REG - Eurowag - Trading Update and Board Changes

WAG Payment SolutionsAnnouncement

25/10/2022 07:16

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RNS Number : 9500D  Eurowag  25 October 2022

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.

25 October 2022

 

EUROWAG

 

Trading Update and Board Changes

 

Strong performance with results for the nine months of 2022 in line with
expectations

 

W.A.G payment solutions plc ("Eurowag", or the "Group") a leading pan-European
integrated payments & mobility platform focused on the Commercial Road
Transportation industry ("CRT"), today provides its trading update for the
nine months ending 30 September 2022.

 

Financial and Operational highlights

 

·     Group net energy and services sales ("net revenue") for 9M 2022 up
23.3% year-on-year to €135.6 million in line with management's
expectations;

-       Organic net revenue growth for the same period represented
19.2%.

·      Payment solutions net revenue for 9M 2022 of €96.9 million, up
20.1% year-on-year.

·      Mobility solutions net revenue for 9M 2022 of €38.7 million,
up 32.4% year-on-year.

-       Webeye's contribution to the top line for the same period
amounted to €4.5 million.

·      Net revenue for the last twelve months reached €178.8 million,
representing 23.1% year-on-year;

-       Organic net revenue growth for the last twelve months
represented 19.9%.

·   Payment solutions net revenue growth was primarily driven by new
customers and trucks acquisitions underpinned by strong net revenue retention;

-       Average number of payment solutions active customers increased
12.9% in 9M 2022 (from 14,834 in the comparable period of 2021 to 16,749);

-       Average number of payment solutions active trucks increased 6.4%
in 9M 2022 (from 82,017 in the comparable period of 2021 to 87,258).

·     Mobility solutions net revenue growth was primarily driven by WebEye
consolidation, effective cross-sell and sales to automotive partners.

 

Strategic highlights

 

·    Announced separately today, the Group has reached agreement to acquire
Grupa Inelo S.A. ("Inelo"), a leading fleet management solutions and work time
management software provider.

·   Launched strategic partnership with JITpay™ Group, a leading provider
of digitalised billing, receivables management and financing solutions,
including invoice discounting.

·    Signed a Multicurrency Term and Revolving Facilities Agreement in
September 2022 consisting of €565 million committed and €150 million
uncommitted facilities to refinance and expand the Group's existing credit
facilities, securing favourable terms on a strengthened debt package.

·      Admitted to FTSE 250.

 

Further progress against long-term strategy

 

Acquisition of Inelo

 

The Group separately announced today that it has reached an agreement for
W.A.G. payment solutions a.s., a wholly-owned subsidiary of Eurowag, to
acquire 100% of the share capital of Inelo for up to €306 million (subject
to certain closing adjustments). Inelo is a leading fleet management solutions
provider in Poland, the largest CRT market in Europe, with critical mass in
Slovenia, Croatia and Serbia. Along with a larger geographic footprint, the
proposed acquisition would also add approximately 87,000 1  (#_ftn1) connected
trucks to Eurowag's platform, which roughly doubles Eurowag's number of
connected trucks, as well as Inelo's mission critical Working Time Management
software.

 

The proposed acquisition offers compelling strategic and financial benefits to
the Group, and takes Eurowag a significant step closer to achieving its
ambition of delivering a fully integrated, end-to-end digital platform for the
CRT industry.

 

The acquisition is a Class 1 transaction for Eurowag under the Listing Rules
of the Financial Conduct Authority (the "FCA"). Completion is conditional,
amongst other things, on approval of the class 1 circular by the FCA, Eurowag
shareholder approval and the receipt of approval from relevant foreign direct
investment regulatory bodies and antitrust authorities in Poland, Slovenia and
North Macedonia. Full details can be found in the separate announcement made
by Eurowag today.

 

Strategic partnership with JITpay™ Group

 

In September 2022, Eurowag entered into a strategic partnership with JITpay™
Group, a Germany-based payment service provider specialising in the logistics
industry. The transaction expands the Group's product portfolio by adding
invoice discounting, digitalised billing and receivables management solutions
and strengthens its presence in Germany, one of the most strategically
important trucking markets in Europe. As part of the strategic partnership,
Eurowag has acquired a 9.99% stake in JITpay™ for an initial consideration
of €14 million, with the flexibility for a potential increase in its
ownership over time subject to regulatory approvals.

 

Refinancing of existing debt

 

On 22 September 2022, the Group signed a Multicurrency Term and Revolving
Facilities Agreement to refinance and expand the Group's existing credit
facilities (the "Refinancing"). Recognising the resilient growth and strong
financial results Eurowag has consistently delivered, the Refinancing secured
favourable terms on a strengthened debt package, extended maturities for all
facilities, and expanded the Group's club of financing banks. The effective
date of the Refinancing is 17 October 2022. Further details were announced on
22 September 2022.

 

Board Changes

 

After three very successful years with the Group, Magdalena Bartoś has
informed the Board that she intends to step down as Chief Financial Officer
and as a Board director of Eurowag to pursue her other interests. To support
an orderly transition, Magdalena will remain with the business for the next
six months to support the business as it completes the acquisition of Inelo
and finalises the Group's 2022 full year results.

 

The Group has clear succession processes in place and will provide a further
update on the recruitment of a new CFO when appropriate.

 

Capital Markets Day

 

Eurowag intends to host a Capital Markets Day on 25 April 2023. Save the Date
and details will be circulated in due course.

 

Outlook

 

Whilst Eurowag has navigated with confidence through the challenging
environment, the Board notes that there are elevated risks and uncertainties
with respect to the future of the European economy, and potential impacts of
the sanctions related to imports of Russian oil introduced by the European
Commission. Notwithstanding these headwinds, following the completion of the
acquisition of Inelo, Eurowag expects to continue to deliver organic net
revenue growth of between high teens and low twenties per cent over the
medium-term. The acquisition of Inelo significantly increases the revenue
contribution to the Group from the mobility solutions segment, which has lower
operational gearing, but generates naturally more recurring revenues.
Consequently, the change in the revenue mix may impact the pace of the margin
expansion of mid-forties trending to high-forties per cent over the
medium-term.

 

The Group continues to expect transformational capex to be €50m in aggregate
for 2022 to 2023 and ordinary capex to be approximately a high single digit
percentage of net revenue over the medium term. The Group expects to exceed
the top end of its leverage target by around half a turn of adjusted pro-forma
EBITDA on completion of the acquisition of Inelo, and return back to the
leverage target range of 1.5x to 2.5x in the near term.

 

Martin Vohánka, Founder and CEO, commented:

 

"The Group delivered another quarter of strong organic growth, in line with
management's expectations. This performance is testament to the value our
platform provides to the CRT sector.

 

Maintaining capital discipline while pursuing strategic growth opportunities
is a key priority for Eurowag and the refinancing gives us the scope and
financial flexibility to deliver our growth strategy while retaining a strong
balance sheet, and also optimises our capital structure and liquidity
position. The proposed acquisition of Inelo combined with our strategic
partnership with JITpay takes us a significant step closer towards achieving
our vision of delivering a fully integrated, digital end-to-end platform for
the CRT industry.

 

On behalf of the Group and the Board, I would like to thank Magda for her
dedicated service to Eurowag over the past three years. She has played an
important role at a transformational time for the Group and her knowledge and
expertise have been invaluable. Her many achievements include leading us
through the IPO and recent refinancing, and further building Eurowag's strong
track record of delivering strategically important partnerships and
acquisitions. Magda leaves the business well positioned to deliver further
growth and achieve its objectives, and we wish her all the best in her future
endeavours."

 

Magdalena Bartos, CFO of Eurowag, added:

 

"It has been a privilege to help lead this Group over the last three years and
I would like to thank the talented and dedicated team at Eurowag for their
support in developing this company into what it is today. The milestones we
have hit are a testament to the strength of the business and our work
together. While now is the right time for me to step aside and allow someone
else to deliver the next steps in Eurowag's journey, I remain committed to the
business and will ensure a smooth transition. I look forward to seeing the
Group go on to realise its full potential as it continues to move from
strength to strength."

 

 

ENQUIRIES

Eurowag

Tomáš Novotný

Head of Investor Relations
investors@eurowag.com (mailto:investors@eurowag.com)

 

Instinctif Partners

Tim McCall, Galyna Kulachek, Bryn Woodward

IR and international media
eurowag@instinctif.com (mailto:eurowag@instinctif.com)

 

About Eurowag

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

 

The person responsible for arranging the release of this announcement is
Tomáš Novotný (Head of Investor Relations).

 

 1  (#_ftnref1) (Inelo connected trucks represent the number of medium and
heavy commercial vehicles over 3.5 tonnes that have an Inelo on-board unit
installed within the vehicle.)

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