LEI: 213800HU63CWV5J8YK95                                                                                                                                 5 September 2024

 

 

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

Interim results for the six months ended 30 June 2024

 

Strong growth, on-track for Q4 phased rollout of integrated platform

 

W.A.G payment solutions plc ("Eurowag" or the "Group"), today announces its interim results for the six-month period ended 30 June 2024.

H1 financial highlights

 

Continued strong growth from our business-critical products and services

·    Total net revenue¹ +18.4% to €141.0m (H1 2023: €119.1m).

-  Payment solutions revenue¹ +10.2% to €79.8m, supported by growth from toll revenues and 11.8% growth in active payment solutions trucks .

-  Mobility solutions revenue¹ +31.3% to €61.3m, as a result of the annualisation of Inelo and continued growth across all our products.

·     Adjusted EBITDA¹ +18.2% to €59.4m (H1 2023: €50.2m), with a margin¹ of 42.1% (H1 2023: 42.2%).

·     Adjusted profit before tax¹ €21.6m (H1 2023: €25.3m). Statutory profit before tax of €4.2m (H1 2023: €8.5m), a result of higher amortisation from acquired intangibles and interest costs relating to increased leverage, as well as higher depreciation as a result of our transformational capital expenditure programme, which is now complete.

·   Capital expenditure spend of €20.5m (H1 2023: €24.7m), including the final €3.0m from our transformational programme.

·   Net debt¹ position of €302.4m (FY 2023: €316.8m); a marked improvement with Net leverage² at 2.6x. Renegotiated credit facilities; extended maturity to 2029 reducing annual amortisation payments and extended revolving facility.   

 

Early adopters already onboarded; on-track for phased rollout of industry-first integrated platform in Q4 2024

·     New platform unifies all Eurowag brands and services into a single data ecosystem, providing a one-stop-shop to deliver increased growth and efficiencies for customers.

·     Early adopters already onboarded; phased migration of existing customers onto the Eurowag Office application for live-user testing. The platform will be ready for new customers in Q4 2024.

 

Outlook

·    While the Board is mindful of macroeconomic challenges across the industry, Eurowag is well positioned and trading in-line with the Board's expectations.

·     Furthermore, the Board remains confident in the value creation from the new integrated platform and therefore our medium-term guidance remains unchanged.

Martin Vohánka, Founder and CEO, commented:

 

"We continue to deliver strong double-digit growth, despite the economic headwinds impacting the Commercial Road Transport ("CRT") industry across Europe. Our resolute focus on providing mission-critical products to our customers has allowed us to create a highly resilient business model, giving us the capacity to enhance our services, scale and innovate.

 

I am pleased with our strong performance and progress in the first half of 2024, having successfully integrated certain functions of our recently acquired businesses - bringing together new colleagues and teams - and laid the groundwork for the phased rollout of our industry's first integrated digital platform in Q4 this year.

 

The new digital one-stop-shop will be transformational. For the first time, the industry will have access to a single data-driven ecosystem, solving the complexity and fragmentation challenge that has held the sector back for far too long. For us, the new platform will deepen customer relationships and unlock further opportunities, and this gives me real confidence in our near and medium term guidance."

 

H1 financials

 

Key statutory financials	H1 2024	H1 2023	YoY growth (%)
Revenue from contracts with customers (€m)	1,149.7	1,017.6	13.0%
Profit before tax (€m)	4.2	8.5	(50.6)%
Basic EPS (cents/share)	0.35	0.76	(53.9)%

 

Alternative performance measures 1	H1 2024	H1 2023	YoY growth (%)
Net revenue (€m)	141.0	119.1	18.4%
Payment solutions revenue (€m)	79.8	72.4	10.2%
Mobility solutions revenue (€m)	61.3	46.7	31.3%
Adjusted EBITDA (€m)	59.4	50.2	18.2%
Adjusted EBITDA margin (%)	42.1%	42.2%	(0.1)pp
Adjusted basic EPS (cents/share)	2.51	2.90	(13.4)%

H1 operational highlights

 

	H1 2024	H1 2023	YoY growth (%)
Average active payment solutions customers3	19,723	18,053	9.3%
Average active payment solutions trucks3	102,667	91,864	11.8%
Payment solutions transactions4	22.4m	18.4m	21.5%

 

Notes:

1.   Please refer to the section Alternative Performance Measures for a definition and see Note 6 of the condensed interim financial statements.

2.     Net debt includes lease liabilities and derivative liabilities.      

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

4.   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.

 

Outlook, near and medium-term guidance unchanged

Eurowag continues to see pressures in the CRT industry, impacting loads and kilometres driven which places higher pressures on the financial stability of smaller businesses, evidenced by a higher rate of insolvencies across some of our markets. Looking ahead, we are starting to see some signs of economic recovery with the load spot market improving, which will benefit small to medium size trucking companies with increased revenues and cash flows. These early indications in the load spot market gives us confidence in delivering in-line with near-term expectations.

With our transformational capital expenditure programme completed, we still expect our ordinary capex to move to around 10% of net revenues. As a result of several deferred consideration payments of circa €35m from past acquisitions to payout in FY 2024, we expect our net debt to adjusted EBITDA to be moderately above our target range of 1.5x -2.5x, with a priority to return within the range in FY 2025.

The delivery of our platform underpins the Group's confidence in delivering mid-teens net revenue growth in the near and medium-term. With further integration work still to take place in respect of recent acquisitions, Adjusted EBITDA margins are expected to grow over the medium-term. The Board is confident in delivering strong growth in-line with expectations, and medium-term financial guidance remains unchanged.

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, 05 September 2024, 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://sparklive.lseg.com/WAGPAYMENTSOLUTIONS/events/7ecd3467-86d9-4cc9-9403-3534849bd8b0/eurowag-2024-half-year-results-announcement-w-a-g-payments-solutions-plc

To view the webcast, you will need to register with SparkLive, which should only take a moment. 

 

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

https://eurowag-2024-half-year-results-announcement-september2024.open-exchange.net/registration

ENQUIRIES

Eurowag
Carla Bloom

VP Investor Relations and Communications

+44 (0) 789 109 4542

investors@eurowag.com

 

Sodali & Co

Justin Griffiths, Gilly Lock

IR and international media

+44 (0)20 7250 1446

eurowag@sodali.com

 

About Eurowag

 

Eurowag was founded in 1995 and is a leading technology company and an important partner to

Europe's CRT industry, with a purpose to make it clean, fair and efficient. Eurowag enables trucking companies to successfully transition to a low carbon, digital future by harnessing all mission critical data, insights and payment and financing transactions into a single ecosystem and connects their operations seamless before a journey, on the road and post-delivery. https://investors.eurowag.com

 

 

 

Chief Executive Officer's Review

 

The first half of 2024 has been a dynamic period for the European CRT industry, marked by regulatory changes, persisting macroeconomic volatility, including fluctuating fuel prices, and a continued shift towards digitalisation.

 

We have remained focused on our strategic priorities, with significant progress made in each area, as we prepare for the phased rollout of our digital platform in Q4 2024. Progress in the first half of the year includes:

 

1)   Be in every truck (attract)

•     11.8% increase in the number of active payment solutions trucks, to 102,667.

•   Launched Eurowag Prime - a collection of 70 strategically placed fuel stations along the major transit corridors in 16 countries, that offer optimised prices, superior service standards and infrastructure.

•   Launched sales omnichannel pilot in Poland, end-to-end digital sales and onboarding process with a bundled offer.

•     Investment in digital sales, growth in converted digital leads +37% year on year.

 

2)   Drive customer centricity (engage)

•     Eurowag app evolving as part of the new platform, monthly active users +12% to c.36k (FY 2023: c.32k)

•     Increased the number of mobile acceptance points to 1,500 (FY 2023: 800).

 

3)   Grow core services (monetise)

•     Total number of acceptance points now 13,900 (FY 2023: 13,000), in 23 countries.

•     Received European Electronic Toll System ("EETS") certification in Slovakia, and we are now certified in 11 countries across Europe. Toll domains ordered on EVA tripled compared to H1 2023.

•     Year-on-year more than doubled the number of OBU devices sold.

•   Continued development of Decarbonisation-as-a-Service ("DaaS"), established the first HVO corridor in Central and Eastern Europe, connecting Austria, Slovakia and Czech Republic.

•     Became the first eMobility Service Provider for the CRT sector.

 

4)   Expand platform capability (retain)

•     Ongoing implementation of ERP system with next phase focussing on billing.

•     E-wallet development continued, on track to launch in FY 2024.

•    Development of our new digital integrated platform on track, with groups of users already migrated; on track for the phased rollout to new customers in Q4 2024.

 

Integration and transformation of our core products and services

 

Eurowag has been focused on growing both organically and inorganically and is currently navigating through a heavy transformation phase. After starting out as a local fuel card provider, it is now close to delivering an industry-first integrated digital platform.

 

Before the phased rollout of the digital platform to new customers, we are starting to migrate existing customers onto the platform so we can pilot and test their user experience. The RoadLords users were the first customers to be migrated to the new application, with around 200,000 monthly active users already migrated, and we are currently focused on migrating our Eurowag Fleet Management solution and Eurowag Fuel card users, of which around 7,000 Fleet Management users are already migrated. Migrated customers will benefit from new functionalities and user dashboards. We are still on track to offer new customers access to the platform in Q4 this year.

 

Alongside working on the digital platform delivery, we continue to expand and improve our core suite of products. In the first half of the year, we expanded our acceptance network to 13,900 points, compared to 13,000 at the end of 2023, of which over 700 in our HVO and LNG networks, supporting our sustainability action plan to improve our customers' access to non-fossil fuel. Our mobile payments application is now available at around 1,500 acceptance points across Europe, almost doubling the acceptance points in the first half of the year. When it comes to toll services, following the successful activation of EETS in Slovakia at the beginning of the year, we saw the number of toll domains ordered through our EVA device triple. We have also added new functionalities, where users can now transfer an OBU between vehicles, improving customer experience. From the beginning of July, Germany has extended toll duty for all vehicles weighting over 3.5 tonnes (as opposed to 7.5 tonnes previously). Together with the new toll regulation in Hungary, which applies toll duty to buses and coaches over 3.5 tonnes, this opens a whole new segment of vehicles to the market and represents a significant revenue opportunity.

 

People and Board

 

The Board continue to evolve to reflect the Group's strategy, in particular with focus on supporting the development of the integrated platform. During the period, the appointments of Kevin Li Ying and Sophie Krishnan as non-executive directors were announced, effective from 1 March 2024. In conjunction, Susan Hooper retired from the Board at the conclusion of the AGM. The Group would like to thank Susan for all her commitment and contribution since the Group's IPO.

 

Furthermore, as the Group progresses into the next phase of its integrated platform phased rollout, it also seeks to strengthen its Executive team to ensure it has the right mix of skills and capabilities to deliver its ambitions. In June, the Group made two new appointments: Felipe Alves joined us as Chief Operating Officer, overseeing all aspects of customer operations, and Francesco Nazzarri joined us as Chief Commercial Officer.

 

Sustainability and decarbonisation                                                            

 

In the first half of 2024, we have continued to work on our sustainability action plan, which focuses on climate action, customer success and wellbeing, community impact and responsible business.

 

As we continue to explore opportunities and partnerships in eMobility, we have become the first eMobility Service Provider for the CRT sector, in collaboration with Last Mile Solutions, the largest eMobility platform in Europe.

 

Our LNG network has expanded to over 420 stations, of which c.12% offer bioLNG. Our HVO acceptance network has expanded to over 310 locations in the Europe (including our own truck parks in Austria, Slovakia and the Czech Republic), helping to establish the first HVO corridor in Central and Eastern Europe, with 48% of HVO sales volumes coming from our own truck parks. The volume of LNG sold in the first half of 2024 has more than doubled, compared to the first six months of 2023.

 

Financial review 

 

The Group continued to excel in the first half, with growth delivered both organically and from the acquisition made in 2023, demonstrating the strength in its strategic and financial transformations.  The Group achieved net revenue growth of 18.4%, with payment solutions up 10.2% and mobility solutions up 31.3%.

 

Our Adjusted EBITDA increased by 18.2% to €59.4m (H1 2023: €50.2m), in-line with revenue growth. On a like-for-like basis, if you include the annualisation of Inelo of €4.4m and exclude the €6.0m FX forward gain last year and the commercial settlement this year of €2.2m, EBITDA grew by 17.6%. The Adjusted EBITDA margin decreased slightly to 42.1% from 42.2%. Despite strong growth in revenues and higher than expected credit losses, we were able to manage our operating costs to keep margins stable year-on-year.

 

On a statutory basis, profit before tax decreased by 50.6% year-on-year to €4.2m (H1 2023: €8.5m), mainly as a result of higher depreciation, amortisation and interest. Basic EPS decreased by 53.9% to 0.35 cents per share (H1 2022: 0.76 cents). Adjusted basic EPS decreased year-on-year to 2.51 cents per share (H1 2023: 2.90 cents) driven by lower profit before tax.

 

The Group's term debt and committed facility, including a multi-currency syndicated revolving credit facility, was amended in the period, now expiring March 2029, with a change to the amortisation but with no change to the related covenants. Net debt at the end of the reporting period was €302.4m (FY 2023: €316.8m). Our net leverage ratio improved to 2.6x net debt to adjusted EBITDA. 

 

In the first half of 2024, investments in our subsidiaries, associates, and financial investments amounted to €8.2m, which consists of deferred acquisition payments for WebEye (€5.0m), deferred acquisition payments for Aldobec (€0.7m) and an acquisition of non-controlling interest within Inelo (€2.5m).

 

Performance review 

 

Below is a summary of the segmental performance and explanatory notes relating to corporate expenses, adjusting items, taxation, interest, investments and cash flow generation. As in prior years, adjusted and other performance measures are used in this announcement to describe the Group's results. Adjustments are items included within our statutory results that are deemed by the Board to be unusual by virtue of their size and/or nature. Our adjusted measures are calculated by removing such adjustments from our statutory results. Note 6 of the condensed interim financial statements includes reconciliations.

 

Segments 

 

	H1 2024 (€m)	H1 2023 (€m)	YoY (€m)	YoY change (%)
Gross revenue	1,149.7	1,017.6	132.1	13.0%
Payment solutions	1,088.4	970.9	117.5	12.1%
Mobility solutions	61.3	46.7	14.6	31.3%
Net revenue	141.0	119.1	21.9	18.4%
Payment solutions	79.8	72.4	7.4	10.2%
Mobility solutions	61.3	46.7	14.6	31.3%
Expenses included in Contribution	33.9	26.4	7.5	28.4%
Contribution total1	107.1	92.6	14.5	15.7%
Payment solutions	65.1	61.0	4.1	6.8%
Mobility solutions	42.0	31.6	10.4	32.9%
Contribution margin total1	76%	78%
Payment solutions	82%	84%
Mobility solutions	69%	68%

 Note:

1.   Please refer to the section Alternative Performance Measures for a definition and see Note 6 of the condensed interim financial statements.

 

The Group's gross revenues increased by 13.0% year-on-year to €1,149.7m, driven mainly by  higher average energy prices (a corresponding increase was reported for costs of energy sold).

 

The Group delivered double-digit net revenue growth and strong contribution margins in both segments. The overall net revenue increased by 18.4% year-on-year, which includes €25.7m contribution from Inelo.

 

Payment solutions net revenue grew by 10.2% year-on-year. This increase reflects strong growth in Toll revenues as a result of new CO₂ charges in Germany and Austria, as well as strong EVA sales and double-digit growth in new truck acquisitions, although the growth is partially offset by lower energy unit prices compared to prior year.

 

Mobility solutions net revenue grew by 31.3% year-on-year. This strong growth is the result of effective cross-selling, Inelo consolidation, and strong growth in tax refund and transport management system.

 

Total contribution increased by €14.5m to €107.1m (H1 2023: €92.6m), driven by higher net revenues, although increased expenses particularly from credit losses, reduced the contribution margin performance by 2pp to 76%. (H1 2023: 78%).

 

Corporate expenses 

 

Statutory operating expenses increased by €17.2m to €121.7m (H1 2023: €104.5m), largely due to increased depreciation and amortisation and higher impairment losses of financial assets, with further details provided later on in this Financial review.

 

	Adjusted (€m)	Adjusting items (€m)	H1 2024 (€m)	Adjusted (€m)	Adjusting items (€m)	H1 2023 (€m)
Employee expenses	44.0	2.4	46.4	41.6	4.8	46.4
Impairment losses of financial assets	7.8	0.0	7.8	4.2	0.0	4.2
Technology expenses	7.3	2.6	9.9	6.8	1.9	8.7
Other operating expenses	25.6	2.4	28.0	23.1	3.3	26.4
Other operating income	(3.1)	0.0	(3.1)	(6.8)	0.0	(6.8)
Total operating expenses	81.6	7.4	89.0	68.9	10.0	78.9
Depreciation and amortisation	22.7	10.0	32.7	18.9	6.8	25.7
Total	104.3	17.4	121.7	87.7	16.8	104.5

 

Adjusted Total operating expenses increased by €12.7m to €81.6m, of which €5.2m related to the annualisation of Inelo. The increase comprised mainly of the following:

 

Adjusted employee expenses increased by 5.8% year-on-year to €44.0m. 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.

 

Impairment losses of financial assets amounted to €7.8m (H1 2023: €4.2m). The additional charge relates to higher than expected credit losses arising in markets such as Poland, Romania, Hungary and Portugal, where a high number of insolvencies have been observed across the transport industry, in particular with small and medium-sized providers. As a consequence, the Group saw its overall credit loss ratio increase slightly to 0.4% from 0.3%. Nevertheless, the Group's overall receivables portfolio and cash collection process remains robust.

 

Adjusted technology expenses increased by 8.9% year-on-year to €7.3m (H1 2023: €6.8m). This increase reflects the Group's focus on technology transformation and cloud transition.

 

Adjusted other operating expenses, comprising consultancy, facilities maintenance and cost of services provided, increased by 10.8% year-on-year to €25.6m (H1 2023: €23.1m), mainly due to the Inelo acquisition.

 

Other operating income decreased by 54.2% year-on-year to €3.1m (H1 2023: €6.8m); last year's balance included a favourable FX forward gain of €6.0m, while this year's balance of €3.1m relates mainly to a legal settlement of a dispute following an acquisition. 

 

Adjusted depreciation and amortisation grew by 19.6% year-on-year to €22.7m (H1 2023: €18.9m), primarily due to the amortisation of acquired assets of Inelo.

 

Adjusting items

 

In H1 2024, the Group incurred costs of €17.4m (H1 2023: €16.8m), which were considered to be Adjusting items and have therefore been excluded when calculating Adjusted EBITDA and Adjusted profit before tax. These are summarised below:

 

	H1 2024 (€m)	H1 2023 (€m)
M&A related expenses	2.2	2.7
ERP implementation and integration expenses	3.0	-
Strategic transformation expenses	-	3.6
Share-based compensation	2.2	3.7
Adjusting items in operating expenses	7.4	10.0
Adjusting Items in depreciation and amortisation	10.0	6.8
Total Adjusting items	17.4	16.8

The Group has incurred acquisition related costs which are primarily professional fees of €2.2m (H1 2023: €2.7m) in relation to M&A activities, predominantly the Inelo acquisition.

 

ERP implementation and integration expenses are costs relating to key IT systems and the integration of Inelo. Around €2.8m is related to the implementation of our ERP system, which successfully went live in January 2024. A further €12-16m expense is anticipated until the end of 2026. Integration costs of €0.2m were incurred in H1 2024 and approximately €1m is expected to be adjusted in 2024.

 

Expenses are no longer categorised as Strategic transformation expenses, as the Group considers the transformational programme was concluded at the end of 2023.

 

Share-based compensation primarily relates to compensation provided to previous management, prior to the IPO. These legacy incentives comprise a combination of cash and share-based payments and will vest during this year.  No further share-based compensation adjusting expenses are expected in the future. For clarity, post-IPO share-based payment charges are not treated as Adjusting items. 

 

Amortisation charges of €10.0m relate to the amortisation of acquired intangibles in H1 2024 (H1 2023: €6.8m); the significant increase is due to the annualization of Inelo.

 

Net finance expense 

 

Net finance expense in the first half of 2024 amounted to €14.8m (H1 2023: €5.7m). The increase mainly reflects higher interest costs related to increased borrowings as well as higher factoring fees related to higher average utilisation throughout the year.

 

Taxation  

 

The Group's adjusted effective tax rate increased to H1 2024: 19.6% (H1 2023: 18.3%) in-line with expectation, as a result of the increased rates in key tax regimes in which the Group operates and lower statutory profitability. Corporate income tax in the Czech Republic increased from 19% in 2023 to 21% in 2024, in the UK the rate increased from 23% in 2023 to 25% in 2024, and in Slovenia the rate increased from 19% in 2023 to 22% in 2024, while in Spain the rate remains at 24%. Further details can be found in Note 6 of the condensed interim financial statements.

 

EPS  

 

Adjusted basic EPS decreased by 13.4% to 2.51 cents per share (H1 2023: 2.90). Despite achieving an increased EBITDA, higher depreciation and amortisation together with increased finance expenses led to an overall decrease. Basic EPS for the first half of 2024 was 0.35 cents per share, a 53.9% year-on-year decrease.

 

Pay-out of deferred consideration and acquisition of non-controlling interests

 

In H1 2024, the Group paid deferred acquisition considerations of €5.7m and acquired non-controlling interests for a consideration of €2.5m. Refer to Note 13 of the condensed interim financial statements.

Cash performance 

 

During the period, the Group reported a cash inflow of €14.4m (H1 2023: outflow of €303.7m). The basis of deriving this net debt movement is set out below:

 

Management free cash flow	H1 2024 (€m)	FY 2023 (€m)	H1 2023 (€m)
Adjusted EBITDA	59.4	108.7	50.2
Non-cash items in Adjusted EBITDA	8.9	10.6	6.2
Tax	(6.8)	(9.3)	(4.0)
Net interest	(11.4)	(17.2)	(7.4)
Working capital	(0.1)	(44.4)	(36.0)
Free cash	50.0	48.4	9.0
Adjusting items - cash	(3.2)	(18.0)	(7.4)
Capital expenditure1	(19.5)	(48.5)	(23.6)
Payments related to previous acquisitions	(8.2)	(297.7)	(279.0)
Repayment of lease obligations	(2.5)	(5.4)	(2.4)
Other	(2.2)	1.5	(0.4)
Movement in Net debt inflow / (outflow)	14.4	(319.6)	(303.7)
Opening net debt / cash2	(316.8)	2.8	2.8
Closing net debt / cash2	(302.4)	(316.8)	(300.9)

 

Note:

1.     Includes proceeds from sale of assets.

2.     Excludes lease and derivative liabilities.  

 

As at 30 June 2024, the Group's net debt position stood at €302.4m, compared with €300.9m as at 30 June 2023. 

 

Tax paid increased to €6.8m (H1 2023: €4.0m), primarily impacted by higher H1 2024 tax advances in the Czech Republic (€0.5m) and higher tax payments in Hungary (€0.5m). A refund of overpaid tax in Spain in H1 2023 (€1.1m) also decreased the comparative figure.

 

Interest paid increased to €11.4m (H1 2023: €7.4m), driven by a higher level of borrowings in the first half of 2024 as a result of the Inelo acquisition in Q1 2023.

 

Non-cash items in Adjusted EBITDA primarily include the add back of share awards issued post IPO and provision movements relating to credit losses of €7.8m (H1 2023: €4.2m).

 

Net working capital increased by €0.1m (H1 2023: €36.0m) reflecting relatively flat inventory levels and offsetting increases in both trade receivables and payables.

 

Adjusting items of €3.2m consists predominantly of the ERP implementation costs and Other items mainly relates to bank guarantee and factoring fees.

 

Capital expenditure 

 

Capital expenditure in the first half of 2024 amounted to €20.5m (H1 2023: €24.7m), which included €3m of spend, completing the transformational programme. Net capital expenditure of €19.5m (H1 2023: €23.6m) included proceeds from the sale of equipment of €1.0m (H1 2023: €1.1m). €6.3m of this capital investment focused on maintaining and enhancing existing products. A further €8.8m is represented by the development and implementation of technology and data systems, including the development of our new Eurowag Office. The target remains to reduce capex spend to around 10 per cent of net revenue through the transition to a single technology platform, and reducing 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 the condensed interim financial statements and enhance the understanding of the Group's performance. These APMs are not defined within IFRS and are not considered to be a substitute for, or superior to, IFRS measures. These APMs may not be necessarily comparable to similarly titled measures used by other companies. Directors and management use these APMs alongside IFRS measures when budgeting and planning, and when reviewing business performance. Executive management bonus targets include an adjusted EBITDA measure and long-term incentive plans include an adjusted basic EPS measure. 

 

 

	Adjusted   (€m)	Adjusting items   (€m)	H1 2024   (€m)	Adjusted   (€m)	Adjusting Items (€m)	H1 2023   (€m)
Net revenue	141.0	0.0	141.0	119.1	0.0	119.1
EBITDA	59.4	7.4	52.0	50.2	10.0	40.2
EBITDA margin (%)	42.1%	5.2%	36.9%	42.1%	8.4%	33.7%
Depreciation, amortisation and impairments	22.7	10.0	32.7	18.9	6.8	25.7
Operating profit	36.7	17.4	19.3	31.1	16.8	14.5
Finance income	1.9	0.0	1.9	5.3	0.0	5.3
Finance costs and share of net loss of associates	(17.0)	0.0	(17.0)	(11.3)	0.0	(11.3)
Profit before tax	21.6	17.4	4.2	(8.3)	16.8	8.5
Income tax	(4.2)	(2.5)	(1.7)	(4.6)	(1.7)	(2.9)
Profit after tax	17.4	14.9	2.5	20.7	15.1	5.6
Basic earnings per share (cents)	2.51	2.16	0.35	2.90	2.14	0.76

 

APMs are reconciled to the statutory equivalent, where applicable, in Note 6 of the accompanying condensed interim financial statements.

 

Capital allocation 

 

Our priority continues to focus around investment in the platform together with integrating the technologies and products of our acquired businesses. We expect to reduce duplications across IT, hardware, and technology processes. M&A is important and we will continue to consider value-accretive M&A opportunities, however we are mindful of our current leverage position. We remain disciplined and want to maintain our strong and robust balance sheet, therefore the Group does not intend to pay dividends, as we continue to prioritise investment in growth.

 

Financing facility and covenants 

 

On 14 March 2024, the Group signed an amendment to the Club Finance facility, which increased the share of revolving loans within the uncommitted incremental facility up to €40 million (previously up to €25 million). The total amount of uncommitted incremental facility remains unchanged. The amendment also removed the requirement to calculate the interest cover covenant for the six months ended 30 June 2024.

On 6 June 2024, the Group signed another amendment to the Club Finance facility, which changed the maturity date to 31 March 2029 and decreased quarterly instalments.

 

Covenant	Calculation	Target	Actual 30 June 2024
Interest cover	the ratio of Adjusted EBITDA to finance charges	Min 4.00	n/a1
Net leverage	the ratio of total net debt to Adjusted EBITDA	Max 3.752	2.64
Adjusted net leverage	the ratio of the adjusted total net debt to Adjusted EBITDA	Max 6.50	4.12

1.             The Group is not required to report on the Interest cover covenant as at 30 June 2024.

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

 

The Group also manages its working capital needs through the use of uncommitted factoring facilities, with average financing limits of €138.7m and average utilisation of 74.0% (H1 2023: €124.1m and 71.8% 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

 

(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 26 March 2024 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
		2024 (unaudited)	2023 (unaudited)
Revenue from contracts with customers	5	1,149,705	1,017,586
Costs of energy sold		(1,008,674)	(898,503)
Net energy and services sales	5	141,031	119,083
Other operating income	9	3,117	6,781
Employee expenses		(46,400)	(46,423)
Impairment losses of financial assets		(7,793)	(4,171)
Technology expenses		(9,942)	(8,680)
Other operating expenses		(28,006)	(26,374)
Operating profit before depreciation and amortisation (EBITDA)		52,007	40,216
Analysed as:
Adjusting items	6	7,358	10,025
Adjusted EBITDA	6	59,365	50,241
Depreciation and amortisation	6	(32,667)	(25,708)
Operating profit		19,339	14,508
Finance income	8	1,887	5,262
Finance costs	7	(16,694)	(10,960)
Share of net loss of associates		(284)	(298)
Profit before tax		4,249	8,512
Income tax expense		(1,733)	(2,914)
PROFIT FOR THE YEAR		2,516	5,597
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		(148)	(92)
Exchange differences on translation of foreign operations		(361)	2,390
Deferred tax related to other comprehensive income		(166)	-
TOTAL OTHER COMPREHENSIVE INCOME		(675)	2,298
TOTAL COMPREHENSIVE INCOME FOR THE YEAR		1,841	7,895
Total profit for the financial year attributable to equity holders of the Company		2,425	5,245
Total profit for the financial year attributable to non-controlling interests		92	353
Total comprehensive income for the financial year attributable to equity holders of the Company		1,749	7,538
Total comprehensive income for the financial year attributable to non-controlling interests		93	357
Earnings per share (in cents per share):
Basic earnings per share	11	0.35	0.76
Diluted earnings per share	11	0.35	0.76

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

(EUR '000)

	Notes	As at
		30 June 2024 (unaudited)	31 December 2023
ASSETS
Non-current assets
Intangible assets	14	524,847	532,404
Property, plant and equipment	14	53,530	55,760
Right-of-use assets		19,630	22,226
Investments in associates		11,435	11,719
Deferred tax assets		9,114	9,564
Other non-current assets		6,080	4,845
Total non-current assets		624,636	636,518
Current assets
Inventories		14,816	14,903
Trade and other receivables	15	460,040	396,943
Income tax receivables		4,832	2,205
Derivative assets	12	1,830	3,425
Cash and cash equivalents		96,409	90,343
Total current assets		577,927	507,819
TOTAL ASSETS		1,202,563	1,144,337
SHAREHOLDERS' EQUITY AND LIABILITIES
Share capital		8,120	8,113
Share premium		2,958	2,958
Merger reserve		(25,963)	(25,963)
Other reserves		3,751	4,427
Business combinations equity adjustment		(22,776)	(22,460)
Retained earnings		293,538	289,380
Equity attributable to equity holders of the Company		259,628	256,455
Non-controlling interests		5,459	6,381
Total equity		265,087	262,836
Non-current liabilities
Interest-bearing loans and borrowings	17	286,760	293,822
Lease liabilities		14,332	17,417
Provisions		1,324	1,324
Deferred tax liabilities		27,277	28,878
Derivative liabilities	12	858	3,140
Other non-current liabilities	16	8,866	9,236
Total non-current liabilities		339,417	353,817
Current liabilities
Trade and other payables	16	473,517	402,834
Interest-bearing loans and borrowings	17	112,069	113,297
Lease liabilities		5,325	4,909
Provisions		2,793	2,529
Income tax liabilities		3,359	3,927
Derivative liabilities	12	996	188
Total current liabilities		598,059	527,684
TOTAL EQUITY AND LIABILITIES		1,202,563	1,144,337

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