,732 11,206
Total Trade and other payables 402,834 398,235
Non-current
Put option redemption liability 5,825 4,435
Contract liabilities 3,353 2,276
Employee related liabilities - 765
Deferred acquisition consideration - 19,898
Other liabilities 58 2
Total Other non-current liabilities 9,236 27,376
Trade payables are non-interest bearing and are normally settled on 30-day
terms.
Miscellaneous payables include mainly payables in respect of sold receivables
to factoring companies (for working capital management), representing cash
collected from customers on behalf of factoring companies.
Advances received include mainly customer deposits related to OBUs and prepaid
cards (Eurowag Mastercard product).
Present value of deferred acquisition consideration relates to the following
acquisitions:
EUR '000 31 December 2023 31 December 2022
Sygic, a.s. 14,216 13,735
Webeye Group 9,128 16,669
KomTes Group* 8,688 -
Other 700 700
Total 32,732 31,104
*presented as put option redemption liability as at 31 December 2022.
18. Trade and other receivables
EUR '000 31 December 2023 31 December 2022
Trade receivables 278,466 240,788
Tax refund receivables 66,953 79,274
Receivables from tax authorities 18,716 24,528
Advances granted 14,346 12,059
Unbilled revenue 4,027 9,728
Miscellaneous receivables 5,879 4,798
Prepaid expenses and accrued income 4,671 3,976
Contract assets 3,885 3,001
Total 396,943 378,152
Trade receivables are non-interest bearing and are generally payable on terms
below 30 days. Trade and other receivables are non-derivative financial assets
carried at amortised cost.
Tax refund receivables include receivables from foreign tax authorities and
from financing of tax refunds to customers until processing of the application
for tax refund by tax authorities.
Advances granted consist mainly of advances related to production of OBU units
and other business-related advances.
19. Financial risk management
The Group's classes of financial instruments correspond with the line items
presented in the Consolidated Statement of Financial Position
The Group's principal financial liabilities, other than derivatives, comprise
loans and borrowings, leases and trade and other payables. These financial
liabilities relate to the financing of the Group's operations and
investments. The Group's principal financial assets include trade and other
receivables, cash and cash equivalents that derive directly from its
operations. The Group also enters into derivative transactions.
The Group is exposed to market risk, credit risk and liquidity risk.
Management of the Group identifies financial risks that may have an adverse
impact on the business objectives and through active risk management, reduces
these risks to an acceptable level. Further information is provided in the
Annual Report and Accounts.
Directors' Responsibility Statement Required under the Disclosure and
Transparency
Rules
The responsibility statement below has been prepared in connection with the
Company's full
Annual Report and Accounts for the year ended 31 December 2023. Certain parts
of that Report
are not included within this announcement. We confirm to the best of our
knowledge:
· the Group Financial Statements, which have been prepared in accordance
with UK adopted international accounting standards, give a true and fair view
of the assets, liabilities, financial position and profit of the Group;
· the Company Financial Statements, which have been prepared in
accordance with United Kingdom Accounting Standards, comprising FRS 101, give
a true and fair view of the assets, liabilities and financial position of the
Company; and
· the Strategic Report includes a fair review of the development and
performance of the business and the position of the Group and Company,
together with a description of the principal risks and uncertainties that it
faces
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