Half-year Report

Eurowag
07 September 2023
 

7 September 2023

 

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

Interim results for the six months ended 30 June 2023

Robust growth despite macro pressures, large-scale digital transformation continues

 

W.A.G payment solutions plc ("Eurowag" or the "Group"), today announces its interim results for the six-month period ended 30 June 2023.

 

H1 financial highlights

 

·    Net revenue1 up 36.9% year-on-year to €119.1m, with organic growth2 of 14.4%.

Payment solutions revenue1 grew by 14.1% year-on-year to €72.4m, with organic growth2 of 12.5%. Economic headwinds have impacted the Commercial Road Transport ("CRT") industry, with fewer kilometres driven.

Mobility solutions revenue1 grew 98.6% year-on-year to €46.7m, with organic growth2 of 19.9%; reflecting strong sales across all our mobility products.

·    Adjusted EBITDA1 up 43.5% year-on-year to €50.2m, with margin1 of 42.2%, reflecting the impact of acquisitions. Organic adjusted EBITDA1 up 21.6% to €42.6m, with margins at 43.3% (H1 2022: 40.7%); Excluding the benefit from the foreign exchange gain as a result of our prudent currency risk management3, organic adjusted EBITDA was €36.6m.

·    Transformational capex of €11.7m and ordinary capex of €12.9m, with our transformational programme on track to finish at the end of the year, in-line with guidance.

·    On a statutory basis, profit before tax was €8.5m, a decrease of 36.7% year-on-year; due to higher depreciation from our transformational capital expenditure programme, the inclusion of our new acquisitions, and higher interest costs following the acquisition of Grupa Inelo S.A. ("Inelo").

·    Net debt position of €300.9m (H1 2022: cash position of €28.7m); leverage increased as expected to 2.9x net debt to adjusted EBITDA4.   

 

Martin Vohánka, Founder and CEO, commented:

 

"We delivered strong double-digit organic growth in the first half of the year. This was in spite of the macroeconomic headwinds across Europe which are impacting the CRT industry through a notable slowdown in freight demand, in turn delivering a reduction in kilometres driven. Our performance against this backdrop continues to demonstrate the resilience of our business model which delivers significant growth through the cycle and that our products are truly mission critical to our customers.

 

This year we have entered a new transformation phase. Our priority is the integration of our newly acquired businesses to ensure we fully capture the synergies and cross sell opportunities, as well as deliver on our vision of providing the industry's first end-to-end digital platform next year. Our transformational capex programme, which remains on track to finish at the end of this year, has allowed us to develop and expand our product and service capabilities, strengthen our business operations, and build a unique and scalable technology platform, which we look forward to discussing further at our Capital Markets Day in October.      

 

There is still a lot of work to do, but I am pleased with the progress made so far this year. We have moved closer to the launch of our integrated platform, which, together with the integration of our acquisitions, gives me confidence that we can unlock further value for both our customers and our shareholders."

 

 

H1 financials

 

Key statutory financials

H1 2023

H1 2022

YoY growth (%)

Revenue from contracts with customers (€m)

1,017.6

1,160.8

(12.3)%

Profit before tax (€m)

8.5

13.4

(36.7)%

Basic EPS (cents/share)

0.76

1.29

(41.1)%

 

Alternative performance measures 1

H1 2023

H1 2022

YoY growth

(%)

H1 2023 organic2

Organic YoY growth (%)

Net revenue (€m)

119.1

87.0

36.9%

98.3

14.4%

     Payment solutions revenue (€m)

72.4

63.5

14.1%

71.4

12.5%

     Mobility solutions revenue (€m)

46.7

23.5

98.6%

26.9

19.9%

Adjusted EBITDA (€m)

50.2

35.0

43.5%

42.6

21.6%

Adjusted EBITDA margin (%)

42.2

40.2

+1.9pp

43.3

+2.5pp

Adjusted basic EPS (cents/share)

2.90

2.35

23.1%

1.80

(23.7)%

 

H1 operational highlights

 

 

H1 2023

H1 2022

YoY growth (%)

Average active payment solutions customers5

18,053

16,523

9.3%

Average active payment solutions trucks5

91,864

87,626

4.8%

Payment solutions transactions6

18.4m

17.7m

4.1%

 

H1 strategic highlights

 

·    M&A strategy adding key capabilities and services:

·    Completed the acquisition of Inelo in March;

·    JITpay GmbH's ("JITPay") call option exercised in July to buy an additional 18.01%, taking total ownership to 28% once completed.

·    Integration of WebEye Telematics Zrt. ("Webeye") and Inelo:

·    Webeye organisation integrated, including moving their sales force into Eurowag as one agile sales team;  

·    Inelo integration workstreams in place to ensure seamless transition, focus on cross-sell initiatives.

·    Grow core services:

·    European Electronic Toll Service ("EETS") certification in the Czech Republic and Hungary.

·    Expand platform capability:

·    Improving customer self-care portal to support end-to-end digital user experience;

·    Continue to develop our financial platform capability, for e-wallet launch in FY 2024;

·    Good progress made on data lake to improve data analytics and reporting governance.

 

Outlook and update to medium term guidance  

 

Eurowag entered 2023 in a strong position and continues to grow, in spite of the macroeconomic environment currently impacting the CRT industry across Europe. This includes high inflation and interest rates, and a slowdown of product manufacturing which has led to a notable slowdown in freight demand and therefore fewer kilometres driven by our customers. Anticipated challenges have arisen from our decision taken last year, following the Russian invasion of Ukraine, to adapt our business operations to a level beyond the restrictions the sanctions imposed and withdrew all operations and fuel purchases with any exposure to Russia, which has impacted fuel pricing in some of our markets. Our robust results in the first half are therefore a reflection of the strength of our business model in that we have a loyal and growing customer base and provide truly mission-critical products and services. With the combination of market headwinds and the transformative programme we are undergoing, we expect in the near-term net revenue percentage growth to be around mid-teens. In the medium-term, we expect revenue percentage growth to return to high-teens, reflecting the value creation from our platform through the growth in customers, the cross-sell opportunities and the full extraction of acquisition synergies.

 

In the first half, excluding a favourable foreign exchange gain, organic adjusted EBITDA grew 4.6% with margins of 37.2%. Organic adjusted EBITDA margins were impacted in the first half due to our cost increases being ahead of net revenue growth, with net revenues expected to be second half weighted due to our usual seasonality. Along with the net revenue weighting in the second half and cost actions already proactively taken through headcount reduction in anticipation of integrating Webeye and Inelo into our organisational structure, we expect margin levels to be in-line with FY 2022, at around 43%. We still expect our margin in the medium-term to move to high-forties as operational leverage and acquisition synergies are realised.   

 

We expect to finalise our transformational capex programme at the end of the year, on time and in budget, having invested significantly in the last few years in developing the industry's first digitally integrated end-to-end platform. We will continue to invest in the business through ordinary capex. Following the acquisition of Inelo and Webeye, we expect ordinary capex to move just above 10 percent of net revenues for the end of this financial year. Inelo and Webeye have historically invested a higher percentage of net revenues, with Inelo spending half of its capex on hardware. As results of these acquisitions, we are updating our medium-term ordinary capex guidance to be around 10 percent of net revenues. We do anticipate reducing duplications across IT, hardware, and technology over time through a combination of integration and the transition to a single technology platform.

 

With the recent acquisition of Inelo, our leverage ratio at the half year increased as expected to 2.9x net debt to adjusted EBITDA. It is still a priority to return to within our targeted leverage ratio range of 1.5x to 2.5x.

 

The next two years are important to us, with the delivery of the integrated platform as well as the transformation of the business, including the integration of those businesses we have acquired recently. With further growth opportunities through cross-sell and geographic expansion, and the value we see being unlocked for customers through the new platform, we are confident that we can continue to deliver strong growth for all stakeholders.

 

The Board's expectations for the full year remain unchanged.

 

 

Notes:

1.     Please refer to the section Explanation of Alternative Performance Measures for a definition and see note 9.

2.     Organic growth excludes Webeye and Inelo performance and recurring Inelo integration expenses.

3.     We use forward currency contracts to mitigate any Euro foreign exchange fluctuations.

4.     Net debt includes lease liabilities and derivative liabilities.      

5.     An active customer or truck is defined as using the Group's payment solutions products at least once in a given month.

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

 

 

Investor and analyst presentation today

 

Martin Vohánka (CEO) and Oskar Zahn (CFO) will host a virtual presentation and a Q&A session for investors and analysts today, 07 September 2023, at 9.00am BST. The presentation and webcast details are available on the Group's website at https://investors.eurowag.com

 

Please register to attend the investor presentation via the following link: https://www.lsegissuerservices.com/spark/WAGPAYMENTSOLUTIONS/events/1f78cd93-d600-4b62-9427-d827694c8ded 

 

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

https://services.choruscall.za.com/DiamondPassRegistration/register?confirmationNumber=7451850&linkSecurityString=1306449012

 

We are hosting our Capital Markets Day on 11 October 2023 from 8.30 to 13.00 in London. Please contact the investor relations team (investors@eurowag.com) if you would like to register to attend in person, or for those who are not based in London, we can provide a video link for the event. We would encourage investors and analysts to attend in person, as you will have the opportunity to meet the Executive team and you will be able to interact with some of our colleagues who will be showcasing some of our products and services.

 

 

ENQUIRIES


Eurowag
Carla Bloom

Head of Investor Relations and Communications

+44 (0) 789 109 4542

investors@eurowag.com

 

Instinctif Partners

Tim McCall, Galyna Kulachek, Bryn Woodward

IR and international media

+44 (0)20 7457 2020

eurowag@instinctif.com

 

About Eurowag

 

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

 

 

Chief Executive Officer's Review

 

Eurowag's purpose has always been about driving change within the CRT industry, helping it to become clean, fair, and efficient. The only way to achieve this is by digitising the industry through a digitally integrated solution. Today, the industry is still heavily reliant on analogue solutions and has a highly fragmented product and services eco-system. Eurowag has been innovating for three decades, evolving with its customers' needs and expanding its suite of missional critical products and services to keep them on the road. To help digitise the industry, Eurowag has more recently acquired or developed data solutions which our customers rely on to do their job. Innovation and M&A has accelerated Eurowag's transformation from a domestic fuel card provider to a pan-European integrated payments and mobility platform. Whilst Eurowag has integrated its legacy solutions, such as fuel cards, tolls and VAT refund solutions, its recent acquisitions still require integration, including people, technology, and products. The ambition of launching an integrated digital end-to-end platform has evolved with every new acquisition, and the first application is expected to launch in FY 2024. We will provide more details on our Capital Markets Day, on 11 October.

 

With the evolution of the business and change of revenue mix, a new strategic framework was set out at the start of the year, with the following strategic priorities:

 

1)   Be in every truck (attract)

·    We have signed our third OEM partnership, which will install the Eurowag app in every new truck produced. The three OEM partnerships cover around 45% of the European truck market today;

·    Integration plans are on track, with Webeye sales teams integrated into agile sales teams.

 

2)   Drive customer centricity (engage)

·    We have improved our customer self-care portal, further supporting an end-to-end digital user experience;

·    Mobile payments roll-out doubled, and we now have 800 acceptance points ready for self-authorisation.

 

3)   Grow core services (monetise)

·    We have expanded our EETS certification in the Czech Republic and Hungary;

·    We have maintained strong net average revenue retention, at over 110%.

 

4)   Expand platform capability (retain)

·    We have continued to develop our financial platform capability, in preparation of our e-wallet launch;

·    Our ERP implementation is on track for launch in the first quarter of 2024; this will bring significant operational efficiencies.

 

Operational Review

 

Payment solutions

 

The Payment solutions business segment currently represents the largest part of our ecosystem, and in the first half of 2023, contributed 61% of total net revenues, a figure we expect to reduce to approximately 55% with the full annualisation of the Inelo acquisition into our mobility segment. Payment solutions includes energy payments through pre- or post-paid fuel cards and toll payments. This is often the first introduction customers have to our services.

 

Energy payments

During the first half of the year, we have added 1,030 locations to our acceptance network ('POS'), taking our total active POS at the end of June to 12,000 stations across 23 European countries. During the first half, we have also completed the termination of a co-branded card scheme with WEX, which provided access to 5,450 sites. This long-term strategic move enabled us to arrange direct relationships with merchants, and streamline our network access to core international routes, which many of these sites were not. As a consequence, we maintain the strength and relevance of our network, and managed to overall improve user experience and security. In the first half, we also focused our efforts on opening more acceptance points in Germany, following our expansion into the DACH region last year, which supports our efforts to establish an important presence in one of Europe's vital trucking markets as well as cover the hotspots our customers' travel. In the second half of the year, we are focused on POS rollouts in Portugal, where a recent regulatory change to fuel prices facilitated expansion in this market.

 

We continue to focus on reducing carbon emissions and supporting our customers in the transition to alternative fuels; our liquefied natural gas1 (LNG) acceptance network currently comprises 398 contracted stations (representing more than 50% of the European market), while our compressed natural gas2 (CNG) acceptance network has 212 contracted stations. We recently opened two Eurowag-owned LNG bunkering stations in the Czech Republic, and we have seen positive momentum in both: in June of this year, 11% of our LNG sales were completed in these locations, compared to 2% in January. The majority of customers fuelling through these stations are from the Czech Republic and Slovakia, and more recently from Poland.

 

Notes:

1.     Liquefied natural gas (LNG) is natural gas that has been cooled down to liquid form. Natural gas burns significantly cleaner; produces lower emissions of sulphur, nitrogen, and carbon dioxide into the atmosphere.

2.     Compressed natural gas (CNG) is a natural gas under pressure that remains odourless, clear, and non-corrosive. Therefore, it is a greener, cheaper, and more efficient fuel.

 

Toll payments

Following the EETS certification received in the Czech Republic at the beginning of the year, we have also expanded to Hungary, where we now offer post-paid toll services. Both the Czech Republic and Hungary provide us with a solid foundation to continue our cross-selling efforts. As a consequence of this, in the first half of the year, we have seen a 46% increase in EVA onboarding units ("OBUs") sold, compared to the first half of 2022. We are also working on finalising the implementation of our direct relationship with toll chargers in Spain and Portugal and expect to be operational in these countries in the second half of the year.

 

We are in the final EETS certification phase in Slovakia, who will eventually turn off their national toll system. This means that Slovakia will be the first country in Europe to be serviced by certified EETS providers. As Eurowag will be among the first providers to be certified, we are well placed to sustain and potentially grow our current market share.

 

We have additional tailwinds in our toll business, with more European countries starting to implement mandatory CO2 reduction regulations, creating a favourable impact on our revenues.

 

Mobility solutions

 

The mobility solutions segment offers our customers Software as a Service (SaaS) solutions, such as fleet management, work time management, transport management, location-based products, navigation apps and tax refund services. In the first half of 2023, the mobility business segment represented 39% of total net revenue, a figure we expect to grow to approximately 45% with the full annualisation of the Inelo acquisition. Mobility solutions revenue is largely subscription based, representing a resilient and predictable revenue stream.

 

SaaS mobility solutions

Fleet management

Our fleet management services provide dispatchers and truck drivers with an enhanced understanding of their vehicles, through monitoring maintenance schedules, tracking fuel usage, driving times, loads and other important metrics, resulting in efficiency improvements and material cost and emissions reduction.

 

In the first half of the year, we have enhanced the Eurowag mobile application and introduced Cold Chain monitoring. This feature allows the safe transportation of fresh and frozen food products, medicine, and cosmetics.

 

Work time management

Inelo's work time management is a proprietary software enabling analysis and settlement of drivers' working time. Some of its key functionalities include downloading, archiving, and analysing data sourced from record sheets, driver cards, and digital tachographs. This allows for preparation of driver work hours settlements, while also detecting any potential manipulations.

 

Through work time management, enforcement authorities responsible for checking drivers' time can ensure that users stay up to date with any regulation. The software is used by over 4,500 inspectors in 25 EU countries.

 

Transport management

Inelo's transport management software is all about profitability management, as it allows automation and control of profitability over a single transport order. It covers transportation route planning, delivery coordination and driver controlling, supporting the entire order processing workflow. The software streamlines end-to-end order management, through order acceptance, monitoring delivery, and settlement and reporting, while also automating all logistics processes by allowing users to store data on all shippers, suppliers, carriers and end customers.   

 

Location-based products and services

We offer smart navigation products, location-based services and mobile navigation apps through our Sygic brand, one of the leaders in providing smart routing worldwide for both individual truck drivers and various vehicle sizes fleets.

 

During the first half of the year, we have continued to add improvements and updates to our Sygic Navigation app: truck drivers can now see fuel prices directly on the map, for ease of decision making. Sygic GPS Navigation is now available on Visteon's AllGo app store. Sygic's Road Lords application has been downloaded over 200,000 times in the first half of the year, with daily active users of just over 27,000.

 

In the first half of 2023 we signed a third contract with a European truck manufacturer; from next year, they will install Eurowag's application into every new dashboard before sale.

 

Tax refund services

During the first half of the year, we expanded our array of services to provide VAT refunds for Croatian customers and we have enhanced the user interface to optimise the experience for our customers.

 

Post-acquisition integrations

 

Following the acquisitions of Webeye (in mid-2022) and Inelo (in early 2023), the first half of the year was focused on integrating the new businesses both on an operational and personnel level whilst pursuing the first level of cross-sell opportunities stemming from the merged sales organisations.

 

At Webeye, several integration and consolidation workstreams have been created, to ensure a seamless transition. The Webeye and Eurowag sales teams are already working as one under agile, multi-competency sales teams, with ongoing lead generation campaigns, enabling cross-sell opportunities in both product portfolios. Webeye's core functions have been integrated within Eurowag's organisational structure, with further unification required in IT and HR processes.

 

While Inelo was acquired more recently, integration workstreams have been deployed. Inelo's management team are now reporting to the Eurowag executive team. The sales teams have seen good momentum on early cross-sell initiatives and continue to work on full integration into Agile sales teams by January 2024. Further levers for cross-sell are expected, following the introduction of the new platform during FY 2024.  

 

Sustainability

 

Our sustainability plan underpins our strategy and is focused on four areas: climate action, customer success and well-being, company governance, and culture and community impact. Eurowag's purpose is to make the CRT industry clean, fair, and efficient.

 

Aligning to our internal targets of reducing emissions, in the first half of 2023, we have switched the Prague office to renewable energy, saving nearly 500 tonnes of CO2 emissions.

 

As part of our ESG targets, our solutions also help our customers to reduce their own emissions. Our SME customers are often unaware of the CO2 from their use of fuel, and as a result we have launched a free CO2 calculator to help them understand their carbon footprint.

 

As a way to further support our drivers, our integration with Inelo brings working time management capabilities, ensuring the well-being of drivers and compliance of drivers' pay with labour regulations across Europe. Together with the Inelo team, we drew on their experience with road enforcement agencies to train and inform our customers about changes in EU Transport legislation.

 

As the integration of Webeye and Inelo continues, we have gained more data and more vehicles, and thus greater insights, helping our customers understand the impact of driving behaviour and load utilisation on fuel costs, emissions, and fleet maintenance.

 

At Eurowag, we recognise that diversity and inclusion are key pillars of achieving a rich culture, where people from all backgrounds are celebrated and together, they contribute to our success. We have recently evolved our People and Culture Ambassadors network, a community of Eurowag employees that is helping to drive improvement in our culture and employee engagement and experience. We have also launched our Women at Eurowag network, fostering a supportive community for personal and professional growth for our colleagues that identify as female.

 

We have also just concluded our 2023 Philanthropy & You programme for employee-led charitable donations and have over 1,000 employees engaged, supporting over 200 causes in over 14 countries.

 

Financial Review

 

In the face of challenging market and macro-economic conditions in Europe, Eurowag delivered a robust performance in the first half of 2023, demonstrating once again the inherent resilience of our business model and the mission critical nature of our services.

 

In the first half of 2023, at a headline level, net revenues grew by 36.9%, with payment solutions up 14.1% and mobility solutions up 98.6%. Adjusted EBITDA grew 43.5%. This strong growth was driven by robust underlying growth and contribution from recent acquisitions.

 

In the first half of 2023, organic net revenue growth was 14.4%, with organic payment solutions net revenue up 12.5%, and organic mobility solutions net revenue up 19.9%. Economic headwinds have impacted the CRT industry, with fewer kilometres driven and a slowdown in freight demand.

 

In the first half of 2023, our adjusted EBITDA increased by 43.5% to €50.2m (H1 2022: €35.0m) with adjusted EBITDA margin of 42.2% (H1 2022: 40.2%). Organic adjusted EBITDA was up 21.6% to €42.6m, with margins at 43.3% (H1 2022: 40.7%). Excluding the benefit from our currency risk management, organic adjusted EBITDA growth was 4.6%. The organic cost increases were mainly driven by employee expenses, of which half was from salary inflation increases, and technology expenses. 

 

On a statutory basis, profit before tax decreased by 36.7% year-on-year to €8.5m (H1 2022: €13.4m), mainly as a result of higher adjusting items, depreciation and amortisation and interest. Basic EPS decreased by 41.1% to 0.76 cents per share (H1 2022: 1.29 cents). Adjusted basic EPS increased year-on-year to 2.90 cents per share (H1 2022: 2.35 cents) driven mainly by profit of Inelo acquisition.

 

Net debt at the end of the reporting period was €300.9m (H1 2022: cash position of €28.7m). Our net leverage ratio, as expected, increased to 2.9x net debt to adjusted EBITDA.

 

In the first half of 2023, our transformational capital expenditure totalled €11.7m, while investments in our subsidiaries, associates, and financial investments amounted to €273.5m, which consists of the Inelo (€265.7m), Webeye (€7.6m), and JITPay (€0.2m) acquisitions.

 

Performance review

 

Below is a summary of the segmental performance and explanatory notes related to items including corporate expenses, alternative performance measures, taxation, interest, investment, and cash flow generation. 

 

Segments

 


H1 2023 (€m)

H1 2022 (€m)

YoY (€m)

YoY %

Segment revenue total 

1,017.6

1,160.8

(143.2)

(12.3)%

Payment solutions 

970.9

1,137.3

(166.4)

(14.6)%

Mobility solutions 

46.7

23.5

23.2

98.7%

Net energy and services sales total 

119.1

87.0

32.1

36.9%

Payment solutions 

72.4

63.5

8.9

14.1%

Mobility solutions 

46.7

23.5

23.2

98.6%

Expenses included in Contribution 

26.4

15.1

11.3

75.6%

Contribution total1 

92.6

71.9

20.7

28.8%

Payment solutions 

61.0

54.9

6.1

11.0%

Mobility solutions 

31.6

17.0

14.6

86.3%

Contribution margin total1 

78%

83%

 

 

Payment solutions 

84%

87%



Mobility solutions 

68%

72%



Corporate overhead and indirect costs before adjusting items 

(42.4)

(36.9)

5.5

14.9%

Adjusted EBITDA 

50.2

35.0

15.2

43.5%

Adjusting items affecting Adjusted EBITDA 

(10.0)

(5.5)

4.5

82.3%

EBITDA

40.2

29.5

10.7

36.3%

Depreciation and amortisation 

25.7

12.4

13.3

106.8%

Operating profit 

14.5

17.1

(2.6)

(15.2%)

 Note:

1.     Please refer to the section Explanation of Alternative Performance Measures for a definition and see note 9.

 

The Group's total revenues decreased by 12.3% year-on-year to €1,017.6m, driven by lower energy prices compared to the comparative period and lower volume of energy sales. Lower volumes of energy sales were driven by overall economic headwinds and the regulatory changes in Portugal. Despite the drop in energy sales prices, overall energy margin levels enabled the Group to grow net energy sales in the Payment solutions segment. 

 

The Group delivered double-digit net revenue growth and strong contribution margins in both segments. Growth in organic net revenue was 14.4%, while the overall net revenue increased by 36.9% year-on-year, which includes €7.4m contribution from Webeye and €13.3m from Inelo.

 

Payment solutions net revenue grew by 14.1% year-on-year. This increase reflects strong new customer and truck acquisitions, underpinned by strong average net revenue retention. Our underlying organic payments solution business was impacted by economic headwinds and changes in fuel regulation in Portugal.

 

Mobility solutions net revenue grew by 98.6% year-on-year, and organic mobility solutions net revenue was up 19.9%. This strong growth is the result of effective cross-selling, as well as sales to automotive partners and Webeye and Inelo consolidation. 

 

Corporate expenses

 


H1 2023 (€m)

H1 2022 (€m)

YoY (€m)

YoY %

Expenses included in Contribution

26.4

15.1

11.3

75.6%

Corporate overhead and indirect costs before adjusting items

42.4

36.9

5.5

14.9%

Adjusting items affecting Adjusted EBITDA

10.0

5.5

4.5

82.3%

Depreciation and amortisation

25.7

12.4

13.3

106.8%

Total

104.5

69.9

34.6

49.5%

 

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

 


H1 2023 (€m)

H1 2022 (€m)

YoY (€m)

YoY %

Employee expenses

46.4

32.8

13.7

41.7%

Technology expenses

8.7

3.9

4.8

123.6%

Impairment losses of financial assets

4.2

2.7

1.5

53.4%

Other operating income

(6.8)

(0.2)

(6.6)

273.8%

Other operating expenses

26.4

18.3

8.0

44.3%

Depreciation and amortisation

25.7

12.4

13.3

106.8%

Total

104.5

69.9

34.6

49.5%

 

Employee expenses increased by 41.7% year-on-year to €46.4m; excluding our acquisitions and adjusting items, organic employee expenses increased by 18.9% This growth was driven by salary increases communicated at the start of the year, as well as hiring the right people to support the business through the next phase of our transformation. Adjusting items included in employee expenses amounted to €4.8m for H1 2023 (H1 2022: €4.2m) and included pre-IPO share based remunerations (H1 2023: €3.7m and H1 2022: €3.3m).

 

Technology expenses increased by 123.6% year-on-year to €8.7m (H1 2022: €3.9m); excluding our acquisitions, organic technology expenses increased by 58.4%. This increase reflects the Group's focus on technology transformation, cloud transition, and expenses related to the new generation ERP system. Adjusting items included in technology expenses amounted to €1.9m in H1 2023 (H1 2022: €0.2m).

 

Impairment losses of financial assets amounted to €4.2m (H1 2022: €2.7m). The increase is connected primarily with our key markets, such as Poland, Romania, and Portugal, where the credit loss ratio increased slightly from 0.2% last year to 0.3% at the end of June 2023. Nevertheless, our overall receivables portfolio and cash collection remained robust.

 

Other operating expenses increased by 44.3% year-on-year to €26.4m (H1 2022: €18.3m), mainly due to acquisition-related expenses, with Webeye consolidation adding €1.4m and Inelo acquisition adding €3.9m. Adjusting items included in other operating expenses amounted to €3.3m for H1 2023 (H1 2022: €1.1m) and included expenses related to acquisitions of €2.2m (H1 2022: €0.5m) and strategic transformation costs of €1.1m (H1 2022: €0.5m).

 

Other operating income increased by 273.8% year-on-year to €6.8m (H1 2022: €0.2m), mainly driven by a favourable foreign exchange gain of €6.0m, as a result of our prudent currency risk management.

 

Depreciation and amortisation grew by 106.8% year-on-year to €25.7m (H1 2022: €12.4m) primarily due to the amortisation of acquired assets of Inelo and Webeye and partly due to transformational technology being put into production. Adjusting items included in depreciation and amortisation amounted to €6.8m for H1 2023 (H1 2022: €3.4m).

 

Net finance expense

 

Net finance expense in the first half of 2023 amounted to €5.7m (H1 2022: €3.3m). The increase mainly reflects higher factoring fees related to higher average factoring limits utilisation throughout the year, as well as higher interest costs related to increased borrowings.

 

Taxation

 

The Group tax charge of €2.9m (H1 2022: €4.3m) represents an effective tax rate of 34.2% (H1 2022: 31.7%). The tax charge in the first half of 2023 was influenced positively by lower profit for the six months period, lower taxes paid in respect of prior years and negatively by tax non-deductibility of adjusting items (mainly M&A related expenses and equity-settled share-based payments). Adjusted effective tax rate decreased to 18.3% (2022: 24.4%) largely due to lower taxes paid in respect of prior years. Adjusted effective tax rate calculation is presented in Note 13 of the condensed interim financial statements.

 

Corporate income tax for companies in the Czech Republic in 2022-2023 was 19%, in the UK the rate was 19% in 2022 and 25% in 2023, while in Spain it was set at 24%. These represent the major tax regimes in which the Group operates.

 

We adopted a prudent approach to our tax affairs, aligned with business transactions and economic activity. We have a constructive and good working relationship with the tax authorities in the countries in which we operate. There are outstanding tax audits in Italy, Bulgaria, Poland, and Romania, where no significant issues are expected.

 

EPS

 

Basic EPS for the first half of 2023 was 0.76 cents per share, a 41.1% year-on-year decrease. This was due to lower profit for the six months' period, with increased EBITDA reduced by higher depreciation and amortisation and increased finance expenses.

 

Adjusted basic EPS for the reporting period was 2.90 cents per share, which is an increase relative to the corresponding period last year. Weighted average number of ordinary shares in issue amounted to 688,911,333 in both H1 2023 and H1 2022, while diluted weighted average number of ordinary shares was 691,208,069 in H1 2023 (H1 2022: 689,429,273). After accounting for the impact of PSP, adjusted diluted earnings per share was 2.89 cents per share. Adjusting items are as described below in the Alternative performance measures section.

 

Investments in subsidiaries and associates

 

Acquisition of Inelo

 

Further to the subsequent events described in the 2022 Annual Report and Accounts, the acquisition of Inelo was completed on 15 March 2023.

 

The Group paid €215.3m in cash upon the acquisition of 100% of the share capital of Inelo on 15 March 2023 and repaid Inelo's bank borrowings of €53.6m on 16 March 2023. In addition, the Group will pay an additional consideration of €8.4m related to the final price adjustment to Inelo's acquisition of FireUp TMS subsidiary and €2.1m related to other purchase price adjustments identified at completion. There is also a contingent consideration, based on Inelo's EBITDA performance for the year to 31 December 2022, capped at €12.5m, which will (if applicable) become payable in the second half of 2023, following approval of the audited consolidated financial statements of Inelo. Full amount of contingent consideration was recognised as of 30 June 2023. The Group will either pay €12.5m or no consideration is payable.

 

Given the short period of time between the acquisition and preparation of the condensed interim financial statements, the amounts recorded below for the acquisition are provisional. Purchase price allocation activities are ongoing, and the preliminary fair value of assets and liabilities will be further revised.

 

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

 

EUR '000

Preliminary fair value recognised on acquisition of Inelo

Assets


Property, plant, and equipment

11,206

Identifiable intangible assets

102,066

Right of use assets

3,060

Trade receivables

8,540

Cash and cash equivalents

3,270

Inventories

1,674

Income tax receivables

943

Other non-current assets

124

Total assets

130,883

Liabilities


Interest-bearing loans and borrowings

59,136

Trade payables

13,138

Lease liabilities

3,146

Other non-current liabilities

418

Income tax liabilities

467

Deferred tax

18,063

Total liabilities

94,368

Total identifiable net assets as fair value

36,515

Non-controlling interest measured at % of net assets

(3,343)

Goodwill arising on acquisition

205,123

Purchase consideration


Cash paid

215,288

Deferred and contingent consideration

23,006

Total purchase consideration

238,294

 

From the date of acquisition until 30 June 2023, Inelo's subsidiaries contributed €13.3m of revenue and €3.5m profit after tax.

 

If the acquisition had occurred on 1 January 2023, consolidated revenue and consolidated profit after tax of Inelo's entities for the half year ended 30 June 2023 would have been €21.0m and €3.8m respectively. Excluding amortisation of acquired intangibles and adjusting items, the adjusted profit after tax would have been €7.1m.

 

Pay-out of deferred consideration

 

On 27 April 2023, the Group paid a contingent acquisition consideration of €2.1m related to the acquisition of Webeye. The consideration was subject to achievement of integration related milestones.

 

Further, on 17 May 2023, the Group paid a deferred acquisition consideration of €5.5m related to the acquisition of Webeye.

 

JITpay call option

 

On 4 July 2023, the Group announced it exercised its call option to acquire an additional 18.01% stake in JITpay's share capital from its founders, management, and Volksbank eG Braunschweig Wolfsburg, on a pro rata basis. The proceeds from the primary capital will be used to fund JITpay's further expansion.

 

The Group entered a strategic partnership with JITpay on 27 September 2022, when it acquired a 9.99% stake for an initial consideration of €14.3m, of which €3.5m was used as primary capital. As per the original agreement, the Group had a call option to acquire an additional 18.01% share, which could be exercised by 3 July 2023 for a consideration of €25.7m, of which €6.5m will be used as primary capital.

 

The purchase of the additional 18.01% stake in JITpay will be funded from existing funds and the transaction is subject to customary closing conditions, including clearance by the German Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin), and is expected to complete in the first half of 2024. The Transaction constitutes a Class 2 transaction for the purposes of the UK Financial Conduct Authority's Listing Rules. Following receipt of the German authorities' clearance, the investment in JITpay would change to an associate (28% equity interest).

 

The remaining 72% stake will continue to be held by existing shareholders. There are Call and Put arrangements in place that give the Group the option to acquire the remaining 72% stake of JITpay's share capital from 2025 onwards. The price of the Put or Call payable by the Group for the remainder of JITpay's share capital will be based on a multiple of 10x of the average of JITpay's profit before tax over the twelve-month period to 31 December 2024 and 31 December 2025 with the Put being subject to a cap of €129.3m.

 

Pay-out of deferred consideration related to Inelo

 

On 31 August 2023, the Group paid a deferred acquisition consideration of €8.4m related to the final price adjustment to Inelo's acquisition of FireUp TMS subsidiary.

 

Balance sheet

 

Net assets of the Group increased by 3.4% to €327.4m, mainly reflecting profit for 2023 and share-based payments impact.

 

Intangible assets of the Group excluding goodwill increased by €105.9m to €236.9m in the reporting period, predominantly due to the Inelo acquisition and investments in strategic technology transformation.

 

Goodwill comprises mainly CGU Energy of €40.2m, CGU Navigation of €34.6m and CGU Fleet management solutions (excluding Inelo) of €59.4m. Provisionally determined goodwill arising on the acquisition of Inelo is €205.1m. Goodwill is tested for impairment on an annual basis; as at 30 June 2023, the Group performed impairment test for the CGU Fleet management systems (excluding Inelo) as the recoverable amount of this CGU was closer to the carrying amount than all other CGUs as at 31 December 2022, no impairment was posted in the first half of 2023 (H1 2022: no impairment posted).

 

Inventories decreased by €1.3m to €19.0m, mainly due to lower value of energy stock corresponding to lower energy prices.

 

Trade and other receivables increased by €15.1m to €393.2m. Out of this, €6.0m is attributable to the Inelo acquisition, and the remaining increase is mainly due to seasonality, with December being our quietest month.

 

Trade and other payables increased by €28.5m to €426.7m, primarily due to deferred acquisition consideration either related to a new transaction in the first half of 2023 or to previous transactions which became payable in less than 12 months. There was a further impact of consolidating Inelo as at 30 June 2023 (€16.9m).

 

Cash performance 

 


H1 2023 (€m)

H1 2022 (€m)

YoY (€m)

YoY

Change %

Net cash generated from operating activities

1.5

16.4

(14.9)

(90.9%)

Net cash used in investing activities

(297.0)

(47.5)

(249.5)

525.4%

Net cash used in financing activities

200.0

(11.5)

211.5

(1,839.3%)

Net decrease in cash and cash equivalents

(95.5)

(42.6)

(52.9)

124.2%

Cash and cash equivalents at beginning of period

146.0

224.2

(78.2)

(34.9%)

Cash and cash equivalents at end of period (presented in statement of cash flows)

50.5

181.5

(131.0)

(72.2%)

Bank overdrafts 

29.9

0.0

29.9


Cash and cash equivalents at end of period (presented in statement of financial position)

80.4

181.5

(101.1)

(55.7%)

Interest-bearing loans and borrowings

381.3

152.8

228.5

149.5%

Net (debt)/ cash

(300.9)

28.7

(329.6)

(1,148.3%)

 

As at 30 June 2023, the Group's net debt position stood at €300.9m, compared with net cash position of €28.7m as at 30 June 2022.

 

The decrease in the level of cash is due to the cash outflows used in the acquisition of Inelo, in investing activities, including technology transformation investments, as well as repayments of borrowings.

 

Net cash flows from operating activities decreased to €1.5m from €16.4m in H1 2023, primarily due to working capital movement. The impact related to Adjusting items in the reporting period amounted to an outflow of €7.4m (H1 2022: €7.7m) and included €5.0m for acquisitions related expenses and €2.4m for strategic transformation expenses.

 

Interest paid increased to €7.6m (H1 2022: €2.3m), driven by a higher level of borrowings in the first half of 2023.               

 

Tax paid increased to €4.0m (H1 2022: €3.2m), which also includes an impact of the Inelo consolidation of €0.8m.

 

Net cash used in investing activities increased by €249.5m to €297.0m, largely due to the outflows in connection with investment in acquisitions and investments in transformational technology and asset base.

 

Net cash from financing activities amounted to an inflow of €200.0m in the reporting period, representing the drawdowns of borrowings partially offset by borrowings repayments and lease payments. 

 

Capital expenditure

 

Capital expenditure in the first half of 2023 amounted to €24.7m (H1 2022: €19.9m), of which €11.7m was spend relating to our transformational capex programme and €5.6m relating to the capital investment in Inelo and Webeye, which drove the year-on-year increase.   

 

The Group's ordinary capital expenditure was €12.9m (H1 2022: €6.6m), including the €5.6m capex investment in Inelo and Webeye. Both businesses have historically invested a higher percentage of net revenues, with Inelo spending half of its capex on hardware, and therefore our ordinary capital expenditure as a percent of net revenue increased to 10.9%.

 

The Group's transformational investment programme was €11.7m (H1 2022: €13.3m) and continued to focus on enhancing our sales and customer touchpoint channels, expanding our product capabilities, and building a cloud-based data system for the Group. This year we continued to improve our EETS product offering and continue to enhance our financing capabilities, enabling further automation and real-time finance management. We are also investing in building a cloud-base data system, which will encapsulate the large volumes of customer information we receive from all our products and services, allowing us to better utilise this data for both our business processes and customers.

 

With regards to our ERP implementation, which is being delivered in stages, the first stage launched last year and included energy billing, pricing, sales, and purchases, while the second stage is still on track to launch in Q1 2024 and includes improving our capabilities in our general ledger and group reporting processes.

 

We expect to finalise our transformational capex programme at the end of the year, on time and in budget. We will continue to invest in the business through ordinary capex, which we expect to be around 10 percent of net revenues, given the slightly higher capex ratio Inelo operates at. Through a combination of integration and the transition to a single technology platform, we expect to reduce duplications across IT, hardware, and technology processes over time.

 

 

Alternative performance measures

 

The Group has identified certain Alternative Performance Measures ("APMs") that it believes provide additional useful information to the readers of Consolidated Financial Statements and enhance the understanding of the Group's performance. These APMs are not defined within IFRS and are not considered to be a substitute for, or superior to, IFRS measures. These APMs may not be necessarily comparable to similarly titled measures used by other companies. Directors and management use these APMs alongside IFRS measures when budgeting and planning, and when reviewing business performance. Executive management bonus targets include an adjusted EBITDA measure and long-term incentive plans include an adjusted basic EPS measure. 

 


H1 2023 (€m)

H1 2022 (€m)

YoY (€m)

YoY

change %

Profit before tax

8.5

13.4

(4.9)

(36.7)%

Net finance expense and share of net loss of associates

6.0

3.7

2.3

65.1%

Depreciation and amortisation

25.7

12.4

13.3

106.8%

EBITDA

40.2

29.5

10.7

36.3%

M&A-related expenses

2.7

0.5

2.2

418.9%

Strategic transformation expenses

3.6

1.7

1.9

118.2%

Share-based compensation

3.7

3.3

0.4

11.1%

Adjusting items

10.0

5.5

4.5

82.3%

Adjusted EBITDA

50.2

35.0

15.2

43.5%

 


H1 2023 (€m)

H1 2022 (€m)

YoY (€m)

YoY

change

Profit for the year

5.6

9.2

(3.6)

(39.1)%

Amortisation of acquired intangibles

6.8

2.8

4.0

144.7%

Amortisation due to transformational useful life changes

0

0.7

(0.7)

(100.0)%

Adjusting items affecting Adjusted EBITDA

10.0

5.5

4.5

82.3%

Tax effect

(1.7)

(1.3)

(0.4)

44.5%

Adjusted earnings (net profit) 

20.7

16.9

3.8

22.2%

 


H1 2023

H1 2022

YoY

YoY

change

Adjusted net profit attributable to equity holders (€m)

19.9

16.2

3.7

23.1%

Basic weighted average number of shares

688,911,333

688,911,333

-

-

Adjusted basic EPS (cents/share)

2.90

2.35

0.6

23.1%

 

Acquisition-related expenses are fees and other costs relating to the Group's M&A activity. Acquisition-related expenses differ every year based on the acquisition activity of the Group. Exclusion of these costs allows for better comparability.

 

Strategic transformation expenses are costs relating to broadening the skill bases of the Group's employees (including executive search and recruiting costs, and were relevant for H1 2022), as well as costs relating to transformation of key IT systems. In 2023, Inelo integration costs were also included.

 

In addition, adjustment has been made for the compensation provided to the Group's management before the IPO. These legacy incentives comprise a combination of cash and share-based payments, and those that have not yet vested will vest across each of the subsequent financial years ending 31 December 2024. The Group believes that it is appropriate to treat these costs as an adjusting item as they relate to a one-off award, designed and implemented whilst the Group was under private ownership (and are reasonably typical of that market and appropriate in that context). The Group now operates in a new environment and the Remuneration Committee has applied the Remuneration Policy in a listed- company context; hence, similar awards are not expected in future. For clarity, where share-based payment charges arise as a consequence of the operation of the Group's post-IPO Remuneration Policy, these are not treated as adjusting items as they represent a non-cash element of the annual remuneration package. This includes costs of €2.0m in the first half of 2023 relating to grants in connection with the awards vesting in 2024 and 2025.

 

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

 

Amortisation due to transformational useful-life changes represents accelerated amortisation of assets being replaced by the strategic transformation of the Group. No such adjustment was relevant for the first half of 2023.

 

Capital allocation

 

Our priority will continue to be organic and inorganic investment to drive long term sustainable growth. Our transformational capital expenditure of €50m, during 2022 and 2023, to develop our integrated end-to-end digital platform, remains on track to complete at the end of this year. We will continue to invest in the platform in parallel with integrating the businesses we acquired, which will require ordinary capital expenditure of around 10 percent of net revenues. With the delivery of the platform next year, along with integrating the technologies and products of our acquired businesses, we expect to reduce duplications across IT, hardware, and technology processes over time.

 

With the recent acquisition of Inelo, our leverage ratio, as expected, has exceeded the top end of our medium-term guidance range of 1.5x to 2.5x net debt to adjusted EBITDA, to 2.9x at the end of the period. Our priority is to return to within the target range. M&A is still important to us, and we will continue to consider value-accretive M&A opportunities in our current and adjacent markets, and in product and technologies that will accelerate growth. However, we remain disciplined and want to maintain our strong and robust balance sheet. As set out in our financial guidance, the Group does not intend to pay dividends, as we continue to prioritise investment in growth.

 

Treasury management 

 

As part of the refinancing project last September for our new Multicurrency Term and Revolving Facilities Agreement, we have agreed with the lenders to incorporate some of our medium term ESG targets within the KPIs. These include reduction of GHG emissions for us and our customers and increased female leadership in the organisation. Under the terms of the agreement, applicable margin adjustments relating to our committed facilities will be contingent on meeting our ESG targets. The first applicable year will be from FY 2024, based on FY 2023 results. This commitment will further drive incentivisation across our organization to ensure we meet our targets and shows our commitment to making the industry clean, fair, and efficient.

In May 2023, the Group utilised €50m under the uncommitted Incremental Facility, which was secured as part of the refinancing last year, and supported capital expenditure initiatives.

The maturity period for all term loan facilities and for the revolving credit facility is 5 years. Facility A of €150m and B of €180m will amortise in quarterly repayments starting on 31 March 2023, with a €45m and €54m balloon respectively. Incremental Facility I of €50m will amortise in quarterly repayments, starting on 30 September 2023, with a €15m balloon.

The new club financing agreement contains financial covenants at the Group level. Financial covenants are governed by financial definitions under the agreement. Financial covenants are tested semi-annually based on announced financials.

 

Covenant

Calculation

Target

Actual

30 June 2023

Interest cover

the ratio of adjusted EBITDA to finance charges

Min 4.00

7.52

Net leverage

the ratio of total net debt to adjusted EBITDA

Max 4.00¹

2.87

Adjusted net leverage

the ratio of the adjusted total net debt to adjusted EBITDA

Max 6.50

4.24

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


The Group has effectively managed its floating EURIBOR interest rate exposure on existing term loans through the execution of zero floor interest rate swaps. The swaps were structured with varying hedge ratios, providing Facility A and Facility B coverage of 100% in 2023 and 2024, 75% in 2025, 50% in 2026, and 25% in 2027. Incremental Facility I has not been hedged. This strategic approach demonstrates the Group's proactive risk management practices and commitment to financial stability.

 

With respect to Facility A, interest rate swaps executed in 2019 for the amount of €120.0m (unamortised) have an effective payable fixed rate of 0.1% and are expected to expire in 2024. Interest rate swaps executed in 2022 but effective in 2023 for the amount of €30.0m (amortised) have an effective payable fixed rate of 2.7% and are expected to expire in 2027. The latter have a complementary amortizing profile in order to achieve the above-mentioned hedge ratio.

 

With respect to Facility B, interest rate swaps executed in 2023 for the amount of €173.0m (amortised) have an effective payable fixed rate between 3.2% and 3.5% and are expected to expire by 2027.

 

Throughout 2023, the Group has effectively managed its working capital needs through the use of uncommitted factoring facilities, with average financing limits of €124m and average utilisation of 77.8% (H1 2022: €97.6m and 58.1% respectively). This demonstrates the Group's proactive approach to maintaining a strong financial position, and its ability to optimise working capital.

 

Directors' responsibility statement

 

We confirm that to the best of our knowledge:

The unaudited condensed consolidated financial statements have been prepared in accordance with UK-adopted IAS 34 Interim Financial Reporting.

 

The interim management report includes a fair review of the information required by:

(a) DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

 

(b) DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report in the Financial statements dated 16 March 2023 that could do so.

 

On behalf of the Board of Directors

 

Martin Vohánka

Chief Executive Officer





Financial statements

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(EUR '000)

 


Notes

For the six months ended 30 June


2023

(unaudited)

2022

(unaudited)

Revenue from contracts with customers

7

1,017,586

1,160,815

Costs of energy sold


 (898,503)

(1,073,837)

Net energy and services sales

7

119,083

86,978

 




Other operating income

 8

6,781

221

Employee expenses

10

 (46,423)

(32,768)

Impairment losses of financial assets


 (4,171)

(2,719)

Technology expenses


 (8,680)

(3,882)

Other operating expenses


 (26,374)

(18,325)

Operating profit before depreciation and amortisation (EBITDA)


40,216

29,505

Analysed as:




Adjusting items

9

10,025

5,498

Adjusted EBITDA

9

50,241

35,003





Depreciation and amortisation

9

 (25,708)

(12,431)

Operating profit

 

14,508

17,074

Finance income

12

5,262

1,275

Finance costs

11

 (10,960)

(4,553)

Share of net loss of associates


 (298)

(353)

Profit before tax

 

8,512

13,443

Income tax expense

13

 (2,914)

(4,256)

PROFIT FOR THE YEAR

 

5,597

9,187

 




OTHER COMPREHENSIVE INCOME

 



Other comprehensive income to be reclassified to profit or loss in subsequent periods

 



Change in fair value of cash flow hedge recognised in equity


(92)

4,976

Exchange differences on translation of foreign operations


2,390

302

Deferred tax related to other comprehensive income


-

-

TOTAL OTHER COMPREHENSIVE INCOME

 

2,298

5,278

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

 

7,895

14,465

Total profit for the financial year attributable to equity holders of the Company


5,245

8,902

Total profit for the financial year attributable to non-controlling interests


353

285

Total comprehensive income for the financial year attributable to equity holders of the Company


7,538

14,137

Total comprehensive income for the financial year attributable to non-controlling interests


357

328





Earnings per share (in cents per share):

18



Basic earnings per share


0.76

1.29

Diluted earnings per share


0.76

1.29

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

(EUR '000)

 

 

Notes

As at

30 June 2023 (unaudited)

31 December 2022

ASSETS

 


Non-current assets

 



Intangible assets

14

579,605

268,171

Property, plant and equipment

14

52,217

39,826

Right-of-use assets


16,491

13,340

Investments in associates


11,925

12,223

Financial assets at fair value through other comprehensive income


14,579

14,364

Deferred tax assets


10,748

10,505

Derivative assets

6

1,415

3,093

Other non-current assets


4,296

3,791

Total non-current assets

 

691,276

365,313

Current assets




Inventories

15

19,037

20,291

Trade and other receivables

16

393,207

378,152

Income tax receivables


2,591

1,800

Derivative assets

6

7,835

3,851

Cash and cash equivalents

17

80,444

146,003

Total current assets

 

503,114

550,097

TOTAL ASSETS


1,194,390

915,410

SHAREHOLDERS' EQUITY AND LIABILITIES




Share capital


8,107

8,107

Share premium


2,958

2,958

Merger reserve


 (25,963)

(25,963)

Other reserves


12,635

10,342

Business combinations equity adjustment


 (18,372)

(12,526)

Retained earnings


340,094

329,362

Equity attributable to equity holders of the Company

 

319,459

312,280

Non-controlling interests


7,983

4,283

Total equity

 

327,442

316,563

Non-current liabilities




Interest-bearing loans and borrowings

19

290,692

121,272

Lease liabilities


11,949

9,510

Deferred tax liabilities


27,009

8,677

Derivative liabilities

6

153

186

Other non-current liabilities

20

8,504

27,376

Total non-current liabilities

 

338,307

167,021

Current liabilities




Trade and other payables

20

426,725

398,235

Interest-bearing loans and borrowings

19

90,616

21,884

Lease liabilities


4,580

3,917

Provisions


2,131

2,124

Income tax liabilities


4,579

5,649

Derivative liabilities

6

10

17

Total current liabilities

 

528,542

431,826

TOTAL EQUITY AND LIABILITIES


1,194,390

915,410

 

The accompanying notes form an integral part of these financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited) 

(EUR '000)

 

Notes

Share capital

Share premium

Other reserves

Merger reserve

Business combinations equity adjustment

Retained earnings

Total equity attributable to equity holders of the parent

Non-controlling interests

Total equity

At 1 January 2022

 

38,113

194,763

1,465

(25,963)

(17,046)

84,526

275,858

8,889

284,747

Profit for the year


-

-

-

-

-

8,902

8,902

285

9,187

Other comprehensive income


-

-

5,235

-

-

-

5,235

43

5,278

Total comprehensive income

 

-

-

5,235

-

-

8,902

14,137

328

14,465

 

Capital reduction


(30,006)

(191,805)

-

-

-

221,811

-

-

-

Dividends paid


-

-

-

-

-

-

-

(57)

(57)

Share-based payments


-

-

-

-

-

3,618

3,618

-

3,618

Put options held by non-controlling interests


-

-

-

-

(174)

-

(174)

-

(174)

At 30 June 2022

 

8,107

2,958

6,700

(25,963)

(17,220)

318,857

293,439

9,160

302,599

 

 

 

 

 

 

 

 

 

 

 

At 1 January 2023

 

8,107

2,958

10,342

(25,963)

(12,526)

329,362

312,280

4,283

316,563

Profit for the year


-

-

-

-

-

5,245

5,245

352

5,597

Other comprehensive income


-

-

2,293

-

-

-

2,293

5

2,298

Total comprehensive income

 

-

-

2,293

-

-

5,245

7,538

357

7,895

 

Acquisition of subsidiaries

5

-

-

-

-

(5,809)

-

(5,809)

3,343

(2,466)

Share-based payments

10

-

-

-

-

-

5,487

5,487

-

5,487

Put options held by non-controlling interests


-

-

-

-

(37)

-

(37)

-

(37)

At 30 June 2023

 

8,107

2,958

12,635

(25,963)

(18,372)

340,094

319,459

7,983

327,442


CONSOLIDATED STATEMENT OF CASH FLOWS

(EUR '000)

 


Notes

For the six months ended 30 June


2023

(unaudited)

2022

(unaudited)

Cash flows from operating activities

 



Profit before tax for the period


8,512

13,443

Non-cash adjustments:




Depreciation and amortisation

14

25,708

12,431

Gain on disposal of non-current assets


(200)

(51)

Interest income


(133)

(79)

Interest expense


8,278

2,650

Movements in provisions


7

17

Impairment losses of financial assets


4,171

2,719

Movements in allowances for inventories


4

-

Foreign currency exchange rate differences


(1,611)

39

Fair value revaluation of derivatives


(1,745)

457

Share-based payments


5,487

3,618

Other non-cash items


462

423

Working capital adjustments:

 



(Increase)/decrease in trade and other receivables and prepayments


(11,288)

(134,596)

(Increase)/decrease in inventories


2,960

(9,302)

Increase in trade and other payables


(27,684)

130,046





Interest received


133

79

Interest paid


(7,555)

(2,261)

Income tax paid


(4,005)

(3,207)

Net cash flows (used in)/generated from operating activities


1,501

16,417

 




Cash flows from investing activities

 



Proceeds from sale of property, plant and equipment


1,442

144

Purchase of property, plant and equipment


(5,681)

(3,664)

Purchase of intangible assets


(19,331)

(18,104)

Purchase of financial instruments


(215)

-

Payments for acquisition of subsidiaries, net of cash acquired


(273,259)

(22,924)

Investment in associates


-

(3,000)

Net cash used in investing activities


(297,044)

 (47,548)

 




Cash flows from financing activities

 



Payment of principal elements of lease liabilities


(2,381)

(1,415)

Proceeds from borrowings


228,391

-

Repayment of borrowings


(25,991)

(10,012)

Dividend payments


-

(57)

Net cash (used in) / generated from financing activities


200,019

(11,484)

 




Net (decrease)/increase in cash and cash equivalents


(95,524)

(42,614)

Effect of exchange rate changes on cash and cash equivalents


-

-

Cash and cash equivalents at beginning of period


146,001

224,154

Cash and cash equivalents at end of period

17

50,477

181,540





1. CORPORATE INFORMATION

 

W.A.G payment solutions plc (the "Company" or the "Parent") is a public limited company incorporated and domiciled in the United Kingdom and registered under the laws of England & Wales under company number 13544823 with its registered address at Third Floor (East), Albemarle House, 1 Albemarle Street, London W1S 4HA. The ordinary shares of the Company were admitted to the premium listing segment of the Official List of the UK Financial Conduct Authority and have traded on the London Stock Exchange plc's main market for listed securities on 13 October 2021.

 

The Parent and its subsidiaries (together the "Group") are principally engaged in:

 

·    Providing payment solutions for fleets of professional transport and forwarding companies, as well as running a network of truck parks for commercial road transportation;

·    Providing unified way of electronic toll payments on a number of European road networks for fleets of professional transport and forwarding companies;

·    Recovery of VAT refunds and excise duty from European countries;

·    Creating an automated journey book and optimising traffic with the use of integrated digital maps;

·    Combine advanced solutions in the field of electronics, software engineering and applied mathematics;

·    Sale of navigation licenses; and

·    Other services.

 

These condensed interim financial statements were approved for issue on 7 September 2023 and have been neither reviewed nor audited.

 

These condensed interim financial statements do not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2022 were approved by the board of directors on 16 March 2023 and delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under section 498 of the Companies Act 2006.

 

2. BASIS OF PREPARATION

 

The condensed interim financial statements for the six-months ended 30 June 2023 have been prepared in accordance with UK-adopted IAS 34 Interim Financial Reporting and the Disclosure and Transparency Rules of the Financial Conduct Authority. The condensed interim financial statements should be read in conjunction with the Annual Report and Consolidated financial statements for the year ended 31 December 2022, which have been prepared in accordance with UK-adopted International Accounting Standards (UK-adopted IFRS).

 

The condensed interim financial statements have been prepared on a historical cost basis, except for derivative financial instruments that have been measured at fair value. The interim condensed financial statements are presented in EUR and all values are rounded to the nearest thousand (EUR '000), except where otherwise indicated.

 

These unaudited condensed interim financial statements have been prepared on the going concern basis. The Board has considered the financial prospects of the Company and Group for the foreseeable future, over the period to 31 December 2024, and made an assessment of the Company's and Group's ability to continue as a going concern. The Board's assessment included consideration of the availability of the Company's and Group's credit facilities, cash flow forecasts and stress test scenarios. Stress test scenarios applied in the Going Concern statement are in line with scenarios covered in the Viability statement. The Board is satisfied that the Company and Group have the resources to continue operating the business for the foreseeable future, and furthermore are not aware of any material uncertainties that may cast significant doubt upon the Company's and Group's ability to continue as a going concern and the Board considers it is appropriate to adopt the going concern basis of accounting in preparing the condensed interim financial statements.

 

The Board is satisfied that the Company and Group have the resources to continue operating the business for the foreseeable future, and furthermore are not aware of any material uncertainties that may cast significant doubt upon the Company's and Group's ability to continue as a going concern and the Board considers it is appropriate to adopt the going concern basis of accounting in preparing the condensed interim financial statements.

 

The condensed interim financial statements are prepared for the six months beginning on 1 January and ending on 30 June 2023.

 

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

The accounting policies adopted, as well as significant judgements and key estimates applied, are consistent with those in the annual financial statements for the year ended 31 December 2022, as described in those financial statements, except as described below:

 

·    Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual profit or loss.

 

4. CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES, ADOPTION OF NEW AND REVISED STANDARDS

 

4.1. Application of new IFRS - standards and interpretations effective in the reporting period

 

The Group has applied the following standards and amendments for the first time for their annual reporting period commencing 1 January 2023:

 

·    IFRS17 Insurance Contracts;

·    Amendments to IAS 8 - Definition of Accounting Estimates;

·    Amendments to IAS 12 - Deferred tax related to assets and liabilities arising from a single transaction;

·    Amendments to IAS 1 and IFRS Practice Statement 2 - Disclosure of Accounting policies.

 

These Amendments did not have a significant impact on the Group's condensed interim financial statements.

 

4.2. NEW IFRSs and IFRICs published by the IASB that are not yet effective

 

Certain new accounting standards, amendments to accounting standards and interpretations have been published that are not mandatory for period commencing 1 January 2023 and have not been early adopted by the Group. These new standards, amendments and interpretations are not expected to have any significant impacts on the Group's condensed interim financial statements.

 

5. BUSINESS COMBINATION

 

As of 30 June 2023, the following acquisitions took place:

 

Acquisition of Inelo

 

Further to the subsequent events described in the 2022 Annual Report and Accounts, the acquisition of Inelo was completed on 15 March 2023.

The Group paid 215.3m in cash upon the acquisition of 100% of the share capital of Inelo on 15 March 2023 and repaid Inelo's bank borrowings of 53.6m on 16 March 2023. In addition, the Group will pay an additional consideration of 8.4m related to the final price adjustment to Inelo's acquisition of FireUp TMS subsidiary and €2.1m related to other purchase price adjustments identified at completion. There is also a contingent consideration, based on Inelo's EBITDA performance for the year to 31 December 2022, capped at 12.5m, which will (if applicable) become payable in the second half of 2023, following approval of the audited consolidated financial statements of Inelo. Full amount of contingent consideration was recognised as of 30 June 2023. The Group will either pay €12.5m or no consideration is payable.

Given the short period of time between the acquisition and preparation of these condensed interim financial statements, the amounts recorded below for the acquisition are provisional. Purchase price allocation activities are ongoing, and the preliminary fair value of assets and liabilities will be further revised.

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

EUR '000

Preliminary fair value recognized on acquisition of Inelo

Assets


Property, plant and equipment

11,206

Identifiable intangible assets

102,066

Right of use assets

3,060

Other non-current assets

124

Trade receivables

8,540

Inventories

1,674

Income tax receivables

943

Cash and cash equivalents

3,270

Total Assets

130,883

 


Liabilities


Interest-bearing loans and borrowings

59,136

Trade payables

13,138

Lease liabilities

3,146

Other non-current liabilities

418

Income tax liabilities

467

Deferred tax

18,063

Total Liabilities

94,368

Total identifiable net assets at fair value

36,515

Non-controlling interest measured at % of net assets

(3,343)

Goodwill arising on acquisition

205,123

 

 

Purchase consideration:

 

Cash paid

215,288

Deferred and contingent consideration

23,006

Total purchase consideration

                                    238,294   

 

The goodwill is attributable to expected synergies from combining operations, workforce and other unrecognisable intangible assets. It will not be deductible for tax purposes.

 

The gross contractual receivables acquired amounted to €9,931 thousand. At acquisition date, there were €1,272 thousand of contractual cash flows not expected to be collected.

 

From the date of acquisition until 30 June 2023, Inelo's subsidiaries contributed €13,291 thousand of revenue and €3,500 thousand profit after tax.

 

If the acquisition had occurred on 1 January 2023, consolidated revenue and consolidated profit after tax of Inelo's entities for the half year ended 30 June 2023 would have been €20,965 thousand and €3,811 thousand respectively. Excluding amortisation of acquired intangibles and adjusting items the adjusted profit after tax would have been €7,113 thousand.

As the deferred consideration is of short-term nature, no discounting has been applied to the amount payable.

Transaction costs are disclosed at the end of this note.

Pay-out of deferred consideration

On 27 April 2023, the Group paid first part of deferred and contingent acquisition consideration of 2,064 thousand related to acquisition of Webeye.

Further, on 17 May 2023, the Group paid second part of deferred acquisition consideration of 5,500 thousand related to acquisition of Webeye.

Other disclosures

Net outflows of cash to acquire subsidiaries were as follows:

EUR '000

30 June 2023 (unaudited)

30 June 2022 (unaudited)

Cash consideration paid

222,852

23,319

Repayment of acquiree's debt

53,676

-

Cash acquired

(3,270)

(395)

Net outflow of cash - investing activities

273,259

22,924

 

Cost of acquisition of subsidiaries recognised in other operating expense:

EUR '000

For the six months ended 30 June

2023 (unaudited)

2022 (unaudited)

Acquisition costs

2,719

524

 

6. FAIR VALUE MEASUREMENT

 

The following table provides the fair value measurement hierarchy of the Group's assets and liabilities.

Fair value measurement hierarchy for assets and liabilities as at 30 June 2023 (unaudited):

EUR '000

Note

Date of valuation

Fair value measurement using

Total

Quoted prices in active markets (Level 1)

Significant observable inputs
(Level 2)

Significant unobservable inputs
(Level 3)

Assets measured at fair value







Financial assets at fair value through other comprehensive income (FVTOCI)


30 June 2023

-

-

14,579

14,579

Derivative financial assets






 

Foreign currency forwards


30 June 2023

-

2,329

-

2,329

Interest rate swaps


30 June 2023

-

6,921

-

6,921

Liabilities measured at fair value

 

 




 

Derivative financial liabilities






 

Foreign currency forwards


30 June 2023

-

5

-

5

Put options


30 June 2023

-

-

153

153

Interest rate swaps


30 June 2023

-

5

-

5

 

As of 30 June 2023, fair value measurement of financial assets at FVTOCI was performed by an independent valuator. The carrying value as of 31 December 2022 falls within the range of the valuation as of 30 June 2023, with a midpoint being higher than the carrying amount. Therefore, we decided to be prudent and keep the value as it was as of 31 December 2022.

There have been no transfers between Level 1, Level 2 and Level 3 during the six months ended 30 June 2023.

Fair value measurement hierarchy for assets and liabilities as at 31 December 2022:

EUR '000

Note

Date of valuation

Fair value measurement using

Total

Quoted prices in active markets (Level 1)

Significant observable inputs
(Level 2)

Significant unobservable inputs
(Level 3)

Assets measured at fair value







Financial assets at fair value through other comprehensive income (FVTOCI)


31 December 2022

-

-

14,364

14,364

Derivative financial assets






 

Foreign currency forwards


31 December 2022

-

1

-

1

Interest rate swaps


31 December 2022

-

6,943

-

6,943

Liabilities measured at fair value

 

 




 

Derivative financial liabilities






 

Foreign currency forwards


31 December 2022

-

17

-

17

Put options


31 December 2022

-

-

153

153

Interest rate swaps


31 December 2022

-

33

-

33

 

There have been no transfers between Level 1, Level 2 and Level 3 during the year ended 31 December 2022.

Specific valuation techniques used to value financial instruments include:

·    for interest rate swaps - the present value of the estimated future cash flows based on observable yield curves;

·    for foreign currency forwards - the present value of future cash flows based on the forward exchange rates at the balance sheet date;

·    for put options - option pricing models (Monte Carlo); and

·    for other financial instruments - discounted cash flow analysis.

The Group engaged independent experts to perform valuation of FVTOCI based on discounted cash-flows. The main level 3 inputs used are:

·    discount rate;

·    revenue growth rate.

Reasonably possible change in the above inputs does not lead to a significant change in the fair value of the financial asset.

Management assessed that the fair values of cash and cash equivalents, trade and other receivables and trade and other payables approximates their carrying amounts largely due to the short-term maturities of these instruments. Interest-bearing loans and borrowings are at floating rates with margin corresponding to market margins and credit rating of the Company has not significantly changed since refinancing in September 2022.

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

7. SEGMENTAL ANALYSIS

 

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker ("CODM"). The Group considers the Executive Committee to be the CODM effective from July 2021. The Board of Directors of W.A.G. payments solutions, a.s. was considered as CODM prior to that date. The CODM reviews net energy and services sales and contribution to evaluate segment performance and allocate resources to the overall business.

 

For management purposes and based on internal reporting information, the Group is organised in two operating segments: Payment solutions and Mobility solutions. Payment solutions represent Group's revenues, which are based on recurring and frequent transactional payments. The segment includes Energy and Toll payments, which are a typical first choice of a new customer. Mobility solutions represent a number of services, which are either subscription based or subsequently sold to customers using Payment solutions products. The segment includes Tax refund, Fleet management solutions, Navigation, and other service offerings.

 

Net energy and services sales, contribution, contribution margin, EBITDA, and Adjusted EBITDA are non-GAAP measures, see Note 9.

 

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

 

Six months ended 30 June 2023 (unaudited)
EUR '000

Payment solutions

Mobility solutions

Total

Segment revenue

970,921

46,665

1,017,586

Net energy and services sales

72,418

46,665

119,083




 

Contribution

61,004

31,621

92,624

Contribution margin

84%

68%

78%

Corporate overhead and indirect costs before adjusting items



(42,383)

Adjusting items affecting Adjusted EBITDA



(10,025)

Depreciation and amortisation



(25,708)

Net finance costs and share of net loss of associates



(5,996)

Profit before tax

 

 

8,512


Six months ended 30 June 2022 (unaudited)
EUR '000

Payment solutions

Mobility solutions

Total

Segment revenue

1,137,314

23,501

1,160,815

Net energy and services sales

63,477

23,501

86,978




 

Contribution

54,938

16,971

71,909

Contribution margin

87%

72%

83%

Corporate overhead and indirect costs before adjusting items



(36,906)

Adjusting items affecting Adjusted EBITDA



 (5,498)

Depreciation and amortisation



 (12,431)

Net finance costs and share of net loss of associates



 (3,631)

Profit before tax

 

 

13,443


Geographical split - segment revenue from contracts with customers

The geographical analysis is derived from the base location of responsible sales teams, rather than reflecting the geographical location of the actual transaction.

EUR '000

For the six months ended 30 June

2023 (unaudited)

2022 (unaudited)

Czech Republic ("CZ")

219,845

242,813

Poland ("PL")

180,975

199,284

Central Cluster (excluding CZ and PL)

124,998

133,417

Portugal ("PT")

109,201

205,110

Western Cluster (excluding PT)

50,003

38,117

Romania ("RO")

144,905

153,735

Southern Cluster (excluding RO)

183,210

183,556

Not specified

4,449

4,783

Total

1,017,586

1,160,815

 

There were no individually significant customers, which would represent 10% of revenue or more.

Geographical split - net energy and services sales

EUR '000

For the six months ended 30 June

2023 (unaudited)

2022 (unaudited)

Czech Republic

18,928

15,861

Poland

25,554

15,323

Central Cluster (excluding CZ and PL)

15,048

12,120

Portugal

5,576

8,638

Western Cluster (excluding PT)

4,627

3,492

Romania

16,890

12,570

Southern Cluster (excluding RO)

28,860

15,559

Not specified

3,600

3,415

Total

119,083

86,978

 

Timing of revenue recognition was as follows:

EUR '000

For the six months ended 30 June

2023 (unaudited)

2022 (unaudited)

Payment solutions



Goods and services transferred at a point in time

952,248

1,125,804

Services transferred over time

18,672

11,510


970,920

1,137,314




Mobility solutions



Goods and services transferred at a point in time

8,242

6,357

Services transferred over time

38,424

17,144


46,666

23,501




Total segment revenue

1,017,586

1,160,815

 

8. OTHER OPERATING INCOME

 

EUR '000

For the six months ended 30 June

2023

2022

Revaluation of foreign currency forwards

5,953

-

Other income

828

221

Total

6,781

221

 

 

9. ALTERNATIVE PERFORMANCE MEASURES

 

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

The Group uses Alternative Performance Measures ("APMs") to provide additional information to investors and to enhance their understanding of its results. The APMs should be viewed as complementary to, rather than a substitute for, the figures determined according to IFRS. Moreover, these metrics may be defined or calculated differently by other companies, and, as a result, they may not be comparable to similar metrics calculated by the Group's peers.

Net energy and services sales

Net energy and services sales is an alternative performance measure, which is calculated as total revenues from contracts with customers, less cost of energy sold. The Group believes this subtotal is relevant to an understanding of its financial performance on the basis that it adjusts for the volatility in underlying energy prices. The Group has discretion in establishing final energy price independent from the prices of its suppliers, as explained in its accounting policies.

This measure also supports comparability of the Group's performance with other entities, who have concluded that they act as an agent in the sale of energy and, therefore, report revenues net of energy purchased.

Contribution

Contribution is defined as net energy and services sales less operating costs that can be directly attributed to or controlled by the segments. Contribution does not include indirect costs and allocations of shared costs that are managed at a group level and hence shown separately under Indirect costs and corporate overhead.

The CODM reviews net energy and services sales and contribution to evaluate segment performance and allocate resources to the overall business (Note 7).

Contribution margin

Contribution margin represents, for each of the Group's two operating segments, that segment's contribution as a proportion of that segment's Net energy and services sales.

EBITDA

EBITDA is defined as operating profit before depreciation and amortisation.

The Group presents EBITDA because it is widely used by securities analysts, investors, and other interested parties to evaluate the profitability of companies. EBITDA eliminates potential differences in performance caused by variations in capital structures (affecting net finance costs), tax positions (such as the availability of net operating losses, against which to relieve taxable profits), the cost and age of tangible assets (affecting relative depreciation expense), the extent to which intangible assets are identifiable (affecting relative amortisation expense) and share of loss of associates.

Adjusted EBITDA

Adjusted EBITDA is defined as EBITDA before adjusting items:

Adjusting item

Definition

Exclusion justification

M&A-related expenses

Fees and other costs relating to the Group's acquisitions activity

M&A-related expenses differ every year based on acquisition activity of the Group. Exclusion of these costs allow better result comparability.

Strategic transformation expenses

Costs relating to broadening the skill bases of the Group's employees (including in respect of executive search and recruiting costs), costs related to transformation of key IT systems as well as Inelo integration costs

Broadening the skill base

IPO and IT strategic transformation requires different skill base of the Group's employees. Expenses related to these strategic events were excluded as otherwise they would not be incurred. The expenses are not expected to be adjusted in 2023.

Transformation of key IT systems

Transformational expenditure represents investments intended to create a new product or service, or significantly enhance an existing one, in order to increase the Group's revenue potential. This also includes systems and processes improvements to improve services provided to customers. Transformational expenditures, which cannot be capitalised as they are mainly related to research, were excluded as the Group is executing its strategic transformation programme and due to the fact that annual investments compared to Group's Net sales are significantly higher than regular investments of a technology company. Strategic transformation programme is expected to end in 2023 except for SAP implementation, which is expected to end in 2024. Anticipated IT transformation expense adjustment amounts to €4.1m in 2023 and €3.3m in 2024. The Group does not expect significant capitalisation related to SAP in 2024.

Integration costs of Inelo

In 2023 and 2024, the Group expects to adjust one-off costs related to transformation and integration of Inelo. While the Group did not adjust integration costs in the past, the related activities and one-off costs are expected to be significantly higher than for previously completed acquisitions. Exclusion of these costs will allow better result comparability.

The Group currently estimates approximately €2m of integration costs in 2023.

Share-based compensation

Equity-settled and cash-settled compensation provided to the Group's management before IPO

Share options and cash-settled compensation have been provided to management and certain employees in connection with the IPO.  Total share-based payment charge to be excluded in period 2021-2024 amounts to €20.7m, from which €1.3m was a one-off in 2021 and €19.4m is amortised over three years. Although these costs will be amortised over the next three years based on accounting policies, they were excluded as they relate to a one-off event. Amortised expenses amounted to €5.1m in 2021 and €5.3m in 2022 and anticipated expense adjustment amounts to €6.5m in 2023 and €2.5m in 2024.

Share awards provided post-IPO were not excluded as they represent non-cash element of annual remuneration package.

Adjusted EBITDA reconciliation

EUR '000

For the six months ended 30 June

2023 (unaudited)

2022 (unaudited)

Intangible assets amortisation (Note 14)

19,310

8,830

Tangible assets depreciation (Note 14)

3,949

2,176

Right of use depreciation

2,449

1,425

Depreciation and amortization

25,708

12,431

Net finance costs and share of net loss of associates

5,996

3,631

Profit before tax

8,512

13,443

EBITDA

40,216

29,505




M&A-related expenses *

2,719

524

Strategic transformation expenses

3,624

1,661

Share-based compensation

3,682

3,313

Adjusting items

10,025

5,498




Adjusted EBITDA

50,241

35,003

* Primarily related to Inelo acquisition.

Adjusted EBITDA margin

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

Adjusted earnings (net profit)

Adjusted earnings are defined as profit after tax before adjusting items:

Adjusting item

Definition

Exclusion justification

Amortisation of acquired intangibles

Amortisation of assets recognised at the time of an acquisition (primarily ADS, Sygic, Webeye and Inelo)

The Group acquired a number of companies in the past and plans further acquisitions in the future. The item is prone to volatility from period to period depending on the level of M&A.

Amortisation due to transformational useful life changes

Accelerated amortisation of assets being replaced by strategic transformation of the Group

Strategic IT transformation programme of the Group is replacing selected software before their originally estimated useful life. This may also include early fixed asset write-offs. Amortisation of such assets has been accelerated and abnormally high difference between original and accelerated depreciation was excluded to allow period on period result comparability.

The item adjusted in 2020-2022 represents assets replaced by strategic IT transformation by the end of 2022, however, decisions may be taken as the Group continues with its strategic IT transformation in 2023, which may lead to new assets being replaced and either accelerated or written-off. The Group expects this adjustment to be relevant until 2024, although, no significant costs are currently expected to be adjusted in 2023 and 2024.

Adjusting items affecting Adjusted EBITDA

Items recognised in the preceding table, which reconciles EBITDA to Adjusted EBITDA

Justifications for each item are listed in the preceding table.

Tax effect

Decrease in tax expense as a result of above adjustments

Tax effect of above adjustments is excluded to adjust the impact on after tax profit.

 

The Group believes this measure is relevant to an understanding of its financial performance absent the impact of abnormally high levels of amortisation resulting from acquisitions and from technology transformation programmes.

Adjusted earnings reconciliation

EUR '000

For the six months ended 30 June

2023 (unaudited)

2022 (unaudited)

Profit for the year

5,597

9,187

Amortisation of acquired intangibles

6,756

2,761

Amortisation due to transformational useful life changes

-

651

Adjusting items affecting Adjusted EBITDA

10,025

5,498

Tax effect

(1,717)

 (1,188)

Adjusted earnings (net profit)

20,661

16,909

 

Adjusted earnings per share

Adjusted earnings per share is calculated by dividing the adjusted net profit for the period attributable to equity holders by the weighted average number of ordinary shares outstanding during the period. See Note 18 for further information.

Adjusted effective tax rate

Adjusted effective tax rate is calculated by dividing the adjusted tax expense by the adjusted profit before tax. The adjustments represent adjusting items affecting adjusted earnings. See Note 13 for further information.

Net debt/cash

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

Transformational capital expenditure

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

 

10. EMPLOYEE EXPENSES

 

Employee expenses for the respective periods consist of the following:

EUR '000

For the six months ended 30 June

2023 (unaudited)

2022 (unaudited)

 

Total personnel

Key management*

Total personnel

Key management*

Wages and salaries

39,114

3,360

27,034

2,408

Social security costs

9,107

593

6,797

349

Option plans

5,654

5,074

3,807

3,421

Own work capitalised

(7,451)

-

 (4,870)

-

Total employee expense

46,424

9,027

32,768

6,178

*Includes the members of the Board and Executive Committee of W.A.G payment solutions PLC.

Expenses arising from share-based payment transactions

EUR '000

For the six months ended 30 June

2023

(unaudited)

2022

(unaudited)

Equity-settled plans (pre-IPO option plans)

3,518

3,124

Cash-settled plans (pre-IPO)

164

189

Total pre-IPO expenses (Note 9)

3,682

3,313

Equity-settled plans (PSP)

1,971

494

Total

5,653

3,807

 

 

11. FINANCE COSTS

 

Finance costs for the respective periods were as follows:

EUR '000

For the six months ended 30 June

2023 (unaudited)

2022 (unaudited)

Bank guarantees fee

673

430

Interest expense

8,257

2,729

Factoring fee

1,956

417

Foreign exchange loss

-

975

Other

74

1

Total

10,960

4,553

 

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

 

12. FINANCE INCOME

 

Finance income for the respective periods was as follows:

EUR '000

For the six months ended 30 June

2023 (unaudited)

2022 (unaudited)

Gain from foreign currency exchange rate differences

3,451

-

Gain from the revaluation of securities and derivatives

1,667

1,117

Interest income

133

81

Other

11

77

Total

5,262

1,275

 

13. INCOME TAX

 

The taxation charge for the interim period has been calculated based on estimated effective tax rate for the full year of 34.2% (six months ended 30 June 2022: 31.7%).

The tax rate is higher in 2023 mainly due to equity-settled share-based payments of 5,489 thousand (six months ended 30 June 2022: 3,618 thousand) and tax non-deductible M&A expenses 1,384 thousand (six months ended 30 June 2022: 524 thousand) offset by positive impact of 2022 CIT assessment of 404 thousand (six months ended 30 June 2022: negative impact of 309 thousand). Related tax impact amounts to 930 thousand in the six months ended 30 June 2023, which represents 10.9 percentage points of the effective tax rate (six months ended 30 June 2021: 1,096 thousand, which represented 8.1 percentage point of the effective tax rate).

In May 2023, the government of the Czech Republic suggested changes in the Czech tax system which include corporate income tax rate increase from 19% to 21%. According to the government's proposal, the new tax rate will be applicable for tax and accounting periods starting in 2024. The changes have not yet been enacted as of the date of preparation of these condensed interim financial statements. If enacted, the impact on the deferred tax as of 30 June 2023 would not be material (approx. 677 thousand increase of deferred tax asset and 1 thousand increase of deferred tax liability).

The Group is currently analysing impact of OECD Pillar II legislation, which is effective from 1 January 2024. Although the analysis has not yet been completed, the new legislation may have an impact on the Group. The management is taking all necessary actions to minimize the impact.

Adjusted effective tax rate is as follows:

EUR '000

For the six months ended 30 June

2023 (unaudited)

2022 (unaudited)

Accounting profit before tax

8,512

13,443

Adjusting items affecting adjusted EBITDA

10,025

5,498

Amortisation of acquired intangibles

6,756

2,761

Amortisation due to transformational useful life changes

-

651

Adjusted profit before tax (A)

25,292

22,353




Accounting tax expense

2,914

4,256

Tax effect of above adjustments

1,717

1,188

Adjusted tax expense (B)

4,632

5,444




Adjusted earnings (A-B)

20,661

16,909

Adjusted effective tax rate (B/A)

18.31%

24.35%

 

14. INTANGIBLE ASSETS AND PROPERTY, PLANT AND EQUIPMENT

 

EUR '000

Intangible assets

Property, plant and equipment

Cost

 


Opening balance as at 1 January 2023

342,614

69,555

Acquisition of a subsidiary

307,188

11,212

Additions

19,708

4,952

Disposals

(347)

(3,924)

Translation differences

5,219

2,099

Closing balance at 30 June 2023 (unaudited)

674,382

83,894

 



Accumulated amortisation / depreciation

 


Opening balance as at 1 January 2023

(74,444)

(29,729)

Amortisation / depreciation

(19,310)

(3,949)

Impairment

-

(120)

Disposals

38

2,972

Translation differences

(1,061)

(851)

Closing balance at 30 June 2023 (unaudited)

(94,777)

(31,677)

 



Net book value

 


As at 1 January 2023

268,171

39,826

As at 30 June 2023 (unaudited)

579,605

52,217

 

Impairment testing

The Group has tested the intangible assets with an indefinite useful life for impairment as at 31 December 2022. As at 30 June 2023, the Group performed impairment test for the CGU Fleet management (FMS) (excluding Inelo) as the recoverable amount of this CGU was closer to the carrying amount than all other CGUs as at 31 December 2022.

Carrying amount of goodwill allocated to FMS CGU as at 30 June 2023 was 59,408 thousand. The recoverable amount of the CGU has been determined based on a value-in-use calculation using cash flow projections from financial forecast covering a five-year period. The Group has considered the potential impact of climate change in impairment tests and a combination of revenue decrease and operating and capital expenses increase was included in the FMS CGU base model. Sensitivities of discounted cash-flows described below directly include the expected climate change impact.

Discounted cash flow model is based on the following key assumptions:

·    Discount rate;

·    Revenues;

·    Long-term revenue growth rate.

 

Discount rate reflects specific risks relating to the industry in which the Group operates. The discount rate used is based on the weighted average cost of capital ("WACC") of the Group as presumed by Capital Asset Pricing Model and was set at 13.0% as at 30 June 2023 (12.0% in year ended 31 December 2022).

The recoverable amount is estimated to exceed the carrying amount of the CGU at 30 June 2023 by 5,216 thousand.

Discount rate used in the value-in-use calculation would have to increase to 13.4% for the recoverable amount to be equal to its carrying amount.

Revenue used in the value-in-use calculation would have to decrease by 1.7% for the recoverable amount to be equal to its carrying amount.

Long-term revenue growth rate would have to decrease to 2.1% for the recoverable amount to be equal to its carrying amount.

15. INVENTORIES

 

EUR '000

30 June 2023 (unaudited)

31 December 2022

Raw materials*

7,028

6,652

Goods (excluding on-board units)

6,293

9,173

Finished products

181

197

On-board units

5,535

4,269

Total

19,037

20,291

*Represents primarily material for On-board units.

Goods recognised as an expense are presented in full under cost of energy sold.

16. TRADE AND OTHER RECEIVABLES

 

 

EUR '000

30 June 2023 (unaudited)

31 December 2022

Trade receivables

268,313

240,788

Receivables from tax authorities

22,378

24,528

Advances granted

12,432

12,059

Unbilled revenue

4,240

9,728

Miscellaneous receivables

65

4,798

Tax refund receivables

77,188

79,274

Prepaid expenses and accrued income

4,745

3,976

Contract assets

3,846

3,001

Total

393,207

378,152

 

17. CASH AND CASH EQUIVALENTS

 

For the purpose of the statement of cash flows, cash and cash equivalents comprise the following:

EUR '000

30 June (unaudited)

31 December 2022

Cash at banks

80,382

145,938

Cash on hand

62

65

Cash and cash equivalents presented in the statement of financial position

80,444

146,003

Bank overdrafts

(29,967)

(2)

Cash and cash equivalents presented in the statement of cash flows

50,477

146,001

 

18. EARNINGS PER SHARE

All ordinary shares have the same rights. Class B share was excluded from earnings per share ("EPS") calculation as it had no voting rights, rights to distributions or rights to the return of capital on winding up.

Basic EPS is calculated by dividing the net profit for the period attributable to equity holders of the Group by the weighted average number of ordinary shares outstanding during the year.

Diluted EPS is calculated by dividing the net profit for the period attributable to equity holders of the Group by the weighted average number of ordinary shares outstanding during the period, plus the weighted average number of shares that would be issued if all dilutive potential ordinary shares were converted into ordinary shares.

Adjusted basic EPS is calculated by dividing the Adjusted earnings (net profit) for the period attributable to equity holders by the weighted average number of ordinary shares outstanding during the period.

The following reflects the income and share data used in calculating EPS:

 

For the six months ended 30 June

2023 (unaudited)

2022 (unaudited)

Net profit attributable to equity holders (EUR '000)

5,245

8,902

Basic weighted average number of shares

688,911,333

688,911,333

Effects of dilution from share options

2,296,736

517,940

Total number of shares used in computing dilutive earnings per share

691,208,069

689,429,273

Basic earnings per share (cents/share)

0.76

1.29

Diluted earnings per share (cents/share)

0.76

1.29

 

Adjusted earnings per share measures:

 

For the six months ended 30 June

2023 (unaudited)

2022 (unaudited)

Net profit attributable to equity holders (EUR '000)

5,245

8,902

Adjusting items affecting Adjusted EBITDA (Note 9)

10,025

5,498

Amortisation of acquired intangibles*

6,310

2,229

Amortisation due to transformational useful life changes

-

651

Tax impact of above adjustments*

(1,633)

 (1,080)

Adjusted net profit attributable to equity holders (EUR '000)

19,948

16,200

Basic weighted average number of shares

688,911,333

688,911,333

Adjusted basic earnings per share (cents/share)

2.90

2.35

Diluted weighted average number of shares

691,208,069

689,429,273

Adjusted dilutive earnings per share (cents/share)

2.89

2.35

*non-controlling interests impact was excluded

 

Options

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

19. INTEREST BEARING LOANS AND BORROWINGS

 

 

 

 

30 June 2023 (unaudited)

31 December 2022


Currency

Maturity

Interest rate

Total limit in currency

Amount in original currency

Amount in EUR'000

Total limit in currency

Amount in original currency

Amount in EUR'000

Bank loans

 









Multicurrency term and revolving facilities agreement**

EUR

2027/09

3M EURIBOR + margin

45,000

40,733

40,733

45,000

42,941

42,941

Multicurrency term and revolving facilities agreement**

EUR

2027/09

3M EURIBOR + margin

68,000

59,687

59,687

68,000

64,889

64,889

Multicurrency term and revolving facilities agreement**

EUR

2027/09

3M EURIBOR + margin

37,000

35,308

35,308

37,000

35,307

35,307

Multicurrency term and revolving facilities agreement**

EUR

2027/09

3M EURIBOR + margin

120,000

108,566

108,566

-

-

-

Multicurrency term and revolving facilities agreement**

EUR

2027/09

3M EURIBOR + margin

60,000

54,283

54,283

-

-

-

Multicurrency term and revolving facilities agreement**

EUR

2027/09

3M EURIBOR + margin

50,000

49,051

49,051

-

-

-

Other loans

CZK


fixed rate

271

271

11

393

393

17

Financial liabilities to telecoms

PLN

36 months from the REPO transaction

Fixed rate -

 6.29-16.86%

15,512

15,512

3,486

-

-

-

Other non-bank loans

PLN, EUR


3M WIBOR + 2%

-

-

216

-

-

-

Revolving facilities and overdrafts

-

-

-

55,000

29,967

29,967

-

2

2

Total

EUR





381,308



143,156

Current

EUR





90,616



21,884

Non-current

EUR





290,692



121,272

*On 27 May 2019, the Group signed senior multicurrency term and revolving facilities agreements ("old club financing agreement") with following banks:

a.     BNP Paribas S.A. acting through its branch BNP Paribas S.A., pobočka Česká republika,

b.     Citibank Europe plc acting through its branch Citibank Europe plc, organizační složka,

c.     Česká spořitelna, a.s.,

d.     Československá obchodní banka, a. s.,

e.     HSBC Bank plc acting through its branch HSBC Bank plc - pobočka Praha,

f.      Komerční banka, a.s.,

g.     Raiffeisenbank a.s.,

h.     UniCredit Bank Czech Republic and Slovakia, a.s.

Under this financing, up to €60m was available for the Group for revolving facilities and overdraft accounts, and up to €113m for bank guarantees.

**On 22 September 2022, the Group signed a new multicurrency term and revolving facilities agreement ("new club financing agreement") with the following banks:

a.     BNP Paribas S.A. acting through its branch BNP Paribas S.A., pobočka Česká republika,

b.     Citibank Europe plc acting through its branch Citibank Europe plc, organizační složka,

c.     Česká spořitelna, a.s.,

d.     Československá obchodní banka, a. s.,

e.     Komerční banka, a.s.,

f.      Raiffeisenbank a.s.,

g.     UniCredit Bank Czech Republic and Slovakia, a.s.

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

i.      Česká exportní banka, a.s.

The new club financing agreement consists of four tranches:

·      €150m committed facility A for the refinancing of all existing term loan indebtedness;

·      €180m committed facility B for permitted acquisitions and capital expenditure;

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

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

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

Net leverage

Facility A and B

> 3.25

2.30% p.a.

≤ 3.25 ≥ 2.50

2.10% p.a.

< 2.50

1.90% p.a.

 

The interest expense relating to bank loans and borrowings is presented in Note 11.

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

On 10 March 2023, the Group received 180m through facility B of the new club financing. The new loan was used to finance the Inelo acquisition above. Interest rate risk was managed by concluding new interest rate swaps.

On 25 May 2023, the Group received 50m through Incremental Facility I of the new club financing. The purpose of the new drawdown is financing of the capital expenditures incurred or to be incurred.

20. TRADE AND OTHER PAYABLES, OTHER LIABILITIES

EUR '000

30 June 2023 (unaudited)

31 December 2022

Current

 


Trade payables

305,972

332,676

Employee related liabilities

10,048

9,243

Advances received

13,849

15,325

Miscellaneous payables

10,821

9,790

Payables to tax authorities

19,904

12,734

Contract liabilities

7,928

4,439

Refund liabilities

3,928

2,822

Put option redemption liability

4,473

-

Deferred acquisition consideration

49,801

11,206

Total Trade and other payables

426,725

398,235

Non-current



Put option redemption liability

1,182

4,435

Contract liabilities

3,044

2,276

Employee related liabilities

72

765

Deferred acquisition consideration

4,204

19,898

Other liabilities

2

2

Total Other non-current liabilities

8,504

27,376

 

21. FINANCIAL RISK MANAGEMENT

The Group is exposed to a variety of financial risks including foreign currency risk, fair value interest rate risk, credit risk and liquidity risk. The condensed interim financial statements do not include all financial risk management information and disclosures required in the annual financial statements; they should be read in conjunction with the Group's annual financial statements as at 31 December 2022. There have been no changes in any risk management policies since the year end.

22. RELATED PARTY DISCLOSURES

Company

The Company controlling the Group is disclosed in Note 1.

Subsidiaries

As at 30 June 2023, there were the following changes in the Group's subsidiaries:

Name

Principal activities

Country of incorporation

Registered address

Effective economic interest

2023

2022

ALŽIRIJA SPA CVS Mobile Algerie (acquired and liquidated in 2023)

Mobility solutions

Algeria

30 Rue Hassen Benamane les Vergers Bir Mourad Rais-Algiers

-

-

CVS Mobile d.o.o.

Mobility solutions

Bosnia and Herzegovina

Ulica Petrovdanska bb 79240, Kozarska Dubica, Bosnia-Herzegovina

85.56%

-

CVS Mobile d.o.o.

Mobility solutions

Croatia

Jankomir 25 10090 Zagreb, Croatia

85.56%

-

FireTMS.com GmbH

Mobility solutions

Germany

Geschäftsanschrift: Stresemannstraße 123, 10963 Berlin, Germany

81.00%

-

CVS Mobile GmbH

Mobility solutions

Germany

Sckellstraße 1/II, 81667 München, Germany

85.56%

-

CVS Mobile s.r.l.

Mobility solutions

Italy

Via Battisti 2, 34125 Trieste, Italy

85.56%

-

CVS Mobile MK dooel

Mobility solutions

North Macedonia

16-ta Makedonska brigada 13b, 1000 Skopje, North Macedonia

85.56%

-

Grupa Inelo S.A.

Mobility solutions

Poland

43-300 Bielsko-Biała, ul. Kaprapcka 24/B13, Poland

100.00%

-

INELO Polska Sp. z o.o.

Mobility solutions

Poland

43-300 Bielsko-Biała, ul. Kaprapcka 24/U2b, Poland

100.00%

-

Marcos Bis Sp. z o.o.

Mobility solutions

Poland

ul. Powstańców 19, 40 - 039 Katowice, Poland

100.00%

-

FIRETMS.COM Sp. z o.o.

Mobility solutions

Poland

44-200 Rybnik, ul. 3 Maja 30, Poland

81.00%

-

CVS Mobile d.o.o.

Mobility solutions

Serbia

Ulica Španskih boraca 24V, 11070 Novi Beograd, Serbia

85.56%

-

Napredna telematika d.o.o.

Mobility solutions

Slovenia

Ulica Gradnikove brigade 11, 1000 Ljubljana, Slovenia

89.30%

-

CVS Mobile d.d.

Mobility solutions

Slovenia

Ulica Gradnikove brigade 11, 1000 Ljubljana, Slovenia

85.56%

-

Infotrans d.o.o.*

Mobility solutions

Slovenia

Ljubljanska cesta 24C, 4000 Kranj, Slovenia

43.63%

-

* The Company, through its subsidiary W.A.G. payment solutions, a.s., has the same percentage voting rights as effective economic interest, directly or indirectly, in all listed above subsidiaries except for Infotrans d.o.o. W.A.G. payment solutions, a.s. is controlling Infotrans d.o.o. through a chain of subsidiaries where it holds majority of voting rights.

Further, for the following entities liquidation process has been ongoing as of 30 June 2023:

·    Klub investorov T&G SK, s. r. o.;

·    W.A.G. AT GmbH;

·    W.A.G. payment solutions IE Limited.

Key management personnel compensation

Key management personnel compensation is disclosed in Note 10.

Paid dividends

Paid dividends are disclosed in Consolidated Statement of Changes in Shareholders' Equity.

Transactions with other related parties

EUR '000

For the six months ended 30 June

2023 (unaudited)

2022 (unaudited)

Sale of fixed assets (vehicles) to key management personnel

1

-

Sale of property to key management personnel

28


Purchases of various goods and services from entities controlled by the Company's Shareholders

-

11

Purchases of various goods and services from entities controlled by key management personnel*

16

-

Purchases of various goods and services from associates

6

-

*       The Group acquired the following goods and services from entities that are controlled by members of the Group's key management personnel: marketing research, consultancy, taxi services, rent of commercial property

23. SUBSEQUENT EVENTS

JITPay call option

On 4 July 2023, the Group announced it exercised its call option to acquire an additional 18.01% stake in JITpay's share capital from its founders, management and Volksbank eG Braunschweig Wolfsburg on a pro rata basis. The proceeds from the primary capital will be used to fund JITpay's further expansion. The Group entered a strategic partnership with JITpay on 27 September 2022, when it acquired a 9.99% stake for an initial consideration of €14.3m, of which €3.5m was used as primary capital. As per the original agreement, the Group had a call option to acquire an additional 18.01% share, which could be exercised by 3 July 2023 for a consideration of €25.7m, of which €6.5m will be used as primary capital.

The purchase of the additional 18.01% stake in JITpay will be funded from existing funds and the transaction is subject to customary closing conditions, including clearance by the German Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin), and is expected to complete in the first half of 2024. The Transaction constitutes a Class 2 transaction for the purposes of the UK Financial Conduct Authority's Listing Rules. Following receipt of the German authorities' clearance, the investment in JITpay would change to an associate (28% equity interest).

The remaining 72% stake will continue to be held by existing shareholders. There are Call and Put arrangements in place that give the Group the option to acquire the remaining 72% stake of JITpay's share capital from 2025 onwards. The price of the Put or Call payable by the Group for the remainder of JITpay's share capital will be based on a multiple of 10x of the average of JITpay's profit before tax over the twelve-month period to 31 December 2024 and 31 December 2025 with the Put being subject to a cap of €129.3m.

Issued shares

On 15 August 2023, 560 204 new ordinary shares of the Company were issued in relation to exercised option plan. The nominal value of the shares was £0.01 per share resulting in €5 thousand share capital increase.

Pay-out of deferred consideration

On 31 August 2023, the Group paid a deferred acquisition consideration of €8,377 thousand related to the final price adjustment to Inelo's acquisition of FireUp TMS subsidiary.

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